Legal Issues Of International Supervision Cooperation On Sovereign Wealth Funds

The Sovereign Wealth Funds(SWFs) have been in existence since 1950s,but they did not become a hot topic of international community until recent two years. Due to their large scale of assets and strong political background,the SWFs stimulate complex feelings of both delight and suspicion for those countries that are involved.Especially during the global financial crisis,such contradiction becomes more intense,and may cause difficulty to the development of the SWFs.Then,how to ensure the investment of the SWFs in commercial environment without any political obstacles? The key to address this problem lies in the international cooperation on the supervision for the SWFs.In Chapterâ… ,recent development of the SWFs and challenges in supervision which the SWFs have brought are introduced.It is known that the SWFs have become an increasingly important role in the international financial system.Because of their characteristics,such as strong political background,great power,and high risk,it is difficult to supervise the SWFs effectively as well as to avoid investment protectionism.In Chapterâ…¡,the feasibility and necessity of international cooperation on the supervision for the SWFs are discussed.On one hand,the SWFs do not claim state immunity for their state-owned nature,which makes the international cooperation possible.On the other hand,due to the positive investment strategy of the SWFs, some recipient countries often adopt unilateral protectionism on investment,which makes the international cooperation necessary.In Chapterâ…¢,some main recent proposals on international supervision cooperation are analyzed,including the OECD Declaration on Sovereign Wealth Funds and Recipient Country Policies and IMF Sovereign Wealth Funds Generally Accepted Principles and Practices "Santiago Principles".In addition,comments which aim at the arguments proposed by some intellects on incorporating the supervision into the architecture of WTO rules are made at the end of the chapter. Chapterâ…£focuses on the legal framework for the supervision on the SWFs in China.In light of China's SWF--China Investment Corporation(CIC),which was founded in 2007,it's worthy for China to obtain useful experiences from international society and enhance the management of the CIC.Therefore,China needs to improve its legal framework for the supervision in terms of both recipient and home country,meanwhile actively participate in the international cooperation.