China may pump additional $200 billion into CIC: report

China Investment Corporation (CIC), China's $300-billion sovereign wealth fund, may get additional $200 billion from the country's massive $2.27-trillion foreign exchange reserves, said the Financial Times  reported today.

The UK-based paper, citing unidentified government officials and people familiar with the fund, said that the amount to be handed to CIC would be similar to the $200 billion given to it when the fund was launched in 2007.

While a final decision has yet to be made, the Chinese media has also reported that the government is considering a new capital injection of $200 billion for the fund.

Any infusion of fresh funds into CIC would be an acknowledgement from the Chinese government that CIC has shown excellent results compared to Singapore's wealth fund Temasek, although it came under criticism for incurring book value losses on its investments in Morgan Stanley and the US private equity firm Blackstone during the global financial crisis.

CIC had invested $3 billion for a 9.4-per cent stake in Blackstone Group in June 2007 and took a 9.9-per cent stake in Morgan Stanley for $5 billion in December 2007.

CIC is considered to be one of the most aggressive sovereign wealth fund having made just $4.8 billion in new overseas investments in 2008 with a portfolio return of 2.1 per cent during the world's worst recession, but said in August that it would increase new overseas investment this year by more than 10 times last year's figure.