The Chinese business elite’s close ties with the top leaders of the Communist Party of China is an open secret. Now, is the White House playing the same game of crony capitalism?
Donald Trump’s son-in-law, Jared Kushner, has just been appointed as senior advisor to the incoming president while he at the same time is tangled up in business deals with one of China’s most shadowy businessmen.
The 36-year-old, heir to his family’s privately held multibillion-dollar real estate firm Kushner Companies, has been working for several months on a Manhattan property deal with Chinese investment giant Anbang Insurance. Kushner has met with its chairman Wu Xiaohui after the presidential election, The New York Times exposed during the weekend.
Anbang first came to global fame when it bought New York’s legendary Waldorf Astoria hotel in 2014 for almost US$2 billion. Wu, on the other hand, has been walking in the shadows and has never given a single press conference. Anbang, founded in 2004 and today one of the country’s most influential companies, is also being described as having close ties to the Communist Party and an impressive list of politically connected directors.
The negotiations between Kushner and Wu are reportedly about Anbang’s investment in the redevelopment of 666 Fifth Avenue, which the Times calls “the fading crown jewel of the Kushner family real-estate empire.” It writes:
“On the night of Nov. 16, a group of executives gathered in a private dining room of the restaurant La Chine at the Waldorf Astoria hotel in Midtown Manhattan. The table was laden with Chinese delicacies and $2,100 bottles of Château Lafite Rothschild. At one end sat Wu Xiaohui, the chairman of the Waldorf’s owner, Anbang Insurance Group, a Chinese financial behemoth with estimated assets of $285 billion and an ownership structure shrouded in mystery. Close by sat Jared Kushner, a major New York real estate investor whose father-in-law, Donald J. Trump, had just been elected president of the United States.”
During the meeting, Wu expressed his desire to meet with the president-elect. The report also described how Kushner has emerged as an important figure for some of America’s most complicated diplomatic relationships, including with China.
This week it emerged that Kushner, who is married to Trump’s daughter Ivanka, will become a senior White House advisor working on trade and the Middle East.
It’s a rare case of a close presidential family member taking a major job, and was labeled by Norman Eisen, who served as President Barack Obama’s government ethics lawyer, as a “murky legal landscape” when it came to the anti-nepotism law.
Beijing must be confused by the mixed signals coming from Trump world. On the one hand, there are threats of sanctions and a trade war … On the other hand, his son-in-law and top advisor is reliant on Chinese investors
“The Donald Trump administration may show the world that America can do princelings profiting from political connections at least as well as China can,” commented Bill Bishop, a Washington-based expert on Chinese business and author of the influential Sinocism China Newsletter.
“Beijing must be confused by the mixed signals coming from Trump world. On the one hand, there are threats of sanctions and a trade war, and several personnel appointments to make those threats look real. On the other hand, his son-in-law and top advisor is reliant on Chinese investors and still negotiating deals with them since the election.”
Reuters said Kushner would resign from his positions as chief executive of the Kushner Companies and as publisher of the New York Observer newspaper, as well as divest from any interests in the New York Observer, Thrive Capital, the 666 Fifth Avenue office building in midtown Manhattan and any foreign investments.
The Times article, however, highlighted the “ethical thicket he would have to navigate while advising his father-in-law on policy that could affect his bottom line.”
Founded in 2004, Anbang Insurance Group has grown rapidly and has total assets exceeding 800 billion yuan (US$115 billion), according to its website. Its ownership structure is however foggy. Wu does not appear in Anbang’s filings as an owner, but The New York Times said in September that a number of the company’s shareholders are relatives and acquaintances of the chairman.
Wu Xiaohui is considered to have substantial political ties, and is married to the granddaughter of Deng Xiaoping, China’s former de facto leader. He also has close links to Chen Xiaolu, son of Chen Yi, a top military commander under Mao Zedong.
“In many ways, Anbang and Mr Wu appear to be archetypal products of China’s mix of freewheeling capitalism and Communist Party dominance, a formula that has fueled nearly four decades of untrammeled growth,” the Times said.
If the true ownership of Anbang is unknown, who was Trump’s son-in-law and senior advisor actually trying to strike a deal with?