U.S. States Bar Pension Funds From Investing In Chinese Companies

Between 2018 and 2022, US 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.

Some investment officials and economists have raised concerns that the emerging patchwork of state divestment policies could weaken investment returns for retirees.

The report stated that more than four-fifths of US states have at least one public pension fund investing in China and Hong Kong, David A. Lieb reported for the Associated Press (AP).

“Frankly, there should be shame—more shame than there is—for continuing to have those investments at this point,” said King, who asserts that China has used intellectual property from US companies to make similar products that undercut market prices.

“You’re talking a considerable amount of money that frankly is competing against the US technology and innovation ecosystem,” King said.

However, 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 US citizens poorer,” said Ben Powell, an economics professor who is the executive director of the Free Market Institute at Texas Tech University.

The National Association of State Retirement Administrators (NASRA) opposes state-mandated divestments, stating such orders should come only from the federal government against specific companies based on US security or humanitarian interests.

The US Treasury Department has proposed a rule prohibiting US investors from funding artificial intelligence (AI) systems in China that could have military uses, such as weapons targeting.