To avoid being shut out by protectionist sentiment from the bargain sale under way in the Western banking sector, China Investment Corporation may go shopping hand in hand with U.S. private-equity fund JC Flowers.
The Chinese sovereign wealth fund is reportedly close to sealing an agreement with New York-based JC Flowers to set up a $4 billion new fund to invest in ailing financial institutions.
With $200 billion in registered capital, CIC has already left some footprints in Western financial turf. The fund plowed $3 billion into the buyout fund Blackstone (nyse: BX - news - people ) last summer and injected $5 billion into investment bank Morgan Stanley (nyse: MS - news - people ) in the fall. The deals have raised the hackles of Western bankers and politicians, arousing anxiety over the threat that China could gain a dangerous level of sway in the U.S economy.
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