The Legal Analysis Of The Marketizational Operation Of China Investment Corporation

The State Council authorized to establish China Investment Corporation(CIC) to operate the foreign exchange reserve,which made a solid step forward in the exploration of foreign exchange reserve management and operation system.However,before its establishment, CIC's subject qualification and foreign exchange assets management behavior aroused attentions and questions in the society following the investment in the American Blackstone Group and the issue of the special bonds.If we put aside CIC's economic significance to inquire into the basic legal principles and rules from the legal perspective and consider the affairs in CIC's establishment,we will find that this half-year long establishment process,though called "the Chinese Temasek" by former Minister of Finance Jin Renqing,is trapped in the awkward situation of doubtful legality because of its insufficient legal evidence.Its market operation model under the future legal framework is also deeply worried because of its congenital lack of institution and specification.Under this kind of background,author chooses "the legal analysis of CIC's marketizational operation pattern" as a topic,to launch a thorough analysis and discussion.Through this article's research,the following main opinions can be obtained:1.After a country's foreign exchange reserve surpasses the moderate scale,the holding cost will increase rapidly,having a negative influence on the macroeconomic health.Referring to international advanced experiences on the foreign exchange reserve management,under the background of the fast growth of China's foreign exchange reserve stock and increment,the positive management represents the general trend.In the implementation of foreign exchange reserve positive management policy,establishing a relatively independent investment organization to separate the foreign exchange reserve management and operation is this policy's essential factor.Therefore,CIC arises at the historic moment.2.This article discusses the legal basis of CIC establishment from the strict and standard legal perspective,including the foreign exchange assets classification,the authorized management as well as the legal localization and so on.The results show the law vacuum appears in the CIC case.That causes it to face the legal institutional insufficiency from the establishment and possibly divert the future improvement of the corporate management mechanism and system.In the foreign exchange reserve management,the lack of law is no doubt a reason which cannot be avoided,but weakness of CIC institutional construction lies with the policy-type factor becoming the criterion to instruct behavior and the law downgrading to some kind of policy goal tools and the ornaments under high pressure of the policy.In addition,CIC's major activities are on the international market stage,therefore its lack of legal factors matters not only whether it conforms to the domestic law but also whether it will be able to stand up in the international marketplace after the implementation of the policy of "walk out" strategy.3.Referring to international successful experience,establishing the government investment company is an important link in the foreign exchange reserve management system.This is proved effective in Singapore and South Korea.China can learn much from Singapore and the South Korean patterns in the transformation of market legal system of CIC.To regulate CIC's operation of foreign exchange reserve and enhance the efficiency of active management of the foreign exchange reserve,the designs and constructions of CIC legal system under the marketizational pattern become an urgent matter.4.It is better to take CIC as a turning point to establish and improve the legal framework of the foreign exchange reserve management. Among them are laws on the subject of foreign exchange reserve management entity and exchange management behavior law,the former like "Chinese investment corporation Law",the latter like "foreign exchange reserve management law" and so on.Improvement on the outside supervision mechanism of CIC and the legal liability rules of foreign exchange reserve management can set clear legal specifications of the subject responsibility,behavior pattern,supervision mechanism,and liability system of foreign exchange reserve management,thus avoids falling into awkward situation of insufficient legal basis and can guarantee CIC's healthy movement on the legal system track and efficient and secure operation of foreign exchange reserve to keep and increase its value.