Impact on Portfolios of Government Investment Entities as a Result of China's Decision to Ban For-profit Private Tuition and Implications on Anticipated Net Investment Return Contribution

Parliamentary Question by Assoc Prof Jamus Jerome Lim:

To ask the Minister for Finance with regard to China’s decision to ban for-profit private tuition (a) whether this decision has resulted in any adverse impact on the portfolios of the Government investment entities (GIE); (b) if so, how does the impact compare to the historical losses experienced in the portfolios of the GIE; and (c) whether the adverse impact will have any implications for our anticipated Net Investment Return Contribution.

Parliamentary Reply by Minister for Finance, Mr Lawrence Wong:

The Government does not comment on specific investment decisions or exposures of our investment entities, as we assess their performance on an overall portfolio basis, over the long term.

Temasek and GIC have globally diversified portfolios, with investment exposures across geographies, asset classes and sectors. The portfolios of both entities have exposures to China, including its education sector, as they have to other geographies. While the recent Chinese regulatory decision had an impact on investments in its education sector, such developments are part and parcel of investing. Portfolios may be impacted by changes in the operating environment from time to time. What is more important and relevant is the performance of the overall portfolio over the long term.

The Net Investment Return Contribution is tied to the long-term expected returns of our investment entities and their total portfolios. It is not driven by short-term impacts to investments.