Britain welcomes China’s wealth fund
CHINA: Britain’s doors are open to China’s sovereign wealth
fund, finance minister Alistair Darling said on Tuesday, speaking after
a report that an arm of the Chinese state has taken a nearly 1 percent
stake in BP.
Darling’s comments after economic talks in Beijing echoed those made
by Prime Minister Gordon Brown in a visit to China earlier this year,
though they came at a more sensitive time as China tightens security
after unrest in Tibet.
The potential heft of China’s sovereign wealth was illustrated on
Tuesday when British newspapers reported that a state fund had built a
stake of just under 1 percent in BP Plc, the oil major that is Britain’s
At about $2 billion, the stake is worth a tiny fraction of China’s
$1.68 trillion held in foreign exchange reserves.
“Our belief in open markets and free trade is reflected in the UK’s
openness to inward investment, including from sovereign wealth funds,”
Darling told reporters.
“And we welcome the creation of the Chinese sovereign wealth fund and
its potential for investing in our country,” he said.
Although details were unclear, the BP investment had the hallmarks of
the State Administration of Foreign Exchange, an arm of the central bank
that manages China’s foreign exchange reserves. SAFE has also bought
into French oil major Total .
Another Chinese state investment body — the China Investment Corp, or
CIC — has generated more attention since its launch last year.
On Brown’s visit to China in January, he pitched for the new $200
billion sovereign wealth fund to open an office in London. Darling did
not refer to progress on that front, though Chinese domestic media have
reported that CIC is recruiting staff for a London office.
Darling met Chinese Vice-Premier Wang Qishan, whose portfolio covers
trade and finance.
Wang made no mention of any of the Chinese state investment funds,
focusing his comments on broad economic cooperation.
“We agreed that the two countries should take active steps to oppose
trade and investment protectionism,” he said.
Wang said Beijing invited British banks and financial institutions to
do business in China and, in particular, encouraged them to venture into
the country’s poorer central, western and rural regions.