As drones hover over Chinese cities monitoring residents and Xi Jinping’s government is attempting to flush coronavirus patients out by halting the sale of fever and cough medicines, the crisis was dubbed “China’s Chernobyl.” Predictions that Beijing’s catastrophic handling of the coronavirus will be the nail in the CCP’s coffin are likely premature.
In the words of Secretary of State Mike Pompeo, China’s ruling party is the “central threat of our times,” but with global news coverage singularly focused on the virus, stories about other scandals have been buried. Pompeo warned that China is seeking to infiltrate American infrastructure and policymaking at every level of government, just as he cautioned other countries against letting Huawei gain a foothold in their 5G networks. London’s decision not to blacklist Huawei from providing equipment for the UK’s telecommunications network, was a blow to the U.S., as well as the Five Eyes intelligence network.
A pair of stories drives home the Trump administration’s wariness over handing Huawei control of sensitive infrastructure. First, Germany’s Handelsblatt reported that the German government had “smoking gun” evidence that Huawei was colluding with Chinese intelligence authorities. On February 11, this report was followed by U.S. national security adviser Robert O’Brien’s admission that Huawei has built a “back door” into its systems. Through this vulnerability, according to O’Brien, the company can extract data which it would then have to provide to Communist Party officials under Chinese law.
This public confirmation was intended to rattle allies, like the UK, who have not heeded the alarm bells over Huawei equipment. “The freedom-loving world can’t sit back and let surveillance state communists infect our infrastructure,” Senator Ben Sasse (R-NE) cautioned. The British media was distracted by the coronavirus’s potential impact on China’s ruling elite and not focusing on Huawei.
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If American lawmakers are acutely aware of how Huawei may be serving Chinese communists’ needs, they’re less aware of other cases. Axios’ revealed on February 12 that the FBI has quietly set up a task force aimed at countering Chinese political influence in the US. A recent case profiled by Reuters on February 10 suggests that some of the ex-politicians walking through this revolving door may not even realize they are working to benefit Chinese interests.
There is a another political feud that pits three billionaires in a fight over subsidies and corporate control: Jackson Widjaja, the scion of a Sino-Indonesian family best known for their network of controversial palm oil and paper companies, and the Batista brothers, who’ve faced corruption allegations in their native Brazil. This feud has resulted in foreign interest lobbying war in the U.S.
In 2017, Widjaja agreed to buy Brazilian pulp manufacturer Eldorado from the Batistas’ holding company. Negotiations soured soon afterwards, with Widjaja telling one of his right-hand men that he would “rather spend millions on lawyers than give them another cent”. Widjaja was determined only to spend on lawyers for an ongoing arbitration in Brazil. His paper firm, Paper Excellence, also embarked on a lobbying campaign to attack one of the Batistas’ other companies—JBS, the world’s largest meatpacking firm.
Widjaja’s lobbied to block JBS from receiving U.S. agricultural subsidies that were intended for the nobel goal of insulating American farmers from the effects of the Chinese trade war. The effort was really intended to disrupt the JBS’ plans for a U.S. IPO. An unusual lobbying battle for a paper company with no agricultural business in the U.S.
The American companies and individuals caught up in the melee further muddy the waters. A Brazilian court filing reveals that Paper Excellence enlisted the help of DC lobbying powerhouse Mercury Public Affairs, whose roster of clients includes Chinese telecoms giant ZTE and Hikvision, a manufacturer of facial recognition technology 42% owned by the Chinese government.
Paper Excellence’s lobbyists convinced current members of Congress to send letters to Treasury Secretary Steven Mnuchin questioning whether JBS, which employs some 60,000 people in the U.S., should have been allowed access to the American market. This caused Senator Bob Menendez (D-NJ) to request the Treasury investigate JBS.
The state-owned China Development Bank is one of the most important financiers of Widjaja family company Asia Pulp and Paper, and had even considered bankrolling Paper Excellence’s purchase of Eldorado. Furthermore, one of JBS’s biggest competitors in the meatpacking industry is Smithfield—bought six years ago by Chinese conglomerate WH Group, in a transaction partly funded by China’s central bank.
China’s intrusion into the American agricultural sector has been as swift as it’s been decisive. Following direction by the Chinese government, Chinese nationals went from owning $81 million of American farmland in 2011 to $1.4 billion in 2013. It’s not hard to imagine how a campaign against JBS could serve Beijing’s interests.
The murky motivations underpinning Widjaja’s vendetta against the Batista brothers and the vindication of Washington’s concerns about Huawei are just two recent examples of the very machinations Secretary Pompeo warned about.
The coronavirus may be dealing a severe blow to the Chinese economy and its ruling elite, but it’s also created a fog concealing Beijing’s continued manipulations in the United States.
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