State leaders urged to divest pension funds from China: watchdog

Published On Nov 14, 2024, 12:00 PM

A watchdog group has urged state leaders to divest their pension funds from investments in China, citing rising geopolitical risks and increased U.S. restrictions on Chinese financial interests. The CEO of the group highlighted the previous financial damage caused by investments in Russia, indicating that similar losses could occur with Chinese assets amid growing tensions over Taiwan. The letter reflects concerns over the Chinese Communist Party's control over local companies, which undermines the ability to accurately assess the risks associated with these investments.

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Stock Forecasts

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Negative

The push to divest from China-based companies could lead to a significant redirection of funds away from Chinese stocks and ETFs, potentially causing declines in their prices. Companies heavily exposed to China could see their stock values decrease as institutional investors pull out their capital and seek safer investments. This trend may prompt volatility in the China-focused segments of the market.

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