George Soros has condemned BlackRock’s wealth management move into China as a “tragic mistake” that will risk losing clients’ money and damage US security, in his latest attack on investment in the world’s second-biggest economy.
“Pouring billions of dollars into China now is a tragic mistake,” the billionaire investor wrote in a Wall Street Journal op-ed.
“It is likely to lose money for BlackRock’s clients and, more important, will damage the national security interests of the U.S. and other democracies.”
It comes after BlackRock last month became the first foreign asset manager offering a wholly owned mutual fund business in China, two months after obtaining approval from the government.
China opened up its huge financial sector last April as part of an interim Sino-US trade deal, which included lifting its foreign ownership cap.
But according to Soros, BlackRock seemed to have misunderstood Xi Jinping’s government – which he claimed perceives all Chinese companies as “instruments of the one-party state” – and made a false distinction between the country’s state-owned and privately owned companies.
The WSJ piece is Soros’ latest broadside against increased investment in China, amid a backdrop of Xi’s multi-sector crackdowns that he said had “reached a crescendo” since beginning with the government’s suspension of Ant Group’s IPO in December.
Last week, Soros argued that US Congress should introduce legislation that limits asset managers’ investments into “companies where actual governance structures are both transparent and aligned with stakeholders,” in a separate op-ed in the Financial Times.
In both pieces, he cautioned to investors that China’s real estate market is particularly vulnerable, and predicted an impending crash.
But Soros no longer manages outside money, in contrast to BlackRock, JP Morgan, Goldman Sachs and other leading asset managers that have made moves into Chinese wealth management after judging that the country’s opportunities outweigh the risks.