BlackRock and MSCI are facing congressional probes over facilitating investments in Chinese firms flagged by US for security concerns
BlackRock and MSCI are facing a probe from lawmakers in Congress over the asset manager and the index provider's roles in funneling American investments into shares of Chinese firms that have been flagged by the US over security concerns or human rights abuses,Per the Journal, the House Select Committee on the Chinese Communist Party is seeking facts that will help determine the US's approach to China policy, including investment flows into the country.
A letter sent by the committee and seen by the WSJ states that the firms are"exacerbating an already significant national-security threat and undermining American values" by helping route American investment money into Chinese companies with security and human rights risks. According to the letter, stocks in some of BlackRock's funds or MSCI's emerging markets indexes include those of companies on US"red flag lists," some of which have helped advance Chinese military interests or have been involved in abuses in the China's Xinjiang region, where most of the country's Uyghur population is located.
The congressional panel said it found that American investors have funded 60 such companies and BlackRock has invested $429 million through five of its funds. "Like many global asset managers, BlackRock offers our clients a number of strategies to invest in or exclude China from their portfolios. 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.
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