The Trump Effect: China’s $800-B Sovereign Wealth Fund to Invest in US
China Investment Corporation (CIC), the national sovereign wealth fund, is looking to raise alternative investments in the United States due to low returns in public markets (aka stock and bonds), its Chairman said Monday.
CIC will boost its investments in private equity and hedge funds as well as making more direct investments in the world’s largest economy, Ding Xuedong said in Hong Kong.
“We hope to increase our alternative investments (in the United States), which is also a common trend among large global institutional investors, to cope with the low or even negative interest rate environment, where the returns in public markets are falling,” he said.
Ding, who is also the Chairman of investment bank China International Capital Corporation (CICC), added that CIC may also look into investing in US infrastructure projects and the manufacturing industry, which are expected to benefit from the policies of President Donald Trump.
“According to our estimate, the United States needs at least $8-T in infrastructure investments. There’s not sufficient capital from the US government or private sector. It has to rely on foreign investments.”
Ding also called for fair treatment for Chinese investors into the US market, adding that CIC is willing to accept US regulatory scrutiny. “We hope there will be no double standard.”
State-owned CIC was funded in Y 2007 to help China earn a higher return on its Forex (foreign exchange) reserves.
It now manages about $800-B assets, including $200-B of overseas investments, according to Ding.