China's sovereign wealth fund may give 'indirect' support to Europe: Jesse Wang, China Investment Corp

China’s sovereign wealth fund may give "indirect" support to Europe through investments without being the nation’s main route for any aid, said Jesse Wang, the executive vice president of China Investment Corp.

The fund "wouldn’t be the main channel" if China helps tackle the sovereign-debt crisis, Wang said in Beijing yesterday. "However, if during such a process there are good investment opportunities in Europe and if CIC’s investment helped the destination company or country to recover and developed the economy, that would be indirect support."

European leaders are looking to China, the holder of the world’s largest foreign-exchange reserves at $3.2 trillion, as a source of funds as the region’s crisis threatens to trigger a global slump. China is among countries that may be willing to support Europe through the International Monetary Fund if policymakers agree on a plan, World Bank President Robert Zoellick said recently.

In tackling the crisis, "China would like to be seen as a constructive force rather than as a saviour ," said Ding Shuang, a Hong Kong-based economist for Citigroup , who formerly worked at the Chinese central bank and the IMF. "The nation may aid Europe through the IMF as a safer method" than other alternatives, he said. Asian stocks fell for a third day today on signs that Europe’s debt crisis is yet to be contained, with the MSCI Asia Pacific Index down 0.6% as of 11:22 a.m. in Tokyo.

CIC managed $409.6 billion at the end of 2010. "As a commercial entity, CIC is seeking reasonable returns with controllable risks," Wang said. He cited an investment in the exploration and production business of Paris-based GDF Suez SA, Europe’s largest natural-gas network operator, as an example of what appeals. "CIC is under no obligation to follow the government’s policy orders in its operations because it’s a commercial entity," Wang said.