[richlevy]

OK, quick poll, who's going to try to take down TW first, China or the U.S.?

The Chinese are getting smarter, they have found a stealthy way to start using the proceeds of a massive trade imbalance to invest in the U.S.. They have 1.2 trillion in foreign reserves, most of it probably U.S. dollars. At any point in time, they could acquire a controlling stake in Blackstone, but they really don't want to.

This is an absolutely fucking brilliant move. Not that we need to have a similar tactic, but I wonder if there is anyone left in our administration smart enough to have come up with something like this.

China's Blackstone deal may be harbinger

NEW YORK (Reuters) -- China has made a splash by acquiring part of influential private equity group Blackstone, portending a possible wave of stakes in companies as diverse as General Electric, Google or Goldman Sachs.
China's state investment company announced Sunday it would take a $3 billion stake in Blackstone Group LP, ahead of the firm going public in what promises to be the year's largest U.S. initial offering of stock.
The deal is a visible sign of the growing investment muscle that China can wield. China said in March it was creating an investment vehicle to diversify part of its $1.2 trillion in foreign reserves.

The new state agency could invest up to $200 billion from its reserves, state media reports have said, giving China the wherewithal to take on sizable stakes. Its Blackstone interest will be just under 10 percent and is part of a trend, Blackstone co-founder Stephen Schwarzman said, of China's investment plans.

China will learn how to structure and value private equity deals, as well as gaining a network of well connected people, said James Oberweis, president of Oberweis Asset Management Inc., who oversees an $800 million China fund.
"The Blackstone deal is as much about education on how to invest as it is about the actual investment itself," Oberweis said. "From the perspective of Blackstone, what better way to increase your penetration into the fastest-growing, major economy in the world than to have that government invested in you?"

The Blackstone deal is one of the most visible signs of China's growing clout. In 2005, Chinese offshore oil developer CNOOC Ltd. was forced to drop an $18.5 billion takeover bid for Unocal Corp., due largely to stiff U.S. political opposition.