China Investment Corp. (CIC)
| Chair and Chief Executive Officer: | Lou Jiwei [Biography of Lou Jiwei] |
| Board Members: | Liu Jiwei, Gao Xiqing, Zhang Hongli, Zhang Xiaoqiang, Li Yong, Fu Ziying, Liu Shiyu, Hu Xiaolian, and one employee representative |
| Chief Supervisor: | Hu Huaibang |
| President and Chief Investment Officer: | Gao Xiqing |
| Executive Vice Presidents: | Zhang Hongli, Yang Qingwei, Xie Ping, Wang Jianxi (Chief Risk Officer) |
| Address: | China Investment Corp., New Poly Plaza, 17th Floor, 1 Chaoyangmen Beidajie, Chaoyang Qu, Beijing 10001 |
Responsibilities and Relationship to PRC Regulators
Established in Beijing on September 29, 2007, CIC holds three main investment objectives:
- Invest a sizable portion of China's foreign exchange (forex) reserves through overseas investments;
- Invest in domestic financial holdings; and
- Provide capitalization for PRC banks during restructuring through Huijin Investment Corp., which CIC acquired in 2007. (The PRC government established the Central Huijin Investment Corp. in 2003 to manage government investment in PRC banks. CIC assumed this task with its acquisition of Huijin as a wholly owned subsidiary.)
As the PRC government's sovereign wealth fund, CIC's primary responsibility is to invest China's forex reserves. To subsidize CIC's funding, the Ministry of Finance (MOF) issued RMB 1.55 trillion in long-term bonds. MOF sold the bonds to the People's Bank of China (PBOC) for $200 billion in forex reserves, which MOF in turn passed to CIC.
Reportedly, CIC's forex investment will be principally channeled toward equity investment in overseas assets with the standard mandate of seeking high returns weighted against corresponding risks. This strategy is in contrast to China's generally conservative and tightly controlled approach to managing forex, most of which remains sequestered away from reinvestment in the market by PBOC and the State Administration of Foreign Exchange. Officially, forex reserves administered by PBOC and CIC's holdings together constitute 100 percent of China's forex reserves.
Though CIC is neither a PRC financial policymaker nor a financial regulator, CIC interacts in various ways with each of the major PRC financial authorities:
- The State Council directly supervises CIC;
- MOF manages all financial state-owned capital and funded CIC by issuing bonds;
- PBOC, which is ultimately responsible for China's forex reserves, can recapitalize CIC;
- The China Banking Regulatory Commission, China Securities Regulatory Commission, and China Insurance Regulatory Commission are each responsible for monitoring any CIC acquisition of a domestic company in their respective fields.
By mid-2008, CIC had made three principal international investments of considerable size. In May 2007, CIC purchased a $3 billion stake in US private equity firm Blackstone Group. In November 2007, $100 million of CIC's fund went toward a large China Railway stock purchase during its initial public offering on the Hong Kong Stock Exchange. And in December 2007, CIC invested $5 billion in Morgan Stanley. Through Huijin, CIC aims to invest a large portion of its fund in domestic assets including Chinese banks and domestic securities.
For more information on CIC, see China Investment Corporation Faces Formidable Challenges
Return to PART VI: State Council Directly Administered Offices