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$4 billion China-Spain business deals [Khaleej Times (United Arab Emirates)]
[September 26, 2014]

$4 billion China-Spain business deals [Khaleej Times (United Arab Emirates)]


(Khaleej Times (United Arab Emirates) Via Acquire Media NewsEdge) China and Spain signed business deals worth about €3.2 billion ($4 billion) on Thursday during a visit by Spanish Prime Minister Mariano Rajoy to the Asian powerhouse to drum up support for his country's economy.



At a ceremony in Beijing's Great Hall of the People, Chinese and Spanish companies signed 14 deals in industries ranging from telecommunications to nuclear power to finance.

Rajoy, who will meet Chinese President Xi Jinping today, is the latest European leader to visit China to lure investment from the world's second-biggest economy.


He was welcomed to the capital by Premier Li Keqiang late on Thursday following a morning gathering of Chinese and Spanish business executives in Shanghai, where Rajoy called for Chinese investment in Spain, saying the Spanish economy was back on track after its problems during the eurozone debt crisis.

"Few countries offer such a good investment opportunity as Spain with its open and competitive market," Rajoy said in Spanish, adding that the food and consumer industries were areas where the companies of both countries could increase cooperation.

Companies that took part in the meetings included Spain's largest bank, Banco Santander, Inditex, the owner of global fashion chain Zara, and Chinese e-commerce juggernaut Alibaba Group Holding, which listed on the New York stock exchange last week.

There was no word late on Thursday of a tie-up between Inditex and Alibaba despite reports in Spain that Rajoy was hoping to push through a partnership between the world's largest clothing retailer and the Chinese e-commerce company that now has a market capitalisation of more than $220 billion.

The 14 agreements included deals between China's Huawei Technologies, the world's largest telecommunications equipment maker, and Spanish telecom giant Telefonica and a 150 megawatt contract in Hebei Province for wind turbine maker Gamesa Corporacion Tecnologica.

Spain is one of few economic brightspots in the eurozone this year. It grew at its fastest pace in six years in the second quarter, accelerating a recovery from an on-off recession that began in 2008 after a property bubble burst.

"As the world economy slowly recovers, trade between China and Spain has been growing against the trend this year," Li said during his meeting with Rajoy.

As China's economy matures, its companies are increasingly investing abroad in search of higher returns. By 2014, China's overseas direct investment is expected to exceed the direct investment it receives from foreign firms, the trade ministry said this month.

Chinese firms invested $90.2 billion in 156 countries last year, government data showed, up 17 per cent on an annual basis.

Spanish bonds advance Meanwhile, Spanish government bonds rose for a third day, pushing the 10-year yields to the least in more than two weeks, after European Central Bank President Mario Draghi said the economy has been weaker than expected.

German 10-year bunds held this past week's gains as Draghi told Lithuania's business newspaper Verslo Zinios that policy makers are ready to use "additional unconventional instruments" to further address the risk of a prolonged period of low inflation. Italian two-year note yields reached the highest in more than a week before the nation sells zero-coupon 2016 securities.

Spain's 10-year yields fell two basis points, or 0.02 per centage points, to 2.13 per cent as of 9:25am, and touched 2.12 per cent, the lowest since September 9.

The rate dropped to a record 2.039 per cent on September 8. The 2.75 per cent bond due in October 2024 rose 0.275, or €2.75 per €1,000 ($1,275) face amount, to 105.665.

The rate on similar-maturity Italian debt declined two basis points to 2.35 per cent, having touched 2.253 per cent on September 5, the least since Bloomberg began compiling the data in 1993. Italy's two-year yield was little changed at 0.38 per cent and touched 0.39 per cent, the most since September 16.

In addition to the €2.75 billion of zero-coupon notes due in August 2016, Italy is also scheduled to auction €3 billion of inflation-linked bonds maturing in 2024 and 2041 on Thursday.

Benchmark German 10-year bund yields were little changed at 1 per cent, down four basis points this week. The rate fell to 0.866 per cent on August 28, the lowest on record.

Euro-area government bonds returned 10 per cent this year through Wednesday, according to Bloomberg World Bond Indexes. Spanish securities earned 14 per cent and Germany's 6.9 per cent.

(c) 2014 Khaleej Times. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

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