UPDATE 1-China fund CIC sees complex 2010 after good '09

Wed Mar 3, 2010 11:35pm EST

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BEIJING, March 4 (Reuters) - China's $300 billion sovereign wealth fund completed most of its investments in 2009, leaving relatively little cash on hand, a senior executive said on Thursday.

Jesse Wang, executive vice president and chief risk officer at China Investment Corp (CIC), described the fund's overseas investment performance as being very good last year, when CIC invested mainly in emerging markets.

But 2010 would be more complex than either 2008 or 2009.

As a result, CIC would manage its portfolio flexibly, Wang told reporters on the sidelines of the Chinese People's Political Consultative Conference, an advisory body to parliament.

Fast-rising commodity prices were one factor complicating CIC's asset management, Wang said.

"Personally, I think the prices are a bit too high relative to the strength of real economic recovery," he said. [ID:nBJB003707]

Wang sidestepped a question about media reports that the State Council, China's cabinet, might hand CIC another $200 billion of the country's reserves to invest.

The State Administration of Foreign Exchange (SAFE) manages the bulk of China's official reserves, which totalled $2.39 trillion at the end of 2009. CIC was set up in September 2007 when the government transferred $200 billion to it from SAFE.

Wang said Central Huijin Investment Ltd, the domestic arm of CIC, would continue to hold stakes in Chinese commercial banks as long as the government wanted to maintain controlling stakes in them. (Reporting by Li Hongwei, Zhou Xin and Alan Wheatley; Editing by Ken Wills)

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