China state fund grabs £1 billion holding in BP

A Chinese sovereign wealth fund has built up a stake in oil and gas major BP as Beijing oversees a buying spree around the world.

The fund holds less than 1% of BP, a stake worth about £1 billion, but the investment has attracted attention as Chinese funds and state-run companies manoeuvre to take holdings in key resources firms.

Downing Street is said to be aware of the purchase and is monitoring it, but is unlikely to be concerned. Virtually alone among European leaders, Gordon Brown has expressed few misgivings about sovereign wealth fund equity holdings, declaring that Britain is open for business.

It is not clear which Chinese fund has bought the BP stake. Wang Xiaoya, a spokeswoman at China Investment Corp, which manages the nation's $200 billion (£101 billion) sovereign wealth fund, refused to comment while Zhao Hongtao, a spokeswoman for China's $70 billion national pension fund, said the agency has not made such investments. China's foreign-exchange regulator also refused to comment.

China Investment last year spent more than $8 billion on stakes in buyout group Blackstone and Morgan Stanley.

State-run aluminium company Chinalco has taken a holding in Rio Tinto and it is rumoured Beijing-controlled funds are looking for a big stake in BHP Billiton. China also spent some of its $1.68 trillion reserves buying 1.3% of French oil giant Total.