On Wednesday’s “Hugh Hewitt Show,” House Select Committee on the Chinese Communist Party Chairman Rep. Mike Gallagher (R-WI) discussed the committee’s investigation of American investment in China and pointed out that in addition to some investments “going to companies that have already been flagged on various government blacklists for posing national security risks” and being “morally reprehensible,” many of the investments aren’t even good at making money.
Gallagher said, “I think everyone can agree…that American dollars should not be funding the Chinese Communist Party’s military buildup. And make no mistake, they’re embarked on the largest sustained peacetime military buildup since World War II, potentially ever, depending on how you [define] it. And we shouldn’t be investing our money in Chinese aircraft carriers, fighter jets, artillery shells, advanced nuclear technology. But that’s what’s happening. We launched a bipartisan investigation into BlackRock and MSCI. My Ranking Member, Rep. Raja Krishnamoorthi (D-IL) has expressed a ton of concern about American dollars funding China’s military buildup, and in many cases, this money is going to companies that have already been flagged on various government blacklists for posing national security risks. So, what’s crazy, Hugh, is that it’s not illegal, but it is suicidal. We’re subsidizing our own destruction.”
He added, “Here’s the other thing, Hugh, that I find interesting when it comes to American investments in China, in addition to being morally reprehensible, the Chinese funds have been terrible investments. So, over the last five years, the S&P 500 has soared…but, meanwhile, things like BlackRock’s FXI ETF, which invests in these Chinese large-cap companies, it’s down 30% in that same period…so, that doesn’t make sense. And a lot of the funds we looked at in our investigation similarly underperformed drastically. So, where did the money go?”
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