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.

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At issue is whether administrators of the Thrift Savings Plan (TSP), a retirement savings fund for federal employees and members of the military, should allow its 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. They have begun opening custodial accounts abroad to channel the investments.

But China hard-liners in Washington have pushed back. They argue that U.S. federal employee pension dollars should not fund companies like aircraft and avionics company Aviation Industry Corp of China, which supplies China`s military, as well as surveillance firm Hangzhou Hikvision Digital Technology Co Ltd, which was sanctioned by Washington for human right abuses.

They also point to heightened risk for investors, since Chinese companies do not have to comply with strict U.S. financial disclosure rules.

U.S. Labor Secretary Eugene Scalia on Monday sent a letter to Michael Kennedy, the chairman of FRTIB, telling him to put a stop to efforts to implement the investment change, according to a copy of the letter seen by Reuters.

The investment shift "would place millions of federal employees, retirees, and service-members in the untenable position of choosing between forgoing any investment in international equities or placing billions of dollars in retirement savings in risky companies that pose a threat to U.S. national security," Scalia wrote. "At the direction of President [Donald] Trump the board is to immediately halt all steps" associated with the investment, he added.

FRTIB spokeswoman Kim Weaver acknowledged the letter had been received, but provided no further comment.

The correspondence was sent after National Security Adviser Robert O`Brien and National Economic Adviser Larry Kudlow wrote to Scalia expressing opposition to the investment move, according to a copy of that letter seen by Reuters. It cited "significant and unnecessary economic risk" of investing in Chinese companies," noting "the possibility of future sanctions will result from the culpable actions of the Chinese government" with respect to the spread of the deadly coronavirus.

Trump has accused Beijing of failing to alert the world to the severity and scope of the virus, which has killed over 80,0000 Americans and was first reported in the city of Wuhan, China late last year. China has denied the allegations.

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

The letters come amid mounting pressure on the White House to stop the investment move. Reuters reported last month that lawmakers and former officials were making a last-ditch push to halt the plan, via letters and calls from Republicans and a sharply worded memo shared with White House Chief of Staff Mark Meadows. Legislation to prevent the change last year languished in Congress.

Earlier this month, the White House named three nominees to sit on the FRTIB, which could have paved the way for a reversal of the investment decision. But it is unclear when their confirmation processes will move forward.

Roger Robinson, a former White House official in the Reagan administration who has fought to halt the investments in Chinese companies, praised the move. "The White House letter ending this TSP debacle implicates directly the broader issues of Chinese corporate bad actors in our capital markets and noncompliance with federal securities laws," he said.

Some investors see the move as a logical way of punishing China amid rising tensions over the coronavirus.

"If this administration wants to make China the boogeyman… instead of another increase in tariffs that would end up hurting consumers already under pressure, you use other tools like limiting the number of investments U.S.-based institutions can have in the Chinese system," said Patrick Esteruelas, head of research at New York-based Emso Asset Management.

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Trillions of dollars worldwide passively track benchmarks that are compiled by third-party index providers based on a range of criteria, including companies’ market capitalization, as opposed to fund managers picking the individual stocks.