China energy head would buy more gold, oil, commodities

Section:

By Zhou Xin
Reuters
via Forbes.com
Monday, March 9, 2009

http://www.forbes.com/feeds/afx/2009/03/09/afx6140426.html

BEIJING -- China should use part of its nearly $2 trillion in foreign exchange reserves to buy more gold, oil, uranium, and other strategic commodities, the head of China's energy bureau said in comments published on Monday.

The comments made by Zhang Guobao, head of the National Energy Administration, marked the latest call out of Beijing that the government should diversify the world's largest stockpile of forex reserves.

Zhang's proposals were published by the Beijing-based China Reform Daily, a newspaper run by China's powerful economic planning agency, the National Development and Reform Commission.

Zhang said the State Administration of Foreign Exchange could directly buy more gold and other strategic materials.

He added that agencies such as China's National Oil Reserves Centre should be allowed to issue foreign exchange bonds to obtain money from China's forex reserves for overseas purchases.

China's foreign exchange reserves amounted to $1.95 trillion by the end of 2008, and economists say most of the reserves are in dollar-denominated securities.

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