CIC not yet ready to make major moves abroad

China Investment Corp's chairman, Lou Jiwei, said that the sovereign wealth fund was not yet ready to make major investments abroad, the Wall Street Journal reported. Lou, speaking at a financial forum, said CIC must first hire an external fund manager and create an advisory body of foreign experts before it can begin investing on its own. He also said it is under "big pressures" to turn a profit, as it has to earn US$40 million a day to offset the cost of the 5% annual interest rate it pays on the special bonds sold by the Ministry of Finance to capitalize CIC. Lou said CIC wanted "long-term returns with reasonable risks," and so would look at investing in instruments like index products. He said CIC would open branches overseas, but did not say where. The fund, which has US$200 billion of China's US$1.46 trillion foreign exchange reserves to invest, has made one investment so far, buying a US$3 billion stake in Blackstone Group in May.