Date
19 November 2017
Ports and logistics investments in Africa will be a key focus area for China's sovereign wealth fund in the near future. Photo: Bloomberg
Ports and logistics investments in Africa will be a key focus area for China's sovereign wealth fund in the near future. Photo: Bloomberg

China sovereign fund to focus more on emerging markets

China Investment Corp. (CIC), the nation’s sovereign-wealth fund, plans to invest more in emerging markets to tap the growth opportunities there, the Wall Street Journal reported Wednesday.

After making several high-profile investments in the US and Europe in recent years, the US$653 billion Chinese fund now aims to focus on emerging markets where there is less competition, more opportunity and a greater need for capital, the report said.

CIC executives specializing in infrastructure, oil, gas and agriculture investing are working together to create “package deals” for emerging economies, Mi Tao, a director of infrastructure investing at CIC, was quoted as saying.

The collaborative approach can open up investments that wouldn’t otherwise be possible, and reduces the risks associated with infrastructure projects in emerging markets, he said.

“We can put together a package deal which will help a lot in those emerging countries, to unlock their value, and also create jobs and create growth. At the same time, when you assess those infrastructure assets in a package deal… many risks get mitigated,” Mi was quoted as saying at an Infrastructure Investor conference in Berlin.

CIC is reconsidering its approach to investing in infrastructure because assets in developed markets have become too expensive, with inflated pricing at auctions, Mi said. 

“You have plenty of capital allocated to developed markets,” he said. “On the other hand there are critical needs in infrastructure in emerging countries which nobody wants to tap.”

The CIC director said he is “quite optimistic” about Africa, particularly South Africa, Tanzania, Kenya and Djibouti.

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RC

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