Leaders rely on China investments abroad

Davos: Chinese investors are trying to follow the rules when spending money abroad, the head of one of China's biggest private equity firms said yesterday, as global leaders increasingly look to the country to prop up the world economy.

Worries that Europe's slowdown would hurt stronger economies are overshadowing discussions at this week's World Economic Forum in the Swiss ski resort of Davos. Attention turned yesterday to how China can help, even as some remain wary about its growing dominance.

John Zhao, CEO of Hony Capital, said foreign prejudice about Chinese investments is unfair, but acknowledged that some companies are still learning a game that much of the world has been playing for decades.

Chinese companies and government funds have been using vast reserves of cash to buy up foreign companies and invest in foreign government bonds in recent years. But with billions of dollars in Chinese investments pouring into their countries, some governments have accused China of seeking to exploit the economic weakness of others to grab valuable natural and technological resources at rock bottom prices.

Unfair protection

The administration of US President Barack Obama has also repeatedly accused China of breaking global trade rules by giving unfair protection to its companies and domestic workers.

"The vast majority of Chinese companies are trying to follow the rules as they understand it," said Zhao, whose company controls PC maker Lenovo, which bought IBM's computer division in 2005. "But many Chinese companies are still trying to learn the rules."

The director general of the World Trade Organisation, Pascal Lamy, said China will continue to face "public perception problems" from its investments abroad.