South Dakota US Rep. Dusty Johnson has introduced a bill protecting states that divert investment dollars from certain industries in China.
The proposal mirrors a law passed by Congress in 2010 against Iran.
Johnson, a member of House Select Committee on China, said his bill provides legal protections to states for investment changes and it allows fiduciaries to divest state assets from certain business in China.
Those businesses include military manufacturers, companies working in Artificial Intelligence and quantum computing, as well as companies using Uyghur Muslims as slave labor.
He said the bill gives states the flexibility to choose whether to invest in these Chinese companies.
“Even if state governments can get a good return by investing in a Chinese military company, we should not—in essence—mandate that they put their dollars there. We should give state governments the ability to decide, ‘Do I want to do this or not?’” Johnson said. “Today, they don’t have that flexibility.”
It’s a proposal Gov. Kristi Noem has urged Congress to pass for around a year, now. She immediately endorsed it immediately Thursday morning.
Last year, Noem directed the South Dakota Investment Council to review internally managed funds and whether any are invested in Chinese companies. The internal review found no funds are, and the investment council had already divested $1.4 million from three Chinese companies.
Johnson said that move could expose the state legally. His bill would change that.
“Our bill would allow them to make a decision, not just based on economics, but based on really the politics of the fact that we—from a national security perspective—do not want to invest in Chinese companies that will hurt America,” Johnson said.
Johnson said he would like to see the proposal pass as a standalone bill.
