Earlier today the Chinese Railway Construction Corporation held two initial public offerings, in Hong Kong and Shanghai, and raised over $5.4 billion to fund construction projects. Yale University contributed $50 million from their endowment as one of the nine “cornerstone investors” in the IPO.

China Railway Construction Corporation is a state owned company that is responsible for building a controversial railroad between Tibet and Beijing. The Lhasa-Beijing railroad was subject to major opposition by Tibetan exile and human rights groups, as it has been used as a major funnel to bring Chinese migrants into Tibet, part of a continuation of China’s policy of population transfer to dilute the percentage of Tibetans in their own land. The CRCC is currently planning an extension to create another major link between Lhasa, Tibet’s capital, and China, a move that will further increase the population transfer into Tibet. The other major beneficiary of the Lhasa-Beijing railroad, incidentally, has been the People’s Liberation Army. The PLA has more troops stationed in Tibet than any other region in the PRC.

Yale’s investment in the CRCC is deeply troubling. They are doing so in contravention to common investment practices at educational institutions. Two years ago, Yale divested from their investments in Sudan, which shows that they’re not immune from pressure from human rights groups and are capable of using their huge endowment to do morally responsible things.

I know some Yale alumni are up in arms about this investment and I’m sure as the news of it grows, students and alumni will continue to let the University know what they think about their donations being used to fund a Chinese companies expansion in Tibet. The sad thing is that because Yale was involved in the IPO, their $50 million has gone directly to the Chinese government’s railway company. Divestment is crucial, but as I understand it, that’s money that Yale can’t get back.

It’s also interesting to note that Yale’s partnership in this IPO was only announced in late February, giving students and human rights groups very little time to organize against it. At the time, the Yale Investments Office declined to comment on the move to the Yale Daily News. I think that this stems from lessons learned by China about how to handle IPOs, knowing their American partners will face withering public criticism for getting in bed with businesses that exploit Tibet or hasten the cultural genocide of the Tibetan people. In 2000, the PetroChina IPO had its value reduced by $7.2 billion following a prolonged campaign by Tibetan groups, labor unions, and human rights organizations against the company. In 2004 BP divested from PetroChina, again following intense pressure from Tibetan groups like Students for a Free Tibet. The best way to avoid such pressure, judging by how Yale and the Chinese Railway Construction Corp. handled this IPO, is to announce it only days before it takes place to avoid scrutiny and response from the constituencies affected by it.

For more on the China-Tibet railway and what Tibetan groups have done to protest it over the last number of years, visit Students for a Free Tibet’s campaign site.