China Seeks to Actively Invest Foreign Exchange Reserves
11 Pages Posted: 11 Mar 2008
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
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