US PRESIDENT DONALD TRUMP’S unpredictable relationship with China has taken an unexpected turn even by his mercurial standards.
Facing an impeachment inquiry by the US Congress in connection with allegations that he pressed the president of Ukraine to investigate his Democratic political rival, former Vice-President Joe Biden, and his son, Hunter, for corruption, Trump has doubled down by urging China to do the same.
One of Trump’s (unsubstantiated) allegations is that the elder Biden was ‘probably’ responsible for Beijing’s ’sweetheart’ trade relationship with the United States because the younger Biden had received what Trump said was $1.5 billion for being on the board of a Chinese private equity company.
The kernel of the allegation is an official two-day visit Biden senior made to China in 2013 when he was President Barack Obama’s vice-president. During the visit, Hunter Biden, who had accompanied his father, met Jonathan Li. Li’s Bohai Capital and Rosemont Seneca Partners, a firm founded by Hunter Biden and the stepson of former US Secretary of State John Kerry, jointly created the private equity fund Bohai Harvest RST (BHR).
Hunter Biden was reportedly an unpaid advisory board member of BHR, rather than a main board director as Trump implied, although this remains unclear. A Biden spokesman said that the figure of $1.5 billion was false. (It is probable that derives from the capital the fund sought to raise.) However, Biden does appear to have become a 10% equity investor in the fund some two years after his father left office. As such, he may not yet have received any payout.
It is not unknown for Chinese companies to court the families of high-ranking officials, either their own or those of foreign governments. In that light, the younger Biden has attracted the criticism of Republicans before for his involvement with Li.
Chuck Grassley, who chairs the Finance Committee in the US Senate, raised concerns about the Obama administration’s approval of US automotive technology company Henniges being acquired for $600 million by state-owned Aviation Industry Corporation of China (AVIC) and BHR. Grassley also asserts that in 2015 another Chinese-government linked entity, Gemini Investments, acquired a 75% stake in Rosemont Realty, a sister company of Rosemont Seneca. Gemini Rosemont invested in US real estate.
US media are reporting that Trump raised Biden in a call with President Xi Jinping in June (the same one in which Trump reportedly said he would not raise the unrest in Hong Kong in order not to derail US-China trade talks). What the two presidents discussed about Biden is not known. The US transcript of their conversation was put into the same highly secure electronic storage system used to conceal, as Trump’s critics would have it, the transcript of his call with Ukraine’s President Volodymyr Zelenskiy.
This will all be extraordinarily perplexing and uncomfortable for Beijing, which will not want to be seen to be interfering in the domestic politics of a foreign government.
Next week, US-China trade talks are due to resume in Washington. The Biden twist throws another tangle into that knotted negotiation.