China Investment Corp. Goes Long on Digital Disruption at SALT

Seeks Chinese investment opportunities that have the potential to enter developed markets.

As hedge fund managers and investors gathered at the annual SkyBridge Alternatives Conference (SALT) in Las Vegas last week, one of the key focus areas for investment managers was looking abroad into emerging markets for new opportunities. However, some investors seem to be looking in the opposite direction. -Dr.. Zhao Haiying, chief risk officer of China Investment Corp. (CIC), used her presentation to highlight how CIC is looking at Chinese investment opportunities that have the potential to enter developed markets.

“We are paying attention to the applications of technology in China and we think there are a lot of opportunities,” Dr. Haiying said from the stage. “Chinese companies are growing abroad and are looking at ways of facilitating Chinese consumerism abroad. That’s very interesting to us.”

Dr. Haiying said Tencent was an example of a Chinese company expanding its influence abroad. She touched on the company’s growth in the mobile payment space, which could allow Chinese consumers to shop abroad. “Chinese consumers are global citizens. Think about the potential of being able to transact with mobile payments facilitated by a Chinese company,” she said.

According to Dr. Haiying, the Tencent example is instructive for understanding two key investment themes for CIC: digitization and disruption. “Like any other country, we are facing a lot of challenges,” she said. “One challenge is common, which is technological change.”  When it comes to investing around technological change, CIC is seeking opportunities that will be profitable despite the disruption caused by technological change. Tencent, with its large online presence and mobile payments, is positioned to be profitable as more consumers move online for their shopping. Traditional retail in China has faced similar pressures to retail elsewhere; fewer shoppers are coming into stores and are instead looking online for the cheapest price.


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