Page:The Elements of the China Challenge (November 2020).pdf/58

 on Major U.S. Stock Exchanges,” updated February 25, 2019, https://www.uscc.gov/chinese-companies-listed-major-us-stock-exchanges.

Josh Rogin, “Washington Presses Wall Street to Solve its China Problem,” opinion, Washington Post, June 6, 2019, https://www.washingtonpost.com/opinions/2019/06/06/washington-presses-wall-street-solve-its-china-problem/; Public Company Accounting Oversight Board, “PCAOB Enters into Enforcement Cooperation Agreement with Chinese Regulators,” press release, May 24, 2013, https://pcaobus.org/News/Releases/Pages/05202013_ChinaMOU.aspx; and Jay Clayton, Wes Bricker, and William D. Duhnke III, Statement on the Vital Role of Audit Quality and Regulatory Access to Audit and Other Information Internationally – Discussion of Current Information Access Challenges with Respect to U.S.-listed Companies With Significant Operations in China, U.S. Securities and Exchange Commission, December 7, 2018, https://www.sec.gov/news/public-statement/statement-vital-role-audit-quality-and-regulatory-access-audit-and-other.

Belgium invokes privacy laws. Every other country complies.

In a case from 2019, the Commerce Department blacklisted Hangzhou Hikvision Digital Technology Co. (Hikvision) — a Chinese state-directed “big brother” surveillance company complicit with China’s human rights abuses against over one million Uyghurs in Xinjiang — on Commerce’s banned Entity List. See “Addition of Certain Entities to the Entity List,” 84 FR 54002, Federal Register, October 9, 2019, https://www.federalregister.gov/documents/2019/10/09/2019-22210/addition-of-certain-entities-to-the-entity-list. Yet many prominent state pension funds — such as the California State Teachers’ Retirement System (CalSTRS), the New York State Teachers Retirement System (NYSTRS), the Florida Retirement System (FRS) — held active investments in Hikvision. See Svea Herbst-Bayliss and Tim McLaughlin, “U.S. pension funds took positions in blacklisted Chinese surveillance company,” Reuters, October 15, 2019, https://www.reuters.com/article/us-hikvision-pensions-focus/u-s-pension-funds-took-positions-in-blacklisted-chinese-surveillance-company-idUSKBN1WU191; “Hikvision: US pension funds invest in China ‘Big Brother’ firm,” BBC News, March 29, 2019, https://www.bbc.com/news/world-us-canada-47753085; and RWR Advisory Group, LLC, “Chinese ‘Bad Actor’ Enterprises in State Public Pension Systems,” January 29, 2020. U.S. investors also may be passively investing in Hikvision through exchange traded funds (ETFs) or mimicking major index providers that include Hikvision and other deeply problematic Chinese firms. Examples of major index providers, which have included, as constituents, securities for Chinese companies with links to China’s military modernization, espionage, and human rights abuses, are MSCI China All Shares Index, MSCI Emerging Markets (EM) Index, MSCI ACWI Index, MSCI ACWI ex-U.S. Index, FTSE Global Equity Index Series (GEIS). See RWR Advisory Group, LLC, “Chinese ‘Bad Actor’ Enterprises in State Public Pension Systems.” In another case, Aviation Industry Corporation of China (AVIC) and its subsidiaries are helping China’s military modernization, designing and supplying the Chinese military with advanced aircraft, unmanned aerial systems, and airborne weapon systems that threaten the U.S. military. See “Listed Subsidiaries,” website of AVIC, accessed May 11, 2020, https://www.avic.com/en/aboutus/listedsubsidiaries/index.shtml. Some state pension funds — such as the California Public Employees’ Retirement System (CalPERS) — have actively invested in AVIC subsidiaries, and many more state pension funds passively invest in AVIC subsidiaries through ETFs or by mimicking major index providers. See CalPERS, 2018-19 Annual Investment Report for Fiscal Year Ended June 30, 2019, https://www.calpers.ca.gov/docs/forms-publications/annual-investment-report-2019.pdf and RWR Advisory Group, LLC, “Chinese ‘Bad Actor’ Enterprises in State Public Pension Systems.”

It is worth noting that Yu “Ben” Meng, who until recently served as chief investment officer of CALPERS, reportedly participated in the Thousand Talents Program. In October 2017, People’s Daily reported that an earlier employer — the State Administration of Foreign Exchange (SAFE), a government agency regulates China’s foreign-exchange activities — hired Yu through TTP in November 2015. See Wu Chuqi, 为国家用好每一笔外汇（海归人才创新创业风采录）[“Make good use of every foreign exchange for the country (returned Rh