August 8, 2023
By Anjali Kochhar
The United States has initiated an investigation into BlackRock, the world’s largest asset management firm, and index provider MSCI due to their investments in blacklisted Chinese companies. The investigation comes after BlackRock’s recent application for a spot Bitcoin ETF was accepted by the Securities and Exchange Commission.
According to the House of Representatives Select Committee on the Chinese Communist Party, BlackRock and MSCI have been investing in Chinese firms that have been associated with bolstering China’s military capabilities. The concern raised by the Select Committee is that American capital flowing into these blacklisted organisations could pose a risk to national security.
In response to the allegations, BlackRock denied any wrongdoing, asserting that their investments in China, like any other country, are compliant with all applicable US government laws. They emphasised that they offer various strategies to invest in or exclude China from clients’ portfolios, and the majority of their clients’ investments in China are through index funds.
The relationship between the US and China has been strained, and this economic dispute has implications for both nations. China’s embassy spokesperson responded to the investigation, stating that overstretching the concept of national security and politicising economic, trade, and investment issues contradicts the principles of market economy and international trade rules.
The escalating dispute has also contributed to depolarisation in Eastern and Asian countries, creating opportunities for alternative currencies like cryptocurrencies to gain further prominence. Notably, BlackRock was among several companies that recently filed for a spot Bitcoin ETF.
Initially, the acceptance of the ETF filings by the Securities and Exchange Commission faced some dissension, but they eventually added them to the regulator’s dockets.
The investigation into BlackRock and MSCI’s investments in blacklisted Chinese companies reflects the mounting tensions between the US and China in economic and financial matters. As the situation unfolds, both countries will need to navigate these challenges carefully to avoid further repercussions on their economies and international relations.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.