WASHINGTON (Reuters) -The chairman of a U.S. congressional committee on China held out the possibility on Thursday of subpoenas for executives from asset management firm BlackRock and index provider MSCI if they do not provide “fulsome” answers about investments in blacklisted Chinese companies.
The House of Representatives select committee on competing with China said on Tuesday it was investigating BlackRock and MSCI for facilitating the flow of American capital into companies the U.S. government has found guilty of fueling China’s military advancement or human rights abuses.
“I don’t seek an antagonistic relationship with anybody but it’s fair to say we want answers,” Representative Mike Gallagher told Reuters in an interview when asked about the possibility of issuing subpoenas over the issue.
“In the law that created the committee we were given subpoena authority for a reason, which is to do our investigation and our oversight in a thorough and robust yet fair fashion,” he said.
“Our hope is that we will get a cooperative and fulsome response from BlackRock and MSCI, and I think our goal is for that response to inform policy and legislation, particularly as we debate this question of guardrails on outbound capital flows,” Gallagher said.
The companies did not respond immediately to requests for comment on Gallagher’s remarks.
BlackRock has said all of its investments in China and around the world comply with U.S. law, and that it will continue engaging with the select committee on the issues it raised. MSCI has said it was “reviewing the inquiry” from the committee.
Representative Raja Krishnamoorthi, the top Democrat on the Republican-led panel, said the goal is not to cut off investment into all Chinese firms, but just those with interests counter to U.S. values.
“They’re not just run of the mill companies. We’re talking about companies that build the J-20 fighter jet, artillery shells for the PLA, they develop software to surveil Uyghurs,” Krishnamoorthi said, using an abbreviation for China’s People’s Liberation Army.
Separately, Gallagher sent a letter to the White House urging President Joe Biden to include curbs on “problematic” U.S. holding of some Chinese stock and bonds in an anticipated executive order restricting outbound investment to China.
“Any rules that exempt them will fail to address the bulk of the national security threat,” he wrote.
Republicans formed the select committee when they took control of the House in January, part of an effort to raise awareness about issues behind growing tensions with China. A hard line toward China is one of the few policies with bipartisan support in the deeply divided U.S. Congress.
The committee does not write legislation, but makes policy recommendations and can subpoena executives and officials.
The committee held a roundtable with farmers in Dysart, Iowa, on Thursday to examine the risk of Chinese-government backed theft of agricultural technology, the latest in a series of events it has held outside of Washington.
The committee says current U.S. tools are insufficient to protect such technology from theft, and that it needed ideas from farmers on legislation to do so.
“We have a duty to protect all our technology, whether it’s in Silicon Valley, or in a cornfield here in Iowa,” Gallagher said at the event.
Reporting by Michael Martina and Patricia ZengerleEditing by Don Durfee and Lincoln Feast
