The CPA is an advocacy organization that exclusively represents U.S.-based manufacturers, workers, farmers, and ranchers.
In addition, Vanguard funds also hold shares of eight Chinese companies sanctioned over human rights abuses in China’s Xinjiang region, where the persecution of Uyghurs has been identified by the U.S. State Department as “genocide.”
The report didn’t provide a tally of all Vanguard investments in Chinese military companies but listed a total of $100 million in three such groups.
While noting that Vanguard’s fund holdings are legal, the CPA urged Congress to take urgent action on the “long-festering, structural problem” that “a weak public policy response by the U.S. government has allowed greed within the asset management industry to supersede urgent American investor protection, national security, and human rights concerns.”
“Congress must turn off the tap of American capital flowing to China and stop private and public market investments into blacklisted CCP-connected companies,” Rep. Mike Gallagher (R-Wis.), chair of the House Select Committee on the Chinese Communist Party (CCP), told The Epoch Times in an emailed statement.
“Americans do not want firms like Vanguard and BlackRock to invest their retirement savings in companies building the Chinese Communist Party’s military and implementing its ongoing genocide against the Uyghur people,“ he added. ”If we accept the status quo, we are willfully fueling our own destruction.”
Congressional scrutiny over Wall Street’s role in financing Chinese military companies has been increasing.
In a letter dated July 31 to BlackRock and MSCI, Mr. Gallagher and committee ranking member Rep. Raja Krishnamoorthi (D-Ill.) wrote that, through the companies’ funds, Americans were “unwittingly funding” Chinese companies that fuel the CCP’s military and the two companies were “exacerbating an already significant national security threat and undermining American values.”
“Vanguard maintains the highest levels of compliance with all applicable laws and regulations, including sanctions law,“ a Vanguard spokesperson told The Epoch Times in an emailed response. ”We welcome additional clarity from policymakers who are in a position to determine sanctions through the formal OFAC process.
“As one of many asset managers offering investors a range of funds to invest internationally, our clients’ investments in China are primarily through U.S.-based passive index products that provide diversified exposure to many developed and emerging economies.”