Nov. 25 (Bloomberg) -- China’s sovereign wealth fund may give “indirect” support to Europe through investments without being the nation’s main route for any aid, said Jesse Wang, the executive vice president of China Investment Corp.
The fund “wouldn’t be the main channel” if China helps tackle the sovereign-debt crisis, Wang said in an interview at a forum in Beijing yesterday.
“However, if during such a process there are good investment opportunities in Europe and if CIC’s investment helped the destination company or country to recover and developed the economy, that would be indirect support.”
European leaders are looking to China, the holder of the world’s largest foreign-exchange reserves at $3.2 trillion, as a source of funds as the region’s crisis threatens to trigger a global slump.
China is among countries that may be willing to support Europe through the International Monetary Fund if policy makers agree on a plan, World Bank President Robert Zoellick said in a Nov. 17 interview.
CIC managed $409.6 billion at the end of 2010.
“As a commercial entity, CIC is seeking reasonable returns with controllable risks,” Wang said. He cited an investment in the exploration and production business of Paris-based GDF Suez SA, Europe’s largest natural-gas network operator, as an example of what appeals.
More than $4 trillion has been erased from the value of equities worldwide this month as rising borrowing costs in the euro-area stoked concern the debt crisis will derail economic growth.
Risk Capabilities
In China, “CIC is under no obligation to follow the government’s policy orders in its operations because it’s a commercial entity,” Wang said. “If the government carried out certain policy moves, CIC usually wouldn’t participate because it has different operational targets and risk-taking capabilities.”
Asked if China will buy European bonds, he said the Chinese government is studying “which way and through which products” to support the region.
On Germany’s failure to sell all the 10-year bonds offered at an auction Nov. 23, he said: “One shouldn’t rush to some decisive judgment about the sales or worry that the debt crisis has spread to the core euro zone.”
businessweek.com
The fund “wouldn’t be the main channel” if China helps tackle the sovereign-debt crisis, Wang said in an interview at a forum in Beijing yesterday.
“However, if during such a process there are good investment opportunities in Europe and if CIC’s investment helped the destination company or country to recover and developed the economy, that would be indirect support.”
European leaders are looking to China, the holder of the world’s largest foreign-exchange reserves at $3.2 trillion, as a source of funds as the region’s crisis threatens to trigger a global slump.
China is among countries that may be willing to support Europe through the International Monetary Fund if policy makers agree on a plan, World Bank President Robert Zoellick said in a Nov. 17 interview.
CIC managed $409.6 billion at the end of 2010.
“As a commercial entity, CIC is seeking reasonable returns with controllable risks,” Wang said. He cited an investment in the exploration and production business of Paris-based GDF Suez SA, Europe’s largest natural-gas network operator, as an example of what appeals.
More than $4 trillion has been erased from the value of equities worldwide this month as rising borrowing costs in the euro-area stoked concern the debt crisis will derail economic growth.
Risk Capabilities
In China, “CIC is under no obligation to follow the government’s policy orders in its operations because it’s a commercial entity,” Wang said. “If the government carried out certain policy moves, CIC usually wouldn’t participate because it has different operational targets and risk-taking capabilities.”
Asked if China will buy European bonds, he said the Chinese government is studying “which way and through which products” to support the region.
On Germany’s failure to sell all the 10-year bonds offered at an auction Nov. 23, he said: “One shouldn’t rush to some decisive judgment about the sales or worry that the debt crisis has spread to the core euro zone.”
businessweek.com
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