This passive approach, combined with developed economy businesses’ desperate thirst for cash, could help sweep away some of the objections to Chinese investment abroad. But Jiwei’s comments about Europe do not necessarily mean the international investor will immediately begin to hunt for bargains in the region, according to the Economist Intelligence Unit.

Large overseas investments could now become less important for the fund because the downturn in exports has made rebalancing China’s capital flows a less urgent task – one that was indirectly served by the CIC’s offshore investments. Amid its internal activity the CIC has moved to invest in less-risky assets. Recently it bought considerable chunks of domestic bank shares. According to China Daily, a state-run newspaper, the CIC holds equity stakes of US$22.5 billion in China Construction Bank, US$22 billion in the Bank of China and US$22 billion in the Industrial and Commercial Bank of China.

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