China’s Sovereign Wealth Fund Received $30 Billion New Capital Last Year
China Investment Corp. (CHIVCZ), the nation’s sovereign wealth fund, received $30 billion of capital from the State Administration of Foreign Exchange by the end of last year, Executive Vice President Jesse Wang said.
The funds were a one-time injection and any future capital will have to be applied for separately, Wang told reporters while attending meetings today of the Chinese People’s Political Consultative Conference in Beijing.
Chairman Lou Jiwei said last month the sovereign fund had received additional capital after having invested almost all its cash in 2010. CIC was set up in 2007 with $200 billion from the Ministry of Finance. It had $410 billion of assets at the end of 2010, according to its latest annual report.
“We’re going to, still in accordance with our existing asset allocation plans, expand our diversified assets in a balanced manner,” Wang said of investments after the capital injection.
Wang also said CIC won’t be participating in efforts led by the Chinese government to help Europe resolve its debt crisis. Such efforts, if any, may be conducted through the People’s Bank of China, the finance ministry or the International Monetary Fund, Wang said. CIC is a commercial investor and so wouldn’t be part of such aid, he said, without saying if the sovereign fund would invest independently.
“If financial assets are undervalued in a certain region and we think we can, with limited risk, get relatively good returns, we’ll invest,” Wang said. “But we won’t make decisions on a very speculative and short-term basis.”
CIC likes emerging markets for longer-term growth prospects, Wang said. The fund is also confident in Chinese banks and that any rebound in the bad-loans ratio for the nation’s lenders won’t be “too big” because of ample provisions, capital and profits, he said.
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