Forex investment agency set for launch

China's new state investment agency will be officially launched at a ceremony in Beijing on Saturday, the Wall Street Journal reported, citing two people familiar with the situation. The agency, which is likely to be called China Investment Corp, or CIC, has been tasked with generating better returns on a chunk of China's foreign exchange reserves. So far the agency has made just one investment – the purchase of a US$3 billion stake in US private equity group Blackstone. However, once the Ministry of Finance completes a special bond sale on Friday, it will have raised about US$93 billion of the US$200 billion earmarked as startup capital. The money raised is used to buy foreign currency from the People's Bank of China. Officials are said to be divided over exactly how the agency will operate. Some favor a passive approach, with the funds being put under the control of professional money managers, while others want to use the fund as a strategic vehicle, backing up Chinese investments in overseas assets.