The Financial Times has a series of reports on the different government organizations and agencies in China that control the use of its massive, 1.8 trillion USD forex reserve. The State Administration of Foreign Exchange (SAFE) is more secretive and has far deeper pockets than CIC, the China Investment Corporation, which is merely the country’s $200bn sovereign wealth fund.
FT reports that SAFE has used its vast wealth as an arm of Chinese foreign policy: it purchased $300m in government bonds from Costa Rica. Costa Rica then ended its 63-year old diplomatic ties to Taiwan. Supposedly, this switch was one of the necessary conditions the Chinese placed on the purchase.
The reports suggest that the Chinese wanted to keep the thing on the DL, despite Costa Rican diplomats’ advice to the contrary.
Ring the alarm bells! If the purpose of the shadowy SAFE is to use money to buy political influence, we better watch out where they are investing. Here’s a list of SAFE investments in the UK.
