Texas Halts Investments in China Amid Rising Tensions

The governor of Texas has instructed state agencies to cease investments and sell assets in China due to financial and security risks, seen as exacerbating U.S.-China tensions. Texas continues to avoid aligning state investments with firms embracing environmental and social governance principles, affecting global markets.

Texas Governor Greg Abbott has issued a directive to state agencies, instructing them to halt any investments in China and to divest current assets, citing security concerns related to China's ruling Communist Party's aggressive actions. This move highlights increasing tensions between the U.S. and China, impacting global capital flows.

The letter, dated November 21 and posted online, commanded investment entities like the Teacher Retirement System of Texas, which manages $210.5 billion, to avoid further investments in China. Abbott's proactive strategy follows Texas's trend of restricting dealings with Wall Street firms supporting environmental, social, and governance principles.

Abbott had previously directed the University of Texas/Texas A&M Investment Management Company to divest from China. Consequently, Chinese markets, including the Shanghai Composite, experienced a downturn, reflecting market sentiment tied to stalled economic stimulus expectations.

(With inputs from agencies.)