WSJ:

China’s finance minister confirmed the outlines of a government plan to overhaul management of its $1.07 trillion in foreign-exchange reserves, in a sign that the world’s largest investor is developing the confidence to take greater risks with its money. Currently, China’s stash of official reserves is managed by a branch of the central bank, and is kept largely in safe, but low-return, investments such as U.S. government bonds.

In statements that confirm months of unofficial discussion, Minister of Finance Jin Renqing told a press conference Friday that the reserves will be split into two parts managed in different styles, though he didn’t give specific figures.

“‘Normal’ foreign exchange reserves will continue to be managed by the State Administration of Foreign Exchange,” Mr. Jin said. “Separately, a foreign-exchange investment company will be set up under the leadership of the State Council,” he said, referring to China’s executive branch.

“In carrying out the investment management of this foreign exchange, we will strive to achieve greater profits and benefits with the prerequisite of maintaining safety,” Mr. Jin said…

The government also said this week that Lou Jiwei, a former deputy to Mr. Jin at the Finance Ministry, has been promoted to deputy secretary-general of the State Council. The move was widely seen as preparing Mr. Lou to take charge of the proposed new agency.

Lou Jiwei will soon get the job of spending as much as $200 billion on worldwide acquisitions of companies, properties, resoucres and technologies. Heck of a job.

This entry was posted on Friday, March 9th, 2007 at 1:10 pm and is filed under business, China, General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.