China's investment 'not a threat'
May 6, 2008 - 9:06AM
China's growing overseas investment is a natural consequence of its development and should not be viewed as a threat, says the man tipped to be a top official in its $US200 billion ($A211 billion) sovereign wealth fund.
Jin Liqun, the country's vice minister of finance between 1998 and 2003, said China's deployment of its massive reserves abroad is positive for the global economy as a whole, adding that Africa had become an early beneficiary.
"Developed countries want to come to China for business and they regard this as normal. But when China's wealth fund starts to invest overseas with minority stakes, why is it such a big issue?" Jin told Reuters in an interview on the sidelines of the Asian Development Bank's (ADB) annual meeting.
"I think a change in the mindset on the part of the developed world is important."
Jin's term as a vice president at ADB ends in July but he said he was not aware of what his next move would be.
"I certainly want to go back (to government). How the government wants to deploy me, I don't know. Let's see."
Citing unnamed sources, a Chinese newspaper said in February that Jin would join CIC after his nearly seven-year ADB stint.
Unease in the industrialised West over China's growing economic clout - embodied by its recently launched China Investment Corp (CIC) sovereign fund - has deepened with the global credit crisis sparking off fears that state-owned Chinese companies would buy up their cash-strapped Western counterparts.
"As China, India and other Asian countries grow...I don't think CIC is the last (sovereign wealth) fund of developing Asia," Jin said, adding that China's overseas investment would be "prudent", avoiding excessive risk to protect its national wealth and without creating foreign misconceptions about its intentions.
He said China had not only bought assets in Africa but had forgiven debt there and provided infrastructure and medical aid there.
Jin, who turns 59 this year, acknowledged that there had been criticism that China, despite its large reserves, had not done enough for poorer countries and had taken more than its fair share of development funds.
The United States has criticised the 67-member ADB, saying that the Manila-based multilateral lender was channelling too much money to middle-income countries such as India and China instead of focusing on poorer states.
But Jin said China remained a developing economy with a large rural population still living in poverty.
"There are critical voices, hostile comments from some quarters in the Western world but we shouldn't regard these as mainstream."
