CIC started later and took a few very public strategic stakes, though its main portfolio is domestic.

Overseas Chinese, HK and Taiwanese family conglomerates tend to have one or more non-listed vehicles (often BVI based, bravo Twofish) at the top of their pyramid. Temasek plays a similar role in Singapore’s version of state capitalism and probably CIC the same in China.

Given the fact that there are several established PRC entities like CITIC and most large SOEs (take for instance Chinalco’s stake in Rio Tinto) who own very large stakes of listed non-chinese companies, it is hard to see a slot for CIC’s foreign investment activities between (a) SAFE’s (now probably frozen) passive portfolio investments and (b) the highly strategic stakes of CITIC etc.

The only rational (from a Chinese bureacratic perspective) for CIC would be to participate in foreign SOE investments and keep an eye on what the decentralized boys are doing. That would be in keeping with the way a proper Chinese conglomerate goes about keeping the family wealth out of the hands of undeserving employees and outsiders.

But if this analogy holds, it would be impossible for outsiders to get a decent picture of “Chinese state” investment in foreign equities. No one knows where the state begins and where it stops and probably, they like it that way.

Why? It’s not clear to me at all why an investment by Citic Pacific or the Guangdong province pension fund would be considered any more or less “private” than an investment by SAFE.

bsetser: I am happy to be persuaded that institutions other than SAFE hold a large US portfolio

There is no need to have large portfolios, a lot of institutions with small portfolios will add up to $100 billlion.

As for China’s equity portfolio, a couple of points in response to 2fish:

a) The telegraph did find 9b GBP of SAFE equity investments in the UK in Sept, which suggests your $10b estimate is a bit low. anderlini also reported — citing sources in beijing — that SAFE has a $100b plus equity portfolio back. And Caijing and others reported in 07 that SAFE had authorization to put 5% or so of its portfolio into equities.

b) portfolio equity investments in the US by Chinese SOEs would show up in the Chinese BoP data as private outflows and as private holdings and neither shows up significantly. That also would show up as private flows in the US data. I think provincial investment funds would also be counted as private flows in the US data.

I am happy to be persuaded that institutions other than SAFE hold a large US portfolio — I just want someone to show me who, and show that they have a large equity portfolio invested abroad (and buying Chinese firms listed on HK doesn’t count).

MOSCOW, March 19 (Reuters) – China and other emerging nations back Russia’s call for a discussion on how to replace the dollar as the world’s primary reserve currency, a senior Russian government source said on Thursday. Russia has proposed the creation of a new reserve currency, to be issued by international financial institutions, among other measures in the text of its proposals to the April G20 summit published last Monday.

Calls for a rethink of the dollar’s status as world’s sole benchmark currency come amid concerns about its long-term value as the U.S. Federal Reserve moved to pump more than a trillion dollars of new cash into the ailing economy late Wednesday.

Russia met representatives of China, India and Brazil ahead of the G20 finance ministers meeting last week, as the big emerging powers seek to up their influence on decisionmaking globally. Their first ever joint communique did not mention a new currency but the source said the issue was discussed.

The evidence that SAFE accounts for the majority of China’s US purchases is overwhelming….

False. Secrecy is the cultural default for foreign exchange reserves managers (the main reason I use a nom de plume here even though I am no longer involved), and to let out something as sensitive as this would probably disqualify the firm involved from doing any business with the public sector in China for a long time.

Not enough. A rough rule of thumb is that it takes one person to manage $10 million. So managing $10 billion takes about 1000 people. A trillion about 100000 people, and $100 billion about 10000 people. I don’t see 10000 employees working for SAFE.

You can also get a rough guess of assets under management by looking at office space. If SAFE really was managing $100 billion, it would have a major office building in HK.

Simpson: It is just that they are not on payroll and do not work in China.

It’s on someone’s payroll. You can outsource fund management, but other than TPG, no one has come up saying that they manage SAFE’s money. Any portfolio manager that is working for SAFE would be an idiot for not screaming that from the hilltops. If you work for SAFE, then you can use that fact to generate more China related business.

Simpson: 400 bn is still less than 1/3 of their overall portfolio and in the parlance of the pre-Lehman era a 1/3 equities – 2/3 bonds portfolio is highly conservative.

Not for foreign exchange reserves. The purpose of foreign exchange reserves is to save your rear end when everything goes bad, so you don’t have to beg and plead for money from the IMF loan sharks. Putting any foreign exchange *reserve* money in equities is highly risky and more than a little stupid.

In fact, the existence of so many ITIC’s and SWF’s within China is one reason why I don’t think that SAFE could get away with running a $100 billion equities fund. The problem is that SAFE has a conflict of interest. People need its permission to do any foreign exchange, but it wants to run its own equity fund. If SAFE started using its regulatory power to block other parts of the Chinese government from starting their equity funds, it would soon find itself in a bureaucratic turf war that it couldn’t win.

What I think is more likely than SAFE running a $100 billion equities fund is that it wanted to run a $10-20 billion equities fund, and in order to run a $10-20 billion equities fund it has to let a lot of other entities within the Chinese government run their $10-20 billion equities fund.

It seems reasonable to believe that entities affliated with the Chinese government control $100 billion in US equities, with the caveat that almost every major economic entity in mainland China is affliated with the Chinese government in some way.

What I cannot believe is that *SAFE* controls $100 billion in US equities, rather than control being divided among several dozen different entities, in part because I just can’t imagine the State Council or the Chinese bureaucracy in generally allowing any one agency to have that much power.