California’s state pension is reported to be investing millions in companies connected to the People’s Liberation Army in China.
According to the Free Beacon, the California Public Employees’ Retirement System (CALPERS) is sending nearly half a billion dollars to Chinese companies that expand the Chinese military and push a Communist agenda. This blacklisted investment creates uncertainty for California state workers relying on their pensions and calls into question the integrity of the state’s investments.
Though Governor Newsom was quick to condemn investment in tobacco companies and Turkish businesses while on the campaign trail, he seems to have lost interest in the thousands of lives suffering under the Communist regime.
California’s State Pension Invests Millions in Chinese State-Owned Companies
Chuck Ross and Matthew Foldi
California's state pension invested hundreds of millions of dollars in Chinese state-owned enterprises linked to the People's Liberation Army, according to records reviewed by the Washington Free Beacon.
The California Public Employees' Retirement System (CalPERS) had more than $3 billion invested in Chinese companies, including 14 state-controlled enterprises blacklisted by the Trump administration, as of June 2020. Many of these companies are funding the Belt and Road Initiative, a massive infrastructure project Beijing is using to expand its geopolitical and military influence.
Gov. Gavin Newsom (D., Calif.), who recently praised a Chinese-owned media company for its "journalistic integrity," has not commented on CalPERS's Chinese investments. It is a notable silence from the embattled governor, who has called on CalPERS, the country's largest public pension system, to divest from tobacco companies and companies linked to the Turkish government. Newsom faces a recall election on Sept. 14.
CalPERS had more than $450 million invested in 14 Chinese companies the Trump administration put on an investment blacklist last year because of their ties to the Chinese military. President Donald Trump's executive order, which the Biden administration has continued, prohibited Americans from investing in companies that aid the Chinese military.
It is unclear whether CalPERS has complied with the executive order by divesting in the blacklisted companies. The pension fund declined the Free Beacon‘s requests for comment. CalPERS had more than $490 million invested in seven Chinese state-owned enterprises that, while not on the U.S. blacklist, are funding the Belt and Road Initiative, according to its 2020 investment report. CalPERS invested in some of the Chinese companies as early as 2016, records show.
Two companies in the CalPERS portfolio—China Merchants Port and CITIC—control ports in Sri Lanka and Myanmar that the People's Liberation Army has used for military exercises. CalPERS had $3.7 million invested in China Merchants Port and $110 million in CITIC as of June 2020.
CalPERS, which has more than $400 billion in assets under management, also had $5 million invested in China State Construction Co., which has built roads and bridges in Asia, Africa, and the United States as part of Belt and Road. China State Construction is one of the firms on the Trump administration investment blacklist.
CalPERS had another $6 million invested in China Communications Construction Company, a state-owned company that U.S. officials have said is building military installations in the South China Sea in violation of agreements that China has with its neighbors. Former secretary of state Mike Pompeo singled out China Communications Construction last year as one of the "weapons" Beijing uses to impose an expansionist agenda.
The pension fund has hundreds of millions of dollars more invested in some of China's largest lenders, including $185 million invested in China Construction Bank. China Construction has invested $405 billion in 176 Belt and Road projects. China Merchants Bank and Bank of China, two other state-owned enterprises in the CalPERS portfolio, are invested heavily in Belt and Road projects.
CalPERS has come under scrutiny from state and national lawmakers over its investments in Chinese companies. The fund's critics say the investments not only aid the Chinese Communist Party but also create financial risk for the state's pensioners because of the lack of transparency into the operations of Chinese firms.
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