A US Congressional committee is conducting an investigation to determine whether investments by US citizens in financial institutions are indirectly funding Chinese companies that have been targeted by US government sanctions.
According to CNN, the investigation specifically focuses on BlackRock, the world’s largest asset manager, and MSCI, a leading provider of investment funds. The Select Committee on the Chinese Communist Party of the US House of Representatives has sent letters to BlackRock CEO Larry Fink and MSCI CEO Henry Fernandez notifying them of the ongoing investigation.
Through these letters, the committee expressed its concern that investments made through these companies may be indirectly benefiting Chinese companies that develop weapons for the People’s Liberation Army of China and further the country’s quest for technological supremacy.
Documents obtained by CNN revealed that BlackRock invested more than $429 million in five funds related to Chinese companies. These investments would be contrary to the interests of the United States. In addition, the investigation identified more than 40 Chinese companies on MSCI’s investment indices that are also “blacklisted” by the US government.
The letter sent by the committee highlighted that the allocation of these financial resources in funds with companies linked to the Chinese armed forces and associated with alleged human rights violations could pose a significant threat to the national security of the United States, in addition to undermining the country’s fundamental values.
In response to the allegations, BlackRock released a statement stating that it “complies with all applicable US laws” regarding cross-border investments. MSCI stated that it is “reviewing the committee’s request for information” and reiterated its “commitment to legal compliance ”.
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