15 State Treasurers Demand States Divest Pension Funds from China

As many state legislatures prepare to head back to work this month, a coalition of 15 state treasurers have issued a joint statement urging state governments to divest their pension funds from the People’s Republic of China (PRC).

As Just The News reports, the 15 state financial officers joined with the Federal Retirement Thrift Investment Board (FRTIB) to issue a letter to each of their respective states’ pension fund fiduciaries, warning that “investments in China are no longer prudent investments.”

In the letter, they argue that trustees of state funds have a responsibility to “divest from imprudent investments, in order to ensure that those funds grow and are protected for future beneficiaries.”

“The time has come to divest from China. Investments in China increasingly present red flags,” the letter continues.

The letter was signed by the treasurers, auditors, and comptrollers of the states of Alabama, Alaska, Arizona, Arkansas, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, Pennsylvania, South Carolina, and Wyoming.

The letter warns of numerous threats presented by China, including the country’s interference with stocks and bond markets, the influence of China-based companies, and the legal status of Variable Interest Entities (VIEs) in a time of geo-political uncertainty.

“VIEs are offshore shell companies that appear to be illegal under Chinese law, yet are the most common type of Chinese investment available to U.S. investors,” the letter explains. “As the SEC has warned, the CCP could declare VIEs illegal ‘at any time and without notice.’”

More states have increasingly taken action on China in recent months. Several states, including Texas and Florida, have passed laws making it more difficult for Chinese citizens or Chinese companies to purchase farmland strategically located near American military bases. President-elect Donald Trump has vowed to crack down on China, in stark contrast to the softer approach taken by his outgoing predecessor Joe Biden.