China may use FX reserves to help oil firms -paper

China is considering using part of its huge foreign exchange reserves to help state oil companies explore for overseas resources, the Shanghai-based National Business Daily reported on Tuesday.

The newspaper said the national energy working conference, which closed earlier this month, had discussed the proposal.

According to the proposal, Beijing would use a slice of China's $1.95 trillion yuan in foreign exchange reserves to set up a special fund to finance offshore oil exploration.

China's foreign exchange holdings are heavily invested in dollar-denominated assets, and Chinese researchers and officials are calling for a more diversified use of the reserves that are the world's largest.

Fan Wenzhong, a state-owned assets supervision official in Chongqing city, said in an interview with the Shanghai Securities News on Monday that the government should use its reserves to set up a $200 billion overseas industrial fund and a $100 billion "social development" fund.、BEIJING, Feb 17 (Reuters)