Billionaire investor George Soros launched a scathing attack on BlackRock, saying the world’s largest fund manager was helping prop up President Xi Jinping’s government and imperilling the national security interests of the US.
Writing in an opinion piece in the Wall Street Journal on Monday, Soros, 91, also urged the US Congress to pass legislation to empower the Securities and Exchange Commission to limit the flow of funds to China and said BlackRock’s investments in China are a ”tragic mistake.”
Soros’s attack comes after BlackRock became the first foreign fund manager to gain approval for a wholly-owned asset management operation in China, enabling it to sell mutual funds to local consumers. In August the BlackRock Investment Institute called for investors to triple their exposure to the world’s second-largest economy and said it should no longer be considered an emerging market.
“Pouring billions of dollars into China now is a tragic mistake,” Soros wrote. ”It is likely to lose money for BlackRock’s clients and, more important, will damage the national security interests of the US and other democracies.”
Engaging with China could previously have been justified, but not now, Soros argued, because “the US and China are engaged in a life and death conflict between two systems of governance: repressive and democratic.”
Soros is well known for his strong liberal opinions and his support of democratic bodies in countries around the world. Soros has reportedly given $18 billion to his Open Society Foundations and is also a supporter of President Joe Biden’s Democratic Party.
Soros said “an enormous crisis is brewing in China’s real estate market,” and that Xi’s ‘Common Prosperity’ programme, while seeking to reduce wealth inequality, “does not augur well for foreign investors.” BlackRock, he said, appears to misunderstand Xi’s China.
China’s recent regulatory crackdowns on everything from tech companies to private tutoring firms and house prices unsettled global investors, knocking more than $1 trillion off the value of China stocks at one point. Still, the Nasdaq Golden Dragon China Index has rebounded by almost 20% since August 19.
• By Kevin Hamlin and Jim Pollard