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Last month, the United States government issued sanctions against eight Chinese companies for complicity in the crackdown on Chinese Muslims in Xinjiang. As many as a million Uighurs, Kazakhs and other ethnic minorities have been “interned” — wrenched away from families and dumped into harsh detention camps that the government insists are merely re-education centers. In light of those sanctions, why haven’t the California State Teachers’ Retirement System and other American funds announced that they would stop investing in companies under sanctions? And why is the federal employee retirement fund poised to move retirement assets to an index fund that includes Chinese companies in 2020?

By any standard, China is led by an amoral dictatorship. In addition to the continuing horrors in Xinjiang, young people in Hong Kong fighting for freedom fear being brutalized by Chinese security forces. In the South China Sea, the People’s Liberation Navy has all but annexed a vast swath of other nations’ territory and international waters. Chinese companies, answerable to the Communist Party, probably have built surveillance into drones that Americans buy and telephones that are bought the world over. Beijing trolls your children’s apps and Chinese hackers have allegedly already breached the private financial and personal information of millions of Americans, not to mention the possibility of forays into America’s most advanced defense plans.

American financial heavyweights and pension funds have in recent years shunned fossil fuels, guns and other investments on ethical grounds. Yet when it comes to providing capital to Chinese companies — including those directly engaged in surveillance or supporting the People’s Liberation Army — many haven’t resisted investment.

Both state-owned and nominally private Chinese companies enjoy almost unfettered access to American capital markets, including listing on American exchanges and heavy investment from some of the nation’s largest pension funds. In mid-2019, China was among the top 10 countries in which the California State Teachers’ Retirement System (CalSTRS) invested. According to the most recent data, from June 2019, CalSTRS owned 4.1 million shares of Hangzhou Hikvision Digital Technology Co., which has faced sanctions from the Trump administration for manufacturing surveillance equipment that the administration alleges is being used in the Xinjiang camps (Hikvision is appealing the sanctions). The New York State Teachers’ Retirement System and the Florida state pension fund have owned shares of the same company (the New York State Common Fund liquidated its shares in Hikvision in May). These and other pension funds including New York State’s, and the enormous California Public Employees’ Retirement System (CalPERS) have indirectly owned shares in iFlytek Co Ltd., another of the Chinese firms blacklisted by the U.S. government.

We reached out to the funds, seeking the current status of their investments in Chinese companies, but got little information. “We have been tracking the situation,” CalSTRS told us, and a representative for the New York State Teachers’ Retirement System said: “Our holdings in public international equities are primarily held according to their weights in passive portfolios benchmarked to the MSCI ACWI ex-U. S. index, our policy benchmark.” A company representative at CalPERS just pointed us to its Governance & Sustainability Principles. A representative for the Florida state pension fund confirmed that it still owns shares in Hikvision.

There are sound political and financial reasons to question the wisdom of exposure to Chinese public and “private” companies. It’s almost impossible to know at what moment the United States may levy sanctions against a company for complicity in the Chinese government’s malign agenda. Hikvision, Huawei, ZTE (telecommunications conglomerates that also allegedly spy for their Beijing bosses, charges that both have denied), and some others, are good examples.

There is also pure fiscal prudence: Chinese corporate data is notoriously sketchy. China’s own National Audit Office has found a number of cases of falsified accounts among listed companies, even among top state-owned enterprises. In an amusing example from earlier this year, the pharmaceutical manufacturer Kangmei discovered it didn’t have $4.4 billion in cash as its records indicated, with the explanation that it had experienced an “accounting error.”

Lack of accounting and management transparency also plague Chinese stocks listed on the NASDAQ, the New York Stock Exchange and other markets. Megacompanies like Alibaba Group, Baidu, PetroChina, China Life Insurance Company and JD.com officially have a combined market capitalization of over half a trillion dollars. Despite that, Chinese firms have repeatedly failed to comply with American financial regulations, including required inspections of their accounting records — a requirement that runs counter to the goals of China’s National Administration for the Protection of State Secrets.

The Trump administration has considered blocking Chinese access to American capital markets for regulatory noncompliance, alongside a convoluted set of Trumpian notions about improving trade balances. A more straightforward option would be to demand compliance from Chinese firms. After all, the notion that select foreign firms would be exempt from, say, environmental or labor regulations is absurd. Why are financial regulations different?

As far as indexed funds are concerned, a mild response may be in order. Why tell individual or institutional investors they cannot invest, when simply informing them — cigarette warning style — could suffice: “This fund includes companies that help suppress human rights, support the Chinese Army and may be spying on the United States.” Who could argue against the government providing basic facts?

Ultimately, many of these problems fall into the category of known unknowns. The main challenge is the risk posed to the uninformed: the millions of Americans who depend on their state or employee pension funds, and may have no clue where their hard-earned pennies are being invested. For example, the federal employees (including the military) whose 401(k)-like plan — known as the Thrift Savings Plan or TSP — has confirmed it will move its retirement assets to a new index made up of about 8 percent Chinese companies in 2020. As a result, federal employees could soon be supporting Chinese rights abusers, the People’s Liberation Army and spies.

Despite those facts, congressional efforts to derail TSP’s investment in Chinese firms have been met with horror. Legislators can’t tell anyone where to invest — until they do, as the Islamic Republic of Iran and its supporters in corporate and financial America learned some years ago. Divestment from companies and funds that treat money and morality as separate matters has been gaining speed at both the state and federal level. Perhaps it’s time for the same ideals to apply to China — one way to protect American investors, American ideals, and American security all at once.