China Investment Corporation had a fine 2021, but how will this year look?
CIC’s annual reviews are always out of date, but they provide clues to what is happening now.
It is time for China Investment Corporation’s (CIC) annual look in the rear-view mirror. Perhaps it is a sign of the pace at which our world is changing, but CIC’s annual reviews – generally published about 11 months after the conclusion of the previous year – seem so dated in recent times they could be steeped in sepia.
CIC’s 2021 was, in hindsight, a year of rare benevolence. It was a year when interest rates were low, inflation was a dim memory held only by those aged 40 or above, and Ukraine was going about its business as a free and uninvaded nation. Most of the world was moving beyond Covid-19. Not China, of course, but the international portfolio of the $1.35 trillion sovereign wealth fund doesn’t invest in China.
In this fine environment, CIC returned 14.27% on its overseas portfolio, a very good year: CIC’s annualized cumulative net return since inception is 7.22%. Next year’s report – accounting for the year that has almost concluded – isn’t going to look anything like that.