China Investment Corporation - CIC

AAA

DEFINITION of 'China Investment Corporation - CIC'

A government-sponsored entity of the People's Republic of China that seeks to invest in securities and commodities abroad. The CIC was initially funded with around $200 billion, which originated from the issuance of long-term treasury bonds by the People's Bank of China (PBOC). The bond proceeds were then converted into dollars through the foreign exchange market.

INVESTOPEDIA EXPLAINS 'China Investment Corporation - CIC'

The CIC provides a vehicle for investing the massive trade surplus that exists in the nation. The CIC will receive regular inflows of capital to help suppress this figure.

Speculations abound as to how the CIC will impact the world financial markets. China has been a large investor in U.S. Treasuries for many years, but hopes to earn a higher return on its foreign investments by diving into stocks, bonds and commodities such as oil and gold. Critics point to general corruption in China's political and economic system and wonder what kind of regulations will exist within the CIC to prevent it from being run in a similar fashion.

One of the first announced investments of the CIC was a 10% stake in U.S.-based private equity firm Blackstone Group, a move that sparked concern on Wall Street at the prospect of Chinese influence on U.S. corporate operations through the stock market.

RELATED TERMS
  1. Special Administrative Region - ...

    Unique geographical areas with a high degree of autonomy set ...
  2. Asian Century

    The dominant role that could be played by Asia in the 21st century, ...
  3. China's State Administration Of ...

    China's foreign exchange regulatory agency, which functions as ...
  4. Baidu

    The dominant Chinese internet search engine company. Baidu offers ...
  5. Guanxi

    A Chinese term meaning "networks" or "connections," understood ...
  6. China Concepts Stock

    The stock of a company whose assets or earnings have significant ...
RELATED FAQS
  1. What is the long-term outlook of the chemicals sector?

    The long-term outlook for the chemicals sector, as of 2015, is good, primarily due to continuing emerging market opportunities. ... Read Full Answer >>
  2. What proportion of the chemical sector is related to life sciences?

    The subsectors of the chemicals sector that are related to life sciences, pharmaceuticals and agricultural chemicals, make ... Read Full Answer >>
  3. How would a standby letter of credit be used during an export transaction?

    A standby letter of credit is typically used to provide a bank guarantee of payment for an exporter in the event that an ... Read Full Answer >>
  4. What emerging markets are best positioned to benefit from growth in the Internet ...

    The emerging markets that are best positioned to benefit from growth in the Internet sector are those that welcome investments, ... Read Full Answer >>
  5. Who are Berkshire Hathaway's (BRK.A) main competitors?

    Led by renowned investor Warren Buffett, Berkshire Hathaway (BRK.A) is involved with multiple sectors of industry, facing ... Read Full Answer >>
  6. How does a company decide whether it wants to engage in a leveraged buyout of another ...

    A company may decide to undertake a leveraged buyout of another company if it believes it can reorganize the target company ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Investing In China

    Investment opportunity is huge in China. However, investors should consider the pitfalls, understand the risks and rewards, focus on shareholder-friendly companies and stick to investments they ...
  2. Mutual Funds & ETFs

    Finding Fortune In Foreign-Stock ETFs

    Think beyond your borders to reduce the impact of local market downturns.
  3. Budgeting

    Current Account Deficits: Government Investment Or Irresponsibility?

    Deficit can be a sign of trouble for some countries, and of health for others. Find out what it means when more funds are exiting than entering a nation.
  4. Economics

    Explaining the Human Development Index

    The Human Development Index (HDI) is a metric developed by the United Nations to take the emphasis off economic growth and focus on human wellbeing.
  5. Economics

    Chinese Opportunities For A Changing Child Policy

    China's one-child policy is changing, and investors are looking for ways to cash in. The reform might not have the effects that many anticipate, however.
  6. Economics

    Gaining Market Influence-- The Case of US Shale

    A convergence of sustained bank financing, falling production costs and rising oil prices might position the US shale industry for a greater market role.
  7. Mutual Funds & ETFs

    The EMAG Emerging Mkts Bond ETF: Worth the Risk?

    The Market Vectors Emerging Markets Aggregate Bond ETF (EMAG) might offer long-term rewards, but is now the best time to jump in?
  8. Professionals

    A Look at How the Ultra-Wealthy Invest

    Ultra-wealthy investors are cautious this year as they approach the markets. Many target mutual funds and stocks, but most also diversify their portfolios.
  9. Fundamental Analysis

    Can You Invest in China's Huawei?

    Have you heard of giant Chinese telecom maker Huawei? Here's what you need to know.
  10. Economics

    Infrastructure Investment & Institutional Reforms

    There has been a lot of buzz in the market lately about the prospect for growth and stability in Latin America.

You May Also Like

Hot Definitions
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  4. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  5. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  6. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
Trading Center