Pension funds rethinking investments in blacklisted Chinese surveillance firm
Many Americans are unsuspecting owners as the shares are owned by index funds with little or no exploration into such factors as human rights abuses or national security.
Its video surveillance systems have won Hangzhou Hikvision Digital Technology Co. a place on the Trump administration’s blacklist for their use in wide-scale repression of the Muslim population of western China.
As a result, a number of U.S. pension funds are rethinking their investments.
A Reuters report says that Hikvision and seven other companies made the blacklist “because they allegedly enabled the crackdown that has led to mass arbitrary detentions in the Xinjiang region.”
Both the California State Teachers’ Retirement System and the New York State Teachers Retirement System owned shares as of the end of June 2018, the most recent time the data were available, with both saying they’re keeping an eye on the situation.
A CalSTRS spokeswoman is quoted in the report saying, “We are tracking the situation given this new development with the Department of Commerce’s announcement,” and a spokesman for the New York teachers’ fund is cited saying, “Our holdings are primarily held according to their weights in passive portfolios matching the MSCI ACWI ex-U.S. index, our policy benchmark. We are monitoring the situation.”
The Florida Retirement System also held shares as of the end of June.
Being blacklisted bars the companies in question from purchasing certain U.S. technologies, like software and microchips, unless they’ve been granted specific permission. The blacklist does not mean U.S. investors are barred from owning their shares.
Hikvision, however, was barred from selling its products to U.S. federal agencies lest its technology gain access to “sensitive” systems. It is appealing the blacklist, with Reuters reporting that its general manager, Hu Yangzhong, has said that the firm has also hired a human rights lawyer to defend itself.
“Hikvision has emerged as the corporate poster child for enabling Chinese human rights abuses, with its surveillance cameras visible atop the walls of detention camps incarcerating some one million or more Uighurs in Xinjiang,” Roger Robinson, president and CEO of Washington, D.C.-based risk consultancy RWR Advisory Group, is quoted saying.
He adds that many Americans are unsuspecting owners because the shares are owned by index funds with little or no exploration into such factors as human rights abuses or national security.
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