Florida Moves to Disentangle State Investments in China

Florida Moves to Disentangle State Investments in China
Florida Gov. Ron DeSantis speaks during a press conference at the Shul of Bal Harbour in Surfside, Fla., on June 14, 2021. Joe Raedle/Getty Images
Zachary Stieber
Updated:

Florida officials on Dec. 20 took action to disentangle state retirement funds from the Chinese Communist Party (CCP), including revoking authority that let outside managers decide where to invest some of the state’s pension funds.

The plan from Gov. Ron DeSantis, a Republican, was approved during a meeting of the State Board of Administration of Florida, which invests and manages the state’s pension plan, one of the largest public retirement plans in the U.S., and smaller funds.

The board also approved starting a review to see how many of the state’s assets are tied up in Chinese companies and clarifying that all fund managers should act solely in the financial interest of the state’s funds.

More than 5,000 proxy votes for investments have been cast since 2016, according to state data.

The revocation of proxy voting authority is important because some investment firms have “an ideological bent,” DeSantis said during the meeting.

The first-term governor noted that a leading view among policymakers had been that boosting China would help soften the country’s hardline government, but he said that hasn’t been the case.

“The whole experiment with China has been a big failure for the United States,” he said. “I think the U.S. as a whole should be disentangling from China, but certainly our investments should be disentangling.”

Florida Chief Financial Officer Jimmy Patronis, who also sits on the board, agreed.

He pointed out that Chinese property developer Evergrande Group recently missed payments and is at risk of defaulting, which would affect businesses across the country.

Patronis listed other reasons to disengage with China, including the CCP’s brazen violation of intellectual property rules, its increasing influence over Hollywood and Washington, the possibility that the virus that causes COVID-19 originated in a Chinese laboratory, and the series of moves done at a federal level in recent weeks, including Congress passing a bill that bans sourcing items produced in China’s Xinjiang region, where many factories use slave labor.

“Some in Washington say we’re entering a Cold War with China. It seems like limiting our exposure to China is not only good for our country but is financially prudent,” he said.

Florida Attorney General Ashley Moody, a Republican and member of the board, said the financial moves were in the best interests of the retirement fund’s participants and beneficiaries.

“Chinese government control and influence over businesses operating in China should be a source of concern for anyone investing there,” Moody said in a statement. “As fiduciaries, we should understand these risks and ensure they are being evaluated by the Florida Retirement System.”

Zachary Stieber
Zachary Stieber
Senior Reporter
Zachary Stieber is a senior reporter for The Epoch Times based in Maryland. He covers U.S. and world news. Contact Zachary at [email protected]
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