US Pension Funds Invest Billions In China Despite Security Fears: Report

A new analysis has pointed out that continued investments by US pension funds in China has undermined Washington's proposals to clamp down on Beijing despite the ongoing tensions, which have led to deterioration in relationship between the two countries since 2020. The 'Rubicon Report' by Future Union, a bipartisan non-profit organisation, public pension funds in 43 US states currently hold investments in China and Hong Kong. It also said that US-based public pension funds have invested more than $68 billion in China in the last 36 months.

Future Union named some of the largest allocators that include the California Public Employees' Retirement System, which has made 80 investments totalling $7.86 billion; the San Francisco Employees' Retirement System, which has invested $3.38 billion over 80 investments; the New York State Common Retirement Fund, which has invested $8.39 billion over 72 investments; and the California State Teachers' Retirement System, which has invested $5.56 billion over 58 investments.

"In the past 12 months, 24 investments alone have been made, which should be acknowledged as support for the technological advancement of China," the report said.

In all, the Future Union report said, various US public pension funds have more than $73.28 billion in Chinese stocks.

Expressing concern about the investment, Future Union executive director Andrew King told New York Post, "The threat posed by China to America's national security is clear yet the managers of our retirees' pensions and university endowments continue to feign ignorance and rue accountability, undermining America's national interests."

"That must end now," he added.

The non-profit report also mentioned that some private university funds have also made questionable investments, but the total amount is unclear as they do not have the same reporting requirements as public institutions.

But there were some major investments by leading university funds - $155 million by Princeton, $80 million by Stanford, $50 million by Yale, $22 million by Massachusetts Institute of Technology and $10 million by Carnegie Mellon.

Mr King, however, said not every investment is directed towards an illegal activity, adding that many institutions don't even know that their funds are being invested in the Chinese market.

"Not every fund is a villain, and this report highlights the pensions, endowments, and non-profit funds that are leading on this issue. Others should follow their lead and take meaningful action," he added.

Mr King said that investing in Chinese stocks is tempting given that Beijing tightly controls its market and can artificially inflate returns.