China to spend reserves to grow overseas

BEIJING, July 21 (UPI) -- Beijing will use its central bank's international reserves, No. 1 in the world, to accelerate Chinese business expansion overseas, the country's premier said.

"We should hasten the implementation of our 'going out' strategy and combine the utilization of foreign exchange reserves with the 'going out' of our enterprises," Wen Jiabao told Chinese diplomats.

Wen said Beijing also wanted Chinese companies to increase China's share of global exports, The Financial Times reported.

The "going out" strategy is a catchphrase for encouraging investment and acquisitions abroad, particularly by big state-owned industrial groups such as PetroChina Co., owned by China's biggest oil producer; Aluminum Corporation of China Ltd., the country's largest aluminum producer; China Telecom Corp., its largest fixed-line and mobile-phone provider; and Bank of China Ltd, one of China's big four commercial banks.

Wen did not elaborate on how much of the $2.132 trillion in international reserves would be channeled to Chinese enterprises.

HSBC Holdings PLC chief China economist Qu Hongbin said the decision was part of a Chinese strategy to reduce its reliance on the U.S. dollar as a reserve currency.