China’s sovereign wealth fund wants to invest in the US infrastructure rebuild, chairman says

China Investment Corporation will broaden its investment scope to include infrastructure rebuilding in the US, according to its chairman

PUBLISHED : Monday, 16 January, 2017, 9:00pm
UPDATED : Monday, 16 January, 2017, 11:00pm

President-elect Donald Trump’s plan to rebuild America’s infrastructure would create investment opportunities for China, the chairman of China’s sovereign wealth fund said on Monday.

China Investment Corporation’s (CIC), chairman Ding Xuedong said its US investments were likely to grow under Trump’s administration, which has proposed to spend US$1 trillion on fixing the roads, bridges and other public works in the United States.

Ding told the Asian Financial Forum in Hong Kong that the US would need at least US$8 trillion to fund the rebuilding effort, and money from the federal government and American private investors would not be sufficient.

“They have to rely on foreign investors,” Ding said, who oversees the nation’s US$800 billion sovereign fund.

Ding added that CIC is seeking to boost alternative investments in the US owing to low returns on assets in public markets.

About 40 per cent of CIC’s US$200 billion overseas investments is now held in US government and agency debt, among other US assets, according to Ding.

He said when investing in the US, CIC respected the review conducted by Washington over industry entry, national security and antitrust concerns, as long as there was no “double standards”.

“Whatever policies and requirements you set for other foreign investors, you should apply the same ones on us,” he said. “This is our bottom line.”

Trump has vowed to get tough on the world’s second largest economy by labelling Beijing a currency manipulator and imposing a 45 per cent tariff on Chinese imports.

Concerns over straining Sino-US trade links have further grown after the incoming president appointed China critics to his trade team.

However, business leaders speaking at the forum doubted whether Trump’s protectionist rhetoric would be reflected in real policies after he takes office on January 20.

Eun Sung-soo , chief executive officer of Korea Investment Corporation, said the economic consequences of Trump’s presidency might not be as serious as many had thought.

“One person does not handle everything,” Eun said. “The US has a strong system to balance the power between the congress and the president.”

Boeing’s vice chairman Raymond Conner said history had showed that protectionism would only hurt the economy, citing the example of how high import tariffs had contributed to the Great Depression.

“Trade is so vital to the US economy,” Conner said at Asian Financial Forum on Monday. “As a company, we will work very closely with the new administration to work on policies that are going to help create trade, because those create jobs.”

Conner said in a December speech in the US that the planes Boeing produced for China supported 150,000 American jobs.

Ding also stressed the cooperation between US and China benefited both countries as well as the global economy.

“No matter who becomes the president, the complementary nature of US and China economies does not change,” he said. “China and US should work together. They must not go to trade wars.”