Chinese deal could open the door for sale of State assets

THEY refrained from ‘clapping themselves on the back’ – but Irish delegates say the deal struck in China yesterday is a ‘major achievement’.

The State’s debt management agency has signed an agreement with a subsidiary of China’s sovereign wealth fund which would allow the Chinese to invest in a range of assets here.

China has a $410billion (€309bn) sovereign wealth fund to seek out long-term investments that maximise financial returns.

After the memorandum of understanding was signed between the National Treasury Management Agency and China Investment Corporation, Enda Kenny noted that the agreement opens up huge potential.

‘I think it’s very significant. This is a case where in the past two days we have met with the vice president and the premier of China – both exceptionally influential political leaders,’ the Taoiseach said.

‘This follows on their declared interest in understanding Ireland as being a partner that they can trust, and a partner that is serious about its business’.

NTMA boss John Corrigan, who flew in to China yesterday to sign the deal, suggested that the move marked a noteworthy step forward in boosting international confidence.

‘It’s a way to acknowledge in a very formal way that there is a special relationship between the CIC and the NTMA – they are the sovereign wealth fund in China.’

He added: ‘At the risk of clapping ourselves on the back it’s a major achievement.’

Although t he NTMA are responsible for finding buyers for Government bonds, the agreement is not limited to one particular area.

The deal will allow the sovereign wealth fund to explore a myriad of investment opportunities, including the purchase of State assets.

Mr Corrigan said: ‘They invest right across the spectrum from bonds right through to quoted assets. Obviously the NTMA is an adviser to Government in relation to the sale of assets through its New Era function, so everything is a possibility.

‘Would they be interested in our banks? I wouldn’t say that they wouldn’t be interested, but I am not sure that is in their horizon.’

The agreement will come as a particularly important step as the State moves towards