U.S. Congressman Greg Murphy from North Carolina on June 9 urged U.S top universities not to invest in firms that violate human rights in China.
The representative is now drafting his legislation, the Protecting Endowments from our Adversaries Act (PEOAA), designed to cut U.S. university endowments that fund problematic Chinese firms.
A successful congressional move to prevent U.S. university endowments from investing in Chinese firms could set a precedent for future legislation. It can discourage investment from private sectors such as private equity, venture capital, or hedge funds to do so, reducing the U.S. financial sector’s dependence on the China market.
According to a press release posted on his official website, the member of the House Ways and Means Committee sent a letter to 15 U.S. private colleges and universities with the largest endowment funds. He urges them to eliminate investments in Chinese entities deemed a threat to U.S. national security. These include top educational institutions such as Harvard, Yale and Duke.
The letter wrote, “Because colleges and universities have an educational mission and receive the significant benefit of tax-exempt status, they have a moral obligation not to use their endowments to invest in companies that contribute to human rights violations and are detrimental to the national security of the United States. Endowments must not invest in entities that are supporting the imprisonment of Uyghur Muslims.”
The congressman asked these universities to examine their endowment investments to ensure that there are no such investments in U.S. restricted lists.
The congressman cited an incident where top universities invested in companies linked to human rights abuses in China. As reported by BuzzFeed in 2019, Duke, MIT, and Princeton allegedly have their endowment invested in a company linked to human rights violations against Uyghurs in the Xinjiang region.
According to Politico, the total investment of U.S. university endowments reached over 800 billion dollars in 2021. The endowments of the 15 private universities that Murphy asks for a China-linked investment review are estimated at 331 billion dollars.
Bloomberg reported in April that Harvard University’s endowment was considering cutting back on its investments in China amid political and market risks.
In addition to the above 15 educational institutions, Murphy also sent his letter to Davidson College and Wake Forest University. These two universities have more than 1 billion dollar endowments and would be subject to his PEOAA.