12/12/2023 0 Comments Carnival breeze forums![]() : 114 This move was intended to support the Belt and Road Initiative including by conducting foreign direct investment and by supporting state-owned enterprises of China engaged in mergers and acquisitions in economic sectors prioritized by the state. In January 2015, CIC made its Special Investments Division into a separate, wholly-owned subsidiary called CIC Capital. : 113 Other points of emphasis during Ding's time as CIC Chair included technology, real estate, and infrastructure investments. : 113ĬIC's investment strategy changed during Ding's tenure, with an increased focus on the agricultural sector, including industries such as irrigation and animal feed, which other institutional investors have tended to overlook. : 113 Amid the nationwide anti-corruption campaign in 2015, CIC launched an internal investigation in which 495 personnel from CIC and its subsidiaries were disciplined. : 113 The audit found that CIC's early losses were primarily due to dereliction of duty by key personnel, inadequate due diligence, inadequate post-investment management, and a general lack of professionalism. Under Ding's tenure, an audit begun under predecessor Lou Jiwei was concluded. : 112–113 He required senior executives and over 400 CIC employees to submit self-criticisms in which they detailed their errors, apologized, and pledged not to repeat those errors. : 112 Ding oversaw a restructuring of CIC and an increased focus on internal discipline. In July 2013, the Communist Party appointed Ding Xuedong as CIC's chairman. In 2011, CIC established its first foreign office in Toronto, Canada. In 2010, CIC established a new subsidiary, CIC International (Hong Kong) Co in Hong Kong and appointed Lawrence Lau as its chairman. In 2009, the Ministry of Finance converted its ownership of $200 billion of CIC's debt into equity, a result which relieved CIC of interest payments on the special treasury bonds that had initially capitalized it and instead resulted in CIC paying an annual dividend to the Ministry of Finance. : 110 It also replaced its previous asset-class based divisions with new divisions organized based on strategic priorities: Public Market Investments, Tactical Investments, Private Market Investments, and Special Investments. : 109–111 As a result, it shifted its focus in 2009 to prioritize investments in natural resources. : 199ĬIC's early foreign investment activities resulted in losses, as it significantly invested in the United States financial sector just before the 2007-2008 global financial crisis. CIC also sought to improve its credibility by assembling an international advisory council of important individuals from the West. In 2008, CIC joined the International Forum of Sovereign Wealth Funds and signed up to the Santiago Principles on best practice in managing sovereign wealth funds. : 136 Central Huijin manages more than two-thirds of CIC's assets. ![]() ![]() : 36 To acquire Central Huijin from the State Administration of Foreign Exchange, CIC paid $67 billion of its initial $200 billion capital. ![]() The state-owned Central Huijin Investment Corporation was merged into CIC as a wholly owned subsidiary, a process that was completed in 2008. : 95 CIC was capitalized as follows: (1) the Ministry of Finance issued bonds, (2) the Ministry of Finance used the proceeds of the bond issuance to buy foreign exchange reserves from the People's Bank of China, and (3) these reserves were used to fund CIC. : 14ĬIC's funding resulted from the state use of leverage and is therefore unlike most non-Chinese sovereign funds, which tend to be funded through state revenue from national resources like oil. That year, the China Investment Corporation was established with the intent of using these reserves for the benefit of the state by investing abroad in investments that are higher risk and higher reward than government bonds. History Īs of 2007, the People's Republic of China had US$1.4 trillion in currency reserves. China's largest sovereign fund, CIC was established in 2007 with about US$200 billion of assets under management, a number that grew to US$1,200 billion in 2021 and US$1,350 billion in 2023. 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 that manages part of China's foreign exchange reserves. ![]()
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