Hillary Clinton Remarks on State Capitalism and SWFs

Hillary Rodham Clinton

On February 19, 2012, U.S. Secretary of State Hillary Rodham Clinton made some remarks about state capitalism and sovereign wealth funds at the G-20 Ministerial in Los Cabos, Mexico.

Hillary Clinton stated, “Second, I would like to talk candidly about the challenges countries face from the emergence of what has been called “state capitalism”—the rise of sovereign wealth and the growing presence and influence of state-owned and state-controlled enterprises that operate globally.

Of course, every nation will decide how involved its government should be in its economy. But for our interconnected global economy to grow together, and for all countries to keep faith in the system, we need to work together to ensure that all companies compete by the same set of rules. When favored state-owned or state-supported enterprises enjoy preferential access to government resources and special protection from competition in their markets, that harms foreign competitors and local entrepreneurs alike.

Several years ago, when sovereign wealth funds began to increase their presence around the world, governments and the private sector came together and developed the Santiago Principles, a code of conduct designed to reassure the world that sovereign wealth funds would act transparently and focus on growth rather than other purposes.

Today, we need to develop similar understandings to ensure that companies compete on a level playing field, whether their owners sit in corporate boardrooms or in government ministries. We call this common-sense principle “competitive neutrality.” It is a principle that G20 members should reaffirm.”

Read more: To view the full speech

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