(ATF) President-elect Joe Biden has now selected the top economic advisers for his administration and two of his picks recently worked for BlackRock, the world’s biggest asset manager, with $7.8 trillion under management.
BlackRock has been pushing hard to increase its presence in China with significant investments in real estate and Chinese corporations. In August it gained approval to set up a mutual fund business in China, based in Shanghai.
This push was helped by BlackRock’s co-founder and chief executive Larry Fink, who in 2015 travelled to China to advise the government on how to cope with the dramatic plunge in its stock market that year.
Fink had played a similar role in advising the US government on how to reform markets and deal with bad debt in the wake of the 2008 global financial crisis, and the access enjoyed by BlackRock’s specialist advisory unit helped the firm’s broader asset management business to become the largest in the world in the subsequent decade.
More recently BlackRock was controversially awarded a mandate - with no deal competition - to advise the New York Federal Reserve on how to establish a facility to buy corporate bonds during this year’s Covid-19 crisis and BlackRock conducted the first corporate debt and ETF purchases ever handled by the US central bank.
The two current Biden appointees with recent BlackRock links are Wally Adeyemo, who will be deputy Treasury Secretary under Janet Yellen; and Brian Deese, who will chair the National Economic Council.
Adeyemo was formally unveiled in his new role on Tuesday December 1, and an announcement of Deese’s new role is expected soon.
Both men are veterans of the Obama administration, and Adeyemo has frontline experience of developing US economic policy towards China and other Asian nations, as he was chief negotiator for the Trans-Pacific Partnership’s provisions on macro-economic policy when he previously worked at the Treasury.
The Trans-Pacific Partnership was a trade agreement that was signed in 2016 and widely viewed as an attempt by the US to reduce the economic reliance of many Asian countries on China, but it never took effect after it was repudiated by Donald Trump when he came to office in early 2017.
Adeyemo worked as a senior adviser to BlackRock from 2017 to 2019, including a stint as interim chief of staff to Larry Fink.
Brian Deese, who worked alongside Adeyemo in the Obama administration, was most recently the global head of sustainable investing at BlackRock.
That was a high-profile role this year as BlackRock stepped up its efforts to burnish its environmental, social and governance (ESG) credentials, following criticism over its investments in polluting corporations.
Adeyemo and Deese accordingly both bring close links to Larry Fink to their new senior roles in the Biden economic team, and can be expected to be a conduit of Fink’s views to the US administration.
Larry Fink reiterated his commitment to China this June, when he said: “we firmly believe China will be one of the biggest opportunities for BlackRock.”
One of his employees echoed this view at a Reuters conference in Hong Kong on Tuesday December 1.
BlackRock’s head of Asian credit Neeraj Seth said that he expects China and other Asian countries to lead the global economic recovery from the Covid crisis.
Seth also dismissed recent debt defaults by some Chinese state-backed corporate borrowers as “the second chapter of deleveraging” and not a systemic risk.