Thank you, and thank you to the committee for inviting me to present today.
I come to this issue from the perspective of one who has tracked Chinese technology developments for decades, but I have also closely followed human rights issues in China since 1979, when I went to the Xidan democracy wall in Beijing to talk to the workers and the students there.
China is now using advanced technology surveillance equipment against the Uighur people, but also in Tibet and Mongolia and against members of Christian “house churches” across China.
What would Canadians think if they knew that the CPPIB has more than a billion of their dollars invested in Tencent, which owns WeChat, which is being used to monitor and censor the communications of Uighurs, Tibetans and zero-COVID protesters?
The company Alibaba makes video cameras that look down from every corner in the crowded cells of Uighurs in indoctrination camps and prisons. What would those Uighurs think if they knew that Canadian pensioners had invested in those video cameras? Its software is also designed to pick a Uighur out of a crowd.
Neusoft is a Chinese tech firm that was asked to build a system to target journalists, migrant women and international students so that public security authorities can quickly locate them and obstruct their work. Both CPPIB and the Caisse de dépôt have investments in Neusoft.
This committee learned last week that CPPIB invests in two Morgan Stanley indices that include 13 companies making money from the genocide. The board says they don’t invest directly in those companies, but they have said they do invest in index funds, giving exposure to as many as 10,000 securities in very small amounts—only a million dollars or two, and sometimes even smaller. Those are their words.
We’re often told by CPPIB that the board invests in companies and not in countries, but when Chinese authorities ask a company to design even more repressive surveillance equipment to use against certain categories of citizens, that argument falls apart. Companies in China fall under government direction and not just market forces, and they now all have Communist Party committees that are increasingly active in decision-making.
I have several recommendations.
First, we need to have an entities list, as the U.S. has, prohibiting Canadian investment in named Chinese genocide and forced labour companies. It does not need to be the same list as the Americans have, but it must be focused on companies serving the Uighur genocide and the surveillance state.
Second, pension and university funds in Canada must be transparent about their investments in China. For example, if a Chinese surveillance company wants a confidentiality agreement, CPPIB respects that, and it does not publish information that is commercially sensitive in some circumstances. These practices obscure investments that are harming human rights.
Third, pension funds must be willing to engage in discussion with civil society about their investments. They may say they use an ethical lens, but what informs that lens when company policy forbids the investment managers from meeting Canadians to hear their concerns first-hand? Any such meetings are with a communications officer, seemingly to keep a PR lid on the discussion.
Fourth, while private investors may pursue the highest return independent of ethics, for a Crown corporation investing public monies there is a higher bar, especially when the government identifies human rights as a principal concern. Its code of ethics should be mandated by the government, whether federal or provincial.
Finally, I would hope that pension funds and universities are now looking more broadly at the economic and geopolitical risks with Chinese investments, including in the tech sector, real estate, unexpected regulations and threats against Taiwan. I believe that our pension funds and university trust funds are smart enough to make the transition that would put themselves on the right side of Canadians’ ethics as well as their wallets.
Thank you.