China points finger at US trade war after US$940 billion sovereign wealth fund suffers negative growth in 2018
- China Investment Corporation (CIC) saw a 2.35 per cent negative return on its overseas investment portfolio in 2018 in contrast to the gain of 17.6 per cent in 2017
- Fund general manager Ju Weimin says trade tensions have led to a ‘more cautious view’ of the situation in the United States, which ‘we are watching closely’
China’s US$940 billion sovereign wealth fund posted a loss last year, with officials pointing to the escalation of trade war with the United States, frequent geopolitical disputes and the slowdown of major economies as the culprits for the weak performance.
Rapid changes in financial markets and the regulatory environment last year tested big institutional investors, including the China Investment Corporation (CIC), with the 2.35 per cent negative return on its overseas investment portfolio in 2018 in stark contrast to the gain of 17.6 per cent recorded in 2017.
“The situation remained complicated this year. The disruption being caused by political factors will get bigger and bigger as the US enters the [presidential] election cycle in the second half of this year,” said CIC chairman Peng Chun, who was appointed in April having previously served as Bank of Communications chairman.
“Some Western countries have also tightened foreign investment policies, while Chinese companies were treated with rose-tinted glasses or prejudice.”
The situation remained complicated this year. The disruption being caused by political factors will get bigger and bigger as the US enters the [presidential] election cycle in the second half of this year,
Despite the drop in its return last year, CIC’s annualised return over the last 10 years, used as an internal appraisal benchmark, stood at 6.07 per cent.
