South Dakota governor Kristi Noem is asking congress to legally require local and state governments to divest from all Chinese interests, the Washington Examiner reports.
In her letter describing China as a threat to national security, Noem outlines her concerns with the "looming threat of the Chinese communist party (CCP)."
"For this reason, I am requesting that congress pass legislation to support state and local governments to divest assets or prohibit the investment of assets in China."
"The Chinese Communist party is ramping up their efforts to purchase large components of America's food supply, including chemical companies, fertilizer companies, processing facilities, and now our nation's agricultural land," she explains further.
The move follows the governor’s decision to ban the Chinese-owned app TikTok from state-owned devices, alleging that the video streaming app has allowed the CCP to "[infiltrate] the homes of 80 million monthly active TikTok users."
FBI Director Chris Wray has previously admitted that he sees TikTok as a national security concern.
"Our nation’s intelligence community views China as the primary national security threat facing the United States of America," Noem added.
At present, approximately one-third of the South Dakota Investment Council’s portfolio still has ties to Chinese companies via an emerging markets index ETF, having already sold all of their internally managed Chinese investments. Gov. Noem is requesting that they seek alternative investments.
A bill that would create a board to investigate agricultural land purchases by foreign investors has been proposed, with the governor’s backing.
The governor has also requested that investment bank Vanguard divest itself from Chinese interests.
"I recognize that China falls under the definition of 'emerging markets' that Vanguard uses," she wrote in a letter to Vanguard CEO Mortimer Buckley. "However, with the world's second-largest GDP of approximately $18 trillion dollars, I take issue with the idea that China is an 'emerging market.' For this reason, I ask that Vanguard create an alternative emerging markets fund that does not include China."
Noem told congress that states are ready to act in the interests of national security, stating that "legislation supporting divestments from China would be a great tool to help us do that."
"If congress were to take this step, it would send a clear sign to China that their activities are not supported by the United States of America."
