'China should consider more Wall Street buys'

Chinese financial institutions should look for the right chance to take further stakes in struggling Wall Street banks to beef up China's global presence, a senior banker said on Tuesday. Investments in recent years by Chinese banks in US financial firms including Morgan Stanley and private equity firm Blackstone Group have fallen in value as turmoil on global markets has taken it toll.
But Tang Shuangning, chairman of mid-sized Everbright Bank, said Chinese banks should be on the look-out for further investments in the US financial sector. "The crisis might reduce the influence of the United States in the global market, while China's voice will grow," Tang, a former vice-chairman of the China Banking Regulatory Commission, told a financial forum. "We should jump at good opportunities when they emerge to find a way into Wall Street."
The US Treasury has proposed a $700 billion bailout plan to staunch a crisis that has forced investment bank Lehman Brothers into bankruptcy and Merrill Lynch into the arms of Bank of America. Other banks are racing to raise extra capital. China's capital controls and the overwhelmingly domestic focus of its banks have largely insulated the country from the immediate fallout of the turmoil on Wall Street.
However, Foreign Ministry spokeswoman Jiang Yu told a regular briefing that Chinese financial regulators would beef up checks to reduce potential risks and would increase contacts with their opposite numbers in the United States. Fitch Ratings warned on Monday that strains were emerging in the Chinese banking sector despite strong interim profits.
The world's top-earning bank in the first half was Industrial and Commercial Bank of China, but Chairman Jiang Jianqing said he wanted ICBC to be also "the best and most respected bank". Jiang said ICBC had done well diversifying its income stream and expanding into overseas markets, and it would keep learning.
"The collapse of Lehman Brothers and other financial giants in the US financial storm has given us a lot of good lessons to learn," Jiang told the forum at which Tang spoke. Tang said the financial meltdown was quite likely to evolve into a global economic crisis, requiring China to navigate skilfully to steer the economy into safe waters. Looking ahead to the customary year-end leadership meeting to set the agenda for the following year, Tang said the setting for monetary policy should revert to "appropriately tight".