CIC Set for up to $200bn in Fresh Funds
China Investment Corp., the official sovereign wealth fund, is going to receive between $100-200 billion in new funds from the government. From the Financial Times:
CIC, which has already fully allocated the $110bn it had available for offshore investments, is to get the new money as Beijing seeks to reduce its exposure to US government debt. “There has been bureaucratic bickering for a year,” said one person familiar with the matter. “It has been difficult to resolve.”
Recently, a number of senior officials, including China’s central bank governor, have said the country’s foreign exchange reserves are excessive and beyond “reasonable requirements”.
The reserves, already the largest in the world, grew by nearly $200bn in the first quarter to top $3,000bn for the first time. In the past week, two senior government economists have publicly said China only needs reserves of around $1,000bn.
CIC was established in 2007 with the mandate to invest some of the country’s foreign reserves in riskier offshore assets. At that time, China had less than $1,500bn in its foreign exchange coffers.
Read more about CIC and China’s overseas investment via CDT.