Chinese investors are trying to follow the rules when spending money abroad, the head of one of China's biggest private equity firms said Thursday, January 26 as global leaders increasingly look to the country to prop up the world economy, AP reported.
Worries that Europe's slowdown would hurt stronger economies are overshadowing discussions at this week's World Economic Forum in the Swiss ski resort of Davos. Attention turned Thursday to how China can help, even as some remain wary about its growing dominance.
John Zhao, CEO of Hony Capital, said foreign prejudice about Chinese investments is unfair, but acknowledged that some companies are still learning a game that much of the world has been playing for decades.
Chinese companies and government funds have been using vast reserves of cash to buy up foreign companies and invest in foreign government bonds in recent years. But with billions of dollars in Chinese investments pouring into their countries, some governments have accused China of seeking to exploit the economic weakness of others to grab valuable natural and technological resources at rock bottom prices.
Yale President Richard C. Levin suggested the rest of the world could be grateful for China's investment interest, as eventually the country of over 1 billion people will have to start spending more of its cash on problems at home, including the lack of proper social security for an aging population. "Some fraction of these trillions could be used domestically," he said.
The head of the Asian Development Bank said Asia has already been affected by the ongoing European financial crisis in two ways – through the withdrawal of credit in Asia by many European banks and financial institutions and a drop in trade, which will impact China because Europe is its largest export market.
