More Anbang For the Buck
Anbang’s bid for Starwood was thwarted, but it nevertheless points to a wave of Chinese acquisitions of Western assets. Chinese growth has quietly stabilized, thanks to deft handling of the RMB exchange rate. But the RMB remains very strong, so acquisitions look cheap at the same time as China is encouraging a drawdown of excessive foreign reserves. It’s a delicate political process, as it was for the Japanese who went through a similar evolution in the late 1980s after the Plaza Accord. It points to rising global asset prices, a weaker US dollar and higher inflation – as dead money comes to life, moving from savings to investment.