American public pension funds have invested tens of billions into Chinese companies over the last three years, according to a new study.
As reported by Axios, the study from the trade advocacy group Future Union shows that a total of $68 billion has been invested in various private Chinese entities in the last three years as of June 30th. There has been at least one public pension fund with investments in China in 42 different states.
Of those 42 states where one public pension has made PE/VC investments into a company in either China or Hong Kong, 17 states have seen at least one public pension with an investment of 2% of its assets or more in a Chinese private company.
The report comes even after the Biden Administration implemented new restrictions on the ability of American entities to invest in Chinese tech companies in August. Some lawmakers have called for even harsher restrictions, particularly in the wake of Future Union’s study. The House Select Committee issued a statement determining that the current economic system in China is “incompatible with the World Trade Organization (WTO).”
The committee recommends that the U.S. completely shuts down all private equity investments in China, as well as forced disclosures of any existing investments followed by divestments away from Chinese entities in favor of American interests.
Such reports are yet another indication of the extent to which American economic interests are deeply tied to China, a crisis that has gone on for decades. Most prominently, American companies depend heavily on China for the manufacturing of basic goods, rather than turning to products that are made in America. Similarly, the manufacture of computer chips and semiconductors is heavily dependent on the island nation of Taiwan, where China has been making military threats ahead of a possible invasion that could greatly disrupt the global supply chain of such crucial technology.