The Role of China’s Sovereign Wealth Funds in President Xi Jinping’s Ambitious Belt and Road Initiative

Abstract

Thomas and Chen show how China’s two large sovereign wealth funds (SWFs), the Chinese Investment Corporation (CIC), and the State Administration of Foreign Exchange Investment Company (SAFEIC), provide vital financial and other support for President Xi Jinping’s US$1 trillion Belt and Road Initiative (BRI). CIC and SAFEIC provide direct investments, top personnel, and global financial expertise to BRI-related institutions such as the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund. CIC and SAFEIC also financially support BRI projects by directing the large Chinese commercial and policy banks that they own or control to make loans to BRI projects. In the process of supporting the BRI, the CIC, China’s largest SWF, has itself become much more of a “policy” SWF.