George Soros slams BlackRock’s big push into Chinese markets as a ‘tragic mistake’ that will hurt the US

George Soros
George Soros hit out at BlackRock’s China push. FABRICE COFFRINI/AFP/Getty Images
  • George Soros has hit out at BlackRock, saying the asset manager’s push into China is a “tragic mistake.”
  • The legendary investor wrote in the Wall Street Journal that it is likely to lead to losses and will hurt the US.
  • Soros is one of many investors concerned about the growing pivot towards China and President Xi Jinping’s policies.
  • See more stories on Insider’s business page.

Legendary investor George Soros has criticized the world’s biggest asset manager BlackRock for pushing heavily into China, branding the move a “tragic mistake” that will hurt the US’s national interest.

In a Wall Street Journal opinion article published Monday, Soros said that BlackRock, which manages more than $US7 ($AU9) trillion, had misunderstood President Xi Jinping’s China.

“Pouring billions of dollars into China now is a tragic mistake,” Soros wrote. “It is likely to lose money for BlackRock’s clients and, more important, will damage the national security interests of the US and other democracies.”

BlackRock has major ambitions in the world’s second-biggest economy and was recently approved as China’s first foreign-owned mutual fund firm. The asset manager last month called for investors to bump up their exposure to the country by up to three times. BlackRock declined to comment on Soros’ criticisms.

Soros, the 91-year-old hedge fund veteran and international philanthropist, is one of many voices who are increasingly concerned about rising US investments in China and Xi’s plans for the country.

Under Xi’s leadership, China has launched a crackdown on its biggest private companies that has spooked foreign investors, causing US-listed as well as domestic Chinese stocks to tumble.

The Hungarian-American investor wrote in the WSJ that all Chinese companies are “instruments of the one-party state” under Xi, making them risky investments.

Soros said China’s abrupt suspension of financial services giant Ant Group’s $US37 ($AU50) billion listing and its intense scrutiny of ride-hailing app provider Didi was evidence of Xi bringing powerful entities to heel as he tries to cement his control of the country.

However, Soros’ view is far from unanimously shared by investors. Fahad Kamal, chief investment officer of Societe Generale’s private bank Kleinwort Hambros, told Insider that although China has numerous problems, its economic growth makes it “absurdly impossible to ignore” for investors.

Yet Soros said: “The BlackRock initiative imperils the national security interests of the US and other democracies because the money invested in China will help prop up President Xi’s regime, which is repressive at home and aggressive abroad.”

He added: “Today, the US and China are engaged in a life and death conflict between two systems of governance: repressive and democratic.”