China Investment Corp, which manages the US$200 billion sovereign wealth fund, won't find it easy to generate high enough returns to meet its financing costs, General Manager Gao Xiqing said yesterday.

 

The government yesterday sold 750 billion yuan (US$102 billion) of 15-year bonds to the central bank as part of the 1.55 trillion yuan it is seeking to raise to fund China Investment. The securities carry a 4.45 percent coupon, compared with 4.66 percent on similar-maturity debt sold last month, said Bloomberg News.

 

"The returns on our national foreign currency reserves have never reached this level before," Gao told a conference in Beijing. "I'm not sure I can do much better than that. We feel big pressure and it's not easy to be successful."

 

The sovereign wealth fund was started in September to help diversify the world's largest foreign currency holdings. The fund in May invested US$3 billion for a 9.4-percent stake in Blackstone Group LP.

 

(Shanghai Daily December 12, 2007)