China's $300 billion sovereign wealth fund could get a government cash injection worth up to $20 billion, state media said on March 03, citing unnamed sources. A plan for the capital injection into China Investment Corp (CIC) has been submitted to the State Council, or cabinet, for approval, the China Daily said.
"The State Council is now working on the plan," a source was quoted as saying. No one at CIC was immediately available to comment when contacted by AFP. CIC was set up in 2007 to invest some of China's massive foreign exchange reserves - the world's largest at $2.847 trillion at the end of 2010 - partly to gain better returns.
The reserves are mainly parked in safe but low-yielding instruments such as US Treasury bonds, but amid the global crisis CIC has tried to diversify its investments and be more aggressive to improve returns.
In January Wang Jianxi, chief risk officer of CIC, said the fund had achieved a satisfactory performance last year but had exhausted its operating capital and had applied for a capital injection, the China Daily said. The company has not yet published its 2010 annual report.