Enter multiple symbols separated by commas

China Places $3 Billion with Blackstone for Overseas Investment

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.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • Hero miles for military members: Real estate magnate's plea

    Chairman of the Fisher House Foundation, Ken Fisher, discusses the Hero Miles program with CNBC's Dina Gusovsky. During Military Appreciation Month, Fisher is asking every traveler to donate 1,000 of their miles to replenish the Hero Miles programs that is in danger of running out.

  • Cramer shuts down this market's haters

    "Mad Money" host Jim Cramer on why this market can't stop, won't stop.

  • From the battlefield to the boardroom

    Your Grateful Nation is dedicated to helping Special Forces veterans enter the corporate world and Knot Standard provides complimentary suits to vets. Mad Money's Jim Cramer spoke with Rob Clapper, Your Grateful executive director; John Ballay, Knot Standard co-founder and president; Tej Gill, retired U.S. Navy Seal; and Darren McB, active duty U.S. Navy Seal.