WHY DID CHINA USE SOVEREIGN WEALTH FUNDS TOO BUY ASSETS

Sovereign Wealth Funds have been around for decades, but were not seen as a serious player in the global economy until 2005 when the US Federal Reserve, who were worried about the growing US budget deficit, made it clear they would not tolerate sovereign wealth funds buying up US assets This was seen as an attempt to protect the US economy and the US Dollar from the China threat€ Shortly thereafter, the US Congress passed the Foreign Investment and National Security Act of 2007, and China announced that they would no longer buy US assets https://www.govinfo.gov/app/details/PLAW-110publ49 With the US out of the picture, Chinese investors started to look elsewhere in the world for opportunities In 2007, the Chinese government created a sovereign wealth fund called the China Investment Corporation, and the next year it was announced that the CIC would be buying 10% of Blackstone Group, a US private equity firm The CIC's investment in Blackstone was seen as an investment in the US, and it was also seen as a way to get around the foreign ownership restrictions in China, and to invest in companies in China that were listed on the NYSE and other international stock exchanges In 2009, the CIC invested $3 billion in Morgan Stanley, and $5 billion in the Blackstone Group, valuing the two companies at $37 5 billion and $37 billion, respectively The CIC's Canadian investments have not always fared well. The fund bought a 17.2 percent stake in Canadian miner Teck Resources Ltd TCKb.TO in July 2009 for C$1.74 billion (£836.5 million). That stake has lost 72 percent of its value and is now worth C$492.3 million currently. CIC's bets on a string of other Canadian resource companies including Penn West Petroleum Ltd PWT.TO, SouthGobi Resources Ltd SGQ.TO and Sunshine Oilsands 2012.HK have also soured. https://www.reuters.com/article/uk-cn-invst-new-york/exclusive-chinas-sovereign-wealth-fund-to-open-first-u-s-office-sources-idUKKBN0TX22320151214 Cic bought a 9 percent stake in Thames water https://www.bbc.com/news/business-16643989.amp I At the height of the financial crisis the CIC invested $5.8 billion in Morgan Stanley. It also bought shares in aig. https://www.reuters.com/article/us-china-cic/chinas-cic-gives-breakdown-of-u-s-equity-stakes-idUSTRE6181K620100209 https://www.morganstanley.com/press-releases/morgan-stanley-receives-regulatory-approvals-for-cicc-stake-sale_8b63041b-0256-11e0-a939-47eef5319fc1. Us approves 10 percent stake in Morgan Stanley https://en.mercopress.com/2010/09/01/chinese-sovereign-fund-takes-control-of-10-of-morgan-stanley-s the CIC invested $1 billion in NYSE-listed Marathon Oil, and $600 million in NYSE-listed Hess Corporation China investment in national oil companies: https://iea.blob.core.windows.net/assets/900e23de-e76a-43ca-82fb-7dd6e70f11f9/PartnerCountrySeriesUpdateonOverseasInvestmentsbyChinasNationalOilCompanies.pdf CIC’s total assets surpassed the milestone of USD 1 trillion, reaching USD 1.2 trillion, with net assets of USD 946.9 billion. http://www.china-inv.cn/chinainven/Media/2020-09/1001838.shtml In 2018 China sold its stake in black stone ending an 11 year relationship https://www.nytimes.com/2018/03/14/business/blackstone-cic-china.html As of 2020 the cic invests 20% of its portfolio in information technology and 12% in financials and 12% healthcare. The cic believes renewables are the future of energy production. This is an error. Nuclear energy is the only way to achieve energy volume for future growth. http://www.china-inv.cn/chinainven/xhtml/Media/2020EN.pdf In 2020 cic assets valuations were $1.2 trillion and net income was $108 billion.