London Expects Surge in Chinese Investment Following New Policy

New rules which allow Chinese funds to invest up to 15 percent of their cash overseas has property agents in the London and other major real estate destinations getting ready to sell to Chinese financial institutions.

Just last week, China’s Commerce Minister, Chen Deming predicted that China’s outbound investment would match inbound investment into China within five to ten years.

At a forum sponsored by China’s Caijing magazine, Chen said that mainland Chinese companies should invest overseas as a way for China to diversify the use of of the nation’s US$3.29 trillion in foreign exchange reserves.

Chinese funds are now allowed to invest up to 15 percent of their cash overseas, which if you look at that in terms of China’s four biggest insurers, would total more than US$144 billion.

In London, reports have now surfaced that China’s $410 billion sovereign wealth fund, China Investment Corporation is in advanced talks to buy the headquarters of Deutsche Bank on London Wall for US$400 million.

According to a report in London’s Evening Standard, Beijing-based Ginkgo Tree Capital has been reported as looking hard to invest in student accommodation. China Life, AIA, China Pacific and Ping An are the insurers now free to look.

So expect to see more reports of Chinese financial firms investing overseas once the holiday season is past.