| Sovereign wealth, different from private wealth, refers to a type of public wealth hold by the government in the form of foreign currencies, which comes from the specific tax, budget allocation, natural resources income and balance of payment surpluses. Since the beginning of21st century, thanks to international commodity prices going up and the imbalance of global economy intensifying further, foreign currency reserves of the Middle East and Asia grew rapidly. How to manage the huge foreign exchange reserves effectively and to maintain and increase the value of reserves became the most concern to emerging economies. Sovereign wealth funds, as special investment entities to operate the national external wealth, managed by specialized investment institutions independent of central bankers and finance department, became the realistic choice of many countries with huge foreign exchange reserves.From perspectives of source of capital and motivation to set up, sovereign wealth funds are considered to be the outcome of global economic imbalances, but the booming development of sovereign wealth funds will affect the trend of global economy. The traditional international capital flows were impacted by the sovereign wealth funds from emerging economies as well as the intro-investment promoted these funds, which caused the "extrusion effect" to capital from developed economics, to some extent. Therefore, in the last two years, the western developed economies treated the sovereign wealth funds from emerging economies with a contradictive attitude as well as their policies. On one hand, the western developed economies treated these funds as "threats" and carried out financial protectionism polices, which even affected the adjustment of global economic pattern and its rebalance; On the other hand, during the recent financial crisis, sovereign wealth funds who saved several banks and large enterprises in the United States and Europe by huge investments, were called "savior" or "rescuers" by the western developed countries in the depths of crisis. Against this background, as the second largest economy in the world and the largest developing country with the largest official foreign exchange reserves, China has been facing several problems such as foreign investment-dependence, imbalance between fictitious economy and real economy, weak management of financial institutions, great pressure on maintaining and increasing the value of reserves and lack of pricing power over the international natural commodities, etc. It is urgent to build a bunch of powerful flexible state-owned investment institutions subjecting to the national strategic interests, among which sovereign wealth fund is one of the most potential institutions. The founding of China Investment Corp.(CIC) is considered as one of the symbolic events for the reform of Chinese Foreign Exchange Management System, which is a bold attempt of the "going out" strategy for China to participate in the competition of international financial market. It should be clearly understood that although CIC has initially constructed the governance structure and operation mechanism and has built a well-performed investment platform as well as a prudent risk management framework since its establishment four years ago, and completed all kinds of strategic asset allocation, still, it has a long way to go, compared with the other mature sovereign wealth funds.To the majority of people, sovereign wealth funds are mysterious and complex. Research on sovereign wealth funds has been considered as one of the most challenging new topic. In this paper, the methods of norm analysis and case study, as well as qualitative and quantitative analysis, are carried out to analyze the emergence and development of sovereign wealth funds. Comparative analysis method is applied to analyze the difference between CIC and other sovereign wealth funds in management framework, operation mode, investment strategy and assets allocation. After studying on the influence of sovereign wealth funds to global economy, financial markets and recipient countries and companies, as well as the international regulatory frameworks of sovereign wealth funds, this paper compares the different characteristic of international sovereign wealth funds, and makes a deep research on sovereign wealth funds in China, trying to find a proper way of future development.Following the logic thinking and technical route of questioning, constructing the framework for analysis, case studies and solution, this dissertation proceed the study on sovereign wealth funds from the aspect of China’s practice in eight chapters.Chapter one is the introduction, which explains the background of this dissertation and the theoretical and realistic value of this research, summarizes studies implemented by domestic, international scholars, introduces the author’s approach towards the problems.Chapter two reviews the development of the sovereign wealth funds. This chapter briefly analyzes several development stages of the sovereign wealth funds, and explains the rise of sovereign wealth funds theory origin from aspects of external assets management and international monetary system. Meanwhile, it is proved through specific data and case studies that based on the global productivity differences and the international division of labor, economic globalization provides sovereign wealth funds with a good external environment and the rapid growth of trade surplus encourages the expansion of sovereign wealth funds from exporting countries. According to the promotions of the theoretical study and the need of reality, sovereign wealth funds have been developed rapidly all over the world. Similarly, the establishment and development of China’s sovereign wealth fund is a necessity as the reform of China’s financial system to adapt to the new trend of development of international finance markets.Chapter three, chapter four and chapter five are the core parts of the research. Chapter three briefly analyzes the policy intentions of different countries to found sovereign wealth funds and the role of government. This chapter divides sovereign wealth funds in the world into three different types and promotes to solve several problems in governance mechanism of sovereign wealth funds. Chapter four makes comments on the influences and effects of sovereign wealth funds. This chapter compares two opposing views from the aspects of international financial markets and recipient countries and companies. The evaluation framework is formed to analyze the influences of China’s sovereign wealth fund. Chapter five studies on the international regulatory frameworks of sovereign wealth funds with discussion on rules and regulations of IMF, OECD as well as the United States, the European Union, Australia and Russia, and analyze the constraints and challenges faced by sovereign wealth funds.Chapter six studies on several topics about CIC, such as organizational structure and investment strategy, investment performance and the evolution of the asset allocation, based on its founding background. It is found that CIC has formed a unique investment philosophy and investment strategy, and constructed the investment risk management structure as well as the strategic asset allocation. The organizational structure and operation mechanism of CIC has been in the process of reform and improvement.Chapter seven studies on some core elements of CIC such as governance mechanisms and risk managements, etc. This chapter makes case studies on other sovereign wealth funds and compared their differences from CIC to provide instance basis for the discussion of china’s sovereign wealth fund.Chapter eight makes some deep thinking about the future trend and challenges faced by sovereign wealth funds, puts forward several methods, from improving legislation to organizational structure reorganization and investment strategy as well as asset allocation of diversification, respectively, and looking forward to the future development of China’s sovereign wealth fund.Because of its critical role in the international financial markets, having important influences on the homeland of external wealth management, investment recipient and investment entity stability and development, sovereign wealth funds attracted widespread concerns from domestic and foreign political and academic as well as other areas. Many scholars and relevant government departments have made important research and practice on sovereign wealth funds and accumulated a certain theoretical achievements and experience. This paper makes some expansion and innovation based on their achievements and experience, but there are a lot to be improved in the future. |
PDF Full Text Request