Funds News
- Forex agency to fund overseas ventures
Date: 14-Sep-2007 Sources: (Shenzhen Daily)
THE country's new State investment agency will help finance the overseas expansion of the country's State-owned enterprises (SOEs), a senior official said Wednesday.
Li Rongrong, head of the State Assets Supervision and Administration Commission (SASAC), said he had already agreed in principle with Lou Jiwei, who will lead the fledgling agency, to jointly fund State firms venturing abroad.
Speaking to reporters on the sidelines of a forum, Li said their cooperation could also involve financing investments by State-owned enterprises in China.
'Lou Jiwei has already talked with me on this issue. We decided to cooperate because he needs good companies (to invest in). If you only have money, you need to decide what to invest in. So there are objective reasons for thinking we can cooperate and we surely will do so,'Li said.
The authorities are still in the process of establishing the new agency, China Investment Corp. (CIC), which will receive US$200 billion of foreign exchange assets now managed by the People's Bank of China.
The State investment agency will invest part of China's foreign exchange reserves, which had reached close to US$1.4 trillion at the end of July, in an effort to achieve higher returns.
Li said the two agencies had not yet settled on any projects to fund. SASAC would draw up a list of potential investment opportunities for CIC.
SASAC oversees 155 centrally-controlled State-owned enterprises, which would be encouraged to seek a stock market listing either at home or abroad, Huang Shuhe, vice chairman of the agency, told the meeting.
Separately, Li said SASAC would give its approval to a bid by U.S. private equity firm Blackstone Group to buy 20 percent of chemical maker China National BlueStar (Group) Corp. for up to US$600 million.
It is Blackstone's first major investment in China.
Other regulatory agencies must also approve the deal, which Blackstone announced Monday.
Lou's CIC bought a stake of almost 10 percent in Blackstone when it went public in June.
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