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China's CIC Has Up to $90 Billion to Invest Abroad: FT

As much as $90 billion of China Investment Corp's initial allocation of $200 billion is available for investment overseas, Gao Xiqing, the president of the sovereign wealth fund, said in remarks reported on Thursday by the Financial Times.

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CNBC.com
China, Chinese Flag

Gao, who is also CIC's chief investment officer, was speaking on Wednesday to a JPMorgan conference in Beijing that was closed to the media.

His comments were in line with an unsourced article in Caijing, a leading Chinese financial magazine, more than a month ago that CIC would have from $73 billion to $93 billion to invest abroad.

The figure represents a modest increase on the $70 billion to $80 billion sum that Jesse Wang, CIC's chief risk officer, cited as being available for overseas investment when he spoke in Hong Kong on April 2.

When CIC was set up last September, it said it would invest a third of its initial capital, about $67 billion, abroad.

Gao told the conference that this sum had risen because the government had decided CIC would need to spend less on restructuring Agricultural Bank of China and other financial institutions, the FT reported.

AgBank is the last big state-owned lender awaiting a bailout. Media reports have said the capital injection could be as much as $40 billion, but a senior CIC official said privately earlier this year that the sum could be as little as $25 billion, according to people who were present.

Gao told the JPMorgan conference that CIC would entrust most of its enlarged overseas allocation to external managers to be invested in equities, fixed-income and alternative investments including private equity funds, hedge funds and possibly commodities.