Beijing faces investment outcry

HONG KONG -- The first purchase by the Chinese government's new overseas investment fund, a $3 billion stake in the Blackstone Group, has backfired badly and produced an unusual public backlash within China.

Blackstone shares have fallen steeply since the company went public June 22, pushing down the value of the government's investment by more than $500 million in just six weeks. Bloggers and even some Chinese financial media have frequently mentioned the dwindling value of the government's stake.

"O, senior officials of the Chinese government, please do not be fooled by sweet-talking wolves dressed in human skin," said one of several Internet postings compiled by an anonymous blogger on Sina.com, a Chinese website.

For years, China's central bank invested many of its assets in Treasury bonds and other government bonds. But, as its foreign reserves have soared to $1.3 trillion, Beijing has started seeking higher returns, and is now learning that this involves greater risk and sometimes losses.