China Watch

China holds the world8217;s largest stockpile of foreign reserves, with more than 350 billion of it in US Treasuries. Wen offered no details about the types of investments the fund would make, but analysts say they would not expect radical moves such as changing all the dollar assets to euros.

Yi Xianrong, researcher with the Chinese Academy of Social Sciences Institute of Finance, said it is 8216;8216;logical8217;8217; to assume that the fund will concentrate on conservative investments.

Peter Alexander, principal of Z-Ben Advisors in Shanghai, predicted that while fund managers will stay away from traditional assets, a significant percentage of holdings will be in US equities. The US is China8217;s most important trading partner.