By Henny Sender in Hong Kong and Kathrin Hille in Beijing
Published: January 16 2011 23:22 | Last updated: January 16 2011 23:22
Published: January 16 2011 23:22 | Last updated: January 16 2011 23:22
China Investment Corp has requested more capital after deploying all its current funds, a senior official at the country’s main sovereign wealth fund has said in a rare public expression of frustration with its government minders.
CIC works with $200bn in central government funds, which it was granted when established in the fall of 2007. A second $200bn injection from the government, talked about more than a year ago, has so far failed to materialise.
The remarks from Wang Jianxi, executive vice-president, who spoke to reporters on Saturday and is expected to retire this year, follow months of lobbying the State Council. Most of China’s $2,850bn in foreign exchange reserves are managed by State Administration for Foreign Exchange, which comes under the auspices of China’s central bank.
According to people familiar with the matter, CIC has argued it deserves more funds with its strong investment record. The fund last reported total assets of $332bn at the end of 2009, saying it realised a 12.9 per cent return that year and 6.8 per cent in 2008.
The turnround followed early stumbles, such as an investment in Blackstone ahead of the private equity fund’s market listing in 2007, and investments the following year in Morgan Stanley and a private equity fund established by Chris Flowers. CIC holds majority stakes in most of China’s largest banks, whose shares have risen sharply over recent years.
Speaking at a conference last month, Gao Xiqing, CIC’s president, said the fund had initially invested 85 per cent of its money in developed markets. He added that CIC would shift its focus to emerging markets and direct investments, such as the $1bn stake it took in Hong Kong-based commodities trader Noble in 2009. Canada’s energy sector is another target.
Safe, meanwhile, remains primarily invested in US Treasuries – a strategy that has attracted criticism for yielding low returns and benefiting China’s primary geostrategic rival.
Senior Chinese leaders have also expressed concerns about the inflationary effects of US monetary policy. According to Mr Gao, for every dollar the US Federal Reserve prints as part of its “quantitative easing” programme, under which it increases the money supply through bond purchases, 40 cents end up in China.
Mr Wang, however, defended the rationale behind dollar-denominated investments.
“We [shouldn’t] complain about the risk of buying US dollars and Treasuries and the need to invest in other countries,” he said. “Investing in other countries does not necessarily make our investment less risky [than in the US].”
Mr Wang’s remarks come ahead of a visit by Hu Jintao, China’s president, to Washington this week.
Additional reporting by Jamil Anderlini in Beijing
According to people familiar with the matter, CIC has argued it deserves more funds with its strong investment record. The fund last reported total assets of $332bn at the end of 2009, saying it realised a 12.9 per cent return that year and 6.8 per cent in 2008.
The turnround followed early stumbles, such as an investment in Blackstone ahead of the private equity fund’s market listing in 2007, and investments the following year in Morgan Stanley and a private equity fund established by Chris Flowers. CIC holds majority stakes in most of China’s largest banks, whose shares have risen sharply over recent years.
Speaking at a conference last month, Gao Xiqing, CIC’s president, said the fund had initially invested 85 per cent of its money in developed markets. He added that CIC would shift its focus to emerging markets and direct investments, such as the $1bn stake it took in Hong Kong-based commodities trader Noble in 2009. Canada’s energy sector is another target.
Safe, meanwhile, remains primarily invested in US Treasuries – a strategy that has attracted criticism for yielding low returns and benefiting China’s primary geostrategic rival.
Senior Chinese leaders have also expressed concerns about the inflationary effects of US monetary policy. According to Mr Gao, for every dollar the US Federal Reserve prints as part of its “quantitative easing” programme, under which it increases the money supply through bond purchases, 40 cents end up in China.
Mr Wang, however, defended the rationale behind dollar-denominated investments.
“We [shouldn’t] complain about the risk of buying US dollars and Treasuries and the need to invest in other countries,” he said. “Investing in other countries does not necessarily make our investment less risky [than in the US].”
Mr Wang’s remarks come ahead of a visit by Hu Jintao, China’s president, to Washington this week.
Additional reporting by Jamil Anderlini in Beijing
Tidak ada komentar:
Posting Komentar