Chinese fund seeking to invest in UK, US projects
By Feng Jianmin |
November 29, 2011, Tuesday
|
Print Edition
Print Edition
China's sovereign wealth fund wants to invest in improving infrastructure in Europe and the United States to spur global growth, the fund's chairman wrote in the Financial Times yesterday.
"Now, infrastructure in Europe and the US badly needs more investment," China Investment Corporation's Lou Jiwei wrote.
"Traditionally, Chinese involvement in overseas infrastructure projects has been as a contractor only. Now, Chinese investors also see a need to invest in, develop and operate projects."
Lou deemed the UK as one of the most open economies in the world, and expressed keenness in teaming up with fund managers or participating in public-private partnerships in the UK infrastructure sector as an equity investor.
In the PPP arrangement, the government could invest with local or overseas institutional investors and share risks and returns.
"CIC believes that such an investment, guided by commercial principles, offers the chance of a 'win-win' solution for all," he said.
An estimated 200 billion pounds (US$310 billion) will be needed to invest in energy, water, transport and other infrastructure by 2015 in the UK, while the US will need at least US$2.2 trillion invested in repairing and rebuilding its infrastructure, Lou said, quoting data released by the British Treasury and the American Society of Civil Engineers.
His comments poses a possible answer to the question of whether and how China should help debt-ailed Europe, China's largest trading partner. Two weeks ago, CIC's President Gao Xiqing said that China would not assist other countries at the cost of its own economy.
Gao stressed that China wants profit and influence from investment, and it should only invest in assets where it could have a voice.
"We frequently meet with foreign regulators whose attitude is that we should give them money and leave everything to them. Nothing comes for free in this world," Gao said.
The US$410 billion fund was created in 2007. CIC was created to invest abroad in the hope of earning a better return on China's foreign reserves, the bulk of which are in US and European government bonds. It says investments are made on commercial rather than political grounds.
The move into infrastructure probably reflects CIC's commercial views, rather than those of the government, Citigroup economist Minggao Shen told the Associated Press.
He said it could help CIC earn a more stable profit and reduce China's exposure to US and European government bonds amid volatile markets.
China is America's biggest foreign bondholder, with US$1.15 trillion in Treasury debt as of September.
"There is a general thought that maybe China should not invest in US Treasury bonds or European sovereign bonds. Instead, why can't we hold direct assets in the economy?" Shen said.
By investing in individual projects, he said, "you don't have to depend on government guarantees and it should be affected less by the sovereign debt crisis."
"Now, infrastructure in Europe and the US badly needs more investment," China Investment Corporation's Lou Jiwei wrote.
"Traditionally, Chinese involvement in overseas infrastructure projects has been as a contractor only. Now, Chinese investors also see a need to invest in, develop and operate projects."
Lou deemed the UK as one of the most open economies in the world, and expressed keenness in teaming up with fund managers or participating in public-private partnerships in the UK infrastructure sector as an equity investor.
In the PPP arrangement, the government could invest with local or overseas institutional investors and share risks and returns.
"CIC believes that such an investment, guided by commercial principles, offers the chance of a 'win-win' solution for all," he said.
An estimated 200 billion pounds (US$310 billion) will be needed to invest in energy, water, transport and other infrastructure by 2015 in the UK, while the US will need at least US$2.2 trillion invested in repairing and rebuilding its infrastructure, Lou said, quoting data released by the British Treasury and the American Society of Civil Engineers.
His comments poses a possible answer to the question of whether and how China should help debt-ailed Europe, China's largest trading partner. Two weeks ago, CIC's President Gao Xiqing said that China would not assist other countries at the cost of its own economy.
Gao stressed that China wants profit and influence from investment, and it should only invest in assets where it could have a voice.
"We frequently meet with foreign regulators whose attitude is that we should give them money and leave everything to them. Nothing comes for free in this world," Gao said.
The US$410 billion fund was created in 2007. CIC was created to invest abroad in the hope of earning a better return on China's foreign reserves, the bulk of which are in US and European government bonds. It says investments are made on commercial rather than political grounds.
The move into infrastructure probably reflects CIC's commercial views, rather than those of the government, Citigroup economist Minggao Shen told the Associated Press.
He said it could help CIC earn a more stable profit and reduce China's exposure to US and European government bonds amid volatile markets.
China is America's biggest foreign bondholder, with US$1.15 trillion in Treasury debt as of September.
"There is a general thought that maybe China should not invest in US Treasury bonds or European sovereign bonds. Instead, why can't we hold direct assets in the economy?" Shen said.
By investing in individual projects, he said, "you don't have to depend on government guarantees and it should be affected less by the sovereign debt crisis."
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