U.S. Investors Are Funding Malign PRC Companies on Major Indices
“Under Xi Jinping, the CCP has prioritized something called ‘military-civil fusion.’ … Under Chinese law, Chinese companies and researchers must – under penalty of law – share technology with the Chinese military. The goal is to ensure that the People’s Liberation Army has military dominance. And the PLA’s core mission is to sustain the Chinese Communist Party’s grip on power.”
– Secretary of State Michael R. Pompeo, January 11, 2020
The Chinese Communist Party’s threat to American national security extends into our financial markets and impacts American investors. Many major stock and bond indices developed by index providers like MSCI and FTSE include malign People’s Republic of China (PRC) companies, listed on the Department of Commerce Entity List and/or the Department of Defense List of “Communist Chinese military companies.” The money flowing into these index funds – often passively, by U.S. retail investors – supports Chinese companies involved in both civilian and military production. Some of these companies produce technologies for the surveillance of civilians and repression of human rights, as is the case of Uyghurs and other Muslim minority groups in Xinjiang, China, as well as in other repressive regimes, such as Iran and Venezuela.