Sovereign wealth funds (SWFs) have recently received increasing attention from both public and academia. Given that SWFs exist since 1950s, this recent surge of interest is surprising. Due to their large-scale and mysterious way of operation, SWFs are believed to destabilize the world's financial markets. Sovereign wealth funds as investment rookie in the world's financial market had a great impact on the structure of global capital markets, pricing decisions in stock markets and investors

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... ption of risk. Many reports agree that sovereign wealth funds will soon become an important participant in the international captial markets and have an enormous impact on the world economy. This Thesis is divided into six chapters. In the first chapter, I introduce the conception and the theory of SWFs. Second chapter analyses the operation and supervision mechanisms of SWFs. Chapter three discusses the main reasons of the development of SWFs. Chapter four introduces some successful examples of SWFs, including Singapore's sovereign funds, Norwegian Government Pension Fund Global, American Old Age, Survivors and Disability Insurance. Chapter five and six describe the development and the problems of SWFs in China, specifically this section offers a detailed analysis of the China Investment Corporation (CIC) establishment by integrating theory with practice. It discusses an investment strategy suitable for CIC by SWOT analysis, and then makes some suggestions.