Why Does Trump Have a Chinese Bank Account?
The U.S. president has attacked Democratic nominee Joe Biden for his son’s dealings in China. But it appears Trump was himself pursuing business interests there.
Welcome to Foreign Policy’s China Brief. The highlights this week: U.S. President Donald Trump’s tax records show his company has a Chinese bank account, Chinese diplomats wreak havoc over Taiwan at a party in Fiji, and Chinese officials threaten U.S. citizens living in China.
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Does Trump Have Business in China?
U.S. President Donald Trump’s tax records show a bank account in China controlled by Trump International Hotel Management, according to the New York Times, as part of its investigation into his tax returns. That is embarrassing for Trump, who has attempted to smear his electoral opponent, Joe Biden, by going after his son Hunter’s business dealings in China—where Trump himself has tried to do business for years.
Setting up a bank account in China used to be pretty easy, and it wasn’t uncommon for firms to establish them just to give employees access to cash while traveling—back in the days when credit cards were rare, electronic payments were unheard of, and the 100-yuan note was king. In those days, one could set up a Chinese bank account by just sending in a passport; today, it requires a face-to-face meeting.
The details remain sketchy, but it seems that the Trump account was set up for business purposes—either as a wholly owned foreign enterprise or as a joint venture with an unknown Chinese partner. In that case, having a bank account would be not only legitimate but also advised, Dan Harris, an experienced China business attorney, wrote in a text message.
“Maybe he was operating 100 percent legally in China,” Harris said. “But he simply didn’t reveal it (as he should have done) because the optics were so bad for him.”
The records show that the company paid Chinese authorities $188,561 in taxes between 2013 and 2015. “Chinese taxes are usually about 25 percent of profits in China, so he’d have had to have done some business there to justify it,” Harris said. Trump has long pursued various interests and licenses in China, but an attorney for the Trump organization told the Times that no deals or transactions “ever materialized” and the office has been inactive since 2015.
Special treatment. Ivanka Trump appears to have received favorable treatment from the Chinese authorities for her own business efforts there. That’s not unusual, either: In China, the children of foreign leaders have often capitalized on their parents’ positions. Hunter Biden’s own private equity deals there may have benefited from his father’s visibility. Neil Bush, the son of President George H.W. Bush (and George W. Bush’s brother), has had substantial dealings in China, including appearances at propaganda events. Former Australian Prime Minister Kevin Rudd’s daughter is a brand ambassador for the Chinese firm Alibaba.
None of this necessarily implies parental collusion—only children taking advantage of their surnames. The practice is also common in reverse: Western firms regularly employ the children and grandchildren of Chinese political leaders in the hope of buying influence.
What We’re Following
Fiji cake fight. Two Chinese diplomats gate-crashed a party held by the Taiwanese mission on the island of Fiji this month, violently objecting to a cake displaying the Taiwanese flag—and beat up a Taiwanese representative so badly he was hospitalized. The undiplomatic behavior shows how seriously the Chinese Foreign Ministry takes not giving Taiwan an inch, as Peter Martin, the author of an upcoming book on “Wolf Warrior” diplomacy, explains.
Apart from personal conviction, Chinese diplomats care far more about covering themselves from political attacks at home than about convincing their host countries of good intentions—as evinced by the embassy’s own statement on the fight, which falls flat to foreign ears.
U.S. citizens in China threatened. Chinese officials have reportedly told their Trump administration counterparts that U.S. citizens in China are at risk of imprisonment if the United States continues to act against China. Exit bans and arbitrary detention have been a danger for foreigners in China for a long time, but fears increased with the detention of two Canadians held as de facto hostages over the arrest of Huawei Chief Financial Officer Meng Wanzhou.
In the past, arrests have usually had a glimmer of rationale, and foreigners arrested on political charges—such as the activist Peter Dahlin—tended to be expelled rather than held permanently. Those norms look likely to crumble in the future.
Chinese media targeted. The Trump administration has labeled six more Chinese media outlets operating in the United States as so-called foreign missions: Yicai Global, Jiefang Daily, Xinmin Evening News, Social Sciences in China Press, Beijing Review, and Economic Daily. These choices are, frankly, weird—especially compared with the well-funded outlets chosen earlier, such as China Daily and CGTN.
Social Sciences in China Press is an academic publishing house linked to the Chinese Academy of Social Sciences, which is a government think tank—but hardly a foreign mission. It’s possible that these outlets have been used as visa cover for espionage purposes. But in the absence of evidence, it seems more like the United States picking a fight for the sake of it and risking more retaliation.
Tech and Business
No-talent firms, stay out of chipmaking. There’s a big government push to domesticize the semiconductor industry in China, where electronics currently depend largely on foreign suppliers. This year, the industry missed the target—for 40 percent of components to come from domestic sources—and it has a lot of ground to make up to meet the 70 percent target in 2025. That, combined with growing fears of decoupling, has pushed heavy investment in next-generation chips.
But any project with the weight of the government behind it attracts a lot of chancers and unrelated firms trying to tap into government funds—resulting in a stern warning from the central government this week for unqualified chipmakers to stay away after several prominent firms collapsed.
Major insurance firm dissolves. Last month, the once prominent insurance firm Anbang announced it would dissolve, prompting a wave of creditors to move in to pick over the pieces. Anbang had substantial links to elite families and was used in a shopping spree that looked like an attempt to get serious amounts of money out of China. That included striking deals with U.S. presidential advisor Jared Kushner on highly favorable terms.
Tech restrictions. This week brought more tit for tat between Washington and Beijing, as China introduced restrictions on the export of sensitive goods and technologies. The United States still has a broad lead over Chinese tech, but Chinese firms are way ahead in a few fields, including online payments. Escalation probably harms China worse than the United States in the long run, but as business ties are unknotted, neither side really looks like a winner.
What We’re Reading
“China’s Influence in Japan: Everywhere Yet Nowhere in Particular,” Center for Strategic and International Studies (CSIS)
This new CSIS report details Chinese influence in Japan—a country deeply shaped by Chinese culture yet strangely immune to China’s present-day influence efforts. As the report points out, that is in part because of the clumsiness of such efforts, which often target the wrong people. But it’s also because of Japan’s relatively placid political environment, where suspicion of outside influence prevails.
That’s it for this week.
James Palmer is a deputy editor at Foreign Policy. Twitter: @BeijingPalmer