U.S. Senator Rubio's office said Thursday it had written to the CEO of MSCI. N, a global index provider, seeking information on why the company included some Chinese stocks in its widely watched emerging market index.
The letter is part of a broader push by Rubio and other U.S. lawmakers to crack down on Chinese companies operating in the U.S. stock market at a time of widespread trade war between the United States and China. If Chinese companies are listed in the U.S. or included in the main index, U.S. investors will be affected by Chinese companies.
In a letter dated 12 June, Rubio told MSCI Chairman Fernandez: "We can no longer let China's authoritarian government avoid financial disclosure and basic transparency in Chinese enterprises, while harvesting returns from the US and international capital markets, so that American investors and pensioners are at risk."
A spokesman for MSCI Mingsheng did not immediately respond to requests for comment.
In 2017, MSCI Mingsheng said it would incorporate Shanghai and Shenzhen-listed stocks into its global emerging market index for the first time, which would eventually bring billions of dollars in global investment to the mainland stock market. In February, the company said it would quadruple the weight of Chinese companies in the index and increase some mid-cap stocks.
Republican Rubio worries that this could expose American investors to companies with poor corporate governance and fraudulent records. He challenged the decision at a time when the United States was fighting against China over trade policy. He said these trade policies were aimed at undermining the U.S. economy and hurting workers.
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