INTERVIEW-China has to keep investing abroad -Cheng Siwei

China, the world's No. 3 economy, has to keep making overseas investments, although it should avoid financial assets for the meantime, an influential former Chinese lawmaker, Cheng Siwei, said.

China, the biggest foreign owner of U.S. Treasury bonds, is keen to diversify the investments made using its huge pool of foreign-exchange reserves, but is cautious after the global financial crisis has left it nursing some steep losses.

Last year, China surpassed Japan as the largest foreign owner of U.S. Treasuries, as its holdings rose 46 percent to $696.2 billion. To diversify, China launched a sovereign wealth fund, China Investment Corp. (CIC), in 2007.

Outbound mergers and acquisitions (M&A) by Chinese companies leapt 64 percent last year to $47.8 billion, Thomson Reuters data showed.

After the collapse of Lehman Brothers, CIC's already underperforming investments in Blackstone and Morgan Stanley plunged even further, prompting it to stay largely in cash.

Meantime, China's State Administration of Foreign Exchange (SAFE) is becoming more inward looking to support domestic development after losing money in collapsed U.S. bank Washington Mutual and Texas Pacific Group.

Some, however, see the downturn in commodity markets as a golden opportunity for China to acquire raw material assets and invest in resource companies cheaply.

The country is considering a range of ways to invest overseas, including dedicated funds to invest in minerals and energy, while the state pension fund plans to put up to a fifth of its money into foreign assets.

China's state metals trader, Minmetals, has proposed using reserves to buy mineral resources overseas, while CIC is evaluating global mining investments and a fund for energy exploration and acquisitions overseas is under consideration.

After stepping down from the Standing Committee of the National People's Congress (NPC), Cheng now heads a research centre at the Chinese Academy of Sciences, a think tank under the State Council.

Copyright and Exemption Declaration :¢ÙAll articles, pictures and videos that are marked with "China Aluminum Network" on this website are copyright and belong to China Aluminium Network (www.alu.com.cn). When transshipment, any media, website or individual must list the source from "China Aluminium Network (www.alu.com.cn)". We seek legal actions against anyone that disobey this. ¢ÚArticles that marked as copy from others are for transferring more information to readers, do not represent or endorse their opinions or accuracy and reliability. When other media, website or individuals copy from our website, must keep the source. Anyone that changes the articles' sources will hold the responsibilities for copyright and law problems. We also seek legal actions against anyone that disobey this. ¢ÛIf any articles copied by our website concern the copyright and other problems, please contact us within one week.