China's investment risk

China's investment risk

United States have difficulty swallowing, is exported to China to build a super job in the West and widespread political unrest.

What can they think of China as a power plant with an investment or not.A securities lawyer Gao Xiqing, educated at Duke University, personifies the organization National Social Security Fund for the year of his contract with the manager for 10 west - including Pimco, T. Rowe Price, and UBS - to begin to invest about $ 38000000000 fund with assets outside China for the first time."You can not put all your eggs in one basket," Gao, Vice President of the Fund, said during an interview at the annual meeting of the World Economic Forum, "Although China is a large basket" ..For most of the last 20 years, China and other countries are investing the savings they have accumulated through the sale of goods to the United States and Europe in their countries or activities become ultrasafe. insurance policy on the type of financial crisis that rocked Asia in 1990, that their needs are low. The yield on the safety of government bonds in the United States.However, changes in the financial environment has become a necessity before - to protect the heritage of safety - gives way to the desire to get a good return on what is in each measure. Then a series of financial resources.The result will likely be China and other emerging countries in Asia, as well as domestic production of oil up the price of financial assets in the West - and probably will. The political reaction in the process."These countries are about to cross the line of the newspaper, the risk of government bonds and the" currency chief economist Stephen Jen, Morgan Stanley said. "They will go where the big markets of the United States and Europe."Jane has written about the emergence of a "fund of wealth, sovereignty," in view of the fact that this amount of data is sometimes the pension funds in a vehicle, at times the investment of public official, and sometimes in the active central bank.By his calculations, the country - are concentrated in the Middle East and Asia - with $ 1400000000000 to get rid of them.What is what is agent accelerator and other economists point out an important piece of the world. 4900000000000 USD foreign exchange reserves is beginning to look a good return for the money to be received in the United States Treasury securities, a traditional stronghold. The central bank funds.According to the Bank for the settlement of the country from March 2000 to June 2005, the proportion of reserves held in the U. S. Treasury fell by 82.3 percent, 73.2, central banks have increased their holdings of bonds issued by the creditor. For example, Fannie Mae, and even blue chips."With the increase in reserves of central banks of developed countries has begun to re-think very hard about how to obtain high yields without the" Kenneth Rogoff, former chief economist of the International Monetary Fund said.There will also be a shortage of models of how to invest state money in the West, economists point out.Fund managed by the United Arab Emirates, Kuwait and throughout the arm, Temasek, the Singapore government's investment of about $ 100 billion. Under the administration has moved to a model that attempts to return through a strong, professional management and risk calculations, often in collaboration with European and U.S. asset managers."We have carefully studied the model, Singapore," Gao said, she said, adding that China's pension fund investments to avoid the higher risks - especially hedge funds and private equity - for the next two years.The idea that China and other countries should seek higher returns on savings for their levels of support in the West, especially by Lawrence Summers, former secretary of U. S. Treasury and former president of Harvard University.Speaking at the World Economic Forum for the summer, the exchange reserves - now estimated at $ 1 trillion in China alone - are well beyond what the countries need to avert financial crisis.What is the largest non-profit American institutions such as Harvard, do not risk their endowments invested in reckless But still, as double-digit returns."And 'natural to ask whether the excess reserves of the national emerging markets should not be invested with the ambitions in this direction," Summer said.But the flood of Chinese coins, the reason that others will generate a lot of people react the same as before the flow of Chinese imports.Widespread public concern to bring Chinese oil company CNOOC to abandon controversial bid for rival Unocal, an American company in 2005.China pension fund biting U.S. stocks and bonds, as can be seen in the same light."To be seen by many people in the United States is losing the" Laura D 'Andrea Tyson, dean of London Business School, said that the tendency to call "the explosion of a policy" ..Gao, increased foreign investment in China to reflect the new economic reality, one that can be run by enlightened politicians. "The United States must depend on other countries in the future," he said.Growing interest among state institutions for people with different interests also have profound implications for Western financial markets.Until now, most of the investment strategy has focused on how the central bank funds and other large state is slowly spreading from the U.S. dollar may have put in the long run, the pressure drop on the money. dollarThe search for higher returns, although there may be upset, she and others have said that this calculation.If China or the Middle East, central banks, pension funds are diversified with the purchase of high quality corporate bonds in the United States will increase the demand for money, rather than to delay it, he said.Eventually, financial markets - currencies, stocks and bonds - will end is difficult to predict."It 'very important for us to have an idea of ​​how the assets of the United States as a central bank can diversify their reserves," Suhail Dada, Head of the Middle East for investment management. Pacific, better known as Pimco, said.