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Why China Should Invest
in U.S. Real Estate and Other Sectors

Even
with the financial turmoil the rest of the world is facing, China Investment
Corp (CIC) still has its $200 billion sovereign wealth fund intact.
Fortunately, it will be put to great use -- to build up the global economy. Why
would China do such a thing though? Are they just great Samaritans? Well, if
you look deeper, you will see that China has been deeply effected by the
financial crisis more than one may believe. Since financial woes are on a
global scale, it has caused a downturn in growth production for China and the
rest of Asia, which has been integrated with the global economy for the past
decade.

Being
that manufacturing demands have lowered, so has Asia’s revenue. This eventually
lead to even more problems for the country, including job security issues,
downing of the country’s GDP, slowed industrial markets and enterprise
complications. By China investing in U.S. real estate in the various sectors
around the globe, it will help to stabilize the market and relieve a lot of the
financial stress we are facing. It would also benefit China because in the
future, when the economy balances out again, they will be able to sell the
properties, they bought at great bargains, at double or triple the cost they
were acquired for. It’s a win-win for everyone. China is already looking to
invest $2 billion in the U.S. real estate market. It will be used to buy
taxpayer subsidized investment funds that have developed harmful
mortgage-backed securities from banks around the nation. The CIC believes that
acquiring these assets will be a lot safer than purchasing into the U.S.
Federal Reserve’s Term Asset-Backed Securities Loan Facility (TALF).

Rumors
suggest that CIC will also be investing in other major countries like the U.K.
and Middle East. They are also being urged to invest in Africa’s manufacturing
sector. So far, China has mainly invested in Africa’s services sector. There
are various Chinese companies in regions like Zambia. When the mines there were
about to be closed by other companies, China came in and kept them operational.
It seems that China has long-term plans for partnership with Africa.

The
more sectors China invests in, the better the countries become financially and
the greater China will become after they reap what they sowed from helping out
these falling markets. Now, only time will tell.

Robin
Trehan is partner at Credit Capital Funding. He can be reached at www.creditcapitalfunding.com or www.businesscreditfunding.com