Legal Issues Of The Sovereign Wealth Fund

Sovereign wealth funds are growing fast recently .Many nations show great concern for it. In NPC and CPPCC this year,. An economist Li Yining also advanced a similar concept of Sovereign wealth funds. He proposed establish public investment funds, using capital markets to increase the source of public funds.In The Santiago principles, sovereign wealth fund is defined as"Sovereign wealth funds (SWFs) are special purpose investment funds or arrangements that are owned by the general government. Created by the general government for macroeconomic purposes, SWFs hold, manage, or administer assets to achieve financial objectives, and employ a set of investment strategies that include investing in foreign financial assets. SWFs have diverse legal, institutional, and governance structures. They are a heterogeneous group, comprising fiscal stabilization funds, savings funds, reserve investment corporations, development funds, and pension reserve funds without explicit pension liabilities."The SWFs in China——China Investment Corporation, CIC has the attention of global market, governments and domestic and international media since its inception. The SWFs is not completely established in developing countries, some developed countries including the United States, Australia and New Zealand, The SWFs are transferred from social insurance, government pension funds and other government revenue surplus or the balance of taxes, through domestic projects and investments in foreign assets, to generate additional revenue into the social security and government pension scheme funds.The SWFs is reviewed and monitored by the investment receiving State because of its sensitive government background and active investment trends Countries prone to unilateral control model of investment protectionism, the multilateral regulatory approach has become a useful option.Therefore, this article hopes to analyze the puzzle which CIC meet in its investment overseas and as a receiving country dealing with other SWFs from legal view, give legal proposes for Chinese SWFs development in future..