Guanxi portfolio: Forget Graham and Dodd

The Chinese government says it wants to earn higher returns on its $1.2tr hoard of foreign currency. A $3bn investment in private equity group Blackstone is a first step. But the returns the government has in mind may be better measured in terms of guanxi, or connections, than anything suggested in Graham and Dodd’s «Security Analysis. « The Chinese have already started to use their wealth to cultivate useful overseas friends. A $4bn investment in a Venezuelan fund is most unlikely to achieve m...