China's sovereign wealth fund took a new leap in its efforts to acquire global assets by setting up its first overseas subsidiary in Hong Kong. The US$300 billion China Investment Corporation sent a message to the global investment community and potential investment targets that it aims to operate on a par with international practice with the establishment of the wholly-owned Hong Kong unit yesterday. The Beijing-based sovereign wealth fund, one of the world's largest, also named renowned economist Lawrence Lau Juen-yee, former vice chancellor of the Chinese University of Hong Kong, as chairman in Hong Kong. Echo Hu, an analyst with Z-Ben Advisors, said: 'By setting up a subsidiary in Hong Kong, CIC is trying to convince potential investment targets that it is committed to international rules. 'The academic background of Lau helped hone CIC's image in terms of professionalism.' Lau, a member of Hong Kong's Executive Council, relinquished his role as a member of CIC's international advisory board in July over a potential conflict of interest. Lau, 66, advises Chief Executive Donald Tsang Yam-kuen on government policy decisions. He was an economics professor at Stanford University before coming to the Chinese University of Hong Kong. Two Beijing-based bankers who had knowledge of CIC's thinking said that appointing a prominent Hong Kong economist could play down potential controversies about the fund's future investments. The sovereign wealth fund grappled with sharp criticism shortly after it was established in 2007 amid growing calls for more transparency in its operations. Among its early deals, the fund suffered losses from investments into Blackstone and Morgan Stanley. The fund published its investments and returns only once a year. According to its annual report last year, CIC invested US$58 billion overseas and achieved an 11.7 per cent return.