BlackRock in China: Nuclear buildup underwritten in part by leading Wall Street firm, report says

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BlackRock, a major Wall Street firm, is investing millions of dollars in an estimated 30 Chinese military-linked companies currently sanctioned by the U.S. government, according to a think tank report prepared for Congress.

The New York Stock Exchange is shown on Tuesday, March 19, 2024, in New York. Stocks are opening lower as some of Wall Street’s mania around artificial-intelligence technology cools.

Noting that BlackRock has said it does not do business with firms in China producing nuclear arms, the report concludes: “The reality is that BlackRock holds stock in Chinese companies pursuing an aggressive buildup of nuclear warheads meant to hold United States territory at risk.” BlackRock is regarded as among the most powerful companies and its giant asset fund “gives BlackRock influence over thousands of companies worldwide,” the report said.

While both BlackRock and MSCI say they promote ESG agendas, the companies “willfully undermine congressional intent to protect defenseless Uyghurs by investing in companies involved in the ongoing oppression,” the report said. CGN Power’s parent, China General Nuclear Power Group, is a military-controlled company that was sanctioned by the U.S. government in 2019 for allegedly trying to steal nuclear technology and materials from the United States, the report said. BlackRock funds invested $142 million in CGN Power, according to the report.

The committee report said MSCI, described as the world’s leading index provider, and BlackRock, dubbed the world’s largest asset manager, funneled $3.7 billion and $1.9 billion, respectively, into banned Chinese companies. The report is based on publicly available information that compared BlackRock’s financial holdings in China with sanctions lists published by the Treasury and Commerce Departments, and the congressionally mandated list of Chinese military companies produced by the Pentagon.

“This symbiotic relationship allows Wall Street to pull management fees out of China’s multi-trillion-dollar investment market while Beijing channels billions of dollars to companies that support the PLA,” Mr. Bernier said. The CPA report contended that BlackRock has been able to circumvent U.S. sanctions law by offering investment products through foreign subsidiaries, including Hong Kong-based BlackRock Asset Management North Asia Limited. In mainland China, BlackRock is represented by BlackRock Fund Management Company, a wholly-owned mutual fund company located in Shanghai.

 

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