Trump weighs banning US$50 billion of US federal savings from holding MSCI emerging market stocks, including Chinese equities
- The US Thrift Savings Plan is scheduled to transfer US$50 billion of its international fund to mirror an MSCI All Country Wolrd Index, which captures equities in emerging markets including China
- Opponents of the transfer, including Republican Senator Marco Rubio of Florida, in recent weeks have engaged in a last-minute effort to stop it
President Donald Trump is exploring blocking a government retirement fund from investing in Chinese equities considered a national security risk, a person familiar with the internal deliberations said.
The Federal Retirement Thrift Investment Board (FRTIB) overseeing the fund made a decision in 2017 that the money should be moved by mid-2020. Opponents of the transfer in recent weeks have engaged in a last-minute effort to stop it.
The action would possibly come in the form of an executive order, the person said. A senior administration official said no decision has been made at this time.
“Microsoft, Boeing, and Lockheed, among other major companies in the US, use the same index the TSP is implementing,” said Kim Weaver, a spokeswoman for the TSP. “The TSP is simply moving to parity with other American 401(k)s. The FRTIB has long held the view that the Office of Foreign Asset Control is the appropriate arm of the federal government to determine legal foreign investments for all Americans.”
The offshore yuan was among the biggest decliners in emerging markets Friday, weakening by the most in a month after the publishing of the report.
