CIC overseas earnings at record high in 2017

Nation’s sovereign wealth fund posts net profit of $103.62 billion last year

China’s sovereign wealth fund announced on Monday it posted a net profit of $103.62 billion as of Dec 31, 2017, up by 37.55 percent year-on-year.

Most importantly, the net return on its overseas investment hit a record high of 17.59 percent last year, compared with 6.22 percent in 2016, according to the annual report of China Investment Corp.

“Among our asset classes, open market operations recorded the fastest growth in return on overseas investment, followed by private equity and direct investment, and then by fixed-income investment,” said Li Wenping, deputy directorgeneral of CIC’s finance department.

Last year, as the exchange rates of non-US currencies remained relatively stable against the US dollar, CIC had a foreign exchange loss of $18 million, much smaller than the exchange loss of $1.53 billion in 2016 when the US dollar was stronger, Li said.

“CIC is an important chapter of the monumental masterpiece of China’s opening up,” said Tu Guangshao, vicechairman and president of the sovereign wealth fund.

“During the past 10 years, we grasped the opportunities of global economic development and the integration of China into the global economic system.”

Since the sovereign wealth fund was established in September 2007, its net cumulative annualized return on overseas investment was 5.94 percent as of the end of 2017. During the same period, its total assets increased from $200 billion to $941.42 billion, and the annualized growth rate of State-owned capital was 14.51 percent, according to the annual report.

CIC is drawing up a future development strategy, especially for the next three years, Tu said.

“We’ll steadily increase our alternative investment and direct investment, better promote the combination of our outbound investment and China elements, keep innovating outbound investment methods, such as optimizing the existing multilateral and bilateral funds, and build a multi-dimensional ecosystem for cross-border investment to deepen our cooperation with various partners,” he said.

The current China-US trade disputes will not affect CIC’s investment in the US, considering that CIC is a long-term financial investor that does not aim to control US enterprises. Its investment will bring mutual benefits to both countries, Tu said.