BEIJING, July 7 (Xinhaunet) -- Chinese author-ities are considering a plan to strip China Investment Corporation (CIC) of all its domestic banking stakes, a move expected to help diversify the portfolio of one of the world's major sovereign wealth funds, industry sources said on Tuesday.

Total banking shares held by CIC were reportedly valued at $70 billion when it was established in 2007, including large shareholdings in Bank of China and the Industrial and Commercial Bank of China. CIC, responsible for managing part of the country's foreign exchange reserves, saw its assets grow to $298 billion at the end of 2008.

Central Huijin, a wholly owned subsidiary of CIC, currently holds the banking stakes.

It is unclear whether CIC will be recompensed for the stripping of the holdings.

But sources close to the matter told China Daily that if the spin-off succeeds, Central Huijin may be either directly controlled by the State Council or acquired by the State-owned financial assets supervision and administration commission, a new government agency that Beijing plans to set up.

Wang Qishan, the vice-premier in charge of finance, is championing the proposal, the London-based Financial Times cited unnamed bankers as saying.

Many analysts see the plan as a move by the country to free CIC from certain restrictions when it invests overseas, particularly in the United States market.
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