China's State Security Fund (SSF) Council said it has been approved by the Chinese government to use one fifth of its total assets for overseas investment as of May 1 of this year.

The move was made possible after the Ministry of Finance, the Ministry of Labor and Social Security and the People's Bank of China, the country's central bank, approved provisional regulations governing the overseas investment of the fund last month. The regulations became effective as of May 1.

Under the regulations, SSF's source of capital for overseas investment should come from the foreign exchange revenues from sales of the shares of State-owned firms listed on the Hong Kong and foreign stock markets.

The Chinese government has and will continue to allocate unspecified  sum of shares of those firms to the fund to increase its capital.

The fund was set up in 2000 by the Chinese government as its strategic reserve for its aging population, and its total asset was valued at 201.02 billion yuan (25.1 billion U.S. dollars) by the end of 2005.

The fund mainly comes from budgetary allocation from the Ministry of Finance as well as revenues from sales of shares of State-owned firms listed overseas.

According to the investment plan unveiled last month, up to 800 million U.S. dollars will be used for share investment in overseas markets while up to 300 million U.S. dollars will be invested overseas in products with fixed returns.

Overseas investment will help the fund to explore more investment opportunities, diversify investment risks and maintain and increase the value of the fund.

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