China's big spending has only just begun

The Chinese are accumulating dollars at the rate of a billion a day, which was all very well when a dollar was a dollar, but now they see the value of their greenbacks dropping by the day, and they don't much like it. The move to invest $3 billion in Blackstone was a signal that purchases of real foreign assets, as opposed to US government IOUs, would be approved by the authorities, and the $10 billion commitment from a state-controlled bank for Barclays' shares is a logical next step.

Our new Chancellor seems to have grasped this. We can no more resist the impact of foreign capital than we can hold up the weather, and it would be foolish to try. As Emma Bonino, Italy's international trade minister, said about the sale of Alitalia: "I don't care who buys it, it can be the Chinese, or the Eskimos, as long as they turn it round." It is not only the Chinese; all across the Far East, countries have held down the value of their currencies, accumulating more dollar reserves than they will ever need. They will follow the Chinese example and start to put them to more productive use. Similarly, the oil boom has left the Middle East awash with capital, and the owners have the same sinking feeling when they look at the value of their dollars. Their backing for ambitious property projects in London and the bid approach to Sainsbury's are just the start.

The point about Sainsbury's is that the buyers are not some caricature of a private-equity group, heavily dependent on the sort of obscure financing instruments that are causing so much grief to the backers of the Alliance Boots bid, but investors with deep pockets. If Sainsbury's is to start closing the gap with Tesco, it's going to need investment, not a replacement of risk capital by debt.

The Qatari ruling family behind the bid approach has promised to invest £3 billion in the chain.

During the last oil boom, it seemed that Saudi Arabia would accumulate enough dollars to buy every listed stock on Wall Street in less than a decade.

It didn't work out like that, but this time around, the power looks set to stay with the producers. Dubai's attempted purchase of US ports may have caused the same cultural shock as the idea of the Japanese buying the Rockefeller Center, but today's trade imbalances are chronic rather than acute, and must either be eliminated or balanced by capital flows. Blackstone, Barclays and Sainsbury's are just the start of a process of foreign asset acquisition which is inevitable, given the Western enthusiasm for consumption and the Eastern determination to save.

The Barclays deal to bring in £9 billion of new equity capital, at above the market price, is an indication of what's to come. The British institutions would never have accepted a rights issue at a premium Oi, ref! Give they would have demanded both a discount and the underwriting fees, and some would have shorted the stock in anticipation.

This novel fund-raising shows that they cannot always call the shots, although it would be too much to hope it would cure their obsession with short-term performance. It may not be enough on its own to deliver ABN Amro to Barclays, but it makes Barclays a more attractive business on its own as well as a tougher nut to crack should a bigger bank be eyeing it up.

It just goes to prove that, as far as chairman Marcus Agius is concerned, you can take the man out of investment banking, but you can't take the investment banker out of the man.