The news comes at a time of heightened tensions between the United States and China over the origins of the new coronavirus and response to the outbreak.
The Trump administration has ordered the prevention of federal retirement assets from being invested in Chinese equities, according to documents obtained by Fox Business.
Fox published a copy of a letter on Monday, in which two top White House officials, Robert O'Brien and Larry Kudlow, tell Labour Secretary Eugene Scalia that the administration wants the Thrift Savings Plan to call off directing $4.5 billion, citing “significant and unnecessary economic risk”.
The Thrift Savings Plan is a 401(k)-style retirement savings programme for federal employees and members of the military. It was scheduled to start transferring its international fund in June into a portfolio that mirrors the global benchmark MSCI All Country World Index.
The latter captures equities in dozens of developed and emerging markets worldwide, including in China. It was reported in April that the White House came under pressure from Republicans to halt federal pension investments in Chinese companies like ZTE and Hikvision, which are on the US trade blacklist.
O'Brien and Kudlow wrote in the letter that the grounds for holding back the funds were the alleged violation of US sanctions laws by Chinese companies and China's “culpable actions” regarding the spread of the COVID-19…
