Now China’s sovereign wealth fund cutting off further investment in the U.S, they already lost $2.46 billion, or 82 percent of their investment in The Blackstone Group.
China is now only interested in saving itself AND it has the financial muscle to do it. That’s exactly what Lou Jiwei, the chairman and chief executive of the China Investment Corporation, said today at the Clinton Global Initiative conference. “China can only save herself.” This is why the $200 billion China had earmarked for overseas investments will now be plowed back into China Banks… and why the nation also plans to spend another $586 billion on new highways and railroads. That’s why their pulling back from the world market and investing domestically. They will profit not only from internal economic growth but also from currency appreciation and domestic spending as well. As Obama economic advisor, Laura Tyson, put it, “It’s going to accelerate the move of economic power to Asia.”
Unlike the U.S. banking system, the Chinese banking system is much safer—with none of the exposure to the subprime mess. The Chinese banking system is dominated by four big state-owned banks—banks that can write a check anytime they want—and without Congressional approval! And with $1.4 trillion in cash sitting in their banks, there’s no liquid crisis in China. The Chinese government can write a check anytime they want and that’s exactly what they’re going to do investing domestically.
A recent report by McKinsey Global Institute will tell you the same thing:
“In 20 years, China’s cities will have added 350 million people—more than the entire population of the United States today.”
“By 2025, China will have 221 cities with more than one million inhabitants—compared with 35 in Europe today—and 24 cities with more than five million people.”
“By 2030, 1 billion people will live in China’s cities…170 mass-transit systems could be built…40 billion of square meters of floor space will be built in five million buildings—50,000 of which could be skyscrapers.”
China will transform itself from a nation of farmers to a nation of urban dwellers, the equivalent of 10 New York cities will need to be built. Its standard of living is on the rise. And its people are spending like there’s no tomorrow: buying into a much richer lifestyle, filled with cell phones, big-screen TVs, and cars
By the year 2025 China will have 221 cities with more than one million people living in them, China’s newfound consumer class will enter the marketplace and replace the American consumer as the supreme driver of world growth.