Larry Fink and BlackRock require congressional scrutiny over China tech industry funding

2022 Clinton Global Initiative
CEO of BlackRock Larry Fink speaks at the Clinton Global Initiative, Monday, Sept. 19, 2022, in New York. (AP Photo/Julia Nikhinson) Julia Nikhinson/AP

Larry Fink and BlackRock require congressional scrutiny over China tech industry funding

BlackRock CEO Larry Fink recently declared that “BlackRock’s job is to provide hope.” He should have added, “to the Chinese Communist Party.”

Fink loves to talk about his commitment to investing with reference to environmental, social, and corporate governance concerns. Fink knows that doing so earns him abundant praise. Unfortunately, Fink’s investment strategy is far less morally motivated when it comes to China.

BlackRock’s 2022 investor prospectus for its China multisector tech exchange-traded fund was released on Thursday. Tracking an “index composed of Chinese equities in technology and technology-related industries,” the fund seeks American investors who will flow capital into the Chinese technology industry. And not entirely congruent with Fink’s ESG commitments, the prospectus is riven with rhetorical efforts to avoid attracting China’s in regards to Beijing’s injustices. Take BlackRock’s observation that “China continues to experience disagreements related to integration with Hong Kong and religious and nationalist disputes in Tibet and Xinjiang.” That language would be hilarious were the related context not so tragic. “Experience disagreements” might be the understatement of the century. What is actually happening in Xinjiang is a terrible Communist Party genocide against the Uyghur population.

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BlackRock’s 2023 prospectus gives Xi Jinping hope that even as U.S.-China relations decline, billions of dollars will continue to flow into his tech industry. That matters because China’s tech industry is ultimately designed with a single pursuit: to support Xi’s effort to replace the U.S.-led democratic international order with an autocratic order of Beijing-led feudal mercantilism.

This isn’t just a grand geopolitical concern, however. BlackRock’s China tech investments are unambiguously and profoundly unpatriotic. After all, by directly funding China’s tech industry, Fink and BlackRock are supporting Xi’s domestic repression and the improved ability of the People’s Liberation Army to kill U.S. military service personnel. It is unconscionable that such a prominent American businessman should openly pursue this activity in 2023.

A rising consensus of U.S. military and intelligence officers now indicates that China is likely to launch an attack on Taiwan in the 2023-2027 window. With President Joe Biden having pledged four times to order U.S. military action to defend Taiwan (even if his deputies have walked back that pledge each time), I would suggest that a major near-term conflict between the U.S. and China is now more likely than not. And China’s tech industry bears special attention in this regard. While it is engaged in civilian commercial activity, it also pursues a vast range of dual-use research activities to boost Beijing’s combat and espionage capabilities. Facial recognition software of the kind used to monitor Chinese citizens and foreigners inside China is one example. The PLA’s development of highly capable stealth, artificial intelligence, and strike platforms is another.

That takes us back to the U.S. military concern. Consider the PLA’s Dongfeng class of anti-ship ballistic missile forces and its rapidly developing hypersonic glide vehicles. Each U.S. Navy aircraft carrier hosts between 4,500 and 6,000 American souls. The Navy insists it can defend its carriers from these missiles, but if Beijing launches 30 different Dongfengs using 30 different satellites/command nodes against a single carrier, those American lives, and their associated contribution to any war effort, will be held at very great risk. If China can deploy capable hypersonic glide vehicles at scale, the carriers might as well stay at port. Threatening U.S. submarine crews, who would be critical to any war effort, China’s tech industry is also supporting the PLA’s rapid development of its undersea sensor networks.

Put simply, Fink and BlackRock are putting the narrow pursuit of profit before the lives of their fellow citizens and the security of their nation. They deserve heavy scrutiny from the incoming Congress.

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