BEIJING (AP) – China's sovereign wealth fund said Friday it lost 2.1 percent last year on its global portfolio and defended its performance as being better than other such funds amid worldwide financial turmoil.

The China Investment Corp., launched in 2007 with $200 billion in assets, was the target of criticism at home after early investments in U.S. assets sank in value in the bear market.
In its first annual report, CIC said its overall return last year was 6.8 percent after it slowed investments abroad. It said cash and cash equivalents accounted for 87.4 percent of its assets.
""In 2008, CIC's return on its global investment portfolio was -2.1 percent,"" the fund said. ""Overall this was better than other sovereign wealth funds, university endowments and pension funds.""
In January, for example, the Council on Foreign Relations estimated that the six Gulf Arab governments of the energy-producing Gulf Cooperation Council saw their holdings shrink by $82 billion in 2008.
Beijing created its fund to invest part of China's $2 trillion in foreign reserves in hopes of getting a better return. Most of China's assets are held in U.S. Treasurys and other safe but low-yielding instruments.
CIC's most controversial investment was its decision to pay $3 billion for a stake in U.S. investment group Blackstone LP's initial public offering in 2007. It declined in value, prompting criticism in China.
CIC also bought a stake in Morgan Stanley, which was forced to seek U.S. government financial support during the credit crisis. It also invested more than $100 million in Visa Inc.'s $19.1 billion IPO.
___