Canada’s Machin Staying the Course with China Despite Tension

Pension board CEO says it will stay cool-headed amid Beijing’s threats over Canadian arrest of tech heiress.

Geopolitical tension with Beijing isn’t changing Canada’s largest public pension fund ‘s investment decisions regarding China, according to Mark Machin, head of the $276 billion Canada Pension Plan Investment Board (CPPIB).

On December 1, Meng Whanzhou, chief financial officer of Huawei Technologies, was arrested in Canada, for extradition charges from the US. In response, China threatened Canada would face severe consequences if she was not immediately released. 

Whanzhou was released on a $10 million bail on Tuesday. The US says the tech heiress allegedly covered up Huawei’s ties to a shell organization selling materials to Iran despite trade sanctions.

“There’s a lot of rhetoric always around these situations,” Machin told Reuters. “If we cut aside all of the rhetoric, I think China will take a mature, cool-headed attitude toward pragmatic negotiations, so we won’t get too much wild action.”

The Canada pension board has an 8% allocation to China and plans to raise its stakes in the coming years. 

Machin, who has 20 years of investment banking experience in China and formerly headed the board’s Asia business, said the fund will continue “engaging and deploying” capital in the nation.

This week, Michael Kovrig, an employee with the International Crisis Group and former Canadian diplomat, was arrested in China. While it is not clear if this is a tit-for-tat over the Whanzhou incident, Kovrig’s detention has created speculation.

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