Eastern Promises
The Canada Pension Plan Investment Board (CPPIB) plans to allocate up to 17% of its total portfolio to China by 2025, Suyi Kim, senior managing director and head of Asia Pacific for CPPIB, reveals today in an interview with Caixin. That’s up from 13% currently and from less than 5% in 2016. The fund reported C$410 billion ($303 billion) in assets under management at the end of March.
That growing investment focus in the Middle Kingdom may cause some awkward situations in the halls of power. Canada-focused website iPolitics reported on July 5 that the House of Commons cybersecurity team emailed a warning to Parliament members and their staff not to use messaging app WeChat on account of “potential cybersecurity risks.”
The email noted that “messages continue to reside on servers even after users have deleted them, with information pertaining to users’ locations saved as well” and, as WeChat’s servers are located outside of Canada, “rigorous protections of user data cannot be assured.” WeChat is a subsidiary of Shenzhen based, Hong-King listed Tencent Holdings Ltd. (ticker: 700), which is the CPPIB’s largest portfolio holding at C$3.05 billion as of March 31.
Then, too, Canada’s 2018 detention of Huawei Technologies Co’s chief financial officer, Meng Wanzhou, on a U.S. arrest warrant further complicates the matter. The Meng case has spurred Chinese retaliation, including restrictions on canola imports and the imprisonment of Canadians on patently trumped-up charges. On the official government website, Ottawa warns Canadians in China to “exercise a high degree of caution due to the risk of arbitrary enforcement of local laws.”