China Investment Corporation, the country’s $813 billion sovereign wealth fund, is eyeing more direct investments in the US in an effort to continue diversifying its portfolio.
The US is an important market for CIC and accounts for 40 percent of its overall foreign investment, vice-president and chairman Tu Guangshao said at the Asian Financial Forum in Hong Kong on Monday. Tu has repeatedly said in interviews the fund plans to make more investments in technology and manufacturing as well as infrastructure companies in the US.
In line with this, CIC teamed up with Goldman Sachs in November to raise a $5 billion private equity fund for US companies to tap the Chinese market.
The sovereign wealth fund also plans to invest more capital in emerging sectors. Tu added: “CIC needs to keep its eyes open and maintain a more balanced portfolio especially in emerging sectors. We will seek more active opportunities in healthcare.”
On diversification, Tu noted that CIC is a major global investor and tries to diversify its portfolio by “not putting all of its eggs in one basket and to invest across a broad spectrum”.
When asked about the possibility of US-China trade war, Tu pointed out a trade war is “mutually destructive”.
“There won’t be any US-China trade war because the current situation benefits both countries – the volume of trade is gargantuan; it has its own history and tradition,” Tu said. “One benevolent way to improve trade relations, however, is for the US to export more technology to China.”