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President Trump Facing Pressure To Stop Retirement Investments In Two Chinese Technology Companies

Lawmakers and former U.S. officials are trying to persuade the Trump administration to halt plans to invest billions of dollars in federal employees' pensions in Chinese companies accused of human rights violations or threatening US security.

The proposal, including letters and appeals from Republican lawmakers, and a hard-line memo shared in parallel with White House Chief of Staff Mark Meadows, coincided with the timing. US-China tensions increase around the origin of Covid-19.

Among the Chinese companies on this index businesses that are particularly noticeable by some Washington officials who consider the Chinese government to be America's biggest economic and geopolitical threat, is a surveillance technology company of Hangzhou Hikvision Digital Technology. 

The business was blacklisted last year because of its technology used in Islamic Uighurs ethnic minority detention centers in China. In addition, the fund is also used to invest in telecommunications equipment company ZTE, which is currently embargoed by the US government for violating U.S. sanctions.

For those who have taken a tough stance with China in the US government, the problem became even more urgent when these pension fund managers began to open overseas depository accounts to proceed in the second half of 2020. 

“Are we soon witnessing federal employees who are unaware of themselves, are forced to invest their retirement money into businesses that violate US national security and human rights Beijing's most serious?" 

Roger Robinson, a former White House official under former President Ronald Reagan, who closely oversees the issue, asks questions. A spokesman for the Federal Retirement Thrift Investment Board (FRTIB), the agency that directly runs the TSP fund, said all companies in the same industry had similar investments self, and if not expanded.

 "it will be lagged behind other retirement savings plans.”

The White House and the US Department of Labor, which oversees the TSP Retirement Fund, did not respond to requests for comment. Trillions of dollars in the world are passive following and simulating the volatility of stock indices collected and aggregated by third parties based on a range of criteria, including the market capitalization of companies. 

This is very different from the fund managers choose each stock to invest individually. When a consulted investment had a higher potential return, in 2017, FRTIB decided to shift its representative index for the international securities fund 2020 to simulate MSCI volatility. 

The All Country World Index ex-US Investable Market Index (abbreviated as ACWI ex-US IMI) - represents 99% of the global stock value, including Canada, China and other emerging markets. The plan faced opposition last year when Senators Marco Rubio and Jean Shaheen, proposed a bill to block investments in China, citing the lack of financial and accounting transparency of businesses in this country, accompanied by national security issues and human rights violations.

But the bill received no support, thus promoting a next and final campaign to prevent intentions to change the index level. An insider said several former government officials provided former MP Meadows with a memorandum of understanding dated March 7, the day after President Donald Trump appointed him as White House chief of staff.

The memorandum states that if President Trump fails to act promptly, such as appointing replacement of FRTIB fund members or issuing an executive order, critics will argue that Mr. Trump has done nothing to help “federal employees avoid being forced to invest in Russian and Chinese companies, which have unpredictable financial risks due to their role in threatening the national security of us and human rights abuses."

Leading lawmakers presented the issue directly to the authorities, an insider said. Congressman Rubio has discussed the matter with President Trump in the past few months, a congressional aide said. 

Republican MPs Mike Gallagher and Jim Banks sent a letter to the Minister of Labor, Eugene Scalia, two aides. In a letter dated April 6, Banks called on Mr. Scalia to explain how the agency plans to notify investors about the risk of owning shares in companies that do not comply with the criteria. US financial transparency standards, and how the risks in investing in companies are currently embargoed by the US. 

"I ask you to do everything in your power to reverse the decision of the Board of Directors of the TSP."

 Senator Banks wrote.

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