On February 8, 2020, then-Secretary of State Mike Pompeo served notice on the nation's governors about the danger posed by the Chinese Communist Party's deep penetration of our state and local governments. He observed:
"The lesson is that competition with China is not just a federal issue.... It's happening in your states with consequences for our foreign policy, for the citizens that reside in your states, and indeed, for each of you."
The term "competition" in this context was a euphemism for the CCP's expansive influence operations – estimated to cost $16 billion per year – intended to subvert, otherwise manipulate and ultimately destroy our country.
It took a while, but last week, Texas Governor Greg Abbott issued a number of executive orders aimed at blocking such insidious Chinese Communist actions in his state. While they included laudable measures to "harden" its government and protect its people from CCP harassment, one action is of surpassing importance. In a letter to state agencies on November 21, Abbott declared:
"I direct Texas investing entities that you are prohibited from making any new investments of state funds in China. To the extent you have any current investments in China, you are required to divest at the first available opportunity."
For over five years, the Committee on the Present Danger: China has urged that U.S. governments at every level, private sector institutional investors and other Americans with funds in this country's immense capital markets stop underwriting our mortal enemy, the Chinese Communist Party, by financing its corporations with our pension plans, mutual funds and other investment vehicles.
With the State of Texas now precluding investments in Chinese entities, Wall Street is on notice: Its practice of sluicing capital to CCP-controlled corporations – including many directly building weapons that the People's Liberation Army is acquiring to kill Americans and other companies helping brutally to oppress the people of China – must end.
At a minimum, American investors in emerging markets must be able to screen out such "bad actors" – something the National Security Index (ticker: NSI) Exchange Traded Fund facilitates. Ideally, they will opt for "Ex-China" and "Ex-Hong Kong" options that enable diversified portfolios in actual and non-threatening developing nations, but not the world's second-largest economy, namely, the People's Republic of China and its now wholly-owned-subsidiary and cut-out: Hong Kong.
Abbott has provided a template for every other state and for the new Trump administration. We can no longer indulge in the delusion that we can prop up a regime that is not merely an economic competitor, but that has declared -- and is waging -- a "People's War" (a shared task that should unite the nation) against us.
In addition, the incoming president should adopt a strategy recommended by our country's foremost expert on the phenomenon of the "enemy within," author and filmmaker Trevor Loudon. He persuasively argues for tactics successfully employed to break up and take down other criminal enterprises like the mafia – namely, an amnesty for participants who turn state's evidence against their erstwhile co-conspirators among what the Chinese call our "captured elites." Incentivizing business leaders, journalists, academics, Hollywood mavens and politicians to come clean would likely quickly transform a dangerous fifth column inside our country into a riven and dysfunctional cohort subject to prosecution and unable to function as controlled assets of the CCP.
Abbott is to be commended for his leadership and every available encouragement offered to his counterparts across the country to follow Texas' lead.
Frank J. Gaffney, formerly acted as an Assistant Secretary of Defense in the Reagan Pentagon. He is currently the President of the Institute for the American Future and host of "Securing America" on the Real America's Voice network.
