Congressional Committee Investigates BlackRock and MSCI : A congressional committee is looking into BlackRock, the biggest money manager, and MSCI, the most prominent company making index funds. They want to know if these companies put money into Chinese businesses that the US government thinks hurt security and human rights. Index funds, which are like stocks, are made by MSCI, a big company. BlackRock is more giant than Vanguard.
On Monday, CNN got letters from the US House Select Committee on the Chinese Communist Party to the CEOs of BlackRock (BLK) and MSCI. The group told both guys they were being looked into for working with Chinese businesses.
“Our investigation found that because of MSCI’s choices, these Americans are now unintentionally helping Chinese companies that make weapons for the People’s Liberation Army (PLA), which is China’s military, and helping the Chinese Communist Party (CCP) reach its goal of technological dominance,” said Chairman Mike Gallagher, a Republican Representative from Wisconsin, and Ranking Member Raja Krishnamoorthi, a Democrat Representative from Illinois. Gallagher and Krishnamoorthi both live in the state of Wisconsin. The same group term was used. The message adds that BlackRock and MSCI are funding the Chinese military and human rights violators. American opinion opposes this national security danger.
The Committee discovered that BlackRock invested $429 million in five Chinese company funds. This hurts America. They discovered 40 MSCI equities that concerned the government. BlackRock told CNN that the majority of its China investors use index products. We are one of sixteen American investment firms that sell Chinese company assets. BlackRock observes US laws in China and elsewhere. The Select Committee will discuss issues.
MSCI was silent.
China banned gallium and germanium exports last month. Computer chips need these two materials.Last October, Vice President Joe Biden made it illegal for Chinese companies to buy complex technology and equipment needed to make computer systems without permission.
The Select Committee on the Chinese Communist Party was formed at the start of this year. It can’t set regulations but can compel individuals to get up and deliver policy.Last month, the Committee launched a formal probe into US venture capital companies to learn how China funds its AI and semiconductor initiatives.
Gallagher will demand their information if leaders don’t cooperate with committee investigations. They warned in the letters that these firms may have spent more than they claimed