WASHINGTON - The US State Department is asking colleges and universities to divest from Chinese holdings in their endowments, warning schools in a letter on Tuesday to get ahead of potentially more onerous measures on holding the shares.
The warning to endowments opens a new front in the Trump administration's multipronged campaign against China's government, businesses and individuals. President Donald Trump's administration has tightened limits on Chinese university students, ordering new restrictions in June that cancelled the US visas of certain graduate students and university researchers.
"These boards have a moral responsibility, and perhaps a fiduciary duty, to really look into this, to make sure their investments are clean," said Krach, former chairman of the Purdue University Board of Trustees. The flow of US pension and endowment cash into Chinese equities has boosted the success of global giants such as online retailer Alibaba Group Holding Ltd., as well as rising stars like artificial-intelligence company SenseTime Group Ltd., which is now on a list of tech companies banned from doing business in the US.