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China’s CIC Says 2012 Investment Returns Will Be Positive

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Dec. 17 (Bloomberg) -- China Investment Corp., which helps manage the world’s largest foreign-currency reserves, will make a profit on its overseas investments this year after a loss in 2011, according to Jesse Wang, executive vice president of the sovereign wealth fund.

Monetary easing in Western countries boosted capital markets and investment returns, Wang said yesterday at forum in Sanya, China. While CIC is investing in Europe, it would do so more proactively if heavily indebted countries and the European Union create a more investor-friendly environment, he said.

“Our overseas investment performance will be better this year than last year and we will definitely deliver a positive return on that and book profits,” Wang said at the forum, without providing specific figures. “The outlook for the euro-area debt crisis is still not optimistic and there are still no bright prospects. CIC will adhere to a principle that will keep its investment portfolio highly diversified in order to minimize risk.”

Beijing-based CIC was set up to improve returns on China’s foreign exchange reserves by investing overseas. It posted a 4.3 percent loss on its international investments last year, its worst performance since the company was set up in 2007, as declines in global commodity prices roiled the value of its resources-heavy portfolio. China had $3.3 trillion of reserves as of Sept. 30, according to data compiled by Bloomberg.

To contact Bloomberg News staff for this story: Zheng Lifei in Beijing at lzheng32@bloomberg.net; Eleni Himaras in Hong Kong at ehimaras@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net