October 08, 2004

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China being invaded

Kuwait, which only a little over a decade ago was invaded itself, is now planning to stake a claim in China. There's a flip-side to all the foreign investment pouring into China. Sometimes it means more competition for local companies from well funded and international experts. And the Kuwaitis are playing a smart game. They are promising to invest huge amounts to create new refining capacity in China, something the coutnry desperately needs to continue supply its rapidly growing energy needs. But the Kuwaitis will only invest if they can also open up retail outlets in direct competition with China's own PetroChina and Sinopec. China will have to weigh up the benefits of securing another large investment in its energy sector with exposing its partially state owned oil retailers.

It's a no-brainer: China is constantly trying to diversify and secure its oil supply. The Chinese oil retailing industry is about to get a massive shake-up thanks to those invading Kuwaitis.

posted by Simon on 10.08.04 at 10:09 AM in the




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Comments:

This is good news. Especially the last paragraph. I do hope the Chinese are able to get some reciprocal concessions on the Kuwaiti fields. The nationalized Kuwaiti oil industry is in quite poor shape technologically and dearly needs foreign investment (or at least the technology that comes with it). There is a lot of untapped product that could be brought to market if they allowed other, more advanced, companies to drill.

posted by: myrick on 10.08.04 at 01:34 PM [permalink]




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