CIC names new alternatives chief

Guangshao Tu, a known reformer who was previously asked to lead the entire organisation, has joined as the sovereign wealth fund increases its focus on agriculture.

Chinese sovereign wealth fund China Investment Corporation has hired 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. New investment areas include agriculture, which chief strategic officer Johannes Zhou has said is becoming an increasingly important area for the fund for food security and risk-return reasons.

CIC has not disclosed specific agriculture investments, but Zhou said at the Agri Investor Australia Forum in June that the fund has invested in China’s domestic pork sector and is still stepping up its agricultural assets abroad.

Last year, the Chinese goverment launched the $10bn Russian-Chinese Far East Agribusiness Development Fund, and state-owned companies have steadily increased their interest in agri assets around the world.

State-owned enterprise China Resources Ng Fung has bought a 15.38 percent share of New Zealand apple exporter Scales Corp for nearly NZ$56 million ($38.13 million; €33.75 million) in March. In June, Chinese government and private equity-backed agribusiness COFCO Agri announced plans to open its first office in Canada, increasing its presence in North America as it prepares for a public offering in the medium term.

Tu is 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.

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.