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China to use forex reserves to aid importers, global investment
By Leo Zhang |
February 19, 2009, Thursday
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Print Edition
Print Edition
CHINA plans to use more of its huge foreign exchange reserves to support importers and to fund the overseas expansion of domestic companies which go bargain hunting amid the wreckage of the global economic downturn, senior government officials said yesterday.
The officials also reiterated the country's stance against protectionism and called on developed nations to ensure that the value of their government bonds is maintained amid the crisis.
"We will expand channels to use the forex reserves actively," Deng Xianhong, deputy director of the State Administration of Foreign Exchange, told a media briefing in Beijing. "We will especially study how the use of forex reserves can better support domestic growth."
China's forex reserves stood at US$1.95 trillion, the world's biggest, at the end of 2008, up 27.3 percent from the year before.
But the increase in forex reserves dropped to US$137.2 billion in the second half of last year from a rise of US$280.6 billion in the first half due to the worsening global financial turmoil, Deng said.
SAFE will support the government's policy to boost domestic consumption by stepping up efforts to meet the growing demand for forex linked to imports, Fang Shangpu, also a SAFE deputy director, said at the briefing.
"We will also provide financing and other support to companies investing overseas," Fang said.
Chinese state-owned enterprises have been stepping up efforts to expand overseas and acquire stakes in foreign companies as the financial turmoil provides them an opportunity to find investments with good values.
Aluminum Corp of China last Thursday unveiled plans to invest US$19.5 billion in Rio Tinto Ltd, and China Minmetals Corp said on Monday it has agreed to pay US$1.7 billion for Australia's Oz Minerals Ltd.
The central government is also considering a plan to use part of the country's foreign reserves to set up a fund for energy exploration and acquisitions in overseas markets, China National Petroleum Corp has said.
Asked whether China will continue to buy US Treasury bonds, Fang reiterated that it will depend on the nation's own needs under the principle of maintaining the value and safety of the forex reserves.
Fang said that SAFE is opposed to trade and investment protectionism as the global financial crisis worsens, calling on major countries to maintain economic and financial stability.
"We hope countries whose currencies are the main holdings in our international reserves will take sound measures to cope with the financial crisis," Fang said.
The officials also reiterated the country's stance against protectionism and called on developed nations to ensure that the value of their government bonds is maintained amid the crisis.
"We will expand channels to use the forex reserves actively," Deng Xianhong, deputy director of the State Administration of Foreign Exchange, told a media briefing in Beijing. "We will especially study how the use of forex reserves can better support domestic growth."
China's forex reserves stood at US$1.95 trillion, the world's biggest, at the end of 2008, up 27.3 percent from the year before.
But the increase in forex reserves dropped to US$137.2 billion in the second half of last year from a rise of US$280.6 billion in the first half due to the worsening global financial turmoil, Deng said.
SAFE will support the government's policy to boost domestic consumption by stepping up efforts to meet the growing demand for forex linked to imports, Fang Shangpu, also a SAFE deputy director, said at the briefing.
"We will also provide financing and other support to companies investing overseas," Fang said.
Chinese state-owned enterprises have been stepping up efforts to expand overseas and acquire stakes in foreign companies as the financial turmoil provides them an opportunity to find investments with good values.
Aluminum Corp of China last Thursday unveiled plans to invest US$19.5 billion in Rio Tinto Ltd, and China Minmetals Corp said on Monday it has agreed to pay US$1.7 billion for Australia's Oz Minerals Ltd.
The central government is also considering a plan to use part of the country's foreign reserves to set up a fund for energy exploration and acquisitions in overseas markets, China National Petroleum Corp has said.
Asked whether China will continue to buy US Treasury bonds, Fang reiterated that it will depend on the nation's own needs under the principle of maintaining the value and safety of the forex reserves.
Fang said that SAFE is opposed to trade and investment protectionism as the global financial crisis worsens, calling on major countries to maintain economic and financial stability.
"We hope countries whose currencies are the main holdings in our international reserves will take sound measures to cope with the financial crisis," Fang said.
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