China plans to merge Central Huijin Investment Co Ltd, the central bank's investment arm, into the country's new foreign exchange investment agency, Securities Daily reported today citing a senior central bank official.
The new agency, tentatively called the State Investment Company, will operate on a "commercial basis," said Wu Xiaoling, vice governor of the People's Bank of China, the nation’s central bank, at the First Annual China Bankers Forum 2007, held over the weekend in Shanghai.
This is the first time that a senior bank official announced the development direction of Central Huijin.
In the future, Central Huijin will become a wholly market-oriented investment company to operate the national capital, Wu said.
Huijin was established in 2003. It has already used part of the foreign exchange reserves to recapitalize major State banks and other State-owned financial institutions.