Sixty years ago, communism saved China. Thirty years later, capitalism saved China. Could China now save capitalism?

It’s a nice idea. The Financial Times’ report that China Investment Corp, the sovereign wealth fund, was considering buying Italian assets (including government bonds) sent a few ripples of relief across markets. But the plans should not be read as Beijing’s vote of confidence in il bel paese, or in its ability to service its debts. The motives may well be much simpler: fund managers trying to expand their turf.

In July, CIC released its 2010 financial report. Headline returns on its global portfolio were 11.7 per cent – identical to the figure reported in 2009. That brought its total assets under management to $135bn, up from its initial $21bn seeding in 2008. But in order to qualify for another big injection from China’s foreign exchange reserves – the Ministry of Finance released an additional $58bn in 2009 – the fund needs to demonstrate that it is ready, willing and able. Hence, the extremely aggressive drawdown of cash holdings, from 32 per cent of assets in 2009 to 4 per cent last year. CIC bought anything and everything: large-cap US stocks, emerging-market equities, commodities, futures, real estate, infrastructure. A European bond fund was one of at least eight new, internally-managed portfolios set up during the year.