A U.S. congressional committee on China said asset management giant BlackRock and index provider MSCI were facilitating investments into blacklisted Chinese companies.

The firms have facilitated American capital flow into the companies the U.S. government had found guilty of fueling China's military advancement or human rights abuses, the House of Representatives' Select Committee on the Chinese Communist Party (CCP) said on Monday.

"With all investments in China and markets around the world, BlackRock complies with all applicable U.S. government laws. We will continue engaging with the Select Committee directly on the issues raised," BlackRock said.

MSCI said it was "reviewing the inquiry" from the committee.

U.S.-China relations are at a crucial juncture as two of the world's biggest economies clash over a range of hot-button issues such as Taiwan and Russia's invasion of Ukraine.

Last month, China curbed exports of some metals widely used in the semiconductor industry, in a move it said was aimed at protecting national security.

Republicans formed the Select Committee when they took control of the House in January, as part of an effort to convince Americans why they should care about competing with China.

A hard line toward China is one of the few policies with bipartisan support in the deeply divided U.S. Congress.

The committee does not write legislation, but makes policy recommendations. It also has the power to subpoena executives and officials, something that it has not done until now.

But Mike Gallagher, the committee's Republican chair, has said he will issue subpoenas for executives who do not cooperate with its investigations.

The committee's action against BlackRock and MSCI was first reported by the Wall Street Journal.

An initial review by the committee had found the companies allow for investments into dozens of blacklisted companies.

"The true scale is likely much larger," the committee said.

BlackRock, the world's largest asset manager, has been walking a political tightrope for years over its stance on environmental, social and governance (ESG) issues.

The company has come under fire from Republicans who accuse it of being too "woke," while other campaigners press it to drive quicker change by using its voting power to force boards to reduce carbon emissions.