China’s new state investment agency is poised to secure its first significant tranche of funding with the announcement that the finance ministry will soon issue $200bn in bonds to capitalise the body, reports the FT.
The official Chinese media said that a draft bill to approve the special treasury bonds is expected to pass the national legislature within days. The launch of the Chinese agency coincides with an intensifying global debate about the role of sovereign investment bodies and their emerging clout in financial markets, and follows China’s decision last month to place $3bn of its massive foreign exchange reserves with Blackstone.
The possibility of tie-ups between such agencies was mooted on Wednesday by an official of a Dubai state holding company, who said the two countries were discussing mutual investments, such as asset swaps. If these sovereign wealth fund titans team up, notes FT Alphaville, companies in the west had better get used to being on the receiving end of this pair’s attentions. The politicians probably should start preparing themselves too.