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Last Updated: Friday, 13 January 2006, 15:15 GMT
Chinese firms told to be low-key
Logo of Chinese oil company CNOOC
CNOOC failed in its bid to buy US oil firm Unocal last year
China's commerce ministry has warned its companies to keep a low profile when trying to buy a foreign firm, so as not to stir up anti-Chinese feeling.

The report said this was necessary due to the antagonism caused in the West by the growing strength of China's economy and the surge in Chinese exports.

It warned that this had "caused political suspicion" abroad.

Chinese oil giant CNOOC last year failed to buy American oil firm Unocal after opposition from US politicians.

'Sensitive approach'

Unocal was instead bought by fellow American oil firm Chevron, despite CNOOC making a higher bid.

Large overseas acquisitions should not become the focus of media attention too early on, to prevent them from being stifled
Chinese Ministry of Commerce

US politicians, further antagonised by America's $18.5bn trade deficit with China, said at the time that it would be against the national interest to allow Unocal to fall into Chinese hands.

The Chinese Ministry of Commerce has now recommended that the country's firms adopt a "softly-softly" approach when hoping to buy abroad.

"Especially for overseas takeovers in important and sensitive areas such as resources and hi-tech, we should guide media coverage in an appropriate and planned way," said the report by the ministry's policy research body.

"Large overseas acquisitions should not become the focus of media attention too early on, to prevent them from being stifled... We should present the mutual benefits of takeovers to counter possible hostility and concerns."

'China premium'

The ministry also warned that if Chinese firms were too vocal in their interest in a firm, it could lead to the price going up significantly, something it dubbed the "China premium".

China's overseas acquisitions have focused on the energy sector over the past year.

As the country has become the world's second largest consumer of oil after the US, firms such as CNOOC and CNPC have moved to buy overseas oil businesses.

Earlier this week, CNOOC agreed to buy a stake in a Nigerian offshore oil and gas field for $2.3bn (1.3bn), while CNPC bought Canada-based PetroKazakhstan for $4.2bn back in October.




SEE ALSO:
China oil firm buys into Nigeria
09 Jan 06 |  Business
China-Africa trade jumps by 39%
06 Jan 06 |  Business
CNPC secures PetroKazakhstan bid
26 Oct 05 |  Business
Chinese firm abandons Unocal bid
02 Aug 05 |  Business
China's global hunt for oil
09 Mar 05 |  Business


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