Republican Marco Rubio and Democrat Jeanne Shaheen are calling on the entity that manages the retirement funds for most government workers to avoid a specific market index so as not to invest in companies under the control of the People’s Republic of China.
The senators, who represent Florida and New Hampshire respectively, made the case in an op-ed Monday that the Federal Retirement Thrift Investment Board’s decision to use the MSCI All Country World ex-U.S. Investable Market Index as a benchmark will funnel the government workers’ retirement savings to the Chinese Communist Party.
“The Board’s decision to force our nation’s public servants to invest TSP retirement funds in unscrupulous Chinese companies raises serious fiduciary concerns because it ignores a fundamental tenet of our securities laws: investor protection,” they said. “It’s our responsibility to ensure that U.S. service members and federal employees do not unwittingly undermine the American interests they work hard everyday to protect.”
MSCI stands for Morgan Stanley Capital International, whose indices cover thousands of international stocks, using them as benchmarks to measure portfolio performances. The senators contend that MSCI’s induces include numerous state-owned or -controlled companies involved in the Chinese military, spying, human rights abuses or Beijing’s “Made in China 2025” industrial policy, which the Trump administration is actively trying to counter.
“Several companies our federal workers could potentially invest in are also engaged in flagrant violations of U.S. laws, including Aviation Industry Corporation of China, which U.S. Trade Representative Robert Lighthizer has described as ‘the sole domestic supplier’ of bombers, fighter jets, and other aircraft for the People’s Liberation Army,” the senators argued.
Rubio has emerged as one of the most prominent China hawks in the Senate, saying last month that Trump’s trade war with China might never end, and has introduced legislation to counter the Made in China 2025 agenda.
