CIC Released Annual Report 202111-11-2022
On November 11, 2022, China Investment Corporation (CIC) released its Annual Report 2021 (Annual Report) as approved by the Board of Directors.
The Annual Report disclosed CIC’s financials, performance, overseas investment activities and domestic equity management as at December 31, 2021. It also elaborated on CIC’s achievements in the past year on corporate governance, human resources, global outreach, and corporate social responsibility.
Mr. PENG Chun, Chairman and CEO of CIC, said in his message that 2021 was a year of milestone significance and great challenge. In 2021, CIC stayed the course, pursued progress while ensuring stability, and successfully achieved all main business targets set for the year.
According to the Annual Report, in 2021, CIC’s overseas investments posted a net return of 14.27% in U.S. dollar terms, and the annualized cumulative 10-year net return reached 8.73%, beating its 10-year performance target by 296 bps. As of the end of 2021, the total state-owned financial assets under the management of Central Huijin reached CNY 5.58 trillion, up 7% from the beginning of the year. CIC’s total assets grew to USD 1.35 trillion, with net assets of USD 1.25 trillion.
Currently, CIC’s global portfolio consists of public equity, fixed income, alternative assets, and cash products and others, respectively accounting for 35.4%, 15.4%, 47.0%, and 2.2%.
On corporate governance, management, and development, we upgraded our corporate governance structure with adjustments to the sub-committees of the Board of Directors, and gave full play to the Board’s role of guidance and oversight over key matters. We reviewed our talent development system and updated policies for recruitment, management, training, mobility, and incentivization. We continued to advance data governance and digital transformation initiatives. We fully marshalled our research resources and continued to build strong proprietary research capabilities. And we consistently applied a proactive problem-solving approach to identify and solve key issues in operations and management, to better position the company for the next stage of high-quality development.
On investment management and capacity building, we remained committed to our position as a long-term institutional investor and made steady progress in our overseas investment business with prudent formulation and disciplined implementation of asset allocation plans. We further enhanced the resilience and quality of the total portfolio by optimizing portfolio construction and our investment footprint. We continued to adopt a more granular approach to managing public market investments, making proactive adjustments to investment styles and managers, and refined our processes around proprietary investments. We stepped up our investments in private markets, optimized the structure of our private market investments, and continued to expand our network of high-quality managers. We achieved higher investment management effectiveness through deepened reform of management policies and systems for overseas investment, the establishment of a “dedicated member of investment committee” system, and the adoption of a more fine-tuned investment performance assessment system.
On domestic equity management and the management of state-owned capital, Central Huijin guided its portfolio companies, through corporate governance channels, to devise new development strategies and deepen reform of their institutional mechanisms, helping them bolster their core competitiveness. By giving full play to the strategic supporting role of state-owned financial capital and mobilizing diverse financial resources in concert, Central Huijin enhanced support for the real economy and contributed to economic and social development. It played an instrumental role as a platform for resolving financial risk and maintaining market stability, bailing out distressed financial institutions on a market-oriented basis and in accordance with law. It also made innovations in the way its dispatched directors perform their duties and exercise their powers, pioneered an “active shareholder” toolkit, systematically built up its roster of dispatched directors, provided stronger support to them in the performance of their duties, and continuously improved the management of state-owned financial capital, in a bid to improve the resilience and quality of state-owned financial capital.
On comprehensive risk management, we upgraded the company’s risk management governance structure with the establishment of a new Risk Management Committee under the Board of Directors and a new Comprehensive Risk Management Committee under the Executive Committee. CIC’s comprehensive risk management system features clearly delineated roles and responsibilities across the risk management committees, their sub-committees, and all relevant departments constituting our “three lines of defense”, ensuring “wall-to-wall and floor-to-ceiling” risk coverage. In our overseas investment business, we made prudent adjustments to risk budget targets for the total portfolio and harmonized risk management practices at all levels. In our management of state-owned financial capital, we stepped up risk monitoring of Central Huijin’s portfolio companies, guided them to carry out risk checks in key areas, and proactively addressed and resolved existing risks to achieve stable and healthy development.
CIC actively practices corporate social responsibility in its operations, investments, and international engagement, seeking to contribute to the sustainable development of the world. In 2021, CIC devised a roadmap for carbon neutrality in its own operations and carbon reductions across the total portfolio, adopted its Sustainable Investment Policy, established an integrated ESG and climate transition portfolio, and actively sought out investment opportunities in green and low-carbon technologies, energy transition, and other related themes. We made proactive efforts to reduce resource consumption and minimize waste in our operations, taking a multi-pronged approach to reducing our carbon footprint. We actively explored the potential of a global green partnership alliance with other sovereign wealth funds and asset managers.
We also continued to commit assistance to Shibing County in Guizhou Province, Xunhua County in Qinghai Province, and Jingning County and Huining County in Gansu Province, to help consolidate their hard-won achievements in eradicating poverty. We are now stepping up our efforts and adopting a wider range of measures to help these four counties embark on a new journey of rural revitalization.
We actively participated in international cooperation mechanisms and dialogues, and was elected to the new Board of Directors of IFSWF, becoming the only member institution that has served continuously on its Board since its establishment. We will continue to promote the healthy development of sovereign wealth funds worldwide.
“Firmly rooted yet flexible, the bamboo bends but does not break even when buffeted by gales from east, west, north, and south.” Chairman PENG Chun said that the year 2022 marks CIC’s 15th anniversary as well as the final year of the China Investment Corporation Strategic Plan 2018-2022. We will stay true to our purpose and hold fast to our mission. We will continuously enhance our corporate governance and investment capabilities. We will actively put into practice sustainable development concepts, remain committed to win-win cooperation, and maintain our determination and courage to move forward on the path of building CIC into an international, market-oriented, professional, and responsible large institutional investor.
Please see CIC Annual Report 2021 for more information.