Trump sought Chi­nese deal while con­demn­ing Bei­jing as US ‘en­emy’

The Myanmar Times - - Business -

EVEN as US pres­i­den­tial can­di­date Don­ald Trump ag­gres­sively con­demned Bei­jing, his ho­tel firm pur­sued a lu­cra­tive busi­ness deal with a gi­ant state-owned Chi­nese firm headed by a top Com­mu­nist of­fi­cial, sources say.

Mr Trump has long de­clared Bei­jing to be Amer­ica’s “en­emy”, but his Trump Ho­tel Col­lec­tion (THC) ne­go­ti­ated with the State Grid Cor­po­ra­tion of China – an elec­tric­ity com­pany that is the coun­try’s largest state-owned en­ter­prise – to brand and man­age a ma­jor de­vel­op­ment in the cap­i­tal, ac­cord­ing to sources with direct knowl­edge of the talks.

The process re­sulted in a mem­o­ran­dum of un­der­stand­ing for a deal po­ten­tially worth be­tween US$100 mil­lion and $150 mil­lion over 15 years, Robby Qiu, the former di­rec­tor of Trump’s Greater China of­fice, told AFP.

The dis­cus­sions were con­firmed by a source who asked for anonymity to dis­cuss the sen­si­tive busi­ness in­for­ma­tion.

Mr Trump has re­peat­edly been ac­cused of dou­ble stan­dards dur­ing the elec­tion cam­paign, and ques­tions have been raised about pos­si­ble con­flicts of in­ter­est due to his over­seas deals.

China’s state-owned en­ter­prises (SOEs) are a key el­e­ment of the Com­mu­nist Party’s con­trol over the world’s sec­ond-largest econ­omy, and seen as im­por­tant tools for pur­su­ing its pol­icy and geopo­lit­i­cal ob­jec­tives.

Un­like pri­vate firms, their top ex­ec­u­tives are di­rectly ap­pointed by the rul­ing party, and of­ten hold se­nior party po­si­tions.

Dur­ing his White House bid, Mr Trump has fre­quently ex­co­ri­ated China, claim­ing it has stolen mil­lions of Amer­i­can jobs through dis­torted trade poli­cies and cur­rency ma­nip­u­la­tion.

In his 2011 book Time to Get Tough – re­leased as he pon­dered a pres­i­den­tial cam­paign – he called China’s lead­ers “our en­emy”.

“What else do you call the peo­ple who are de­stroy­ing your chil­dren and grand­chil­dren’s fu­ture ... who are ru­in­ing our way of life? We shouldn’t en­ter­tain Com­mu­nists and beg for a few tiny con­tracts,” he wrote.

The ne­go­ti­a­tions with State Grid – whose then-chair Liu Zhenya had been an al­ter­nate mem­ber of the Com­mu­nist Party’s Cen­tral Com­mit­tee – be­gan over two years later.

Derek Scis­sors, an ex­pert on US-China busi­ness re­la­tions at the Amer­i­can En­ter­prise In­sti­tute, told AFP. “It does make him look con­sid­er­ably worse, in my view, to be work­ing with branches of the Chi­nese state af­ter so sharply crit­i­cis­ing the poli­cies of the Chi­nese state.”

State Grid is listed as the world’s sec­ond-largest com­pany by revenues in the Forbes Global 500 and pro­vides elec­tric­ity for around 1.1 bil­lion peo­ple across China.

Ear­lier this year Aus­tralia re­jected a bid by it to pur­chase a re­gional elec­tric­ity util­ity over con­cerns the deal would be “contrary to the na­tional in­ter­est”.

Sev­eral at­tempts by Chi­nese SOEs to in­vest in US firms and in­fra­struc­ture have pre­vi­ously been blocked by Wash­ing­ton on se­cu­rity grounds.

THC, since re­named Trump Ho­tels, man­ages Mr Trump’s port­fo­lio of lux­ury ac­com­mo­da­tions and has struck li­cens­ing and man­age­ment deals for Trump-branded ho­tels, res­i­dences and golf cour­ses in coun­tries from Panama to Azer­bai­jan and In­done­sia.

Mr Trump has said he has 121 projects abroad, telling Vanity Fair that they in­clude “nu­mer­ous deals” in China.

His com­pa­nies’ current ac­tiv­i­ties in the Asian coun­try re­main un­clear.

Ne­go­ti­a­tions with other SOEs and at least one Chi­nese city govern­ment con­tin­ued at least through the open­ing months of Mr Trump’s pres­i­den­tial cam­paign, ac­cord­ing to Mr Qiu, who moved to a different em­ployer late last year.

In July 2015, a month af­ter Mr Trump de­clared his can­di­dacy, the com­pany’s of­fice in Shang­hai be­gan re­cruit­ing for two em­ploy­ees with ex­pe­ri­ence work­ing with “large sta­te­owned cor­po­ra­tions”, ac­cord­ing to a job post­ing seen by AFP.

Last Oc­to­ber THC chief ex­ec­u­tive Eric Danziger told the state-owned China Daily news­pa­per that it was “ac­tively” pur­su­ing deals in ma­jor Chi­nese me­trop­o­lises in­clud­ing Bei­jing, Shang­hai and Shen­zhen.

Mr Trump has sought busi­ness in China since at least 2006, when doc­u­ments filed with the Chi­nese govern­ment show he be­gan trade­mark­ing his name in Hong Kong and on the main­land.

In 2008 he agreed with Chi­nese prop­erty de­vel­oper Ever­grande and Hong Kong-based Ori­ent Prop­erty Group to try to build a de­vel­op­ment in Guangzhou, ac­cord­ing to fil­ings to the Hong Kong stock ex­change.

But noth­ing ever came of the col­lab­o­ra­tion.

The Trump fam­ily re­newed its push into the coun­try in 2012 – just months af­ter his book came out.

In Hong Kong, his daugh­ter Ivanka told The Wall Street Jour­nal, “China is go­ing to be one of our pri­mary fo­cuses go­ing for­ward. There’s such in­ter­est in the brand be­ing here.”

Months later, THC opened its Shang­hai of­fice, its sole out­post in Asia.

Trump busi­nesses al­ready had long­stand­ing re­la­tion­ships with Chi­nese SOEs in the US: New York’s Trump Tower houses the Amer­i­can head­quar­ters of ICBC, the coun­try’s big­gest bank.

De­tails of the State Grid dis­cus­sions de­scribed to AFP sug­gest they fo­cused on a 7 bil­lion yuan (now $1 bil­lion) de­vel­op­ment that State Grid and its sub­sidiary Luneng En­ergy were build­ing in Bei­jing’s prime Guo­mao neigh­bour­hood.

State Grid ex­ec­u­tives flew to New York for sev­eral rounds of talks and Mr Trump and his fam­ily were “ex­cited” about the deal, sources said.

But ne­go­ti­a­tions were put on hold af­ter Chi­nese au­thor­i­ties opened a cor­rup­tion investigation into State Grid, with China’s Na­tional Au­dit Of­fice say­ing it il­le­gally used pub­lic land for the Guo­mao project.

There is no sug­ges­tion Mr Trump or his com­pa­nies were im­pli­cated in the Chi­nese inquiry.

Nei­ther State Grid nor the Trump cam­paign re­sponded to re­quests for com­ment. –

Photo: AFP

Don­ald Trump’s com­pany was in ne­go­ti­a­tions with the State Grid Cor­po­ra­tion of China.

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