The Chinese government decided in 2007 to join a growing list of nations and create a sovereign wealth fund (SWF). The resulting entity—the China Investment Corporation (CIC)—with an initial capital fund of $200 billion, was a significant new addition to the existing pool of SWFs (see Table 1 ). The rapid expansion of SWFs in 2007, and in particular, the CIC's creation, became the subject of significant congressional inquiry in 2007 and 2008. Several congressional committees – including the Joint Economic Committee, the Senate Banking Committee, the Senate Foreign Relations Committee, the House Financial Services Committee, and the House Foreign Relations Committee – held hearings on the growth of SWFs and their implications for the U.S. economy and national security. In February 2008, the U.S.-China Economic and Security Review Commission, a congressional advisory panel, convened a day-long hearing on SWFs, with a focus on the CIC. After the onset of the global financial crisis, concerns about SWFs in general and the CIC in particular diminished, in part because the CIC and many of the other major SWFs sharply curtailed their investment activities. However, starting in 2009, the CIC began making major investments in several different companies, with an apparent focus on energy and natural resources companies. In addition, one of the CIC's subsidiaries, the Central Huijin Investment Corporation (Central Huijin), made substantial investments in several larger Chinese banks and financial enterprises, which in turn, began to back outward foreign direct investment (FDI) and domestic investments by state-owned enterprises and private corporations. Its renewed investment activities have rekindled congressional and scholarly concerns about the nature and intent of the CIC's overall investment strategy. Although the CIC maintains that it is an institutional investor seeking to maximize its rate of return, some observers speculate that the CIC is operating as a vehicle for a Chinese government strategy to secure access and possibly control over resources necessary for China's growing economy. Some are concerned that China's expanding international holdings of energy and strategic resources may pose a risk to U.S. security. Discussions of ways to monitor and regulate the investment activities of SWFs and the CIC have reappeared among international experts and in Congress. China announced in March 2007 that it would create a sovereign wealth fund to invest its accumulated foreign exchange reserves more profitably than the usual low-risk/low-return items, such as U.S. Treasury Notes. After a few delays, China's new sovereign wealth fund officially started operations on September 29, 2007. The CIC provided China with another avenue by which it could invest its growing foreign exchange reserves, which totaled $1.4 trillion as of September 2007, and which have continued to grow, standing at $2.45 trillion as of July 2010. The genesis of the CIC was apparently subject to political infighting among China's major financial institutions, with both China's central bank, the People's Bank of China (PBOC), and the Ministry of Finance vying for control over the new SWF. In the end, the CIC was placed directly under the control of the State Council, China's ruling executive body. The investment activities of the CIC are nominally directed by an 11-member board of directors. However, a separate seven-person Executive Committee is generally considered to be in charge of the CIC's day-to-day operation. According to the CIC's webpage, its mission "is to make long-term investments that maximize risk adjusted financial returns for the benefit of its shareholder [the State Council]." From its inception, the CIC has stressed that its investment decisions are made purely on a commercial basis. However, some of its investments raise questions about their commercial merit. In particular, the CIC assumed responsibility for the assets and liabilities of the Central Huijin Investment Limited (Central Huijin) in November 2007. As a result, the CIC indirectly became a major stock holder in the China Construction Bank (CCB), the Industrial and Commercial Bank of China (ICBC), and other Chinese financial institutions. Central Huijin's main mission is to "make equity investments in major state-owned financial enterprises … to achieve the goal of preserving and enhancing the value of state-owned financial assets." Some observers see a contradiction between the missions of the CIC and Central Huijin. The China Investment Corporation is a wholly state-owned company, under the direct supervision of the State Council, China's ruling executive body. The daily operations of the CIC are managed by its Executive Committee, which is overseen by a board of directors (appointed by the State Council) and monitored by a board of supervisors (also appointed by the State Council). the CIC's chief executive officer is Lou Jiwei, its chief operating officer is Zhang Hongli, and its chief risk officer is Jesse Wang Jianxi. The details of the CIC's investment operations are not readily available and the company's annual reports do not include detailed listings of its holdings. The CIC utilizes both its internal staff of about 250 people, as well as contracted asset management companies and an unknown number of subsidiary investment companies, to make investments. Since its creation, there have been several unconfirmed reports that the CIC has hired specific asset management companies (including U.S. firms) to manage a portion of its investment portfolio, but the CIC and the alleged companies have generally refused to comment on the details. The CIC's 2009 annual report indicates that 51% of its holdings are externally managed and 41% are internally managed. Among the CIC's known subsidiaries are Beijing Wonderful Investment, Ltd., Chengdong Investment Corporation, Country Forest Limited, Fullbloom Investment Corporation, Land Breeze II, Stable Investment Corporation, and Central Huijin. While the CIC technically owns Central Huijin, Central Huijin has its own board of directors, board of supervisors, and executive officers. The CIC's CEO Lou Jiwei is the chairman of Central Huijin's board of directors, and the CIC executive vice president Peng Chun is Central Huijin's chairman. According to its 2009 annual report, the CIC's investment objective is "to achieve an appropriate long-term and risk-adjusted return for its shareholder [the State Council]." In its efforts to achieve this goal, the CIC says it abides by four key investment principles. First, it selects investments based on commercial criteria. Second, it is a passive, financial investor, and does not seek control of companies. Third, the CIC complies with the laws and regulations of the countries in which it makes investments. Fourth, investments are selected based on research utilizing standard evaluation techniques. In addition, the CIC is a founding member of the International Forum of Sovereign Wealth Funds (IFSWF) and has agreed to abide by the IFSWF's Santiago Principles, which set voluntary guidelines of behavior for SWFs. Since its creation in September 2007, the CIC has grown from its initial capital endowment of $200 billion to a total worth of $332 billion at the end of 2009. In 2009, the CIC's return on its total registered capital was 12.9% and its return on its global portfolio was 11.7%. In 2008, the return on capital was 6.8% and its global investments lost 2.1%. By comparison, Norway's Government Pension Fund's return on capital in 2009 was 25.6% and in 2008 was -23.3%. Based on its 2009 performance, the CIC has reportedly asked for an additional $200 billion in capital. The State Council has not made a decision on the request. Because of the separation of management between the CIC and Central Huijin, the investment activities of each entity should be examined independently. In general, the CIC's major investments have been made overseas, while Central Huijin has focused on domestic investments. In addition, Central Huijin's primary objective is to support China's financial institutions; the CIC is supposed to make commercially based investments. The CIC's investment activities can be divided into three distinct periods (see Table 2 below). First, just prior to and immediately after its establishment, the CIC focused its investments on financial institutions. The second period was one of comparative investment inactivity in response to the global financial crisis. Third, the CIC reactivated its investment activity starting in 2009, with a notable shift to investments in energy and natural resource companies. The apparent change has raised concerns about the commercial basis of CIC's investment strategy. According to a report submitted to the Securities and Exchange Commission (SEC) in February 2010, the CIC had holdings in 82 different U.S. entities as of December 31, 2009, with a total worth of $9.627 billion. In addition to those U.S. companies listed in Table 2 , the CIC held shares in several other major corporations, including Apple, Bank of America, Burlington Northern Santa Fe, Chesapeake Energy, Citigroup, Coca Cola, Eli Lilly, Hartford Financial Services, Ingersoll-Rand, Johnson & Johnson, Merck, Metlife, Motorola, News Corp, Pfizer, Sprint Nextel, Terex, and Wells Fargo. There have also been a number of unsubstantiated reports of the CIC interest in investing in other companies. In the spring and summer of 2009, there were repeated claims that the CIC was considering providing Australian mining giant Fortescue a loan of $1 billion. The CIC was also reputedly pondering an investment in the French nuclear power company Areva during the summer of 2009. In October 2009, there were claims that CIC was among a list of possible investors in Russian aluminum producer United Co Rusal. During a January 2010 forum in Hong Kong, CIC Chairman Lou indicated that the CIC had been discussing possible investments in the mining industries of Brazil and Mexico.