The People's Bank of China (PBOC) is working on a plan to establish a new government agency to invest its US$3.5 trillion of foreign exchange reserves abroad more efficiently. The new agency would be in addition to the China Investment Corp (CIC), the nation's sovereign wealth fund. The information was given to the South China Morning Post by two sources close to the central bank. They said PBOC governor Zhou Xiaochuan has assigned a division head of the State Administration of Foreign Exchange (SAFE), the country's foreign exchange regulator, to lead a small team to study the feasibility of such a unit. Zhou is in favour of the idea of a parallel platform, but some senior SAFE officials fear it would gnaw away at the powers of the foreign exchange regulator. Senior officials and scholars, unhappy with CIC's poor returns, have been pressing for platforms other than the CIC and SAFE to invest China's reserves abroad. The sources said the PBOC is considering creating the unit within its own organisational structure, or as a separate, independently run agency directly under the central bank. It would be responsible for the management and investment of the bulk of the forex reserves. Once the plan is finalised, it will be submitted to the State Council, China's cabinet, said the sources, who spoke on condition their names were withheld due to the sensitive nature of the matter. The SAFE, which currently takes the lead in managing and investing foreign reserves abroad, is under the PBOC while the CIC, which handles only a slice of foreign reserves, reports to the cabinet. "If the PBOC wants to manage foreign reserves on its own, the SAFE is more likely to focus on its regulatory role rather than asset management," said one source. When contacted by the Post , the PBOC said it currently had no information to disclose about foreign reserves management. Beijing set up the CIC, the country's first officially recognised sovereign wealth fund, in 2007. It has US$480 billion of assets under management. The SAFE runs an offshore investment entity, SAFE Investment, registered in Hong Kong. The SAFE itself also carries out regular foreign reserves operations, mainly in the trading of US treasury bonds. China is the world's largest holder of US debt. On June 19, Premier Li Keqiang hosted a cabinet meeting at which he said the government would support domestic enterprises to "go out" and make China's foreign reserves management more "innovative", Xinhua reported. While domestically the CIC has been under pressure to improve investment performance, it is viewed with suspicion by Western politicians. In formulating a new platform, the sources said, the PBOC does not want to create a shareholding company like the CIC due to concerns related to public information disclosure.