A tale of two sovereign funds: China's exceptionalism in sovereign wealth management through CIC and SAFE

Q3 Social Sciences

International Journal of Public Policy Pub Date : 2017-08-25 DOI:10.1504/IJPP.2017.10006454

Angela Cummine

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Abstract

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.

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两只主权基金的故事：中投和外管局主权财富管理的中国例外论

中国是世界上唯一一个拥有两个主权投资工具的国家，它们致力于管理超额外汇储备以获取回报，而不仅仅是安全和流动性。由于这两只基金的投资状况和行为与政府经济议程的目标一致，人们很容易将中国的两只主权基金视为推进国家投资政策的协调努力的一部分。然而，对中国多主权投资者制度起源的分析表明，这种做法主要是中国公共服务部门内部激烈的官僚竞争的产物，而不是赞助政府深思熟虑的策略。这种竞争对中投公司的制度设计和早期投资决策产生了不利影响。将中国的旗舰主权投资者中投公司与韩国和新加坡的亚洲同行基金进行比较表明，与地区储备投资公司相比，中投公司缺乏强有力的机制，无法从其国家赞助商那里实现有效的公平治理。对中国主权基金进行改革，以确保其使命更加明确，目标与内部决策保持一致，这将确保中国主权投资的例外主义从警示转变为典范。

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来源期刊

International Journal of Public Policy Social Sciences-Political Science and International Relations

CiteScore

0.40

自引率

0.00%

发文量

期刊介绍： The IJPP proposes and fosters discussion on public policy issues facing nation states and national and supranational organisations, including governments, and how these diverse groups approach and solve common public policy problems. The emphasis will be on governance, accountability, the creation of wealth and wellbeing, and the implications policy choices have on nation states and their citizens. This perspective acknowledges that public policy choice and execution is complex and has ramifications on the welfare of citizens; and that, despite national differences, the actions of nation states are constrained by policies determined by supranational bodies, some of which are not directly accountable to any international body.