China Seeks to Actively Invest Foreign Exchange Reserves

11 Pages Posted: 11 Mar 2008

See all articles by Eiichi Sekine

Eiichi Sekine

Nomura Institute of Capital Markets Research

Abstract

In September 2007, China established the China Investment Corporation (CIC) as a vehicle to invest its foreign exchange reserves. The CIC reports directly to the State Council, and is led by its Chairman, Lou Jiwei, the former Deputy Secretary-General of the State Council. The CIC's US$200 billion in capital was funded through the domestic issuance of special treasuries, and the organization plans to invest 2/3 of this capital in domestic financial institutions, and 1/3 of it overseas. The CIC's challenges include ensuring a high investment yield and meeting overseas disclosure and transparency requirements.

Keywords: China Investment Corporation, CIC, foreign exchange reserves

JEL Classification: E50, E60, F30, G10, H00

Suggested Citation

Sekine, Eiichi, China Seeks to Actively Invest Foreign Exchange Reserves. Nomura Capital Market Review, Vol. 10, No. 4, Winter 2007, Available at SSRN: https://ssrn.com/abstract=1104603

Eiichi Sekine (Contact Author)

Nomura Institute of Capital Markets Research ( email )

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