The TSP’s administrators, known as the Federal Retirement Thrift Investment Board, decided in 2017 to make the investment shift in the second half of 2020 to boost returns. They have begun opening custodial accounts abroad to channel the funds. But China hard-liners in Washington have pushed back. They argue that U.S. federal employee pension dollars should not fund companies like aircraft and avionics company Aviation Industry Corp of China, which supplies China’s military, as well as surveillance firm Hangzhou Hikvision Digital Technology Co Ltd, which was sanctioned by Washington for human right abuses.
They also point to heightened risk for investors, since Chinese companies do not have to comply with strict U.S. financial disclosure rules.