Flush with cash despite the global economic downturn, China’s sovereign wealth fund quietly snapped up more than $9 billion worth of shares last year in some of the biggest American corporations, including Morgan Stanley, Bank of America and Citigroup.
Although most of the stakes were small, China Investment Corp., the government’s $300 billion investment fund, now owns stock in some of the best-known American brands, including Apple, Coca-Cola, Johnson & Johnson, Motorola and Visa, David Barboza and Keith Bradsher report in The New York Times.
The detailed list, which contained holdings totaling $9.6 billion as of Dec. 31, was disclosed Friday in a filing with the U.S. Securities and Exchange Commission; it lists stakes only in companies traded in the United States.
The filing offers a glimpse of how China is trying to diversify its more than $2 trillion in foreign currency holdings with stock, rather than investing almost entirely in U.S. Treasury bonds and other debt securities issued by governments and by government-sponsored enterprises like Fannie Mae.
Prime Minister Wen Jiabao of China and other officials have repeatedly expressed worry about how the country’s holdings of U.S. Treasury securities could be hurt by inflation or by mounting U.S. debt. By buying the securities of international companies, China is trying to spread its fast-growing wealth more widely. It is also seeking to acquire strategic stakes in companies that could feed its hungry economy with a wide range of commodities.
From NYT Buying Spree Nets China Stakes in Top U.S. Firms
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