Friday, October 9, 2009
China Sells Dollars-5
"China's sovereign-wealth fund is fast becoming a major backer of natural-resource companies world-wide, as the $300 billion fund seeks to buy into a global rebound. ... CIC's willingness to dole out cash contrasts with other sovereign-wealth funds, for example those in the Middle East [ME] and Singapore, which remain cautious after having seen their portfolios hurt in the financial crisis. ... CIC's resource plays dovetail with China's long-term strategic interest in securing access to natural resources. Chinese officials have pushed state-owned firms to buy overseas mining and oil assets this year as commodity prices dropped. ... This spate of activity signals renewed confidence at CIC, which endured criticism over poor timing on its high-profile purchase of stakes in Blackstone Group LP and Morgan Stanley in 2007", Rick Carew and Tom Wright at the WSJ, 24 September 2009, link: http://online.wsj.com/article/SB125373234125034921.html.
Disagreeing with Carew & Wright, CIC's actions do not contrast with those of ME sovereign wealth funds. CIC just sees dollars as riskier than commodity-based investments and the ME sovereign wealth funds disagree as to where the risks lie.