Only when it involves money. The Communist Chinese government is looking for Western capitalists to run part of its $200 billion China Investment Corporation assets.
One analyst told MarketWatch that this was the largest amount of incremental money to come into the capital management business in recent memory.
The news speaks to an odd problem withing China, one that is probably born from the country’s desire to control its capital markets as tightly as possible. Across a nation of over 1.4 billion people there are not enough skilled money manager to run the country’s vast pool of capital accumulated due to its huge trade surplus.
Imagine if the US government said it would turn to China to manage the money in the Treasury.
The amount of money available to Western institutions is huge. Even with a modest fee structure, managing China funds could be worth $4 billion a year. If there are milestones for performance, the number could go over $10 billion.
China may be a economic powerhouse and growth in its GDP and trade balance may continue to drive up the amount of capital the government controls. But, the county cannot find a few thousand people within its own borders to manage all that cash.
Douglas A. McIntyre
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