BEIJING -- China's state foreign exchange company, drawn wide attention recently, made its first concrete step towards establishment by holding its first preparatory meeting, China Securities reported Friday.

Lou Jiwei, deputy secretary-general of the State Council, held a meeting attended by senior officials from key economic ministries and regulators Thursday to discuss the arrangements, orientation and structure of the planned company, it said.

Lou was appointed by the State Council, the cabinet, as its Deputy Secretary-General, a position with ministerial status, earlier this month, from the position as vice-minister of finance.

Analysts estimate that Lou will likely be appointed as the president of the new company, and the general manager will possibly come from the central bank or State Administration of Foreign Exchange.

China's foreign exchange reserve reached US$1.066 trillion at the end of last year while the country prepared to establish a state forex investment company earlier this month.

The major aim of the planned company is to improve management of China's huge foreign exchange reserves and generate as more as possible returns on the reserves under the preconditions of security.

Current issues would be the orientation and character of the company, sources were quoted by the newspaper as saying.

"Investment channels of the planned company will include financial securities invested by the Central Huijin Investment," Wu Xiaoling, vice governor of the central bank, was quoted as saying, "and we are talking about some strategic investments."

The planned company would be launched within the year while details such as the capital scale has not been discussed yet, Hu Xiaolian, head of the State Administration of Foreign Exchange, was quoted as saying.

The investment company will issue 200 billion to US$250 billion of RMB-denominated bonds. Money to be raised will be firstly used as strategic investment for energy enterprises like CNOOC, earlier reports said.

Founded in 2003 as an investment arm of the central bank, the Central Huijin Investment holds shares in China's four leading commercial banks.

In 2005, Central Huijin injected US$60 billion into three of the "big four". The money came from the nation's huge forex reserves.

It is reported that Central Huijin will pump another US$25 billion to 30 billion into the Agricultural Bank of China to help improve its balance sheet before the bank is ready to go public.