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PARIS: Massively rich sovereign wealth funds from China and Norway, feared by some for their power, said on Tuesday they posed no threat and wanted to be treated in the same way as ordinary investors.
Delegates from China and Norway, countries that have racked up huge cash surpluses, tackled head on criticism that sovereign funds had a political agenda as much of a business one.
"We want to be viewed as just another investor," Xiqing Gao, head of the giant China Investment Corporation (CIC) told an OECD forum here.
"To my knowledge, there is no case of a sovereign fund investing on (any) other criteria than maximising profit," said Norwegian Finance Minister Kristin Halvorsen.
Sovereign wealth funds in Asia, the Middle East and elsewhere have been set up in recent years to invest growing trade surpluses in the hope of getting a better return than just leaving the money in cash.
With massive riches at their disposal - China's forex reserves top 1.7 trillion dollars - some voices in Western countries have expressed concerns that their investments could serve political as much as financial ends, a charge the funds have consistently rejected.
Xiqing Gao of CIC said China had made rapid progress in the past 30 years and recognised that "many people feel uncomfortable with this situation.
"On the one hand, we try to behave like a transparent concern but you cannot be totally transparent about what you do, especially if you have a lot of money because people get ahead of you," he said, adding: "We are in a difficult situation."
The Chinese official said his fund did not seek to take control of companies in which they invested, pulling out if they did not like how things develop.
As for introducing new regulations to govern sovereign wealth funds, he said it was "really counter-productive," while welcoming initiatives by the International Monetary Fund and the Organisation of Economic Cooperation and Development on ensuring transparency.
The Norwegian finance minister said sovereign wealth funds had acted as stabilisers in the world economy because of their long-term horizon.
She said that while some funds were reluctant to provide information on their activities, there was a growing realisation that they had to respond to the concerns being raised.
The IMF has been developing guidelines for state-controlled sovereign wealth funds, which are voluntary and designed to promote best practice.
Sovereign wealth funds manage between two and three trillion dollars in investments, according to the IMF, which will likely rise to 10 trillion dollars in the next five years. - AFP/de
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