Report: Wall Street to channel billions of funds into blacklisted Chinese companies.

A bipartisan investigation by the United States House of Representatives has found that American financial institutions have channeled billions of dollars into Chinese companies, fueling the strengthening of the CCP’s military power, authoritarian rule, and genocide against the Uighur people.

On Thursday, April 18th, the latest investigation report released by the US-China Economic and Security Review Commission revealed that Wall Street had used billions of dollars from US retirement savings and other investments to purchase stock in index funds, with over half of the companies being blacklisted Chinese firms.

The report, announced by Republican chairman Mike Gallagher and Democratic ranking member Raja Krishnamoorthi of the US Senate Committee on US-China Strategic Competition, focused on the world’s largest asset management company, BlackRock, and stock market index provider MSCI.

The shocking results of the investigation showed that in 2023, major financial institutions provided over $6.5 billion to 63 Chinese companies already blacklisted or on the restricted list by the US government. MSCI alone funneled $3.7 billion into these entities, while BlackRock’s investments in these companies amounted to at least $1.9 billion, along with other major index providers and asset management companies injecting billions of dollars into these blacklisted entities.

While the committee lacks legislative authority, it urged US lawmakers in the report to restrict such capital flows amidst intensifying US-China competition. The report noted that the activities were not illegal, which may come as a surprise to many Americans.

Both BlackRock and MSCI asserted that they had not violated any laws and maintained that they had minimal discretion in excluding Chinese entities from index funds independently. MSCI facilitates global investments but is not an investment company itself.

As geopolitical tensions escalate and China’s economy weakens, US investors are steadily withdrawing from China, with some large pension funds reducing investments or halting expansion plans in the country.

Through investments in index funds, US financial institutions funneled $6.5 billion to approximately 63 Chinese companies targeted by the US, with over $5.3 billion used to support CCP military enterprises.

These enterprises include AVIC, a major manufacturer of military aircraft for the CCP; BGI, which under CCP military support developed a new infant genetic test, collecting genetic data from millions (including US citizens) without consent; CSCEC, a state-owned enterprise and key player in the CCP’s Belt and Road Initiative, constructing military bases, facilities, and infrastructure, including the missile center at Jiuquan Satellite Launch Center and internet security company Qihoo 360 supporting CCP surveillance in Xinjiang.

While companies like BlackRock purchased stock in blacklisted Chinese companies through index funds and MSCI did not directly channel funds to them, the committee believed that these companies redirected American funds to related entities.

The Wall Street Journal quoted responses from MSCI and BlackRock regarding the investigation report. MSCI stated it would review the committee’s report and recommendations, emphasizing compliance with all applicable laws and regulations and readiness to reflect any necessary changes in its indices due to potential shifts in US laws regarding investments in Chinese companies.

BlackRock confirmed compliance with applicable US laws as highlighted by the committee and stressed the need for clear regulatory guidelines for American investors through joint efforts by Congress and the government.

US political and foreign policy analysts suggest that as the November election approaches, President Trump’s tough stance on China will pressure the Biden administration to expedite measures such as tariffs and other trade and investment restrictions against China. On Wednesday, April 17th, Biden called for raising the crucial tariff rates on Chinese steel and aluminum products from 7.5% to 25%.

This report from the House committee comes as Congressman Gallagher, one of Washington’s staunchest critics of the CCP, nears the end of his tenure leading the committee since early 2023.

Gallagher, who secured a significant victory last month with the House passing a bill he spearheaded, forcing ByteDance, the Chinese parent company of TikTok, to relinquish ownership of the social media platform, has been a vocal opponent of the CCP.

责任编辑：任子君#