Other core members are: Gao Xiqing, deputy chairman of the National Social Security Fund, the mainland's largest pension body; Zhang Hongli, a vice-minister of finance and a rising star; and Jesse Wang Jianxi and Xie Ping, respectively deputy chairman and managing director of Central Huijin Investments, the state-controlled investment arm that holds controlling stakes in the mainland's largest banks and brokerage houses.

They are undoubtedly the elites in the government. Such a lineup serves every political consideration but not the financial one. It ensures tight government control.

It nicely carves up the interest and influence between the People's Bank of China and the Ministry of Finance which have fought bitterly over the agency's establishment.

However, maximising returns on investment is not enshrined.

Without exception, the team members have their roots in the two departments. Their experience in the real financial world is limited despite the corporate titles held by some.

Mr Gao is the only one that has had a taste of that world. He headed Bank of China (Hong Kong)'s investment bank before returning home to become a securities regulator and then the government pension fund manager.

The fund has been doing well, given the buoyant A- and H-share markets. Yet it has experienced no large market downturn. Neither was it active in international capital markets.

One may argue that a dominance of bureaucrats will ensure a prudent use of public money. However, a well-disciplined team of professional managers could also serve this purpose.

And, the Blackstone experience has shown that civil servants are no more risk averse than private hands.

The same team masterminded a US$3 billion pre-public offering investment into the United States private equity firm, way before the agency was formed.

Troubled by the subprime mortgage crisis, potential tightening of regulations and a massive cash-out by its founders, Blackstone dived well below its offering price. The agency's investment has lost more than 16 per cent of its face value.

It is likely that external managers will be hired to help run the agency. If so, this goes back to the main question: Why should a separate body be established, instead of letting the money stay with the central bank?

The bureaucrat-dominated leadership is also at odds with the trend of reducing government involvement among sovereign management funds by bringing in senior management from the private sector and increasing transparency.

A good example is Temasek Holdings, an investment agency of the Singapore government. Its 10-strong board includes four ex-civil servants; three state-owned enterprises officials and three from the private sector.

Its long-serving chairman is a former cabinet member but an ExxonMobil Asia-Pacific senior official holds the deputy chairmanship.

The agency's senior management was populated largely by local talent from the private sector until recently.

In 2005, its chief operating officer was hired from American Express and then its China investment head from Goldman Sachs.

This introduction of 'private faces' is not just for smarter investment and better returns. Most importantly, it is to fend off rising political hostility.

Washington and Brussels have been campaigning against sovereign funds, in particular those from emerging economies, arguing that these funds will increase volatility in global capital markets.

The dominance of civil servants with little public accountability and therefore market discipline has been singled out as a key problem at these funds.

In October, the International Monetary Fund will meet to discuss the need to regulate them.

An investment agency owned by communist China and governed by public servants, if anything, will only feed into this criticism.