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China ramps up foreign investing

Scott Tong Aug 28, 2009
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China ramps up foreign investing

Scott Tong Aug 28, 2009
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Steve Chiotakis: China is picking up the pace of its dealmaking. This week it announced plans to boost overseas bets by ten times. And a good chunk of it could be coming to the United States. From Shanghai, here’s Marketplace’s Scott Tong.


Scott Tong: China’s sovereign wealth fund wants to spread up to $50 billion around the world this year. It’s hiring Wall Street pros to help it out. The fund has given Morgan Stanley and Blackstone $10 billion to invest.

Michael McCormack: In the same way that they might hire Fidelity or T. Rowe Price to manage U.S. equities for them.

That’s Michael McCormack of the Shanghai research firm Z-Ben Advisors. Rumor has it the Chinese wealth fund also fancies U.S. toxic mortgage assets clogging the balance sheets of American banks. And a Hollywood studio.

That may bring to mind Japanese investors snapping up Universal Studios in the 80s. That attracted political hostility in the States; and China’s trying to be more discreet.

McCormack: They’re going to tread very carefully to make sure that their reputation — or the reputation of Chinese investors more broadly — isn’t damaged by what they do.

Most expect the Chinese wealth fund to invest indirectly — for instance through Wall Street firms. And by buying non-controlling stakes in companies it hopes to avoid political heat. McCormack says the fund’s mandate is not political: It’s purely to make money.

In Shanghai I’m Scott Tong for Marketplace.

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