SAFE buys into French oil firm Total
7 April 2008
China's State Administration of Foreign Exchange (SAFE) has purchased a 1.6% stake worth about US$2.8 billion in French oil firm Total, the Financial Times reported. According to a person close to Total, which is the world's fourth-largest oil group, SAFE began building its stake in the company several months ago. This has been done with the full knowledge of Total, the person added. The primary task assigned to SAFE is the management of China's US$1.5 trillion-plus in foreign exchange reserves. Most of the investments it makes with this money are in low-yield securities such as US Treasury bonds but the purchase of a stake in Total suggests a more aggressive new strategy. This could heighten tensions between SAFE and China Investment Corp, the country's sovereign wealth fund. Earlier this year a SAFE subsidiary was linked to investments in three Australian banks.
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