China’s pension fund doubles offshore investments to new high in quest for higher returns

Hong Kong market to benefit as lower growth and interest rates make it harder for fund to ‘rely solely on domestic assets’, analyst says

China’s national pension reserve more than doubled its offshore investments over the past three years to a record 580 billion yuan (US$86 billion), as the state fund increasingly sought higher returns by diversifying its portfolio beyond domestic assets.

Offshore investment assets held by the National Social Security Fund (NSSF) reached 580.02 billion yuan at the end of 2025, accounting for a record 15.23 per cent of its total assets, according to an annual report released by the National Council for Social Security Fund on Tuesday.

Offshore assets accounted for 9.8 per cent of the fund’s assets in 2022 at 282 billion yuan, rising to 346 billion yuan in 2023 and 438 billion yuan in 2024.

The growth in offshore allocations comes as Beijing seeks to broaden investment channels for mainland institutional capital, with Hong Kong emerging as one potential beneficiary.

“Lower nominal growth and interest rates in China have made it harder for the fund to rely solely on domestic assets for returns,” said Gary Ng, senior economist at Natixis. “The increase likely reflects strategic overseas diversification, amplified by strong global market performance.”

Hong Kong equities could have contributed significantly to the increase amid the market rebound in 2024 and 2025, Ng said, citing attractive valuations and access to technology companies not readily available in mainland-listed, yuan-denominated shares, known as A shares.