China set to invest again in Europe

[FT_news]

The head of China's flagship sovereign wealth fund is looking to invest in Europe after expressing relief that snubs from the continent saved Beijing from embarrassing investment losses last year.

Lou Jiwei, head of China Investment Corp, said he was pleased he did not make a single trip to Europe in 2008 after EU officials expressed concerns about his fund’s transparency and intentions.

But speaking at the Boao Forum for Asia, China’s riposte to the annual World Economic Forum meeting in Davos, he said he was considering investing on the continent again, now that European officials have been humbled by the global financial crisis. “I have to thank these European officials,” Mr Lou said. “They saved me a lot of money. Now they come to me without conditions and I am beginning to consider making investments in Europe again.”

Mr Lou did not mention CIC’s experience in the US, where the fund made controversial – and costly – investments in Blackstone, the private equity group, and Morgan Stanley on the eve of the crisis.

His comments, made at the forum on the southern Chinese island of Hainan, reflect how China’s leaders are emboldened by their country’s stature as a rock of relative economic stability able to weather the global financial storm.

Topping a list of senior Chinese government officials and leaders speaking at the forum, premier Wen Jiabao was confident that the country’s economy was turning a corner, despite first-quarter growth of 6.1 per cent – the lowest since quarterly reporting started 17 years ago.

“China’s [stimulus] package is already paying off,” Mr Wen said at the forum’s main event. “The situation is better than expected.”

Liu Mingkang, chairman of the China Banking Regulatory Commission, added: “My view on the existing situation is cautious optimism. The potential of Chinese domestic consumption has been triggered.”

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