April 12, 2022
Dear Friends and Family,
For this introduction, I am again using excerpts from Hillsdale College Imprimis: Facing Up to the China Threat as I did in Epilogue 1.
Perhaps the greatest threat to the U.S. posed by the Chinese Communist Party (CCP) is its corruption of America’s business and financial elites, who view the economic benefits of dealing with China as more important than America’s national interests. If there is a single group committed to the globalist project and the elusory China dream, it is Wall Street. Our great investment banks are now selling trillions of dollars in debt and equity in Chinese corporations to American investors and retirees. They are literally betting on the success of China at the expense of the U.S.
Over the past decade alone the People’s Republic of China (PRC) has stolen almost $6 trillion of U.S. intellectual property, including tech innovations coming out of Silicon Valley and Seattle, entertainment coming out of Hollywood, and medical research and development coming out of New England and elsewhere. Properly understood, this is China stealing the wealth and future wealth of the American people. It is only recently that our government began trying to combat this theft in a serious way.
Many of us have heard of the CCP’s imprisonment in concentration camps of one to two million Uyghurs in Xinjiang province. Fewer of us are aware of how the Chinese government facilitates the abduction of Uyghurs women for sexual use by Chinese soldiers – or even worse, if that were possible, how the government harvests the organs of the Uyghur population for sale both in China and abroad. This latter atrocity has become a multi-billion-dollar industry; the Uyghur organs since they are uncorrupted by alcohol or pork, are especially desirable to wealthy Muslims in the Middle East and elsewhere.
Source: Facing Up to the China Threat by Brian T. Kennedy (2020)
This epilogue 3 set of excerpts provides additional information on the CCP and some of their relationships with American Elites in both Silicon Valley and Wall Street. All of the excerpts come from Red Handed: How American Elites Get Rich Helping China Win by Peter Schweizer (2022).
The last epilogue (#2) contains excerpts on CCP’s re-education (concentration) camps. They can be found here.
Next: Epilogue 4 will conclude the epilogues on China and is titled CCP and American Political Elites. Its excerpts are also from Peter Schweizer’s book Red Handed.
Happy Learning,
Harley
Dear Friends and Family,
For this introduction, I am again using excerpts from Hillsdale College Imprimis: Facing Up to the China Threat as I did in Epilogue 1.
Perhaps the greatest threat to the U.S. posed by the Chinese Communist Party (CCP) is its corruption of America’s business and financial elites, who view the economic benefits of dealing with China as more important than America’s national interests. If there is a single group committed to the globalist project and the elusory China dream, it is Wall Street. Our great investment banks are now selling trillions of dollars in debt and equity in Chinese corporations to American investors and retirees. They are literally betting on the success of China at the expense of the U.S.
Over the past decade alone the People’s Republic of China (PRC) has stolen almost $6 trillion of U.S. intellectual property, including tech innovations coming out of Silicon Valley and Seattle, entertainment coming out of Hollywood, and medical research and development coming out of New England and elsewhere. Properly understood, this is China stealing the wealth and future wealth of the American people. It is only recently that our government began trying to combat this theft in a serious way.
Many of us have heard of the CCP’s imprisonment in concentration camps of one to two million Uyghurs in Xinjiang province. Fewer of us are aware of how the Chinese government facilitates the abduction of Uyghurs women for sexual use by Chinese soldiers – or even worse, if that were possible, how the government harvests the organs of the Uyghur population for sale both in China and abroad. This latter atrocity has become a multi-billion-dollar industry; the Uyghur organs since they are uncorrupted by alcohol or pork, are especially desirable to wealthy Muslims in the Middle East and elsewhere.
Source: Facing Up to the China Threat by Brian T. Kennedy (2020)
This epilogue 3 set of excerpts provides additional information on the CCP and some of their relationships with American Elites in both Silicon Valley and Wall Street. All of the excerpts come from Red Handed: How American Elites Get Rich Helping China Win by Peter Schweizer (2022).
The last epilogue (#2) contains excerpts on CCP’s re-education (concentration) camps. They can be found here.
Next: Epilogue 4 will conclude the epilogues on China and is titled CCP and American Political Elites. Its excerpts are also from Peter Schweizer’s book Red Handed.
Happy Learning,
Harley
CHINA EPILOGUES – EPILOGUE 3
CCP AND AMERICAN ELITES – EXCERPTS
NOTE: All excerpts are from Red-Handed: How American Elites Get Rich Helping China Win by Peter Schweizer (2022).
INTRODUCTION: Beijing forged ties and gave money and deals to certain American elites, who became friendly to the Beijing regime. But for some, there are other motives beyond money. They believe the Beijing dictatorship is more efficient – even a better system overall – than representative democracy. Some of the most prominent names in Big Tech, Wall Street and American politics figure into the story.
Too many of America’s rich and powerful turn a blind eye to the nature of their business partners. This is not exactly a win-win scenario.
SILICON VALLEY:
The Tech Titans: Silicon Valley’s tech giants seem enamored with the Chinese dictatorship’s ability to get things done. They are also partly blinded by their technological ambition and are therefore prepared to collaborate with the notorious regime to accomplish their silicon dreams.
Bill Gates: Bill Gates is one of the world’s richest men, rightly recognized as a visionary who helped build a massive technology industry. He has a deeply troubling relationship with the Chinese regime. He has cooperated in ways that other tech titans have not. He has lent credence to the claims of the CCP and been rewarded with access, favors, and titles. He has done the bidding of the regime in the tech world and has apologized or made excuses for its aberrant activities. On top of all that, he has invested in companies attached to Beijing’s military-industrial complex. Gates appears to have always underestimated the repressive nature of the CCP.
In 2010, Microsoft set up a research laboratory in China to work on artificial intelligence (AI) with a Chinese military university, an essential area of research that would have huge implications for the economy and on the battlefield. Microsoft even started taking in interns from the People’s Liberation Army (PLA) at its Asian research facility. Microsoft worked with the Beijing regime in other ways. The company allowed the PLA to access communications on Skype, the company’s online videoconferencing platform. Communist officials were monitoring chats that might displease the regime. When asked about it, Microsoft simply said, “Skype’s mission is to break down barriers to communications and enable conversations worldwide.”
With a fascination with nuclear power, he had cofounded a company called TerraPower in 2008, with hopes to build nuclear reactors in China. Gates seemed oblivious to national security concerns about the project. By working with the communist regime, he was providing the government a strategic leg up in its competition with the U.S. for control over global nuclear markets. As the U.S. State Department has repeatedly explained, China uses “its large, rapidly-growing, state-sponsored nuclear industry as a strategic tool with which to augment China’s ‘comprehensive national power’ – both through the development in the civilian sector and in support of a military buildup.”
Google: In 2017, Google announced the opening of an AI research facility in Beijing. The Google AI China Center would include “a small group of researchers supported by several hundred China-based engineers.” The research would include machine learning and would classify, perceive, and predict outcomes based on massive amounts of data. This is the sort of work that military and intelligence officials would want from AI. Collaboration between American tech companies and Chinese military-linked research labs has enormous implications for our national security. As the National Security Commission of AI announced in its final report, “Authoritarian regimes will continue to use AI-powered face recognition, biometrics, predictive analytics, and data fusion as instruments of surveillance, influence and political control. The chair of that commission? Former Google CEO Eric Schmidt, who favors joint AI work with Beijing.
Cisco: Cisco Systems has been a regular partner with the Chinese military-industrial complex. The company has a long history of working with the Chinese Public Security Ministry, proving the technological tools to develop the PoliceNet as well as upgrade the “Golden Shield” surveillance database project. Golden Shield is a decades-long ambitious program to create an “all-encompassing surveillance network” to monitor the Chinese people. Leaked presentation materials indicate that Cisco executives knew that the Chinese would use their technology against dissidents in the country. Cisco CEO John Chambers appeared uninterested in how the government would use Cisco’s technology – and clearly does not want to pass judgment on the totalitarian regime. As he said, “One thing a technology company should never do is fall in love with one political party or one form of government. We don’t provide any unique capabilities to any government, we will not enable any organization uniquely, including our own U.S. government.
Chambers was also quite open about seeing the company’s future more anchored in Beijing than is Boston. After all, hiring engineers in China was far cheaper than hiring engineers in the U.S. “My workforce has to be five time as productive in this country than in the rest of the world,” he explained during lecture at MIT. Engineers in China were paid about $40,000 a year, he explained, compared to U.S. tech workers who made up to $250,000. However, Cisco’s embrace of Beijing was not perpetually reciprocated. The government came to support the rise of a significant homegrown competitor – Huawei. With a suitable Chinese alternative, the CCP leaned on local governments and businesses to start buying computer networking technologies from Chinese companies like Huawei rather than American firms like Cisco. For sensitive government entities, authorities declared, 100% must come from Chinese firms. For less critical projects, 70% should be from Chinese companies. Cisco was suddenly feeling the squeeze of unrequited love.
Elon Musk: Musk had for several years denied that he was going to build a facility in China, claiming that he was quite happy with his production facility in the U.S. Then Beijing rolled out the red carpet, coughing up $1.6 billion in subsidized loans. And the regulatory red tape to build in China was eliminated by government authorities. The enormous plant was built in less than a year. Musk has since become a Beijing booster. In January 2021, he explained in one interview how the unelected Beijing regime was possibly “more responsible” toward its people that the democratically elected U.S. government. He said, “it seems ironic, but even though you have sort of a single-party system, they really actually seem to care a lot about the well-being of the people. The energy in China is great. People there – there’s like a lot of smart, hardworking people. I see in the U.S. increasingly much more complacency and entitlement especially in places like the Bay Area, and L.A. and New York.”
The Partnership: Why do already fabulously wealthy tech titans kowtow to such a brutal regime? Why do they lay such obsequious comments at their feet? Why do they seemingly shrug their shoulders to the reality that they are boosting the Chinese military in its mortal competitions with us? Peter Thiel, co-founder of PayPal believes that there is something more at work here than simply money. He said, “There’s something about the woke politics inside these companies, the way they think of themselves as not really American companies. And it’s somehow very, very difficult to, for them to have a sharp anti-China edge of any sort whatsoever.” He went on: “You have this almost magical thinking that by pretending that everything is fine, that’s how you engage and have a conversation. And you make the world better.” The attraction may also be the power that tech giants can feel in an authoritarian society.
WALL STREET: Wall Street titans clamoring for opportunities in China have been seduced with financial riches, accolades, and appeals for their self-importance. It has worked fabulously well for Beijing, leading America’s top capitalists to praise the dictatorial regime, help finance its operations, and even fund some of its propaganda efforts.
Blackstone: Stephen Schwarzman is one of the most powerful people on Wall Street. Dubbed the “King of Wall Street” by Fortune magazine, he cofounded Blackstone Group and built it into a global financial titan. Schwarzman’s enormous financial success, in part, resulted from his close working relationship with CCP officials in Beijing. Schwarzman has also been a cheerleader for Beijing, deflecting criticisms or painting the regime in a stunningly benign light.
Schwarzman’s attachment to China is so great that in 2013, he launched an audacious $100 million plan to create a global education scholarship program in China to rival the Rhodes Scholarships offered at Oxford University. The Schwarzman Scholars study at Tsinghua University, a training ground for the CCP and government elite. Students from around the world – especially from the U.S. – would be exposed to the Chinese Communist system. They are also required students to take a course titled “Theory and Practice of Socialism with Chinese Characteristics.” The convocation of the first class brought congratulatory messages from both President Xi and President Barack Obama. So, what does this mean? A Wall Street financier worth billions courtesy of the free market system, is funding courses in Marxism-Leninism and a program that preaches the superiority of Chinese communism over American capitalism.
Goldman Sachs: Goldman became a trusted partner in Beijing because it advised officials on how to incorporate Communist Party leadership structures into Chinese corporations. John Thornton, a former head of Goldman Sachs Asia explained that there was no contradiction between the interests of the CCP and corporate investors. Perhaps no one figure at Goldman is more responsible for the cozy ties the firm enjoys in Beijing than Thorton, who has become fabulously wealthy in part because of those ties. In 2013, Thornton abruptly left Goldman and took a professorship at the elite Tsinghua University, the same institution where Schwarzman would later set up his Schwarzman Scholars program and the alma mater of President Xi. As the Japanese business media stated, “his presence in China, where personal connections are a key factor in business success, is likely to give Goldman Sachs a great deal of leverage for its future expansion in the country.”
The big Wall Street firms actively bring the children of Beijing party bosses into their companies. It was reported that in 2013 Goldman had more than two dozen sons and daughters of high-ranking officials at the firm. Merril Lynch, J.P Morgan, and other firms have done the same.
Bridgewater: One of the most powerful people on Wall Street is Ray Dalio, founder of Bridgewater, the world’s largest hedge fund. In 2018 alone, his compensation from Bridgewater was said to be $2 billion. But he is troubled by American capitalism. Capitalism is the world’s best system, he says, but it has not worked well for ordinary Americans. In 2018, Dalio’s firm became a significant player in China, having been granted the first license to provide hedge fund investments to locals in China. Dalio has been a consistent apologist for the communist system in China. Dalio enjoys a “rock-star investor status” in China, and his business is booming, thanks to the assist from the Beijing government. In 2020, the government granted him the right to launch a second investment fund.
BlackRock: The biggest asset manager in the world is BlackRock. Built from the ground up by Larry Fink (the CEO) and his partners. Fink has been outspoken for years on the need for greater “social responsibility” in investing, especially on environmental, social and governance (ESG) issues. He wants investors to focus not just on profits but on doing social good through companies. But those standards do not apply to investments in China. Fink sings the praises of the regime and avoids criticizing some of the more abhorrent actions in the country. Today, he serves as not only the head of BlackRock but also as an advisor to CEOs, officials at the U.S. Federal Reserve, Treasury secretaries, and U.S. presidents. BlackRock has become so large and powerful that some bankers regard it as “almost a shadow government.” Others have called it the “fourth branch of government.” When it comes to China, Fink does not have much criticism.
China’s sovereign wealth funds, like the China Investment Corporation (CIC) have hired BlackRock and others “to manage large portions of their portfolios.” So. BlackRock collects fees while its client works to advance Chinese interests at the expense of the United States. Fink clearly sees China at the center of BlackRock’s future. “We are here to work with China,” he says. “We firmly believe China will be one of the biggest opportunities for BlackRock.”
One of Fink’s great passions is climate change. He has been critical of fossil fuel producers and companies resisting climate goals. But those criticisms seem to stop at China’s border. Beijing is by far the greatest contributor to greenhouse gas emissions in the world. Fink has not taken the regime to task here, either. While Fink has pushed for better governance of companies in the U.S. and the Western world, he has done the opposite in China. BlackRock’s reach extends beyond the purviews of financial markets and now includes the highest reaches of the White House. No less than three executives from the firm, who were central to this firm’s push into China, are in senior roles in the Biden administration. Brian Deese, the former global head of sustainable investing in BlackRock, is the head of the National Economic Council. Deese had served in the Obama administration, where he helped negotiate the climate change deal that allowed China to avoid curtailing carbon emissions for more than a decade.
Summation: Whenever presidents Clinton, Bush, or Obama threatened to take a tougher stance on China’s trade protectionism, currency manipulation or technology theft, Wall Street chiefs used their influence to persuade them to back off. They conclude, “Financial institutions have been Beijing’s most powerful advocates in Washington.” Too many of America’s financial titans, who prospered under a free-market system and benefited from American rule of law, are now actively cheerleading for Beijing and profiting from the regime’s actions.
THE NATIONAL BASKETBALL ASSOCIATION (NBA): Joe Tsai, a billionaire and entrepreneur is a huge donor to colleges around the United States and the owner of the National Basketball Association’s Brooklyn Nets. But he also has strong and troubling views about and ties to the dictatorial regime in Beijing. These positions and relationships are important to understand in light of his remarkable influence in shaping the national conversation about China. The source of Tsai’s enormous wealth, estimated at over $10 billion, is his involvement with the Chinese tech giant Alibaba. The company has heavy ownership from the Communist Party elite. Indeed, their significant investors include the sons and daughters of the ruling Communist Party.
A few months after Tsai became a full-fledged NBA owner, Houston Rockets general manager Daryl Morey set off a firestorm with a simple tweet about ongoing protests in Hong Kong. “Fight for Freedom, Stand with Hong Kong,” he tweeted. The Chinese government in Beijing was furious and immediately asked for Morey to be fired. Tsai jumped in after Morey’s tweet and immediately declared that expressions about China and civil rights were entirely out of bounds. Tsai went further, proclaiming that foreigners did not have a right to even talk about human rights in China. Morey eventually lost his job in Houston because of the angry reaction in China.
YALE UNIVERSITY: Joe Tsai, a billionaire tech entrepreneur and Yale graduate, donated $30 million to the China Center at Yale Law School to honor his father. When speaking on college campuses, Tsai presents a remarkably rosy view of the communist regime. Tsai contends that the CCP is simply trying to improve the country’s economy and the life of the average citizen. Some students were appalled that Yale remained silent as Tsai worked to squelch any discussion about human rights in China. If people like Tsai have freedom of speech surely so do Yale administrators. For a university that sells itself on its quest for light and truth, it is appalling that it would consistently turn a blind eye to disinformation in order to appease a foreign nation. Yale’s big benefactor has also expressed his support for China’s Orwellian social credit system. China has a deplorable, farcical system of “justice.” which features incarceration without trial, torture, and other issues. Curiously, we could not find a single statement by Tsai criticizing the Chinese regime.
Yale’s strong ties to China, particularly China’s elite who govern the country, are not by happenstance. Yale has deep historical ties to the country. Today, more than 800 Chinese students and about 800 Chinese scholars are in residence at Yale. Yale made a conscious decision decades ago to cultivate ties in China, both academic and financial. “Part of the strategic thinking was to make China a real priority,” recalled President Rick Levin of his tenure back in the 1900s. Levin seemed to embrace the idea peddled by so many that what was good for the Beijing regimes was good for the world.
Unfortunately, Yale is not the only university that has significant and entangling financial ties with Beijing and works to obscure them. A U.S. Senate subcommittee investigation found that numerous universities were systematically underreporting donations from China and were inaccurately disclosing them to the federal government. Chinese officials seek influence on American universities to steer the debate in a way more favorable to themselves. They also want research partnerships in science and technology to enhance their ability to steal technological and intellectual property. This has been known by universities for quite some time but largely ignored.
Source: Red-Handed: How American Elites Get Rich Helping China Win by Peter Schweizer (2022).
The unabbreviated version of the above can be found in the pdf document below.
CCP AND AMERICAN ELITES – EXCERPTS
NOTE: All excerpts are from Red-Handed: How American Elites Get Rich Helping China Win by Peter Schweizer (2022).
INTRODUCTION: Beijing forged ties and gave money and deals to certain American elites, who became friendly to the Beijing regime. But for some, there are other motives beyond money. They believe the Beijing dictatorship is more efficient – even a better system overall – than representative democracy. Some of the most prominent names in Big Tech, Wall Street and American politics figure into the story.
Too many of America’s rich and powerful turn a blind eye to the nature of their business partners. This is not exactly a win-win scenario.
- They are currently on display in the Nanjing province, where they are violently repressing millions, the largest mass incarceration of an ethnic-religious minority since the second world war.
- Beijing’s suppression of COVID. Beijing continues to take a position of non-cooperation in global efforts to find out the true origins of the virus.
- The Chinese military is openly talking about using new kinds of biological warfare, including “specific ethnic genetic attacks.”
- Constant surveillance and censorship, detention without trial, torture and force confessions. This is the regime with whom the following American elites are in bed.
SILICON VALLEY:
The Tech Titans: Silicon Valley’s tech giants seem enamored with the Chinese dictatorship’s ability to get things done. They are also partly blinded by their technological ambition and are therefore prepared to collaborate with the notorious regime to accomplish their silicon dreams.
Bill Gates: Bill Gates is one of the world’s richest men, rightly recognized as a visionary who helped build a massive technology industry. He has a deeply troubling relationship with the Chinese regime. He has cooperated in ways that other tech titans have not. He has lent credence to the claims of the CCP and been rewarded with access, favors, and titles. He has done the bidding of the regime in the tech world and has apologized or made excuses for its aberrant activities. On top of all that, he has invested in companies attached to Beijing’s military-industrial complex. Gates appears to have always underestimated the repressive nature of the CCP.
In 2010, Microsoft set up a research laboratory in China to work on artificial intelligence (AI) with a Chinese military university, an essential area of research that would have huge implications for the economy and on the battlefield. Microsoft even started taking in interns from the People’s Liberation Army (PLA) at its Asian research facility. Microsoft worked with the Beijing regime in other ways. The company allowed the PLA to access communications on Skype, the company’s online videoconferencing platform. Communist officials were monitoring chats that might displease the regime. When asked about it, Microsoft simply said, “Skype’s mission is to break down barriers to communications and enable conversations worldwide.”
With a fascination with nuclear power, he had cofounded a company called TerraPower in 2008, with hopes to build nuclear reactors in China. Gates seemed oblivious to national security concerns about the project. By working with the communist regime, he was providing the government a strategic leg up in its competition with the U.S. for control over global nuclear markets. As the U.S. State Department has repeatedly explained, China uses “its large, rapidly-growing, state-sponsored nuclear industry as a strategic tool with which to augment China’s ‘comprehensive national power’ – both through the development in the civilian sector and in support of a military buildup.”
Google: In 2017, Google announced the opening of an AI research facility in Beijing. The Google AI China Center would include “a small group of researchers supported by several hundred China-based engineers.” The research would include machine learning and would classify, perceive, and predict outcomes based on massive amounts of data. This is the sort of work that military and intelligence officials would want from AI. Collaboration between American tech companies and Chinese military-linked research labs has enormous implications for our national security. As the National Security Commission of AI announced in its final report, “Authoritarian regimes will continue to use AI-powered face recognition, biometrics, predictive analytics, and data fusion as instruments of surveillance, influence and political control. The chair of that commission? Former Google CEO Eric Schmidt, who favors joint AI work with Beijing.
Cisco: Cisco Systems has been a regular partner with the Chinese military-industrial complex. The company has a long history of working with the Chinese Public Security Ministry, proving the technological tools to develop the PoliceNet as well as upgrade the “Golden Shield” surveillance database project. Golden Shield is a decades-long ambitious program to create an “all-encompassing surveillance network” to monitor the Chinese people. Leaked presentation materials indicate that Cisco executives knew that the Chinese would use their technology against dissidents in the country. Cisco CEO John Chambers appeared uninterested in how the government would use Cisco’s technology – and clearly does not want to pass judgment on the totalitarian regime. As he said, “One thing a technology company should never do is fall in love with one political party or one form of government. We don’t provide any unique capabilities to any government, we will not enable any organization uniquely, including our own U.S. government.
Chambers was also quite open about seeing the company’s future more anchored in Beijing than is Boston. After all, hiring engineers in China was far cheaper than hiring engineers in the U.S. “My workforce has to be five time as productive in this country than in the rest of the world,” he explained during lecture at MIT. Engineers in China were paid about $40,000 a year, he explained, compared to U.S. tech workers who made up to $250,000. However, Cisco’s embrace of Beijing was not perpetually reciprocated. The government came to support the rise of a significant homegrown competitor – Huawei. With a suitable Chinese alternative, the CCP leaned on local governments and businesses to start buying computer networking technologies from Chinese companies like Huawei rather than American firms like Cisco. For sensitive government entities, authorities declared, 100% must come from Chinese firms. For less critical projects, 70% should be from Chinese companies. Cisco was suddenly feeling the squeeze of unrequited love.
Elon Musk: Musk had for several years denied that he was going to build a facility in China, claiming that he was quite happy with his production facility in the U.S. Then Beijing rolled out the red carpet, coughing up $1.6 billion in subsidized loans. And the regulatory red tape to build in China was eliminated by government authorities. The enormous plant was built in less than a year. Musk has since become a Beijing booster. In January 2021, he explained in one interview how the unelected Beijing regime was possibly “more responsible” toward its people that the democratically elected U.S. government. He said, “it seems ironic, but even though you have sort of a single-party system, they really actually seem to care a lot about the well-being of the people. The energy in China is great. People there – there’s like a lot of smart, hardworking people. I see in the U.S. increasingly much more complacency and entitlement especially in places like the Bay Area, and L.A. and New York.”
The Partnership: Why do already fabulously wealthy tech titans kowtow to such a brutal regime? Why do they lay such obsequious comments at their feet? Why do they seemingly shrug their shoulders to the reality that they are boosting the Chinese military in its mortal competitions with us? Peter Thiel, co-founder of PayPal believes that there is something more at work here than simply money. He said, “There’s something about the woke politics inside these companies, the way they think of themselves as not really American companies. And it’s somehow very, very difficult to, for them to have a sharp anti-China edge of any sort whatsoever.” He went on: “You have this almost magical thinking that by pretending that everything is fine, that’s how you engage and have a conversation. And you make the world better.” The attraction may also be the power that tech giants can feel in an authoritarian society.
WALL STREET: Wall Street titans clamoring for opportunities in China have been seduced with financial riches, accolades, and appeals for their self-importance. It has worked fabulously well for Beijing, leading America’s top capitalists to praise the dictatorial regime, help finance its operations, and even fund some of its propaganda efforts.
Blackstone: Stephen Schwarzman is one of the most powerful people on Wall Street. Dubbed the “King of Wall Street” by Fortune magazine, he cofounded Blackstone Group and built it into a global financial titan. Schwarzman’s enormous financial success, in part, resulted from his close working relationship with CCP officials in Beijing. Schwarzman has also been a cheerleader for Beijing, deflecting criticisms or painting the regime in a stunningly benign light.
Schwarzman’s attachment to China is so great that in 2013, he launched an audacious $100 million plan to create a global education scholarship program in China to rival the Rhodes Scholarships offered at Oxford University. The Schwarzman Scholars study at Tsinghua University, a training ground for the CCP and government elite. Students from around the world – especially from the U.S. – would be exposed to the Chinese Communist system. They are also required students to take a course titled “Theory and Practice of Socialism with Chinese Characteristics.” The convocation of the first class brought congratulatory messages from both President Xi and President Barack Obama. So, what does this mean? A Wall Street financier worth billions courtesy of the free market system, is funding courses in Marxism-Leninism and a program that preaches the superiority of Chinese communism over American capitalism.
Goldman Sachs: Goldman became a trusted partner in Beijing because it advised officials on how to incorporate Communist Party leadership structures into Chinese corporations. John Thornton, a former head of Goldman Sachs Asia explained that there was no contradiction between the interests of the CCP and corporate investors. Perhaps no one figure at Goldman is more responsible for the cozy ties the firm enjoys in Beijing than Thorton, who has become fabulously wealthy in part because of those ties. In 2013, Thornton abruptly left Goldman and took a professorship at the elite Tsinghua University, the same institution where Schwarzman would later set up his Schwarzman Scholars program and the alma mater of President Xi. As the Japanese business media stated, “his presence in China, where personal connections are a key factor in business success, is likely to give Goldman Sachs a great deal of leverage for its future expansion in the country.”
The big Wall Street firms actively bring the children of Beijing party bosses into their companies. It was reported that in 2013 Goldman had more than two dozen sons and daughters of high-ranking officials at the firm. Merril Lynch, J.P Morgan, and other firms have done the same.
Bridgewater: One of the most powerful people on Wall Street is Ray Dalio, founder of Bridgewater, the world’s largest hedge fund. In 2018 alone, his compensation from Bridgewater was said to be $2 billion. But he is troubled by American capitalism. Capitalism is the world’s best system, he says, but it has not worked well for ordinary Americans. In 2018, Dalio’s firm became a significant player in China, having been granted the first license to provide hedge fund investments to locals in China. Dalio has been a consistent apologist for the communist system in China. Dalio enjoys a “rock-star investor status” in China, and his business is booming, thanks to the assist from the Beijing government. In 2020, the government granted him the right to launch a second investment fund.
BlackRock: The biggest asset manager in the world is BlackRock. Built from the ground up by Larry Fink (the CEO) and his partners. Fink has been outspoken for years on the need for greater “social responsibility” in investing, especially on environmental, social and governance (ESG) issues. He wants investors to focus not just on profits but on doing social good through companies. But those standards do not apply to investments in China. Fink sings the praises of the regime and avoids criticizing some of the more abhorrent actions in the country. Today, he serves as not only the head of BlackRock but also as an advisor to CEOs, officials at the U.S. Federal Reserve, Treasury secretaries, and U.S. presidents. BlackRock has become so large and powerful that some bankers regard it as “almost a shadow government.” Others have called it the “fourth branch of government.” When it comes to China, Fink does not have much criticism.
China’s sovereign wealth funds, like the China Investment Corporation (CIC) have hired BlackRock and others “to manage large portions of their portfolios.” So. BlackRock collects fees while its client works to advance Chinese interests at the expense of the United States. Fink clearly sees China at the center of BlackRock’s future. “We are here to work with China,” he says. “We firmly believe China will be one of the biggest opportunities for BlackRock.”
One of Fink’s great passions is climate change. He has been critical of fossil fuel producers and companies resisting climate goals. But those criticisms seem to stop at China’s border. Beijing is by far the greatest contributor to greenhouse gas emissions in the world. Fink has not taken the regime to task here, either. While Fink has pushed for better governance of companies in the U.S. and the Western world, he has done the opposite in China. BlackRock’s reach extends beyond the purviews of financial markets and now includes the highest reaches of the White House. No less than three executives from the firm, who were central to this firm’s push into China, are in senior roles in the Biden administration. Brian Deese, the former global head of sustainable investing in BlackRock, is the head of the National Economic Council. Deese had served in the Obama administration, where he helped negotiate the climate change deal that allowed China to avoid curtailing carbon emissions for more than a decade.
Summation: Whenever presidents Clinton, Bush, or Obama threatened to take a tougher stance on China’s trade protectionism, currency manipulation or technology theft, Wall Street chiefs used their influence to persuade them to back off. They conclude, “Financial institutions have been Beijing’s most powerful advocates in Washington.” Too many of America’s financial titans, who prospered under a free-market system and benefited from American rule of law, are now actively cheerleading for Beijing and profiting from the regime’s actions.
THE NATIONAL BASKETBALL ASSOCIATION (NBA): Joe Tsai, a billionaire and entrepreneur is a huge donor to colleges around the United States and the owner of the National Basketball Association’s Brooklyn Nets. But he also has strong and troubling views about and ties to the dictatorial regime in Beijing. These positions and relationships are important to understand in light of his remarkable influence in shaping the national conversation about China. The source of Tsai’s enormous wealth, estimated at over $10 billion, is his involvement with the Chinese tech giant Alibaba. The company has heavy ownership from the Communist Party elite. Indeed, their significant investors include the sons and daughters of the ruling Communist Party.
A few months after Tsai became a full-fledged NBA owner, Houston Rockets general manager Daryl Morey set off a firestorm with a simple tweet about ongoing protests in Hong Kong. “Fight for Freedom, Stand with Hong Kong,” he tweeted. The Chinese government in Beijing was furious and immediately asked for Morey to be fired. Tsai jumped in after Morey’s tweet and immediately declared that expressions about China and civil rights were entirely out of bounds. Tsai went further, proclaiming that foreigners did not have a right to even talk about human rights in China. Morey eventually lost his job in Houston because of the angry reaction in China.
YALE UNIVERSITY: Joe Tsai, a billionaire tech entrepreneur and Yale graduate, donated $30 million to the China Center at Yale Law School to honor his father. When speaking on college campuses, Tsai presents a remarkably rosy view of the communist regime. Tsai contends that the CCP is simply trying to improve the country’s economy and the life of the average citizen. Some students were appalled that Yale remained silent as Tsai worked to squelch any discussion about human rights in China. If people like Tsai have freedom of speech surely so do Yale administrators. For a university that sells itself on its quest for light and truth, it is appalling that it would consistently turn a blind eye to disinformation in order to appease a foreign nation. Yale’s big benefactor has also expressed his support for China’s Orwellian social credit system. China has a deplorable, farcical system of “justice.” which features incarceration without trial, torture, and other issues. Curiously, we could not find a single statement by Tsai criticizing the Chinese regime.
Yale’s strong ties to China, particularly China’s elite who govern the country, are not by happenstance. Yale has deep historical ties to the country. Today, more than 800 Chinese students and about 800 Chinese scholars are in residence at Yale. Yale made a conscious decision decades ago to cultivate ties in China, both academic and financial. “Part of the strategic thinking was to make China a real priority,” recalled President Rick Levin of his tenure back in the 1900s. Levin seemed to embrace the idea peddled by so many that what was good for the Beijing regimes was good for the world.
Unfortunately, Yale is not the only university that has significant and entangling financial ties with Beijing and works to obscure them. A U.S. Senate subcommittee investigation found that numerous universities were systematically underreporting donations from China and were inaccurately disclosing them to the federal government. Chinese officials seek influence on American universities to steer the debate in a way more favorable to themselves. They also want research partnerships in science and technology to enhance their ability to steal technological and intellectual property. This has been known by universities for quite some time but largely ignored.
Source: Red-Handed: How American Elites Get Rich Helping China Win by Peter Schweizer (2022).
The unabbreviated version of the above can be found in the pdf document below.
| china_e3l_american_elites_--_epilogue_3.pdf |