(12 December 2011 — China) China’s central bank is planning to create a new vehicle to manage investment funds worth a total of US$300 billion (A$295 billion), aiming to improve returns on its foreign exchange reserves.The investment fund would operate under two streams, one targeting investments in the United States and the other focused on Europe according to a Reuters source.
The vehicle’s goal is to make more aggressive overseas investments for higher returns, said the source along with a second, independent source, who also declined to be named.
The investment vehicle would be affiliated with China’s State Administration of Foreign Exchange (SAFE), the part of the central bank in charge of the daily management of China’s US$3.2 trillion in foreign exchange reserves.
One of the funds would be named Hua Mei, or China-US, for investments in the United States, and the other is named Hua Ou, or China-Europe, for investments in European markets.
China’s leaders have said recently that they will seek investments in the real economies of the United States and Europe, apart from their routine investments in government debt.