CHINA INVESTMENT CORPORATION. POLICY IMPLICATIONS AND DEVELOPMENTS
CHINA INVESTMENT CORPORATION. POLICY IMPLICATIONS AND DEVELOPMENTS

Summary/Abstract: The Chinese State Council, China’s chief executive body established China Investment Corporation, a sovereign wealth fund, in September 2007 to invest $200 billion of China’s then over $1 trillion in foreign exchange reserves. Because of its size, as well as because of its governance structure and its position within the Chinese political system, scholars and political analysts raised concerns about CIC. Some observers were concerned that the Chinese government would use CIC to purchase geo-strategically important natural resources, gain access to sensitive technology, or disturb international financial markets. This paper deals with China Investment Corporation, from an international political economy perspective, by analyzing the establishment of the fund, in terms of reasons for and process of creation, its governance structure as well as CIC’s main investment activities since 2007. The first section is dedicated to a general discussion on the emergence of Sovereign Wealth Funds, in order to develop a basic framework with which to make sense of them. The second part turns to China Investment Corporation, by focusing on the aspects mentioned above.

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