Does China have a sovereign wealth fund? (2024)

Does China have a sovereign wealth fund?

China is home to one of the world's largest sovereign funds, China Investment Corporation. CIC's total assets under management reached about $1.24 trillion at the end of 2022, bigger than Saudi Arabia's 2022 GDP (about $1.1 trillion). Saudi Arabia was the 17th largest economy in the world in 2022.

CIC's total assets fell to US$1.24 trillion by the end of last year from US$1.35 trillion for the previous year, mainly due to a US$51.4 billion impairment in the fair value of its holdings, according to its annual report. It was the first drop since the fallout from the US-China trade war in 2018.

World's largest sovereign wealth fund posts record $213 billion profit, boosted by tech stocks. Norway's giant sovereign wealth fund on Tuesday reported record profit of 2.22 trillion kroner ($213 billion) in 2023, supported by robust returns on its investments in technology stocks.

In China, many people put their money in real estate and bank deposits. This is a big part of Chinese investment behavior. They see this as a safe way to keep their wealth. A lot of houses in China belong to families who live there, nearly 39%.

Some countries may have more than one SWF. Also, while the United States does not have a federal sovereign wealth fund, several of its states have their own SWFs. The list does not include pension funds that do not meet the SWF criteria.

Wealth, however, is significantly more concentrated than income: the top 10% holds approximately 67% of China's wealth compared with 41% for income. The top . 0001% owns 5.8% of China's total wealth, which is roughly equivalent to that of the bottom 50%.

The Japan Government Pension Investment Fund remains the largest pension fund, with assets of USD 1.4 trillion.

The Korea Investment Corporation (KIC; Korean: 한국투자공사; Hanja: 韓國投資公社; RR: Hanguktujagongsa) is a sovereign wealth fund established by the government of South Korea in 2005.

Existing sub-national sovereign wealth funds in Canada include the Alberta Heritage Savings Trust Fund, the Quebec Generations Fund, the Newfoundland & Labrador Future Fund, the NWT Heritage Fund, and the Ontario First Nations Sovereign Wealth Fund.

How much does America owe China?

US Treasurys Owned by China, in USD Billions

As of Oct. 2022, China owns $769.6 billion of the total $7,565 billion U.S. national debt.

China's economic size and rapid growth are not the only thing that set it apart. It also relies on different drivers of growth than many large economies. China's economic development has been fueled in large part by a sprawling industrial sector, which includes manufacturing, construction, mining, and utilities.

Manufacturing, services and agriculture are the largest sectors of the Chinese economy – employing the majority of the population and making the largest contributions to GDP. Since 1949, the Chinese Government has been responsible for planning and managing the national economy.

The USA is quite unique in the world. And in a very real way, it is not a Sovereign Entity, except in matters of Treaty and Defense. So, that's why. The Federal government hold no wealth beyond the Federal Reserve.

Each state in the U.S. is sovereign in the sense that they have their own constitution and generally create their own laws. However, they still have to adhere to federal laws, and the Supreme Court (a federal court) is the highest court in the land that can overrule states' judicial decisions.

Despite the advantages, SWFs are not without their drawbacks. One concern is the potential for mismanagement and corruption. Poor governance and lack of transparency can lead to funds being misappropriated or invested in risky ventures, resulting in significant financial losses.

China owns 384,000 acres of American agricultural land. That's a 30% increase just since 2019. And on top of that, they own land near an air force base in North Dakota.

Consequences of Owing Debt to the Chinese

If China called in all of its U.S. holdings, the U.S. dollar would depreciate, whereas the yuan would appreciate, making Chinese goods more expensive.

In fact, very much like Norway, Singapore has more assets than debt. Which means that de facto the Singaporean government has no net debt. And what is more impressive, without the vast natural resources Singapore has. This is a privileged situation to be in, but Singaporeans have earned that privilege.

In some cases, Chinese are improvising to get around China's strict government controls on transferring money overseas. They have bought gold bars small enough to be scattered unobtrusively through carry-on luggage, as well as large stacks of foreign currency. Real estate is an option, too.

Does China have more millionaires than us?

According to Credit Suisse estimates, the number of dollar-millionaires residing in China totaled 6.2 million individuals, ranking second after the United States in the world.

As of 2020, China has succeeded in eradicating absolute poverty, but not the poverty defined for upper middle-income countries which China belongs to. China still has around 13% of its population falling below this poverty line of $5.50 per day in 2020.

The Netherlands is top of the class when it comes to comparing pension systems around the world, according to a recent global pensions report from the Mercer CFA Institute. The ranking looked at more than 50 indicators and compared 47 retirement income systems, covering 64% of the world's population.

The oldest mutual fund still in existence is MFS' Massachusetts Investors Trust (MITTX), also established in 1924. The exchange-traded fund, a modern variation, has taken the market by storm since the Great Recession of 2007–2009.