Who's afraid of sovereign wealth funds?

A spectre is stalking the world: the spectre of a rich Chinese state buying strategic resources, hollowing out companies, gobbling up financial institutions and threatening the sovereignty of the countries in whose resources and companies it invests. The China Investment Corporation (CIC) - a sovereign wealth fund company (SWF) - is the stalking horse of the Chinese state. Using the CIC as an example, this article argues that the warning about SWFs has little to do with their size, the speed of their growth or what SWFs have or have not done. It is about a shifting power relationship in the global economy. This broader realignment may have been occurring slowly, but it is happening. Neither side - those who have been writing the rules of the game for international political economy and those who are historically rule-takers - is fully willing to acknowledge the shift and take responsibility to build a new architecture of an international financial system that can accommodate interests of old and new players.