Missouri State Treasurer Vivek Malek has been at the forefront of a movement to divest from Chinese companies, a stance that has gained traction in several states across the country. Malek's efforts have positioned Missouri as one of the early adopters of divestment from Chinese investments, with Indiana and Florida also taking similar steps.
The push for divestment stems from concerns about China's economic practices and its perceived threat to U.S. interests. A recent analysis revealed that between 2018 and 2022, U.S. public pension funds and university endowments invested approximately $146 billion in Chinese entities.
Advocates of divestment argue that China's actions, such as intellectual property theft and undercutting market prices, pose a significant risk to U.S. technology and innovation. However, some economists caution that state-mandated divestments could potentially harm investment returns for retirees.
The National Association of State Retirement Administrators opposes state-led divestments, suggesting that such decisions should be made at the federal level based on national security or humanitarian concerns.
While the U.S. Treasury Department has proposed rules to restrict certain investments in China, individual states have taken matters into their own hands. States like Indiana and Florida have passed laws requiring divestment from Chinese companies, with varying degrees of success in reducing investment exposure.
Malek's reelection campaign in Missouri has prominently featured his advocacy for Chinese divestment, emphasizing the need to protect American interests. His Republican primary challengers, state Rep. Cody Smith and state Sen. Andrew Koenig, also support divestment, citing concerns about China's stability and its blurred line between public and private sectors.
Florida Governor Ron DeSantis signed a law mandating divestment from Chinese-owned companies, adding to existing prohibitions on investments tied to other countries like Cuba, Iran, and Venezuela. In contrast, Arizona Governor Katie Hobbs vetoed a similar bill, expressing concerns about its potential impact on the state's economic growth and investment portfolio.
The trend of state-led divestments reflects a broader shift towards more confrontational policies towards China, raising questions about the coordination between state and federal governments in managing international relationships.
