OECD Head Says Sovereign Wealth Curbs Unneeded, No Political Moves Seen.
The head of the Organization for Economic Cooperation and Development said Tuesday there is no need to restrict investments by government funds so long as they are motivated by profit, not politics.
The OECD, a 30-nation group of the richest economies, has found no evidence that sovereign wealth funds have acted to further political agendas, Secretary-General Angel Gurria told reporters.
The rapid growth of such funds run by China and other governments in Asia and the Middle East has stirred concern they might be used to promote official policy and prompted calls for possible investment restrictions.
"There should not be any regulation or code applied that unduly restricts the freedom of investment, because we would be doing ourselves a disservice," Gurria said at a news conference after weekend meetings with Chinese leaders. "Our hosts agree."
China's $200 billion investment fund, created last year, attracted attention in December when it put $5 billion into Morgan Stanley. Wall Street welcomed the infusion of fresh capital after the U.S. subprime mortgage crisis shook many firms.
American lawmakers, though, have sought assurances such funds would not be used to further political goals. European officials say investments by sovereign funds might be restricted if they fail to disclose more information about their strategy and intentions. The OECD includes the United States, most European countries, Japan, South Korea and Australia. China is not a member.
Beijing's fund has tried to allay foreign concern by saying it will buy only minority stakes in companies and avoid sensitive industries such as oil or telecommunications. The fund says it will invest most of its money in China.
Other governments with sovereign wealth funds include Abu Dhabi -- which has the world's largest fund, with $875 billion in assets -- Singapore, South Korea, Russia and Australia. The value of cross-border deals by sovereign wealth funds jumped 65 percent last year to $48.5 billion compared to 2006, according to the financial information firm Dealogic Inc.
Gurria, a former Mexican finance minister, was in Beijing for talks on closer ties between the OECD and China. "We would like it to participate more," Gurria said. "We want to become a more relevant, more global, more pertinent institution, and without these countries, we feel that we do not cover enough ground to be relevant, to be important."
An OECD report in September forecast that China, now the world's fourth-largest economy, will become No. 1 as early as 2015, surpassing Germany, Japan and the United States, the current leader.
The head of the Organization for Economic Cooperation and Development said Tuesday there is no need to restrict investments by government funds so long as they are motivated by profit, not politics.
The OECD, a 30-nation group of the richest economies, has found no evidence that sovereign wealth funds have acted to further political agendas, Secretary-General Angel Gurria told reporters.
The rapid growth of such funds run by China and other governments in Asia and the Middle East has stirred concern they might be used to promote official policy and prompted calls for possible investment restrictions.
"There should not be any regulation or code applied that unduly restricts the freedom of investment, because we would be doing ourselves a disservice," Gurria said at a news conference after weekend meetings with Chinese leaders. "Our hosts agree."
China's $200 billion investment fund, created last year, attracted attention in December when it put $5 billion into Morgan Stanley. Wall Street welcomed the infusion of fresh capital after the U.S. subprime mortgage crisis shook many firms.
American lawmakers, though, have sought assurances such funds would not be used to further political goals. European officials say investments by sovereign funds might be restricted if they fail to disclose more information about their strategy and intentions. The OECD includes the United States, most European countries, Japan, South Korea and Australia. China is not a member.
Beijing's fund has tried to allay foreign concern by saying it will buy only minority stakes in companies and avoid sensitive industries such as oil or telecommunications. The fund says it will invest most of its money in China.
Other governments with sovereign wealth funds include Abu Dhabi -- which has the world's largest fund, with $875 billion in assets -- Singapore, South Korea, Russia and Australia. The value of cross-border deals by sovereign wealth funds jumped 65 percent last year to $48.5 billion compared to 2006, according to the financial information firm Dealogic Inc.
Gurria, a former Mexican finance minister, was in Beijing for talks on closer ties between the OECD and China. "We would like it to participate more," Gurria said. "We want to become a more relevant, more global, more pertinent institution, and without these countries, we feel that we do not cover enough ground to be relevant, to be important."
An OECD report in September forecast that China, now the world's fourth-largest economy, will become No. 1 as early as 2015, surpassing Germany, Japan and the United States, the current leader.
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