![\"090813_PC_leong\"](\"http:\/\/www.profitconfidential.com\/wp-content\/uploads\/2013\/08\/090813_PC_leong-196x300.jpg\")
America has a national debt that is nearing $17.0 trillion. The Chinese own a good portion of this debt. The country also has about $3.5 trillion in foreign exchange reserves at its disposal, according to the South China<\/a> Morning Post<\/i>. (Source: \u201cBeijing to create forex investment agency,\u201d China Economic Review<\/i>, August 7, 2013.)<\/p>\nThat\u2019s a lot of money that needs to be invested. But according to the article, the People\u2019s Bank of China<\/a> (PBC) is looking at the development of a new unit that will help to invest the funds. Currently, investing the reserves is the responsibility of China Investment Corporation, which has invested about $480 billion.<\/p>\n What I see is this: the continued movement of invested capital into foreign countries by China<\/a> is a strategy for diversification and a means by which the country can get its hands on raw materials and intellectual property. We saw this with the acquisition of mining and oil companies in North America, along with major investments in the oil fields and mines in South Africa.<\/p>\n Call it the \u201cRed Invasion,\u201d but I expect foreign acquisitions to pick up going forward, especially with the creation of another agency by the PBC. Of course, China has its eyes on many companies, but receiving approval for the takeovers is another question.<\/p>\n Even the proposed takeover of pork producer Smithfield Foods, Inc. (NYSE\/SFD) by Shuanghui International Holdings Limited was met with some resistance, but now it looks like the deal will go through.<\/p>\n I expect China will focus on acquiring raw materials with its reserves\u2014iron, copper<\/a>, oil\u2014along with agriculture and industrial outlets. I wouldn\u2019t be surprised to see a rise in shopping trips by the Chinese around the world, especially in resource-rich regions, such as Canada, Australia, the Middle East, and Africa. There\u2019s already talk of building a massive pipeline on the bottom of the Pacific Ocean to carry oil from the tar sands in Alberta to China.<\/p>\n The reality is that $3.5 trillion is a lot of money. With this amount of cash, you could buy Apple Inc. (NASDAQ\/AAPL) 8.3 times over, or Wal-Mart Stores, Inc. (NYSE\/WMT) 13.8 times over. But don\u2019t worry; the country doesn\u2019t want these kinds of investments. It wants the raw materials and industrials. Plus, there are already many Chinese manufactured goods on the shelves of Wal-Mart.<\/p>\n It will be interesting to see when the buying activity picks up from China\u2014and it will come very soon. The newly formed government is aggressive and open to the West. (Read \u201cChina: The New Breeding Grounds for Capitalism<\/a>.\u201d)<\/p>\n