MercoPress. South Atlantic News Agency

Chinese investment fund purchases 1% of BP for a billion £

China has spent a billion pounds buying a 1% stake in BP, the UK's largest company by market value. The investment was made by the State Administration of Foreign Exchange, a unit of the Central Bank managing 1.6 trillion US dollars in foreign exchange reserves.

The move is the latest purchase by China of strategic stakes in leading European and US firms such as Total, Blackstone and Morgan Stanley. Critics of this approach say China must be more open about its intentions. There have been growing calls for state-controlled sovereign wealth funds - which invest the surplus wealth of Asian and Gulf economies such as China, Singapore and Kuwait - to be more transparent about their motives for investing in individual businesses. Particular concerns have been expressed about China's recent drive into the global oil and commodity sectors, at a time when it is searching for fresh sources of energy and mineral resources to fuel its economic expansion. Chinese officials have insisted that such investments are long-term commercial arrangements and Beijing is not looking to influence the strategies of firms it invests in. BP confirmed that the Chinese fund had joined its register of shareholders, saying that it was "not a stake that gives us any cause for concern". The Kuwait Investment Authority already owns a 1.7% holding in the oil giant. The British government is relaxed about Chinese investment in top UK companies and wants to make London the principal destination for Chinese investment in Europe. Chancellor Alistair Darling is currently in Beijing where he is holding talks with Prime Minister Wen Jiabao and Lou Jiwei, head of the separate China Investment wealth fund, about Anglo-Chinese commercial links. One analyst said Beijing was interested in the sector because of the spiraling price of oil.