China has risen to greater prominence in sovereign investors’ portfolios, with inflows surging 21 per cent year on year in 2024, according to a tracker of nearly 750 state-owned investors globally.
The world’s second-largest economy attracted US$10.3 billion in investments from funds managed by central banks, sovereign wealth funds and public pension funds, up from US$8.5 billion in 2023, according to Global SWF. The growth came amid warming ties between China and the Middle East, as well as increased diversification goals among investors.
“China is gaining importance among sovereign investors because of their need to diversify their portfolios away from developed markets,” Diego Lopez, founder and managing director of the data platform, told the Post on Thursday. “We believe this trend will continue in both equity capital markets and private investments.”
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Sixty-two per cent of the investments by sovereign wealth funds in China last year came from Persian Gulf nations, including Saudi Arabia’s Public Investment Fund (PIF), Abu Dhabi’s Mubadala and Investment Authority (ADIA), and the Qatar Investment Authority (QIA), he said. Singapore accounted for 24 per cent, including from Temasek and GIC.
The investors were interested in the real estate, financial services and technology sectors, among others.
GIC bought additional shares in a China Vanke shopping centre in Shanghai to increase its stake to 98 per cent in the third quarter of last year. The transaction followed ADIA and Mubadala’s investments to take control of Zhuhai Wanda’s shopping malls. They were part of a PAG-led consortium that injected 60 billion yuan (US$8.2 billion) into a business unit owned by Chinese property magnate Wang Jianlin.
“Both deals were the result of disposals emerging in the context of China’s real estate woes, which have seen borrowing costs surge and Beijing cracking down on the property sector,” Global SWF said in a report published on Wednesday.
Other deals in 2024 included QIA buying a 10 per cent stake in China Asset Management, one of the country’s largest mutual-fund firms, in a transaction worth at least US$490 million.
An undated file photo of Mubadala Tower in Abu Dhabi. Photo: Handout alt=An undated file photo of Mubadala Tower in Abu Dhabi. Photo: Handout>
