BlackRock has been accused by the US government of supporting the Chinese military and violating human rights.
The world’s largest asset manager BlackRock and top stock index compiler MSCI are accused of facilitating American investment in Chinese companies, which the US government accuses of supporting the Chinese military and violating human rights.
BlackRock faces investigation from the House of Representatives
The Chinese Communist Party’s Elected Committee of the House of Representatives has launched an investigation into BlackRock and MSCI’s activities.
The purpose of the investigation is to gather facts that will inform US policies on China, including US capital flows. The committee seeks a review of the investments of these two companies that have led to Americans funding more than 60 Chinese companies that US agencies have flagged for security or human rights reasons.
The letters, signed by panel chairman Mike Gallagher and top Democrat Raja Krishnamoorthi, say that the diversion of American capital into such Chinese enterprises exacerbates national security threats by U.S. firms and undermines American values. The panel found that BlackRock has invested more than $429 million in such Chinese companies across five funds.
BlackRock is a company that manages more than $9 trillion in assets and entrusts millions of Americans’ savings to investments. The firm said it was collaborating with the committee to better understand their concerns by speaking directly to the committee, emphasizing that they are one of 16 asset managers that offer U.S. index funds investing in Chinese companies.
MSCI, on the other hand, selects the securities that make up the indices on which many investors base their portfolios. The firm said it was reviewing the committee’s investigation and stated that index decisions were made as a result of consultations with global market participants.
