China's Sovereign Wealth Funds Gaining Credibility and Traction

BEIJING -- China is seeking more-productive ways to deploy the $3.2 trillion it holds in foreign exchange reserves and other national wealth, including rapid expansion of its sovereign wealth management vehicles. With Western investors on the back foot in the past year, Chinese funds have notably expanded their ownership of high-profile strategic overseas assets. While large-scale Chinese foreign investment is seen by many as a cause for geopolitical concern, these entities are becoming increasingly sophisticated and credible, representing one of the most viable mechanisms for restoring balance to global trade and investment flows.

Asian sovereign wealth funds (SWFs) have accrued an impressive range of strategic assets, increasingly diverse by location and type, and are steadily establishing a solid track record and enhancing their credibility as international investors. With developed markets still mired in a debt crisis, cash-rich Asian SWFs find themselves presented with an unprecedented window of access to high-quality developed market assets. Led by the Chinese, they strongly intend to take advantage of the opportunity. ...