PetroChina buys into Singapore Petroleum

In a sign that cash rich Chinese companies are prepared to invest more aggressively overseas, PetroChina (PTR) is buying 45 percent of Singapore Oil for $1 billion. If may even offer to buy the rest of the firm.

The Chinese economy is doing well enough, compared to the rest of the world, that it is in a good position to buy assets that have lost much of their value due to the recession.

According to Bloomberg, because PetroChina is controlled by the China central government it can take a very long-term view of its investments without significant concern that it will alienate public shareholders.

If the recession continues for another year of two, China will probably be an aggressive bidder for strategic assets that could include oil, minerals -- and even some sectors of the car industry. This could put it at odds with other governments who might fight Chinese investments in businesses considered critical to local economic interests. Would the U.S. Congress and Administration let a Chinese company buy Chrysler? Maybe, but there would be a hell of a political fight first.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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