WASHINGTON (Reuters) – The Trump administration is pressing a board charged with overseeing billions in federal retirement dollars to halt plans to invest in Chinese companies that Washington suspects of abusing human rights or threatening U.S. security.

At issue is whether administrators of the Thrift Savings Plan (TSP), a retirement savings fund similar to a 401(k) for federal employees and members of the military, should allow its $50 billion international fund to track an index that includes some China-based stocks of companies under scrutiny in Washington.

The TSP’s administrators, known as the Federal Retirement Thrift Investment Board, decided in 2017 to make the investment shift in the second half of 2020 to boost returns and have begun opening custodial accounts abroad to channel the investments.

But China hardliners in Washington have pushed back, arguing that U.S. federal employee pension dollars should not fund companies like aircraft and avionics company Aviation Industry Corp of China[SASADY.UL], that fuel China’s military build-up. They also oppose investments in Chinese companies that are under Washington sanctions for human rights abuses, such as surveillance firm Hangzhou Hikvision Digital Technology Co Ltd(002415.SZ).

U.S. Labor Secretary Eugene Scalia on Monday sent a letter to Michael Kennedy, the chairman of FRTIB, telling him to halt all steps associated with putting government employees’ money in a fund that includes stakes in Chinese companies, according to a copy of the letter seen by Reuters.

FRTIB spokeswoman Kim Weaver acknowledged the letter had been received without providing further comment.

The correspondence was sent after National Security Advisor Robert O’Brien and National Economic Advisor Larry Kudlow wrote a letter to Scalia, expressing opposition to the investment move, according to a copy of that letter seen by Reuters.

The news was first reported by Fox Business News and Bloomberg News.

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