Global Public Pensions and Sovereign Wealth Funds Will Keep a Distance from CNY

On December 6th, a survey showed that global public pension schemes and sovereign wealth funds managing more than US$3 trillion in assets fear a worsening economic crisis in the next 12-24 months.

The investors face huge challenges in switching their portfolios to cope with, according to the think tank Official Monetary and Financial Institutions Forum (OMFIF), which carried out a survey of 19 funds across Europe, North America, the Middle East, Asia-Pacific and Latin America. Persistently high inflation was the top long-term concern of almost 50% of the samples surveyed.

The bottom line in the survey’s findings is that investors are also looking to re-allocate away from Communist China’s CNY, citing issues around geopolitics, market transparency, regulation and capital controls.

OMFIF conducted this survey between August and October of 2022 and is sending out the results now to show that these funds are already going to act. Following closely on the heels of the supply chain relocation, global public pension funds and sovereign funds that are not hot money will move away from the CNY, meaning that after the technological decoupling and supply chain decoupling, a financial decoupling will also kick off. CNY will gradually lose its value and eventually become worthless.