Economy May 03

Trump 'may block govt fund from investing in China equities'

The Thrift Savings Plan’s scheduled investment earmarked for China is being opposed and could be thwarted via an executive order, report claims

by Umesh Desai
Trump 'may block govt fund from investing in China equities'
Politicians have called on President Trump to veto an investment by the Thrift Savings Plan earmarked for China, but a decision has yet to be made. File photo by AFP. 

(ATF) US President Donald Trump may block a government retirement fund from investing in Chinese equities on grounds of national security, Bloomberg reported without identifying sources.

The report said that the Thrift Savings Plan’s scheduled investment earmarked for China is being opposed and it could be thwarted via an executive order.

The investment was headed for Chinese stockmarkets as part of a $50 billion fund being set up to mimic the MSCI All Country World Index, which mirrors emerging markets, including China.

The report quoted a senior administration official who said a decision was yet to be made.

The Thrift Savings Plan, also known as the TSP, was introduced in 1986 as part of the Federal Employees’ Retirement System Act. The TSP was created to give federal workers the opportunity to invest in a tax-advantaged account for retirement, similar to a 401(k) plan (3).

US politicians like Florida Senator Marco Rubio have been urging the TSP to reverse its November 2017 decision to mirror the MSCI All Country World ex-US Investable Market Index (ACWI ex-US IMI).

“The FRTIB’s decision to track this MSCI index constitutes a decision to invest in China-based companies, including many firms that are involved in the Chinese Government’s military, espionage, human rights abuses, and 'Made in China 2025' industrial policy, and therefore poses fundamental questions about the Board’s statutory and fiduciary responsibilities to American public servants who invest in federal retirement plans,” a statement on Rubio’s website said. 

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