China sets up fund to bankroll takeovers

Boasting $3.2 trillion in foreign currency reserves, China has created a new fund aimed at financing takeover bids abroad. The fund also seeks to boost China’s currency in global financial markets.

In its drive to step up overseas investment, the Chinese government has set up a new fund worth 12 billion yuan ($1.9 billion), Shanghai International Group said in a statement Friday.

Shanghai International said it was responsible for running the fund, describing it as China’s "biggest ever fund of its kind."

"The yuan-backed fund will help domestic companies go abroad in seeking more investment opportunities," China’s central bank deputy governor Liu Shiyu was quoted by the official Shanghai Daily newspaper as saying.

The fund is planned to grow to 50 billion yuan, and can be boosted to 150 billion yuan through loans and bond issues.