China Wealth Fund Buys Into Visa's IPO

China's sovereign wealth fund has taken a stake in Visa according to a media report on Tuesday, moving back into the market as Beijing agonizes over whether to be more aggressive in its overseas investments.

Scarred by big paper losses that China Investment Corp (CIC), the wealth fund, and China Development Bank have suffered on investments they made last year, some policy makers are counseling caution, saying China still lacks expertise.

CIC, which separately manages $200 billion, invested more than $100 million in Visa's initial public offering last week, Caijing magazine reported on its Web site.

But others scent that a meltdown in U.S. financial stocks and the depressed sale of investment bank Bear Stearns affords government and state-owned banks and firms opportunities to bargain shop.

"Because of the subprime crisis, the value of financial assets in the United States has fallen to a more reasonable range, which creates a fairly good opportunity for China to invest," said Li Ruogu, president of Export-Import Bank of China in a Reuters story.

In an article to be published in the International Economic Review, a Beijing academic journal, Li said China urgently needed to invest abroad to diversify its huge foreign exchange reserves, which exceeded $1.6 trillion at the end of February.