Beijing: China will set up an agency to manage its $1.07 trillion (Rs47 lakh crore) of currency reserves that would be Asia’s largest government-controlled investment fund.
Finance minister Jin Renqing said the fund will be modelled on Singapore’s Temasek Holdings Pte, which holds stakes in companies ranging from Chinese banks to Indian textile makers. Lou Jiwei, promoted to China’s cabinet on 6 March, will manage at least $200 billion as head of the agency.
China, the world’s second-largest holder of US treasury bonds, now invests most of its currency reserves in dollar assets. The agency may prompt increased Chinese investments in overseas technology companies, mines and oil fields to support an economy that grew 10.7% last year.
“Global investors will be getting nervous,” said Tim Condon, chief Asia economist at ING Bank NV in Singapore.There aren’t that many targets when you’re looking at deals of that size, so expect political tussles to come as China goes shopping.”