China Hits Out at Rising Global Protectionism
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China’s top trade and investment officials have lambasted what they call a rising tide of global protectionism, threatening that it would not invest its massive wealth of $482 billion in countries “that do not welcome us”.
Speaking at the sidelines of the Communist Party Congress in Beijing, Chinese officials warned that protectionism is on the rise on a global scale, not limited only to the epicentres of the economic slowdown.
China’s top trade and investment officials have lambasted what they call a rising tide of global protectionism, threatening that it would not invest its massive wealth of $482 billion in countries “that do not welcome us”.
Speaking at the sidelines of the Communist Party Congress in Beijing, Chinese officials warned that protectionism is on the rise on a global scale, not limited only to the epicentres of the economic slowdown.
Responding to questions from reporters, state officials as well as executives from some of China’s largest state-owned enterprises, agreed that protectionism should be curbed as it only seeks to damage global growth and damage trade and bilateral relations.
Lou Jiwei, chairman and CEO of China Investment Corporation told Reuters that a rise in protectionism was “forcing a rethink at the country’s $482 billion sovereign wealth fund, which would not spend money in countries ‘that do not welcome us’.”
Lou said:
[quote] There are other places to invest. [/quote]
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In a separate interview with Reuters last week, Lou said he noticed a “rise in protectionism in trade and investment in some Western countries”, without providing any specific details.
“As compared to other financial investors we feel that the scrutiny on us is a little stricter, because of issues like national security,” Lou said, adding that while not a major issue yet, he detected rising concern among foreign regulators when CIC partnered with Chinese firms to make acquisitions.
[quote] China’s money will instead be spent in Asia, Lou said, in twin bids to beat a rise in protectionism in the West as well as boost the fund’s exposure to rapid growth in regional markets. [/quote]
Beijing’s apparent sensitivity comes after a US Congressional panel warned in October that Chinese telecom firms Huawei and ZTE – among the world’s biggest makers of networking equipment – posed a national security threat to the US and should be barred from any US mergers and acquisitions.
Officials from Huawei and ZTE have denied the accusations, insisting that its equipment met all US regulatory standards and is not a spy threat.
Analysts estimate China could spend $2 trillion globally on foreign direct investment in the next 10 years, an appealing proposition for many of the world’s top economies struggling for growth and employment opportunities – but a risk as well for politicians who see government-backed entities on the hunt for strategic assets.
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