China Investment Corporate (CIC), the country’s long-awaited state forex investment company set up to make better use of its huge foreign exchange reserve, has started business.

Lou Jiwei, the company’s newly-appointed board chairman, who is also deputy secretary-general of the State Council, seen here, said, ‘We will maintain transparency of company operations on the premise of safeguarding our commercial interests.’

Analysts said CIC’s debut was a major move China had made to increase the value of its $1.4-trillion foreign exchange reserve, which is the world’s largest.

The CIC, with a registered capital of $200 billion, is a solely state-owned company.

The company will mainly pursue combined investment in overseas financial markets, and it wil into domestic financial institutions to support their reforms, such as shareholding reforms of China’s state-owned banks, said the sources.

The CIC will operate in a completely commercial way despite its governmental backup explaining that ‘it will deal with its forex investment business independently by persisting in the principle of separating government functions from company management.’

It will try to maximize the proceeds via long-term investments within a range of acceptable risks, the sources said.

In May, the new company, still in preparation, made its first investment in non-voting shares, valued at $3 billion, in the U.S. private equity firm, the Blackstone Group. China’s exports rose by 27.6% in the first half of 2007, exceeding imports growth of 18.2%, lifting the trade surplus to $112.5 billion.
Source: People’s Daily Online