State capitalism and sovereign wealth funds : finding a “soft” location in international economic law

Introduction

State capitalism has become a formidable force in the international economy. As described in a Special Report of The Economist, state capitalism, which attempts to meld “the powers of the state with the powers of capitalism,” is posing a potent alternative to liberal capitalism, which rests mainly upon free markets and private ownership. 
The magic of state capitalism lies in its ability to marry government control to market forces. “It depends on government to pick winners and promote economic growth. But, it also uses capitalist tools such as listing state-owned companies on the stock market and embracing globalization.” With such characteristics, Ian Bremmer asserts that state capitalism can take many forms, the most important being “national oil (and gas) corporations (NOCs), other state-owned enterprises (SOEs), privately owned national champions, and sovereign wealth funds (SWFs).” 
State capitalism, in its various forms, has been an international concern since the early days of its creation. As has been noted, state enterprises are the “new masters of the universe,” thanks to their rapid spread at the global level. The simplest and most straightforward activities of state enterprises are that they are swallowing resources overseas. National energy companies “are increasingly venturing abroad in order to lock up future energy supplies or forming alliances with private-sector specialists to increase their access to expertise and ideas.” They are also proactively engaged in cross-border mergers and acquisitions. In finance, SWFs are used by state capitalists to earn profits overseas or to promote economic growth at home.