DAVOS, Switzerland (AP) — Chinese investors are trying to follow the rules when spending money abroad, the head of one of China's biggest private equity firms said Thursday, as global leaders increasingly look to China to prop up the world economy.
Worries that Europe's slowdown would hurt stronger economies are overshadowing discussions at this week's World Economic Forum in the Swiss ski resort of Davos. Attention turned Thursday to how China can help, even as some remain wary about its growing dominance.
John Zhao, CEO of Hony Capital, said foreign prejudice about Chinese investments is unfair, but acknowledged that some companies are still learning a game that much of the world has been involved in for decades.
Chinese companies and government funds have been using vast reserves of cash to buy up foreign companies and invest in foreign government bonds in recent years. But with billions of dollars in Chinese investments pouring into their countries, some governments have accused China of seeking to exploit the economic weakness of others to grab valuable natural and technological resources at rock bottom prices.
The administration of U.S. President Barack Obama has also repeatedly accused China of breaking global trade rules by giving unfair protection to its companies and domestic industries.
"The vast majority of Chinese companies are trying to follow the rules as they understand it," he said. "But many Chinese companies are still trying to learn the rules."
The director general of the World Trade Organization, Pascal Lamy, said China will continue to face "public perception problems" from its investments abroad.
"We will see in the years to come, as China's investments grow and grow. ... We will have the same sort of political turbulences as we have had on trade for the last 10 years," he said.
The head of the Asian Development Bank that Asia has already been affected by the ongoing European financial crisis in two ways — through the withdrawal of credit in Asia by many European banks and financial institutions and a drop in trade, which will impact China because Europe is its largest export market.
"I really hope that the European financial crisis can be overcome," Haruhiko Kuroda said in an interview with The Associated Press.
The Davos forum, where business and political leaders gather every year in an invitation-only event, is under growing criticism by those who feel it's too removed from the real world.
Nigerian Finance Minister Ngozi Okonjo-Iweala and other leaders brought things crashing back down to earth, appealing for the millions of people who do not have enough food to eat.
"The world can feed itself. Africa can feed itself. The problem is we have vulnerable populations who do not have access," Okonjo-Iweala said.
The head of the U.N. food agency, Jose Graziano da Silva, agreed. "The problem is the access — they don't have the money to buy it or they don't have the water and land they need if they are subsistence farmers."
Malnourished people, particularly kids, are more susceptible to dying from malaria and other diseases in Africa, said Microsoft founder Bill Gates, whose philanthropy has mainly focused on promoting health.
Gates also rode to the rescue of a beleaguered health fund by pledging $750 million to fight three of world's killer diseases. A donor backlash over losses at the Geneva-based Global Fund to Fight AIDS, Tuberculosis and Malaria forced it to cancel more than $1 billion in new spending last year. The fund's executive director said Tuesday he is resigning.
Leaders at the Davos forum are looking later Thursday at challenges to democratic institutions around the world, including protest movements such as Occupy Wall Street.
Activists from Occupy Davos are camping out in igloos and yurts to call attention to income inequality.
"With 50 million people going below the poverty line, and over 200 million becoming unemployed with the recent crisis, it's stopped being a question of hardship and starting to become an issue of human rights violations," said Salil Shetty, the secretary-general of Amnesty International.
"This is a man-made crisis and the people who have caused the crisis, many of whom are in Davos, should be held to account," he told The Associated Press.
John Heilprin and Edith M. Lederer in Davos contributed to this story.