Deputy Shanghai Mayor 'to Take over at CIC'

BY    2013-05-12 11:08:29

  (Beijing) -- A deputy mayor of Shanghai is expected to take the helm at the country's sovereign wealth fund, a source close to the matter says, amid reshuffling at major financial institutions.
  Tu Guangshao, 54, would succeed Lou Jiwei at China Investment Corp. (CIC). Lou was named finance minister in March.
  The move has the approval of the central government, the source said, and a formal notice would be announced soon.
  The source also said Li Xiaopeng, vice president of Industrial and Commercial Bank of China, is expected to be named chairman of CIC's board of supervisors.
  Tu has worked at the central bank, the Shanghai Stock Exchange, the China Securities Regulatory Commission and other institutions. In 2007, he was named a deputy mayor of Shanghai. He oversaw the city's financial development.
  A major challenge facing Tu is how to better manage the country's surging foreign exchange reserves – now at US$ 3.4 trillion – through overseas investments.
  CIC was established in 2007 with US$ 200 billion from the forex reserves through a special bond issuance arrangement handled by the Ministry of Finance. By 2010, the sovereign wealth fund had used up most of its money for overseas investments.
  CIC has received more money from the central bank in recent years, but a stable mechanism for this is not in place.
  CIC has tried to distance itself from its domestic investment arm, Central Huijin Investment Ltd., which is closely linked to the government. The sovereign wealth fund emphasizes its independence from the government, especially when pursuing of commercial investments abroad. But it still relies on Huijin's higher investment returns and its access to wealthy and influential state-owned enterprises to boost performance.
  Also, separate sources say that Peng Chun, the vice general manager of CIC, will be named president of the Bank of Communications, one of the country's largest banks. The bank's current president, Niu Ximing, will become bank chairman.

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