China’s sovereign wealth fund to stop buying European bonds10 May, 2012, 16:04. Posted by Zarathustra
Tags: Euro Crisis
Here, I have argued that Europe should not be hoping for a bailout from China.
Also, some stock-flow consistent modelling suggests that diversification of China’s foreign exchange reserve from US dollar denominated assets to Euro denominated assets will be bad for Eurozone economy.
So Chinese sovereign wealth fund has stopped buying government bonds anyway.
That is according to Bloomberg:
Gao Xiqing, president of China Investment Corp., said the nation’s sovereign wealth fund has stopped buying European government debt on concerns about the region’s financial turmoil.
CIC will continue to look for new investments in Europe as part of its strategy to boost allocations to infrastructure, private-equity assets as well as emerging markets to help boost returns, Gao said. CIC, with an estimated $440 billion in assets, is the world’s fifth-largest country fund, according to Sovereign Wealth Fund Institute.
“What is happening in Europe right now is of course of concern,” Gao said in an interview in Addis Ababa, Ethiopia, during the World Economic Forum on Africa. “We still have our people looking at opportunities in Europe, even though we don’t want to buy any government bonds.”
And why do they stop buying European government bonds? As a reminder, they think some Europeans are lazy.