The Ministry of Finance will sell a special treasury bond to raise money
to buy foreign-exchange reserves from the central bank, a finance ministry
"Since it will be a special treasury bond issue, the State Council will
decide on the amount and then submit to the National People's Congress for
approval," Zhan Jingtao, director of the treasury department of the ministry,
said in an interview at a conference in Beijing yesterday.
currency reserves grew at about US$1 million a minute in the first three months
of this year to reach US$1.2 trillion, as exports boomed. The government is
setting up a State investment company that will use some of the reserves to buy
investments with higher yields. The State Investment Co probably will be set up
officially before the end of this year.
Zhan yesterday declined to confirm media reports that the finance ministry
will sell bonds to buy US$200 billion to US$300 billion of foreign reserves to
put into the State Investment Co.
"Detailed amount of the bond sales and how it will be sold is still under
discussion," he said, adding that the decision is likely to be made before
China's foreign-currency reserves may reach US$1.6 trillion by the end of the
year and may exceed US$2 trillion in 2008 if current growth keeps up, Fan Gang,
a monetary policy committee adviser of the People's Bank of China, said at an economic seminar on June