Chinese asset managers could be merged into CIC

Chinese asset managers could be merged into CICSpeculation has mounted over the fate of three major asset managers in China following reports that they will be merged into the country’s US$1.24 trillion sovereign wealth fund. A report on Monday from state-backed Xinhua Finance News stated that three of China’s largest “bad debt” managers – China Cinda Asset Management, China Orient Asset Management and China Great Wall Asset Management – would be folded into China Investment Corporation (CIC). The move was described as part of a plan to reform financial institutions in China and a commitment from the government to separate its roles as both regulator of and shareholder in state-owned firms – the Ministry of Finance is the major shareholder of all three asset managers. However, the report has subsequently been deleted and none of the firms have provided comment on the news. The three asset managers were set up in 1999 as a way to handle non-performing loans from four of its state-owned banks, however in the intervening 25 years, they have exceeded their original remit and now pose a systemic risk of their own due to an underperforming stock market and a rising debt in the real estate sector. One news story concerning the CIC that has not been deleted is the prospective appointment of Liu Haoling as vice chairman and president. He has been with the sovereign wealth fund since its inception in 2007 and was most recently executive vice president and chief risk officer. ©2024 funds global asia

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