CORRECTED - CORRECTED-COLUMN-China may marshal reserves to fund African dema

(Corrects paragraph 14 to clarify trade data for whole of Africa, not just Central and West Africa. Also corrects last part to ...exports, not imports, edged up)

-- Wei Gu is a Reuters columnist. The opinions expressed are her own --

By Wei Gu

HONG KONG, Aug 12 (Reuters) - China's main sovereign wealth fund, CIC, held 90 percent of its funds in cash last year. Few things illustrate better Beijing's dilemma -- it doesn't want to lose money investing overseas in developed markets, but at the same time fears the consequences of sitting on its hands.

So it's no surprise that Beijing is looking beyond Europe and the U.S. to emerging markets as a possible destination for China's surplus cash.

A group of retired officials and think-tank researchers have come up with a plan to direct foreign reserves towards developing nations. If China can fund purchases of rich American consumers, why not funnel capital to new markets in places like Africa?

The plan, proposed by former Deputy Director of State Administration of Taxation Xu Shanda after a study of the U.S. Marshall plan, comes from China's eagerness to continue exporting its over-capacity. The hope is that it might kick-start African economies, while also building China's ties with a valuable source of raw materials.

The idea has its critics in China, where some think it all feels too American. After all, wasn't the Marshall Plan an anti-communist measure, and not just a philanthropic helping hand to shattered Europe after World War Two?

But Beijing is enthused. President Hu Jintao has said that building strong ties between China and Africa will not only promote development of each side, but also contribute to establishing a just and equitable new international political and economic order.

It's pretty easy for China to make an impact in capital-starved Africa. If Beijing provided just 0.1 percent of its reserves to Africa, that would easily exceed the support the support the continent gets from the World Bank.

It would be an eye-catching way for China to show to the world that as it gets richer, it can give back than merely taking everything it can from the world.

In the past, Beijing has always argued that it is still a very poor country on per capita basis so cannot afford foreign aid. China's foreign aid was only 0.04 percent of its gross domestic product, only a fraction of the U.S. percentage of 0.4 percent and Europe's 0.7 percent.

But the financial crisis has changed this. While the downturn has crimped U.S. and Europeans companies' ability to expand overseas, Chinese firms, awash with cash, are keen to look for new growth opportunities in new markets.

Of course these are not charitable or philanthropic ventures. But they are adventurous investors, who are also responsive to state-directed initiatives. They are eager to tap into a continent estimated to hold a third of the world's mineral resources, and almost a billion people who are beginning to devour the consumer products, such as mobiles and TVs, that China dominates.

The Industrial and Commercial Bank of China (ICBC) (1398.HK)(601398.SS) and Africa's Standard Bank (SBKJ.J), in which ICBC bought a 20 percent stake in 2008, would finance the expansion of a coal power station in Botswana for $825 million over 20 years. Since the project is outsourced to a Chinese company, 95 percent of the equipment will be sourced from China.

China Development Bank, a policy bank which funds most of China's infrastructure projects, has made foreign development loans its focus area, calling it the new "blue ocean" -- a popular business strategy that promotes creating new market space.