Central Huijin Investment

People's Bank of China

Central Huijin was established in 2003 by the People's Bank of China. It was created as a special purpose vehicle incorporated as a limited liability company. Its mission was to recapitalize China's banks. Researcher Zongyuan Zoe Liu writes that using a sovereign fund like Central Huijin gave "the CPC the maximum degree of flexibility to decide when it would leave the market to its own devices and when it would forcefully intervene to protect the state's interest." Between 2003 and 2006, Central Huijin functioned as a quasi-state-owned private equity fund.

In 2005, the State Council approved the Comprehensive Plan for the Consolidation of Brokerage Firms, with the goal of implementing new regulatory mechanisms and rooting out misconduct in the securities field. Central Huijin wholly owned subsidiary Jianyin Investment, along with the China Securities Investor Protection Fund, were tasked by the State Council with restructuring Chinese brokerages. During the period 2004–2007, Central Huijin and Jianyin Investment acquired controlling stakes in ten large Chinese brokerage firms, totaling at that time one-third of the Chinese securities industry. The brokerages recapitalized in 2005 included Galaxy Securities, China Southern Securities (which was subsequently liquidated), Shenyin & Wanguo Securities, and Guotai Junan Securities. This in turn gave Central Huijin's parent institution, the People's Bank of China, significant power in the securities industry despite not having formal legal oversight. Central Huijin's track record of restructuring financial institutions has largely been viewed as a success.

In 2007, the Ministry of Finance increased its degree of supervision over Central Huijin.

China Investment Corporation

In 2008, Central Huijin Investment was acquired from the State Administration of Foreign Exchange by the China Investment Corporation for roughly $67 billion. It manages more than two-thirds of CIC's assets. Central Huijin functions as the "shareholder in chief" of the entire financial sector, a role that allows the state to participate in the market consistent with global norms of corporate ownership structure without letting go of state oversight of strategic enterprises and sectors.