China will take a US$3 billion stake in American private equity firm Blackstone Group, as part of its new foreign exchange reserve investment strategy, the Wall Street Journal reported. A state foreign exchange investment company, which will soon be set up, will buy nonvoting shares in Blackstone that amount to less than 10% of total shares offered. Blackstone just announced a US$4 billion initial public offering. China's Blackstone investment is its first attempt at diversifying its US$1.2 trillion in foreign exchange reserves. It has traditionally bought US Treasury bonds and other government debt.