Who Is Guo Wengui, the Chinese Emigre With Links to Steve Bannon?

Welcome to Foreign Policy’s China Brief. The highlights this week: What to make of the Chinese emigre linked to Steve Bannon, Beijing flexes its muscle in the South China Sea, and the Chinese Communist Party continues its security purge.

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When the far-right agitator and former White House strategist Steve Bannon was arrested last week on fraud charges, he was sunning on the yacht of the renegade Chinese billionaire Guo Wengui, also known as Miles Kwok. Guo, a powerful Bannon funder, is facing an FBI investigation into a company of his own—also linked to Bannon.

But Guo is also a high-profile target for the Chinese Communist Party (CCP) due to his status as a rich fugitive. Another notorious conservative figure, the Republican fundraiser Elliott Broidy, is accused of illegally lobbying for China—including an attempt at the request of a high-ranking Chinese official to get Guo extradited for bribery charges. (Broidy also lobbied to get U.S. charges dropped against Malaysian fraudster Jho Low, currently protected by China.)

Guo is often labeled as an activist or a dissident, but he is neither. He is a familiar type in emigre circles: the man who loses a power struggle at home and then flees abroad, where he tries to present himself as offering insider insight into his home country.

Guo’s departure from China in 2015 was not a matter of conscience; he participated in high-level business and political affairs until he left. But he was closely tied to longtime security minister Ma Jian, and when Ma fell it prompted Guo’s permanent departure. Guo promptly entangled himself in U.S. political affairs, where he has made claims about CCP corruption, became close with operatives such as Bannon, and faces an array of lawsuits, including charges of sexual harassment. He says the lawsuits are cooked up by the CCP.

Why is Guo a CCP target? As a participant in contests among Beijing’s elite, Guo probably does know where some of the bodies are buried—even if most of his allegations can’t be verified. And unlike most actual dissidents, he has money that he invests in areas usually dominated by the CCP, such as Chinese-language media. Lastly, keeping the rich at home in line is a key part of CCP strategy. The Hurun Rich List, which tracks wealth in Asia, is sometimes called the “pig slaughter list” in China, since its members are so frequently purged.

Dangerous figures. Western policymakers should be wary of figures like Guo. Take Ahmed Chalabi, the Baghdad multimillionaire who fled Iraq after becoming wrapped up in a Jordanian financial scandal. Chalabi played a malignant role in the U.S. drive to the Iraq War, making a series of exaggerated claims that were taken seriously by political and military leaders. As U.S. relations degenerate with China, the space for those like Guo to operate will grow.

Muscle-flexing in the South China Sea. China launched two missiles in the South China Sea this week as part of a training exercise, including a “ship-killer” designed to sink aircraft carriers. The United States observed the exercise closely, sending a U-2 spy plane into China’s no-fly zone and prompting complaints from Beijing.

China’s military assumes that the ability to destroy carriers can deter U.S. intervention in the South China Sea or in the event of a war with Taiwan. That seems to stem in part from a long-held belief that military casualties would drive the United States away from a conflict. The political consequences of China killing several thousand Americans are less talked about.

Security purge. China isn’t defunding the police, but it is carrying out a large purge for corruption, insufficient political loyalty, and laziness. Mao-era language dominates the campaign, which portrays command of the security services as the CCP’s “knife handle.” Of particular concern for the party are links between organized crime and the police.

It’s worth noting Federico Varese’s study of attempts by the Hong Kong triad to break into China in the 1990s, which found that the offshore gangsters failed because the CCP already performed all the functions of organized crime. Today’s anti-gang campaign is more likely to consolidate organized crime by higher-level Chinese officials, as happened in Chongqing during Bo Xilai’s war on the city’s gangs.

Hong Kong police arrest victims of triad assault. As part of the assault on civil society following the new national security law, Hong Kong police are now blaming the attack by triad thugs against protesters last year—when police stood by—on the protesters themselves. Police arrested two democratic lawmakers who were attacked in the incident.

The brazenness may be the point: Hong Kong authorities are increasingly adopting the authoritarian tactics of demanding acquiescence with deliberately unbelievable lies as a loyalty test.

New U.S. sanctions. The U.S. Department of Commerce has sanctioned 24 firms involved in China’s expansion in the South China Sea, extending measures previously directed at tech firms and those involved in Xinjiang. The inclusion of the China Communications Construction Company, a major player in Belt and Road projects, is particularly significant.

With more Chinese firms added to the entity list weekly, U.S. businesses are going to have to make tough risk assessments, especially about the odds that so far unsanctioned partners could be added to the list. That furthers the agenda of the Trump administration—or at least U.S. Secretary of State Mike Pompeo’s faction—effectively forcing decoupling on U.S. businesses.

Hit movie debuts in reopened cinemas. The long-delayed film The 800 is the first blockbuster in post-coronavirus China, with 87 percent of cinemas reopened. The movie depicts a well-known episode of heroism during the Japanese invasion of China, in which just over 400 men—described as 800 by their leader to deter the Japanese—defended Sihang Warehouse in Shanghai against waves of attackers as the Chinese army retreated.

But they were nationalists, not Communists, making The 800 politically tricky: It faced censorship delays and at one point looked as though it would never be released in theaters, but after 13 minutes of cuts it has proved to be a massive hit. Unusually for a modern Chinese blockbuster, the film is by all accounts very good, mixing debate about war with spectacular action scenes. Its success is also a positive sign for the post-pandemic movie industry.

Flooding impact. The devastating floods that hit southern China this year have now hindered production of key commodities in the region, including rare earths and fertilizer. Jiangsu, an economically important coastal province that surrounds Shanghai, has suffered in particular, leading many factories to close. Transport costs have also risen due to flooded roads.

“Beaconism and the Trumpian Metamorphosis of Chinese Liberal Intellectuals,” by Yao Lin

As the blind Chinese dissident Chen Guangcheng, known for his heroic work as a village lawyer, makes an appearance at the Republican National Convention tonight in support of U.S. President Donald Trump, read this article by the political scientist Yao Lin on why many liberal Chinese intellectuals end up on the far-right in the United States.

Yao argues that the legacy of eugenicism and nationalism in Chinese intellectual circles, mixed with a naive idealism about the United States, makes Chinese intellectuals surprisingly susceptible to Trumpism.

That’s it for this week.

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