States Must Stop Sending Tax Dollars to the CCP

As the Protecting America Initiative has frequently reported, states around the country are taking action to protect their citizens from the malign influence of the Chinese Communist Party (CCP). From protecting U.S. agriculture from unfair competition to ensuring that states prioritize American products in contracting, there are transformative policy changes being enacted around the nation.

All of the good that states are doing to fight CCP influence is often undercut when those same states allow billions of dollars to flow from taxpayers to Chinese Communist financial entities. Whether it is university endowments, state pension funds, or economic development corporations, state entities are still funneling taxpayer money to the CCP. 

There is a growing chorus of state treasurers and legislatures sounding the alarm. President Trump and the White House are doing their part by reviewing how U.S. companies invest in China. Unless legislatures act, legacy connections between states and China could undermine major advances that have taken place. To help states navigate this complicated landscape of divestment regulations and laws, the Protecting America Initiative is helping identifying states that have taken the first step. The following are proactive measures that can be duplicated as early as the spring legislative session. 

Indiana 

In 2023, Indiana passed Senate Bill 268, which prohibits the Indiana Public Retirement System (INPRS) from investing in entities controlled by the People’s Republic of China or the Chinese Communist Party. Reportedly the first state in the country to direct its public pension fund to divest from China, Indiana barred INPRS from making any investments in a prohibited entity after June 30, 2023 and directed the board of trustees to divest 100% of prohibited investments within five years of being identified. By August of 2024 – four years before mandated by statute – INPRS had shed all $1.2 billion worth of Chinese investments.  

Missouri 

Even absent a law mandating divestment from China, in December 2023 the board of trustees of the Missouri State Employees’ Retirement System (MOSERS) voted 9-2 in favor of divesting “from all Global Public Equity investments in China” within a year of passing the motion. Championed by state Treasurer Vivek Malek, the move to divest from China had failed a board vote a month prior before finally succeeding in a special meeting called “at the urging of Gov. Mike Parson.”  

Oklahoma  

In June of 2024, Oklahoma Governor Kevin Stitt issued an executive order aimed at confronting “an aggressive and emboldened Chinese government.” Section 4 of the executive order directed the state’s retirement systems to review their portfolios for exposure to or investment in any countries considered foreign adversaries and develop divestment plans in coordination with the state treasurer for submission to the governor, the speaker of the Oklahoma House of Representatives, and the president pro tempore of the Oklahoma Senate.  

In the current legislative session, Senator Micheal Bergstrom has introduced SB 579, which if passed would bar the State Treasurer from making any investments in any instrument “associated with any entity owned or controlled by the government of China, any political subdivision of China, or any corporation that is headquartered in China or whose principal operations are located in China.”   

Kansas 

In April of 2024, large majorities in the state legislature enacted HB 2711 – the Countries of Concern Divestment Act. The bill became law without the signature of Democratic Governor Laura Kelly, who was “concerned about the unintended consequences that could be caused” by the legislation. HB 2711 directed the Kansas public employees retirement fund and any other fund sponsored or managed by a state agency to divest all publicly traded securities associated with a “country of concern” – which includes China, Cuba, Iran, North Korea, Russia, and Venezuela. By November, Kansas pensions had divested nearly $300 million from countries of concern.   

Florida 

In May of 2024, Florida Governor Ron DeSantis signed into law HB 7071 requiring the Florida State Board of Administration (SBA) to review all current securities held by the Florida Retirement System Trust Fund to determine exposure to any companies that are “publicly known to be majority-owned by China,” develop a divestment plan for all direct holdings in such companies by September 1, 2024, and complete divestment from direct holdings in such companies by September 1, 2025. In December of 2024, the state Investment Advisory Council voted in favor of directing portfolio managers “to lower China exposure in the Florida Retirement System Investment Plan.” 

Texas 

Texas Governor Greg Abbott sent a letter to state agencies in November of 2024 prohibiting them from making new investments of state funds in China and requiring the divestment of any current investments in China “at the first available opportunity,” citing how China’s “belligerent actions across the Southeastern Pacific region and the world have increased instability and financial risk to the State holding investments in China.”  

Idaho 

Idaho legislators enacted HB 665 in March 2024 requiring that the state treasurer compile and prepare a report of all public money in state-managed funds that are “invested in any foreign adversary, state-owned enterprise of a foreign adversary, company domiciled within a foreign adversary, or company owned or controlled by a foreign adversary” – including China, Russia, North Korea, Cuba, Venezuela, and Syria – for submission to the governor, the president pro tempore of the senate, the speaker of the house of representatives, and the director of the legislative services office. Although the bill states that “it is the intent of the legislature that the state of Idaho's public investment dollars are not put at risk in countries of concern and do not fund the development of the military technologies and surveillance tools of foreign adversaries,” the statute itself does not bar investment in or mandate divestment from foreign adversaries. 

Other States Should Take Inspiration from These Examples 

The states highlighted here show that in divesting public money from China, there’s a diversity of options that have been taken, whether through legislatures enacting statutory restrictions, governors issuing executive orders, or boards of trustees taking votes to guide their future investments. And states like Oklahoma and Tennessee have already introduced bills on divestment from China for consideration during this current legislative session. The Protecting America Initiative will continue to advocate for continued adoption of these policies as part of our toolbox of policy solutions.