On Tuesday, lawmakers revealed new information on the asset management giant BlackRock and index provider MSCI engaging in investments into blacklisted Chinese companies.
The investigations, led by the United States Select Committee on the Chinese Communist Party spearheaded by Wisconsin Republican Chairman Mike Gallagher found various firms have facilitated the flow of American capital into blacklisted companies that have fueled the Communist Chinese Party’s (CCP) military advancement and human rights abuses.
“It is unconscionable for any US company to profit from investments that fuel the military advancement of America’s foremost foreign adversary and facilitate the [Chinese Communist Party’s] human rights abuses,” the Committee said.
On Twitter, the Select Committee on the CPP released a letter outlining its investigation into BlackRock, MSCI, and others who have invested millions into numerous blacklisted PRC companies that “pose national security risks to and act directly against American interests.”
The letter goes on to say that because of the decisions made by these companies, ordinary Americans are “unwittingly funding PRC companies,” which build weapons for the People’s Liberation Army (PLA) and assist China’s technological supremacy.
The second letter of the page outlined how it reviewed specific BlackRock-provided investment funds to look at where the funds went and whether they included companies on the US government blacklist.
According to the Committee, the US Department of Commerce’s Entity List found BlackRock facilities investment into “dozens of blacklisted companies.” Committee officials believe that the true scale is “likely much larger.”
Lawmakers examined investments from iShares Core MSIC Emerging Markets ETF (IEMG), iShares MSCI Emerging Markets ETF (EEM), and many others to determine whether they had investments in blacklisted PRC companies. Asset managers, including Franklin Templeton, VanEck, and WisdomTree, were found to have funds or exchange-traded funds with Chinese assets, prompting concerns from lawmakers on the Committee.
On page three of the letter, the Select Committee notes that technological firms like 360 Security Technology INC and ZTE Corporation have had their software products and telecommunications infrastructure used by the CCP to engage in espionage, repress, and crackdown opponents in Xinjiang via surveillance.
Officials also note that ZTE was “found guilty of selling restricted US phone technology to foreign adversaries like Iran and North Korea.”
In a public statement on Tuesday, BlackRock stated that it did not engage in anything wrong.
“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.”
Speaking to Reuters, a spokesperson from the Chinese embassy said that the US government was “overstretching the concept of national security and politicizing economic, trade and investment issues runs counter to the principles of market economy and international trade rules.”
Following the midterm elections, Republicans started the Select Committee on China to investigate and showcase to Americans the depth of China’s influence in the US. In the past few months, lawmakers on the Select Committee have raised issues regarding China’s control of TikTok and other social media outlets and the CCP’s infiltration of college universities.
In April, Rep. Gallagher said he would issue subpoenas for executives refusing to cooperate with its investigations into Chinese influence.