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China buys $3bn Blackstone stake China buys $3bn Blackstone stake
(40 minutes later)
The Chinese government has agreed to pay $3bn (£1.5bn) for a 10% stake in US private equity company Blackstone.The Chinese government has agreed to pay $3bn (£1.5bn) for a 10% stake in US private equity company Blackstone.
The move will give Blackstone a head start in Chinese takeover deals and allow China's government to tap into the global private equity boom.The move will give Blackstone a head start in Chinese takeover deals and allow China's government to tap into the global private equity boom.
The news, which is likely to create some political opposition in the US, comes just days before Chinese Vice Premier Wu Yi visits America.The news, which is likely to create some political opposition in the US, comes just days before Chinese Vice Premier Wu Yi visits America.
China is buying the stake through its newly formed state investment fund.China is buying the stake through its newly formed state investment fund.
'Enhancing access''Enhancing access'
"For both China and Blackstone, it's about enhancing access and developing deeper relationships," said analyst Monte Brem, chief executive of advisory firm Leucadia Capital Partners."For both China and Blackstone, it's about enhancing access and developing deeper relationships," said analyst Monte Brem, chief executive of advisory firm Leucadia Capital Partners.
"The Chinese government wants to increase its access and role in the global private equity market; Blackstone wants to increase its access and role in China.""The Chinese government wants to increase its access and role in the global private equity market; Blackstone wants to increase its access and role in China."
For Blackstone, the deal will give bring an inevitable advantage when investing in China, where foreign companies often struggle to gain support from Beijing when trying to buy Chinese companies.For Blackstone, the deal will give bring an inevitable advantage when investing in China, where foreign companies often struggle to gain support from Beijing when trying to buy Chinese companies.
But the deal will raise eyebrows among some US politicians wary of China's growing economic clout.But the deal will raise eyebrows among some US politicians wary of China's growing economic clout.
In 2005, China's plans to buy US energy giant Unocal fell through in the face of fierce political opposition in Washington.In 2005, China's plans to buy US energy giant Unocal fell through in the face of fierce political opposition in Washington.
China's purchase will be part of Blackstone's $7bn share floatation, planned for next month.