Diversifying Massive Reserves, SAFE Co-Financing is Created
China’s State Administration of Foreign Exchange (SAFE) has created a new investment body named SAFE Co-Financing. This extension of SAFE will assist Chinese companies invest overseas by providing credit loans backed by foreign exchange reserves. Instead of allocating capital to a sovereign fund and then to a fund manager or asset, SAFE Co-Financing will allocate capital through Chinese financial institutions. These institutions will provide financing opportunities for Chinese companies in overseas investing and trade.
SAFE is trying to diversify their investment strategy in their massive pool of foreign exchange holdings. In addition, they want to maximize efficiency.
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