The Trump administration warned about investing in Chinese companies because of the possibility of sanctions and boycotts over the Chinese Communist Party’s handling of the coronavirus pandemic and its strong-arm response to pro-democracy rallies in Hong Kong, according to a report.
National security adviser Robert O’Brien and Larry Kudlow, director of the National Economic Council, wrote in a letter to the US Railroad Retirement Board that investments in China opened its retirees to “unnecessary economic risk,” the New York Times reported Tuesday.
The letter also noted that the investments would put money into the hands of companies “that raise significant national security and humanitarian concerns,” including some that supply the Chinese army.
Citing a “time of mounting uncertainty,” O’Brien and Kudlow said “the possibility of future sanctions or boycotts that may arise from a wide range of issues, including the culpable actions of the Chinese government with respect to the global spread of the Covid-19 pandemic, the suppression of Hong Kong’s democracy.”
The Railroad Retirement Board, an independent federal agency, managed $28.3 billion in assets in late 2018, the report said.
It said the board has placed the assets in a diversified portfolio as many private-sector retirement plans have.
The White House’s warning comes at a time of increased tension between Washington and Beijing.
President Trump blamed China for fumbling its response to the coronavirus, which originated in the city of Wuhan.
And the world’s two biggest economies have been engaged in a trade war after Trump accused Beijing of treating US companies unfairly and stealing intellectual property.
Last week, China imposed a strict national security law on Hong Kong that cracks down on criticism of the Chinese Communist Party and criminalizes “secession,” “subversion” and organization of “terrorist activities.”
Secretary of State Mike Pompeo, in an interview Monday with Fox News, said the US is considering banning TikTok and other Chinese social media apps over concerns they gather users’ data and share it with the Chinese Communist Party.
“I don’t want to get out in front of [Trump], but it’s something we’re looking at,” Pompeo said. “We are taking this very seriously. We are certainly looking at it.”