Search

China is the only country in the world with two sovereign investment vehicles dedicated to managing excess foreign reserves for return, not just safety and liquidity. As the investment profile and behaviour of both funds align with the aims of the government's economic agenda, it is tempting to view China's two sovereign funds as part of a coordinated effort to further state investment policy. However, analysis of the origin of China's multi-sovereign investor regime shows that this approach is primarily a product of intense bureaucratic rivalry within the Chinese public service, rather than a considered strategy of the sponsoring government. This rivalry had a detrimental impact on aspects of the CIC's institutional design and early investment decision making. Comparison of the CIC, China's flagship sovereign investor, to its peer Asian funds in Korea and Singapore reveals that relative to regional reserve investment corporations, the CIC lacks robust mechanisms to achieve effective arms-length governance from its state sponsor. Reforms to the Chinese sovereign fund to ensure greater clarity of mission and alignment of purpose with internal decision making would ensure Chinese exceptionalism in sovereign investment transitions from cautionary to exemplary.

The article presents the author's insights on how to convert wealth funds into a social investment. Topics include the establishment of government-owned investment funds worldwide, sovereign funds that distribute returns, and the proposal to consider public commercial assets, as well as the use of a financial asset to gain a sovereign fund.

More than 50 states around the world now possess a Sovereign Wealth Fund (SWF), yet only the Alaska Permanent Fund (APF) directly distributes profits to national citizens. SWFs are government-owned investment vehicles, more than two-thirds of which have been established since the year 2000. This article seeks to discover why this recent proliferation of SWFs has not been matched with a similar increase in their use as a financing source for Basic Income schemes.