China sees another opportunity
Dubai’s debt crisis could provide China an opportunity to snap up oil and gold assets to diversify its foreign exchange investments, state-run press quoted a senior official as saying on Monday.business Updated: Nov 30, 2009 23:14 IST
Dubai’s debt crisis could provide China an opportunity to snap up oil and gold assets to diversify its foreign exchange investments, state-run press quoted a senior official as saying on Monday.
“This may give China an investment opportunity to use part of its foreign reserves to buy gold and oil reserves,” said Ji Xiaonan, head of the supervisory board of the state-owned Assets Supervision and Administration Commission.
Ji’s comments appeared in the Economic Information Daily. Global gold and oil prices were hit last week after a shock request by the government in Dubai that its creditors delay repayment of the massive debts at flagship conglomerate Dubai World.
China’s forex reserves, the world’s largest, stood at $2.27 trillion at the end of September, much of it invested in US dollar assets such as safe but low-yielding US Treasury bonds.
But there have been calls from some officials and economists to invest the reserves in natural resources and gold in order to diversify and hedge against the weakness in the dollar.
Chinese companies have been pouring money into oil and other raw materials overseas, such as in Africa, to fuel the needs of its expanding economy.
‘It’s not to impact India’s growth’
The Dubai financial crisis will not impact India’s high economic growth as the country’s exposure to the debt-ridden Dubai World is limited, said Planning Commission Deputy Chairman Montek Singh Ahluwalia. “My understanding is that India’s exposure to Dubai World is very low... I don't think that India’s high growth would be affected by Dubai crisis”, he told reporters here. However, in case the impact of the crisis is big, Ahluwalia added, “it may have some impact on us.