What Is SAFE Investment Company (China)?
The SAFE Investment Company is the Hong Kong division of the Chinese language language sovereign wealth fund. SAFE is an acronym for State Control of In another country Business. SAFE’s Hong Kong subsidiary opened in 1997 with $20 billion in capital. At the present time, the SAFE Investment Company is a non-public company, however, officials from the Chinese language language State Control of In another country Business (SAFE) department serve on its Board of Directors. The fund is set aside principally as a foreign exchange echange reserve.
Key Takeaways
- The SAFE Investment Company is China’s sovereign wealth fund’s Hong Kong operations.
- The executive targets of the SAFE Investment Company are to understand investment returns, building up diversification of holdings and to scale back China’s exposure to fluctuations throughout the value of the U.S. buck.
- SAFE stands for State Control of In another country Business, and the fund is this present day overseen by means of the Peoples Monetary establishment of China (PBoC).
- The Hong Kong subsidiary opened in 1997 and focuses on maintaining foreign exchange echange reserves.
What Are Sovereign Wealth Funds (SWFs)?
Understanding SAFE Investment Company (China)
As of January 2021, China holds kind of $3.2 trillion in foreign exchange echange reserves. The SAFE Investment Company is able to invest in a wide variety of equipment along side in a foreign country and residential equities and fixed income securities. The executive targets of the SAFE Investment Company are to understand investment returns, building up diversification of holdings and to scale back China’s exposure to fluctuations throughout the value of the U.S. buck. Since 1997, all SAFE operations are undertaken by means of the Peoples Monetary establishment of China (PBoC).
SAFE Investment Company (China) and Sovereign Wealth Funds
The majority of complicated international locations have sovereign wealth price range (SWF) that they deploy in reasonably a large number of ways to benefit the country’s monetary gadget and citizens. As with SAFE in Hong Kong, the funding for a sovereign wealth fund comes from collected central monetary establishment reserves from worth vary and industry surpluses.
Some world places have created SWFs to diversify their profits streams. For instance, the United Arab Emirates (UAE) uses a portion of its SWF to invest in assets become independent from oil, the primary driving force of their monetary gadget. That is serving to protect the country in opposition to any oil-related probability, very similar to the improvement of alternative energy technologies. In line with Statista’s February 2021 ratings, the absolute best ten sovereign wealth price range by means of assets underneath keep an eye on (AUM) in billions are as follows:
- Norway’s Govt Pension Fund (Norway): $1273.54
- China Investment Corporate (China): $1045.72
- Abu Dhabi Investment Authority (UAE): $579.62
- Hong Kong Monetary Authority Investment Portfolio (China- Hong Kong): $576.03
- Kuwait Investment Authority (Kuwait): $533.65
- GIC Private Limited (Singapore): $453.2
- Temasek Holdings (Singapore): $417.35
- Public Investment Fund (Saudi Arabia): $399.45
- National Council for Social Protection Fund (China) $327.07
- Investment Corporate of Dubai (UAE): $301.53
In the USA, the Alaska Permanent Fund ticks in at $72 billion, and the Texas Permanent School Fund has $48.2 billion. Each and every have powerful origins in oil and natural property and have been established in 1976 and 1854, respectively.
