Not so long ago, a joint venture between a British company and a Chinese state-owned enterprise would require foreign executives to spend years courting government officials and soliciting approval from senior Communist Party members.

To secure what is potentially the largest foreign direct investment by a Chinese government business, John Varley and the Barclays management consulted with Gordon Brown, the Prime Minister, but were not even asked to see China’s President Hu Jintao or Prime Minister Wen Jiabao. This is a remarkable comment on how quickly and confidently the Chinese Government is buying into strategic businesses abroad.

Last month Mr Varley, the Barclays chief executive, went to Beijing to discuss a strategic investment with Chen Yuan, the governor of the China Development Bank, which is owned by the People’s Republic and overseen by the State Council. Yesterday it was announced that CDB is proposing to take a £1.5 billion stake in Barclays and, if the bank acquires ABN-Amro, a further £5.1 billion in the enlarged bank. On the heels of China’s investment in Blackstone in May, the Barclays deal shows the ease with which Chinese businesses will become owners of international corporate assets. The relationship with the China Development Bank is a boon for Barclays. Barclays will not only gain an influential Chinese politician around its boardroom table, but also access to industrial and commercial banking business across China.

Where the CDB investment – and the £2 billion investment commitment from Temasek, the Singaporean state investment fund – may prove less helpful is back in Europe. Thanks to their new Asian investors, Barclays is now able to up its bid to €35.73 a share, as of yesterday’s opening price, and a 37 per cent cash component. This is still below the RBS-led consortium’s offer of €38.40 a share, 93 per cent of it in cash. With less value on offer to ABN shareholders, Barclays continues to depend on unforeseen circumstances derailing the rival offer from RBS chief executive Sir Fred Goodwin. It is a Harold Macmillan strategy – it banks on “events”, such as an intervention from the Dutch regulator or the collapse of the fundraising effort by the Belgian member of the consortium, Fortis.

After yesterday’s deal, Mr Varley has closed the gap on RBS, but he is still in second place. The beauty of the deal with CDB, though, is that coming in second looks more and more like a winning proposition.

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