In 2015, China Investment Corporation (CIC) reported negative return on its foreign investment, for the first time in four years due to volatility on international financial markets, falling oil prices and appreciation of the US dollar against the yuan.
The annual report showed net loss of 2.96% on overseas investments from a 5.47% gain the year earlier. The corporation reported a 17% decline in net profit to $73.9 billion. Return was dragged down to 4.58% at end-2015, from 5.66% a year earlier. CIC’s total assets increased by 9%.
Analysts say there is still a period of world economic adjustment after the financial crisis. In 2016 sluggish economic growth is likely to continue. Moreover, weak inflation as well as low productivity and weak trade are seen to persist.
CIC’s 2015 performance was “not too bad considering the high volatility in financial markets last year and the low inflationary environment,” Johnny Fang, an analyst at Z-Ben Advisors Ltd., said, citing negative returns among other sovereign wealth funds.
