China’s CIC Focus Shifts

August 08, 2013 by Loch Adamson

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CIC's Assets Under Management * Equity Method Valuation † At Fair Value Source: China Investment Corp. DELVE DEEP into the pages of China Investment Corp.’s 2012 annual report, which was released on July 26, and a picture emerges of an organization in the midst of change. CIC posted a strong 10.6 percent return in 2012, but the sovereign wealth fund faces an uncertain future as its archrival, the State Administration of Foreign Exchange (SAFE), a subsidiary of China’s central bank, has started to undercut it by playing a bigger role in diversifying the country’s $3.4 trillion in foreign exchange reserves. Without the promise of future cash inflows from the People’s Bank of China (PBoC), CIC must become self-funding — and more self-reliant. To generate income on an ongoing basis, $575 billion CIC has adopted the so-called U.S. endowment model for its portfolio, but becoming self-reliant will be a tougher challenge.…

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