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Forex investment agency not affecting dollar assets

(chinadaily.com.cn/Xinhua)
Updated: 2007-03-16 13:40

The creation of a foreign exchange reserve investment company would not affect the US dollar-denominated assets, promised Chinese Premier Wen Jiabao on Friday.

China kept a bulk of its US$1.07 trillion-forex holdings in US-dollar-denominated assets, and this kind of treatment is mutually beneficial, Wen said.

"The proper use of such a huge amount of foreign exchange reserves has become a new problem to us," the premier addmitted.

The country is preparing for the establishment of a foreign exchange investment company, Wen told a press conference following the closure of the annual session of the National People's Congress, adding that the agency will not be affiliated to any government departments or institutions.

The new investment entity is aimed at operating the investment in line with state laws to preserve and increase the value of foreign exchange, he noted.

Responding to a question on the rapid growth of China's stock market last year, the Chinese premier said that the Chinese government aims to build a mature capital market and build an open, transparent financial system.

"Our goal is to build a mature capital market," said the premier, adding that the country will continue to improve the quality of the listed companies, put in place an "open, fair and transparent" market and strengthen supervisions over the market.

The premier also stressed that the government should encourage timely disclosure of the information, and improve individual investors'awareness of the capital market's risks.