U.S. House committee flags MSCI, BlackRock for China financial investments

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A teller count China’s renminbi (RMB) or yuan notes beside U.S. dollar notes at a Kasikornbank in Bangkok, Thailand, January 26, 2023.

Athit Perawongmetha|Reuters

BEIJING– U.S. financial investments in around 50 blacklisted Chinese business have actually drawn the attention of the U.S. House of Representatives Select Committee on the Chinese Communist Party.

The committee on Tuesday revealed it sent out different letters to MSCI and BlackRock requesting more details about the companies’ assistance of U.S. financial investments into those Chinese business.

The Chinese business were blacklisted over claims of supporting China’s military or supposed human rights abuses, the committee stated. It kept in mind the preliminary evaluation did not consist of among the biggest blacklists, the U.S. Department of Commerce’s Entity List.

“The true scale is likely much larger,” the letters stated.

MSCI stated in a declaration it is examining the ask for details, which it does not “facilitate” financial investments in any nation. “MSCI indexes measure the performance of equity markets available to international investors, and comply with all applicable US laws,” the indexing giant stated.

BlackRock did not right away react to a CNBC ask for remark.

Here’s the complete list of names, which are mainly state-owned business:

Combined list of Chinese business flagged by U.S. House committee

AECC Aero-Engine Control Company Limited
AECC Aviation Power Co., Ltd.
Aerospace Ch Auv Company Limited
AVIC Aviation High-Technology Company Limited
AVIC Electromechanical Systems Company Limited
AVIC Heavy Machinery Company Limited
AVIC Helicopter Company Limited
AVIC Industry-Finance Holdings Company Limited (a.k.a. AVIC Capital Company Limited)
AVIC Jonhon-Optronic Technology Co., Ltd.
AVIC Shenyang Aircraft Company Limited
AVIC Xi’an Aircraft Industry Group Company Limited
Avicopter PLC
BGI Genomics Co., Ltd.
CETC Cyberspace Security Technology Co., Ltd.
CGN New Energy Holdings Co., Ltd.
CGN Power Co., Ltd.
Changsha Jingjia Microelectronics Co., Ltd.
China CSSC Holdings Ltd.
China Mobile Communications Group Company Limited
China National Chemical CorporationLtd (Ch emChina)
China National Chemical Engineering Group Corporation Limited
China National Nuclear Corporation (CNNC)
China National Nuclear Corporation Hua Yuan Titanium Dioxide Company Limited
China National Nuclear Power Company Limited
China National Offshore Oil Corporation (CNOOC)
China Railway Construction Corporation Limited (CRCC)
China Spacesat Company Limited
China State Construction Engineering Corporation Limited
China State Construction Group Company Limited
China State Construction International Investment Group Company Limited
China Telecommunications Corporation Group
China United Network Communications Group Company Limited
CNOOC Energy & &(******************************************************************************************************************************* )(*************************************************************************************************************************************** )Limited
(****************************************************************************************************************************************************************************************************************** )(************************************************************************************************************************************************************************************************ )(********************************************************************************************************************************************************************************************************************** )Limited? CRRC Corporation Ltd.
CRRC Corporation Ltd.
CSSC Offshore & & Marine Engineering (Group) Company Limited
Dawning Information Industry Company Limited
Fujian Torch Electron Technology Company Limited
Hoshine Silicon Industry Company Limited
Inspur Electronic Information Industry Company Limited
Jiangxi Hongdu Aviation Industry (Group) Corporation Limited
North Industries Group Red Arrow Company Limited
Offshore Oil Engineering Company Limited
Qihoo 360
Semiconductor Manufacturing International Corporation (SMIC)
Xinjiang Daqo New Energy Co., Ltd.
Zhejiang Dahua Technology Company Limited
Zhuzhou CRRC Times Electric Company Limited
ZTE Corporation

Source: https://selectcommitteeontheccp.house.gov/media/press-releases/unconscionable-profit-fueling-chinas-military-select-committee-launches

The U.S. House committee approximated that 5 BlackRock funds have actually invested more than $429 million into the blacklisted names. Those business likewise represented almost 5% of the MSCI China A Index’s worth since March 1, the committee stated.

U.S.-China stress

The ask for details comes as the U.S. has actually increased its examination of monetary ties with China.

Last week, the U.S. Senate extremely backed legislation that would need U.S. companies to inform the Treasury when purchasing sophisticated Chinese innovation on nationwide security issues. An earlier variation of the legislation had actually required financial investment limitations.

President Joe Biden has actually long been anticipated to release an executive order that would limit U.S. financial investment in high-end Chinese tech. No action has actually yet been revealed.

Last month, the House committee stated it corresponded to 4 U.S. equity capital companies over their financial investments into Chinese expert system, semiconductor and quantum computing business.

The committee pointed out claims that China was utilizing such innovations for military advancement or perpetuation of human rights abuses.

Beijing has actually rejected such abuses, and released claims of “human rights violations in the United States.”