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.”
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.