Improving Cross-Border Investment Regulation: A Case Study of China\u27s Largest and Least Known Sovereign Wealth Fund

This paper highlights current problems in the international regulatory regime governing sovereign wealth funds by examining Chinese-funded Safe Investment Company’s equity investments into three Australian banks. It proceeds by analyzing how the operative laws and international agreements governing those investments--Hong Kong law, Australian law, the New York Convention, and customary international law—fail in part to adequately regulate the cross-border investments of one of the largest and most opaque sovereign wealth funds in the world. Assessment of existing legal oversight and Hong Kong’s strict absolute sovereign immunity stance leads to the conclusion that the Safe Investment Company’s investments must be closely regulated. As sovereign wealth increasingly makes its way across borders, domestic or regional legislation accounting for the unique considerations attached to sovereign wealth investments must be carefully crafted by both developing and developed countries. As such, communication channels between “like economies” need to be established to consider how best to regulate such investments. Additionally, discussions must be held between those countries that have already developed foreign investment policies sensitive to opaque investment of sovereign wealth and those that have not