The Governor of Texas has ordered all state agencies in Texas to cease investing in China, and to sell their assets as soon as they can, citing security and financial risks. This is a sign that rising U.S. – China tensions are beginning to affect global capital flows.

Gov. In a letter dated November 21 that was posted on his website, Governor Abbott wrote to agencies in the state. Greg Abbott, Republican, stated that “belligerent” actions of China’s ruling Communist Party increased the risks for Texas’ investments in China and told investors to leave.

I direct Texas investment entities that it is prohibited to make any new investments in China. “If you currently have investments in China, it is your responsibility to divest them as soon as possible,” he said.

Texas is taking a more activist approach to its investments. Previously, it had restricted public pension funds’ dealings with Wall Street companies that adhered to environmental, social, and governance principles.

According to the annual report, the Teacher Retirement System of Texas had $210.5 Billion under management by the end of August.

Tencent Holdings, valued at $385 million, is the TRS’s 10th largest holding.

Abbott wrote that he told the University of Texas/Texas A&M Investment Management Company, which manages over $80 billion in assets, earlier this year to divest its investments from China.

A request for comment made outside of business hours was not immediately responded to by either UTIMCO or Texas Teachers.

The Shanghai Composite fell 3% on Friday. In Hong Kong’s afternoon trading, Tencent shares fell about 2% in line with the wider market.

Dealers reported that Hong Kong’s trade was light and the mood already depressed, as Chinese authorities disappointed in their promises of economic stimulus. However, the news only added to the negative mood.

“Even though it is obvious that the U.S. will continue to pursue policies that are hostile towards China, we still have no idea how many more there will be.” …. Steven Leung is the executive director of UOB Kay Hian, a Hong Kong brokerage.