George Soros, billionaire and founder of Soros Fund Management LLC, pauses as he speaks at an event on the third day of the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, January 23, 2020.

Simon Dawson | Bloomberg | Getty Images

LONDON – BlackRock, the world’s largest wealth manager, has responded to billionaire George Soros’ sharp criticism of the company’s investments in China.

Registered mail The Wall Street Journal On Tuesday, Soros described BlackRock’s initiative in China as a “tragic mistake” that would “harm the national security interests of the US and other democracies.”

The comment, titled “BlackRock’s China Blunder,” said the company’s decision to pour billions into the country was a “bad investment” that would likely lose money for its customers.

It comes soon after BlackRock launched a range of mutual funds and other investment products aimed at Chinese consumers. The initiative resulted in BlackRock becoming the first foreign-owned company to operate a wholly-owned company in the Chinese mutual fund industry.

The asset manager told CNBC on Wednesday that its Chinese mutual fund subsidiary launched its first fund in the country after raising 6.68 billion Chinese yuan ($ 1.03 billion) from more than 111,000 investors.

“The United States and China have a large and complex economic relationship,” said a BlackRock spokesman in response to Soros’ comments.

“Total trade in goods and services between the two countries exceeded $ 600 billion in 2020. Through our investment activities, US asset managers and other financial institutions contribute to the economic networking of the world’s two largest economies.”

BlackRock’s investment institution recommended In mid-August that investors even tripled their exposure to China. At the beginning of the year, CEO Larry Fink in a letter to shareholders described China’s market as “a significant opportunity to achieve the long-term goals of investors in China and internationally”.

A BlackRock Inc. sign hangs over their building in New York.

Lucas Jackson | Reuters

“The vast majority of assets BlackRock manages are for retirement. BlackRock’s customers around the world – including many US customers – are looking for a wide range of investments, including in China, to meet their retirement and other financial goals, ”the spokesman said.

BlackRock added that it believes it can help China cope with its growing pension crisis by providing expertise, products and services for pension systems.

“We believe that globally integrated financial markets will give people, businesses and governments in all countries better and more efficient access to capital that supports economic growth worldwide.”

“The situation is completely different now”

Soros said Tuesday that BlackRock’s investments in China showed that the company had “misunderstood” Chinese President Xi Jinping.

Beijing cracked down on several companies this year, resulting in a sharp sell-off in Chinese stocks. Soros warned that while the new rules target tech companies, they should also be seen as a sign that Xi will do whatever it takes to stay in power.

“Previous efforts could have been morally justified by claiming they were building bridges to bring countries closer together, but the situation is completely different now,” Soros said. “Today the US and China are in a life and death conflict between two systems of government: repressive and democratic.”

Write for the Financial Times In a separate comment posted Aug. 30, Soros said investors in Xi’s China are facing an “ominous awakening” before adding that Xi’s crackdown on private companies showed he “doesn’t understand the market economy.” .

BlackRock reported on July 14 that assets under management rose to a record $ 9.49 trillion in the second quarter, compared to $ 7.32 trillion a year earlier.

BlackRock’s shares are up over 28% since the start of the year.