Florida Gov. Ron DeSantis and his administration announced on Dec. 20 that they would move to take control of the state’s sizable retirement funds away from private asset managers who invest heavily in Communist China.
During a meeting with the state’s Board of Administration, DeSantis, a Republican, was joined by Florida Chief Financial Officer Jimmy Patronis and state Attorney General Ashley Moody. The motion aimed to “revoke all proxy voting authority that has been given to outside fund managers,” and was passed after being put to a vote.
According to state data, since 2016, over 5,000 proxy votes for investments have been cast. Most of these focused on “participation in corporate bankruptcy proceedings, share-owner litigation, and financial assets.”
The Epoch Times reported that Florida’s state board also approved launching a review to see how many of the state’s assets are tied up in Chinese companies and requested more transparency from fund managers as to how these assets are divided.
Florida state officials said the move was needed to ensure that fund managers “act solely in the financial interest of the state’s funds.” The measure also orders a survey of the Florida Retirement System’s investments “to determine how many assets the state has in Chinese companies with ties to the Chinese Communist Party (CCP).”
Patronis: ‘We’re entering a Cold War with China’
The move comes after Consumers Research, a conservative watchdog group, launched a major campaign accusing BlackRock of growing ties with Beijing and state-owned companies openly linked to supporting Chinese military buildup. BlackRock is the world’s largest investment company by assets under management.
“The whole experiment with China has been a big failure for the United States. I think the U.S. as a whole should be disentangling from China, but certainly our investments should be disentangling,” DeSantis said when asked about U.S. investments pouring into China, inadvertently assisting the CCP.
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Chief financial officer Patronis echoed DeSantis’ sentiments on American investments in China and pointed out concerns over the CCP’s rampant reports of human rights’ abuse against prisoners of conscience and the Uyghur Muslim community, as well as the country’s struggling economy over its big tech sector crackdown and violation of intellectual property rules.
“Some in Washington say we’re entering a Cold War with China. It seems like limiting our exposure to China is not only good for our country, but is financially prudent,” Patronis said.
China’s real estate market is also experiencing a growing crisis after real estate giant China Evergrande Group has struggled to meet its financial obligations and recently defaulted on over $300 billion in liabilities.
Evergrande has been officially declared a defaulter for the first time after it failed to make payments on two dollar-denominated bonds. Beijing has shown reluctance to bail out the company, with the People’s Bank of China (PBoC) saying that the crisis at Evergrande was caused by its “own poor management” and “reckless expansion.”