China Central Huijin Investment Ltd, the domestic arm of China's sovereign wealth fund, will be the institution that recapitalizes the Export-Import Bank of China, domestic media reported yesterday.
The website of Caijing magazine cited unidentified sources as saying that Huijin, now part of China Investment Corp (CIC), has also received approval from the country's cabinet to inject funds into the China Export & Credit Insurance Corp (Sinosure).
CIC was set up in September 2007 with $200 billion of foreign currency reserves transferred from the central bank.
The amount of capital injection in both cases was not decided yet, Caijing reported.
The magazine said the move would enhance Huijin's role as a government vehicle to control equity stakes in key financial institutions, and that the upcoming recapitalization would help China's export sector, which was hit hard by the global slowdown.
China Exim Bank and Sinosure were established to help Chinese exporters grab overseas market share. The Ministry of Finance is currently the sole owner of the two institutions.
Exim Bank would be following in the footsteps of policy lender China Development Bank, which at the end of 2007 got a capital injection of $20 billion from Central Huijin as part of its restructuring.
Central Huijin currently holds 49 percent of CDB.
CDB has been converting into a commercial bank from a policy lender. The company is 51 percent controlled by the Finance Ministry.
(China Daily 09/17/2009 page14)