China's sovereign wealth fund to focus on Asia investments

China's sovereign wealth fund would focus more of its US$482 billion firepower on Asia in a bid to beat a rise in protectionism in the West and boost exposure to rapid regional growth, chairman and chief executive Lou Jiwei said.

The man charged with stewardship of a slice of the world's largest store of foreign wealth lauded the British approach to overseas investment in public sector projects as one for the world to follow. He said the policy response to Europe's debt crisis was a reason to stay underweight on bonds and stocks there.

"There is a rise in protectionism in both trade and investment in some Western countries," said the China Investment Corporation chief, speaking on the sidelines of the 18th party congress.

"As compared to other financial investors, we feel that the scrutiny on us is a little more strict because of issues like national security," Lou said, adding that while not a major issue yet, he detected rising concern among foreign regulators when CIC partnered with Chinese firms to make acquisitions.

Lou said CIC would not change its strategy of partnering with Chinese firms simply to assuage concerns of foreign regulators - particularly if such a partnership presented the best-value proposition to the fund, which is mandated to boost returns on a substantial chunk of China's US$3.29 trillion stash of foreign reserves.

"We would avoid investing in countries that do not welcome us. There are other places to invest," Lou said.

Asia is a particularly favoured option for CIC, thanks to some of the fastest rates of growth and development, which are themselves levered to China's own economic dynamism.