China is considering stripping China Investment Corp (CIC) of all its domestic banking assets in a move designed to overcome some US investment restrictions, AFP reported. Under the proposal, CIC would no long be responsible for holding China’s majority stakes in the country’s biggest banks. This would mean the Federal Reserve Bank of New York would no longer consider CIC as a bank holding company, allowing the sovereign wealth fund greater access to investment opportunities in the US where it is understood to be targeting equities, bonds and real estate. Banking shares held by CIC were valued at US$70 billion when it was established in 2007. Central Huijin, a wholly owned subsidiary of CIC, currently holds the fund’s bank assets. Citing sources close to the situation, state media said that if the spin-off succeeds, Central Huijin could be directly controlled by the State Council or acquired by the state-owned financial assets supervision and administration commission, a new agency Beijing is planning to set up.
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