China buys $3bn Blackstone stake

The Chinese government has agreed to pay $3bn (£1.5bn) for a 10% stake in US private equity company Blackstone.
The move will give Blackstone a head start in Chinese takeover deals and allow China's government to tap into the global private equity boom.

The news, which is likely to create some political opposition in the US, comes just days before Chinese Vice Premier Wu Yi visits America.

China is buying the stake through its newly formed state investment fund.

'Enhancing access'

"For both China and Blackstone, it's about enhancing access and developing deeper relationships," said analyst Monte Brem, chief executive of advisory firm Leucadia Capital Partners.
SparkySteve said:
What do Blackstone do?
They are a Private Equity firm who have do Venture Capital work, Real estate investment and a host of other money making ventures. They are not publically traded and this particular firm has some good stats for a Private Equity firm:
Blackstone Group
The Blackstone Group website:

From the Financial Times via

The decision suggests that China is testing the water for a much bigger investment in private equity. It could open the floodgates to a tide of money flowing into the sector at the precise moment regulators are becoming concerned it may be overheating.


Private equity has been one of the best-performing asset classes in recent years, attracting record investments. But the industry's increasingly prominent role in the economy and its ownership of companies employing tens of thousands has drawn scrutiny from politicians, regulators, unions, and the media.

Economists perceived the news as China's response to pressure to raise the value of its currency against the dollar before next month's G8 summit, where the renminbi's level is set to be discussed. China has announced some monetary tightening measures, to include an interest rate rise and widening of the daily trading band with the dollar.

"China preparing to trade U.S. bonds for equities in a big way"
By cpowell
Created 2007-05-18 23:43

I might add to the foregoing explanation: The Chinese might be feeling nervous about the future value of their huge reserve of US Treasury bills and other dollar-denominated debt securities.

They might hope to acquire something that they feel will possess more enduring value.

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