Saturday, 02 Nov 2024

Americans are 'unwittingly funding' blacklisted Chinese companies, Congressional panel says


Americans are 'unwittingly funding' blacklisted Chinese companies, Congressional panel says
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A Congressional select committee is investigating BlackRock, the world's largest asset manager, and MSCI, one of the biggest providers of index funds, to determine whether they are investing Americans' savings in Chinese companies blacklisted by the US government for security and human rights issues.

The Select Committee on the Chinese Communist Party of the US House of Representatives sent letters to BlackRock (BLK) CEO Larry Fink and MSCI CEO Henry Fernandez on Monday notifying both parties that it is investigating their investments in certain Chinese companies, according to documents reviewed by CNN.

"Our review has shown that, as a direct result of decisions made by MSCI, these Americans are now unwittingly funding PRC companies that develop and build weapons for the People's Liberation Army (PLA)-the PRC's military-and advance the CCP's stated mission of technological supremacy," wrote the Select Committee's Chairman, Republican Rep. Mike Gallagher of Wisconsin, and its ranking member, Rep. Raja Krishnamoorthi, a Democrat from Illinois. The committee sent an identical letter to BlackRock.

By sending massive amounts of American money to companies linked to the Chinese military and human right abuses, the letter said, BlackRock and MSCI are "exacerbating an already significant national security threat and undermining American values."

The Committee said it found that BlackRock had invested more than $429 million across five funds into Chinese companies that "act directly against the interests of the United States."

They also said that they identified at least 40 companies listed on the MSCI indexes that are designated on governmental red-flag lists.

"The majority of our clients' investments in China are through index funds, and we are one of 16 asset managers currently offering US index funds investing in Chinese companies," BlackRock said in a statement to CNN. "With all investments in China and markets around the world, BlackRock complies with all applicable US government laws. We will continue engaging with the Select Committee directly on the issues raised."

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