China Investment Corporation

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China Investment Corporation
Type Sovereign wealth fund
Industry Investment service
Founded Beijing, China (2007)
Headquarters Beijing, China
Key people

Ding Xuedong (Chairman and CEO)

Gao Xiqing (Vice Chairman, President and CIO)
Operating income Increase US$ 54.802 Billion (2010)[1]
Net income Increase US$ 51.560 Billion (2010)[1]
Total assets Increase US$ 409.579 Billion (2010)[1]
Total equity Increase US$ 409.579 Billion (2010)[1]
Employees 497 (2011)[1]
Subsidiaries Central Huijin Investment Ltd. (Central Huijin)
Website www.china-inv.cn

China Investment Corporation (CIC) (Chinese: 中国投资有限责任公司; pinyin: zhōngguó tóuzī yǒuxiàn zérèn gōngsī) is a sovereign wealth fund responsible for managing part of the People's Republic of China's foreign exchange reserves. CIC was established in 2007 with approximately US$200 billion of assets under management. As of August 2013, the CIC has US$575.2 billion in assets under management.[2]

History[edit]

As of 2007, the People's Republic of China has US$1.4 trillion in currency reserves,[3] while this had grown by 2013 to US$3.44 trillion.[2] The China Investment Corporation was established with the intent of utilizing these reserves for the benefit of the state, modeled according to Temasek Holdings of Singapore. The state-owned Central Huijin Investment Corporation was merged into the new company as a wholly owned subsidiary company.[3]

Special treasury bonds were issued to create the capital that the CIC needed. 1,550.35 billion yuan ($207.91 billion) was issued in this bond sale. The bond process was completed in December 2007.[4] According to Lou Jiwei, the CIC needs to make a profit of 300 million Yuan every day just to pay the interest on the bonds and operation costs. The CIC paid its first interest on the bonds in February 2008 where it paid 12.9 billion yuan.[5]

In 2010, CIC established a new subsidiary, CIC International (Hong Kong) Co in Hong Kong and appointed Lawrence Lau as its Chairman.[6]

In 2011, CIC established its first foreign office in Toronto, choosing it over financial centres such as New York or London as its first office. Felix Chee will be the chief representative officer[7]

In September 2013, the fund acquire a 12.5% stake in Russian potash fertiliser company Uralkali for a rumoured $2 billion.[8]

Governance[edit]

The management and board of the China Investment Corporation ultimately reports to the State Council of the People's Republic of China. The China Investment Corporation is seen as being "firmly entrenched" in the political establishment as the composition of its Board of Directors implies "considerable influence on the part of China’s Ministry of Finance."[9]

Board of Directors[edit]

Board of Supervisors[edit]

Executive Committee[edit]

  • Chairman & CEO - Ding Xuedong
  • Vice Chairman, President & CIO - Gao Xiqing
  • Chairman of Board of Supervisors - Jin Liqun
  • Executive Director, Executive Vice President & COO - Zhang Hongli
  • Executive Vice President - Peng Chun
  • Executive Vice President & Deputy COO - Fan Yifei
  • Executive Vice President & Deputy CIO - Xie Ping
  • Executive Vice President & CRO - Wang Jianxi
  • Member of the Executive Committee - Liang Xiang

International Advisory Council[edit]

Asia

Americas

Europe

See also[edit]

References[edit]

  1. ^ a b c d e http://www.china-inv.cn/cicen/include/resources/CIC_2010_annualreport_en.pdf
  2. ^ a b China Investment Corporation Profile. Sovereign Wealth Fund Institute. July 2, 2008. Retrieved August 27, 2013.
  3. ^ a b China Business: "China's trillion-dollar kitty is ready", Asia Times, October 2, 2007.
  4. ^ The Creation of the China Investment Corporation. - Amadan International. - (Adobe Acrobat *.PDF document)
  5. ^ Liming, Li (January 31, 2008). "Day of Reckoning for China's Sovereign Fund". Economic Observer. 
  6. ^ "CIC launches Hong Kong subsidiary". Financial Times. October 19, 2010. Retrieved March 8, 2011. 
  7. ^ Canada (January 12, 2011). "China’s sovereign wealth fund sets up shop in Toronto". Theglobeandmail.com. Retrieved March 8, 2011. 
  8. ^ Polina Devitt (24 September 2013). "China gets 12.5 percent stake in Russia's Uralkali". PUBLISHER. 
  9. ^ A Review of Chinese-Language Literature on Sovereign Wealth Funds. - Oxford International Review. - (Adobe Acrobat *.PDF document)

External links[edit]