A U.S. House committee is launching a probe into the largest asset management company in the world concerning the flow of capital out of the U.S. and into the People's Republic of China.
The House Select Committee on the Chinese Communist Party sent a letter Monday to BlackRock asserting that the asset management company has invested more than $429 million in Chinese companies "that pose national security risks to and act directly against the interests of the United States."
The committee launched a similar probe into MSCI Inc., a major stock market index-compiler, also accused of facilitating investment into Chinese Communist Party-affiliated corporations.
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Neither company has not been accused of breaking the law with its investment practices.
"Like many global asset managers, BlackRock offers our clients a number of strategies to invest in or exclude China from their portfolios. The majority of our clients’ investments in China are through index funds, and we are one of 16 asset managers currently offering US index funds investing in Chinese companies," BlackRock told FOX Business in a statement.
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BlackRock has just over $9 trillion in assets under management.
"With all investments in China and markets around the world, BlackRock complies with all applicable U.S. government laws. We will continue engaging with the Select Committee directly on the issues raised," BlackRock added.
In addition to security risks posed by investment in CCP-adjacent entities, the House committee also alleges that large amounts of U.S. capital is being directed toward Chinese companies with records of human rights abuses.
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"It is unconscionable for any U.S. company to profit from investments that fuel the military advancement of America’s foremost foreign adversary and facilitate human rights abuses," the committee wrote in a letter to BlackRock CEO and Chairman Larry Fink.
MSCI said in a statement that the company is "currently reviewing the inquiry from the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party."
