Wall Street is selling out to China
And it’s much worse than you think
But what are they getting in return?
Welcome back to China Uncensored.
I’m Chris Chappell.
Over the last couple years, the US government has been getting tougher and tougher on China.
But don’t worry.
Because China has one powerful friend left in the US: Wall Street.
Yes, Wall Street CEOs really want to be BFFs with the Chinese Communist Party—the kind
of best friends who make lots of money together selling out America.
And Wall Street is not afraid to let people know.
Take Larry Fink, the CEO of BlackRock.
BlackRock is the world’s largest asset management company.
It has more than 7 trillion dollars of assets under management.
It’s invested in things like mutual funds, retirement funds, and exchange-traded funds.
Back in 2018, BlackRock received an award from the National Committee on US-China relations,
a nonprofit that “promotes understanding and cooperation” between the US and China.
The award was presented at a black-tie gala dinner featuring speeches by former Secretary
of State Henry Kissenger and Chinese Ambassador Cui Tiankai, who read a congratulatory message
from Chinese leader Xi Jinping.
That dinner by the way raised more than 2 million dollars for that nonprofit.
Is it too late for me to sell out?
Meanwhile BlackRock CEO Larry Fink took the opportunity to praise China’s leadership.
“And the work China has done to lift millions out of poverty and build a strong middle class
is one of the great economic achievements of our lifetimes.
And when I am in China, I always congratulate the leaders for what an accomplishment.”
Yes, first China’s communist leaders destroyed their country’s economy for 30 years, then
they actually let people make their own money again, and finally they took all of the credit.
What an accomplishment.
But Larry Fink didn’t just parrot Chinese Communist Party propaganda.
He went on to talk about how China still has a long way to go, but don’t worry because
foreign companies can help Chinese people build their investments.
Foreign companies like BlackRock, I assume.
BlackRock is not alone.
The biggest Wall Street investment banks, private equity firms, and hedge funds are
all complicit.
What these companies and their CEOs have done is shocking.
And I’m going to name names later in this episode.
But first, how does Wall Street influence the US government on China?
I’ll show you after the break.
Welcome back.
How does Wall Street influence the US government on China policy?
White House trade adviser Peter Navarro explains.
“Consider the shuttle diplomacy that’s now going on by a self-appointed group of
Wall Street bankers and hedge fund managers between the US and China.
As part of a Chinese government influence operation, these globalist billionaires are
putting a full court press on the White House in advance of the G20 in Argentina.
The mission of these unregistered foreign agents—that’s what they are, they’re
unregistered foreign agents—is to pressure this president into some kind of deal.”
Navarro is talking about Wall Street pressuring the Trump Administration to cut a trade deal
with China back in 2018.
He uses some pretty strong language here, calling these Wall Street bankers “globalist
billionaires” and “unregistered foreign agents” and accusing them of being part
of a “Chinese government influence operation.”
Is that going too far?
Well, consider this.
China’s chief trade negotiator Liu He came to the US in February 2018 to try and work
out a trade deal with the White House.
According to the Wall Street Journal, before Liu even met with US officials, he met with
a group of Wall Street executives.
“Looking for allies in trade talks with the Trump administration, Mr. Liu dangled
a prize...Beijing offered to give U.S. financial firms a new opportunity to expand in China.”
And it worked.
“The get-together helped turn Wall Street into one of the biggest cheerleaders for a
[trade] deal.”
Unfortunately for Wall Street, the Trump Administration wasn’t buying what they were selling.
Right after President Trump took office, we predicted on this show that he would put tariffs
on China, based on the fact that he had been consistently talking about it for decades.
And a year later, he did.
And that’s when China’s Wall Street allies started losing their...clout.
In September 2018, executives from some of the biggest Wall Street companies traveled
to Beijing to meet with Chinese Vice President Wang Qishan, Xi Jinping’s right-hand man.
Those executives also met with “current and former Chinese officials and bankers...to
find ways to strengthen financial ties between the United States and China.”
Yeah, if Gordon Gekko were around today, he’d be smoking his Cuban cigars in Shanghai.
Selling out is good.
But the Chinese Communist Party’s courting of Wall Street didn’t start because of the
recent trade war.
It’s been going on for decades.
Let’s travel back to the year 1999.
When the biggest thing we were worried about was the Y2K computer bug, and the biggest
thing we were looking forward to was a new Star Wars movie.
Well, we’re older and wiser now.
The Matrix also came out that year.
And you just didn’t listen, Mr. Anderson.
In April 1999, Chinese Premier Zhu Rongji visited the US.
The purpose of his trip was to lobby US officials and business executives to support China’s
entry into the World Trade Organization.
He even gave the CEO of Nasdaq a carved wooden bull.
Highly symbolic, because the Chinese Communist Party would spend the next twenty years giving
Wall Street a truckload of bull.
But Zhu Rongji also played hardball, warning business executives that they wouldn’t get
access to the China market unless a trade agreement was quickly approved.
“Taking his case to the American business interests that have consistently pushed for
expanded commercial ties to the world’s biggest market, Mr. Zhu insisted that compromises
allowing American telecommunications firms, farm products, banks and insurance companies
into the Chinese market could all perish.”
Well, it worked.
And the White House ended up giving into pressure from the business community.
The Clinton Administration helped China join the World Trade Organization.
And the rest is history.
Really depressing history, involving the loss of millions of American jobs and the hollowing
out of US manufacturing.
But hey, Wall Street made billions of dollars.
The Chinese Communist Party has learned a lot about manipulating Wall Street over the
last 20 years.
And I’ll show you a video later that proves it.
Stick around because it’s explosive.
But first, it’s time to name names.
Right after this short break.
Welcome back.
Who are the biggest Wall Street sellouts?
Well, I can’t go into detail about *all* of the Wall Street companies that have sold
out to China—or this video would be 20 hours long.
But I’ll give you some highlights.
Let’s start with BlackRock, the asset management company I talked about at the beginning of
this episode.
BlackRock CEO Larry Fink is gunning for the China market.
In his 2019 letter to shareholders, Fink said “Our goal is to become one of the country’s
leading global asset managers.”
But don’t worry!
This is good for the US.
According to BlackRock.
Blackrock told the Wall Street Journal that “U.S. financial institutions’ expanding
in China is consistent with the policy goals of the U.S. government.”
Yes, it’s consistent with the US government’s policy goals...that were set by Wall Street
in the 90s.
BlackRock’s China ambitions have also affected the larger investment market.
In a pretty disturbing way.
MSCI is one of the biggest index providers in the world.
Lots of big investors, like banks and government pension funds, invest according to MSCI’s
indexes.
Back in 2017, MSCI was considering adding Chinese A Shares, which are stocks that trade
in mainland China, to its emerging-markets indexes.
“The Chinese government lobbied heavily for the inclusion.
The other strong voice that helped drive the shift was from BlackRock.”
Just that one change “steered tens of billions of dollars into China’s stock market.”
So thanks to BlackRock, the money in your bank or your pension fund could be invested
in China.
And you have absolutely no control over that.
Yay!
Now let’s move from BlackRock to Blackstone.
Blackstone is the world’s largest private equity fund.
That means it invests money for private groups of investors.
Back in 2007, China’s sovereign wealth fund bought a stake in Blackstone.
They sold their stake in 2018 as the trade war with China ramped up.
Blackstone’s CEO Steven Schwarzman has been called Trump’s China whisperer.
Schwazman says he made eight trips to China in 2018 on behalf of the White House, “trying
to assure China’s most senior officials that the president was not looking for a trade
war.”
I bet that went well.
Schwarzman also helped organize trade talks between the US and China behind the scenes.
But that’s not his only connection to China.
“Mr. Schwarzman has raised more than $500 million to build a scholarship program in
his name at China’s prestigious Tsinghua University.”
But educating Chinese youth is a lot better than what one investment bank did.
JP Morgan Chase is one of the few Wall Street companies that have actually gotten in trouble
with the US government over its China activities.
It was forced to pay 264 million dollars in fines for violating the Foreign Corrupt Practices
Act.
“Between 2006 and 2013, the bank developed a referral program, known as ‘Sons and Daughters,’
for applicants connected to business or government officials that could land JPMorgan work.”
“As JP Morgan hired more and more candidates based on referrals from Chinese leaders, senior
bankers in several instances explicitly tied those jobs or internships to securing deals
with Chinese government-run companies.”
So basically JP Morgan Chase hired the children of Communist Party officials in order to get
business in China.
And they got caught.
And they had to pay 264 million dollars in fines.
Which may sound like a lot to you and me, but it’s less than a 10th of one percent
of their market cap, so did they really care?
And even what JP Morgan Chase did is small potatoes compared to investment bank Goldman
Sachs, which once employed the grandson of former Chinese leader and money toad, Jiang
Zemin.
The book Hidden Hand says “No organisation has been more important to the CCP’s campaign
to penetrate US elites, or more willing” than Goldman Sachs.
This isn’t surprising, since Goldman also has close links to the US government, which
the Chinese Communist Party wants to influence.
“Goldman Sachs is one of the most heavily invested financial firms in the [US] federal
government, whether it manifests in the form of campaign donations, hiring former government
officials as lobbyists, or having former employees receive appointments to powerful cabinet positions.”
Mmmm.
So many possible targets of influence.
So little time.
Speaking of Goldman employees that get cabinet positions: Hank Paulson was the CEO of Goldman
Sachs until he became Treasury Secretary under George W. Bush.
“By the time he became treasury secretary in July 2006, [Hank] Paulson had traveled
to China about 70 times in his capacity as a top Goldman Sachs executive.”
By that time, Goldman Sachs had already helped Chinese state-owned enterprises raise billions
of dollars on the US stock market.
And in his first trip to China as Treasury Secretary, Paulson even got a private meeting
with then Chinese leader Hu Jintao.
Paulson, by the way, is good buddies with Chinese Vice President Wang Qishan.
They started working together in the 90s.
Wow, that’s the happiest I’ve ever seen Wang Qishan.
What happened to you Wang?
What horrors have you seen that you dare not name?
Communism is bad for the soul.
Anyway, back to Hank Paulson.
After leaving office in 2009, he set up his own think tank, the Paulson Institute.
Which is “dedicated to fostering a US-China relationship that serves to maintain global
order in a rapidly evolving world.”
Yes, a relationship that serves to maintain global order sounds totally normal and not
creepy or authoritarian at all.
Moving on to another former Goldman Sachs executive, John Thornton.
He was co-president when Hank Paulson was CEO.
When Thornton left Goldman in 2003, he joined Tsinghua University as the director of their
global leadership program.
In 2006, he gave 12.5 million dollars to the Brookings Institution think tank to fund the
John L. Thornton China Center.
And in 2008, he received the Friendship Award, the highest honor given to foreign experts
working in China.
Thornton has also been involved in Trump’s trade negotiations.
Back in August 2018, he briefed China’s trade negotiator Liu He in Beijing.
And Thornton also helped arrange a meeting between Wang Qishan and...Steve Bannon?
I wonder what those two talked about.
This episode just keeps getting weirder.
I should also mention that in the Trump Administration, current Treasury Secretary Steven Mnuchin
is also a former Goldman Sachs executive.
However, he didn’t really work on the China side of things at Goldman.
Mnuchin’s China conflicts come from his former role as... a Hollywood producer?
Whoa, whoa.
Wait a minute.
So Mnuchin’s Hollywood ties raise ethical questions because he was pushing for Beijing
to give Hollywood more access to the China market.
But Hank Paulson’s Goldman Sachs ties that directly involved putting American money in
Chinese state-owned companies *did not* raise ethical questions?
Really, New York Times?
Don’t get me wrong, when it comes to selling out to the Chinese Communist Party, Hollywood’s
hands are not clean.
But if Hollywood’s hands are dirty, Wall Street’s hands are caked in 3 inches of
mud.
As I’ve spent this whole episode showing, this problem is not new.
It’s been happening since at least the 1990s.
But it’s likely going to get worse.
Because the Chinese Communist Party has figured out how to manipulate America’s elite.
And I’ll show you how after this final commercial break.
Welcome back.
As I like to say, the Chinese Communist Party is great! ...at manipulating America’s elite.
I’m going to show you part of a speech given last month by Di Dongsheng an Associate Dean
at Renmin University, a prestigious university in Beijing.
“Because we know that the Trump administration is in a trade war with us, so why can’t
we fix the Trump administration?
Why did China and the U.S. use to be able to settle all kinds of issues between 1992
and 2016?
No matter what kind of crises we encountered, be it the Yinhe incident, the bombing of the
embassy, or the crashing of the plane, things were all solved in no time, like (a couple)
do with their quarrels starting at the bedhead but ending at the bed end.
We fixed everything in two months.
What is the reason?
I’m going to throw out something maybe a little bit explosive here.
It’s just because we have people at the top.
We have our old friends who are at the top of America’s core inner circle of power
and influence.”
He goes on to tell a story about how an “old friend of China” from a top US financial
institution helped him pressure a famous Washington DC bookstore into doing an event for Xi Jinping’s
book back in 2015.
I’ve cut that because it’s too long.
But the next clip is definitely worth watching.
“As I said before, since the 1970s, Wall Street had a very strong influence on the
domestic and foreign affairs of the United States.
So we had a channel to rely on.
But the problem is that after 2008, the status of Wall Street has declined, and more importantly,
after 2016, Wall Street can’t fix Trump.
It’s very awkward.
Why?
Trump had a previous soft default issue with Wall Street, so there was a conflict between
them, but I won’t go into details, I may not have enough time.
So during the US-China trade war, they (Wall Street) tried to help, and I know that my
friends on the US side told me that they tried to help, but they couldn't do much.
But now we’re seeing Biden was elected, the traditional elite, the political elite,
the establishment, they’re very close to Wall Street, so you see that, right?
Trump has been saying that Biden’s son has some sort of global foundation.
Have you noticed that?
Who helped him (Biden’s son) build the foundations?
Got it?
There are a lot of deals inside all these.”
Now I’m not saying Di Dongsheng is right about everything.
But his speech represents the attitude of the Chinese elite: the absolute gloating over
the fact they’ve cracked the code to manipulate American politics, using their old friends
on Wall Street.
Especially if Biden becomes president.
If you’re upset after watching that video, don’t worry!
This story has a happy ending.
For Wall Street, that is.
Because now that there’s a Phase 1 trade deal, the Chinese Communist Party is rewarding
a lot of the companies I talked about earlier.
For being a good friend to China.
“Since the signing of the trade deal, JPMorgan will get full control of a futures venture
in which it had a minority stake.
Goldman Sachs and Morgan Stanley became controlling owners of their Chinese securities ventures.”
“And in August, BlackRock became the first foreign firm to win preliminary approval to
start a wholly owned mutual-fund business in China.”
See?
Selling out *is* good!
Of course, ultimately it’s not going to be a happy ending for Wall Street, because
the Chinese Communist Party is luring American companies to China for a specific reason.
But that’s a topic for another episode.
Still, the Chinese Communist Party is keeping Wall Street happy for now.
Because no matter which political party is in power in America, Wall Street will always
be there to grease the wheels for the Communists.
Like a loyal friend should.
And now it's time for me to answer a question from a fan who supports China Uncensored on
Patreon.
We couldn’t afford to make this show without their support.
zEd asks, “Thank you for the great content...Any plans to expand further with this momentum?
Asia, Europe, Central/South America Uncensored?
Happy holidays and positive vibes.
Now that’s an interesting question Zed.
I actually was just talking with Matt about doing new shows.
His suggestion was...that we do a show that’s just him playing with Legos.
He really likes Legos.
And while that’s a...great idea, maybe there’s some better kind of show we could do.
Shelley had a great idea for a cooking show, where we invite all the world’s top dictators
on.
It’s called Cooking with Authority.
Kim Jong-Un still hasn’t returned my call.
But if we were to start another show, what would you like us to do?
Let me know in the comments below.
Once again I’m Chris Chapppell, see you next time.