South Dakota Gov. Noem Asks Congress to Assist in Divesting From China
South Dakota Gov. Kristi Noem has taken aim at the Chinese regime by asking Congress to pass a law requiring state and local governments to divest themselves of assets in China.Noem sounded the alarm about the looming threat of the Chinese Communist Party (CCP) in a Dec. 21 letter (pdf) to Congressional leaders. “The Chinese Communist party is ramping up their efforts to purchase large components of America’s food supply, including chemical companies, fertilizer companies, processing facilities, and now our nation’s agricultural land,” she said. According to the governor, her move aims at hindering the situation in her state from worsening. She further cited another challenge imposed on 80 million American monthly users of Tiktok, a popular video-sharing app developed in China. Americans risk having their financial information exposed from the data collection policies of the platform, Noem noted. In a separate act, the governor called on the investment company Vanguard to halt investing in the Asian economic power. She disagrees with the category of “emerging market” that the company puts China in, given its GDP of approximately $18 trillion dollars which ranks the country as the world’s second-largest economic power. “For this reason, I ask that Vanguard create an alternative emerging markets fund that does not include China,” she said in the letter (pdf) to Vanguard CEO Mortimer Buckley. Limited Funds Tied to China According to the review conducted by the South Dakota Investment Council (SDIC) at Noem’s request, the state had already divested from three Chinese companies and, thus, is free of direct investment in China. These investments are valued at about $1.4 million, Matt Clark, the state’s investment officer, said. Clark noted that the economy is “global and intertwined,” and big corporations including Apple frequently hold shares in China, but they are exempt from the state’s divestment. South Dakota still has 1.3 percent of its assets in an exchange-traded fund for emerging markets managed by Vanguard, which has one-third of its holdings in China. Additionally, 0.7 percent of its portfolio is made up of real estate and private equity partnership firms with Chinese interests, according to a statement from the governor’s office. Noem asked SDIC, a panel managing investment of the state’s pension fund, to find alternatives in order to clear those remaining interests with China ties. According to the governor, Vanguard could offer remedies for those holdings if it agrees to shift away from Chinese investments. “This would provide states the opportunity to safely invest our state trust fund and pension dollars without exposure to the threat of the CCP,” she contended in the letter. Leading the Charge The Republican governor has led the charge in clamping down on the Chinese regime’s influence. On Dec. 13 she introduced a new proposed legislation to restrict farmland purchases by foreign countries, namely China. “With this new process, we will be able to prevent nations who hate us—like Communist China—from buying up our state’s agriculture land,” Noem said in a statement. To this end, Noem and state legislators planned to create a new board, the Committee on Foreign Investment in the United States–South Dakota, to review proposed agricultural land purchases by foreign entities. On Dec. 8, she called for an immediate review of all investments “to determine if taxpayer dollars are being invested in companies that pose a threat to our national security, like those in Communist China.” “South Dakotans deserve to know if their taxpayer dollars are being invested to benefit the Chinese Communist Party,” said Noem in a statement. Noem requested that SDIC complete the review in seven days, arguing that good deals can not be made with bad people, referring to the CCP. On Nov. 29, Noem signed an executive order banning state government employees and contractors from using TikTok, citing concerns that Americans’ personal data collected by the app can be manipulated by the communist regime. The move had been later followed by several states, with the latest ones including Louisiana and West Virginia. Last week, the Senate unanimously passed the bill to ban using the Chinese app on all government devices amid growing concerns that the app poses a cybersecurity risk and is a threat to national security. Dorothy Li and Rita Li contributed to this report. Hannah Ng is a reporter covering U.S. and China news. She holds a master's degree in international and development economics from the University of Applied Science Berlin.
South Dakota Gov. Kristi Noem has taken aim at the Chinese regime by asking Congress to pass a law requiring state and local governments to divest themselves of assets in China.
Noem sounded the alarm about the looming threat of the Chinese Communist Party (CCP) in a Dec. 21 letter (pdf) to Congressional leaders.
“The Chinese Communist party is ramping up their efforts to purchase large components of America’s food supply, including chemical companies, fertilizer companies, processing facilities, and now our nation’s agricultural land,” she said.
According to the governor, her move aims at hindering the situation in her state from worsening.
She further cited another challenge imposed on 80 million American monthly users of Tiktok, a popular video-sharing app developed in China.
Americans risk having their financial information exposed from the data collection policies of the platform, Noem noted.
In a separate act, the governor called on the investment company Vanguard to halt investing in the Asian economic power.
She disagrees with the category of “emerging market” that the company puts China in, given its GDP of approximately $18 trillion dollars which ranks the country as the world’s second-largest economic power.
“For this reason, I ask that Vanguard create an alternative emerging markets fund that does not include China,” she said in the letter (pdf) to Vanguard CEO Mortimer Buckley.
Limited Funds Tied to China
According to the review conducted by the South Dakota Investment Council (SDIC) at Noem’s request, the state had already divested from three Chinese companies and, thus, is free of direct investment in China. These investments are valued at about $1.4 million, Matt Clark, the state’s investment officer, said.
Clark noted that the economy is “global and intertwined,” and big corporations including Apple frequently hold shares in China, but they are exempt from the state’s divestment.
South Dakota still has 1.3 percent of its assets in an exchange-traded fund for emerging markets managed by Vanguard, which has one-third of its holdings in China. Additionally, 0.7 percent of its portfolio is made up of real estate and private equity partnership firms with Chinese interests, according to a statement from the governor’s office.
Noem asked SDIC, a panel managing investment of the state’s pension fund, to find alternatives in order to clear those remaining interests with China ties.
According to the governor, Vanguard could offer remedies for those holdings if it agrees to shift away from Chinese investments.
“This would provide states the opportunity to safely invest our state trust fund and pension dollars without exposure to the threat of the CCP,” she contended in the letter.
Leading the Charge
The Republican governor has led the charge in clamping down on the Chinese regime’s influence.
On Dec. 13 she introduced a new proposed legislation to restrict farmland purchases by foreign countries, namely China.
“With this new process, we will be able to prevent nations who hate us—like Communist China—from buying up our state’s agriculture land,” Noem said in a statement.
To this end, Noem and state legislators planned to create a new board, the Committee on Foreign Investment in the United States–South Dakota, to review proposed agricultural land purchases by foreign entities.
On Dec. 8, she called for an immediate review of all investments “to determine if taxpayer dollars are being invested in companies that pose a threat to our national security, like those in Communist China.”
“South Dakotans deserve to know if their taxpayer dollars are being invested to benefit the Chinese Communist Party,” said Noem in a statement.
Noem requested that SDIC complete the review in seven days, arguing that good deals can not be made with bad people, referring to the CCP.
On Nov. 29, Noem signed an executive order banning state government employees and contractors from using TikTok, citing concerns that Americans’ personal data collected by the app can be manipulated by the communist regime.
The move had been later followed by several states, with the latest ones including Louisiana and West Virginia.
Last week, the Senate unanimously passed the bill to ban using the Chinese app on all government devices amid growing concerns that the app poses a cybersecurity risk and is a threat to national security.
Dorothy Li and Rita Li contributed to this report.