China Wealth Fund Wants To Turn Treasuries to U.S. Infrastructure
Jan. 16, 2017 (EIRNS)—In a speech to the Asia Financial Forum in Hong Kong today, China Investment Corporation chairman Ding Xuedong said that CIC wants to change its holdings of U.S. Treasury debt, into an investment in building of new infrastructure in the United States. Ding’s speech was reported in the South China Morning Post, Reuters, and other media.
Ding’s estimate of the investment needed to build a new and modern economic infrastructure in America was a very large $8 trillion, which, he said, would not be invested by the U.S. government and private investors alone. "According to our estimate, the United States needs at least $8 trillion in infrastructure investment; there’s not sufficient capital from the U.S. government or private sector. It has to rely on foreign investments."
Ding said the CIC also wants to invest in American manufacturing capacity.
The vehicle CIC is seeking, in fact, does not yet exist; it would be a "Hamiltonian" national credit institution for infrastructure and manufacturing investments, as specified in EIR Founding Editor Lyndon LaRouche’s "Four Laws To Save the United States Economy" in 2014.
CIC now holds $50 billion in U.S. Treasuries, a part of $1.14 trillion in Treasuries held by Chinese institutions. Ding called the return on those Treasuries too low, and said "the returns in public markets are falling." CIC wants alternatives, and wants to convert those holdings into investments in new U.S. infrastructure projects. Ding is also chairman of the China International Capital Corporation, which has substantial U.S. Treasury holdings as well.
Ding called the Chinese and U.S. economies "complementary" in this respect.