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China Investment Corporation

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China Investment Corporation
Company typeSovereign wealth fund
IndustryInvestment service
FoundedBeijing, China (2007)
Headquarters
Beijing
,
China
Key people
Ding Xuedong (Chairman and CEO)
Li Keping (Vice Chairman, President and CIO)
Increase US$ 93.709 Billion (2013)[1]
Increase US$ 89.097 Billion (2014)[1]
Total assetsIncrease US$ 746.730 Billion (2014)[1]
Total equityIncrease US$ 709.349 Billion (2014)[1]
Number of employees
467 (2013)[1]
SubsidiariesCentral Huijin Investment Ltd. (Central Huijin)
Websitewww.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. At the end of 2014, the CIC had over US$740 billion in assets under management.[2]

History

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. 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.[4]

In 2010, CIC established a new subsidiary, CIC International (Hong Kong) Co in Hong Kong and appointed Lawrence Lau as its Chairman.[5]

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[6]

In September 2013, the fund acquire a 12.5% stake in Russian potash fertiliser company Uralkali for a rumoured $2 billion.[7]

In March 2014, the CIC acquired a $40 million stake in iKang Health Group.[8] In October 2015, the CIC provided capital in a deal between Carnival Corporation and China State Shipbuilding Corporation[9]

Governance

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."[10]

Board of Directors

Board of Supervisors

Executive Committee

  • Chairman & CEO - Ding Xuedong
  • Vice Chairman, President & CIO - Li Keping
  • Chairman of Board of Supervisors - Guo Haoda
  • Executive Director, Executive Vice President & COO - Zhang Hongli
  • Executive Vice President - Peng Chun
  • Executive Vice President & Deputy COO - Fan Yifei- left CIC, announcement 12 March 2015[12]
  • Executive Vice President & Deputy CIO - Xie Ping
  • Executive Vice President & CRO - Wang Jianxi
  • Member of the Executive Committee - Liang Xiang

International Advisory Council

Asia
Africa
Americas
Europe
Oceania

Subsidiaries and minority interests

  • GDF Suez Exploration & Production International SA (30%; joint venture with Engie)[13][14]

See also

References

  1. ^ a b c d e http://www.china-inv.cn/wps/wcm/connect/5c337c13-8677-4862-aa36-4efbc1b243ae/%E4%B8%AD%E6%8A%95%E5%B9%B4%E6%8A%A5%E7%94%B5%E5%AD%90%E4%B9%A6%E6%96%87%E4%BB%B6%EF%BC%8D%E8%8B%B1%E6%96%87.pdf?MOD=AJPERES&CACHEID=5c337c13-8677-4862-aa36-4efbc1b243ae
  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. ^ Liming, Li (January 31, 2008). "Day of Reckoning for China's Sovereign Fund". Economic Observer.
  5. ^ "CIC launches Hong Kong subsidiary". Financial Times. October 19, 2010. Retrieved March 8, 2011.
  6. ^ Canada (January 12, 2011). "China's sovereign wealth fund sets up shop in Toronto". Theglobeandmail.com. Retrieved March 8, 2011.
  7. ^ Polina Devitt (September 24, 2013). "China gets 12.5 percent stake in Russia's Uralkali". PUBLISHER.
  8. ^ "China's Sovereign Fund to Acquire $40 Million Stake in iKang". Sovereign Wealth Fund Institute. March 27, 2014. Retrieved July 15, 2014.
  9. ^ "CIC Backs Carnival Cruise Joint Venture". Sovereign Wealth Fund Institute. October 22, 2015. Retrieved October 25, 2015.
  10. ^ A Review of Chinese-Language Literature on Sovereign Wealth Funds. - Oxford International Review. - (Adobe Acrobat *.PDF document)
  11. ^ "China appoints Ding Xuedong as new CIC chairman -sources". June 28, 2013. Retrieved June 17, 2014.
  12. ^ "China Investment Corporation".
  13. ^ "2014 Management report and annual consolidated financial statements" (PDF). GDF Suez. February 26, 2015. Retrieved February 21, 2016.
  14. ^ "ENGIE and China Investment Corporation (CIC) signed MOU". Engie. June 30, 2015. Retrieved February 21, 2016.
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