China to dump billions of dollars of US Treasury Bills (Joe McDonald)

  China to create firm to invest its $1 trillion in reserves.

  By Joe McDonald -- ASSOCIATED PRESS

  March 10, 2007 -- BEIJING -- China will soon create one of the world’s largest investment funds, with ramifications for global stock, bond and commodities markets and for how the U.S. finances its trade deficits.

  Finance Minister Jin Renqing said on Friday the aim is to make more profitable use of its $1 trillion in foreign currency reserves that have piled up as it posted huge trade surpluses year after year. Most of those funds are now parked in safe, but relatively low-yielding U.S. Treasury securities and other dollar-denominated assets.

  “We can achieve more profit from the investments,” Jin said at a news conference. “We are now preparing the organization of this new corporation.”

  Jin said Beijing may follow the lead of Singapore’s Temasek Holdings, which manages nearly $90 billion in government pension funds and other assets. It owns stakes in Singapore Airlines and Singapore Telecom, as well as in banks, real estate, shipping, energy and other industries in India, China, South Korea and elsewhere.

  Analysts have speculated for some time that China would create an investment company, and officials have said repeatedly they want to make better use of the country’s reserves.

more

READ MORE: Centre For Global Research