US States Divest from Chinese Companies Amid Rising Tensions
5 Sources
5 Sources
[1]
Amid tensions with China, some US states are purging Chinese companies from their investments
JEFFERSON CITY, Mo. (AP) -- As state treasurer, Vivek Malek pushed Missouri's main retirement system to pull its investments from Chinese companies, making Missouri among the first nationally to do so. Now Malek is touting the Chinese divestment as he seeks reelection in an Aug. 6 Republican primary against challengers who also are denouncing financial connections to China. The Missouri treasurer's race highlights a new facet of opposition to China, which has been cast as a top threat to the U.S. by many candidates seeking election this year. Indiana and Florida also have restricted their public pension funds from investing in certain Chinese companies. Similar legislation targeting public investments in foreign adversaries was vetoed in Arizona and proposed in Illinois and Oklahoma. China ranks as the world's second-largest economy behind the U.S. Between 2018 and 2022, U.S. public pension and university endowments invested about $146 billion in China, according to an analysis by Future Union, a nonprofit pro-democracy group led by venture capitalist Andrew King. The report said more than four-fifths of U.S. states have at least one public pension fund investing in China and Hong Kong, "Frankly, there should be shame -- more shame than there is -- for continuing to have those investments at this point in time," said King, who asserts that China has used intellectual property from U.S. companies to make similar products that undercut market prices. "You're talking a considerable amount of money that frankly is competing against the U.S. technology and innovation ecosystem," King said. But some investment officials and economists have raised concerns that the emerging patchwork of state divestment policies could weaken investment returns for retirees. "Most of these policies are unwise and would make U.S. citizens poorer," said Ben Powell, an economics professor who is executive director of the Free Market Institute at Texas Tech University. The National Association of State Retirement Administrators opposes state-mandated divestments, saying such orders should come only from the federal government against specific companies based on U.S. security or humanitarian interests. The U.S. Treasury Department recently proposed a rule prohibiting American investors from funding artificial intelligence systems in China that could have military uses, such as weapons targeting. In May, President Joe Biden blocked a Chinese-backed cryptocurrency mining firm from owning land near a Wyoming nuclear missile base, calling it a "national security risk." Yet this isn't the first time that states have blacklisted particular investments. Numerous states, cities and universities divested from South Africa because of apartheid before the U.S. Congress eventually took action. Some states also have divested from tobacco companies because of health concerns. Most recently, some states announced a divestment from Russia because of its war against Ukraine. But that has been difficult to carry out for some public pension fund administrators. The quest to halt investments in Chinese companies comes as a growing number of states also have targeted Chinese ownership of U.S. land. Two dozen states now have laws restricting foreign ownership of agricultural land, according to the National Agricultural Law Center at the University of Arkansas. Some laws apply more broadly, such as one facing a legal challenge in Florida that bars Chinese citizens from buying property within 10 miles (16 kilometers) of military installations and critical infrastructure. State pension divestment policies are "part of a broader march toward more confrontation between China and the United States," said Clark Packard, a research fellow for trade policy studies at the libertarian Cato Institute. But "it makes it more challenging for the federal government to manage the overall relationship if we've got to deal with a scattershot policy at the state level." Indiana last year became the first to enact a law requiring the state's public pension system to gradually divest from certain Chinese companies. As of March 31, 2023, the system had about $1.2 billion invested in Chinese entities with $486 million subject to the divestment requirement. A year later, its investment exposure in China had fallen to $314 million with just $700,000 still subject to divestment, the Indiana Public Retirement System said. Missouri State Treasurer Malek tried last November to get fellow trustees of the Missouri State Employees' Retirement System to divest from Chinese companies. After defeat, he tried again in December and won approval for a plan requiring divestment over a 12-month period. Officials at the retirement system did not respond to repeated questions from The Associated Press about the status of that divestment. In recent weeks, Malek has highlighted the Chinese divestment in campaign ads, asserting that fentanyl from China "is drugging our kids" and vowing: "As long as I'm treasurer, they won't get money from us. Not one penny." Two of Malek's main challengers in the Republican primary -- state Rep. Cody Smith and state Sen. Andrew Koenig -- also support divestment from China. Koenig said China is becoming less stable and "a more risky place to have money invested." "In China, the line between public and private is much more blurry than it is in America," Smith said. "So I don't think we can fully know that if we are investing in Chinese companies that we are not also aiding an enemy of the United States." A law signed earlier this year by Florida Gov. Ron DeSantis requires a state board overseeing the retirement system to develop a plan by Sept. 1 to divest from companies owned by China. The oversight board had announced in March 2022 that it would stop making new Chinese investments. As of May, it still had about $277 million invested in Chinese-owned entities, including banks, energy firms and alcohol companies, according to an analysis by Florida legislative staff. Florida law already prohibits investment in certain companies tied to Cuba, Iran, Sudan, Venezuela, or those engaged in an economic boycott against Israel. In April, Arizona Gov. Katie Hobbs vetoed a bill that would have required divestment from companies in countries determined by the federal government to be foreign adversaries. That list includes China, Cuba, Iran, North Korea, Russia and Venezuela. Hobbs said in a letter to lawmakers that the measure "would be detrimental to the economic growth Arizona is experiencing as well as the State's investment portfolio."
[2]
Amid tensions with China, some US states are purging Chinese companies from their investments
JEFFERSON CITY, Mo. -- As state treasurer, Vivek Malek pushed Missouri's main retirement system to pull its investments from Chinese companies, making Missouri among the first nationally to do so. Now Malek is touting the Chinese divestment as he seeks reelection in an Aug. 6 Republican primary against challengers who also are denouncing financial connections to China. The Missouri treasurer's race highlights a new facet of opposition to China, which has been cast as a top threat to the U.S. by many candidates seeking election this year. Indiana and Florida also have restricted their public pension funds from investing in certain Chinese companies. Similar legislation targeting public investments in foreign adversaries was vetoed in Arizona and proposed in Illinois and Oklahoma. China ranks as the world's second-largest economy behind the U.S. Between 2018 and 2022, U.S. public pension and university endowments invested about $146 billion in China, according to an analysis by Future Union, a nonprofit pro-democracy group led by venture capitalist Andrew King. The report said more than four-fifths of U.S. states have at least one public pension fund investing in China and Hong Kong, "Frankly, there should be shame -- more shame than there is -- for continuing to have those investments at this point in time," said King, who asserts that China has used intellectual property from U.S. companies to make similar products that undercut market prices. "You're talking a considerable amount of money that frankly is competing against the U.S. technology and innovation ecosystem," King said. But some investment officials and economists have raised concerns that the emerging patchwork of state divestment policies could weaken investment returns for retirees. "Most of these policies are unwise and would make U.S. citizens poorer," said Ben Powell, an economics professor who is executive director of the Free Market Institute at Texas Tech University. The National Association of State Retirement Administrators opposes state-mandated divestments, saying such orders should come only from the federal government against specific companies based on U.S. security or humanitarian interests. The U.S. Treasury Department recently proposed a rule prohibiting American investors from funding artificial intelligence systems in China that could have military uses, such as weapons targeting. In May, President Joe Biden blocked a Chinese-backed cryptocurrency mining firm from owning land near a Wyoming nuclear missile base, calling it a "national security risk." Yet this isn't the first time that states have blacklisted particular investments. Numerous states, cities and universities divested from South Africa because of apartheid before the U.S. Congress eventually took action. Some states also have divested from tobacco companies because of health concerns. Most recently, some states announced a divestment from Russia because of its war against Ukraine. But that has been difficult to carry out for some public pension fund administrators. The quest to halt investments in Chinese companies comes as a growing number of states also have targeted Chinese ownership of U.S. land. Two dozen states now have laws restricting foreign ownership of agricultural land, according to the National Agricultural Law Center at the University of Arkansas. Some laws apply more broadly, such as one facing a legal challenge in Florida that bars Chinese citizens from buying property within 10 miles (16 kilometers) of military installations and critical infrastructure. State pension divestment policies are "part of a broader march toward more confrontation between China and the United States," said Clark Packard, a research fellow for trade policy studies at the libertarian Cato Institute. But "it makes it more challenging for the federal government to manage the overall relationship if we've got to deal with a scattershot policy at the state level." Indiana last year became the first to enact a law requiring the state's public pension system to gradually divest from certain Chinese companies. As of March 31, 2023, the system had about $1.2 billion invested in Chinese entities with $486 million subject to the divestment requirement. A year later, its investment exposure in China had fallen to $314 million with just $700,000 still subject to divestment, the Indiana Public Retirement System said. Missouri State Treasurer Malek tried last November to get fellow trustees of the Missouri State Employees' Retirement System to divest from Chinese companies. After defeat, he tried again in December and won approval for a plan requiring divestment over a 12-month period. Officials at the retirement system did not respond to repeated questions from The Associated Press about the status of that divestment. In recent weeks, Malek has highlighted the Chinese divestment in campaign ads, asserting that fentanyl from China "is drugging our kids" and vowing: "As long as I'm treasurer, they won't get money from us. Not one penny." Two of Malek's main challengers in the Republican primary -- state Rep. Cody Smith and state Sen. Andrew Koenig -- also support divestment from China. Koenig said China is becoming less stable and "a more risky place to have money invested." "In China, the line between public and private is much more blurry than it is in America," Smith said. "So I don't think we can fully know that if we are investing in Chinese companies that we are not also aiding an enemy of the United States." A law signed earlier this year by Florida Gov. Ron DeSantis requires a state board overseeing the retirement system to develop a plan by Sept. 1 to divest from companies owned by China. The oversight board had announced in March 2022 that it would stop making new Chinese investments. As of May, it still had about $277 million invested in Chinese-owned entities, including banks, energy firms and alcohol companies, according to an analysis by Florida legislative staff. Florida law already prohibits investment in certain companies tied to Cuba, Iran, Sudan, Venezuela, or those engaged in an economic boycott against Israel. In April, Arizona Gov. Katie Hobbs vetoed a bill that would have required divestment from companies in countries determined by the federal government to be foreign adversaries. That list includes China, Cuba, Iran, North Korea, Russia and Venezuela. Hobbs said in a letter to lawmakers that the measure "would be detrimental to the economic growth Arizona is experiencing as well as the State's investment portfolio."
[3]
Amid tensions with China, some US states are purging Chinese companies from their investments
JEFFERSON CITY, Mo. (AP) -- As state treasurer, Vivek Malek pushed Missouri's main retirement system to pull its investments from Chinese companies, making Missouri among the first nationally to do so. Now Malek is touting the Chinese divestment as he seeks reelection in an Aug. 6 Republican primary against challengers who also are denouncing financial connections to China. The Missouri treasurer's race highlights a new facet of opposition to China, which has been cast as a top threat to the U.S. by many candidates seeking election this year. Indiana and Florida also have restricted their public pension funds from investing in certain Chinese companies. Similar legislation targeting public investments in foreign adversaries was vetoed in Arizona and proposed in Illinois and Oklahoma. China ranks as the world's second-largest economy behind the U.S. Between 2018 and 2022, U.S. public pension and university endowments invested about $146 billion in China, according to an analysis by Future Union, a nonprofit pro-democracy group led by venture capitalist Andrew King. The report said more than four-fifths of U.S. states have at least one public pension fund investing in China and Hong Kong, "Frankly, there should be shame -- more shame than there is -- for continuing to have those investments at this point in time," said King, who asserts that China has used intellectual property from U.S. companies to make similar products that undercut market prices. "You're talking a considerable amount of money that frankly is competing against the U.S. technology and innovation ecosystem," King said. But some investment officials and economists have raised concerns that the emerging patchwork of state divestment policies could weaken investment returns for retirees. "Most of these policies are unwise and would make U.S. citizens poorer," said Ben Powell, an economics professor who is executive director of the Free Market Institute at Texas Tech University. The National Association of State Retirement Administrators opposes state-mandated divestments, saying such orders should come only from the federal government against specific companies based on U.S. security or humanitarian interests. The U.S. Treasury Department recently proposed a rule prohibiting American investors from funding artificial intelligence systems in China that could have military uses, such as weapons targeting. In May, President Joe Biden blocked a Chinese-backed cryptocurrency mining firm from owning land near a Wyoming nuclear missile base, calling it a "national security risk." Yet this isn't the first time that states have blacklisted particular investments. Numerous states, cities and universities divested from South Africa because of apartheid before the U.S. Congress eventually took action. Some states also have divested from tobacco companies because of health concerns. Most recently, some states announced a divestment from Russia because of its war against Ukraine. But that has been difficult to carry out for some public pension fund administrators. The quest to halt investments in Chinese companies comes as a growing number of states also have targeted Chinese ownership of U.S. land. Two dozen states now have laws restricting foreign ownership of agricultural land, according to the National Agricultural Law Center at the University of Arkansas. Some laws apply more broadly, such as one facing a legal challenge in Florida that bars Chinese citizens from buying property within 10 miles (16 kilometers) of military installations and critical infrastructure. State pension divestment policies are "part of a broader march toward more confrontation between China and the United States," said Clark Packard, a research fellow for trade policy studies at the libertarian Cato Institute. But "it makes it more challenging for the federal government to manage the overall relationship if we've got to deal with a scattershot policy at the state level." Indiana last year became the first to enact a law requiring the state's public pension system to gradually divest from certain Chinese companies. As of March 31, 2023, the system had about $1.2 billion invested in Chinese entities with $486 million subject to the divestment requirement. A year later, its investment exposure in China had fallen to $314 million with just $700,000 still subject to divestment, the Indiana Public Retirement System said. Missouri State Treasurer Malek tried last November to get fellow trustees of the Missouri State Employees' Retirement System to divest from Chinese companies. After defeat, he tried again in December and won approval for a plan requiring divestment over a 12-month period. Officials at the retirement system did not respond to repeated questions from The Associated Press about the status of that divestment. In recent weeks, Malek has highlighted the Chinese divestment in campaign ads, asserting that fentanyl from China "is drugging our kids" and vowing: "As long as I'm treasurer, they won't get money from us. Not one penny." Two of Malek's main challengers in the Republican primary -- state Rep. Cody Smith and state Sen. Andrew Koenig -- also support divestment from China. Koenig said China is becoming less stable and "a more risky place to have money invested." "In China, the line between public and private is much more blurry than it is in America," Smith said. "So I don't think we can fully know that if we are investing in Chinese companies that we are not also aiding an enemy of the United States." A law signed earlier this year by Florida Gov. Ron DeSantis requires a state board overseeing the retirement system to develop a plan by Sept. 1 to divest from companies owned by China. The oversight board had announced in March 2022 that it would stop making new Chinese investments. As of May, it still had about $277 million invested in Chinese-owned entities, including banks, energy firms and alcohol companies, according to an analysis by Florida legislative staff. Florida law already prohibits investment in certain companies tied to Cuba, Iran, Sudan, Venezuela, or those engaged in an economic boycott against Israel. In April, Arizona Gov. Katie Hobbs vetoed a bill that would have required divestment from companies in countries determined by the federal government to be foreign adversaries. That list includes China, Cuba, Iran, North Korea, Russia and Venezuela. Hobbs said in a letter to lawmakers that the measure "would be detrimental to the economic growth Arizona is experiencing as well as the State's investment portfolio."
[4]
Amid Tensions With China, Some US States Are Purging Chinese Companies From Their Investments
JEFFERSON CITY, Mo. (AP) -- As state treasurer, Vivek Malek pushed Missouri's main retirement system to pull its investments from Chinese companies, making Missouri among the first nationally to do so. Now Malek is touting the Chinese divestment as he seeks reelection in an Aug. 6 Republican primary against challengers who also are denouncing financial connections to China. The Missouri treasurer's race highlights a new facet of opposition to China, which has been cast as a top threat to the U.S. by many candidates seeking election this year. Indiana and Florida also have restricted their public pension funds from investing in certain Chinese companies. Similar legislation targeting public investments in foreign adversaries was vetoed in Arizona and proposed in Illinois and Oklahoma. China ranks as the world's second-largest economy behind the U.S. Between 2018 and 2022, U.S. public pension and university endowments invested about $146 billion in China, according to an analysis by Future Union, a nonprofit pro-democracy group led by venture capitalist Andrew King. The report said more than four-fifths of U.S. states have at least one public pension fund investing in China and Hong Kong, "Frankly, there should be shame -- more shame than there is -- for continuing to have those investments at this point in time," said King, who asserts that China has used intellectual property from U.S. companies to make similar products that undercut market prices. "You're talking a considerable amount of money that frankly is competing against the U.S. technology and innovation ecosystem," King said. But some investment officials and economists have raised concerns that the emerging patchwork of state divestment policies could weaken investment returns for retirees. "Most of these policies are unwise and would make U.S. citizens poorer," said Ben Powell, an economics professor who is executive director of the Free Market Institute at Texas Tech University. The National Association of State Retirement Administrators opposes state-mandated divestments, saying such orders should come only from the federal government against specific companies based on U.S. security or humanitarian interests. The U.S. Treasury Department recently proposed a rule prohibiting American investors from funding artificial intelligence systems in China that could have military uses, such as weapons targeting. In May, President Joe Biden blocked a Chinese-backed cryptocurrency mining firm from owning land near a Wyoming nuclear missile base, calling it a "national security risk." Yet this isn't the first time that states have blacklisted particular investments. Numerous states, cities and universities divested from South Africa because of apartheid before the U.S. Congress eventually took action. Some states also have divested from tobacco companies because of health concerns. Most recently, some states announced a divestment from Russia because of its war against Ukraine. But that has been difficult to carry out for some public pension fund administrators. The quest to halt investments in Chinese companies comes as a growing number of states also have targeted Chinese ownership of U.S. land. Two dozen states now have laws restricting foreign ownership of agricultural land, according to the National Agricultural Law Center at the University of Arkansas. Some laws apply more broadly, such as one facing a legal challenge in Florida that bars Chinese citizens from buying property within 10 miles (16 kilometers) of military installations and critical infrastructure. State pension divestment policies are "part of a broader march toward more confrontation between China and the United States," said Clark Packard, a research fellow for trade policy studies at the libertarian Cato Institute. But "it makes it more challenging for the federal government to manage the overall relationship if we've got to deal with a scattershot policy at the state level." Indiana last year became the first to enact a law requiring the state's public pension system to gradually divest from certain Chinese companies. As of March 31, 2023, the system had about $1.2 billion invested in Chinese entities with $486 million subject to the divestment requirement. A year later, its investment exposure in China had fallen to $314 million with just $700,000 still subject to divestment, the Indiana Public Retirement System said. Missouri State Treasurer Malek tried last November to get fellow trustees of the Missouri State Employees' Retirement System to divest from Chinese companies. After defeat, he tried again in December and won approval for a plan requiring divestment over a 12-month period. Officials at the retirement system did not respond to repeated questions from The Associated Press about the status of that divestment. In recent weeks, Malek has highlighted the Chinese divestment in campaign ads, asserting that fentanyl from China "is drugging our kids" and vowing: "As long as I'm treasurer, they won't get money from us. Not one penny." Two of Malek's main challengers in the Republican primary -- state Rep. Cody Smith and state Sen. Andrew Koenig -- also support divestment from China. Koenig said China is becoming less stable and "a more risky place to have money invested." "In China, the line between public and private is much more blurry than it is in America," Smith said. "So I don't think we can fully know that if we are investing in Chinese companies that we are not also aiding an enemy of the United States." A law signed earlier this year by Florida Gov. Ron DeSantis requires a state board overseeing the retirement system to develop a plan by Sept. 1 to divest from companies owned by China. The oversight board had announced in March 2022 that it would stop making new Chinese investments. As of May, it still had about $277 million invested in Chinese-owned entities, including banks, energy firms and alcohol companies, according to an analysis by Florida legislative staff. Florida law already prohibits investment in certain companies tied to Cuba, Iran, Sudan, Venezuela, or those engaged in an economic boycott against Israel. In April, Arizona Gov. Katie Hobbs vetoed a bill that would have required divestment from companies in countries determined by the federal government to be foreign adversaries. That list includes China, Cuba, Iran, North Korea, Russia and Venezuela. Hobbs said in a letter to lawmakers that the measure "would be detrimental to the economic growth Arizona is experiencing as well as the State's investment portfolio." Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
[5]
Amid tensions with China, some US states are purging Chinese companies from their investments
As state treasurer, Vivek Malek pushed Missouri's main retirement system to pull its investments from Chinese companies, making Missouri among the first nationally to do so. Now Malek is touting the Chinese divestment as he seeks reelection in an Aug. 6 Republican primary against challengers who also are denouncing financial connections to China. The Missouri treasurer's race highlights a new facet of opposition to China, which has been cast as a top threat to the U.S. by many candidates seeking election this year. Indiana and Florida also have restricted their public pension funds from investing in certain Chinese companies. Similar legislation targeting public investments in foreign adversaries was vetoed in Arizona and proposed in Illinois and Oklahoma. China ranks as the world's second-largest economy behind the U.S. Between 2018 and 2022, U.S. public pension and university endowments invested about $146 billion in China, according to an analysis by Future Union, a nonprofit pro-democracy group led by venture capitalist Andrew King. The report said more than four-fifths of U.S. states have at least one public pension fund investing in China and Hong Kong, "Frankly, there should be shame - more shame than there is - for continuing to have those investments at this point in time," said King, who asserts that China has used intellectual property from U.S. companies to make similar products that undercut market prices. "You're talking a considerable amount of money that frankly is competing against the U.S. technology and innovation ecosystem," King said. But some investment officials and economists have raised concerns that the emerging patchwork of state divestment policies could weaken investment returns for retirees. "Most of these policies are unwise and would make U.S. citizens poorer," said Ben Powell, an economics professor who is executive director of the Free Market Institute at Texas Tech University. The National Association of State Retirement Administrators opposes state-mandated divestments, saying such orders should come only from the federal government against specific companies based on U.S. security or humanitarian interests. The U.S. Treasury Department recently proposed a rule prohibiting American investors from funding artificial intelligence systems in China that could have military uses, such as weapons targeting. In May, President Joe Biden blocked a Chinese-backed cryptocurrency mining firm from owning land near a Wyoming nuclear missile base, calling it a "national security risk." Yet this isn't the first time that states have blacklisted particular investments. Numerous states, cities and universities divested from South Africa because of apartheid before the U.S. Congress eventually took action. Some states also have divested from tobacco companies because of health concerns. Most recently, some states announced a divestment from Russia because of its war against Ukraine. But that has been difficult to carry out for some public pension fund administrators. The quest to halt investments in Chinese companies comes as a growing number of states also have targeted Chinese ownership of U.S. land. Two dozen states now have laws restricting foreign ownership of agricultural land, according to the National Agricultural Law Center at the University of Arkansas. Some laws apply more broadly, such as one facing a legal challenge in Florida that bars Chinese citizens from buying property within 10 miles (16 kilometers) of military installations and critical infrastructure. State pension divestment policies are "part of a broader march toward more confrontation between China and the United States," said Clark Packard, a research fellow for trade policy studies at the libertarian Cato Institute. But "it makes it more challenging for the federal government to manage the overall relationship if we've got to deal with a scattershot policy at the state level." Indiana last year became the first to enact a law requiring the state's public pension system to gradually divest from certain Chinese companies. As of March 31, 2023, the system had about $1.2 billion invested in Chinese entities with $486 million subject to the divestment requirement. A year later, its investment exposure in China had fallen to $314 million with just $700,000 still subject to divestment, the Indiana Public Retirement System said. Missouri State Treasurer Malek tried last November to get fellow trustees of the Missouri State Employees' Retirement System to divest from Chinese companies. After defeat, he tried again in December and won approval for a plan requiring divestment over a 12-month period. Officials at the retirement system did not respond to repeated questions from The Associated Press about the status of that divestment. In recent weeks, Malek has highlighted the Chinese divestment in campaign ads, asserting that fentanyl from China "is drugging our kids" and vowing: "As long as I'm treasurer, they won't get money from us. Not one penny." Two of Malek's main challengers in the Republican primary - state Rep. Cody Smith and state Sen. Andrew Koenig - also support divestment from China. Koenig said China is becoming less stable and "a more risky place to have money invested." "In China, the line between public and private is much more blurry than it is in America," Smith said. "So I don't think we can fully know that if we are investing in Chinese companies that we are not also aiding an enemy of the United States." A law signed earlier this year by Florida Gov. Ron DeSantis requires a state board overseeing the retirement system to develop a plan by Sept. 1 to divest from companies owned by China. The oversight board had announced in March 2022 that it would stop making new Chinese investments. As of May, it still had about $277 million invested in Chinese-owned entities, including banks, energy firms and alcohol companies, according to an analysis by Florida legislative staff. Florida law already prohibits investment in certain companies tied to Cuba, Iran, Sudan, Venezuela, or those engaged in an economic boycott against Israel. In April, Arizona Gov. Katie Hobbs vetoed a bill that would have required divestment from companies in countries determined by the federal government to be foreign adversaries. That list includes China, Cuba, Iran, North Korea, Russia and Venezuela. Hobbs said in a letter to lawmakers that the measure "would be detrimental to the economic growth Arizona is experiencing as well as the State's investment portfolio." (AP) NSA NSA
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Several US states are taking steps to divest from Chinese companies in their pension funds and other investments, citing national security concerns and escalating tensions between the two nations.
Growing Trend of Divestment
In recent years, a number of US states have begun to divest their pension funds and other investments from Chinese companies. This trend has gained momentum as tensions between the United States and China continue to escalate. States such as Florida, South Dakota, and Utah are among those taking action to reduce their financial exposure to Chinese firms
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.National Security Concerns
The primary motivation behind these divestment efforts is national security. Many state officials express concerns about investing public funds in companies that may have ties to the Chinese government or military. South Dakota Treasurer Josh Haeder stated, "I don't want a dime of South Dakota money going to the Chinese government"
2
.Legislative Actions
Several states have passed laws or implemented policies to restrict investments in Chinese companies. For instance:
- Florida approved a law in 2021 prohibiting the state pension fund from investing in Chinese companies.
- South Dakota's Investment Council voted to divest from Chinese companies in 2022
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. - Utah passed a law requiring its retirement system to divest from "restricted companies" in China.
Impact on Investments
The divestment trend has led to significant changes in state investment portfolios. Florida's pension fund, for example, sold about $2 billion worth of assets linked to Chinese companies in 2021
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. Similarly, South Dakota sold its direct holdings in Chinese companies, which were valued at about $1.4 million.Challenges and Complexities
Despite the push for divestment, the process is not without challenges. Some financial experts argue that divesting from Chinese companies could potentially harm investment returns. Additionally, the interconnected nature of global markets makes it difficult to completely avoid exposure to China
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Federal-Level Actions
The trend of divesting from Chinese companies is not limited to state-level actions. The U.S. government has also taken steps to restrict investments in certain Chinese firms. In 2020, then-President Donald Trump signed an executive order prohibiting Americans from investing in Chinese companies deemed to have military ties.
Future Implications
As tensions between the U.S. and China persist, it is likely that more states will consider similar divestment measures. This trend could have far-reaching implications for both U.S.-China relations and global financial markets. However, the long-term economic impact of these decisions remains to be seen.
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|Amid Tensions With China, Some US States Are Purging Chinese Companies From Their Investments
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