An FT report said the Chinese government is planning to buy General Motor’s underfunded pension plan.

China, which holds close to $1.2 trillion in U.S. treasuries, is willing to pay between $1.5 billion and $2 billion for the deal.

GM's pension plan owns stakes in some of the most high-profile private equity funds in the United States and Europe, including Carlyle Group, Blackstone G, and CVC Capital Partners, the report said.

The sale, which is uncompleted, would involve the transfer by GM adviser Performance Equity Management of stakes to the State Administration of Foreign Exchange (SAFE), which manages China's more than $3 trillion in foreign exchange reserves.

GM declined to comment, Lexington Partners did not respond to a request for comment and SAFE could not be immediately reached for comment.

The FT quoted an investment adviser as saying the deal was discreet, even by private equity standards, because "there is clearly concern about selling US assets to China, especially in an election year".

“The private equity industry has emerged as a major issue in this year’s US presidential election. Mitt Romney, the Republican candidate and founder of Bain Capital, has had to fend off criticism that the companies it acquired actively outsourced US jobs.

Lexington Partners, a specialist investor in second-hand private equity stakes, is advising Safe and will administer the complex portfolio, according to someone briefed on the situation. It may also buy some GM positions that Safe does not want. The New York-based investor was one of three firms mandated in 2010 to pick up $1.5bn of private equity investments for China Investment Corp, the country’s sovereign wealth fund.”