Foreign Media: "Shift in US Stance Previously Negative Toward Sovereign Wealth Funds"
The Joe Biden administration in the United States is reportedly pushing to establish a sovereign wealth fund to counter China and Russia. This shift indicates that the U.S., which had previously been critical of the global trend toward sovereign wealth fund creation citing concerns over market fairness, is now leaning toward protectionism.
On the 7th (local time), major foreign media outlets including Bloomberg cited White House officials reporting that senior White House figures such as National Security Advisor Jake Sullivan and Deputy National Security Advisor for International Economics Daleep Singh have been quietly advancing plans to establish a sovereign wealth fund over the past several months. A White House official stated, “Government agencies have been involved in this plan so far, and the next phase will include Congress and key private stakeholders.”
A sovereign wealth fund refers to a fund owned and managed by the government to increase national wealth. The U.S. has long held the position that sovereign wealth funds established by various countries worldwide distort global trade and investment markets and undermine fair competition. Foreign media noted that the Biden administration’s change in stance signals a shift in the U.S. approach to the global economy amid intensifying competition with China and Russia and rising tensions in the Middle East.
A White House official explained, “The premise behind the effort to establish a sovereign wealth fund is the recognition that the U.S. lacks the stable and flexible capital necessary to gain an advantage and promote strategic interests in a competitive geopolitical environment,” adding, “The sovereign wealth fund could be used to support companies requiring large amounts of capital to restore supply chains and compete with China.”
Discussions are reportedly still active regarding the sovereign wealth fund’s structure, funding model, and investment strategies. Foreign media anticipate that the fund will target sectors with high entry barriers such as specialized shipbuilding, nuclear fusion, and critical mineral stockpiling.
The establishment of a U.S. sovereign wealth fund is a concept also raised by former President Donald Trump, the Republican presidential candidate. In a speech last week at the New York Economic Club, Trump expressed support for the fund, stating that it “could invest in cutting-edge manufacturing hubs, advanced defense capabilities, and state-of-the-art medical research.”
However, Bloomberg explained that skepticism remains about whether the sovereign wealth fund can actually be realized. Bloomberg pointed out, “It is unclear whether the fund can be financed given that sovereign wealth funds could be exploited for the incumbent president’s political purposes and that the national debt exceeds $35 trillion.”
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