BlackRock and MSCI, two major players in the financial world, are under investigation by a U.S. congressional committee for allegedly funneling American investments into Chinese companies blacklisted by the U.S. government. The Select Committee on the Chinese Communist Party has accused both firms of facilitating massive flows of American capital into dozens of Chinese companies with ties to human rights abuses, including forced labor in Xinjiang and the advancement of China’s military.
The Congressional committee’s review has found that BlackRock alone has invested over $429 million into blacklisted Chinese companies, although the true scale of the investments is believed to be much larger. The committee sent letters to the leaders of both BlackRock and MSCI, criticizing their inclusion of these companies in their indexes, which ultimately results in capital being directed towards entities contributing to China’s techno-totalitarian surveillance state and the alleged genocide of Uyghur Muslims.
The companies implicated in the investigation include Qihoo 360, known for its software, and BGI Genomics Co. Ltd. These companies have been tied to China’s human rights abuses and the expansion of its surveillance state. However, it’s important to note that BlackRock and MSCI have not been accused of breaking the law in their investment activities.
This investigation into BlackRock and MSCI follows a previous inquiry by the same committee into the investment activities of four American venture capital firms. The venture capital firms were also accused of contributing to China’s military advancements and human rights violations. The committee’s probe into the connection between the U.S. investment world and the Chinese Communist Party appears to be an ongoing effort.
As of now, neither BlackRock nor MSCI has commented on the investigation. The accusations made by the Select Committee on the Chinese Communist Party highlight the concern that American investments may inadvertently support companies involved in activities that contradict American values and pose national security risks. The investigation will likely be closely watched to determine if any further action will be taken in response to these allegations.
In conclusion, BlackRock and MSCI, the world’s largest asset manager and index provider, respectively, are facing scrutiny from a U.S. congressional committee for their role in channeling investments into Chinese firms with connections to human rights abuses and China’s military advancement. The investigation aims to shed light on the potential consequences of such investments and their implications for American values and national security.
