US easing a worry but gold profits help, CIC chief says

America's indebtedness and repeated monetary easing is a matter of grave concern but gold offers a glimmer of hope in these times, according to China Investment Corp (CIC) president Gao Xiqing.

Gao, who runs China's US$482 billion sovereign wealth fund, said he is "not quite convinced" about the US economic system, which he said makes the government print money to satisfy the needs of certain interest groups.

"You cannot spend more than you make. Once you go down that road, it's very, very difficult to come back," Gao said at a financial summit organised by Caijing magazine yesterday in Beijing. "We are worried. That's why we took Ray's suggestions" to buy gold, he said.

Gao was referring to his friend Ray Dalio, founder and chief investment officer of Bridgewater Associates, who invested heavily in gold when the price was only a third of the current level.

Gao said CIC got into gold later, but even now its "gold portfolio is still the single-most profitable one".

The sovereign wealth fund reported a 4.3 per cent loss in its overseas investments last year, its worst annual performance since 2008.