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Updated Friday, September 28, 2007 0:00 am TWN, AP

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China to launch US$1.3 trillion investment fund

BEIJING -- A government fund that is to invest part of China’s US$1.3 trillion in foreign reserves is due to be officially launched Saturday, according to news reports.

Financial analysts are closely watching the agency to see where it invests and its possible impact on world financial markets. It is expected to be entrusted with up to US$200 billion, which would make it one of the world’s richest investment funds.

The agency is likely to be called the China Investment Corp., Dow Jones Newswires and the Chinese newspaper Securities Journal reported Thursday. Both cited unidentified sources.

The Chinese government created the fund in an effort to earn higher returns on its reserves. Authorities say it will be modeled in part on Singapore’s government-owned Temasek Holdings, which invests in banks, real estate and other industries in China, India and elsewhere.

The Chinese agency agreed in May to pay US$3 billion for just under 10 percent of American investment firm Blackstone Group LP.

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