American funds are being invested in China, its companies and its communist regime through the BlackRock Investment Management Company, according to a report by Consumer's Research.
Blackrock, headquartered in New York, continues to invest state pension funds in Chinese government-owned or -supported companies despite widespread coverage of the country's mistreatment of the Uyghur population and the expansion of its surveillance systems and military presence, Consumer’s Research reported.
“I continue to firmly believe China will be one of the biggest opportunities for BlackRock over the long term, both for asset managers and investors, despite the uncertainty and decoupling of global systems we’re seeing today,” BlackRock CEO, Larry Fink, wrote in a 2020 letter to shareholders.
Among such businesses are Hikavision and iFlytek, which have been blacklisted by the United States for their connection to human rights violations against Uyghurs in the Xinjiang District.
iFlytech focuses on artificial intelligence and speech recognition and Hikavision manufactures surveillance equipment, the report stated. Other Chinese companies supported by BlackRock include Tencent, Semiconductor Manufacturing International Corporation (SMIC) and China Telecom, all of which have strong ties to the Chinese military.
According to Chinese law, U.S. investors are not permitted to directly hold shares in Chinese businesses. Instead, U.S. investors often choose to invest in Chinese shell corporations known as Variable Interest Entities (VIEs), the report stated.
Although VIEs are deemed "invalid" by Chinese law, they are still permitted to operate at the government's discretion. Additionally, Chinese companies have their own reporting guidelines, which are often controlled by the Communist Party.
BlackRock's top 10 investments for state pensions within the U.S. include: Washington, $13 billion; Florida, $10.7 billion; New York, $9.8 billion; Nevada, $9.7 billion; Nebraska, $9.4 billion; South Carolina, $9.3 billion; Oklahoma, $9.3 billion; Pennsylvania, $3.5 billion; Montana, $2.9 billion; and West Virginia, $2.1 billion.