Yale Launches Probe of China Investments Over Human Rights Concerns

A committee at one of the world’s most prestigious institutions of learning, Yale University, has launched a probe of the investment of funds from the university’s $42.3 billion endowment in companies active in China that may be complicit in repression and human rights abuses there, the Yale Daily News reported on Jan. 26. According to a 2020 report from the university’s investment office, 6.5 percent of the school’s investment portfolio goes to emerging markets, and China falls within that category. It is not known exactly how much of this amount goes into Chinese companies. A New York Times report indicates that the university’s emerging markets portfolio in 2015 began to include investments in JD.Com and Tencent, which has itself been the target of recent regulatory crackdowns by the Chinese Communist Party (CCP). University President Peter Salovey told the student newspaper that divestment is warranted where a company is actively engaged in causing social injury. The review comes amid heightened scrutiny over U.S. investments into Chinese companies that aid the communist regime’s military or support rights violations in Xinjiang and other regions across China. The U.S. administration has already banned American investment into dozens of Chinese companies that assist with the regime’s military modernization. In August 2020, the U.S. State Department sent a letter to universities urging them to divest in Chinese holdings out of concern over the increasing authoritarianism of CCP rule, which, the letter warned, has a spillover effect on the climate for intellectual freedom on U.S. campuses. “The boards of your institution’s endowment funds have a moral obligation, and perhaps even a fiduciary duty, to ensure that your institution has clean investments and clean endowment funds,” the letter stated. Yale University, in the past, has taken strong stances against supporting companies active in nations with human rights problems. In response to fervent student protests and the building of shanties on campus in the early 1990s, Yale divested from South Africa over that country’s apartheid policies. More recently, the university cut off its investments in an oil firm active in Sudan over the genocide in Darfur. It has also not been shy about pulling funds from companies whose practices do not comport with social and political stances supported by the administration. In April 2021, the university, again in response to heavy pressure from students, announced a new set of guidelines that preclude investing in fossil fuel companies that do damage to the environment and exacerbate the climate crisis. The probe undertaken by the divestment committee this month arises partly from an anonymous article published in the Yale Daily News about the fate of tennis star Peng Shuai, who disappeared from public view late last year following her accusations of sexual misconduct against former Chinese Vice Premier Zhang Gaoli. Ongoing concerns for Shuai’s welfare, even after she returned to public view, drove the Women’s Tennis Association to cancel tournaments set to be held in China this year, forfeiting some $1 billion in revenues. The Yale Daily News published the student’s letter anonymously—a departure from its standard editorial policy—on the grounds that the student has family in China who might suffer punishment at the hands of the regime if their identities were known. The author of the article criticizes the Yale Investments Office for not reviewing the moral implications of its China investments and for failing to make a China-specific ethical investment policy publicly available. Without weighing in on the truth or falsity of Peng Shuai’s allegations, the author makes a case for using divestment as a lever to put pressure on the CCP over its human rights abuses. “Without strong and constant international pressure, we will never hear what she [Peng Shuai] has to say again, because there is only one language that the CCP understands: the language of power,” the author states. “The Yale endowment needs to divest from China. The track record of the CCP has made it more than clear that every dollar of investment in China is unethical, until the CCP is willing positively respond to, and act on, allegations by Peng Shuai and many others,” the author adds. China Reporter Follow Michael Washburn is a New York-based freelance reporter who covers China-related topics. He has a background in legal and financial journalism, and also writes about arts and culture. Additionally, he is the host of the weekly podcast Reading the Globe. His books include “The Uprooted and Other Stories,” “When We're Grownups,” and “Stranger, Stranger.”

Yale Launches Probe of China Investments Over Human Rights Concerns

A committee at one of the world’s most prestigious institutions of learning, Yale University, has launched a probe of the investment of funds from the university’s $42.3 billion endowment in companies active in China that may be complicit in repression and human rights abuses there, the Yale Daily News reported on Jan. 26.

According to a 2020 report from the university’s investment office, 6.5 percent of the school’s investment portfolio goes to emerging markets, and China falls within that category. It is not known exactly how much of this amount goes into Chinese companies.

A New York Times report indicates that the university’s emerging markets portfolio in 2015 began to include investments in JD.Com and Tencent, which has itself been the target of recent regulatory crackdowns by the Chinese Communist Party (CCP).

University President Peter Salovey told the student newspaper that divestment is warranted where a company is actively engaged in causing social injury.

The review comes amid heightened scrutiny over U.S. investments into Chinese companies that aid the communist regime’s military or support rights violations in Xinjiang and other regions across China. The U.S. administration has already banned American investment into dozens of Chinese companies that assist with the regime’s military modernization.

In August 2020, the U.S. State Department sent a letter to universities urging them to divest in Chinese holdings out of concern over the increasing authoritarianism of CCP rule, which, the letter warned, has a spillover effect on the climate for intellectual freedom on U.S. campuses.

“The boards of your institution’s endowment funds have a moral obligation, and perhaps even a fiduciary duty, to ensure that your institution has clean investments and clean endowment funds,” the letter stated.

Yale University, in the past, has taken strong stances against supporting companies active in nations with human rights problems. In response to fervent student protests and the building of shanties on campus in the early 1990s, Yale divested from South Africa over that country’s apartheid policies. More recently, the university cut off its investments in an oil firm active in Sudan over the genocide in Darfur.

It has also not been shy about pulling funds from companies whose practices do not comport with social and political stances supported by the administration. In April 2021, the university, again in response to heavy pressure from students, announced a new set of guidelines that preclude investing in fossil fuel companies that do damage to the environment and exacerbate the climate crisis.

The probe undertaken by the divestment committee this month arises partly from an anonymous article published in the Yale Daily News about the fate of tennis star Peng Shuai, who disappeared from public view late last year following her accusations of sexual misconduct against former Chinese Vice Premier Zhang Gaoli. Ongoing concerns for Shuai’s welfare, even after she returned to public view, drove the Women’s Tennis Association to cancel tournaments set to be held in China this year, forfeiting some $1 billion in revenues.

The Yale Daily News published the student’s letter anonymously—a departure from its standard editorial policy—on the grounds that the student has family in China who might suffer punishment at the hands of the regime if their identities were known.

The author of the article criticizes the Yale Investments Office for not reviewing the moral implications of its China investments and for failing to make a China-specific ethical investment policy publicly available. Without weighing in on the truth or falsity of Peng Shuai’s allegations, the author makes a case for using divestment as a lever to put pressure on the CCP over its human rights abuses.

“Without strong and constant international pressure, we will never hear what she [Peng Shuai] has to say again, because there is only one language that the CCP understands: the language of power,” the author states.

“The Yale endowment needs to divest from China. The track record of the CCP has made it more than clear that every dollar of investment in China is unethical, until the CCP is willing positively respond to, and act on, allegations by Peng Shuai and many others,” the author adds.

Michael Washburn

China Reporter

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Michael Washburn is a New York-based freelance reporter who covers China-related topics. He has a background in legal and financial journalism, and also writes about arts and culture. Additionally, he is the host of the weekly podcast Reading the Globe. His books include “The Uprooted and Other Stories,” “When We're Grownups,” and “Stranger, Stranger.”