And at least 32 companies with ties to China’s regime nabbed loans of $1 million or more.
On Friday evening, President Trump announced that he would ban TikTok, the Chinese-owned social networking app that is extremely popular with young people but also has prompted major worries about espionage by China’s authoritarian regime.
In any case, the TikTok news was huge, and drove a lot of the China-related debate over the past few days. But there was another story about China that dropped this weekend that we are closely monitoring here at the Alliance for American Manufacturing, and one we think you should care about, too.
The New York Times reported on Sunday afternoon on new findings that more than 125 Chinese-backed companies received loans from the Paycheck Protection Program (PPP), which was created at the start of the COVID-19 shutdowns to keep America’s small businesses afloat (and keep workers employed) during this unprecedented crisis.
In fact, as much as $419 million in PPP funds have gone to these companies, many of which have direct ties to China’s authoritarian regime. In some cases, it even appears that U.S. taxpayer money went to companies with direct links to the Chinese military.
According to the new research, which was put together by the team at Horizon Advisory, at least 32 of these Chinese companies nabbed loans of $1 million or more. Some even received loans between $5 and $10 million.
Here are some of the more egregious examples:
- Up to $10 million went to Continental Aerospace Technologies Inc., an aircraft engine maker that is owned by the Aviation Industry Corporation of China, which itself is a state-owned company and has been classified as a Chinese military company by the U.S. Department of Defense. The company also owns Aviage Systems, which received up to $350,000 in PPP funding.
- Up to $1 million went to BGI Americas Corporation, a gene-testing company owned by China’s BGI Group. Horizon Advisory notes that BGI’s leadership is “closely connected” to the Chinese state, and is now helping build a gene bank in Xinjiang, where China’s government stands accused of orchestrating a genocide of the Uighur people.
- Two companies affiliated with China’s HNA Group received loans of up to $1 million. The HNA Group is part of China’s military-civil fusion program.
- Robotics company CloudMinds Technology Inc. received loans of between $1 and $2 million. Most of the company’s workforce is in China, and the U.S. Commerce Department placed CloudMinds entities on a debarred list, meaning they stand accused of “engaging in activities contrary to the national security or policy” interests of the United States.
- Semiconductor company Mattson Technology Inc., received between $2 million and $5 million in loans. The company is owned by Chinese state-invested Beijing E-Town International Industrial Investment and Development.
According to the report, at least 11 companies with ties to China’s regime received PPP loans of between $5 million and $10 million.
Now, Horizon Advisory points out many of these companies received the PPP funding because they employ workers at facilities in the United States, so some jobs were likely saved. But it’s also worth noting that these companies have access to other revenue streams… including that of the Chinese government.
Why should America’s taxpayer dollars go to prop up companies that are owned and/or supported by China, especially during a time when so many small businesses in the United States are struggling or even shutting their doors because of the economic crisis?
So while it appears that Microsoft is planning to swoop in to save TikTok – much to the relief of dancing, lip-syncing teenagers everywhere – it's now on Congress to put in place real protections that will ensure that Chinese companies aren’t the recipients of future PPP or other stimulus funding, like potential infrastructure legislation.
America’s small businesses and workers should be the ones accessing this much-needed money, after all, not companies that are subsidized and supported by the Chinese goernment.