The Study On The Legal Status Of The China Investment Corporation

On September 29th, 2007, China Investment Corporation (CIC) was set up in Beijing. Ministry of Finance issued 1.55 trillion yuan special treasury bonds and used the income from issuing bonds and the central bank's foreign exchange reserves as the registered capital of CIC. The bonds operators of CIC are some senior officials of ministerial or vice-ministerial rank, and while served in CIC, they are still the straight cadres of central authorities.CIC is the company which was set up to manage and use the sovereign wealth funds of foreign exchange in the background that China has foreign exchange surplus and excess liquidity crisis, and it clearly has the characteristics of the public enterprise.In addition, for it undertakes special responsibilities and functions, and the supervision of it, CIC should be taken as a special public enterprise. The business scope of CIC decides the opening of its business and preserve and increase the value of the sovereign wealth funds and the realization of other function.Since CIC was set up, the deficit is very serious, this because that the CIC has not formed its philosophy of investment and experience in the international investment, the most important is that it has not establish the mechanisms investigating the responsibility, so base on the doctrine of fiduciary duty, the CIC constructive very effective accountability system, make sure respective person's duty in the investment is of great urgency.As the sovereign wealth funds, the CIC has the function of state regulation. Its establishment and running undertakes the function of the nation's investment. It uses the foreign exchange reserve to invest can recover excess liquidity, eliminate double-surplus phenomenon, stabilize economic development, dispatch resources appropriately, and this is the reflection of the state macro-control function.In addition, as the sovereign wealth funds and special public enterprise, the CIC assume major responsibility. In order to make sure preserve and increase the value of the sovereign wealth funds and the realization of the state macro-control function, we should exercise effective regulation on the CIC. China's State Council, Ministry of Finance, People's Bank of China, Administration of Foreign Exchange, Banking Supervision Commission, Securities and Futures Commission and other sections should exercise fair and just regulation on the CIC.Combining the economic and political backgrounds where CIC was set up and the status of China's legal construction, this paper analyses the system background where CIC was set up in details, and makes CIC's legal status clear.