Central bank purchases of traditional reserve assets still dwarf sovereign wealth fund purchases of riskier assets -- as well as central bank purchases of equities. But over time, it is reasonable to expect that many over-reserved sovereigns will diversify their portfolios. The recent decision to increase the share of the CIC's initial $205-210 billion in capital that it can invest abroad and SAFE's increased willingness to purchase equities as well as bonds are examples.
A far more challenging issue is how the huge increase in financial assets managed by potentially non-economic agents will affect the efficiency of the global capital market and the allocation of risk and resources. ….
And then there is China. China enormous foreign asset growth in the first quarter implies that it might be able to add more to its reserves and sovereign fund in 2008 than all the oil-exporters combined even if oil stays at its current levels.
China consequently has an enormous latent capacity to alter the composition of global capital flows by changing the composition of its portfolio:
The offsetting risk is that state owners of assets will in some sense abuse their ownership rights, and use their rights to promote “state” objectives.
Qatar’s advertising in Forbes says as much: the QIA's evaluation criteria include “added value to the State of Qatar" such as "economic synergies or benefits for Qatar and its people." Mubadala has made a string of investments (Ferrari, the “National”) designed to elevate the profile of Abu Dhabi.
China’s fund, like Singapore’s fund, reports directly to the top levels of China’s state. It has yet to build up enough of a track record to show how it will be used. However, China’s management of its state stakes in domestic industries suggests the need for some caution. One example: Three of China's four large state commercial banks have been listed, but they still aren’t managed in a fully commercial manner.
The Peterson Institute’s Ted Truman recently updated his “sovereign wealth fund scorecard.” His impressive and detailed work is worth reading carefully.
Truman’s latest scorecard illustrates how the practices of many large existing sovereign funds – particularly those originating in non-democratic countries – differ from the practices of US state pension funds as well as Norway's government fund.
Kjaer’s framing implicitly raises a third issue, one that I don’t think has gotten enough attention. The surge in sovereign investment in safe government bonds that accompanied the surge in global reserve growth likely contributed to a “bond market bubble” – one that pushed down the real yields on government bonds in both the US. That contributed to a host of additional market distortions, as private investors scrambled to find higher returns.
Under rules of public financing, a candidate has access to $85 million from a taxpayer-financed fund for the general election, a substantial amount to spend for the roughly two months after this year’s conventions. But this election cycle has shattered fund-raising and spending records and upended expectations.
The setting, which has the feel of an Internet start-up, is emblematic of how Mr. Obama, of Illinois, has been able to raise so much money.
Mrs. Clinton’s operation has also been pushing to improve its efforts online, with her campaign saying Tuesday that it brought in $15 million over the Internet in February, with donations jumping after news broke that she had lent $5 million to her campaign.
“I know you just made a donation, but we are about to enter the most decisive period of the campaign,” he said, signing his name at the end, “Thank you, Barack.”
It would be a good strapline for the 60 Minute interview with Gao Xiqing, president of the Chinese Investment Corporation. Give the man a PhD in giving reasonable responses under hysterically motivated questioning.
He points out that to withdraw funds for political reasons would hurt everyone: the fund, the Chinese government, the US, the company concerned. It’s therefore highly unlikely to happen. In other words, the business and investment ties between the two countries could help to dissipate and moderate political spats rather than exacerbate or be used as a weapon in them.
The most interesting thesis is the idea that China could use international law as a weapon, or “lawfare” for short. The authors argue that citizens of democracies increasingly demand that their countries uphold international rules, particularly ones that govern human rights and the conduct of war. Governments are, therefore, constrained by regional or worldwide organizations, such as the European Union, ASEAN, the International Monetary Fund, the World Bank, the WTO and the United Nations. The authors argue that China should copy the European model of using international law to pin down the USA: “there are far-sighted big powers which have clearly already begun to borrow the power of supra-national, multinational, and non-state players to redouble and expand their own influence.” They think that China could turn the United Nations and regional organizations into an amplifier of the Chinese worldview – discouraging the USA from using its might in campaigns like the Iraq War.
Beijing has been willing to allow the Organization of Islamic States to take the lead in weakening the new Human Rights Council. This subtle diplomacy has been devastatingly effective – contributing to a massive fall in US influence: in 1995 the USA won 50.6 percent of the votes in the United Nations general assembly; by 2006, the figure had fallen to just 23.6 percent. On human rights, the results are even more dramatic: China’s win-rate has rocketed from 43 percent to 82 percent, while the USA’s has tumbled from 57 per cent to 22 percent. The New York Times’ UN correspondent James Traub has detected a paradigm shift in the United Nations’ operations: “it’s a truism that the Security Council can function only insofar as the United States lets it. The adage may soon be applied to China as well.” Traub may be right. China’s capacity to influence the United Nations is increasing, and soon we may be complaining about Chinese behavior on big policy issues
The games have been billed as China's "coming out party" to the world. They are far more significant than that. These Olympics are the coming out party for a disturbingly efficient way of organizing society, one that China has perfected over the past three decades, and is finally ready to show off. It is a potent hybrid of the most powerful political tools of authoritarianism communism -- central planning, merciless repression, constant surveillance -- harnessed to advance the goals of global capitalism. Some call it "authoritarian capitalism," others "market Stalinism," personally I prefer "McCommunism."
By next year, the Chinese internal security market is set to be worth $33-billion. Several of the larger Chinese players in the field have recently taken their stocks public on U.S. exchanges, hoping to cash in the fact that, in volatile times, security and defense stocks are seen as the safe bets. China Information Security Technology, for instance, is now listed on the NASDAQ and China Security and Surveillance is on the NYSE. A small clique of U.S. hedge funds has been floating these ventures, investing more than $150-million in the past two years. The returns have been striking. Between October 2006 and October 2007, China Security and Surveillance's stock went up 306 percent.
Ever since the 1989 Tiananmen Square Massacre, U.S. companies have been barred from selling police equipment and technology to China, since lawmakers feared it would be directed, once again, at peaceful demonstrators. That law has been completely disregarded in the lead up to the Olympics, when, in the name of safety for athletes and VIPs (including George W. Bush), no new toy has been denied the Chinese state.
Q: Is China an ally or an adversary?A: They're neither. The fact of the matter is, though, they hold the mortgage on our house. This administration, in order to fund a war that shouldn't be being fought and tax cuts that weren't needed
for the wealthy--we're now in debt almost a trillion dollars to China. We better end that war, cut those taxes, reduce the deficit and make sure that they no longer own the mortgage on our home.
How would you balance human rights and trade with China? A:
I've been pushing, on the Foreign Relations Committee for the last seven years, that we hold China accountable at the United Nations. At the UN, we won't even designate China as a violator of human rights. Now, what's the deal there?
We talk about competition in terms of trade. It's capitulation, not competition. Name me another country in the world that we would allow to conduct themselves the way China has, and not call them on the carpet at the UNQ: So you would call them on th
carpet?A: Absolutely. Q: You would appoint a UN ambassador who would press for this?A: It's the one way to get China to reform. You can't close your eyes. You can't pretend. It is self-defeating. It's a Hobson's choice we're giving people here.
Here was a report that really delivered a blow to the BBC’s solar plexus. Peacock began to foresee the possibility of digital diversity on an unimagined scale, it also put forward the ideas of a consumer-led, market driven broadcasting world, one in which the very principles of a licence fee funded public service broadcasting system would naturally be seen as obsolete. This suited the tenor of the times: deregulation, privatisation and a rigorous dismantling of the frontiers of the state – it was happening in the city and in industry and the utilities, why not broadcasting? The BBC, long seen as harbouring tendencies and personnel that were socialistic at best, Marxist at worst, was suddenly no longer a secure and unassailable acropolis. It was no secret that Norman Tebbit and some of the more fundamentalist free-marketeers and red-baiters of the administration would have been very happy indeed to dismantle the entire structure of the BBC. Peacock prevaricated and the charter appeared safe, but at a great price. Nothing would ever be the same again, the old certainties were dead and the harsh realities of capitalism arrived at Wood Lane and Portland Place. Whole departments were razed and working practices abolished, and something called an internal market was put in place. Radio Times was outsourced, the permanent make-up staff went, engineers, editors and set-designers were suddenly out of a job. Twenty-five percent of the BBC’s output was commanded to be produced from outside sources and a whole new independent sector was born. Companies like Hat Trick and Talk Back achieved almost instant success.
I’m getting a distinct sense that the entrepreneurs here in the U.K. are so dependent on public sector funding that commercial applicability suffers. All of the pitches I’ve seen seem to suffer from this.
What
is occurring is the meltdown of the biggest pyramid game in human
history.
The right course of action is for
the US government to establish a Resolution Trust Corporation to take
over failing financial institutions, including hedge funds and private
equity firms, and leave the Fed to tackle inflation. But a Republican
administration could not go to a Democratic Congress for money to
capitalise such a corporation. It could not justify spending US$1
trillion to bail out those who deceived investors around the world and
destroyed the finest financial institutions in America for their own
gains. Instead, the Fed will be called on to save the financial system,
boost the economy and suppress inflation at the same time.
When a small campaign becomes a permanent organization, there are often difficulties in scaling. A small group can communicate with supporters through a Google Group, but what if you have multiple constituencies or you want to record information about your supporters that will help you communicate with them effectively? Wouldn’t you like to manage your “relationships” better? Or, be more efficient in sending out appeals and updates? Tap the right quarters when it comes to fund-raising? Know exactly who your potential supporters could be?
It also notes that CiviCRM is also used by many other large NGOs such as Amnesty International, Creative Commons and the Wikimedia
Foundation for their fundraising. And there have been also cases of very large record sets being used with one company claiming to have set up CiviCRM with a set of over 3 million constituents .
What can Facebook and Western social networks learn, if anything?
If monetizing a social network is so easy, then why hasn’t Facebook opened up its payment API to third party developers? While the aggressive and intrusive hyper-viral aspects of the apps in China may not be replicable in a Western Market, the problems for creating a more viable business model run deeper. Western companies cannot innovate in the same way due to institutional problems stemming from their own struggle for an identity and revenue.
Facebook has just recently announced a “credits” system, but it seems to miss the mark. The new system demonstrates little incentive for users to shell over money, and does not speak to the same need as paying for a social application that all your friends are already on and talking about. Facebook may be afraid to become a marketplace for applications, because they are reluctant to be labeled as a social gaming network or a social app store. Instead, they are a self-styled guru of dynamic human interaction. If they opened up their platform to become an apps store, their major revenue streams would put them into a pigeonhole, calling their $15 billion valuation into question. They obviously don’t want to be labeled as a “gaming platform” either, and don’t want to fully depend on selling digital trinkets.
Like during the American gold rush in 1849, where Chinese merchants prospered while most prospectors went bust in search of striking gold, it appears that building viable, scalable businesses for Social Networking sites may still be an ancient Chinese secret for Westerners.
中国外储投资对于世界资本市场的终极影响
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