On February 6, a coalition of 17 Republican state attorneys general accused major U.S. asset management firms, including BlackRock and State Street, of inadequate disclosure regarding their investments in China.
In a letter dated Thursday, the coalition claimed that these companies were downplaying risks related to China, such as its designation as a "foreign adversary" of the U.S. and its "apparent intention to invade Taiwan."
The criticism was predominantly directed at BlackRock, the leading issuer of exchange-traded funds that track emerging market equities, as documented by VettaFi's ETF Database.
This critique emerges amidst escalating tensions between the world's two largest economies, which will challenge asset managers as they navigate an increasingly intricate geopolitical environment.
U.S. authorities have been pressuring investment firms with ties to China due to concerns regarding potential human rights violations and controlling the outflow of American capital into a nation accused of harboring intentions to invade Taiwan.
While Beijing refutes accusations of human rights abuses and considers Taiwan its territory, Taiwan's government disputes these assertions.
The attorneys general pointed out gaps in BlackRock's fund disclosures related to China's alleged intentions towards Taiwan, noting that other asset managers also neglect this issue.
In addition to BlackRock and State Street, the coalition targeted other firms like Invesco, JPMorgan, Goldman Sachs, and Morgan Stanley.
JPMorgan, Goldman Sachs, and State Street chose not to comment, while the other companies did not immediately respond to requests for comments. The contents of the letter were initially reported by Bloomberg News and the Financial Times.