BEIJING (Reuters) - China’s $500 billion sovereign wealth fund China Investment Corp (CIC) CIC.UL has appointed cabinet official Ding Xuedong as its new chairman, two sources said on Friday, ending a three-month search.
The appointment of Ding, a vice secretary general of China’s cabinet and a former vice finance minister, was announced within the fund on Friday, a source with knowledge of the situation said.
“It was announced this afternoon at CIC by the organization department,” the source said, referring to the China Organisation Department, which oversees appointments of senior party, government, military and state-owned enterprise officials.
CIC was not immediately available for comment.
Little is known about Ding, a career official at the finance ministry who turns 53 this year. He holds a Ph.D in economics from a Chinese university affiliated with the Finance Ministry.
Ding succeeds Lou Jiwei, who became finance minister in March. Although a range of officials were tipped to replace Lou after he left CIC, including former head of China’s securities regulator Guo Shuqing, the fund was without a chairman for three months.
The leadership vacuum stirred speculation about the behind-the-scenes power struggles between top leaders of the Communist Party, who decide the appointments of senior officials. It also highlighted the opaque ways in which China picks its senior leaders.
Reuters reported in March that Guo was reluctant to become CIC chairman as he was only 18 months into his job as the chief of the securities regulator. Guo is now governor of the eastern province of Shandong.
CIC was created in 2007 to earn higher returns from riskier investments such as commodities, private equity, and hedge funds for part of China’s $3.4 trillion foreign exchange reserves.
But not all of the fund’s bets have paid off. Its $3 billion investment in Blackstone Group LP (BX.N) and $1.8 billion investment in Morgan Stanley (MS.N) lost money, drawing scathing criticisms from ordinary Chinese.
Reporting by Shen Yan, Zhao Hongmei and Koh Gui Qing; Editing by Ron Popeski