US Government Investigating BlackRock for Chinese Investments
The US government is intensifying its scrutiny of BlackRock's investment practices in China. 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 their actions are facilitating the flow of American capital into Chinese companies that pose potential risks to national security and economic stability.
Growing concerns about American investments in Chinese entities have prompted action on Capitol Hill. A congressional panel has launched probes into BlackRock and Morgan Stanley Capital International (MSCI), with lawmakers alleging their financial products facilitate investment in companies that may be contributing to China's military modernization or engaging in human rights abuses.
The U.S. Select Committee on the Chinese Communist Party of the U.S. House of Representatives sent letters to BlackRock CEO Larry Fink and MSCI CEO Henry Fernandez, demanding information about their investment strategies and risk assessments related to Chinese investments. The committee seeks to understand the extent to which American savings are being channeled into Chinese firms and the potential consequences of such investments.
The House of Representatives select committee on competing with China said on Tuesday it was investigating BlackRock and MSCI for facilitating the flow of American capital to companies included on U.S. government blacklists or otherwise implicated in activities contrary to American interests. This investigation aims to ensure that American investors are not unwittingly supporting entities that threaten U.S. national security.
A US congressional committee is investigating BlackRock Inc. and MSCI Inc. for allegedly helping to facilitate American investment into Chinese companies that the U.S. government deems problematic. The investigation is focusing on whether BlackRock and MSCI are adequately disclosing the risks associated with investing in Chinese companies and whether they are taking sufficient steps to ensure that their investments align with U.S. foreign policy objectives.
This ongoing investigation highlights the increasing tension between the U.S. and China and the growing concern about the potential risks of American investment in Chinese companies. The outcome of these investigations could have significant implications for the future of U.S.-China economic relations and the role of asset managers like BlackRock and MSCI in facilitating international investment.