Santiago Principles Self-Assessment

China Investment Corporation

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  • Pillar 1: Legal
  • Pillar 2: Institutional
  • Pillar 3: Investment
Principle 1

1. The legal framework for the SWF should be sound and support its effective operation and the achievement of its stated objective(s).

1.1. The legal framework for the SWF should ensure legal soundness of the SWF and its transactions.

1.2. The key features of the SWF’s legal basis and structure, as well as the legal relationship between the SWF and other state bodies, should be publicly disclosed.

China Investment Corporation (CIC) is incorporated under the Company Law of the People's Republic of China as a wholly state-owned company. The legal basis and structure, as well as CIC's legal relationship with the Chinese government, are disclosed on CIC’s website (www.china-inv.cn) and in its Annual Reports.

Principle 6

6. The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.

Pursuant to the Company Law of China, CIC sets up its Board of Directors, Board of Supervisors and Executive Committee as three governing bodies, with well-defined responsibilities and effective checks and balances among the three.

CIC’s Board of Directors is authorised to oversee the company’s operations, evaluate its overall performance and make decisions on important matters in accord with its Articles of Association. Based on objectives and principles set by the State Council, the Board reviews and approves CIC’s development strategies, operational guidelines and investment plans. It also decides on the implementation of corporate strategies, identifies major issues to report to the shareholder, appoints and removes senior executives and decides on or authorises the establishment of management bodies as necessary.

The Board of Supervisors is responsible for monitoring the performance of directors and executives in the execution of their duties as well as the effectiveness of supervisory procedures within CIC. Also in charge of the Department of Internal Audits, the Board of Supervisors selects external auditors and monitors CIC’s accounting and financial functions.

Entrusted by the Board of Directors, CIC’s Executive Committee translates Board of Directors’ guidance into detailed strategies and oversees CIC’s day-to-day operations. It has the authority to make required operating decisions, including those for basic rules, institutional adjustment, operating mechanisms, performance evaluation and remuneration.

Principle 18

18. The SWF’s investment policy should be clear and consistent with its defined objectives, risk tolerance, and investment strategy, as set by the owner or the governing body(ies), and be based on sound portfolio management principles.

18.1. The investment policy should guide the SWF’s financial risk exposures and the possible use of leverage.

18.2. The investment policy should address the extent to which internal and/or external investment managers are used, the range of their activities and authority, and the process by which they are selected and their performance monitored.

18.3. A description of the investment policy of the SWF should be publicly disclosed.

CIC follows clear and consistent principles and policies that reflect its defined objectives, risk tolerance, and investment strategy for its portfolio management and investment activities. CIC's investment strategy and management, as well as risk management, are publicly disclosed on its website and in its Annual Reports.

In CIC’s Annual Reports, the investment principles and philosophies, investment decision-making, portfolio construction, investment activities, and investment management and support are addressed in investment strategy and management section. The risk management objective and approach, system and mechanism, and risk management outcomes are addressed in risk management section.