American Quislings: Stop Investing in China’s Crimes Against Humanity,

It’s time for pension funds and others to stop supporting companies that abet Beijing’s crackdowns on China’s Uighurs and Hong Kong’s protesters.

By Danielle Pletka and Derek Scissors

Last month, the United States government issued sanctions against eight Chinese companies for complicity in the crackdown on Chinese Muslims in East Turkestan.
As many as a million Uighurs, Kazakhs and other ethnic minorities have been “interned” — wrenched away from families and dumped into harsh concentration camps.
In light of those sanctions, why haven’t the California State Teachers’ Retirement System and other American funds announced that they would stop investing in companies under sanctions?
And why is the federal employee retirement fund poised to move retirement assets to an index fund that includes Chinese companies in 2020?

By any standard, China is led by an amoral dictatorship.
In addition to the continuing horrors in East Turkestan, young people in Hong Kong fighting for freedom fear being brutalized by Chinese security forces. 
In the South China Sea, the People’s Liberation Navy has all but annexed a vast swath of other nations’ territory and international waters.
Chinese companies, answerable to the Communist Party, have built surveillance into drones that Americans buy and telephones that are bought the world over. 
Beijing trolls your children’s apps and Chinese hackers have already breached the private financial and personal information of millions of Americans, not to mention the possibility of forays into America’s most advanced defense plans.
American financial heavyweights and pension funds have in recent years shunned fossil fuels, guns and other investments on ethical grounds.
Yet when it comes to providing capital to Chinese companies — including those directly engaged in surveillance or supporting the People’s Liberation Army — many haven’t resisted investment.
Both state-owned and nominally private Chinese companies enjoy almost unfettered access to American capital markets, including listing on American exchanges and heavy investment from some of the nation’s largest pension funds. 
In mid-2019, China was among the top 10 countries in which the California State Teachers’ Retirement System (CalSTRS) invested. 
According to the most recent data, from June 2019, CalSTRS owned 4.1 million shares of Hangzhou Hikvision Digital Technology Co., which has faced sanctions from the Trump administration for manufacturing surveillance equipment that is being used in the East Turkestan concentration camps. 
The New York State Teachers’ Retirement System and the Florida state pension fund have owned shares of the same company (the New York State Common Fund liquidated its shares in Hikvision in May).
These and other pension funds including New York State’s, and the enormous California Public Employees’ Retirement System (CalPERS) have indirectly owned shares in iFlytek Co Ltd., another of the Chinese firms blacklisted by the U.S. government.
We reached out to the funds, seeking the current status of their investments in Chinese companies, but got little information.
“We have been tracking the situation,” CalSTRS told us, and a representative for the New York State Teachers’ Retirement System said: “Our holdings in public international equities are primarily held according to their weights in passive portfolios benchmarked to the MSCI ACWI ex-U. S. index, our policy benchmark.”
A company representative at CalPERS just pointed us to its Governance & Sustainability Principles. A representative for the Florida state pension fund confirmed that it still owns shares in Hikvision.
There are sound political and financial reasons to question the wisdom of exposure to Chinese public and “private” companies. 
It’s almost impossible to know at what moment the United States may levy sanctions against a company for complicity in the Chinese government’s malign agenda.
Hikvision, Huawei, ZTE (telecommunications conglomerates that also spy for their Beijing bosses), and some others, are good examples.
There is also pure fiscal prudence: Chinese corporate data is notoriously sketchy. 
China’s own National Audit Office has found a number of cases of falsified accounts among listed companies, even among top state-owned enterprises.
In an amusing example from earlier this year, the pharmaceutical manufacturer Kangmei discovered it didn’t have $4.4 billion in cash as its records indicated, with the explanation that it had experienced an “accounting error.”
Lack of accounting and management transparency also plague Chinese stocks listed on the NASDAQ, the New York Stock Exchange and other markets. 
Megacompanies like Alibaba Group, Baidu, PetroChina, China Life Insurance Company and JD.com officially have a combined market capitalization of over half a trillion dollars.
Despite that, Chinese firms have repeatedly failed to comply with American financial regulations, including required inspections of their accounting records — a requirement that runs counter to the goals of China’s National Administration for the Protection of State Secrets.
The Trump administration has considered blocking Chinese access to American capital markets for regulatory noncompliance.
A more straightforward option would be to demand compliance from Chinese firms.
After all, the notion that select foreign firms would be exempt from, say, environmental or labor regulations is absurd. 
Why are financial regulations different?
As far as indexed funds are concerned, a mild response may be in order.
Why tell individual or institutional investors they cannot invest, when simply informing them — cigarette warning style — could suffice: “This fund includes companies that help suppress human rights, support the Chinese Army and may be spying on the United States.” 
Who could argue against the government providing basic facts?
Ultimately, many of these problems fall into the category of known unknowns.
The main challenge is the risk posed to the uninformed: the millions of Americans who depend on their state or employee pension funds, and may have no clue where their hard-earned pennies are being invested. 
For example, the federal employees (including the military) whose 401(k)-like plan — known as the Thrift Savings Plan or TSP — has confirmed it will move its retirement assets to a new index made up of about 8 percent Chinese companies in 2020. 
As a result, federal employees could soon be supporting Chinese rights abusers, the People’s Liberation Army and spies.
Despite those facts, congressional efforts to derail TSP’s investment in Chinese firms have been met with horror.
Legislators can’t tell anyone where to invest — until they do, as the Islamic Republic of Iran and its supporters in corporate and financial America learned some years ago.
Divestment from companies and funds that treat money and morality as separate matters has been gaining speed at both the state and federal level. 
Perhaps it’s time for the same ideals to apply to China — one way to protect American investors, American ideals, and American security all at once.

Criminal Company

Killing Huawei is more important than trade deal with China
By JUN MAI 

Former Trump strategist Steve Bannon said he talks to senior officials in the White House every day about wicked China.

Driving Huawei out of the United States and Europe is “10 times more important” than a trade deal with China, according to former White House chief strategist Steve Bannon.
He also said he would dedicate all his time to shutting Chinese companies out of U.S. capital markets.
The remark by Mr Bannon, a strong advocate of an all-encompassing war against China, came days after U.S. President Donald Trump signed an executive order effectively banning Huawei from the U.S. market and cutting off its vital components supply.
“Huawei is a massive national security issue to the West,” Mr Bannon said, in a phone interview on Saturday with the South China Morning Post. 

“The executive order is 10 times more important than walking away from the trade deal. Huawei is a major national security threat, not just to the US but to the rest of the world. We are going to shut it down.”
The U.S. ban on Huawei came as a shock to capital markets and the tech industry.
Jude Blanchette of the Crumpton Group, a business advisory and geopolitical risk firm based in the U.S., said that while there was “a broad consensus” in Washington on the security concerns over Huawei equipment, the president’s executive order had surprised the market.
“We’re entering uncharted territory where actions to defend against security risks cut at complex global supply chains,” Blanchette said.
But Mr Bannon is adamant that Huawei needs to be driven out of Western markets altogether, suggesting Trump made “a mistake” in lifting a similar sanction last July on ZTE — another Chinese telecommunications equipment maker.
The U.S. had imposed the ZTE ban on the grounds that it had broken the American sanctions on Iran. But, at Trump’s urging, the restrictions on ZTE were lifted after the Chinese company agreed to a number of terms and conditions for its future operations.
“During the trade talks’ early stage, Trump gave a waiver for ZTE, which was a mistake,” Mr Bannon said.
Mr Bannon, who was fired by Trump in August 2017, is also calling for shutting Chinese companies out of American capital markets.
“The next move we make is to cut off all the IPOs, unwind all the pension funds and insurance companies in the U.S. that provide capital to the Chinese Communist Party,” he said.
“We’ll see a big move on Wall Street to restrict access to capital markets to Chinese companies until [they agree to] this fundamental reform.”

In March this year Mr Bannon revived the cold war Committee on the Present Danger specifically to target China.

The CPD was first established in the early 1950s as a bulwark against the influence of communism in the U.S. 

The group disbanded after some leading members were drafted into the Dwight Eisenhower administration, but was reformed in 1976 by U.S. patriots to counter the Soviet Union during the cold war.
Without providing further details, Mr Bannon said he “talks to senior officials in the White House every day about China.” 

When asked if he meets Trump regularly, the right-wing populist said, “No, if I need to talk to him, I go through his lawyers.”
But he cited reports by The New York Times and POLITICO in the past couple of months which said Trump “liked Steve a lot."
“It is pretty well known I was the one who worked closest with President Trump,” Mr Bannon said. 

“I’m much farther to the right than President Trump on this [China]. And I pride myself with that. [I’m] the super hawk.”
Mr Bannon said the objective of what he called “an economic war” with China was to force Beijing to carry out fundamental reforms.
“I don’t think it’s going to be resolved quickly. This is the beginning of a very long and tough process,” he said.
“I have dedicated my life to this. This is what I do 24 hours a day. The pressure we are going to keep up will be relentless. We are not going to be quiet.”