CIC urges West to spend more on infrastructure

BEIJING -Europe and the United States should increase infrastructure investment to drive a global economic recovery, the head of China's $410 billion sovereign wealth fund said just days after expressing interest in buying into Western transportation deals.

China Investment Corp (CIC) Chairman and Chief Executive Lou Jiwei said in the official People's Daily newspaper on Tuesday that China should not be regarded as the sole engine of global economic growth because domestic consumption is relatively weak.

He said emerging economies including China were struggling with elevated inflation that crimped the scope of any large-scale stimulus plan or investment.

In contrast, developed economies had room to raise investment in infrastructure given their benign inflation outlooks, he said.

"European countries and the United States should take effective measures to boost infrastructure investment to provide a new driving force for the world economy and revive market confidence," Lou said.

His remarks came two days after he said CIC was keen to invest in the ailing infrastructure of Western countries, especially Britain.

Lou said developed economies should provide a good policy environment, including favorable credit terms and tax breaks, to draw domestic and foreign investors.

Holder of the world's largest foreign exchange reserves at $3.2 trillion, China has been asked to help Europe overcome its debt crisis by buying eurozone sovereign debt, a proposition that has drawn cool responses from Beijing.

Instead, some government officials said China wanted to help through investment and trade - as opposed to outright debt purchases - with several academics urging Beijing to buy into some of Europe's best brand names, companies and intellectual property.

CIC has met little public resistance to its overseas investment since its 2007 inception, although ill-timed purchases into Morgan Stanley and Blackstone Group LP before the financial crisis sparked a public outcry.

The fund said in July that North America accounted for nearly 42 percent of its portfolio in 2010.

Reuters