Republican attorneys from more than a dozen U.S. states accused BlackRock, Goldman Sachs and JPMorgan of misrepresenting risks of investing in China, including the possibility of a possible invasion of Taiwan.
17 lawyers said in letters to three companies and other big asset managers, including Interstate Street, Envesco and Morgan Stanley, that financial groups conceal or misrepresent China's investment risks.
"We are particularly concerned about BlackRock's material misstatements and omissions, as BlackRock is the largest issuer of emerging market ETFs and Chinese ETFs," they wrote in a letter directed against BlackRock.
“BlackRock implies that while China is a legally designated foreign rival of the United States and threatens to invade Taiwan, investment in China poses similar risks as investments in other countries.”
The Attorney General includes senior state attorneys from Texas, Montana, Ohio and Virginia, and all companies’ “misstatements or material omissions” prevent the trustee from being able to fulfill their prudent responsibility to fulfill their Cautious and responsible investment”.
This makes it impossible for state pension funds to invest in China's risky funds “not violating their fiduciary obligations.” The attorney general added. It noted that last year Texas Governor Greg Abbott directed state agencies to “evacuate from China as soon as possible.”
State Street did not immediately respond to requests for comment regarding the allegations. Blackrock, JPMorgan, Goldman, Morgan and Invesco declined to comment immediately.
BlackRock is also under pressure from Capitol Hill in its Chinese investments. In 2023, the House China Committee accused the world's largest asset manager of profiting from Chinese investments, which allegedly led to the rapid military modernization of the People's Liberation Army.
In their notes, the attorney general said that BlackRock's prospectus "general failure to identify China as a foreign rival" and failed to disclose the "material risks" of China's possible invasion of Taiwan.
"These omissions will harm investors because such intrusions could lead to the closure of Lakerock's China-centric funds," the letter said. "Following the Russian invasion, BlackRock suspended its 'emerging Europe' fund-still It was suspended. It also liquidated the Russian ETF, and the holders of the fund received change for their investments.
BlackRock had previously said it “complied with all applicable U.S. government laws.”
The letter was originally reported by Bloomberg, who said Chinese President Xi Jinping is "preparing to invade Taiwan by 2027."
U.S. intelligence officials said Xi Jinping has ordered the PLA to develop military capabilities to attack Taiwan by 2027, but U.S. officials stressed that this does not mean that China will take military action at that time. "I don't think war is inevitable," Jake Sullivan said in a recent interview with the Financial Times after resigning as a national security adviser.