Market

BlackRock’s China Relationship Target In Nationwide Ad Campaign

It’s been a rough couple weeks for Larry Fink and BlackRock
BLK
. The CEO was the source of some thinly veiled ridicule and classic Joe Kernen snark on CNBCs Squawk Box earlier this month for touting “climate justice” while being heavily invested in, and promoting retail investments in China, the world’s largest producer of greenhouse gas emissions. (Like two times more than the U.S., just saying.)

Fink pushed back saying that BlackRock was simply going to help millions of Chinese save for retirement and that they talk to the government about greening their economy away from fossil fuels.

Okay, then, save the planet, invest in Nio and BYD, all is forgiven.

Well, not so fast there, Mister Fink.

A new group called the Consumers First Initiative is going after BlackRock this week with TV ads and New York City billboards. The message is that BlackRock kowtows to the Chinese Communist Party (CCP) while scolding Americans on their climate and social justice short-comings.

It’s phase one of a multi-million dollar campaign to expose BlackRock’s close ties to the CCP.

The ad, titled “Betting on China,” will air nationally on cable TV news and on business networks. (I’ve got to see this on Bloomberg. Let’s go.)

Accompanying the ad rollout is the group’s dedicated BlackRock-bashing website, BlackRockLovesChina.com. It features the billboard art and has a number of mainstream news articles about BlackRock’s China business.

For starters, BlackRock was the first large American investment bank to be granted a license to serve local clients without a partner. This happened in June.

It is believed that China uses these influential relationships to pressure American companies to convince legislators and the executive branch of government to go easy on China, lest they end up hurting American businesses there.

On Tuesday, during a House Financial Services Committee hearing, Subcommittee chairman Brad Sherman of California said, “the intertwining of the U.S. and Chinese economies has given China substantial power here in the United States. It really hasn’t given America any political power in Beijing.”

Sherman understands how China picks American influencers, and punishes those who try to lecture the locals the way they lecture Americans.

“I represent the movie industry in my district. They only allow 40 movies into China. If you run a studio, you want to be one of those 40. You know if you make a movie about Tibet, that’s not getting into China. Actually, if you made one movie about Tibet, none of your movies is getting into China,” Sherman said on Tuesday. Then he made the connection to Wall Street.

“If you’re Morgan Stanley
MS
, you know that you may be one of the banks that gets into China…if your global index includes Chinese companies to a sufficient degree,” he added.

At the heart of the Consumers First campaign is the perceived hypocrisy of American corporate giants — woke at home, silent on China on all matters — be it pollution to prison labor in Xinjiang, the far western province home to hundreds of thousands of Uyghur Muslims living in captivity.

“We began the Consumers First Initiative this past summer because we were sick of watching Corporate America distract from their failures, misdeeds, and mistreatment of their customers by cozying up to woke politicians,” Will Hild, Executive Director of Consumers’ Research told me Wednesday evening. “The campaign is aimed at sending a simple message to every corporate boardroom in the nation: If you think that you can distract us with a woke façade, it’s not going to work. We will call you out.”

The BlackRock campaign is part of a larger effort that recently targeted American Airlines
AAL
, Coca-Cola (including this sing-a-long jingle), Nike
NKE
, Ticketmaster, and the MLB.

The NBA recently felt the scorn of China when Celtics player Enes Kanter got his team’s merchandise banned from there. Kanter called out China for its actions in Tibet and in Xinjiang.

Well-known investor Kyle Bass praised Kanter for challenging China on his Twitter feed on Wednesday.

“Any executive reading this is on notice, if you think you can cover up by going woke,” says Hild. “We will come for you, you will be named.

Can’t BlackRock sue for defamation, I asked Hild.

“BlackRock can threaten whatever they want, but it won’t do any good,” he told me. “Everything we say about their nefarious investments supporting the Chinese Communist Party is true.”

One obvious example, while surely not illegal, was BlackRock’s tens of millions of dollars invested in Chinese military contractors. President Biden improved on a Trump Executive Order banning investment in some 50 Chinese defense companies as of August 2. BlackRock and other firms, including Vanguard, have been selling out of those positions as required by the Executive Order. Still, the point remains that BlackRock, others, were funding what the Director of National Intelligence and Biden himself call our biggest strategic rivalry.

“Our job is to stand up for the American consumer,” says Hild. “We won’t be intimidated into silence by anyone.”

Earlier this week, The Economist Intelligence Unit released their Risk Outlook for 2022. China tops the top 10 list.

China-related risks include the No. 1 risk for 2022, which is worsening U.S.-China ties forcing a full decoupling in the global economy. Other risks include a real estate crash in China (No. 3); China and Taiwan get into a shooting match (No. 7); and China and Europe’s relationship gets worse (No. 8), which can seem odd at times considering Europe is often quite soft on China, if not an enabler. It’s the home of Davos, afterall. Recall the World Economic Forum in 2017 basically naming Xi Jinping the leader of global free markets.

“A lot of companies want to be in China because of the market there. But at the same time, they are not only our competitors, they cheat. They want to access our capital markets and don’t play by the rules. We want them to play by the rules, but they don’t,” California Congressman Juan Vargas said in the House hearing this week on China and Wall Street. “We’ve got to get more aggressive. We are in a situation now with China…I know our companies want to be there. But we cannot continue down this road.”



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