The Chinese Government has agreed to buy a $US3 billion ($A3.64 billion) stake in New York-based buy-out firm Blackstone Group, the first step in the diversification of its overseas investments. The State Investment Co will buy an undisclosed number of non-voting Blackstone shares at 95.5 per cent of the price set in its planned initial public offering. The stake would be reduced if necessary to keep it below 10 per cent after the IPO, the Government and Blackstone said in a statement. China, the largest holder of US Government debt behind Japan, is creating the investment company to buy potentially more lucrative assets such as private equity. Foreign exchange reserves, swelled by export revenue, rose by a record $US136 billion in the first quarter to $US1.2 trillion, the most in the world, according to China’s central bank. Most of it is invested in sovereign debt. ‘With all the money that has flowed to China and the cash they have built up, they are looking for ways to put it to work,’ said Colin Blaydon, director of the Centre for Private Equity and Entrepreneurship at Dartmouth College’s Tuck School of Business in New Hampshire. ‘They […]