China's parliament began reviewing the proposed issuance of 1.55 trillion yuan in bonds to buy about $200 billion in foreign exchange that would fund the start-up of the country's new sovereign wealth management fund, Xinhua news agency reported on Wednesday.

It gave no details.

Economists expect the new agency to buy foreign exchange directly from the People's Bank of China, which controls China's $1.2 trillion in currency reserves.

Xinhua did not say whether the special treasury bonds, which would be issued by the Ministry of Finance, would be sold directly to the central bank or sold in the domestic market, with the cash raised then used to buy foreign exchange from the PBOC.

The agency is still being set up, but it has already spent $3 billion on a 10 percent stake in Blackstone, a U.S. private equity group.