China Investment Corporation

China US$ 652.7 Billion Origin: Non-Commodity

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Established: 2007
Transparency Rating: 8
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Firm Investment Style: Portfolio
Entity Structure: Corporation
Population Est.: 1.35 billion – 2013
Wealth Per Capita Est.: $484

Fund Details

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SWF Asset Allocation

Direct Investments

Fixed Income Managers

Equity Managers

Real Estate Managers

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Board and Advisors


Main Office

New Poly Plaza
No.1 Chaoyangmen Beidajie
Dongcheng District
Beijing, 100010
China
Tel: +86 (10) 8409 6277
Fax: +86 (10) 6408 6908

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Governance

The China Investment Corporation has a board of directors which has decision-making authority. Appointment and dismissal of the board of directors is under the power of China’s State Council.

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China Investment Corporation

Summary

The China Investment Corporation (CIC) is responsible for managing part of China’s foreign exchange reserves.

Background on the China Investment Corporation

As of April 2013, the People’s Republic of China currently has around US$ 3.44 trillion in foreign reserves. The need to seek greater returns, increase diversification and hold less in U.S. currency helped prompt the creation of the China Investment Corporation. Established in September 29, 2007, the CIC has made substantial investments in a variety of asset classes, including direct investments, institutional real estate and infrastructure. The previous vehicle, state-owned Central Huijin Investment Limited was merged into the new company as a wholly-owned subsidiary company.

Some of the funds are also applied locally to some state-owned enterprises (SOE) and state-owned banks.

China – Total Reserves including Gold

Source: Government of China – Billions USD, Annual Series

Historical Assets Under Management

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The capital of the China Investment Corporation is funded through issuing special treasury bonds. With the approval of the Standing Committee of the 10th National People’s Congress, the Ministry of Finance issued Y1.55 trillion special treasury bonds and used raised funds to purchase foreign reserves (US$ 200 billion) to be injected into CIC as its registered equity capital. China Investment Corporation has to pay dividends to the State Council as its owner – to cover the cost of these special treasury bonds.

Three subsidiaries of CIC: China Investment Corporation International Co., Ltd. (CIC International) and Central Huijin Investment Ltd.(Central Huijin) were incorporated separately and function as two distinct entities. There is a strict operational firewall between the business activities of CIC International and those of Central Huijin. In May 2015, another sovereign wealth enterprise CIC Capital was created with US$ 5 billion in initial capital. The funds came from the CIC. The unit plans to spur Chinese domestic enterprises to invest overseas and encourage Chinese exports.

CIC International was established in September 2011 in accord with China’s Company Law, with a mandate to invest and manage overseas assets. It took over the entire overseas investment portfolio and mandate from CIC, and it continues to pursue CIC’s investment principles and approaches of independent decision-making grounded in market conditions. Since CIC International was established, an additional $49 billion has been provided to the company.