Spain is set to secure a massive $7.3 Billion in deals this Wednesday with Li Keqiang (The Vice Premier of China) signing the deals. Beijing made a pledge to help the European nation and support like this from China offers is a massive boost and optimistic future in terms of fundraising for Spain.
Mr Li Keqiang was quoted as saying “China is a long-term and responsible investor in the Spanish and European financial markets, and it has confidence and great interest in the Spanish market,”
This news comes from a Spanish official who has reported that Mr Li Keqiang made this announcement during a visit to Madrid with business officials during breakfast on the second day of his European Union tour which is set to last nine days. It is widely thought that Mr Li will be voted in as the next Premier of China two years from now and this news comes as a huge supports to China’s biggest market of export goods.
The deal is said to be spread over a number of different sectors, 16 in total covering amongst many, telecommunications, agriculture, banking and energy. The Ministry of Industry in Spain was quoted in saying that Spain and China will “strengthen their relationship” in the energy sector and collaborate on foreign investments.
By far the most lucrative deal to be struck this week is with Repsol, the Spanish Oil company and the acquisition of its Brazilian assets (7.1 billion dollars worth )by Sinopec the merged company of China Petroleum and Chemical Corp. A statement was made by Repsol last Tuesday reporting that both companies have pledged to analysing business opportunities on a worldwide basis.
Negotiations are also being made with regards to Spanish financial firms operating in China with Mr Li Keqiang inviting talks. A co-operation agreement has already been struck with Banco Bilboa Vizcaya Argentaria SA or BBVA (The second largest bank in Spain) with China Development bank in Latin America. According to BBVA, the co-operation contract was made in the agreement that the two companies can collaborate in Commercial services, Project finance, Corporate banking and derivatives. 15% of China Citic Bank Corp is owned by BBVA making them already the largest investor in China.
Reports from the official agency of Xinhua are that other contracts will be in Olive Oil (9 million dollars) Wine (6 million Dollars) Meat products (13.5 million dollars) and Spanish ham (260 million dollars)
It is very likely that China will buy more government bonds from Spain after Tuesday’s meeting with Elena Salgado, the Economy and Finance Minister of Spain and depending on market conditions. Approximately 10% of Spain’s overall sovereign debt is owned by China, making them one of the lion sharers.
China is continuing to create massive support for many EU countries such as Greece and Portugal, but has not yet confirmed the particulars of any bond purchases. Spain is the first stop on the second day of Mr. Li Keqiangs 9 day visit to European countries in distress, which will also include visits to the U.K and Germany.