2023-08-01 12:21:41 ET
A U.S. congressional committee has requested information from BlackRock ( NYSE: BLK ) and MSCI ( NYSE: MSCI ) regarding investments their clients may make in Chinese companies that the U.S. government has blacklisted due to their Chinese military connections or human rights abuses.
In its initial review, the House of Representatives' Select Committee on the Chinese Communist Party said the firms have allowed American funds to flow into those companies, according to reporting by Reuters.
MSCI ( MSCI ) is "reviewing the inquiry," it told Seeking Alpha in an emailed statement.
"With all investments in China and markets around the world, BlackRock ( BLK ) complies with all applicable U.S. government laws," the company said on its Twitter feed. It will continue to engage with the committee on the issues raised.
The world's largest asset manager said the majority of its clients' investments in China are through index funds, and it's one of 16 asset managers offering U.S. index funds investing in Chinese companies.
U.S.-China tensions, which started to ramp up under the Trump administration, have stayed just as fraught, if not more so, under the Biden White House.
In recent months, the administration has made efforts to ease the tensions. Last month, Treasury Secretary Janet Yellen traveled to Beijing in hopes of finding some common ground for cooperation. And in June, Secretary of State Anthony Blinken went to China in an effort to improve communications between the world's two largest economies.
The congressional committee's review found that BlackRock ( BLK ) and MSCI ( MSCI ) allow for investments into dozens of blacklisted companies, Reuters reported . The inquiry was first reported by the Wall Street Journal .
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BlackRock, MSCI face congressional probe on facilitating Chinese investments