Under The Us Financial Hegemony Of Sovereign Wealth Funds

Since the financial crisis in2008, sovereign wealth funds (shorted for SWF)have become the focus of different parties due to the massive investment on Westernfinancial institutions. It has also become a research hotspot domestically andinternationally. There are many papers studying it from the perspective of economicsand law，but relatively fewer from the perspective of international politics andinternational political economy.This paper studies the operating characteristics and development prospects of theSWF against the backdrop of the U.S. financial hegemony. After analyzing the wayU.S. achieving the financial hegemony, we try to figure out the impact of the U.S.financial hegemony on the operation of SWF, analyze the attitude of the hegemonytowards SWF and various measures taken. The development prospects of SWF undera series of restrictive condition are further depicted in this paper.Firstly, domestic and foreign researchs are combed. A brief introduction is givento the cause and development situation of SWF; Secondly, the course of theestablishment of U.S. financial hegemony is reviewed and three different path wasanalyzed, operating characteristics of SWF is then being demonstrated. Moreover，further analysis of the subjective attitude of the hegemony to SWF and restrictivemeasures taken by hegemony is carried out. Lastly，the prospect for the developmentof SWF is described brielfy.Under the U.S. financial hegemony, there are a range of fetures representing bythe operation of SWF due to some constraints. First, the scale of SWF is huge; Second,the goal of the establishment is to manage foreign exchange reserves reasonably toachieve preservation and appreciation; Third, the investment targets are shiftted fromfixed-income assets to the risk category; Fourth, the investment destinations aremainly developed economies; Fifth, the transparency is improved; Sixth, the controlpower is not pursued.Measures taken by Hegemony to prevent and control the SWF are as follows:thorough investigation of the investment through domestic legislation，separate talkswith the countries concerned and the signing of binding agreement, regulations onSWF through international organizations with the main regulatory basis of the"Santiago Principles" which bring forward a series of specific measures aboutinformation disclosure. Under the constraints of the hegemony, the future prospect of the SWF are asfollows: its scale will be further expanded; its investment destination will transfer toemerging countries with its asset allocation more inclined to risky assets; itstransparency will be further strengthened and the possibility of endorsing it withholding and voting ri’ghts wont be ruled out when conditions allowed.