Lou Jiwei, deputy secretary general of the State Council, is expected to lead China's forex investment company. [file]

The expected head of China's forex investment company Friday discussed the establishment of the investment vehicle with five financial experts in Beijing, reports said Monday.

The gathering, called by Lou Jiwei, deputy secretary general of the State Council, came after a meeting involving several ministries earlier this month on the positioning and structure of the new entity.

The five experts are Li Yang of Chinese Academy of Social Sciences, Xia Bin of the Development Research Center of State Council, Zhang Shuguang with Tianze Economic Research Center, Ding Zhijie of the University of International Business and Economics and Lu Lei from Guangdong University of Finance.

No details were revealed about the meeting. But there were no changes in their opinions, the experts were quoted as saying by China Securities Journal.

Out of China's US$1.07 trillion foreign exchange reserves, US$700 billion could provide a safe cushion for the country's international payments and the rest could be transferred to the forex investment company for management, Xia Bin once said.

In operations, the new investment vehicle could issue bonds with a maturity of 10 years or above to raise funds from the domestic market, then buy forex from the central bank before making investments, according to Xia.

He suggested that the forex used to buy oil or other scare resources from overseas market or stakes of related foreign enterprises, advanced technologies or equipment that could be conducive to the innovation of domestic enterprises, and shares of multinational corporations in certain fields, including financial institutions.

The forex investment company should not only guarantee a profit from its investment, but also contribute to the country's financial reform, for example, working for a market-determined interest rate, proposed Lu Lei.

"The investment decisions of the company may also help the state realize certain short-term economic goal," noted Lu.