Pekingology How the CCP Finances its Global Ambitions
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Feb 13, 2025 
Zongyuan Zoe Liu, a Fellow for international political economy at the Council on Foreign Relations and author of 'Sovereign Funds,' discusses the intricate ways the Communist Party of China finances its global ambitions. She unpacks the evolution of sovereign wealth funds, using examples from Kuwait to Norway, and illustrates China’s unique approach shaped by political and economic strategies. Liu also dives into Central Huijin’s role in banking reforms and examines how Chinese sovereign funds navigate international partnerships, especially in the face of geopolitical tensions.
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Sovereign Wealth Funds Overview
- Sovereign wealth funds (SWFs) are government-owned investment vehicles, primarily found in commodity-exporting countries.
- They aim to manage resource wealth, providing fiscal stabilization and intergenerational wealth transfer.
Non-Chinese SWF Examples
- Abu Dhabi's ADIA and Norway's SWF exemplify diversification strategies.
- They invest in diverse assets like real estate and equities, minimizing reliance on their original resource wealth.
China's SWF Motivations
- China's SWF creation was partly driven by external shocks like the Asian financial crisis.
- This crisis highlighted the importance of financial security, leading to rapid FX reserve accumulation.