The Chinese Sovereign Wealth Fund Management And Its Oversea Investment Strategy

The prosperity of Sovereign wealth fund cannot live up with the country's substantial foreign exchange reserves.In order to preserve and increase the value of the foreign exchange reserve,more and more countries are considering setting up sovereign wealth funds,which are dependent on exporting of natural resources or long-term current account surplus.China has also established its own sovereign wealth fund--China Investment Corporation in September 2007.In recent years,the behavior of sovereign wealth funds' investments are in the close attention of Western developed countries.Feared of the political motivation behind the investments,the western governments set up many restrictions on the investment object's choice.On this basic point,this paper has analyzed the challenge that the Chinese sovereign wealth fund would face with.Objectively,the investment of Chinese sovereign wealth fund is impacted by the restriction of western country and financial crisis.Subjectively,the Chinese sovereign wealth fund is less of operation and investment experience unavoidably.Therefore, this article analyzes the typical represents of strategy and portfolio sovereign wealth funds—Temasek and Norwegian Government Pension Fund—Global.Both funds hold high reputation because of these distinctive investment characteristic and good performance in all sovereign wealth funds.Through the method of comparative analysis,this paper discovered the similarity and difference in the management, operation and the investment strategy between two funds.In the foundation of reference both successful sovereign wealth funds,this paper proposed the Chinese sovereign wealth fund investment suggestions, including corporation position,investment objective,investment options,investment strategy,risk control mechanisms,information disclosure,performance evaluation and oversight of the auditing,etc.