A recent inquiry by Congress revealed that Wall Street has been channeling billions in American retirement savings and other investments into index funds holding shares of numerous Chinese companies on the U.S. blacklist, according to a report by the Wall Street Journal.
The investigation, carried out by a bipartisan House committee with a mandate to formulate U.S. strategies against China, scrutinized the activities of the world's leading asset manager, BlackRock, and index provider MSCI. Neither company provided immediate feedback when approached for comments.
The relationship between the United States and China has experienced tension over various issues, including Taiwan, the COVID-19 pandemic origins, espionage, human rights concerns, and trade tariffs. These tensions have affected economic interactions between the two largest global economies.
The House Select Committee on the Chinese Communist Party found that American financial entities invested approximately $6.5 billion in 2020 into 63 Chinese corporations identified as problematic by the U.S. government, through their stakes in index funds.
Attempts to get a comment from the committee were unsuccessful at the time of reporting.
