Largest US Public Pension Fund to Invest in Chinese Companies

September 27, 2006 at 6:38 am (China, Economics, US)

The $208 billion California Public Employees Retirement System is considering to invest for the first time in Chinese companies (Financial Times story). Calpers is the largest US public pension fund. The fund doesn’t have a QFII quality and can’t invest directly on China’s equity markets. What Calpers is considering to do is to buy American Depository Receipts and Global Depository Receipts.

The investment strategy is due to be reviewed by the fund’s board, which has been avoiding an exposure to Chinese companies for their volatile performance and poor corporate governance.

Chinese equity markets are still isolated from the rest of the world, with only a small group of so-called qualified foreign investors being allowed to invest a limited amount of capital. Weeks ago China shut the door more tightly by banning foreign firms from acquiring Chinese stockbrokers. The Economist published a great comment on this.

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2 Comments

  1. One More Reason Why Taiwan Outpaces Mainland « Random Blog said,

    […] The Wall Street Journal reported that Taiwan is Seeking to lure more foreign funds to its stock and bond markets. This news comes in sharp contrast with mainland China’s new policy on banning foreign firms to acquire domestic stockbrokers. (Also please refer to this post). […]

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