While the electioneering U.S. takes China’s and other sovereign wealth fund’s capital but frets about foreigners buying America, the U.K. is courting it. British prime minister Gordon Brown, now visiting Beijing, told his counterpart Wen Jiabao that he would like the China Investment Corp. to set up an office in London as a base from which to invest some of its $200 billion.
True, this is part of London’s continuing battle to one-up New York as the world’s financial capital, but the U.K. has clear attractions for China as an investment front door into the EU. China has an interest in buying into companies with expertise in financial services and with technologies it needs to develop its 20 champion industries. Europe has both, and on the tech side, green technologies in particular. Plus at a time of economic uncertainty, there are companies there going cheap, just as there are in the U.S.
As former Citibank chairman Walter B. Wriston said, capital goes where it is needed, but stays where it is welcome.