It is in China interest to ‘buy assets, keep them going’

Since purchasing US government securities to manage huge surpluses has not produced much benefit, Chinese companies are acquiring assets abroad for a higher return on investment, economist Roger Nightingale told RT.

RT: It seems like China doesn't really have a choice, does it?
 
Roger Nightingale: China's got a lot of money, it's got to do something with its money. Well it's been doing in the past, it's been buying rather low yielding America government securities. That hasn't produced much benefit for China. What has been doing more recently and I think it'll carry on doing is buying into companies which issue much higher yields. Britain has been a beneficiary of this so far, but I think the rest of the world will also share in this largess.
 
RT:Is it all about economics? China is buying a trillion in US debt, didn't give it a whole lot of influence. But buying up industry, that's bound to give it some kind of a clout.
 
RN: If a country has a large surplus, then it has to do something with that surplus. There is no possibility of it not doing anything with its surplus. And the only possibilities are to buy securities or to buy assets. I think in fact it's in China's interest to buy the assets. Frankly, it is in most country’s interests that it buys the assets and keeps them going. One of your previous interviewees was talking about the British industrial base being a holdout on the country. The industrial base would have been a holdout had the company's gone bust. Having had Chinese investment in them, having kept the companies going. The industrial base is being less holdout, but remember Britain doesn't have a particularly good industrial base. What we do well is financial services and therefore we have to expect that the other part of our industry will do what it needs to be a part of the economy, and it needs the help from those overseas. Just as for instance Germany doesn't have financial services. 

 
 
RT:When China was investing in Africa many were saying that China was exploiting that situation. But here you are saying that coming to the UK it's a different kind of set-up. So, are we saying if it’s good for us, it’s a benefit, if it’s good for them, it’s exploitation?
 
RN: No, I never used such terms and I wouldn't. I mean frankly the African countries didn't have to sell out to the Chinese. They could've chosen not to, they had the choice, they chose in certain circumstances to sell out. But this is absolutely normal. The country is buying raw materials and the country is using raw materials, and having bought the actual material you feel tempted by the company that produces the raw material. Britain did that over a long period of time, Germany's done it. America has done it. Japan has done it. It's only to be expected that China is the new up and coming industrial country that will also do it.