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'Nothing comes for free': CIC
By Jane Feng |
November 16, 2011, Wednesday
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Print Edition
Print Edition
CHINA'S sovereign wealth fund cannot dispose holdings of treasuries of some "large countries" and it sounded a warning that the fund will not assist other countries unconditionally, the fund's president said yesterday.
"China cannot dispose of the sovereign debt of others, especially some large countries because our assets on hand will also devalue," Gao Xiqing, president of China Investment Corp, told the China Overseas Investment Summit in Hong Kong yesterday.
"When we talk about international investments, we must consider whether they serve our interests. We can't say that ... we can help you at whatever economic costs to us," he cautioned.
Gao said in September that CIC "cannot just step into Europe and save someone because our task is to be profitable," despite Premier Wen Jiabao's promise in June that China could offer "a helping hand" to Europe by buying a limited amount of sovereign bonds. Spain also secured a Chinese pledge to invest in the nation's savings banks and in government debt earlier this year.
"In the process of investing overseas, we have to be rational and profitable," Gao said. "The attitude some people have is that we can go and invest, leave our money there and just go away. We won't get seats on the board, we won't have any say in how a place is run. That's not how things are done."
He said that CIC frequently meets ''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.
His comments are the latest amid discussions about whether China should boost holdings of bonds issued by European governments as there are concerns its huge United States assets may devalue due to the sluggish economic recovery there.
China cut its holdings of US Treasuries by US$36.5 billion in August, the first reduction in five months, after Standard and Poor's slashed the US sovereign credit rating due to the country's rising debt burden.
"China cannot dispose of the sovereign debt of others, especially some large countries because our assets on hand will also devalue," Gao Xiqing, president of China Investment Corp, told the China Overseas Investment Summit in Hong Kong yesterday.
"When we talk about international investments, we must consider whether they serve our interests. We can't say that ... we can help you at whatever economic costs to us," he cautioned.
Gao said in September that CIC "cannot just step into Europe and save someone because our task is to be profitable," despite Premier Wen Jiabao's promise in June that China could offer "a helping hand" to Europe by buying a limited amount of sovereign bonds. Spain also secured a Chinese pledge to invest in the nation's savings banks and in government debt earlier this year.
"In the process of investing overseas, we have to be rational and profitable," Gao said. "The attitude some people have is that we can go and invest, leave our money there and just go away. We won't get seats on the board, we won't have any say in how a place is run. That's not how things are done."
He said that CIC frequently meets ''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.
His comments are the latest amid discussions about whether China should boost holdings of bonds issued by European governments as there are concerns its huge United States assets may devalue due to the sluggish economic recovery there.
China cut its holdings of US Treasuries by US$36.5 billion in August, the first reduction in five months, after Standard and Poor's slashed the US sovereign credit rating due to the country's rising debt burden.
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