74 US Institutional Investors Poured $70B Into China Despite Geopolitical Tensions: Report

Amid escalating geopolitical tensions and ongoing restrictions, major U.S. institutional investors are persisting with their funding of investments in China and Hong Kong.

What Happened: CNBC reported on Dec. 12, 2023, that a study conducted by the non-partisan trade organization, Future Union, has found that a significant number of U.S. public pensions, universities, and non-profit organizations are maintaining their financial commitments to China and Hong Kong, including in sensitive technology sectors. The study reveals that the top 74 contributors have funneled over $70 billion into companies in these regions via more than 1,100 investments.

Andrew King, Future Union’s executive director, said that these 74 entities represent a “long laundry list of U.S. pension funds invested in China.”

He added that the report aims to urge these funds to “move and change,” highlighting what he referred to as the “historical misuse of capital” by key capital allocators.

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Notably, the New York State Common Retirement Fund (NYSCRF) and the California Public Employees Retirement System (CalPERS) were identified as the largest investors in China and Hong Kong, committing $8.3 billion and $7.8 billion respectively. University endowments have also significantly invested in the region, totaling $7.7 billion in China and Hong Kong via 385 investments, according to the Future Union analysis.

Why It Matters: This continuing investment trend comes amidst strained U.S.-China relations over national security, trade, and defense issues, including China’s increased provocations toward Taiwan. Moreover, President Joe Biden’s executive order in August 2023 aimed at curbing U.S. investment flow into specific high-tech fields in China, such as semiconductors, quantum information technologies, and artificial intelligence.

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