China Committee Chairs Slam Funding of Blacklisted Firms


A new report from the House Select Committee on China found that US financial institutions have facilitated investment of more than $6.5 billion to 63 Chinese companies that the US government has red-flagged or blacklisted for advancing Beijing’s military capabilities or supporting its human rights abuses.

The report was released Thursday by outgoing Chairman Mike Gallagher (R-Wisc) and ranking Democrat Raja Krishnamoorthi (Ill).

Their bipartisan investigation examined the world’s foremost index provider, MSCI, and the world’s largest asset manager, BlackRock. The investigation also included a canvass of the broader US financial industry.

According to their findings, US financial institutions are facilitating investments worth billions of dollars in Chinese companies that advance the country’s military ambitions and perpetrate human rights abuses.

Report Findings

In 2023, according to the report:

!Major financial institutions provided $6.5 billion to 63 PRC companies that the U..government has blacklisted or otherwise red-flagged because they advance the PRC’s military capabilities or support the CCP’s human rights abuses.

  • MSCI indexes alone channeled $3.7 billion to these entities.

  • BlackRock invested at least $1.9 billion in these companies.  These Chinese companies develop advanced fighter jets and nuclear weapons for the People’s Liberation Army and create the technology used to perpetrate the ongoing genocide against the Uyghur people.

    Congressional Action Needed
    “What may surprise many Americans is that the activity by US financial institutions described not illegal. It is time for Congress to act,” the lawmakers said. “The existing regulations prohibiting investment in certain Chinese companies because of national security risks or human rights violations are insufficient,” they said. “Congress must act to restrict US investment in entities tied, directly or indirectly, to the PLA, critical technology sectors, or forced labor and genocide."

According to the lawmakers, Congress specifically should pass legislation to:

  • Restrict investment in companies blacklisted by the US government, including subsidiaries, affiliates, parents and holding companies.
  •  Require US public companies to disclose key risks related to the PRC. ! Ensure the US financial system is resilient to PRC market uncertainty.

[Link to Report]


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