Print

Mail

wiki links

Brown invites PRC fund to set up office in Britain

British Prime Minister Gordon Brown yesterday invited China Investment Corp (CIC), the nation's huge sovereign wealth fund seen as a tool to project Beijing's economic clout, to set up its first overseas office.

Brown extended the welcome on his maiden visit to China, in sharp contrast to a more guarded response in the US and other nations to the rise of sovereign wealth funds.

"We want Britain to benefit from the US$200 billion of investment available through the Chinese Investment Corp," he told a gathering of British and Chinese businesspeople in Beijing.

"The UK has benefited from our policy of open trade and investment and remains committed to it, so we would welcome the CIC setting up an office in London," Brown said.

Britain, he said earlier after talks with Chinese Premier Wen Jiabao (溫家寶), should become "the first location for Chinese investment, in Europe and in the rest of the world."

The CIC, established in September last year, is charged with investing roughly US$200 billion of China's US$1.5 trillion foreign exchange reserves.

Some estimates say that funds under CIC's management could triple within the next couple of years, as China seeks to shift a growing part of its forex reserves out of low-yield US Treasury bonds.

"London may wish to consolidate its position as a global financial center," said Sun Mingchun (孫明春), a Hong Kong-based economist with Lehman Brothers.

"If CIC accepts the invitation, a lot more Chinese investors in the private sector will probably follow suit and go to Britain," he said.

The CIC has already sealed a series of high-profile deals abroad, including a US$3 billion share in private equity firm Blackstone and US$5 billion in investment bank Morgan Stanley, both US-based.

Wen yesterday said that only part of CIC's US$200 billion would be invested abroad, as one-third had been spent on reforming domestic banks.

"We will endeavor to enable the funds overseas to be transparent and open. That is to say, foreign people in other countries as well as domestic media will have much insight into them," Wen said.
This story has been viewed 985 times.