China Investment Corporation (CIC) is a sovereign wealth fund (SWF) established by the Chinese government in 2007. With an initial capital of $200 billion, it has since grown to become one of the world's largest sovereign wealth funds. The primary objective of CIC is to manage a portion of China's vast foreign exchange reserves and invest them in a diversified portfolio of assets to achieve higher risk-adjusted returns.
CIC operates with a mandate to invest globally and is structured as a market-oriented commercial entity. It is governed by a board of directors and supervised by a board of supervisors. The Chinese government's State Council is responsible for formulating the fund's overall strategy, and the Ministry of Finance provides the initial capital.
CIC's investment strategy focuses on a diversified, long-term approach, which includes investments in a wide range of asset classes, such as equities, fixed income, private equity, real estate, and infrastructure. The fund aims to achieve stable and sustainable returns while also promoting China's economic growth and development.
In addition to its global investment portfolio, CIC has two subsidiaries:
- CIC International (CIC Intl.): This subsidiary is responsible for the fund's overseas investments. CIC Intl. focuses on a broad range of investment opportunities, including direct investments, fund investments, and co-investments with other financial institutions or strategic partners. The objective is to achieve long-term, risk-adjusted returns and contribute to global economic growth.
- Central Huijin Investment Ltd. (Huijin): This subsidiary is responsible for managing CIC's domestic investments, mainly in state-owned financial institutions such as banks, securities companies, and insurance firms. Huijin's primary objective is to support the stability and development of China's financial sector.
CIC is also committed to responsible investing and incorporates environmental, social, and governance (ESG) factors into its investment decision-making process. The fund actively engages with its portfolio companies on ESG-related issues and is a signatory to the United Nations-supported Principles for Responsible Investment (PRI).
Overall, China Investment Corporation plays a crucial role in managing China's vast foreign exchange reserves and diversifying its investments across different asset classes and geographies, aiming to generate stable and sustainable returns for the country's long-term economic development.