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Business |
China to run state-owned
investment corporation
BEIJING: China launched last
Saturday a long-anticipated state-owned investment company that
is intended to manage around US$200 billion (K601 billion ), or
nearly one sixth of the nation’s massive foreign exchange
reserves.
The China Investment Corp will be headed by Lou Jiwei, a former
vice-finance minister, according to a statement issued by the
new company, which took pains to stress the company’s
independence from government interference.
“The company will operate based on the principle of separating
management and government,” the statement issued at the grand
opening in Beijing’s recently erected New Poly Plaza said.
“The company will function independently and based on commercial
principles,” it said.
The statement seemed to be aimed at concerns, voiced overseas,
about the exact nature of the new organisation, and whether, for
example, it would be used to help satisfy the nation’s enormous
thirst for energy and natural resources.
“The company will contribute funds. It’s not a bad thing,” Zhang
Taowei, a finance professor at Beijing’s Tsinghua University,
said.
“If the Americans are concerned about this, it’s because they’re
still stuck in Cold War thinking.”
The company, which will be in charge of the largest fund of its
kind anywhere in the world, emerges at a time when China, long a
magnet for foreign investment, is surfacing as a major source of
capital in its own right.
China’s reserves, the world’s largest, surpassed Us$1.33
trillion (K4 billion) at the end of June, boosted by the
nation’s ballooning trade deficit.
About 70% has generally been believed to be held in US dollar
denominated paper, principally US government bonds. – AFP
 
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