Chinese sovereign wealth fund China Investment Corporation (CIC), with over US$800 billion under management, plans to invest in infrastructure projects in the U.S. as President-Elect Donald Trump calls for a fiscal expansion package to stimulate the world’s largest economy.
"By my estimation, over US$8 trillion will be required for U.S. infrastructure projects," said Ding Xuedong, CIC chairman, during the Asian Financial Forum in Hong Kong today. "The U.S. government and the U.S. private investments will not have enough, which means they must rely on foreign investments, and we are foreign investors."
Ding said President-Elect Trump’s planned policy initiatives including fiscal expansion policy will give the Chinese state fund manager more opportunity to make direct investments in infrastructure, as well as mergers and acquisitions in industries such as manufacturing.
But Ding called the incoming White House administration to treat foreign investors, including CIC, fairly.
"(The U.S. regulators) will examine and approve foreign investments on the ground of industry entry, national security and anti-monopoly, but we hope that there is no double standards for investments from us and other foreign countries," Ding said. "We should be treated the same (as others)."
CIC has over US$200 billion allocated to overseas markets, with 40% of those in the U.S. markets. CIC’s portfolio in the U.S. are mostly in the open markets, and the state fund is seeking to increase its alternative investment allocations including private equity, hedge funds and direct investment in the future, Ding commented during a panel discussion in Hong Kong.
He said CIC’s move towards more allocation in alternative investments is part of a broader trend among global institutional investors to seek better returns in the backdrop of lower investment performance from public markets.
Ding said President-Elect Trump will not change CIC’s determination and direction in its investment strategy in the U.S., and he is confident that CIC will be able to increase its U.S. investments and make them more long term.