Canadian Pension Money Keeps Pouring Into China as Risks Escalate

Beijing only too eager for foreign capital to prop up Chinese economy

The Canada Pension Plan Investment Board (CPPIB) runs one of the world’s largest pension funds, with assets of $434.4 billion at June 30. It and two other big Canadian pension funds, including the Ontario Teachers’ Pension Plan, remain strongly bullish on China despite plenty of reasons not to be.

Aside from a number of geopolitical risks, particular challenges with investing in Chinese companies are that some pose national security concerns or may be complicit in human rights violations. They have also been criticized for not being transparent in their financial reporting, and according to Chinese law, may be called upon to serve the needs of the Chinese Communist Party (CCP) at any time.

Another issue is barriers to liquidating investments in China and repatriating the funds.

“The most recent change in tone and aggression of the Beijing government would cause any board to be reviewing its risk analysis,” Liberal MP John McKay told The Epoch Times.

“It’s a far riskier investment. I don’t know how you can arrive with any other conclusion,” he added. “The political risk has changed, so also has the investment risk.”

Chinese law prohibits oversight by foreign entities of the reporting of Chinese companies, creating a worrying lack of transparency for financial markets regulators. The United States is taking steps to institute a level playing field for companies listed on its exchanges by delisting Chinese companies that don’t comply with regulatory requirements, like Luckin Coffee.

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