Abstract

Sovereign Wealth Funds (SWFs) refer to the funds set up by government to manage and operate sovereign wealth. It has important significances for China and global financial system and it also restricts American financial hegemony, which is analyzed in details in this essay. In China, there are huge foreign exchange reserves whose return should be increased in the manner of SWFs. Therefore, it’s obviously both inevitable and necessary for China to develop SWFs.

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