The lobby of China Investment Corp. in Beijing. (Photo/CFP)
China Investment Corporation (CIC), the nation's sovereign wealth fund, plans to collaborate with Chinese enterprises in jointly explore overseas investment opportunities, Shanghai-based China Business News reports, citing CIC chairman Ding Xuedong.
As part of the collaboration, CIC hopes domestic enterprises can lead and control overseas investment targets, while it will be a minority financial investor with no intention of seeking management control, Ding said.
CIC is a sovereign wealth fund responsible for managing part of the People's Republic of China's foreign exchange reserves. The firm was established in 2007 with approximately US$200 billion in assets under management.
Ding made the comments at a recent investment forum.
Over the past 10 years, China's direct overseas investments have seen speedy growth, with an average annual compound growth of nearly 50%, he said. Last year marked the first time private enterprises accounted for more than 50% of China's overseas investments. As well, private enterprises accounted for 76% of China's investments in the United States in terms of investment amount and nearly 90% in terms of investment cases, Ding said.
CIC expects the next stage to see the fastest growth for China's overseas investments, especially those from private enterprises.
With its unique position as the nation's sovereign wealth fund, CIC has encountered more obstacles than private enterprises due to international trade protectionism.
Over the past few years, CIC has been actively visiting many nations in Asia, Europe, North America, Latin America and Africa to communicate with governments and businesses on its purely financial investments as a minority investor, with no intention to seek management control over investment targets, an unnamed CIC executive said. "Still, we often encountered obstacles and setbacks," the executive said.
Despite the obstacles, CIC in 2012 turned a profit return of 10.6%. It has achieved an average annual profit return of 5.02% since it was founded in Sept. 2007. As of the end of 2013, CIC had total assets under management of about US$650 billion, including an overseas investment amount of more than US$200 billion.
CIC is focusing on investments in agriculture, new technologies, infrastructure projects and properties, and hopes to collaborate with domestic enterprises in jointly exploring these investments.