This change has been a long time coming. As reported by the Financial Times:
CIC close to deal on London business park
China poised to name head of CIC
Desperately seeking Chinese SWF chairman
China struggles to find wealth fund head
beyondbrics China’s CIC: change of the guard
IN Financial Services
Former SFO director may be called as witness in hedge fund case
Second surprise exit for El-Erian
Week in review, January 25
China criticises US SEC auditor ban
“SAFE is all that matters now,” says the head of one private equity firm that invests CIC funds, referring to the State Administration for Foreign Exchange which is responsible for almost all of the country’s reserves.The move comes at a delicate time. China appears on the verge of pivoting its North American activities from Canada and a natural resources management strategy toward New York and a more strategic role in equities markets. "China's sovereign wealth investment fund is poised to launch a buying spree in global infrastructure projects and advanced technology companies after deleveraging in the US and European private sectors has run its course, its chief said." Ray Chan, Chief of China's wealth fund bullish on US private sector, South China Morning Post, China Business, Jan. 23, 2014 ("US companies in the areas of shale gas, manufacturing, and advanced technology are within our investment radar," said Ding, who took over at the sovereign wealth fund in July last year. "We plan to take a range of investments including private, direct, and alternative." Ibid). This might include entry into the start up or mezzanine finance markets. (Uber Could Use Sovereign wealth Fund Money, Sovereign Wealth Fund Institute, Jan. 7, 2014.)
“In the beginning, there were unrealistic expectations both on CIC’s performance and its ability to do big deals,” says Chen Zhiwu, now a professor at Yale University who is on many advisory boards in China.
“They did not become reality. As a result, money which was originally expected to move to CIC from SAFE has not happened. They will keep CIC going but the expectations have shifted downwards.”
SAFE has recently taken over functions previously handled by CIC, including setting up a debt fund with the asset management unit of the International Finance Corp arm of the World Bank. It is also increasingly investing China’s trillions of dollars in reserves abroad itself. (Ibid).
Within China, Mr. Gao appears to have been his own worst enemy, or at least the victim of changing political tastes, and its consequences for advancement. The official unofficial version is well known: "A fierce intellectual independence and unwillingness to “play politics”, along with complaints that he is too “western”, are often cited by other senior officials to explain why he never advanced to much higher office." (Sender, supra). But more importantly, perhaps, was the consequences of his past. At a time when Party building and ideological work is moving to the front of the agenda of the CCP, Gao's symbolic stance during the Tienanmen protests of 1989 might well have come to haunt him (Ibid). Of course, it could have gone the other way--Gao might have served as a symbol of transformation and symbol of the way in which the CCP had moved forward. BUt there were likely too much history here to make that feasible.-