The U.S. investment firm BlackRock has been investing in Chinese companies linked to the country’s military and surveillance apparatus, including efforts to target its ethnic minority populations in Xinjiang.
“Betting on China,” a new ad released by Consumers’ Research this week, calls into question BlackRock’s investments in China and its connections to Chinese military and surveillance firms.
Keith Krach, the former U.S. Under Secretary of State for Economic Growth, Energy, and the Environment under President Donald Trump, shared the ad in a LinkedIn post on Thursday, with the caption, “Important ad from Consumers’ Research. Americans may not know that investment firms like BlackRock are helping Communist China fund its military and human rights abuses, like the #UyghurGenocide. Why? Is it because Chinese companies are too big to fail or some conflict of interest?”
As Under Secretary of State for Economic Growth, Energy and the Environment, Krach oversaw the State Department’s “Clean Network” campaign, which was an effort to get dozens of countries and telecommunications companies to avoid partnering with Chinese telecoms companies like Huawei and to counter China’s overall masterplan to control 5G communications networks around the world.
Consumers’ Research and Krach aren’t the first to point out BlackRock’s support of China.
In April, The American Prospect (TAP) reported BlackRock is an investor in Hikvision and iFlytek, two Chinese firms involved in the surveillance industry that were both placed on the U.S. Department of Commerce’s entity blacklist in October 2019. In announcing its blacklist decision, the Commerce Department wrote Hikvision and iFlytek are two of 28 companies “that have been implicated in human rights violations and abuses in China’s campaign targeting Uighurs and other predominantly Muslim ethnic minorities in the Xinjiang Uighur Autonomous Region (XUAR).”
According to SEC filings obtained by TAP at the time of its April report, BlackRock’s investment in Hikvision was valued at over $15 million.
“Technically, the entity list bars trading with these companies, not investing in them. But obviously, if a company is sufficiently harmful to the U.S. national interest that it should be barred from commercial relations, investing in it is even worse,” wrote TAP co-founder Robert Kuttner.
In August 2020, The Wall Street Journal reported BlackRock had received approval from Chinese regulators in the China Securities Regulatory Commission to set up a wholly-owned mutual-fund business in Shanghai, making it the first foreign-owned company allowed to conduct such business in China. Following the approval by China’s regulators, BlackRock chairman and CEO Larry Fink wrote in a letter to investors, “The Chinese market represents a significant opportunity to help meet the long-term goals of investors in China and internationally.”
While China’s regulators had given BlackRock the approval to transact this new mutual-fund business in China, U.S. investors have raised concerns that BlackRock’s investment activities in China will largely serve the interests of the Chinese government, including its military and surveillance programs.
The “Betting on China” ad cites a September 6 Wall Street Journal op-ed by George Soros, a billionaire investor and liberal megadonor. In his September 6 op-ed, Soros wrote, “The BlackRock initiative imperils the national security interests of the U.S. and other democracies because the money invested in China will help prop up President Xi’s regime, which is repressive at home and aggressive abroad.”
Responding to Soros’ critical op-ed, a BlackRock spokesperson told CNBC, “The overwhelming majority of the assets BlackRock manages are for retirement. BlackRock’s clients around the world — including many US clients — seek a broad range of investments, including in China, to achieve their retirement and other financial objectives.”
The BlackRock spokesperson added, “We believe that globally integrated financial markets provide people, companies, and governments in all countries with better and more efficient access to capital that supports economic growth around the world.”
Will Hild, Executive Director of Consumers’ Research said, “No amount of woke posturing can hide what BlackRock is really up to. The idea that an American company is taking billions of dollars and using it to bet on China’s success is extremely concerning. We cannot allow this to continue. Funneling Americans’ hard earned retirement savings to China is unsafe from both a national security and financial perspective.”
Hild also said, “We cannot let executives like Larry Fink try and tell Americans how to live while simultaneously cozying up to one of the world’s leading human rights abusers.”