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China's buying spree in global fire sale

This month China bought stakes in French, Canadian, and Australian firms.

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Sign here: Chinalco president Xiao Yaqing (left) closes a $19.5 billion deal for a share of Rio Tinto, a mining firm.

Stephen HIRD/REUTERS

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General Motors is doing it. The world's second-largest mining group is doing it. Russia, Brazil, and Venezuela are doing it. And China is loving it.

Squeezed between falling profits and the credit crunch, a growing number of troubled corporations and countries are turning to cash-rich China for a bailout. And with foreign assets cheaper than they have been for years, Beijing is on an international spending spree.

"The international financial crisis ... is equally a challenge and an opportunity," China's energy czar, Zhang Guobao, wrote recently in the official newspaper People's Daily. "The slowdown ... has reduced the price of international energy resources and assets and favors our search for overseas resources."

So far, the government has concentrated on natural-resource deals, securing supplies of oil and minerals in return for large amounts of cash. But private Chinese firms are also taking advantage of the crisis in other sectors: Diesel-engine giant Weichai Power is expected to buy a French plant that US automaker General Motors is selling off in its struggle to survive.

Though the Chinese economy has also been hit by the crisis, cutting growth by almost half, "what sets China apart is that Chinese banks have not been so badly hurt, and the policy banks still seem ready to lend" in support of key government objectives, says Erika Downs, a China energy specialist at the Brookings Institution in Washington.

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