WASHINGTON – American public pension funds have invested more than $68 billion in China – America’s number one adversary – since 2020, alarming financial experts who warn of risks to national security in a new report obtained by The Post.
The bipartisan nonprofit Future Union found that 56 of the 74 largest U.S. pension plans had invested money in the Chinese market over the past 36 months, a period during which relations between Beijing and Washington They have only become more tense.
“In the last 12 months, only 24 investments have been made, which should be recognized as supporting China’s technological advancement,” the report says.
“Our research indicates that four of the largest US public pensions have invested in China in recent months,” he added.
American public pension funds have invested more than $68 billion in China since 2020. AP
Investments
In total, the new report says, several US public pension funds have more than $73.28 billion invested in Chinese stocks.
Among the largest funds investing in Chinese companies are the New York State Common Retirement Fund (more than $8.3 billion) and the New York State Teachers’ Retirement System, which has committed $3.1 billion.
Other major public pension funds investing in China include the California Public Employees’ Retirement System ($7.86 billion); the California State Teachers System ($5.55 billion); the Washington State Board of Investment ($5.02 billion); San Francisco Employees Retirement System ($3.3 billion); and the Pennsylvania Public School Employees Retirement System ($3.2 billion), according to the report.
Dozens of American public school systems and university endowments have also invested more than $7.6 billion in Chinese companies.
Topping that list are the University of Michigan ($1.56 billion); the Texas public school fund ($1.97 billion) and the University of Texas System ($1.6 billion); as well as the Board of Regents of the University of California ($1.55 billion).
Among the largest funds investing in Chinese companies is the New York State Teachers’ Retirement System. Google Maps
“The threat China poses to America’s national security is clear, but the trustees of our retiree pensions and university endowments continue to feign ignorance and rue responsibility, undermining America’s national interests,” he told The Post Future Union CEO Andrew King. “That must end now.”
Endowments from private universities are also guilty of questionable investments, but the total amounts are unclear since they do not have the same reporting requirements as public institutions, King said.
For example, the group discovered that Columbia University, Harvard University and the University of Chicago have invested unknown amounts in China.
Still, Future Union tracked down enough information to determine that Princeton has at least $155 million invested in Chinese funds, followed by Stanford (at least $80 million), Yale (at least $50 million); Massachusetts Institute of Technology (at least $22 million); Duke (at least $20 million); and Carnegie Mellon (at least $10 million).
“The report is effectively an indictment of the existing leaders on pensions and endowments who, until now, have taken the path of least resistance by preserving optionality rather than demonstrating true leadership and doing what is right rather than what is easy.” King said.
Data showing the investment of public pension funds in China. Future Union
“This just has to stop”
Although the investment data is concerning, King said he was not alleging any illegal activity, adding that many of the institutions “probably don’t know” their funds are being invested in the Chinese market.
“Not all funds are bad, and this report highlights pension, endowment and nonprofit funds that are leading the way on this issue,” King said. “Others should follow his lead and take meaningful action.”
King also said Future Union did not want to accuse money managers of “intentionally backing China over the United States,” but explained that investing in Chinese stocks is tempting given that Beijing tightly controls its market and can artificially inflate returns.
“They are investing in new companies that compete against us and against democratically aligned countries with a rigged system where the [CCP] Members basically put their thumb on the scale of who wins, so obviously the returns are better,” he said.
States invest retirees’ money in China and Hong Kong. Future Union
“The fact is [investors] “They manage portfolios, they want diversification and, frankly, if the returns are good in China, they are going to invest to prove it,” he added.
Still, he said, such conduct “simply has to stop,” given the threats such investments pose to the U.S. government and American innovation and industry.
In a statement last week, former Pentagon chief technology officer Christine Michienzi called China “the leading threat to the national and economic security of the United States,” and noted that investing in its market only increases that threat.
“Efforts that help China grow its economy contribute to eroding American capabilities and provide China with an advantage in any potential military engagement,” he said. “Identifying these investors is a critical step in deterring this type of assistance and preventing China from continuing its quest for dominance.”
In addition to making a political misstep, King said U.S. investors in China take on “a non-zero risk” that Beijing could freeze funds given current geopolitical tensions.
Future Union plans to present its findings to Congress after House Speaker Mike Johnson withdrew a proposal to curb Pentagon investments in China. Michael Brochstein/SOPA Images/Shutterstock
“Because the whole system is rigged in China, there may come a day when they won’t let you get your money back,” he said. “It doesn’t include any of the models that make these asset management companies work.”
Future Union, which works to “magnify the impact of the private sector and capitalism in preparation for global conflicts,” plans to present its findings to Congress after House Speaker Mike Johnson (R-La.) will remove a bipartisan proposal to curb Pentagon investments in Chinese technology from the 2024 National Defense Authorization bill, passed last week.
“Removing legislation that would have restricted capital to China through the NDAA effectively sidelined Congress well into next year and into the foreseeable future,” King lamented. “It also revealed an uncomfortable truth that America’s elected leaders need help.”
“What we hope to do is catalyze the return of some of the representatives to the Capitol to address this issue,” he added.
Such an initiative may have a chance in the new year, as Chinese Communist Party Select Committee Chairman Rep. Mike Gallagher (R-Wis.) told The Post that “Congress must act to make pension dollars “public bodies do not feed the economic, ideological and military aggression of the PCC.”
“Under no circumstances,” he added, “should American workers’ retirement accounts fund the Chinese Communist Party, support forced labor, or build the weapons that could one day be used against us on a battlefield.”
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Source: vtt.edu.vn