Temasek exec: Investors may face China nationalism
Updated: 2007-05-11 10:42
NEW YORK - Nationalism is on the rise in China, which could potentially hamper efforts by foreign investors looking to latch on to the Asian growth juggernaut, said a senior manager at Temasek Holdings on Thursday.
"There are more concerns these days about foreign investments," said Frank Tang, senior managing director of China investment at the Singapore state-owned investment firm, in a speech organized by Columbia University's business school.
"I don't think in the near term this issue will go away, frankly," he said.
In particular, some policy-makers and business owners are concerned about China's economic security and whether the rapidly growing economy's fixed assets are being purchased at a discount by investors looking to scoop up newly privatized companies and resell them.
Nevertheless, Tang, who before joining Temasek worked at Goldman Sachs' private equity business, said foreign private equity investors have shown "tremendous interest" in China in the last few years, adding that the world's fourth largest economy is big enough now to deal with the onslaught of private equity capital.
Emerging Asia has become a big focus for Temasek, which manages $80 billion in assets. In the last year, Temasek has increased its allocation of assets from Asia outside of Japan to 34 percent from 19 percent. It has also doubled its exposure to the Chinese mainland, Taiwan and Korea.
Tang said that Temasek has $1 billion invested in Chinese mainland's non-banking sector and is bullish on the transportation, retail, natural resources and real estate sectors.
"It's no longer about low-cost manufacturing," said Tang, who believes Chinese mainland is moving from an export-oriented economy to becoming more consumer-oriented with stable growth.
"The biggest bet for us is a macro-economic bet," he said.
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