<div><p>China's sovereign wealth fund is expected to get a new capital injection of up to 200 billion dollars from the government in the coming months, a report said Monday.</p><p>The cash infusion for China Investment Corp (CIC) from the country's massive foreign exchange reserves would be similar to the 200 billion dollars it was granted upon its founding in 2007, the Financial Times newspaper said.</p><p>But a final decision has yet to be made, the report said, citing unnamed government officials and people familiar with the fund.</p><p>CIC declined to comment when contacted by AFP on Monday.</p><p>Any new cash injection would amount to an acknowledgement from Beijing that CIC has performed well during a time of global turmoil, the Financial Times said.</p><p>CIC, a controlling stakeholder of China's largest banks, also needs the extra money to avoid a dilution of its holdings as the lenders are expected to issue new shares to meet tighter regulatory capital requirements, it said.</p><p>Chinese banks need to raise 500 billion yuan (73.2 billion dollars) in 2010 to increase their capital adequacy ratio, the Securities Times said Monday, citing Li Fuan, an official with the country's banking watchdog.</p><p>CIC was set up to help China find more lucrative ways to invest its foreign exchange reserves, which stood at 2.27 trillion dollars at the end of September and are parked mainly in low-yielding instruments such as US Treasury bonds.</p><p>The company is shifting its focus to raw materials and renewable energy after investments in Western financial institutions including Morgan Stanley booked huge unrealised losses during the financial crisis.</p><p>The company's total assets stood at 297.5 billion dollars at the end of 2008, according to corporate data.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=65798090&bid=informcom" /></div><div id="copyright"><div>

Copyright 2009  <a href="http://www.afp.com/english/links/?pid=copyright">AFP Asian Edition</a></div></div>