In recent years, Western governments have voiced concerns about Asian governments’ vast sovereign wealth funds (SWFs) investing in Western companies. Some called this "investment protectionism"
But as Western banks faced collapse, they were delighted to receive capital injections from Asian SWFs – and Western governments didn’t object. In a crisis, needs must.
Now, though, Asia’s SWFs are having second thoughts.
China Investment Corp, the country’s sovereign wealth fund, will no
longer risk investing in western financial institutions because of
concerns about their viability and a lack of consistency in their
governments’ policies, according to its chairman.
“Right now we
don’t have the courage to invest in financial institutions because we
don’t know what problems we will put ourselves into,” Lou Jiwei said.
Perhaps Western governments will realise that the only thing worse than receiving investment from Asia’s sovereign-wealth funds is being denied it.