Foreign exchange body to be created

China has begun preparations to create an entity to manage the country's massive foreign exchange reserves, according to vice governor Wu Xiaoling, state media reported. The new group will be related to Central Huijin Investment, a state agency that has invested foreign exchange reserves to recapitalize domestic financial companies. China had $1.07 trillion in forex reserves at the end of 2006 and has actively been exploring ways to diversify its holdings. No timetable was provided for creating the entity to manage the foreign exchange funds, as Wu said the timing will depend on the progress of the preparations.