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Wealth Funds May Invest if Europe Finds Debt Solution: China Fund Exec

If the European Union works out a "credible, convincing debt program," sovereign wealth funds may see it as an opportunity to invest, Jin Liqun, chairman of the board of supervisors for China Investment Corporation, told CNBC Friday.

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CIC is the fifth-largest sovereign wealth fund in the world, with $409 billion under management.

"The sovereign wealth funds are managing the public money. It's not private money. And they have to be extremely prudent about where they put the money," said Liqun, also chairman of the International Forum of Sovereign Wealth Fund.

"The euro zone members do understand there's no way except to implement very good austerity programs, " he said. "It's so important for euro zone members to work up something, which could actually enhance the confidence.”

Liqun stressed that although it’s somewhat difficult having 17 parliaments within the European Union, it "does not give [them] the excuse of not [taking] action as quickly as possible."

The European countries are faced with a dilemma when they cut spending, he noted. "The problem is when you cut spending, how do you continue with the growth? To spur growth you need capital, and capital follows [along] the path of least resistance."

CIC has 60 percent of its assets in the United States. “We have basic confidence in the markets in the United States,” Liqun went on to say. “We will continue to enhance our presence.”


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