Manage $600 billion! US federal pension decided to invest in China

China Investment

According to the Global Times, the US Federal Retirement Savings and Investment Commission,

which manages nearly $600 billion in pensions for millions of federal employees, including parliamentarians, white house officials and military personnel, decided to invest in international index funds including Chinese listed companies on the 13th. .

The US Federal Retirement Savings Investment Committee said on Wednesday that it will begin tracking a benchmark index that includes Chinese listed companies.

American people’s choice

In a letter to the senators, Federal Pension Savings Investment Committee Chairman Kennedy wrote:

“Investing in emerging markets is not only legal, but also an overwhelming choice for trustees in various industries. It is also the choice of the American people.” US and world investors have recently shown their views on the Chinese market in various research reports and investment surveys. attention. The world’s largest asset management company, BlackRock, released its latest investment report on the 14th: “If the investment excludes China, what will be missed is the explosive growth potential of this market.”

The US Congress passed a bill in 1986 to set up a Thrift Savings Plan (TSP) to provide federal employees with retirement savings investment services similar to the 401(k) plan for private sector employees.

Reuters said that the US Federal Retirement Savings Investment Committee has been investing in a clear-cut (MSCI) European Oceania Far East Index, which mainly tracks developed countries’ stock markets, but the income is not good. At the suggestion of the hired consulting firm Aon Hewitt, the committee decided to transfer the investment to a more diversified portfolio, investing in emerging markets that outperform developed countries in accordance with the Alum Global Investable Market Index. In this index, the weight of the Chinese market is about 8%.

The dispute has been for several months

In fact, the dispute between the US Federal Savings and Investments Commission and the anti-China MP has been going on for months.

According to the US Federal News Network, four of the five directors of the Federal Retirement Savings and Investment Committee support this ( China investment ) program, and only one has recommended a postponement.
Board member Bill Jorge said that as an investment trustee for 5.5 million federal employees, we must make a decision that is in the best interest of most of the principals. Currently, the top ten US listed companies and the top ten federal contractors provide opportunities for their defined investment participants to invest in emerging market stocks including China. “The board exists to meet the interests of most participants, the committee There is no responsibility to solve certain political problems. That is the matter of the Foreign Assets Control Office of the Ministry of Finance.”

“The risk of not investing in China is high”

Investors in the United States and the world have recently shown their preference for the Chinese market and concerns about the US recession in various research reports and investment surveys.

“The risk of not investing in China is high.” The Nihon Keizai Shimbun recently reported a public speech by Dalio, the founder of Bridgewater, the largest hedge fund in the United States.

Dalio said that the US and European economies are at great risk. If you want to spread the risk, you need to invest in various markets. He particularly emphasized the importance of investing in China. Reuters quoted senior market analyst Bernstein on November 6 as saying that the 10-year boom in the US economy is coming to an end. He advised investors to turn their attention to China with higher return on investment.

Explosive growth potential

the world’s largest asset management company Blackrock, released its latest investment report. In a report titled “China’s investment opportunities are too big to ignore,” the multi-trillion-dollar giant uses “explosiveness” to describe China’s development and investment potential.

According to the report, China’s rapid development, increased productivity and increasingly prominent domestic demand have given new opportunities to global investors. “The biggest part of global growth in the next 40 years will probably be brought by Chinese consumers.”

The report emphasizes that although China will inevitably encounter challenges in its development, China is drawing an investment blueprint for global investors. “If the investment excludes China, what is missed will be the explosive growth potential of this market.”

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