President Trump demanded that federal retirement funds not be invested in Chinese companies accused of human rights abuses as he looks to step up economic pressure on Beijing.
The Washington Examiner revealed last week that Trump had nominated three people to serve on the Federal Retirement Thrift Investment Board in an effort to reverse a decision to use some of its $500 billion in assets to “mirror” a Chinese-linked index.
This week, he moved to accelerate that process, according to two letters obtained by Fox Business, in which White House officials and Secretary of Labor Eugene Scalia demanded that the existing board take action this week.
In the first letter, national security adviser Robert O’Brien and White House economic adviser Larry Kudlow said the risks are revealed by China’s efforts to conceal the danger from COVID-19. Pushing ahead with the investment plan, they warn Scalia, risks employee retirement plans becoming embroiled in trade restrictions or boycotts.
“This action would expose the retirement funds to significant and unnecessary economic risk, and it would channel federal employees’ money to companies that present significant national security and humanitarian concerns because they operate in violation of U.S. sanction laws and assist the Chinese government’s efforts to build its military and oppress religious minorities,” they write.
Scalia forwarded their warning to the board’s chairman, along with his own letter asking for a response by Wednesday.
In 2017, board members decided to move its international fund to track an index with about 11% of its holdings in Chinese-based equities.
The index includes Hangzhou Hikvision Digital Technology, a surveillance company blacklisted by the U.S. Department of Commerce, which said it was “implicated in human rights violations and abuses against the Muslim Uighur minority.”
AviChina Industry and Technology, which supplies aircraft systems to the People’s Liberation Army, is another company on the list.
Last month, eight former senior U.S. military leaders were among those who signed an open letter saying it was unacceptable for members of U.S. armed forces to be funding Chinese arms manufacturers.
“It is especially intolerable to those of us who have proudly served the Nation in uniform that our retirement investments will help its enemies threaten our comrades-in-arms and the country we love,” said the letter released by the Committee on the Present Danger: China.
Signatories included two former White House national security advisers, retired Commandant of the Marine Corps Gen. James L. Jones, and retired Navy Vice Adm. John M. Poindexter.
