Commentary | China Policy Initiative

To strengthen America and weaken the CCP, billion-dollar U.S. university endowments must divest from Chinese firms

Adam Savit,  May 12, 2022

America First means deploying all elements of American statecraft to protect America’s interests and ensure its security, with economic pressure representing a primary tool. U.S. investment in mainland China has the harmful effect of helping to fund a Communist Party regime that undermines our geopolitical position. In addition, our rule of law, civil society, and respect for human and individual rights set our constitutional republic apart, and it gives us the strength to confront the authoritarian communist government of China. Our most affluent and generously endowed universities are damaging our security and making a mockery of higher education and their own humanitarian pretenses by bankrolling the Chinese Communist Party (CCP).

The CCP excels at penetrating American cultural and financial institutions, and the prestigious and resource-rich American university system provides a fertile ground for both. While the CCP has invested for decades in proliferating Confucius Institutes to promote supposed Chinese cultural and language products that often amount to communist-flavored propaganda, well-heeled university endowments have been leveraged to fund nefarious projects in China, including technology ventures used to surveil, persecute and imprison millions of ethnic minorities.

More than 150 college endowments hold $1,000,000,000 or more in market value, and the vast majority do not pay any taxes. Private equity funds invest this money into ventures on their behalf that include Chinese startups that have developed facial recognition software used to surveil, identify and imprison at least a million Uighur Muslims in China’s western Xinjiang region. To address this problem, it is possible to identify adversaries among comprehensive lists that the U.S. government already maintains, such as the Entity List, Military End User (MEU) List, Unverified List, and FCC Covered List, and then institute fines and other disincentives for American college endowments who might invest in them.

Most importantly for our security, American capital funds should not be investing in entities that pose the greatest threat to our national interests and the American way of life. America First foreign policy dictates that we leverage existing means at the federal level to weaken our rivals before committing our financial or military resources abroad. We must cut off American university endowments from investing in entities that enable the criminal Communist Chinese government to keep our own country strong and to divest from the oppression of ethnic minorities within China itself.

Adam Savit serves as Senior Policy Analyst, China Policy Initiative for the America First Policy Institute (AFPI).

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