China has placed $3 billion of the country's huge foreign exchange reserves with U.S.-based private equity firm Blackstone Group to invest abroad, a paper said.
China announced in March that it was setting up a separate vehicle to help diversify part of its $1.202 trillion of foreign exchange reserves, the world's largest, as a way of improving its returns and diversifying risk.
Although the agency has not yet been formally incorporated, the reported fund placement would mark its first operation.
Citing unidentified sources, the semi-official China Business News said the new agency had handed the funds to Blackstone through Central Huijin, the investment arm of the central bank.
An official with the State Administration of Foreign Exchange declined to comment. No immediate comment was available from Central Huijin or Blackstone. The Finance Ministry said it was not aware of the report.
State media have reported that the new agency could manage up to $200 billion, although some Chinese economists have called for twice that amount to be at its disposal.
Several ministries had agreed on the principle of establishing such an agency, but differed on the details, the sources told the newspaper, adding that the agency could begin formal operations as early as end-2007.
On May 7, Central Bank Governor Zhou Xiaochuan told reporters in Basel, Switzerland, that the new agency was still in the preparatory stages and would probably be up and running soon.
Chinese Premier Wen Jiabao has said that China's moves to actively manage its reserves would not pose any negative impact on dollar assets.