China defends role of sovereign wealth funds

China defended the role of sovereign wealth funds, responding to fears that its own fund, China Investment Corp., might destabilize global markets, state media said Monday.

Sovereign wealth funds can help countries allocate resources optimally, the China Business News reported, citing Wei Benhua, deputy director of the State Administration of Foreign Exchange.

Some developed countries have reacted strongly to the investments of various sovereign wealth funds, but actually their long-term approach to investment will not destabilize markets, Wei was quoted as saying. Just like other equity funds, sovereign wealth funds are market-oriented, and must not be discriminated against, he said.