China uses dubious investment practices to gain access to Western companies. The most recent case: a loan from Beijing for the American investment bank Goldman Sachs. Alarm bells should have been ringing in the governments of the Western world long ago.
Governments of the free world are apparently not succeeding in preventing the Chinese state from investing in their critical infrastructure.
This is according to a report in the Financial Times. According to the report, the major U.S. bank Goldman Sachs has bought up companies in Great Britain and the United States with funds provided by a Chinese sovereign wealth fund. Among them is said to be even a service provider that is supposed to guarantee the Internet security of the computers of the British government.
Goldman Sachs is said to have made at least seven deals with cash from the China-US Industrial Co-operation Partnership Fund totaling $2.5 billion, according to the newspaper's research. The bank launched this fund in 2017 together with the sovereign wealth fund China Investment Corporation.
The fund, which manages about $1.35 trillion, is the largest of its kind in the world. In this way, China has gained access to companies that, for example, optimize global supply chains, provide cloud computing, and produce drones or batteries for electric cars.
Alarm bells must be ringing in capitals across the Western world.
This revelation should set alarm bells ringing in capitals from Berlin to Ottawa, because actually the "de-risking" from the People's Republic's economy should prevent exactly that; namely, Beijing gaining access to these technologies.
In Germany, Chancellor Olaf Scholz's decision to single-handedly allow a corporation in which the Chinese state (and thus very directly the Chinese Communist Party) owns shares to acquire stakes in the security-relevant port of Hamburg caused horror.
Why the chancellor, against the advice of scientists and European politicians, pushed through this investment remains his secret. Goldman Sachs, too, has made a secret of the People's Republic's involvement in its investments.
China uses perfidious measures to circumvent the West's "de-risking".
The Biden administration has paraphrased its approach to "de-risking" with the following mnemonic: "small yard, high fence".
Which can be translated as "small yard, high fence". The phrase is meant to condense Washington's intention to keep China away from technologies that Xi Jinping could turn against the U.S. and its allies. At present, this refers primarily to semiconductors, those valuable, complex-to-manufacture computer chips that are built into cell phones and medium-range missiles.
In principle, other countries are joining in this approach, while at the same time economic players are circumventing the corresponding measures by re-packaging the sanctioned goods via third countries and ultimately sending them to the People's Republic.
This also applies to the opposite approach: the official trade balance between the People's Republic of China and the United States of America has fallen by 20 percent compared to July of the previous year.
At the same time, more Chinese trade goods reached the land of opportunity via its southern neighbor Mexico, with which the USA and Canada share a common economic zone.
Goldman Sachs Sees Itself as a Profit Multiplier and Xi Claps His Hands.
Not every Chinese player involved in trade and business is a stooge of the Chinese Communist Party.
However, the latter tries to close every loophole, no matter how small, that could be interpreted as a hint of lack of control. In any Chinese company where three or more Communist Party members work, they are required to set up a party cell.
True, only 100 million of China's 1.4 billion population belong to the totalitarian Unity Party. Through clever strategies such as those mentioned, however, Xi and his nomenklatura succeed in intensifying the iron stranglehold around every stirring in Chinese society.
The investment bank Goldman Sachs, which has repeatedly come under heavy criticism not only since the financial crisis of 2008, sees itself as a profit maker and not as a defender of the free democratic order.
As a result, only a few of the bank's executives should feel any pangs of conscience. Beijing is clapping its hands in the face of such opportunism, because it gives Xi and company the opportunity to buy deeper into the security infrastructure of the free world.
If it comes to war with any of the democratic actors with whom Beijing has picked a quarrel - Taiwan, the Philippines, India, Australia, to name a few - it will become clear too late that the real product on which Beijing has spent its money has been the security of the people of the free world.
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