A Glimpse of China’s Ownership in US
Yi Song
April 23, 2021 Updated: April 23, 2021
Commentary
China is more involved in your life than you might think. Sure, who doesn’t like fried rice? Who doesn’t own a thing “Made in China?” However, the kind of involvement I am talking about runs deeper than that.
Precisely speaking, the Chinese Communist Party (CCP) is becoming increasingly involved in the everyday lives of Americans.
Take my friend Bill for example. He and his wife have three school-aged children. Bill enjoys cooking in his kitchen equipped with GE Profile appliances. The family loves Smithfield ham and bacon. Every now and then, they watch a movie at the nearby AMC theater or go on a road trip in their Volvo XC90. The kids have been doing remote learning via Zoom, which is also how they stay connected with families and friends. Bill’s boys like to play video games, such as League of Legends by Riot Games. Bill is training for his second Ironman race that will take place in July in New York. The family will then take a week-long vacation staying at the famed Waldorf Astoria.
Sounds familiar? Do you know someone like Bill? Do you use any of the iconic products Bill enjoys?
Do you know these products are owned by CCP-controlled Chinese companies or individuals who have pledged allegiance to the CCP?
More Complicated than Business Decisions
Over the past two decades, China’s state-controlled enterprises embarked on a buying spree for all-things-western. The above-mentioned brands, which are only a small sampling, all became Chinese-owned between 2010 and 2016. Volvo was purchased by Geely for $1.5 billion in 2010. GE Appliances was acquired by Haier in 2016 for $5.6 billion.
The reasons behind the Chinese takeovers are more complicated than pure business decisions. Fan Yu, an expert on finance and economics, sees a few recurring themes behind the purchases:
Moving assets abroad, i.e. money laundering. Some Chinese companies were very active in buying up assets abroad, such as Anbang Insurance (who purchased AMC), HNA Group/Hainan Airlines, etc. They were suspected of moving assets abroad for high-level CCP cadres.
Securing valuable resources, like food, land, oil, etc. Shuanghui’s take-over of Smithfield Foods was to secure pork supplies.
Projecting CCP soft power. The CCP was buying up Hollywood studios to inject some subtle propaganda into American films and TV shows. U.S. films, TV shows, and even video games are very influential and over time, these influences will help project a positive view of the CCP. China’s internet and entertainment giant Tencent has fully owned Riot Games since 2015. With over 300 investments in its gaming portfolio, Tencent is also the world’s largest games publisher, in addition to owning QQ and WeChat.
Buy for-profit businesses and often this is acquiring a famous Western brand so they can market these products back to the Chinese domestic market to make money. GE’s takeover by Haier belongs to this category. In addition, Shandong Ruyi is a fashion conglomerate (aka “China’s LVMH”) that bought a bunch of high fashion brands like LANVIN, St. John, and Bally. Similarly, when China Fosun bought the Club Med vacation resort chain a few years ago, it was also to profit from Chinese travelers who go on vacation at these resorts.
Let’s take a closer look at some of these acquisitions.
Some of the products of Smithfield Foods
Some of the products of Smithfield Foods are displayed in front at a news conference on WH Group’s IPO in Hong Kong on April 14, 2014. (Bobby Yip/Reuters)
Smithfield Takeover: $4 Billion Loan Approved in 24 Hours
Smithfield Foods, the world’s largest pork producer, was purchased by China’s Shuanghui (later renamed to WH Group) for $4.7 billion (30 percent above Smithfield’s market value) in 2013. The deal also included 146,000 acres of American farmland. At the time, it was the largest takeover of an American consumer brand by China.
A documentary (pdf) produced by NPR in 2014 revealed the CCP’s involvement in the deal. The Bank of China, owned by the CCP, approved Shuanghui’s $4 billion loan to buy Smithfield in a single day. In its annual report, the Bank of China highlights the Smithfield takeover as “social responsibility” and that it “spares no effort to support Chinese enterprises in their international competition.”
Then-president of Shuanghui told NPR: “The Chinese government has been supporting us with preferential policy, as well as investment. For instance, the Bank of China has shown great support both financially and politically.”
Smithfield CEO Larry Pope, who originally denied the knowledge of any Chinese government involvement, was shocked when NPR presented him with the above findings. “I don’t think I could go out today and get the U.S. government to support making a $4 billion loan as a social responsibility for Smithfield to move forward on a foreign—on a foreign country’s territory. No, I don’t think that’s doable in any industry that I can think of,” Pope said in the video.
Why would the CCP support such a takeover? Its “five-year plan” dated 2011 directs food companies such as Shuanghui to obtain more meat for their production lines by purchasing overseas businesses.
According to this Reuters report, Smithfield Foods renovated its Virginia plant to supply carcasses to China. A person with direct knowledge of operations said, “There were departments that were completely eliminated, or erased, or remodeled.” Workers in the Smithfield, Virginia plant have been boxing up pig carcasses to ship to China. Arnold Silver, Smithfield’s director of raw materials procurement, said at an industry conference that sales to China could eventually create bacon and ham shortages for American consumers.
The Smithfield purchase was a prime example of the CCP’s goal to secure valuable resources. China is the world’s biggest pork consumer. Swine flu, injecting pigs with hormones and drugs, etc. are rampant in China. They cause scandals and social unrest. So they need to look outside for good quality pork.
Along these lines, the CCP also signed oil supply deals with Brazil and Venezuela to secure valuable crude oil at bargain prices. (to read the whole article visit the link below)
https://www.theepochtimes.com/a-glim...s_3786909.html
Thomas Jefferson once said: “Eternal vigilance is the price of liberty.”
To safeguard our liberty, we need more awareness and vigilance when dealing with the Chinese communist regime.