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    Soft Power: China Stepping Up Its Global Economic Expansion

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    China’s state-owned grain trading company Cofco Corp. has taken full ownership of Dutch grain trader Nidera NV. Cofco acquired 51 percent of Nidera’s stock for $1.2 billion back in 2014 and it has now bought the remaining 49 percent from another Dutch company, Cygne BV.

    The mutually-beneficial deal brings together two of the world’s major importers and exporters of grain and oil-bearing plants, Wang Zhiming, the head of China’s Center for the Study of the Problems of Globalization,  said in an interview with Sputnik.

    “This deal will add to the Chinese grain corporation’s effort to go global. Nidera has assets in South America and warehouse and logistics centers in North America and Europe. After the recent debt crisis Europe desperately needs investments and Cofco can line up the much-needed funds, which is why this deal is mutually beneficial,” he said.

    Indeed, the deal strengthens Cofco’s grip over the supply chain that helps feed China’s growing and increasingly wealthy middle class.

    “The Chinese want to buy everywhere and the acquisition of the Dutch company will help meet this growing demand,” Wang Zhiming said.

    In January, Cofco Corp, snapped up the Hong Kong-based grain trader Noble Group paying $750 million to acquire a 49 percent stake previously owned by its rivals.

    In an interview with Sputnik Yakov Berger, a leading expert at the Institute of the Far East in Moscow, said that with the Nidera deal signed, Cofco’s will now be able to buy more grain and oil seeds in Latin America thus bolstering its status as one of the world’s leading grain traders.

    “China is 95 percent sufficient in grain and most of the corn it buys abroad is used to feed cattle. The Chinese people now eat more meat, hence their growing stock of meat and dairy cattle. However, China is 70 percent dependent on soy beans imports from the US, that’s why the acquisition of the Dutch company will improve the country’s food security,” Berger said.

    Sergei Khestanov, a Moscow-based market analyst, said that the purchase of Nidera stock reflects China’s ongoing effort to gain access to advanced western technology.

    In February, China’s National Chemical Corp. snapped up Swiss seed giant Syngenta AG in a $43.2 billion takeover, approved by the US industry watchdog — the Committee on Foreign Investment in the US (CFIUS). Many in the United States  considered the deal a threat to the nation’s security because about a quarter of Syngenta’s sales come from North America.

    Meanwhile, Beijing’s economic expansion goes beyond agriculture. China’s National Offshore Oil Corporation (Cnooc) recently took control of two of the North Sea’s biggest oilfields and China General Nuclear Power Company has offered to financially participate in the construction of Britain’s new Hinkley Point nuclear power station.

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    Tags:
    Oil, nuclear energy, agriculture, economic expansion, National Chemical Corp, Noble Group, Cofco Corp, Yakov Berger, Wang Zhiming, China
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