A little internal Party pressure to exchange China's vast FX reserves for foreign mining shares. As they say, where there is smoke...
Regards - VHF
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China urged to spend FX on mines, resources
Mon Jul 21, 2008 1:49am BST
Reporting by Zhou Xin; Editing by Alan Wheatley
BEIJING, July 21 (Reuters) - China should invest more of its $1.8 trillion of official reserves in natural resources abroad, a Communist party researcher said in remarks reported on Monday.
Buying tangible assets, from mines to farms, would not only help China's foreign exchange reserve management but also ease domestic inflation, Li Lianzhong was quoted by the official China Securities Journal as saying.
Chinese companies have been busy buying into natural resource producers, notably in Australia and Africa, but the only reported investments bought with the central bank's reserves are small stakes in oil producers BP Plc and Total SA.
Li, who heads the economic department in the Party's policy research office, called China "the biggest victim" of a falling dollar and said the government must do something to turn its stockpile of reserves, the world's largest, into "sources of wealth creation".
