China is more involved in your life than you might think. Sure, who doesn’t like fried rice? Who doesn’t own a product “Made in China?” However, the kind of involvement I am talking about runs deeper than that.
Specifically, the Chinese Communist Party (CCP) is becoming increasingly involved in the everyday lives of Americans.
Take my friend Bill, for example. His wife and he 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, where the family will then take a week-long vacation, staying at the famed Waldorf Astoria.
Sound familiar? Do you know someone like Bill? Do you use any of the iconic products Bill enjoys?
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.- Moving assets abroad, i.e., money laundering. Some Chinese companies were very active in buying up assets abroad, such as Anbang Insurance, which purchased AMC; HNA Group/Hainan Airlines; and others. They were suspected of moving assets abroad for high-level CCP cadres.
- Securing valuable resources, like food, land, and oil. Shuanghui’s takeover 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, TV shows, and even video games. 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 more than 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. 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 in this category. In addition, Shandong Ruyi—also known as China’s LVMH—is a fashion conglomerate 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.
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.Then-President of Shuanghui Zhang Taixi told PBS: “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 regime involvement, was shocked when PBS 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—directed food companies such as Shuanghui to obtain more meat for their production lines by purchasing overseas businesses.
The Smithfield purchase was a prime example of the CCP’s goal to secure valuable resources. China is the world’s biggest pork consumer. Issues such as swine flu and the injecting of pigs with hormones and drugs are commonplace in China, causing scandals and social unrest. So the CCP needs to look outside its borders for good quality pork.
Caught in the Crossfire
The Waldorf Astoria was acquired by an obscure Shanghai-based Anbang Insurance Group for nearly $2 billion in 2014. The Waldorf has hosted every U.S. president since 1933. Since the purchase by Anbang, however, the U.S. State Department prefers putting U.S. diplomats up in a different hotel.The Jiang faction is a group within the CCP that’s fighting for control of the Party. It’s named after former CCP head Jiang Zemin. Its power is concentrated in Shanghai, and it opposes current CCP head Xi Jinping.
Who would have imagined that only four years after the change of ownership, the iconic American hotel, the Waldorf Astoria, would be stuck in the middle of the factional in-fighting of the CCP.
How did Wanda’s chairman build up a $32.2 billion fortune in just 12 years?
Zoom: Software Made in China
Unlike other businesses that were purchased by Chinese entities, Zoom remains American, though the Chinese regime has no problem exerting control over it.The Buying of US Land
China is among the many buyers of U.S. land. The Smithfield takeover included 146,000 acres of farmland. There has been a tenfold expansion of Chinese ownership of farmland in the United States in less than a decade. Massive Chinese investment in American farmland is troubling, as it puts the food security of the nation in the hands of a hostile foreign power.There is another type of land that also is very valuable to the Chinese regime.
Sun’s Guanghui Energy Co. purchased the land in 2018.
Awareness and Vigilance
CCP-controlled entities continue to expand control globally. No matter what the motivation behind the acquisitions, one thing is for sure: The CCP wants control.U.S. businesses and consumers need to be aware of what companies are owned by China and what risks they pose in order to make informed decisions on which brands or products to support. Regardless of whether the risks are high or low, awareness is still very important.
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.
Yi Song has been a China scholar since 2010. Having lived many years in both the United States and China, she writes about the connections between the two countries.