China sovereign fund eyeing Russia investment

Russia "has big development potential given its vast market and rich resources," CIC chairman Lou Jiwei told the official Xinhua news agency in an interview during a trip to Moscow.

"CIC is willing to invest in Russia," he said.

The company sees Russia\'s planned direct investment fund and a new round of privatisation as two channels for possible investment in the country, Lou said.

The direct investment fund, for which Moscow plans to raise $10 billion within five years, will look for projects in the country for foreign investors as a way to attract overseas capital, according to the report.

Lou said CIC\'s potential Russian portfolio was likely to include stocks and bonds, commodities, infrastructure and real estate projects to diversify risks, the report said.

CIC was set up in 2007 to invest some of China\'s massive foreign exchange reserves -- the world\'s largest at $3.045 trillion at the end of March -- partly to gain better returns.

The reserves are mainly parked in safe but low-yielding instruments such as US Treasury bonds, but amid the global crisis CIC has tried to diversify its investments and be more aggressive to improve returns.

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