China still debating capital funding for CIC
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China is still debating whether or not to offer funding to China Investment Corp, the country's US$300 billion sovereign wealth fund, said head of the State Administration of Foreign Exchange (SAFE) Yi Gang.
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Yi Gang, vice governor of the People's Bank of China |
Yi, also vice governor of the People's Bank of China, made the remarks at a press conference on the sidelines of the 2010 annual session of the National People's Congress.
CIC's return on overseas investment projects exceeded US$10 billion last year, a 10-percent jump when compared with the negative 2.1-percent return in 2008, China Business News reported yesterday.
China had US$2.4 trillion in foreign exchange reserves at the end of 2009.
Yi Gang steered clear of a question about whether China will cut US treasuries holdings this year.
According a US Fed report, China further cut treasuries holding in 2009. But Yi Gang declined to comment on the report.
Although gold is a kind of relatively safe asset, China will still be prudent in buying it as a component of foreign exchange reserves, Yi Gang said in response to a question about gold holdings in foreign exchange reserves.
He said that there are limitations facing China if it wants to increase its gold holdings, because the global gold market is limited and China’s buying would push up the price of the precious metal.
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