George Soros considers the Wall Street giants’ eagerness to enter the world’s second largest economy despite the fierce US-China confrontation as harming national security and posing risks to customers.
Billionaire George Soros. (Photo: Bloomberg ).
Billionaire George Soros has criticized BlackRock’s efforts to enter the Chinese market as a risk to clients’ money and US security interests. This is not the first time Soros has opposed investing in the world’s second largest economy.
Soros expressed his opinion in the Wall Street Journal : “Putting billions of dollars into China is a disastrous mistake. This action can easily cause BlackRock’s clients to lose money and, more importantly, damage the national security of the United States and other democratic countries.”
BlackRock is leading a global push into China’s asset management industry. Last month, the world’s largest asset manager began offering investment products to individuals in China, two months after it was granted permission to open a 100% foreign-owned mutual fund in the country.
The Wall Street Journal op-ed is one of several recent pieces by Soros warning of the dangers of closer economic ties with China under President Xi Jinping. Over the past few weeks, Beijing’s harsh policies have sent stock markets reeling, wiping out as much as $1.5 trillion in market value at one point.
Last month, George Soros also criticized Mr. Xi in the press. He also commented in the Financial Times that the US Congress should enact laws that limit asset management companies to investing in countries where the government protects the interests of those related to the business.
The contrasting views between two of the world’s most influential asset managers underscore the increasingly complex environment financial firms face in China.
Mr. Xi has made it easier for foreign investors to enter the Chinese market. But at the same time, the Chinese government has tightened its grip on the private sector and clashed with the United States on a range of issues, from cybersecurity to alleged human rights abuses in Xinjiang.
Soros wrote that the restrictions, which began with the abrupt cancellation of Ant Group’s IPO last year, have now “reached a tipping point.” He pointed to an investigation into ride-hailing company Didi Global just days after its New York listing and bans on a “ US-funded ” Chinese tutoring business.
Soros also advised BlackRock managers to pay attention to “the huge crisis brewing in China’s real estate market.”
While Soros remains a key supporter of Democratic President Joe Biden, he no longer manages money for clients and now represents a minority voice on Wall Street.
BlackRock, Goldman Sachs and most of their big peers in money management and banking have decided that the opportunities in China outweigh the risks, Bloomberg reported .
