25.07.2013 - China needs market discipline to manage its foreign exchange wealth
Hu Shuli says the government must look at restructuring its sovereign investment companies to compete on the global stage for better returns. The inception of the China Investment Corporation six years ago marked the birth of a true sovereign wealth fund for China. Though it is undoubtedly heading in the right direction, the CIC is hobbled by the terms of its inception. For its funds, it relies on the foreign exchange reserves bought with the special bonds issued by the Ministry of Finance. The cost of this money is high, while it may invest only in low-risk, low-return financial products. This mismatch has limited its operations...............................................Full Article: Source
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