U.S. Administration looking at CalPERS holding in Chinese defense firms: U.S. national security adviser

The U.S. Administration is “looking at” investments made by the California Public Employees’ Retirement System (CalPERS) in Chinese military companies, said U.S. national security adviser Robert O’Brien.

O’Brien’s comments come midst U.S. charges of massive Chinese espionage in the United States and comes at a time when both economies are seeing trade tensions with China putting military establishments on disputed islands in the South China Sea.

“It’s something we are looking at,” responded O’Brien when asked at the conservative Heritage Foundation thinktank if the federal government could examine CalPERS’ investments in Chinese defense firms.

“It’s an issue of security for American investors.”

CalPERS is the the biggest U.S. public pension fund; it manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families.

CalPERS’ representative did not immediately respond to requests for comment.

“Some of the CalPERS investment policies are incredibly concerning,” said O’Brien. “We’ve got folks who are going to rely on their pension for their retirement and putting those investments into companies that don’t have GAAP accounting and they don’t have the same reporting requirements that American companies do is scary.”

“If someone told me I had to invest my 401(k) in Chinese state-owned enterprises or partially state-owned enterprises, where they don’t follow the generally accepted accounting principles and they don’t have to report to independent regulatory bodies, I’d be pretty worried about that”.

“It’s something we are taking a look at and it’s concerning and, moreover, OK, why are we sending American capital to a country and supporting a defense industry that is popping out a couple of destroyers and frigates a month and threatening to have total over-mass against us in the Indo-Pacific,” said O’Brien.

In February, U.S. Representative Jim Banks urged California to fire CalPERS’ chief investment officer, Yu Ben Meng, citing what he called the official’s “long and cozy” relationship with Beijing.

Banks have also assailed the fund’s investments in Chinese firms.

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