China Investment Corp (CIC), a sovereign wealth fund responsible for managing part of China's foreign exchange reserves, recently bought a 10 percent stake in London's Heathrow Airport with 450 million pounds ($720.81 million). Earlier this year, the fund also bought an 8.68 percent stake in Thames Water's parent company, Kemble Water, for 276 million pounds.

Considering that both of these projects have been mature for decades and are strictly supervised by regulators in the UK, the investment returns they can offer the CIC will be limited. Also, compared with other financial assets, positions in mature public works projects cannot be easily unwound, which means that a large chunk of China's foreign exchange assets are now effectively frozen.

CIC was established in order to put China's large supplies of foreign currency in high-growth projects overseas. The recent purchases in the UK however, run contrary to this goal, and I hope CIC will make better investment choices in the future.

The author is Liu Xiaozhong, a commentator.