Should China spend more capital on the US economy?

Wen Jiabao
via WikipediaThese are challenging times, also for China's corporate and political decisions makers, as they see possibly interesting items passing by from the ongoing global financial fire-sales. While China has officially expanding globally high on its political agenda, most of its international investments have turned bad very fast.
The latest problems developed last week when the insurance company Ping'an wrote off 15.7 billion renminbi on its investment in the Dutch-Belgium bank-insurer Fortis and was only lucky because its Beijing regulators had been very slow in approving a huge expansion of its Fortis' participation.
China still has one trillion US dollar in its coffers from supporting the US economy over the past few decades. Now, newswire IPS and others report, the international investment community hopes China is going to use those resources before they are useless for - yes again - another round of support of the US economy by the Chinese.
Premier Wen Jiabao was - not surprisingly - little forthcoming, reports IPS:

Premier Wen Jiabao summed up China's cautious position: maintaining "steady and fast growth" is the "biggest contribution" China can make to help the world overcome the current financial crisis stemming from the United States, he said during an inspection tour of Chinese provinces this week.

Chinese bank officials have dismissed as groundless reports that China plans to buy up to US$200 billion worth of US Treasuries to help Washington combat the deepening financial crisis. In a statement published on the central bank's website this week, governor Zhou Xiaochuan said the bank views a "stable currency and job creation" as priorities in the current situation.

And right they are: the economic textbooks suggest this is the best moment to buy assets and shares in companies that have gone down dramatically, but I would also pass on the honor.

Commercial
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