China Investment Corp sees investment opportunities in energy and commodities sectors as prices have fallen steeply, Jesse Wang, a senior official with the country's $200 billion sovereign wealth fund, said on Wednesday.

Officials have said that CIC wants to diversify its portfolio in the natural resources sector after booking heavy losses on high-profile financial investments in private equity fund Blackstone and U.S. bank Morgan Stanley.

Wang, CIC chief risk officer, said the global recession had just begun, and as a result, bigger price declines in commodities and energy were possible.

No matter where the company invests, it is always possible there will be book losses in a particular period, he told reporters on the sidelines of a meeting of a parliamentary advisory body.

The wealth fund will diversify its investments in the financial and energy sectors, Wang added.

A move into commodities and energy by CIC would add to a wave of investments backed by Chinese state funds in those sectors that topped $50 billion in February alone, including Russian and Brazilian oil deals and investments in Australian mining firms Rio Tinto and OZ Minerals.

Last month, CIC Chairman Lou Jiwei travelled to Australia to meet Treasurer Wayne Swan, who holds sway over Chinese investments such as the Rio Tinto deal agreed by state metals conglomerate Chinalco.

As well as long-term oil deals and equity investments, in recent months China has been taking advantage of low prices by stocking up on a wide range of commodities.

It has imported crude oil for its strategic oil reserve, which can hold about 100 million barrels of oil, and is building tanks to store another 169 million barrels.

China's State Reserves Bureau (SRB) has also bought up metals to increase stocks of strategically important raw materials such as copper and to lend support to struggling smelters of aluminium and zinc.

With commodity prices in the doldrums after a collapse in demand at the end of last year, China's buying is seen as a rare source of demand in oversupplied global markets.

(Reporting by Xie Heng and Shao Xiaoyi; Writing by Tom Miles; Editing by Alan Wheatley and Ken Wills)

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