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China sovereign wealth fund returns to profit in overseas investment

Updated: Jul 12,2017 9:53 AM     Xinhua

BEIJING — China’s sovereign wealth fund China Investment Corporation (CIC) said on July 11 that its overseas investment returned to profit in 2016.

CIC posted a US dollar-denominated net return of 6.22 percent in overseas investment last year, compared with a loss of 2.96 percent in 2015.

The year 2016 was an extraordinary year for the fund, CIC Vice Chairman and President Tu Guangshao said in the annual report.

Facing a complex global landscape fraught with uncertainties, CIC achieved encouraging results through internationalized, market-oriented and professional operations, Tu said.

The fund has seen a net cumulative annualized return of 4.76 percent in overseas investment since its establishment, according to the report.

Its total assets had grown to $814 billion by the end of last year.

In CIC’s $220 billion overseas investment portfolio, public equities, fixed income, alternative assets and cash products accounted for 45.9 percent, 15 percent, 37.2 percent and 1.9 percent, respectively.

In 2016, CIC performed well in overseas real estate investment, CIC spokesperson Liu Fangyu said.

CIC Capital Corporation, a CIC subsidiary, completed investment decisions on 16 foreign direct investment projects last year, totaling about $5 billion in value.

CIC Capital also increased its investment in infrastructure, such as Port of Melbourne in Australia.

For 2017, Tu cautioned that the global investment environment presented high volatility, citing rising uncertainties in global politics and policies.

“Global growth for 2017 should pick up, but the downside risks cannot be overlooked,” he said.

Headquartered in Beijing, CIC was established in September 2007 as a vehicle to diversify China’s foreign exchange holdings and seek maximum returns for its shareholders within acceptable risk tolerance.

China’s forex reserves stood at $3.057 trillion at the end of June.

CIC invests overseas through two subsidiaries: CIC International and CIC Capital.

Central Huijin Investment Ltd, another CIC subsidiary holding stakes mainly in commercial banks, securities and insurance companies, experienced stable and healthy development in 2016, Liu said, highlighting its function in serving real economy and supporting economic restructuring.