America’s Biggest Public Pension Has No Plans To Pull Investments From China As Others Flee

© (Photo by PHILIP PACHECO/AFP via Getty Images)
The flag of the People’s Republic of China flies in the wind above the Consulate General of the People’s Republic of China in San Francisco, California on July 23, 2020.

The California Public Employees’ Retirement System (CalPERS) has no plans to divest from Chinese assets despite other large pensions pulling funds due to geopolitical risks, according to a statement given to the Daily Caller News Foundation.

CalPERS, which is the largest U.S. public pension and covers California’s public employees, has “no [sic] new initiatives to announce at this time,” a spokesperson told the DCNF when asked if CalPERS would divest from Chinese assets. The DCNF calculated over $3.6 billion in Chinese investments across numerous Chinese companies in the pension’s portfolio from its 2022 fiscal year report.

Several pension funds across the globe have signaled their departure from China, including the Dutch All Pension Group (APG), which handles €532 billion in assets, according to the Financial Times.

“There is a very real geopolitical risk that has been added to the proposition,” APG Asset Management Chief Economist Thijs Knaap told the Financial Times, discussing investing in China.

Other large pension systems in countries like Canada have also made moves to decouple from China. CDPQ, one of Canada’s largest pensions, will be closing its China operation after other Canadian pensions like the Ontario Teachers’ Pension Plan and the British Columbia Investment Management Corporation made similar moves, according to Axios.

Many investors have taken steps to protect their investments in the wake of the increasing tensions between China and the U.S. Sequoia Capital, a major American venture capital firm, is separating its Chinese operation into its own firm following national security concerns.

The Chinese economy has seen signs of slowing growth in recent months, with exports down 7.5% and imports down 4.5% from last year in May, according to the Associated Press. Other economic metrics for China include lackluster factory and consumer activity as well as an increase in unemployment among young people.

The Biden administration has previously signaled it will use an executive order, planned to be released this summer, to limit outbound investments into Chinese defense industry groups, according to Axios. The White House did not respond to a request for comment.

US-China tensions have been increasingly tense in recent months as China has shown repeated hostility towards the U.S. A Chinese fighter pilot performed an aggressive maneuver on May 26, flying directly in front of the nose of an American aircraft over the South China Sea in international airspace, according to a press release from the U.S. Indo-Pacific Command.

An incident on June 3 involved a Chinese warship coming dangerously close to an American destroyer in the Taiwan Strait. The near-collision sparked calls from the U.S. Navy’s Indo-Pacific Command that Beijing “violated the maritime ‘Rules of the Road’ of safe passage in international water.”

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