As the 2024 US presidential election approaches, candidates from both the Democratic and Republican parties are holding similar stances on a crucial issue: viewing the Chinese Communist Party as the biggest threat to the United States. They all support divesting from China.
According to reports by the Associated Press, Vivek Malek, as the state treasurer, has led Missouri’s major retirement system to divest from Chinese companies, making Missouri one of the first states in the country to do so. Malek is now seeking re-election in the Republican primary on August 6, with his opponents also criticizing the state’s financial ties with Communist China.
Meanwhile, Indiana and Florida are restricting their public pension funds from investing in certain Chinese companies. Illinois and Oklahoma have also proposed similar legislation.
According to an analysis by “Future Union,” a non-profit democratic organization led by venture capitalist Andrew King, from 2018 to 2022, US public pension funds and university endowment funds have invested approximately $146 billion in China. The report stated that over four-fifths of US states have at least one public pension fund invested in China and Hong Kong.
“Frankly, continuing these investments at this time should be considered shameful,” said King. “It should be more than just shameful.”
He explained that this significant amount of funding “is competing with the US technology and innovation ecosystem.”
The US Department of the Treasury recently proposed regulations to prohibit US investors from funding Chinese artificial intelligence systems that could be used for military purposes, such as weapon targeting.
Indiana took the lead last year in enacting a law that requires the state’s public pension system to gradually divest from certain Chinese companies. As of March 31, 2023, the system had approximately $1.2 billion invested in Chinese entities, with $486 million subject to divestment requirements. The Indiana Public Retirement System stated that a year later, the investment risk in China had decreased to $314 million, with only $700,000 subject to divestment requirements.
Last November, Missouri State Treasurer Malek attempted to have the state employees’ retirement system’s board withdraw funds from Chinese companies. After an initial failure, he made another attempt in December, and one of his requests for a plan to divest within 12 months was approved.
In recent weeks, Malek has emphasized divestment from China in his campaign ads, claiming that fentanyl from China is “poisoning our children” and vowing that, as long as he is in charge of finances, “they won’t get any money from us—not a penny.”
Malek’s two main challengers in the Republican primary, State Representative Cody Smith and State Senator Andrew Koenig, also support divesting from China.
Koenig stated that China is becoming increasingly unstable, making investment risks greater there. Smith mentioned that “the boundary between public and private sectors in China is much more blurred than in the US. Therefore, I believe we cannot be certain that by investing in Chinese companies, we are not also aiding America’s enemies.”