Last Tuesday, I told Taipan Publishing Group subscribers in Taipan Insider that one Middle Eastern country was injecting massive amounts of cash into international markets.

That’s not really news nowadays, though, is it? Everyone’s heard of the $7.5 billion Citigroup bailout by Abu Dhabi back in November 2007.

But things have noticably been slowing down. When billions of dollars worth of investments get halved in value in less than a year, it makes you think.

Yet for some regions, this credit crunch is an opportunity of a lifetime.

Think about it. You’re an oil-rich nation with foreign currency reserves well into the hundreds of billions. Major global institutions are searching desparately for cash. Their fellow financial institutions are equally cash-strapped.

Suddenly, your country has a lot of power.

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With cash-strapped companies coming cup-in-hand to their equally cash-strapped governments, the world over is looking for Warren Buffett-sized checkbooks to help ease the credit crunch.

Increasingly, the world is looking to China and its $1.9 trillion in reserves.

Should China whip open its gigantic checkbook to bailout the global financial system?

Does it even want to?

China’s been burned before with its investments in the U.S. financial sector. It has a 9.9% stake ($5 billion) in Morgan Stanley (MS:NYSE) that has been pummeled by the industry-wide downturn. And some Chinese leaders believe that the U.S. and Western Europe should clean up their own mess.

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About four months ago, China’s sovereign wealth fund, China Investment Corp., announced that it would up the amount of money it pours into foreign investments by 30%. Now, CIC has about $90 billion to spend on assets abroad.

CIC has some complex dealings with internal state-owned banks, like the Agricultural Bank of China and China’s Development Bank. Not surprising, since on of CIC’s major funtions, indeed, the reason it was formed at all was to provide financial stability for China’s state-owned banks.

Near the end of last week, China’s Development Bank signed a $100 million loan contract with Banco de Chile (BCH:NYSE).

BCH is Chile’s second largest bank, and has also signed an agreement to open joint credit lines with CDB. According to the press release, CBD wants to invest in Chile’s “ports, bioceanic corridors and junior mining companies.

Chile is a major producer of copper, which is of great import to China. In fact, China’s capital investment in infrastructure like roads, factories, and property climbed 27.3% in the first half of 2008. That’s more than was expected, and this continued growth is sure to keep demand high for industrial metals like copper.

This should come as no surprise to any of you who have been keeping up with the sovereign wealth fund story. Barely a month ago, Kuwait announced it would boost investments in stocks, bonds and real estate in China, India and Japan.

But I did find one interesting story…

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The easiest way to pocket gains in emerging markets is to follow the money.

This may sound odd coming from a bunch of contrarians who usually bet against Wall Street. But we’re not talking about Wall Street this time. We’re talking about the REAL BIG MONEY…Sovereign Wealth Funds.

SWFs are usually owned by the central bank of a government that has trillions in surplus. SWFs have grown in power most recently with the commodity boom. Surging prices in oil, natural gas and precious metals have given SWFs in the Persian Gulf and Asia in particular increased clout in how they want to shape the world.

Now we find that SWFs in the Persian Gulf are moving into oil-rich Southest Asia — tipping off investors to stable, long-term growth opportunities.

At the end of last year, the Qatari Investment Authority (QIA) signed a deal with the Indonesian government to establish a $1-billion fund aimed at improving the country’s infrastructure. Once a government starts investing in infrastructure, you know that the economy is set for growth.

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