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OpEdNews Op Eds    H3'ed 2/17/17

Trump and Chinese Business

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Foreign companies looking for a foothold in China like partnering with the PLA because of the stability it can offer to any long-term project. Companies with military partners get the added security of knowing that the top "management" of many of the PLA companies are from the ranks of the "princelings," the children and relatives of senior Chinese Communist Party officials. These influential princelings assure that the business operations of the PLA will have the government connections that are so important in China's corrupt system. In the case of China Poly, chair Wang Jun and president He Ping act as brokers between the government and the military. Wang Jun is the eldest son of the late Vice-President Wang Zhen. He Ping is the son-in-law of the late Deng Xiaoping. Wang Jun's brother, Wang Bing, is the chair of the PLA Navy Helicopter Company. China Carrie's president is Ye Xuanning, the second son of late PLA Marshal Ye Jianying.

This dominant role of the PLA corporations grew after Tienanmen Square as the Communist Party was in some disarray. By 1998 the Party tried to reassert itself in control. There was an effort by the Chinese government to try and rein in some of these companies but to no avail. More than a year after the Chinese military was ordered to disband its octopus-like business empire (1999) and return to the barracks, its influence over the nation's economy continued. During 1999, some PLA high-profile investments, such as Beijing's five-star Palace Hotel, were handed over to central government shareholders with great public fanfare. And at least 150 large, profitable enterprises were grabbed up by the central government. Most, however, stayed with the PLA.

By the mid-1990s, the so-called PLA Inc. included over twenty thousand companies in everything from agribusiness to electronics to tourism to arms exports. The 1989-1990 reforms had only a marginal effect. The Party had diminished control of these companies. With the rise to power of Xi Jinping in 2012 the party began to reassert control of the military and its companies. In addition to his role as Chairman of the Communist Party Xi Jinping took over the leadership of the Central Military Council ('CMC') the Party's control organisation in charge of the military. He used his position to dramatically reduce the number of soldiers and reorganised the military structures. Most importantly, Xi embarked upon a strict anti-corruption campaign.

President Xi Jinping concentrated on the "rule of law" within China. An important part of the "rule of law "was the eradication or at least suppression of corruption. Since the start of his anti-corruption drive in November 2012, more than forty high-level officials have been investigated and shamed. These officials include current and former municipal and provincial party secretaries and vice governors, senior government officials, and executives at state-owned enterprises

This anti-corruption campaign was not embarked upon solely to punish Party and Army leaders who had stolen from the State. It was also a means of removing from the leadership of the Party many of Xi's enemies; both on the Left (Bo Xilai and the "New Left" in China); and the Right Jiang Zeminists (Zuo Yongkang, Xu Caihou and Guo Boxiong). Xi and Wang Qishan, Politburo Standing Committee member and head of the powerful Central Commission for Discipline Inspection, have made it clear that the 'new' PLA will not tolerate a senior military leadership that has its loyalties anywhere but the CMC. Many of the leaders of the PLA military corporations had to choose between the companies and their ranks in the Army. This effectively returned many of the companies to Communist Party discipline.

At the same time, after 2014 and the collapse of the real-estate market the large, and mostly unregulated, "Shadow Banks" in China were brought back under the control of the large state banks. By far the most important development was the gradual expansion of the State-Owned Enterprises ('SOE' yangqi) under State-Party control. There are about 120 large SOEs in China, managed by the State-owned Assets Supervision and Administration Commission (SASAC) as well as several large banks and insurance companies not supervised by the SASAC. In recent years, the Communist Party leadership has concentrated its financial might in supporting these SOEs with cheap credit and a policy of growth. This has a dramatic effect in spurring their growth and they have spread overseas as well.

What is important in all this is that the Trump Organisation has large financial dealings with Chinese companies and banks that are owned by the Chinese state or the military-industrial complexes of the PLA corporations. According to a detailed study by the New York Times, a building on the Avenue of the Americas in New York City's Manhattan borough that is partially owned by Trump has a loan of $950 million that was paid for by a few different entities, including the Bank of China and Goldman Sachs.

The Industrial & Commercial Bank of China Ltd., a state-controlled enterprise and the world's biggest lender by assets, is Trump Tower's largest office tenant, occupying 11 percent of its office space. It is due to renegotiate its lease at Trump Tower in Manhattan during Donald Trump's presidency. The bank's lease is slated to end in October 2019. This will put Trump in direct personal financial negotiations with a state-owned Chinese bank.

There may well be other properties and deals in which the Trump organisation is in direct negotiation with the Chinese state enterprises. This is why it is crucial for the Ethics Committees to have a look at Trump's tax returns to see with which, if any, Chinese state companies the Trump organisation is directly involved. If there is to be the required compliance with the Constitution such disclosures must be made. There is no other way to satisfy the demands for transparency.

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Dr. Gary K. Busch has had a varied career-as an international trades unionist, an academic, a businessman and a political intelligence consultant. He was a professor and Head of Department at the University of Hawaii and has been a visiting (more...)
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