The China Investment Corporation, or CIC, appointed a new chairman to lead the $500 billion sovereign wealth fund Friday.

Ding Xuedong, a vice secretary general of China's State Council and a former vice finance minister, was named inside the fund's offices, according to Reuters. He succeeds interim chair Lou Jiwei who held the position since March.

Mr. Ding, 53, holds a PhD in economics from a Chinese university affiliated with the finance ministry.

The CIC is a sovereign wealth fund that manages part of China's foreign exchange reserves. It was established in 2007 with approximately $200 billion in assets to earn higher returns from riskier investments such as commodities, private equity and hedge funds for part of China's $3.4 trillion foreign exchange reserves. By 2011, CIC officials said assets stood at $482 billion and at $500 billion by 2012.

Premier Li Keqiang's cabinet had difficulty choosing Lou's successor, because some people under consideration worried that some of CIC's prior investments might become losses in the coming years. Others couldn't win strong enough support from cabinet members.

Ding's appointment comes due to his close ties to cabinet members and his experience in the finance ministry relating to agriculture finance management, according to the South China Morning Post. Yet he lacks investment experience in international capital markets.