China formally launched its state investment company Saturday which is intended to manage about $200 billion of its massive foreign exchange reserves, Chinese state media reported. Lou Jiwei, deputy secretary-general with the State Council, will be chairman of the new entity charged with investing a portion of China's foreign-exchange reserves, which reached $1.33 trillion at the end of June. Senior management will reportedly include Gao Xiqing, a U.S.-trained lawyer who helped oversee the National Social Security Fund when it paid $3 billion for a less than 10% stake in Blackstone Investment Group LP n June, only to see the shares plunge in the months following the group's initial public offering. Blackstone shares closed down 3 cents at $25.08 Friday in New York, compared with an IPO price of $31. China Central Huijin Investment Co., the investment arm of the central People's Bank of China, will merge into the new entity. Central Huijin Investment holds controlling stakes in the nation's four biggest banks. Since January 2004, Central Huijin has injected $60 billion of its foreign reserves to boost the capital of Industrial & Commercial Bank of China, Bank of China Co. Ltd and China Construction Bank Corp. About $67 billion of the new agency's assets will be used to purchase the government-held shares of the state banks, Dow Jones reported. http://www.marketwatch.com/news/sto...x?guid={6C8824E6-11EF-4ED1-A5E4-63A79BF3DCF1} Maybe we should rename this forum "Beijing Street News"...
For the umpteenth time...........when foreign investors get excited about foreign assets, be careful, be very careful.