by Mitch Kokai
Senior Political Analyst, John Locke Foundation
China has over 700 companies in our stock and bond markets or capital markets. It has about 86 companies listed on the New York Stock Exchange, about 62 in the NASDAQ, and over 500 in the murky, poorly regulated over-the-counter market. Among these companies are some egregious bad actors. Hikvision, for example, is responsible for facial recognition technology that identifies and monitors the movement of ethnic Uyghurs. It also produces the surveillance cameras placed atop the walls of Chinese concentration camps holding as many as two million Uyghurs in Xinjiang. Both its parent company and Hikvision itself are on the U.S. Commerce Department Entity List (what many describe as the “Blacklist”).
Do any of us have the financing of concentration camps in mind when we transfer money into our retirement and investment accounts?
This sounds difficult to believe, but it is an empirical fact: the majority of American investors are unwittingly funding Chinese concentration camps, weapons systems for the People’s Liberation Army (PLA), and more. This is because the U.S. has no security-minded screening mechanism for our capital markets, which have roughly $35 trillion under management.
When it comes to screening Chinese investments in U.S. companies, we have the Committee on Foreign Investment in the United States, which was recently strengthened with the Foreign Investment Risk Review Modernization Act of 2018. Congress expanded its reach because it was properly worried about China undermining our security and stealing our technology.
Our capital markets, on the other hand, are completely unprotected.