Acting at the strong urging of President Donald Trump, the Federal Retirement Thrift Investment Board (FRTIB) voted unanimously Wednesday morning to stop its implementation of plans to invest the pension funds, belonging to U.S. government employees and the U.S. military, in China.
The decision came little more than two weeks before the transfer of the pension funds to the Chinese index was scheduled to start — June 1, with about 90 days to be fully implemented.
The vote came in response to two letters sent from administration officials — from National Security Advisor Robert O'Brien and National Economic Council Chairman Larry Kudlow to Secretary of Labor Eugene Scalia, and then from Scalia to FRTIB Chairman Michael Kennedy — calling on the FRTIB to halt all steps toward investing in China.
"At the direction of President Trump, the board is to immediately halt all steps associated with the moving of the funds to the Chinese index," Scalia wrote Kennedy, leaving no doubt from whom the idea originated.
As Newsmax reported two weeks ago, the five-member board voted in May 2017 to shift an estimated $593.7 billion contained in its Thrift Savings Plan's (TSP) I Fund to the MSCI ACWI ex-U.S. Investible Market Index — 8% of which includes state-run Chinese companies, including several already sanctioned by the U.S.
Among them are the AviChina Industry and Technology Ltd., which develops fighter planes, helicopters, and unmanned aircraft systems for the People's Liberation Army, and Hangzhou Hikvision Digital Company Ltd., which is responsible for security surveillance equipment to tighten the Chinese grip over the Xinjiang Uighur Autonomous Region (XUAR).
White House sources told Newsmax the move to thwart the transfer of the pension funds originated with the president's newly minted White House chief of staff Mark Meadows. As congressman from North Carolina last year, Meadows introduced legislation to stop the investment of government pensions in China.
Along with Meadows, Deputy National Security Adviser Matthew Pottinger reportedly brought the issue to the president's attention. Pottinger is widely considered the administration's toughest hard-liner on dealing with China.
The initial decision to expand investment and the unanimous vote to reverse it were made by Obama appointees to all five spots on the FRTIB. On May 4, President Trump sent three new nominees to the board to the Senate for confirmation.
John Gizzi is chief political columnist and White House correspondent for Newsmax. For more of his reports, Go Here Now.
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