The manager of Norway’s sovereign wealth fund today announced it is shutting down its Shanghai office after having a physical presence in China for nearly 15 years.

Norges Bank Investment Management (NBIM) said in a statement it had “initiated a process to close the representative office in Shanghai”.

“The decision is driven by operational considerations and does not affect the fund’s investment strategy or our investments in China,” said NBIM, which runs the NOK15.3trn (€1.3trn) Government Pension Fund Global (GPFG).

NBIM said the Shanghai office had been operating since November 2007, and it currently had eight people working there.

“Over the years, our Singapore office has increasingly served as the hub for the whole of the Asian region and has been built up to take care of all operational functions, including for China,”it said.

“Effectively, the decision to close the office in Shanghai is therefore only an adjustment of our operating business model,” the central bank division said.

The GPFG was invested in approximately 850 Chinese companies worth a total of around $42bn (€39bn) at of end of 2022, it said.

NBIM said it would make sure the closing process was conducted “in an orderly manner for all affected persons at the office and in line with local requirements and procedures”.

IPE understands that while the Shanghai office was intended to be an important one for NBIM when it was opened back in 2007, over the years, fewer and fewer NBIM functions were located there, and instead moved to the Singapore office – which was opened in 2010.

Concerns about increasing hostility – including militarily – between the US and China that were highlighted in an independent report on long-term perspectives for the GPFG published a year ago are also understood to be a factor behind the decision to give up having a physical presence in China.

In that wide-ranging report, from an expert committee chaired by Norwegian professor Ulf Sverdrup and entitled ‘The Fund in a changing world’, the panel said that internationally, there was a mounting political desire for greater cohesion between politics and the economy.

Russia’s war against Ukraine had triggered a discussion on whether to keep economic ties with a state considered to be a political and military rival, the report said.

“Similar developments are also to some extent already underway between Western countries and China,” the Sverdrup panel said.

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