Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent estimate she has made of the UK’s exposure to Chinese (a) sovereign debt and (b) state-backed entities through (i) public pension funds and (ii) financial institutions.

Seven of the eight largest Public Service Pension Schemes (PSPSs) are unfunded, which means that they do not hold or invest assets against their pension liabilities and instead the Exchequer pays pensions as they come due. The largest funded PSPS is the Local Government Pension Scheme in England & Wales (LGPS). The LGPS is managed locally by 86 Administering Authorities and each publish asset allocation data in their yearly Annual Report and Accounts.

The Bank of England’s Financial Policy Committee closely monitor risks to the financial system, including those stemming from UK financial institutions’ global exposures. The Bank’s most recent stress test (Financial Stability Report, November 2024), shows that the UK banking system is resilient to severe global scenarios.