CBS: In an exclusive interview with Lesley Stahl for “60 Minutes,” the head of China’s new sovereign wealth fund, Gao Xiqing, pledges more transparency to allay fears that China will try to use its vast investment ability to exert economic or political control in the United States.
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Nicolas Véron and Jakob von Weizsäcker: We find that investments by Sovereign Wealth Funds (SWFs) are not a danger but a plus for developed countries. The growth prospects will tame SWFs for the time being.
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Robert M. Kimmitt:, U.S. Deputy Secretary of the Treasury, applauded Germany’s efforts at forging transatlantic economic bonds during a media breakfast hosted by the Atlantic Initiative in conjunction with the DGAP and Bohnen Kallmorgen & Partner. Kimmitt’s stop in Berlin was part of an extended trip through European capitals aimed at promoting common transatlantic policies towards financial and economic issues.
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Asia’s role in the financial crisis shouldn’t be underestimated. ++ Endless liquidity coupled with cheap goods fueled America’s “buy-now pay-later consumption,” inflating the housing bubble in the process. ++ The overextension is as much a story of “Asian prudence” as it is of “US recklessness;” Meanwhile, China and others grew at astounding clips. ++ While there has been a relative shift of
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Foreign direct investment by sovereign wealth funds from oil-producing and Pacific Rim nations has many Americans worried about the impact on financial markets. ++ However, the lack of transparency poses a greater problem for the country of origin than the host. ++ Of greater concern for the US are the political ramifications. ++ Large assets in autocratic regimes undermine democratization and
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An increasing number
of governments are becoming global economic players - and this in the form of
state-controlled companies or gigantic sovereign wealth funds. The global
economy used to be dominated by the democratic West but the states that are now
gaining influence are primarily authoritarian nations. This shift towards a new
balance of power however does not necessarily indicate the
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The growth of Sovereign Wealth Funds requires vigilance to “ensure they continue to be the positive force in the global macro-economy that they have been.” ++ Greater transparency rather than investment protectionism is needed. ++ Robert Kimmitt made these comments at a panel discussion of the Brussels Forum organized by the German Marshall Fund of the United States.
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Anders Åslund of the Peterson Institute for International Economics argues that citizens of paternalistic regimes stand to lose most from Sovereign Wealth Funds (SWF).
Even though by 2015, assets accumulated by SWF will equal the size of the entire U.S. economy, they are nothing for Americans or Europeans to fear. SWF are usually only developed by authoritarian regimes, not by democratic ones.
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