LONDON (Reuters) - China is keen to invest in the ailing infrastructure of Western countries, especially Britain, the chairman and chief executive of the Asian country’s sovereign wealth fund wrote in the Financial Times.
“Now, infrastructure in Europe and the U.S. badly needs more investment,” China Investment Corporation’s (CIC) Lou Jiwei wrote in an op ed piece.
He said while China had traditionally confined itself to the role of contractor in overseas infrastructure projects, the country’s investors now saw a need to invest in, develop and operate such projects.
“In a sign of this determination, the China Investment Corporation ... is now keen to team up with fund managers or participate in public-private-partnerships (PPP) in the UK infrastructure sector as an equity investor,” Lou wrote.
“CIC believes that such an investment, guided by commercial principles, offers the chance of a ‘win-win’ solution for all.”
Local co-investors need to provide local knowledge for infrastructure projects while the government must encourage domestic players to head them, Lou wrote.
He proposed PPP arrangements for infrastructure projects whereby governments invest with local or overseas institutional investors to share the risks and returns.
Lou said long-term investment in infrastructure was inadequate and emphasised the need for governments to implement pro-investment policies such as making fiscal adjustments, lowering taxes and offering bank loans at discounted rates.
“These measures will generate demand for equipment manufacturing, put more people on the payroll and cut back on unemployment benefit spending,” he wrote.
Writing by Michelle Martin; Editing by Dale Hudson