BEIJING, May 18 (Xinhua) -- China's foreign exchange reserve authorities are rumored to have entrusted three billion U.S. dollars to a U.S. company for investment abroad even though the state forex investment company has not yet been set up.

    Officials were not available for comment on the Friday report by China Business News.

    Though the scheme for the state forex investment company has not yet been finalized, the newspaper said, the money has been transferred to U.S.-based Blackstone Group, a global private investment and consulting firm founded in 1985.

    The company mainly invests in equities, real estate and corporate bonds. Anthony Leung Kam-chung, former Financial Secretary of the Hong Kong Special Administrative Region, runs the company's business in China.

    The newspaper cited anonymous sources as saying that the three billion U.S. dollars came from Central Huijin Investment, which is owned by the People's Bank of China, the central bank. Accountants will regularize the situation once the state forex investment company has been established.

    According to earlier reports, China plans to build a state foreign exchange investment company in 2007 modeled on Central Huijin Investment.

    The company's mission will be to improve management of China's huge foreign exchange reserves and generate high returns without sacrificing security.

    Zhou Xiaochuan, governor of the People's Bank of China, has confirmed that Lou Jiwei is heading the group preparing the new company.

    Lou was appointed by the State Council, the cabinet, as its Deputy Secretary-General, a position with ministerial status, earlier March, from his earlier position as vice-minister of finance.

    Analysts say that Lou might become the president of the new company, and the general manager will possibly be drawn from the ranks of the central bank or the State Administration of Foreign Exchange.