For the first time, China Investment Corp., the country’s sovereign wealth fund, has filed a Form 13F with the US Securities and Exchange Commission listing details of its investments in companies traded on US exchanges. With a couple of exceptions, the investments are small and pose no immediate threat of an attempted takeover.

But CIC does sit on a pile of cash, about $300 billion, of which it has spent $9.6 billion on buying shares of US companies like Apple (AAPL), Chesapeake Energy (CHK), Coca Cola (KO), Johnson & Johnson (JNJ), and News Corp. (NWS). None of these stakes is very large, amounting to less than $10 million in every case.

CIC does have larger stakes in two financial firms, though. It reports that it owns more than 3 million common shares of BlackRock Inc. (BLK) and 59 million common shares of Morgan Stanley (MS). These shares are in addition to investments that CIC made in the two companies in 2007 and 2008. BlackRock took $3 billion for a non-voting stake and Morgan Stanley gave up a 9.9% stake for about $5 billion. Neither of these investments is listed in CIC’s filing, most likely because the equities are not traded.

From China’s point of view these investments are diversifying the country’s portfolio. China does not want to continue to buy primarily US Treasuries, putting all its eggs into a single investment basket. That’s a standard, and usually benign, investment strategy.

But this is a foreign government’s money that is buying up US equities. Shouldn’t the US government do something about this?

Well, probably no, the US government should keep its hands off for now. There is a standing committee, the Committee on Foreign Investment in the United States (CFIUS), that was established by Executive Order in 1975 for “monitoring the impact of foreign investment in the United States, both direct and portfolio, and for coordinating the implementation of United States policy on such investment.” Just the possibility that CFIUS would meet and question a couple of foreign bids for US companies caused the foreign investors to pull out.

When CNOOC Ltd (CEO) bid for Unocal in 2006, the public outcry forced CNOOC to withdraw. Likewise, when Dubai Ports World made an offer to operate US ports, public opposition again forced the company to withdraw. Americans, apparently, don’t want foreign control of their assets.

That’s an  attitude when it can be backed up with dollars. But China’s strength as an exporter has delivered a current account surplus to the country on the order of $2 trillion. The Chinese government would have to be nuts to keep every dime of that in US Treasuries.

US firms will certainly welcome the investments, as long as the Chinese are no threat to take over the company or to take an active role in its governance. Right now, the CIC is a passive and welcome investor, but that could change if their stakes in US companies grow.

Douglas A. McIntyre

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