US Investment Fund Financing China's Military Buildup

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Vanguard's emerging market fund has invested billions in PLA companies.

A U.S. asset management company is continuing to invest in Chinese companies linked to the People's Liberation Army despite growing scrutiny, a new report has revealed.The Coalition for a Prosperous America reported that the Vanguard Group has invested in 2,100 Chinese A-share companies, exposing U.S. investors to PLA's subsidiaries despite growing strategic tensions between Washington and Beijing.

Vanguard's holding of the A-shares outstrips the shares held by Blackrock's EM fund, which has holdings in 402 A-share companies. Another fund, State Street, holds stocks in 778 A-share companies in its EM funds.'There is no coherent U.S. policy on investing in Chinese publicly traded securities or private companies. The legal status of A-shares and the appropriateness of holding these equities in American investment portfolios remains an open question,' CPA said in its report.

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