At the Reuters Tech Summit, Trulia chief executive Pete Flint says private equity investors are starting to pull back from buying U.S. real estate, while overseas buyers are coming on strong once again. Video
China fund sees economy meeting growth goal
MEXICO CITY |
MEXICO CITY (Reuters) - China's economy can make its 7.5 percent growth rate target for 2012, and the government will make sure growth does not fall too low, a senior official with China's $480 billion sovereign wealth fund said on Friday.
Jin Liqun, chairman of the supervisory board of the China Investment Corporation (CIC), said China wanted to bring its economy onto a sustainable footing but was not "cavalier" about slowing growth, which has fanned fears about the world's ability to withstand a deeper euro zone crisis.
"The government is intentionally bringing down the growth rate, from 8 percent to 7.5 percent as a target, and I think we can achieve 7.5 percent for 2012," he told Reuters on the sidelines of an international sovereign wealth fund meeting in Mexico City.
A string of downbeat data has prompted economists to steadily cut their 2012 growth forecasts to converge with Beijing's 7.5 percent goal, which would be the worst in at least 13 years. Predictions for a recovery have also been pushed out from the first quarter to the fourth.
Jin, a former vice finance minister of China, said negative effects for China and the rest of the world would be avoided as long as the economy kept growing above 7 percent.
"The government is not taking this cavalierly, the government is doing a lot of things to help sustain the growth of the economy. In my view if the economy can grow at above 7 percent, it's fine," he said, adding that this goal was "no problem" for the next five years.
China has given the green light to 60 infrastructure projects worth more than $150 billion as it looks to energize an economy mired in its worst slowdown in three years. Jin said the latest spending would be effective.
"This is not repetition of the stimulus package in 2008-09, but still it's stimulus," he said.
Jin cautioned, however, that China, the world's biggest importer of goods including soybeans and iron ore, would not continue to have an insatiable demand for raw materials as its economy becomes more sophisticated.
"As China moves up the value chain, eventually when we are entering the post-industrialization stage, the demand for energy would be reduced, the demand of raw material would be reduced," he said, without giving a timeframe.
FUNDS WIELD MUSCLE
Jin also chairs the International Forum of Sovereign Wealth Funds, which groups senior officials from state-owned funds across more than 26 countries and was meeting in Mexico City to discuss the world economic outlook and fund governance issues.
Sovereign wealth funds, which manage countries' windfall revenues for future generations, are estimated to control close to $5 trillion in assets, according to a report by the financial services representative body TheCityUK earlier this year.
The funds have also been knocked by the global crisis: the CIC, one of the world's five biggest sovereign funds, posted a 4.3 percent loss on its global portfolio last year.
Jin said it was not clear yet how the CIC CIC.UL, a vehicle set up by the Chinese government to invest its massive foreign exchange reserves, would perform this year, but noted that on an annualized basis, returns were positive to mid-year.
"I have confidence that we will turn around and achieve greater results next year. I hope that we will do better than last year, but certainly I am waiting for the final figures," he told journalists.
Asked if the CIC would request a new capital injection, he said it was still digesting its last funds transfer and had about $30 billion in credit that still needs to be invested.
According to its last annual report, 43.8 percent of the CIC's global assets were invested in North America at the end of 2011, 29.6 percent in Asia and the Pacific, 20.6 percent in Europe, 4.7 percent in Latin America, and 1.3 percent in Africa.
Fully owned subsidiary Central Huijin has controlling stakes in key Chinese state-owned banks and financial institutions.
Jin, who has said in the past China cannot help heavily indebted euro zone countries by buying their assets without seeing clear solutions to sovereign debt problems, declined to say if he saw euro zone assets as a good buy now.
But he said that the fact that euro zone governments, such as Italy, had approached the CIC seeking purchasers for their bonds showed it was seen as a trusted investment partner.
Funds participating in the meeting had a generally positive impression of the latest moves by the European Central Bank and euro zone governments to support growth, Jin said.
(Editing by Dan Grebler, Leslie Adler, Gary Hill)
- Tweet this
- Share this
- Digg this