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CIC to increase international infrastructure investment, says chairman

China's sovereign wealth fund, China Investment Corp (CIC) is to increase its infrastructure investments in overseas assets its chairman told the Wall Street Journal31 Mar 2015

CIC, which was established in 2007, plans to take a more direct role in managing overseas assets, and recently opened a unit called CIC Capital that will oversee investments in assets such as infrastructure and farms, the Wall Street Journal said.

Ding Xuedong, chairman of CIC, said that CIC will increase spending on infrastructure and real estate, especially in developed countries like the US and Europe, where it can expect steady cash flows. It will also cut back its energy holdings, given the recent fall in prices, while looking for assets to buy on the cheap, he told the Wall Street Journal.

Ding said it would invest in the US as it was "the number one engine of growth for the global economy", with China as number two.

Ding said he expects "good performance" from countries including India, Nigeria and Mexico. He was less positive about developing nations Brazil, Russia and South America, and said that Abenomics, the economic revival programme of Japan's prime minister Shinzo Abe, as "a kind of lazy politics in my view," the Wall Street Journal said.

The Chinese government's moves to increase fiscal spending and loosen monetary policy will spur economic activity, Ding told the Wall Street Journal. He is confident, he said, that China will meet its annual growth target of 7% this year, as the government shifts the economy to focus on consumption and entrepreneurship.

CIC announced a focus on investments in agriculture and global food supplies last year, in a change from the energy, metals, mining and the other commodities required to support China’s industrial rise. In an opinion piece in the Financial Times in June 2014, Ding said that CIC would invest more in agriculture around the world, and also in technology, infrastructure and real estate investments which offer long-term stable returns.

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