©2024 The News Service of Florida
Florida is moving to place a “zero” benchmark for pension investments in China.
Members of the state Investment Advisory Council on Monday voted 7-2 to direct portfolio managers to lower China exposure in the Florida Retirement System Investment Plan.
The move came as the state has been taking steps to divest holdings in China-owned companies.
Lamar Taylor, chief investment officer for the State Board of Administration, pointed to a change in philosophy about China.
Before the COVID-19 pandemic hit in 2020, investments in the country were viewed as a step to bring China into the global market and potentially improve issues such as human rights.
But China has grown as an economic, political and military competitor, Taylor said.
“I think there’s likely to be more action taken in response to that reality, that is going to have risk in terms of impacting our returns,” Taylor said.
The Legislature and Gov. Ron DeSantis this year approved a bill that requested the State Board of Administration to develop a plan to sell holdings tied to companies that are majority-owned by the Chinese government, the Chinese communist party or the Chinese military.
A House analysis released in February put investments in more than 200 Chinese state-owned entities at $277 million, or 0.16 percent, of the retirement system.
Of that, $53.6 million was linked to China Construction Bank Corp. and $46.4 million was in Kweichow Moutai, which specializes in a particular Chinese liquor.
The majority of the investments were each less than $5 million.
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