The governor of Texas has ordered its state funds to withdraw investments from China and asked all state agencies to take measures to protect themselves from the Chinese Communist Party (CCP)’s possible cyberattacks and infiltrations.
Greg Abbott, a Republican politician who has been Texas’ governor since 2015, issued three executive orders and a letter from November 18 to 21 calling on government departments, universities and state funds to cut their ties with China.
His calls came two weeks after Republican Donald Trump won the presidential election on November 5. They were announced at the same time as Abbott’s offer of 1,402 acres of land along the US-Mexico border near Rio Grande City to build facilities as part of Trump’s mass illegal immigrant deportation plan.
In recent days, Abbott has issued:
- an executive order to protect Texans (Chinese descent) from the coordinated harassment and coercion by the People’s Republic of China (PRC) or the CCP;
- an executive order to protect Texas’ critical infrastructure from threats posed by the PRC and the CCP;
- an executive order to harden state government from the malicious espionage operations of the PRC and the CCP;
- a letter to Texas state agencies directing them to divest from risky investments originating from China.
The Federal Bureau of Investigation in Houston also issued a warning to Texans on November 18 that the PRC may be targeting and harassing Chinese dissidents who speak out against the CCP in Texas.
“The CCP has engaged in a worldwide harassment campaign against Chinese dissidents in attempts to forcibly return them to China,” said Abbott. “Texas will not tolerate the harassment or coercion of the more than 250,000 individuals of Chinese descent who legally call Texas home by the CCP or its heinous proxies.”
In 2014, the Chinese government launched a covert global operation known as Operation Fox Hunt to arrest and repatriate suspects of financial crimes. However, the operation was reportedly used to arrest and harass political dissidents around the globe.
In July 2020, the Trump administration ordered China to “cease all operations and events” at its consulate in Houston, Texas within 72 hours.
The State Department said at the time that China had engaged for years in massive illegal spying and influence operations, and that those activities had significantly increased in recent years.
In retaliation, China ordered the US Consulate in Chengdu, Sichuan province to cease operations.
Critical infrastructure
On November 20, Abbott said he directed the Texas Division of Emergency Management (TDEM) and Public Utility Commission of Texas (PUC) to prepare for potential threats against Texas’ critical infrastructure from a hostile foreign government or their proxies.
“China has made it clear that they can and will target and attack America’s critical infrastructure,” Abbott said in a press release. “Just this past year, a hostile Chinese government actor targeted America’s communications, energy, transportation, water and wastewater systems, threatening our national security.”
He told Fox News in an interview that the Biden administration either does not know or does not care about the CCP’s threats to the United States’ national security.
The Wall Street Journal reported on October 5 that “Salt Typhoon,” a group of Chinese hackers tied to the Chinese government, penetrated the networks of a swath of US broadband providers including AT&T, Verizon and Lumen Technologies in September.
In December 2000, the Texas-based AT&T, China Telecom Corp and a company under the Shanghai government set up a joint venture called Shanghai Symphony Telecommunications (SST). In 2017, AT&T and China Telecom agreed to launch new services such as the Internet-of-Things (IoT) and big data via SST.
Texas is the top oil and gas state in the US, producing 42% of crude oil and 27% of marketed natural gas in 2022, according to its government’s website. It has 32 petroleum refineries (the most of any state), which can process more than 5.9 million barrels of crude oil per day (32% of US refining capacity).
Abbott said it would be a disaster if Texas, as a powerhouse of the US, had its power grid paralyzed by Chinese cyberattacks.
The Houston-based Exxon Mobil Corp, a supplier of liquified natural gas (LNG), chemicals and lubricants, has grown its China businesses through ExxonMobil (China) Investment Co Ltd in Shanghai since the late 1970s.
Halliburton, a Houston-based oil service firm, has been providing services in China since 1984. In 2014, it signed an agreement with Petrotech (Xinjiang) Engineering Co Ltd, an affiliate of the Beijing-based SPT Energy Group Inc, to establish a joint venture focused on hydraulic fracturing and production enhancement services in Xinjiang.
As of now, the Texas government has not urged private companies to leave China. Chinese commentators also do not believe that these firms will close their profit-making units in China.
A Guangdong-based columnist said Abbott is apparently doing what Trump wants to see by discouraging US investments in China. He said Texas Instruments, a Dallas-based semiconductor maker, may now feel the heat.
In May 2022, media reports said Texas Instruments disbanded its microcontroller (MCU) research and development team in China. The company stressed that there had been no layoffs.
Decoupling from China
On November 21, Abbott ordered state funds to sell their investments in Hong Kong and China. He said he had told the University of Texas/Texas A&M Investment Management Company (UTIMCO), which manages nearly US$80 billion, to divest from China earlier this year.
The Teacher Retirement System of Texas (TXRS) had $210.5 billion under management at the end of August 2024, according to its annual report. It has about $1.4 billion exposure to Chinese yuan and Hong Kong dollar assets, including $385 million worth of shares of Tencent Holdings.
Chinese commentators said Abbott’s call to sell Chinese stocks might be the reason why the Hang Seng Index and the Shanghai Composite Index fell 1.9% and 3.1%, respectively, on November 22.
In November 2023, the US Federal Retirement Thrift Investment Board (FRTIB) said it had decided to exclude Hong Kong-listed shares from the benchmark indexes for its international funds.
Future Union, a non-partisan trade organization, said last December that 74 US public pensions, including the TXRS, have allocated more than $70 billion of funds to companies in China and Hong Kong.
Yong Jian is a contributor to the Asia Times. He is a Chinese journalist who specializes in Chinese technology, economy and politics.
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Texas oil is about to lose the largest world oil importer to Russia. Smart move?
This is purely political. One might call this guy an “Isolationist.” Who will lose? The people of Texas.
small minded ppl doing small minded things …