US lawmakers introduce new bill to ban federal pension fund from investing in China
- Group led by Marco Rubio aims to prevent federal employees and military personnel from putting savings in fund that includes China-listed stocks
- Lawmakers say such investment is ‘effectively funding the Chinese government and Communist Party’s efforts to undermine US economic and national security’
A group of US lawmakers introduced legislation on Wednesday that would block a federal retirement fund from investing in Chinese stocks.
The group, led by Republican Senator Marco Rubio, say the bill is aimed at reversing a decision to allow federal employees and military service members to invest their retirement savings in a fund that includes China-listed stocks.
Amid heightened US-China trade tensions and efforts to limit the flow of US capital to Chinese companies because of security concerns, Rubio and other senators described that move as “short-sighted”, saying it amounts to “effectively funding the Chinese government and Communist Party’s efforts to undermine US economic and national security”.
In November 2017, the Federal Retirement Thrift Investment Board, an independent government agency that oversees the federal retirement plan, decided to shift the index it uses for its international stock investment fund to the broader MSCI All Country World ex-US Investable Market Index.
The index represents 99 per cent of the international equity market and is 7.5 per cent weighted to Chinese companies.
