Chinese state funds used third parties to more than double their investment in Japanese blue chip companies last year, taking their combined holding to about $19.5 billion, a report said Friday. China Investment Corp, the country's $300 billion sovereign wealth fund, is one of the parties behind an Australian-registered investment vehicle that bought stakes in Toshiba Corp, Kirin Holdings and Shiseido Co, the Wall Street Journal said.
The same party also appears to have bought stakes in Sony Corp, Mitsubishi UFJ Financial Group and Mizuho Financial Group, the newspaper said. The State Administration of Foreign Exchange, which manages China's more than $2.85 trillion in foreign currency reserves, is also probably behind the investment vehicle called SSBT OD05, the report said, citing advisory firms and people familiar with the matter.
The Japanese companies know little about the investors, which use investment vehicles registered in Sydney at State Street Bank & Trust, the report said. The stakes held by Chinese state funds - worth 1.62 trillion yen - are below the five percent threshold that requires greater disclosure under Japanese securities law and appear to be passive, the report said, citing Japanese investment adviser Chibagin Asset Management. The figure does not include funds from other Chinese investors.
CIC was established in 2007 to invest some of China's world-beating foreign exchange reserves overseas, partly in order to gain better returns. The reserves are mainly parked in safe but low-yielding instruments such as US Treasury bonds, but since the global financial crisis a growing portion has been invested in euro and yen assets. China overtook Japan last year to become the world's second-largest economy behind the United States.