SHANGHAI - China's sale of 1.55 trillion yuan ($203.6 billion) in special
domestic bonds to finance its fledgling overseas investment agency will be
carried out in stages, a senior central bank official said in remarks reported
The country's stock market has been hit by the planned bond issue, approved
by China's parliament on Friday, as investors fear it will pull funds from the
"The plan will be carried out gradually according to its monetary policy," Yi
Gang, assistant governor of the People's Bank of China, told the Shanghai
Securities News. Yi reiterated the Finance Ministry's view that the bond issue
would have only a neutral impact on the domestic economy, the newspaper said.
The Finance Ministry indicated on its Web site on Friday that it would issue
the bonds directly to the central bank in exchange for part of the $1.2 trillion
in foreign currency reserves under the central bank's control.
No specific timetable was given for the sale of the bonds, but the increase
in this year's debt ceiling suggests they will all be issued this year.
The first bonds were reported to be issued this month.
The English-language newspaper said the sovereign wealth fund would be named
China Investment Co. Ltd. and would formally begin operations in September after
registering in August.
The directors of the fund will be drawn from government organisations such as
the central bank, the ministries of finance and commerce and the National
Development and Reform Commission, the paper reported. ($1 = 7.611 yuan)