Minister of Finance Jin Renqing on Friday said the reserves will be split into two and managed differently. "'Normal' foreign-exchange reserves will continue to be managed by the State Administration of Foreign Exchange," Mr. Jin said. "Separately, a foreign-exchange investment company will be set up under the leadership of the State Council," he said, referring to China's executive branch.
He didn't say what portion of the reserves might be channeled through the new investment company or when it would start to operate. He also didn't specify whether the reserves might be spent to achieve nonfinancial goals. Some government officials in charge of energy and industry policy have called for using the funds to buy natural resources or key technologies.
"In carrying out the investment management of this foreign exchange, we will strive to achieve greater profits and benefits with the prerequisite of maintaining safety," Mr. Jin said.
How quickly the communists have become profit seeking capitalists...
Seriously, I don't know why it was taken them this long to more aggressively manage their foreign reserves. They do have over $1 trillion, after all.
Additionally, China has made a ton of deals over the last 5 years, essentially promising large amounts of cash for investment in return for access to raw materials. The South American landscape is littered with such deals.
China isn't the only country doing this. There is another Asian country who is also doing this, although I can't remember which one. Any help jostling my memory would be appreciated.
