The CIC was set up to make good use of China’s 2 trillion dollars worth of foreign currency reserve. Traditionally markets have been sceptical and somewhat resistant to investments by these so-called sovereign funds. However, according to the Financial Times, they have “softened” their attitude to Chinese money. Read that as beggars can’t be choosy. In these economic times, Diageo and their ilk can’t afford to worry about where the money is coming from. If it’s the largest dictatorship on Earth, so be it. To be fair, judging by past standards, it’s doubtful if they ever/will care.
The Chinese drinks sector is an expanding market and it makes sense for the CIC to want a share of it. Indeed, the Chinese government likes to take a stake in any large foreign operator trading on their soil. So it comes as no surprise that the FT also reports that the CIC have a 0.5% shareholding in Tesco-well I suppose, every little helps.