Chinese sovereign wealth fund China Investment Corporation (CIC) has hired former Shanghai vice mayor, Guangshao Tu, as the fund’s new vice chairman and president, according to a statement.
The role of vice chairman includes oversight of the fund’s alternative assets programme, which has grown from 6 percent in 2009 to as much as 26.2 percent or close to $195 billion in 2016, according to PEI Research & Analytics data.
The appointment is an interesting one: Tu was a former executive vice mayor in Shanghai, known for introducing reforms that scaled back government intervention in the market. As well as speeding up government approvals, he encouraged local entrepreneurship in the municipality and backed key financial reforms in China, including setting up the free trade zone in Shanghai and the Shanghai-Shenzhen stock connect scheme.
CIC, which manages around $747 billion of assets, was created in 2007 to help China earn higher returns on its pool of foreign exchange reserves, which amounted to $3.21 trillion in June 2016.
The fund opened its representative office in New York in December to scout for potential investments in the US. The move came after CIC closed down its Toronto office last year, after falling oil prices made oil and gas investment a less attractive prospect.
Tu will succeed outgoing vice chairman Keping Li, who has decided to retire after five years at CIC.
China’s Communist Party had reportedly offered Tu the chairmanship position for CIC in 2013, but he declined, citing concerns about the fund’s weak financial performance at that time.
He was previously head of the Shanghai Stock Exchange, a deputy chair with the China Securities Regulatory Commission (CSRC), and a central bank official.
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