(March 26, 2008) – Jim Dorn and I were in graduate school together at the University of Virginia. In addition to being a great guy, he is China specialist at the Cato Institute. Jim’s article in the South China Morning Post on Sovereign Wealth Paranoia is a good antidote to the things we read in the press. Enjoy.
The most recent example of sovereign wealth fund paranoia is the 3Com deal, in which China’s Huawei was denied the ability to make a minority investment in the company. I had the chance to spend a day at Huawei’s headquarters in Shenzhen–impressive company. Similar things are happening in Australia now where the new government is likely to restrict proposed investments in mining companies. This is protectionism in another form.
This is a tricky issue that will be in the headlines for a long time. I think the answer is disclosure, not the straightjacket. What do you think?