China Investment Corp., the world’s fifth-largest sovereign wealth fund, is treated differently than other investors by U.S. regulators, the company’s president said in Washington.
CIC faces challenges in the U.S. and is “singled out as a different investor,” CIC President Gao Xiqing said yesterday at a conference after meetings with officials in the U.S. capital.
“We thought we were friends,” Gao said. “All of the sudden, you’ve got people slapping you in the face and telling you, OK, we don’t like you.”
While Gao didn’t name specific investments or cite examples that have run into regulatory trouble, he urged for more dialog between the world’s two largest economies, echoing U.S. investors who are calling for regular discussions that would help boost investment.
U.S. Treasury Secretary Jack Lew chose China for his first foreign trip earlier this year and pressed Chinese Premier Li Keqiang and President Xi Jinping on cyberespionage and exchange- rate issues.
Gao, who helps oversee a fund with about $482 billion in assets under management, said he gets questions about whether China will follow American regulators in tightening control of markets after the 2008 financial crisis.
“Our government had always been that way. Since when? I said, well, since about 3,000 years ago. We always controlled, we always distrusted the market,” Gao said. The “market is like a little boy, it needs to be disciplined. Now, for the regulators here to do it that way, of course it’s a challenge for them.”
Turning to China, Gao said he’s optimistic the new government and the economy are heading in “a much better direction.”
China’s economy unexpectedly weakened in the first quarter, growing 7.7 percent, below analysts’ forecast and slower than in the fourth quarter.
The world’s second-largest economy is still expanding faster than most other major countries. The nation’s gross domestic product will probably grow 8.1 percent this year, while U.S. GDP increases at a 2 percent rate and the euro area shrinks 0.4 percent, according to economist estimates compiled by Bloomberg.
Gao said he expects the new government will reverse “the trend of major state enterprises becoming stronger.”
To contact the reporter on this story: Kasia Klimasinska in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: David Scanlan at email@example.com