7 May 2024/

An alarming report by the Coalition for a Prosperous America (CPA) reveals disturbing entanglement between Wall Street and the Chinese Communist Party (CCP). The report highlights how leading financial institutions in the United States have formed partnerships with state-controlled banks in China, thereby becoming intertwined with, and increasingly beholden to, China's economic and geopolitical agenda. Following CPA’s recently-published report on Vanguard, this latest publication is centered on BlackRock. These two American asset management firms, put together, manage over 17 trillion USD in assets, with BlackRock individually responsible for 10 trillion.

 

CPA's thorough investigation reveals that BlackRock is not only funding Chinese military companies, but also those involved in China's nuclear weapons program and in oppressive campaigns against minority groups including the Uyghurs. Through its offshore subsidiaries, BlackRock holds significant stakes in entities that are sanctioned by the U.S. government, effectively circumventing U.S. sanctions laws and posing a serious threat to national security and investor protection.

Furthermore, the report sheds light on how BlackRock, along with other U.S. asset managers, utilizes indexes provided by the China Securities Index (CSI), which is under the control of the CCP, to steer investor capital towards sectors deemed strategically vital by Beijing. This collaboration between Wall Street and Beijing not only compromises the integrity of the global financial system, but directly undermines U.S. national security while benefitting China’s strategic interests.

The implications of this alignment are dire. By forming joint ventures with CCP-controlled financial institutions, Wall Street firms are becoming complicit in advancing China's bellicose ambitions and human rights abuses. The report underscores the urgent need for legislative action to safeguard national interests and investor rights, and recommends prohibiting ownership of Chinese A-shares by U.S. investors and outlawing joint ventures between U.S. financial services firms and CCP-controlled entities.

This report adds to a growing body of work on the national security implications of indiscriminate foreign capital markets investment by Western actors. In January, PSSI published its findings on how major U.S. asset managers, including BlackRock and Vanguard, are actively funding Chinese companies linked to Iran and its strategic interests.