Pulling American pensions out of China isn’t just politics. It’s a moral imperative | Opinion

You would think we Americans would learn lessons from history’s most traumatic events. One obvious lesson from World War II is to be wary of countries that keep religious minorities in camps. Another lesson that was obvious well before the Civil War is that slavery is a moral abomination.

China has put a million Muslims, many of them Uyghurs, in camps in which thousands have died or disappeared, a move even the morality-free United Nations has called “genocide.” Many more Uyghurs live in fear that they are next. Of the Uyghurs in camps, tens of thousands are abused as slaves, some of them making Western products. The scene in northwestern China’s Xinjiang region is one part Nazi concentration camp and one part antebellum slave port. That we shouldn’t be part of it is as clear as the tattooed numbers on a Holocaust survivor’s wrist.

Yet apparently for the 11-member board of the Missouri State Employees’ Retirement System, these are still iffy propositions in need of more study. State Rep. John Rizzo, an Independence Democrat, voted against ending investment in China, arguing that the proposal by Missouri’s state treasurer “was clearly being done for political purposes.” He argued the board should wait for the legislature to take the lead.

Imagine being so blinded by partisan loyalty that you can’t see that marching Uyghur Muslims off to make iPhones or BMWs against their will is wrong. This is not a hard call and it shouldn’t have to wait.

If that’s not enough for you, China has political prisoners from across the ethnic spectrum, including members of the dominant Han ethnic group by the thousands. There’s mass censorship that keeps hundreds of millions docile and in the dark as they are fed a distorted nationalist diet of half-truths and outright lies. The Chinese Communist Party has crushed democracy, freedom of speech and the rule of law in Hong Kong, where they once thrived after the end of British rule. China is an economic lifeline for Russia as it slaughters innocent Ukrainians while facing the economic sanctions of the world’s united democracies. Oh, and then there is the rhetorical support for Hamas as it slaughters and kidnaps Jews.

Tell me again how you are worried that calls to sever economic ties with China are politics.

Communism makes for a bad economic partner

But let’s step back and perhaps consider a view of China guided only by greed. If making an extra buck for Missouri public employees and retirees is your only goal, investing in China is foolish. The leaders of the Kansas public employee retirement system have seen the writing on the wall and taken small steps to remove the incentive for their fund managers to invest in China.

Here’s why: Communism is by its very nature secretive and analysts the world over know to take the official statistics that come out of China with more than a grain of salt. China’s preposterous claim that it had fewer deaths from COVID-19 than the United States with nearly four times the population is only one example. As The New York Times dryly put it, “China is thought to have drastically understated the number of Covid cases and deaths.”

One danger that threatens China that its lack of transparency obscures is the amount of bad loans carried by the country’s banks. Entire cities have been built with loans to construction firms and real estate speculators, and their buildings sit empty without residents. When China is finally forced to deal with the economic restructuring that will be required to make its banking system whole again, the financial calamity it faces will make the 2009 Great Recession here seem like a bump in the road.

Another danger that is more clear is the consequences flowing from China’s old one-child rule, which lasted 36 years before finally ending in 2016. While the United States faces headwinds from an aging population as families get smaller and young people wait longer to have kids, China faces a tsunami. Its population is growing old twice as fast as America’s with a far-weaker retirement system. Moreover, China’s racist policies keep it from welcoming immigrants while America can import vibrant, ambitious young people by the millions, many of them from China.

And then there is the danger of war. China is preparing to smother the growing economic might of its democratic neighbor Taiwan, which the communists view as a renegade province. While China faces growing financial problems and a slowing economy, it is pouring more and more of its wealth into a military buildup aimed at the small island nation armed by the United States and its allies.

For several years, Western corporations have been cutting their new investments in China, with some even pulling out to shift investments toward more friendly countries in a trend called “friendshoring.” As the world teeters toward war, it is better to have your supply chain in friendly countries than in the hands of newly-minted enemies.

Investing in China is morally wrong, but just as important, it is needlessly risky as well. Missouri’s public pensions should pull their money out sooner rather than later.

This story was originally published November 29, 2023 at 6:34 AM with the headline "Pulling American pensions out of China isn’t just politics. It’s a moral imperative | Opinion."