The current turmoil in credit markets could end up strengthening the hands of China and the oil-rich nations. Henny Sender, writing in the Wall Street Journal ($link), raises this possibility:

Debt isn't merely more expensive, it is scarcely available at any price or on any terms, jeopardizing the 'L' in leveraged buyouts. Private-equity firms are looking for new pools of capital to take the place of the banks and hedge funds now sitting on the sidelines that provided deal financing.

One possible source: the bulging coffers of oil-exporting nations and other rich governments. Their sovereign wealth funds are big investors in private-equity funds. They also have been investing alongside the firms, helping buyout shops do their largest deals in a practice known as co-investment. The Qatar Investment Authority routinely asks for co-investment opportunities when it invests in funds. Private-equity firms now wonder if they might tap these same pools of capital for the debt instruments they once turned to banks for.

... at a time of global financial instability, the administration has started to worry that foreign governments are increasingly converting their dollar holdings into investment funds to acquire companies, real estate, banks and other assets in the United States and elsewhere. The fear is that these so-called sovereign wealth funds could destabilize markets or provoke a political backlash.

In response, the Bush administration is pressing the International Monetary Fund and the World Bank to examine the behavior of these funds, which control up to $2.5 trillion in investments, and develop possible codes of conduct for them. Among the proposed rules would be an obligation to disclose investment methods and to avoid interfering in a host country's politics.