China Sovereign Fund: G7-Backed Code Of Conduct Not Needed
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China’s US$200 billion sovereign wealth fund Thursday criticized as unnecessary a Western proposal for a code of conduct aimed at pushing such funds into accepting outside scrutiny.
“The claim that sovereign wealth funds are causing threats to state security and economic security is groundless,” Jesse Wang, an executive vice president and chief risk officer of China Investment Corp. told Dow Jones Newswires in an interview.
“We don’t need outsiders to come tell us how we should act,” Wang said, adding that China has its own code of conduct for its fund. He called the code of conduct proposal pushed by the Group of Seven “unfair.”
Wang’s comment was the first public response by the CIC to a request from the G7 that the International Monetary Fund and global bodies draft a voluntary code that would guide the behavior of sovereign wealth funds.
The issue arose as sovereign funds have bought stakes in a number of U.S. and European financial institutions including Citigroup Inc., Merrill Lynch & Co. and UBS AG.
Sovereign wealth funds hold an estimated $3 trillion in assets and are growing quickly.
The investments have raised concerns in Washington and European capitals that the funds may be gaining political clout. At the same time, the Western nations don’t want to choke off all the investment from the funds.
Filed by Anita Li under International Financial Architecture Reform, Investment and Competition Policy