Fund to help French firms eyeing China

CIC teams up with banking group BNP Paribas, investment company Eurazeo

China Investment Corp has partnered with two French financial institutions to launch an investment fund, as part of the sovereign wealth fund's efforts to facilitate closer international cooperation, a top CIC executive said on Friday.

Tu Guangshao, vice-chairman and president of CIC, said the fund has teamed up with global banking group BNP Paribas and global investment company Eurazeo to launch a fund worth 1 billion euros ($1.12 billion) to 1.5 billion euros for investments in French enterprises looking to expand into the Chinese market.

The fund aims to unleash the potential of win-win economic cooperation between China and France by leveraging each others' advantages, Tu said on the sidelines of the Boao Forum for Asia.

The Chinese and the French economies complement each other in many ways, said Tu. "France has strong advantages in technology, fashion, creative industries and the like, while China has a large domestic market undergoing consumer and industrial upgrading."

When the invested French companies expand their presence in the Chinese market, they will not only increase profitability but facilitate the country's consumer and industrial upgrading, said Tu.

"Also, as a fund investing in French businesses, it could accelerate the development of local enterprises and boost employment."

The bilateral investment funds are a critical part of CIC's innovations in foreign investment cooperation, as previously it cooperated with foreign partners by jointly carrying out investment projects, Tu said.

"We have now entered a new stage of foreign investment cooperation, characterized by bilateral cooperation funds."

Compared with cooperation in projects, cooperation as fund partners means a stabler community of interests as well as closer, wider collaboration, Tu said.

Tu expects the bilateral funds to bring mutual benefits to investors and the countries concerned. He expects the funds to attract more investors and become platforms facilitating cross-border economic cooperation.

CIC's bilateral funds are in line with the win-win international cooperations that China has been pursuing, including the Belt and Road Initiative, according to Tu.

According to him, the BRI has brought huge investment opportunities, on which the CIC will focus this year. Specifically, the company will focus on investments in infrastructure and the new economy such as e-commerce.

"These areas are where we can achieve business sustainability by leveraging our strengths as a long-term investor with large investment scales and rich cooperation networks," he said.

According to a report by the Asian Development Bank, the demand for infrastructure across the Asia-Pacific region far outstrips the current supply, with the financing needs expected to exceed $1.5 trillion to $1.7 trillion per year.