The best that China can do for their future interests is to diversify the investment of their vast foreign reserves.
Most particularly, their future needs for raw materials and the increasing price of these means that they would be well advised to invest in these and, rather than buying up vast supplies of these, the best way to do this is to invest in resource companies, either as shareholders or as partners.
They should be buying up all the world´s major mineral and resources companies which, apart from securing minerals in the ground, will be securing businesses providing a returns on their investments.
This activity may not be welcome by others, but it is the best strategic approach for China.
Onésimo Alvarez-Moro
See article:
Analysts split over what impact Beijing's $300 billion investment arm could have on world markets.
By Chris Zappone, CNNMoney.com staff writer
The Chinese government's investment agency, being formed to invest a portion of China's staggering $1.07 trillion in foreign exchange reserves, will reportedly have enough money in it to buy a company the size of Wal-Mart or Citigroup outright.
While no one expects the agency to pursue such a target, the reported $200 to $300 billion in funds to be available give a sense of the investment vehicle's size.
Data provider Private Equity Intelligence forecasts $450 to 500 billion will be raised this year. China's agency, expected to be functioning by the end of the year, could increase that amount 60 percent.
"That amount represents the single-largest pool of cash that any government has thrown at anything, ever," according to Stratfor, a geopolitical intelligence service. "Adjusted for inflation, the United States' largest effort, the Marshall Plan, comes in at just over $100 billion."
See full Article.
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