China’s sovereign wealth fund appoints new head of North America – Sources – November 10, 2023 at 10:00 am

China Investment Corp (CIC) has appointed a new North American head for its New York office, two people familiar with the matter said. It fills a month-long vacancy and shows the sovereign wealth fund is committed to keeping the outpost despite rising tensions between the US and China.

Other than Hong Kong, New York is the only office of the $1.35 trillion fund outside mainland China. It was created in 2015 to help the fund manage its US assets. Since then, Washington has viewed many Chinese investments as a national security risk.

CIC has asked Bai Xiaoqing, who had led some private equity investments from Beijing, to move to New York as head of North America, the sources said, speaking on condition of anonymity because the move was not publicly announced.

He succeeds Zhang Hong, who left the CIC late last year and returned to China after six years in the post, one of the sources added. The reason for Zhang’s departure could not be determined.

CIC, Bai and Zhang did not respond to requests for comment.

The Committee on Foreign Investment in the United States, which reviews deals based on national security interests, has blocked Chinese investments it believes could erode America’s technological edge or compromise data security. US officials are particularly wary of investments by companies close to China’s communist government, such as CIC.

As a result, Chinese investment has fallen from 63 deals worth $53.5 billion in 2016 to just three deals worth $400 million this year, according to the American Enterprise Institute, which collects data. More than $95 million.

However, CIC’s recent disclosures show that some of its US holdings are substantial. According to its latest annual report, 61.48% of CIC’s foreign-listed shares held in 2021 were US stocks. Public stocks constitute 35.4% of the total portfolio.

CIC is also a major investor in US private equity funds, as alternative assets make up nearly half of its portfolio. One of his most significant investments is a $2.5 billion private equity fund from Goldman Sachs Group Inc., which focuses on investing in companies that could benefit from closer U.S.-China ties.

Launched in 2017 and named the China-US Industrial Cooperation Fund, the fund has invested in several companies in the US and UK.

CIC has forged ties with BlackRock Inc, the world’s largest asset manager. Last month, CIC chairman Peng Chun met with BlackRock chief executive Larry Fing to discuss “collaborating on multiple fronts,” the company said. No further details were provided and a BlackRock spokesperson did not respond to questions about the meeting.

Bhai joined CIC in 2007. Previously, he worked at China’s Ministry of Finance for more than 12 years and served as deputy director, according to the Milken Institute website.

Another reminder that China remains a major investor in U.S. assets came Thursday, when a ransomware attack on China’s Industrial and Commercial Bank disrupted trading in the U.S. Treasury market. (Reporting by Echo Wang in New York and Roxanne Liu in Beijing; Additional reporting by Ken Wu in Hong Kong; Editing by Greg Roumiliotis and Edwina Gibbs)