South Dakota government Kristi Noem has demanded an immediate review of state investments for any national security threats linked to the Chinese government.

In a statement on December 8, Noem said, “South Dakotans deserve to know if their taxpayer dollars are being invested to benefit the Chinese Communist Party.”

Upon the perception that any Chinese company can pose risks, Noem wanted the South Dakota Investment Council to review all their stakes in 7 days. The council will have to move the funds elsewhere if any investments in Chinese businesses are found.

Noem reiterated, “It is not possible to make good deals with bad people.” 

As the Associated Press reported, the Chinese government has tried to install small committees filled with Chinese Communist members among private companies in recent years. The report said it remains unclear how far these cells have gotten control over a firm’s conduct. 

Nikkei Asia reported in October that Chinese corporate law demands companies “to provide necessary conditions for the activities of party association.” At the time, the publication found that such cells had been established in more than two-thirds of the mainland-listed companies whose shares can be traded by international investors in Hong Kong. China has also pushed the cells to be established in subsidiaries of foreign-owned companies.

Still, AP News noted that Noem’s directives might achieve much. China did not appear on a list of the top ten nations that the Investment Council has funded in the most recent annual report
The state legislature formed the South Dakota Investment Council in 1971 to oversee the investments of South Dakota’s financial assets. It oversees funds for the state retirement system, which benefits public employees, the school and public lands trusts, and the healthcare trust fund.

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