CADF Ramps Up

Ashby Monk

Oxford Analytica has an interesting article on the China-Africa Development Fund this morning. The CADF isn’t really a SWF, but it is an important and unique financial institution. The article is worth a read (subscription required). Here are a couple of nuggets:

“In 2008, the CADF invested more than 400 million dollars in Chinese firms operating in Africa; the remaining 600 million of its initial 1 billion dollars in capital are expected to be invested by the end of this year — two years ahead of schedule. In addition, it will receive a top-up of 2 billion dollars starting in 2010, and opened its first dedicated African office in South Africa in March.”

“Established in June 2007, the CADF is wholly owned by the China Development Bank (CDB), which is in turn controlled by China’s State Council. Its mandate is to invest in Chinese companies with current or planned operations in Africa:

  • Investment. It is less of a development fund and more of a private equity investment fund. It does not make loans to African countries but instead invests — based ostensibly on market principles — in Chinese companies that operate in Africa. Eventually, the fund hopes to invest a total of 5 billion dollars.
  • Financial advice. The CADF also sees itself as a business consultancy and financial adviser. It seeks to advise Chinese firms on how to invest in Africa directly, offering a wide range of services designed to facilitate entering what can be a daunting investment environment.”

“Chinese policymakers suggest that the CADF is more of an ‘ethical investor’ than funds from the West because it does not seek to impose conditions or its views on the recipient countries. This claim frustrates Western investors, who perceive the Chinese to be complicit in environmental degradation and human rights abuses in certain regions by investing with ‘no strings attached’. Nevertheless, the CADF is the first among Chinese investment funds to insist on an environmental assessment of the projects in which it invests. Moreover, it does have an internal policy that requires investments to conform to local labour protections.”

3 Responses to “CADF Ramps Up”

  1. 1 miamiohio June 9, 2009 at 2:40 pm

    If the CADF is not considered a SWF, have the Chinese engaged in any SWF activity on the African continent? They have clearly employed a number of other state owned entities/enterprises in their escalation of relations and trade with a number of countries, though apart from the CADF I have not been able to find any reference to Chinese wealth fund activity. As a follow up, would you classify any other Chinese entities besides the Chinese Investment Corporation (CIC) as SWFs? And would the CIC even technically be a SWF given that investment has thus far been confined to domestic projects?

  2. 2 Ashby Monk June 9, 2009 at 2:47 pm

    On the first point, I haven’t seen much going on in Africa from other Chinese SWFs. In the latter point, in my view, the CIC is definitely a SWF. As for SAFE, it does not see itself as a SWF (it did not participate in the International Working Group), but I’d probably include it in the SWF category of investors. Also, on CIC investing: it is active internationally. See the recent Morgan Stanley deal as evidence. Granted, much of their initial capital did go to domestic projects…

  1. 1 China’s SWFs Tournament: To the Victor Goes the Reserves « Oxford SWF Project Trackback on September 17, 2010 at 12:52 pm

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

RSS Feed


Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 370 other followers

Latest SWF News

Visitors Since August 2010

%d bloggers like this: