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Rumors have been flying in financial circles over the past few days that Saudi Prince Alwaleed bin Talab, already the second-largest holder of shares in U.S. financial group Citibank, is masterminding a further capital infusion into that entity. Among the various parties rumored to be involved are a number of Chinese government institutions.
Such involvement would continue an accelerating trend of sovereign Chinese interest in Western financial houses. The China Investment Corp. (CIC) — an institution designed to spend some of the country’s massive currency reserves — said Dec. 19 that it is investing $5 billion in the U.S. financial powerhouse Morgan Stanley. Before that, China made a $3 billion investment in Blackstone and a $1 billion share exchange with Bear Stearns.
Many in the United States fear that the Chinese are using their abundant currency reserves to purchase influence in the United States. Such goals could not be further from the Chinese mind, however; these purchases are all about events closer to home.
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