--- BlackRock and MSCI Face Congressional Investigation Over Investments in Blacklisted Chinese Military Companies
A Congressional select committee is investigating BlackRock, the world's largest asset manager, and MSCI, one of the biggest providers of index funds, for their investments in Chinese military companies that have been blacklisted by the United States. Americans' retirement funds are unwittingly fueling these Chinese firms, which the U.S. has flagged over security and human rights issues, according to lawmakers.
The House Committee on China has launched an investigation into BlackRock and MSCI for investing in blacklisted Chinese companies. The committee is concerned about the unwitting support provided by American investors to these companies, given the security and human rights concerns associated with them.
U.S. investments in approximately 50 blacklisted Chinese companies are now under scrutiny from the House of Representatives Select Committee on China. The committee aims to assess the extent of American investment in these companies and understand the potential risks associated with such investments.
The Biden administration's new technology restrictions on Chinese companies are considered just the beginning of a long-overdue correction in terms of regulating investments in companies linked to the Chinese military. The investigation into BlackRock and MSCI is part of this broader effort to ensure that American investments align with national security interests.
The chairman of the U.S. congressional committee on China has indicated the possibility of issuing subpoenas for executives from BlackRock and MSCI. The committee seeks to examine the decision-making process behind these investments and determine whether there were any violations of existing laws or regulations.
Analysts believe that BlackRock and MSCI's decision to sell out of these investments was primarily driven by their long-term poor performance. However, it remains to be seen whether this move will alleviate concerns regarding the inadvertent financing of blacklisted Chinese companies.
The investigation into BlackRock and MSCI by the congressional committee highlights the need for increased scrutiny and regulation of investment decisions, particularly when it comes to companies with potential national security implications. It raises questions about the responsibility of asset managers and index providers in ensuring that investors are aware of the risks associated with their investments.
If found guilty of facilitating American investment into blacklisted Chinese companies, BlackRock and MSCI could face significant legal and reputational consequences. The investigation serves as a warning to other asset managers and index providers to carefully consider the implications of their investment decisions and ensure compliance with relevant regulations.
In conclusion, the congressional investigation into BlackRock and MSCI's investments in blacklisted Chinese military companies underscores the importance of aligning investment practices with national security interests. The outcome of this investigation could have far-reaching implications for the asset management industry and the regulation of investments in companies associated with the Chinese military.
