Here’s an idea: Let’s reward China for its pandemic

Originally published on Real Clear Defense

A lot of Americans whose lives, families, financial prospects and futures have been severely afflicted by the Chinese Communist Party (CCP) virus understandably want to punish the perpetrators. On Capitol Hill, in the media and even in the White House, there is talk about ways by which China’s dictator and his government can be made to pay for the damage they have done.

So, it is simply unbelievable that an obscure and wholly unaccountable government panel, the Federal Retirement Thrift Investment Board (FRTIB), is – at this very moment – beavering away at what would amount to a huge reward for Xi Jinping’s Communist regime. Indeed, that panel is poised to invest tens of billions of dollars of U.S. government employees’ pension funds in CCP companies.

Thanks to a decision originally taken by the FRTIB in 2017 and reaffirmed last November – in the face of bipartisan and bicameral opposition in Congress, such Chinese companies would include:

  • AviChina Industry & Technology: AVIC and its subsidiaries develop and produce a range of aircraft, unmanned aircraft systems, and airborne weapons for the People’s Liberation Army. AVIC and its subsidiaries have been repeatedly sanctioned by the U.S. for missile proliferation activities in Iran.
  • China Industry Shipbuilding Group: Naval equipment produced by CSIC includes: guided missile destroyers, frigates, conventional submarines, nuclear-powered ballistic missile submarines, unmanned aerial vehicle (UAV) systems, and, most notably, aircraft carriers.
  • Hikvision Digital Technology: Hikvision manufactures video cameras and other security technology integral to the CCP’s surveillance state apparatus and its “social credit” system. It has been sanctioned by the U.S. government for human rights and other activities “contrary to the national security or foreign policy interests of the United States.”
  • Zhongxing Telecommunications Equipment Corporation (ZTE): ZTE is a telecommunications company that has engaged in economic and trade activities in sanctioned states in violation of U.S. laws and regulations.
  • China Communications Construction Company: As of 2015, CCCC owned over half of China’s dredging industry capacity. Several CCCC subsidiaries have been observed conducting dredging (and other) activity in support of Beijing’s illegal island-building activity in the South China Sea.
  • China Unicom: China Unicom is providing telecommunications systems to the contested Paracel Islands and the Spratly Islands in the South China Sea to service China’s civilian and military personnel and also reportedly to support signals intelligence activities.
  • China Mobile : China Mobile provides telecommunications services to illegal fortified Chinese-constructed islands in the Paracel and Spratly Island chains. In May 2019, the U.S. FCC denied China Mobile’s application to provide international telecommunications services between the U.S. and foreign destinations, saying it “raises substantial national security and law enforcement risks.”
  • China Telecom Corporation: In April 2020, the U.S. government pulled a license from this Chinese telecommunications company’s American subsidiary on the grounds that it entailed unacceptable risks of Chinese espionage and disruption of U.S. networks.  
  • China Industry Shipbuilding Group: Naval equipment produced by CSIC includes: guided missile destroyers, frigates, conventional submarines, nuclear-powered ballistic missile submarines, unmanned aerial vehicle (UAV) systems, and, most notably, aircraft carriers.

Fortunately, eleven influential veterans have just urged the Joint Chiefs of Staff to recommend that President Trump stop this travesty, especially because it would compel military personnel to invest in Chinese corporations that make weapons designed to kill them. Among the general, flag and non-commissioned officers who signed a joint letter to the Chiefs are: General James Jones, U.S. Marine Corps (Ret.), former National Security Advisor to President Obama and former Commandant of the Marine Corps; Vice Admiral John M. Poindexter, U.S. Navy (Ret.), former National Security Advisor to President Reagan; Lieutenant General William “Jerry” Boykin, U.S. Army (Ret.), former Deputy Under Secretary of Defense for Intelligence; Lieutenant General Thomas McInerney, U.S. Air Force (Ret.), former Assistant Air Force Vice Chief of Staff; Lieutenant General Steven L. Kwast, U.S. Air Force (Ret.), former Commander, Air Education and Training Command; Major General Robert F. Dees, U.S. Army (Ret.), former Commander, Second Infantry Division, U.S. Forces Korea; Brigadier General Robert Spalding, U.S. Air Force (Ret.), former Defense Attaché, Beijing and former Senior Director for Strategic Planning, National Security Council; and Lieutenant Colonel Allen West, U.S. Army (Ret.), former Member of Congress.

These distinguished military leaders powerfully warned the JCS about an “intolerable” prospect: namely, that they and millions of other U.S. government employees – past and present, military and civilian – could soon unwillingly be investing their personal retirement dollars in Chinese-linked advanced weapons manufacturers, U.S.-sanctioned entities and other malevolent enterprises of the Chinese Communist Party. Their letter read, in part:

Today, such Chinese companies are being underwritten – in most cases, unwittingly – by American pension funds and other institutional and individual investors. For example, there is roughly $3 trillion invested in a fund benchmarked against the MSCI All-Country World ex-U.S. Index, which has just over 11% percent of its portfolio invested in the stocks of Communist Chinese enterprises.

Worse yet, the federal retirement system’s Thrift Savings Plan is set imminently to “mirror” this MSCI index. If that happens, it is especially intolerable to those of us who have proudly served the Nation in uniform that our retirement investments will help its enemies threaten our comrades-in-arms and the country we love. We call on you as the senior military advisors to our Commander-in-Chief to urge President Trump to prevent the Thrift Savings Plan from being tapped by companies tied to the Chinese Communist Party and, thereby, ensure that federal retirees will not wind up financing our foes.

I am very proud to say that the Committee on the Present Danger: China strongly opposed U.S. capital markets’ financing of such malevolent Chinese Communist Party companies long before the CCP virus was unleashed on the world. It would be absolutely obscene, and a betrayal of the American people was the regime in Beijing now effectively to be rewarded for inflicting on the world a lethal pandemic. The Committee commends these veterans – and the millions of men and women for whom they speak – for their past and continuing service to our country and urges the Joint Chiefs and President Trump to heed their urgent appeal: Don’t fund our enemies.

About Frank Gaffney, Jr.

Frank Gaffney is the Founder and Executive Chairman of the Center for Security Policy in Washington, D.C. Under Mr. Gaffney's leadership, the Center has been nationally and internationally recognized as a resource for timely, informed and penetrating analyses of foreign and defense policy matters. Mr. Gaffney formerly acted as the Assistant Secretary of Defense for International Security Policy during the Reagan Administration, following four years of service as the Deputy Assistant Secretary of Defense for Nuclear Forces and Arms Control Policy. Previously, he was a professional staff member on the Senate Armed Services Committee under the chairmanship of the late Senator John Tower, and a national security legislative aide to the late Senator Henry M. Jackson.