South Dakota governor orders review of Chinese stake in state investments

South Dakota governor has taken aim at the state's ties to China and claimed that they pose a national security threat

South Dakota Gov. Kristi Noem on Thursday called for an immediate review of the state's investments to determine if it has stakes in Chinese companies, stepping up her rhetoric against the ascendant Asian economic giant that has also emerged as a powerful rival to the United States.

The Republican governor has taken aim at the state's ties to China and claimed that they pose a national security threat. Last week, she banned the popular video-sharing platform TikTok, which is owned by Chinese company ByteDance, from being used on state-owned devices.

Noem has become increasingly comfortable using her position as governor of a rural state to wade into national and now international issues. With executive orders and statements that cater to conservative media headlines, she has made it clear that her political ambitions lie beyond South Dakota. She is seen as a potential contender for the Republican nomination for the 2024 White House.

On Thursday, her office issued a statement saying she wanted the South Dakota Investment Council, which oversees a $19 billion portfolio for the state's pension fund and other trust funds, to review its investments for ties to Chinese companies within seven days. She argued that all Chinese companies are tied to the country's Communist Party.

South Dakotans deserve to know if their taxpayer dollars are being invested to benefit the Chinese Communist Party, Noem said in a statement.

China's government has worked in recent years to exert stronger ties to companies by pushing the development of party cells, which are small committees of Communist Party members, within companies. But it's not clear how much influence the cells have on company operations, and experts say the relationship between the party and business is complicated.

Noem called on the Investment Council to propose a plan to divest from Chinese companies. Last year, the Investment Council reviewed its portfolio to determine if it had invested in Russian companies after that country invaded Ukraine, but determined that there were not any direct investments in Russian companies.

U.S. President Joe Biden last year expanded a list of Chinese companies whose shares are off-limits to American investors because of their purported links to the Chinese military and surveillance. Chinese officials vehemently objected to that move.