US House committee marks MSCI, BlackRock for investments in China

BEIJING — US investments in about 50 blacklisted Chinese companies have attracted the attention of the US House of Representatives’ Select Committee on the Chinese Communist Party.

The committee announced Tuesday that it sent separate letters to MSCI and BlackRock, asking for more information about the firms’ facilitation of U.S. investments in these Chinese companies.

The Chinese companies were blacklisted over allegations of supporting China’s military or alleged human rights abuses, the committee said. It noted that the first review did not include one of the largest blacklists, the US Commerce Department’s device list.

“The true scale is likely much larger,” the letters said.

MSCI said in a statement that it is reviewing the request for information and that it does not “facilitate” investment in any country. “MSCI indices measure the performance of equity markets available to international investors and comply with all applicable US laws,” the indexing giant said.

BlackRock did not immediately respond to a CNBC request for comment.

Here is the full list of names that are primarily state-owned companies:

The US House committee estimated that five BlackRock funds have invested more than $429 million in the blacklisted names. These companies also accounted for almost 5% of the value of the MSCI China A index as of March 1, the committee said.

The request for information comes as the US has increased its scrutiny of financial relations with China.

Last week, the U.S. Senate overwhelmingly backed legislation that would require U.S. companies to notify the Treasury Department when they invest in advanced Chinese technology because of national security concerns. An earlier version of the legislation had called for investment restrictions.

President Joe Biden has long been expected to issue an executive order that would limit American investment in high-end Chinese technology. Nothing has been announced yet.

Last month, the House Committee said it sent letters to four US venture capital firms about their investments in Chinese artificial intelligence, semiconductor and quantum computing companies.

The committee cited allegations that China was using such technologies for military development or perpetuating human rights abuses.

Beijing has denied such abuses and publicly allegations of “human rights violations”. in USA.”