* Change of wording highlights returns on China's reserves
* SAFE aims to "improve" yields by studying market trends
* Restates policy of widening outbound portfolio investment
BEIJING, Aug 31 (Reuters) - China is aiming to improve the long-term returns on its $2.13 trillion in official currency reserves, the largest stockpile in the world, the foreign exchange regulator said on Monday.
The State Administration of Foreign Exchange (SAFE) said it would step up the study of economic cycles and market trends with the goal of generating higher returns.
It did not say how it would do this in a world of very low interest rates, pledging only to keep improving a reserve management system "that suits Chinese characteristics".
"With the precondition of ensuring security and liquidity, we will improve the long-term profitability of reserve assets," SAFE said on its website, www.safe.gov.cn.
The agency posted the statement after a strategy session chaired by the agency's new head, Yi Gang, who took over in July.
The wording of the statement differed from comments earlier this year by Yi's predecessor, Hu Xiaolian.
Hu told the official Xinhua news agency in April that China's aim was to "maintain", rather than "improve", stable returns on its reserves over the long term.
In January, when global markets were in freefall, she emphasised said SAFE would further enhance risk management.
China does not disclose the composition of its reserves or the returns it makes, but analysts who follow the agency say returns in normal years are in the range of 3-4 percent.
In an interview with Caijing magazine published on Monday, the head of China Investment Corp, Lou Jiwei, said his aim was to generate higher returns for his sovereign wealth fund than SAFE does.
But Lou said that did not mean CIC had to beat SAFE year in, year out. CIC might suffer initial losses on an investment that recovers and goes on, over a period of five years, to yield average annual returns of, say, 6 percent, Lou explained.
CIC was founded in September 2007 with $200 billion transferred from SAFE's hoard of reserves.
Its assets had grown to $298 billion by the end of last year, and Lou said on Saturday that the fund was now investing as much overseas each month as it did in all of 2008 [ID:nPEK59655]
In its statement on Monday, SAFE said it would widen channels for outbound portfolio investment under the Qualified Domestic Institutional Investor (QDII) scheme.
The agency gave no details, leaving it unclear whether this amounted to a simple restatement of long-standing SAFE policy or was foreshadowing the approval of new funds that may invest client funds in selected overseas markets, principally Hong Kong.
SAFE described China's international payments as stable, with some net capital inflows and no major outflows. (Reporting by Zhou Xin and Jason Subler; Editing by Alan Wheatley and Ken Wills)