(July 23) Communist China is waging financial war (not too strong a term here) against the United States. So it only makes sense for the U.S. to play financial hardball in return.

In that light, Rep. Greg Murphy (R-NC) deserves applause for introducing a bill that would pressure large universities to divest from Chinese enterprises that are deemed as threats to our national security. Joining Murphy as the original co-sponsors are Reps. Brad Wenstrup (R-OH), Adrian Smith (R-NE), Lloyd Smucker (R-PA) and Darin LaHood (R-IL).

University endowments are tax-advantaged, often tax-free. A State Department letter in 2020 reported that a majority of American university endowment funds own stock in companies that are instruments of the People’s Republic of China. According to the letter, “dozens of PRC government agencies, state-owned, and notionally private corporations” have some relation to massive human rights abuses in the Xinjiang region, not to mention other nefarious activities and connections.

Also, through “Confucius Institutes” on many college campuses, along with multiple other methods, Chinese enterprises engage in intellectual property theft and financial espionage against U.S. entities — a problem against which Sen. Ben Sasse (R-NE), to his credit, has been working diligently.

For all these reasons, Murphy wants American universities to divest from Chinese outfits. His bill would target (for now) only the approximately 80 U.S. colleges and universities that boast endowments larger than a billion dollars. His bill would assess a 50% excise tax on such endowments’ investments when they are acquired and a 100% tax on “gains realized from such investments.” In other words, for all intents and purposes, it would make those investments worthless, which is exactly the point.

The bill doesn’t just vaguely ask for all Chinese companies to be targeted for divestment. Instead, the tax would apply only to investments in companies on any one of four U.S. government lists that identify entities that may “threaten the national security of the United States.” The bill, therefore, is well targeted at security risks, not at China or its people in general…. [The full column is here.]


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