ING raises rate of return on investments to meet inflation

CHINA'S runaway inflation has forced ING Beijing Investment Co to revise upward its required rate of return from potential investments on the mainland.

Executive director Hu Xucheng said the investment fund, which specialises in investments in the Chinese capital, was looking for a return rate of 20 per cent compared with 15 per cent previously.

''Inflation is inevitable because of the tremendous economic growth,'' he said. In spite of increasing pressure on costs as employees asked for higher wages, he said inflation would stimulate production as a result of a rise in prices.

Listed on the local bourse in April, ING Beijing made its first investment last week. It announced an investment of US$5.3 million for a 35 per cent stake in a joint venture with Far East Instrument Corp in Beijing.

Mr Hu said ING Beijing would have invested in three to four projects by the end of the year, and that it was on the lookout for new opportunities.

He said investments would be mainly in areas of manufacture, processing, basic industries, building materials and medicines. But it did not rule out the possibility of investments in the entertainment and tourism industries.