Investment strategy of sovereign wealth funds from emerging markets: the case of China

Ewa Cieślik

DOI: http://dx.doi.org/10.1515/bog-2014-0012

Abstract


Chinese sovereign wealth funds SWFs continue to expand rapidly and have become increasingly active in real-time strategic transactions recently. They have focused not only on financial markets in developed countries, but they also concentrate on commodity investment in emerging markets (mainly in African or Central Asian markets). The main goal of this paper is to examine investment patterns and performance of two large Chinese sovereign wealth funds: the State Administration of Foreign Exchange Investment Company (SAFE IC) and the China Investment Corporation (CIC). In the absence of official data on the activities of the funds, the article is based largely on press releases relating to the operation of funds and corporate reports of the companies invested in by the Chinese SWFs. The paper presents sectoral and geographical directions of China's SWFs investment and tries to describe how the investment strategy of the aforementioned vehicles changed until mid-2013. The main limitation of the adopted methodology derives from the lack of information and poor transparency of the analysed vehicles. Moreover to obtain the correct information on the details of fund investments (size, value, date) each press release requires extensive verification.

Keywords


sovereign wealth fund; investment strategy; foreign investment; China Investment Corporation; China

Full Text:

PDF

References


Bloomberg, 2011: http://www.bloomberg.com/news/2011-05-16/chinese-state-investment-groupbuys-gold-one-for-its-south-african-assets.html

Bloomberg, 2013: http://www.bloomberg.com/

Bolton, P., Samama, F. and Stiglitz, J. E., 2012: Sovereign Wealth Funds and Long-Term Investing, New York: Columbia University Press.

Carr, C., 2013: “National Interest” Concerns and Uncertain Investment Regimes Are Impending Important

Investment Sovereign Wealth Funds. In: Harvard Business Law Review, p. 68.

China Daily, 2013: http://www.chinadaily.com.cn/china/

China Development Bank, 2011: 2011 Annual Report.

China Investment Corporation, 2008: Annual Report 2008.

China Investment Corporation, 2009: Annual Report 2009.

China Investment Corporation, 2010. Annual Report 2010.

China Investment Corporation, 2011. Annual Report 2011.

China Investment Corporation, 2013: http://www.chinainv.cn/

Cieślik, E., 2013: Inżynieria finansowa po chińsku (Chinese financial engineering – in Polish). In: Gazeta Bankowa, 10, pp. 80–87.

Cieślik, E., 2013: Skuteczny jak państwowy fundusz inwestycyjny (Efficient as sovereign wealth fund – in Polish). In: Gazeta Bankowa, 6, pp. 68–74.

Cieślik, E., 2013: The Investment Strategies of China’s Sovereign Wealth Funds during Global Financial Crisis, Istanbul: Emerging Economies Conference 2013.

Farrel, D. and Lund, S., 2008: The New Role of Oil Wealth in the World Economy. In: McKinsey Quarterly,pp. 14–19.

Fortado, L., 2012: The Bloomberg,: http://www.bloomberg.com/news/2012-07-01/china-owns-10-of-veoliawater-uk-after-sale-sunday-times-says.html

Heritage Foundation, 2013: http://www.heritage.org/

Huijin Investment, 2013: http://www.huijin-inv.cn/hjen/aboutus/aboutus_2008.html?var1=About

IMF, 2008: Sovereign Wealth Funds – A Work Agenda,IMF.

International Working Group of Sovereign Wealth Funds, 2014: http://www.iwg-swf.org/pubs/gapplist.htm

KPMG, ESADE, Invest in Spain, 2013: Sovereign Wealth

Funds 2013.

Martin, M., 2010: China’s Sovereign Wealth Fund: Developments and Policy Implications. In: Congressional

Research Service, 23 September, p. 4.

Mcmahon, D., 2013: The Wall Street Journal, http://online.wsj.com/article/SB10001424127887323699704578323670119279066.html

National Bureau of Asian Research, 2013:

"> http://www.nbr.org/

Nolan, P., 2012: Is China Buying the World, Cambridge:Polity Press.

O’Brien, P., McKibbin, W. and Fry, R., 2011: Sovereign Wealth: The Role of State Capital in the New Financial Order, Singapore: Imperial College Press.

Orlik, T. and Davis, B., 2012: Beijing Diversifies Away From U.S. Dollar. In: The Wall Street Journal, 2 March.

Pignal, S. and McCrum, D., 2013: China to Buy US Assets via GM Pension. In: Financial Times:

"> http://www.ft.com/intl/cms/s/0/82cd520a-d0f9-11e1-8957-00144feabdc0.html

Reuters, 2013: http://www.reuters.com/

Russian Direct Investment Fund, 2013: http://rdif.ru/Eng_fullNews/236/

Shemirani, M., 2011: Sovereign Wealth Funds and International Political Economy: Ashgate Publishing Limited.

State Administration of Foreign Exchange, 2013: http://www.safe.gov.cn/

SWF Institute, 2013: http://www.swfinstitute.org

The Central People’s Government of the PRC, 2011: Report on the Work of the Government, Beijing.

The Guardian, 2013: http://www.theguardian.com/uk

The New York Times, 2013: http://www.nytimes.com/

The Wall Street Journal, 2013: http://europe.wsj.com/home-page

Truman, E., 2010: Sovereign Wealth Funds: Threat Or Salvation?, U.S. Department of the Treasury: Peterson Institute for International Economics.

Wearden, G., 2007: The Guardian: http://www.guardian.co.uk/business/2007/jul/23/china.internationalnews

http://www.reuters.com/article/2008/02/04/anglo-china-idUSL0432174320080204

Wu, F., Gog, C. and Hajela, R., 2011: China Investment Corporation’s Post-Crisis Investment Strategy. In:

World Economics, pp. 144–145.

Xiaotian, W., 2013: China Daily: http://www.chinadaily.com.cn/bizchina/2013-03/04/content_16274302.htm








Print ISSN: 1732-4254
Online ISSN: 2083-8298

Partnerzy platformy czasopism