China Investment Corporation (CIC), the country’s sovereign wealth fund, is looking to raise alternative investments in the United States due to low returns in public markets, its chairman said on Monday.
CIC will boost its investments in private equity and hedge funds as well as making more direct investments in the world’s largest economy, Ding Xuedong said at the Asian Financial Forum in Hong Kong.
“We hope to increase our alternative investments (in the United States), which is also a common trend among large global institutional investors, to cope with the low or even negative interest rate environment, where the returns in public markets are falling,” he said.
Ding, who is also the chairman of investment bank China International Capital Corporation (CICC) (3908.HK), added that CIC may also look into investing in U.S. infrastructure projects and the manufacturing industry, which are expected to benefit from the policies of President-elect Donald Trump.
“According to our estimate, the United States needs at least $8 trillion in infrastructure investments. There’s not sufficient capital from the U.S. government or private sector. It has to rely on foreign investments.”
Ding also called for fair treatment for Chinese investors into the U.S. market, adding that CIC is willing to accept U.S. regulatory scrutiny. “We just hope there would be no double standard.”
Although Chinese firms’ announced as well as completed overseas acquisitions were the highest ever last year, the number of deals that stalled was also a record as buyers ran into greater regulatory pushback in the United States and other Western nations.
State-owned CIC was funded in 2007 to help China earn a higher return on its foreign exchange reserves.
It now manages about $800 billion assets, including $200 billion of overseas investments, according to Ding.