The article “Don’t Let Massive Money Managers Use American Money to Bet on China” by Michael Lucci, featured in RealClearPolicy, expresses concerns about major U.S. asset managers investing American funds in Chinese companies, which could potentially compromise national security and financial interests.
In his op-ed, Michael writes:
Seventeen state attorneys general have had enough. The AGs, led by Montana’s Austin Knudsen, recently sent a letter to six of the world’s largest money managers – BlackRock, JP Morgan, State Street, Invesco, Goldman Sachs, and Morgan Stanley –warning them that by whitewashing the obvious risks of investing in China, they could face legal action.
The AGs point out seven apparent material misrepresentations and omissions by the money managers. For example, Blackrock fails to mention that the Chinese Communist Party imposes CCP cells and militia units upon “private” companies. What the State Department describes as “genocide,” Blackrock cynically describes as “religious and nationalist disputes.” Furthermore, most Chinese companies listed on U.S. exchanges are, in reality, Cayman Islands shell companies that are probably illegal under Chinese law. BlackRock represents stakes in Cayman Islands shell companies as investments in “China” and “appears to actively conceal” these issues.
The six money managers collectively manage tens of trillions of dollars. They have ignored repeated warnings by legal experts, hedge fund managers, activist groups, and federal leaders. When Maria Bartiromo and George Soros agree that your fiduciary malfeasance harms national security, it’s time to rethink your investment strategy.
Perhaps not coincidentally, Blackrock gained access to Chinese savers mere weeks after they began hocking Chinese stocks to American savers. In 2021, Blackrock “abruptly reversed course on prior advice and made the disastrous recommendation that worldwide investors increase their investments in China.” The AGs view this as evidence of potential mixed motives to curry favor with the CCP in exchange for market access, a potential violation of fiduciary duty to their clients. Since then, BlackRock’s China ETF is down 30% while the MSCI all-world index is up 25%.
In financing Beijing’s war machine, American asset managers help China build a world-class military and give Beijing trillions in leverage over the American economy, thereby empowering and emboldening the CCP in its quest to dominate East Asia.
Read the full text of Don’t Let Massive Money Managers Use American Money to Bet on China at RealClearPolicy.
