Chapter

The Asian Funds

Christopher Balding

in Sovereign Wealth Funds

Published in print February 2012 | ISBN: 9780199842902
Published online May 2012 | e-ISBN: 9780199932498 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199842902.003.0007
The Asian Funds

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The major Asian sovereign wealth funds are the only funds in the world not based on commodity revenues. China and Singapore created their sovereign wealth funds from accumulated budgetary and trade surpluses. China and Singapore also manage their funds differently taking a more statist view of economic matters targeting specialized industries. Conversely, Chinese and Singaporean investment in both local and foreign firms are focused on controlling stakes in targeted industries. They have taken significant stakes in domestic companies urging them to expand internationally and protecting them from foreign take overs. China has targeted financial services, natural resource, and high technology industries which it views as vital to sustaining and increasing Chinese growth. This investment pattern, more than any other sovereign wealth fund, has caused concern by governments around the world not swayed by the declared benign intentions of the Chinese government. Singapore has taken a statist view to its sovereign wealth fund but designed to build up national flagship giving them preferred access to capital and even venture capital funding for high technology firms. While the intention of Chinese investment worries foreign critics, the inconsistency of declared Singaporean returns is most concerning. The divergence between the stated returns of Temasek, the primary Singaporean indexes, of which they are the primary owner, and other financial metrics such as Singaporean indexes or other sovereign wealth funds is worrying.

Keywords: sovereign wealth fund; china; singapore; china investment corporation; temasek; government of singapore investment corporation; peoples bank of china; trade surplus; fixed exchange rate

Chapter.  10774 words. 

Subjects: Financial Markets

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