China’s sovereign wealth fund is expected to get a new capital injection of up to US$200 billion from the government in the coming months, a report said yesterday.
The infusion for China Investment Corp (CIC) from the country’s massive foreign exchange reserves would be similar to the US$200 billion it was granted upon its founding in 2007, the Financial Times newspaper said.
But a final decision has yet to be made, the report said, citing unnamed government officials and people familiar with the fund.
CIC declined to comment when contacted by reporters yesterday.
Any new cash injection would amount to an acknowledgement from Beijing that CIC has performed well during a time of global turmoil, the <
CIC, a controlling stakeholder of China’s largest banks, also needs the extra money to avoid a dilution of its holdings as the lenders are expected to issue new shares to meet tighter regulatory capital requirements, it said.
Chinese banks need to raise 500 billion yuan (US$73.2 billion) next year to increase their capital adequacy ratio, the Securities Times said yesterday, citing Li Fuan (李伏安), an official with the country’s banking watchdog.
CIC was set up to help China find lucrative ways to invest its foreign exchange reserves, which stood at US$2.27 trillion at the end of September and are parked mainly in low-yielding instruments such as US Treasury bonds.
CIC’s total assets stood at US$297.5 billion at the end of last year, corporate data said.
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