US Lawmakers Introduce Bill To Keep Chinese Firms Out Of Federal Government Retirement Plan

US Lawmakers Introduce Bill Proposing To Keep Chinese Firms Out Of Federal Government Retirement Plan

US lawmakers introduced a bipartisan bill on Wednesday that would prevent the federal government’s retirement plan from holding Chinese companies, the latest in a series of laws and executive orders aimed at restricting the ability of US entities to fund technologies that could harm American national security.

Introduced by four Republican senators known for pushing anti-China initiatives – including Florida’s Marco Rubio and Missouri’s Josh Hawley – and Democratic senator Jeanne Shaheen of New Hampshire, the bill would block the Thrift Savings Plan from investing in firms based in or closely affiliated with China, Iran, North Korea, and Russia.

The prohibited companies identified in the Taxpayers and Savers Protection (TSP) Act include not only those headquartered in, or listed on, an exchange of one of the four countries but also those deriving more than half their revenues within the countries.

“Congress can’t sit on the sidelines and allow the TSP board to fund Beijing’s rise at the expense of our nation’s future prosperity and national security interests,” Rubio said in a joint announcement about the bill.

Shaheen echoed Rubio’s concern about national security, saying it was “dangerous to prop up companies that threaten the interests of the US and our allies, and it would be particularly egregious to do so with the hard-earned savings of federal workers, including our military and civilian workforce”.

The bill is a revised version of one introduced last year by Shaheen, Rubio and three other Republicans, and only targeted companies affiliated with China. It was referred to the Senate Homeland Security and Governmental Affairs Committee but never passed.

However, the Rubio-sponsored Holding Foreign Companies Accountable Act, which sought to delist from US exchanges Chinese companies that did not comply with Securities and Exchange Commission auditing requirements, went into effect in late 2021.

That law had threatened to delist nearly 170 mainland Chinese companies with a combined market value of US$1.5 trillion if US regulators were not allowed to inspect their audit records.

Legislative initiatives aimed at investor activity that could help China develop technologies threatening US interests are happening concurrently with deepening layers of restrictions that US President Joe Biden’s administration has placed on exports of advanced semiconductor chips and other hi-tech products.

The Thrift Savings Plan, which permits its participants to choose among five main investment funds, did not immediately respond to a request for comment.

The plan’s “I” fund replicates the Morgan Stanley Capital International EAFE (Europe, Australasia, Far East) Index, which excludes mainland Chinese companies but includes those listed in Hong Kong, many of which are controlled by mainland entities.

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