US Federal pension insists on investing in China: in the best interests of the client

category:Finance
 US Federal pension insists on investing in China: in the best interests of the client


In spite of political pressure, the US Federal pension will invest in Chinese stocks. The federal retirement savings and Investment Commission for federal employees said Wednesday it will begin tracking a benchmark index that includes listed companies in China, VOA said Thursday. According to the report, the federal retirement savings and Investment Commission manages nearly $600 billion in retirement benefits for 5.5 million federal employees, including lawmakers, White House officials and military personnel. The Commissions decision to increase investment in Chinas stock market comes at a time when the United States and China are in a trade dispute, the report said. The move sparked strong opposition from members of both parties in the US Congress. In response, the committee said the external investment consultants assessment showed that it was in the best interests of participants in the federal pension savings plan.

Rubio, a Republican senator who has been known as the Anti China Pioneer, jumped out immediately, calling the decision unreasonable and stupid. the committees refusal to act for the best interests of the United States will not have no corresponding consequences. I will urge my colleagues to pass bills in the house and Senate (to prevent investment in Chinese companies). . In a column in the Wall Street Journal, U.S. Navy Secretary Spencer wrote, Imagine retiring after a long service, only to find that your savings over the years have funded the advanced weapons of U.S. enemies.

Reuters said that Rubio and Democratic Senator Shaheen had written to the federal retirement savings and Investment Commission, saying that the Commission used the money of U.S. soldiers and other federal government employees to support Chinese enterprises, which means U.S. capital will be used to help Chinese government in military, espionage and human rights violations, and these companies and many other Chinese companies Investing in Chinese companies will expose themselves to serious risks. They also submitted proposals to Congress to restrict federal employees funds from investing in shares of Chinese companies. A similar bill has been proposed by members of the house of Representatives.

In 1986, the U.S. Congress passed a bill to establish a thrifty savings plan (TSP) to provide federal employees with pension savings investment services similar to the 401 (k) plan for employees of private enterprises. According to Reuters, the US federal retirement savings and Investment Commission has previously invested in a MSCI Europe Oceania Far East index, which mainly tracks the stock markets of developed countries, but its earnings have been poor. At the suggestion of AON Hewitt, a consulting firm hired by the Commission, the Commission decided to transfer its investment to a more diversified portfolio, investing in emerging markets that outperformed developed countries according to the Mingsheng global investable market index. In this index, Chinas market weight is about 8%.

Trade war spreading to financial market?

In fact, the fracas with anti Chinese lawmakers has been going on for months. Four of the five board members of the federal retirement savings and Investment Commission support the plan, with only one recommending a postponement, according to the federal news network. As an investment trustee for 5.5 million federal employees, we have to make decisions that are in the best interests of most of our clients, board member bilo said. At present, the top ten American listed companies and the top ten federal contractors provide opportunities for their quota investment participants to invest in emerging market stocks, including China. The existence of the board of directors is to meet the interests of most participants, and the Committee has no responsibility to solve some political problems. Thats the foreign assets control office of the Ministry of finance.

Grubin, the boards general counsel, said that under the 1986 act, funds in TSP accounts were private property of federal employees, not federal property. In spite of possible political controversy, he said, we believe that participants should be allowed to choose their own investment direction, which is their own money.. He also said that some members of the motion tamper with the ownership of funds suspected.

According to the financial times, the decision of the US federal retirement savings and Investment Commission can be seen as a test of the spread of the Sino US trade war to the capital and financial markets. The hawks in Congress still face a tough battle if they want to cut off the ties between Wall Street and the Chinese market.

Chinas investment opportunities are too big to be ignored

The U.S. has reason to be concerned about Chinas competition, the New York Times quoted horvanetz, chief strategist at silver crown asset management, as saying, but China is the second largest economy in the world. If you want to push them off the cliff, its best to make sure youre not chained to them. . According to Shalit, chief investment officer of Morgan Stanley, investment in the final analysis is to invest in growth, that is, to find where there is growth.. China has more fortune 500 companies than the United States, the report said. Although Chinas economic growth has slowed down in recent years, it is still growing at a rate of more than 6%, about three times that of the United States.

Trump has broken an arrow, German news television said Thursday. In the trade dispute, Trumps government tried to fight against the worlds second largest economy in the field of trade and finance at the same time. The U.S. plans to curb Chinas financial development in three ways, which are called three arrows to Chinas finance by observers: first, remove all Chinese companies from the U.S. stock market; second, restrict or prohibit U.S. funds from investing in China; third, restrict Chinas stock market from entering the global stock index. This is part of the US strategy of isolating China. However, the result now is that Trumps first arrow has been broken, and the other two seem unable to shoot out.

Investors in the United States and the world have recently shown their preference for the Chinese market and concerns about the U.S. recession in various research reports and investment surveys. The risk of not investing in China is high, Japan economic news recently reported a public speech by Dalio, founder of Bridgewater, the largest hedge fund in the United States. Dalio said there are big risks in the US and European economies. If you want to spread the risk, you need to invest in each market. He stressed the importance of investing in China. Reuters quoted senior market analyst Bernstein on November 6 as saying that the 10-year expansion of the US economy has come to an end. He urged investors to turn to China, which has higher return on investment.

American debt is now at a record $14 trillion, the New York Fed announced Thursday, adding that U.S. households mortgage, credit card and other debt has reached a record $14 trillion, rising for the fifth consecutive year. On October 12, the U.S. Treasury Department announced that the federal deficit in October was $134.5 billion, an increase of $34 billion or more than 30% over the same period last year. According to CNN, all these debts, especially household debts, on the one hand support consumer spending and become the main factor supporting the economic growth of the United States, but on the other hand, once the economy declines and the unemployment rate rises, these debts will be difficult to repay. Its like a bartender who dispenses drinks all night and asks why everyone is drunk at the end of the party, said bockwar, chief investment officer of Blackley consulting

BlackRock, the worlds largest asset management company, released its latest investment report Wednesday. In the report, Chinas investment opportunities are too big to be ignored, the trillions dollar giant uses explosiveness to describe Chinas development and investment potential. According to the report, the growth of China is driven by Chinas rapid development, productivity improvement and increasingly prominent domestic demand, which gives new opportunities to global investors, the largest part of global growth in the next 40 years may be brought by Chinese consumers. The report stressed that although China will inevitably encounter challenges in its development, China is drawing up an investment blueprint for global investors. If investment excludes China, what will be missed is the explosive growth potential of this market.

[Xiaoda, a special correspondent of global times in the United States, Germany and Canada, Chen Yiliu, Yupeng, a short room of green wood and pottery

Source: editor in charge of Global Times: Wang Xiaowu NF