Chinese state sponsored news outlet, The People’s Daily, came to the defense of President Xi Jinping on Wednesday amid a crackdown on the country’s tech industry — and criticism from George Soros on American companies investing there.
The editorial acknowledged Xi’s recent crackdown on private industry — claiming the regulatory scrutiny promotes free and fair markets — but emphasized what it said was China’s commitment to protect investors’ money.
“Unswervingly, the principles and policies of encouraging, supporting and guiding the development of the non-public sector of the economy have not changed,” the editorial read. “Opening to the outside world is China’s basic national policy, and it will not waver at any time.”
The unsigned editorial comes just days after an op-ed from hedge fund titan George Soros slammed BlackRock for launching investment vehicles in China. He said BlackRock’s involvement with the communist country would imperil clients’ money and US security.
Soros, in the Wall Street Journal on Monday, said BlackRock’s investment in China is tantamount to propping up an oppressive regime. He warned it’s “likely to lose money for BlackRock’s clients and, more important, will damage the national security interests of the US and other democracies.”
BlackRock is the world’s largest money manager, with $9.5 trillion under management.
Late last month, BlackRock introduced mutual funds in China for Chinese investors to buy after getting the green light from President Xi Jinping to launch investment products earlier this year. Shortly after getting approval, BlackRock recommended clients invest more money in China — the world’s second-largest economy.
BlackRock has already raised $1 billion, or 6.68 billion yuan, for their mutual fund — a sign that American companies may be able to expand their presence in the fast-growing market.
BlackRock was quick to defend its investment. In a statement to The Post, a spokesman said: “The United States and China have a large and complex economic relationship. Total trade in goods and services between the two countries exceeded $600 billion in 2020. Through our investment activity, US-based asset managers and other financial institutions contribute to the economic interconnectedness of the world’s two largest economies. “
BlackRock added that investment in China is beneficial for everyone. “We believe that globally integrated financial markets provide people, companies, and governments in all countries with better and more efficient access to capital that supports economic growth around the world.”
But even as China opens itself up to foreign investment following various trade agreements struck with the US, Soros, who’s known for supporting liberal causes through his Open Society Foundations, warns it’s a serious mistake for banks and other financial institutions to expand their presence in the nation.
Xi has used his power to crack down on multiple successful companies over the last year, including halting Alibaba’s Ant Group IPO just days before the company was set to go public and launching a probe into ride-hailing company Didi days after it listed on an American exchange.
The moves have caused a sharp selloff in Chinese stocks. Didi has dipped more than 30 percent since going public earlier this summer and Alibaba has plummeted 35 percent over the last year.
Soros said he sees these initial moves targeted toward tech-focused companies as a sign Xi will do whatever it takes to stay in power.
“Earlier efforts could have been morally justified by claims that they were building bridges to bring the countries closer, but the situation now is totally different,” Soros said of encouraging investment in China. “Today, the US and China are engaged in a life-and-death conflict between two systems of governance: repressive and democratic.”