CIC said it was not seen as a bank holding company seeking to invest in U.S. infrastructure

Author Wu Xiaopeng editor Li Yanxia China Investment Co., Ltd. ("CIC") an executive said the company's investment in US financial institutions was exempt from the Federal Reserve and the Securities and Exchange Commission and was not considered a bank holding company.　　In response to the high unemployment rate in the US, the CIC executive suggested that the US should "invest heavily in infrastructure to stimulate the economy", which he said would "create more jobs" than the Fed's quantitative easing measures.　　No intention to control any overseas financial institution local time October 30, Chow, director of CIC's asset allocation and strategic Research department, received an interview with this reporter during the 16th annual meeting of the Chinese Financial Association of China (TCFA).　　He said that the current 300 billion dollar scale of the CIC is divided into two parts, part of the CIC's wholly owned subsidiary of Central Huijin, central Huijin mainly holding some of China's key financial institutions, while the other part of the main focus on overseas investment. Chow's job is mainly to take charge of the investment activities of CIC funds overseas.　　CIC now has about 150 billion dollars invested in overseas markets, he said. "The two parts of CIC are separate, and we have no intention of playing the role of a bank holding company overseas for this part of overseas investment," he said. "July 21 this year, the United States passed a new Financial Regulation reform bill."　　Under the new law, bank holding companies cannot invest more than 3% of bank capital in proprietary trading, private equity and hedge funds.　　By coincidence, CIC has been selling shares of Morgan Stanley, the bank holding company, for a total of 690 million dollars for three consecutive weeks, starting July 21.　　Brad Hintz, the former chief financial officer at Lehman Brothers, told the Brad Hinz that CIC would sell Morgan Stanley because it did not want to be seen by the US as a bank holding company, subject to very strict financial regulation and limit its ability to invest in the US.　　CIC converted some of its limited trust securities into Morgan Stanley's common stock by mid-August this year, according to the CIC's initial investment in Morgan Stanley. At the time, the Fed wrote in the document approving the deal: "The bank Holding Company Act sees CIC and Huijin as bank holding companies, and if they directly or indirectly invest in a bank holding company or a 5% or more stake in a US bank, they will need to obtain prior approval from the Board of Governors (Fed)."　　In an interview with the Washington Heritage Foundation researcher, Derek Scissors, an expert on China's economic problems, Derek Scissors said that in the eyes of the U.S. government, CIC has other identities (sovereign wealth funds), "It's a bank holding company". Chow told our correspondent: "In fact, we have been exempted from the Federal Reserve and the Securities and Exchange Commission for our investment activities in US financial institutions, so we are not considered bank holding companies and we have no intention of controlling any foreign financialInstitutions。　　"Nevertheless, U.S. regulators still have a number of restrictions on the CIC exemption, which chow not elaborate on." Chow, who wants to invest in infrastructure in the US, also commented on the quantitative easing measures the Fed plans to take this week.　　Investors expect the Fed to unveil at least $ hundreds of millions of trillion of asset-buying plans this week. "It's going to be the biggest money-printing operation ever.　　Chow expects the US to launch a third round of QE after the second round of QE. In his view, none of these measures can effectively improve employment in the United States.　　He suggested that the United States should invest heavily in infrastructure to stimulate the economy. In September this year, U.S. President Barack Obama unveiled plans for an initial 50 billion-dollar transport infrastructure renovation and expansion.　　The plan is still subject to congressional approval, which could face resistance in Congress.　　But chow that 50 billion dollars is not enough. CIC has carried out research into the program, such as high-speed rail. "Such infrastructure construction will create more jobs than the second round of quantitative easing or the third round of quantitative easing," Chow said. "According to CIC, America's infrastructure projects could reach $1 trillion in the next 3-5 years," he said.　　It is likely that two-thirds of them are financed by bonds and the rest in equity. "We think America's infrastructure can be financed and it should be financed," he said. Because these infrastructure projects will create 500,000 permanent jobs. We believe that the current government has the political will to let these things happen, and the American people will support the idea.　　Chow admits the proposal was made to the U.S. government and people because CIC wanted to participate in a project to invest in U.S. infrastructure stakes. But he stressed, "CIC will be a passive investor in the US infrastructure and we will not run or have any infrastructure projects."　　"When asked about the assets that CIC prefers in the United States, he quoted Buffett, a well-known investor, as saying," We prefer a profitable industry.　　Chow admits that Buffett has a habit of often running out of his own long positions and saying that a certain asset is good, "we might do the same." When it comes to hedge fund investment, Chow said, "hedge funds are valuable to a diversified portfolio, and the portfolio is diversified." ”