Wall Street chasing more profits in Beijing – economic researcher
12 May, 2011 17:50
Goldman Sachs and Morgan Stanley are reportedly planning to set up yuan-dominated private equity funds in China. Economic researcher William Engdahl believes this is just a way to pump out funds from the big markets.
It is reported that Goldman Sachs wants to raise up to 5 billion yuan in China – roughly $800 million – and Morgan Stanley is set to follow suit next week.“To let Goldman Sachs enter an equity fund for the city of Beijing is simply inviting the fox to guard the chicken coop,” said Engdahl.“The problem is that Goldman Sachs and Morgan Stanley have destroyed their home market with the securitization scheme, if you want to call it that, back in 2007, 2008, 2009,” he explained. “They’ve done a good job of destroying much of the European market with the Greek crisis, and Portugal now surviving. So now they are desperately looking for new sources to suck up the capital in China and the BRIC countries, one of the prime plums that are left for them to pick from the world economy.” Engdahl believes the Wall Street is going after all the world’s big markets for more profit. “I’ve seen indications that the Chinese authorities are being very guarded in what they are going to allow these foreign investors to do inside China raising private equity from Chinese sources, so it remains to be seen how massive the shift is,” he added. “But I think from the side of Goldman Sachs and the Wall Street guardian of money, they simply want to get in – into Brazil, they are doing similar things there. And into Russia. You’ve had this project announced by President Medvedev: Goldman Sachs, the Bank of America and JP Morgan have been invited to present a proposal to make Moscow a world financial center. Wall Street is going after all of these big markets to get new sources of profit.”