A leading figure in a Chinese group allegedly created to groom foreign elites has been pictured with five British prime ministers.
Photographs uncovered by the Daily Mail show how Zhirong Hu has moved among the British Establishment.
Mr Hu is a director of the Chinese People’s Association for Friendship with Foreign Countries, which is reportedly controlled by the country’s Communist Party.
Academics say its mission is to groom ‘business, political and media leaders in countries around the world’.
The claims are backed by a new book, Hidden Hand, whose serialisation continues in the Mail today.
Photographs uncovered by the Daily Mail show how Zhirong Hu has moved among the British Establishment, including current Prime Minister Boris Johnson
Zhirong Hu has met five British Prime Ministers including previous Prime Minister Theresa May (both pictured left) and Labour Prime Minister Gordon Brown (pictured right together)
Mr Hu is a director of the Chinese People’s Association for Friendship with Foreign Countries, which is reportedly controlled by the country’s Communist Party. Here he is pictured with Tony Blair in China in 2008 – a year after Tony Blair stepped down as Prime Minister
It alleges that China is recruiting ‘useful idiots’ to push the country’s agenda in the West.
Mr Hu, who sits in China’s upper parliamentary house, has also been pictured giving a thumbs-up while posing shoulder to shoulder with Donald Trump in 2018.
Eight years earlier he was seen shaking hands in Shanghai with former US president George W Bush.
The revelations about how Beijing has infiltrated the British elite come as the National Security Council is poised to ban China’s Huawei from involvement in the UK’s 5G network tomorrow.
Mr Hu is variously described as a ‘director’ and ‘national director’ of the CPAFFC, which is linked to the Communist Party’s ‘United Front’.
It was described in a dossier compiled with the help of a former MI6 spy as being ‘set up to pursue a United Front strategy … in order to promote a Party agenda abroad’.
The 86-page report, entitled China’s Elite Capture and leaked to this newspaper last week, made a string of incendiary claims that Beijing was trying to manipulate key figures in the UK.
Hidden Hand, written by Australian academic Clive Hamilton, a global authority on China, said of the CPAFFC: ‘Just as in the United Kingdom no community organisation can use the word “royal” in its title without official permission, in China, no community group would include the words “people” or “friendship” in its title without Party approval.
Mr Hu, who sits in China’s upper parliamentary house, has also been pictured giving a thumbs-up while posing shoulder to shoulder with Donald Trump in 2018
Mr Hu is variously described as a ‘director’ and ‘national director’ of the CPAFFC, which is linked to the Communist Party’s ‘United Front’. Here he is pictured with David Cameron, who was Prime Minister between 2010 and 2016
‘Friendship has a very distinct meaning, a cynical and opportunistic one. It does not refer to an intimate personal bond, but to a strategic relationship on behalf of the party.’
Such is Mr Hu’s standing in China that shortly after a parade in Tiananmen Square last October to celebrate 70 years of Communist Party rule, he posed for a photograph alongside Chairman Mao’s grandson Mao Xinyu.
In 2013, he was pictured with President Xi Jinping.
Political sources in China suggest that Mr Hu’s access to Establishment figures in the West is ‘unprecedented’.
Contacted for comment last night, Mr Johnson, Mrs May and Mr Blair said they did not know Mr Hu and were merely posing for photographs at large events.
A source close to Mr Brown indicated the former prime minister had no knowledge of Mr Hu. Mr Cameron declined to comment.
Mr Hu, who also uses the anglicised alias ‘Jacky’, is behind the Kai Xin Rong Group, which invested 500million euros in broadband in Greece shortly after the country’s prime minister visited Beijing.
Such is Mr Hu’s standing in China that shortly after a parade in Tiananmen Square last October to celebrate 70 years of Communist Party rule, he posed for a photograph alongside Chairman Mao’s grandson Mao Xinyu. In 2013, he was pictured with President Xi Jinping (pictured).
He claims to donate a third of his personal wealth to charitable causes. He has also attended functions of the mysterious 48 Group Club in Britain at least twice, accompanied by Lady Xuelin Bates, wife of Conservative peer Lord Bates. Lady Bates was photographed giving a thumbs-up to camera alongside Mr Hu and Mr Johnson at a convention last year.
The 48 Group Club is in the spotlight after Hidden Hand claimed the political networking club was being used to further Beijing’s agenda by making connections with senior politicians.
The revelations came as Labour peer Lord Mandelson, also linked to the 48 Group Club, yesterday appeared to toe the Beijing line and accused the UK government of being at ‘sixes and sevens’ on China.
He said Britain needed to decide whether it was going to ‘jump on the anti-China bandwagon because that’s the current sort of fashion to do’ or to reconsider trade talks.
Jobs in City firms for children of party leaders. The country’s critics banned from Lord Mayor’s show. Part two of our devastating expose of China’s creeping influence shows just how the ‘red aristocracy’ has snaked its way into the heart of Britain’s financial powerhouses
By Clive Hamilton and Mareike Ohlberg
Top communist party leaders in China are known as the ‘red aristocracy’, and, for all their professed belief in equality, they like to ensure a gold-plated future for their children.
Hence the so-called ‘princelings’, who are placed in high-flying financial businesses in the West.
For Western hedge funds, insurance companies, pension funds and banks, a prerequisite for doing business in the lucrative Chinese capital markets is a network of connections to the families that dominate the Party hierarchy.
Giving jobs to the sons, daughters, nephews and nieces of these families brings immediate guanxi — that peculiarly Chinese word that implies networking and the exchange of favours. It is essential to the way the Chinese do business. The offspring need not be well qualified, or even especially bright. It’s their connections that count.
The American banking house J.P. Morgan operated what it called the Sons And Daughters Program — which provided dozens of jobs in Hong Kong, Shanghai and New York to children of the Party elite.
The American banking house J.P. Morgan operated what it called the Sons And Daughters Program — which provided dozens of jobs in Hong Kong, Shanghai and New York to children of the Party elite. The JP Morgan sign is pictured at its Beijing office
One was Gao Jue, the son of China’s commerce minister, Gao Hucheng. Gao Jue landed a job after a meeting between his father and senior J.P. Morgan executive William Daley.
(Daley was a former U.S. commerce secretary under Bill Clinton, and pushed for China’s entry into the World Trade Organisation. He later served as President Obama’s chief of staff.)
Gao Jue interviewed poorly but was offered a coveted analyst position with the bank. Prone to falling asleep at work, he was soon judged to be an ‘immature, irresponsible and unreliable’ employee.
When, as part of a general downsizing, the bank later wanted to lay him off, his father took the head of the bank’s Hong Kong office, Fang Fang, to dinner and pleaded for his son to be kept on, promising to ‘go extra miles’ for J.P. Morgan in its China deals.
Fang was persuaded, and a senior executive in New York agreed to keep Gao Jue on, even though the executive’s own son had been laid off. Business is business. When Gao Jue was eventually let go, he took other finance jobs before winding up at Goldman Sachs.
As one equity executive told the Financial Times: ‘You don’t say no to a princeling.’ Which begs the question of what else the banks do for the Party elite, besides employing their children.
European financial institutions have gone the same way. In Zurich, Credit Suisse kept a spreadsheet that tracked princeling hires against how much money they brought in. It hired more than 100 sons, daughters and friends of senior government officials.
European financial institutions have gone the same way. In Zurich, Credit Suisse (pictured) kept a spreadsheet that tracked princeling hires against how much money they brought in. It hired more than 100 sons, daughters and friends of senior government officials
One ‘princess’ was employed after the company helped massage her resume. Once on the payroll, she often didn’t show up for work. When she did, she was judged ‘rude and unprofessional’ and sometimes brought her mother with her.
Nevertheless, she was paid $1 million during her employment and given a number of promotions because her family awarded deals to the bank.
Deutsche Bank, Germany’s biggest, used bribes and corrupt practices to gain access to China, including showering gifts on leaders, especially the family of then premier Wen Jiabao, and then mayor of Beijing, Wang Qishan.
In 2009, Deutsche Bank beat J.P. Morgan to a deal because it had employed the daughter of the client’s chairman.
Merrill Lynch also employed the son-in-law of Wu Bangguo (pictured right with then French President Nicolas Sarkozy), who for a decade until his retirement in 2013 was ranked second in the Party hierarchy, and Janice Hu, granddaughter of former Party head Hu Yaobang
There was nothing unique about J.P. Morgan’s Sons and Daughters Program; all the big American finance companies had something similar. It was claimed in 2013 that Goldman Sachs had employed 25 sons and daughters, including the grandson of Jiang Zemin, the all-powerful Chinese Communist Party boss until the early 2000s.
Merrill Lynch (and before it, Citigroup) employed the daughter-in-law of former premier Zhao Ziyang, Margaret Ren.
Merrill Lynch also employed the son-in-law of Wu Bangguo, who for a decade until his retirement in 2013 was ranked second in the Party hierarchy, and Janice Hu, granddaughter of former Party head Hu Yaobang.
Of course, some of these princelings may have been employed on their own merits as respected bankers and financiers, but there is no doubt that China’s red aristocracy is placing its children at the heart of Western finance.
For the CCP elite, entanglement with the masters of Wall Street through the placement of scores of princelings serves a more important purpose than employment for their kids.
It is a means of gathering intelligence and exerting influence, because it places its informants and agents in the heart of American power. The entire workings of a U.S. firm may be sent back to a father or uncle in China, along with confidential information on the personal and financial affairs of the wealthiest people in America.
While the placement of princelings and promises of access to China’s huge financial market have been the foremost avenue of influence in Wall Street, in the City of London the situation is different.
London’s financial district is also the financial hub of Europe, giving big finance an inordinate influence in British politics.
London’s financial district (pictured) is also the financial hub of Europe, giving big finance an inordinate influence in British politics
Brexit has many wondering whether the City can retain its dominant position or will be displaced by its rivals in Frankfurt or even Paris. The mandarins of the City have been working hard to ensure its pre-eminence, which provides a golden opportunity for Beijing.
It would be an exaggeration to say that if Beijing could control the City, it could control Britain, but not a large one.
An ominous, if small, sign of the influence Beijing already wields came in May 2019 when the City of London Corporation, the district’s municipal government, banned the Taiwan office from contributing a float to the annual Lord Mayor’s parade.
The City of London Corporation can’t get enough of China. In March 2019, two months before he banned Taiwan’s float in his parade, Lord Mayor Peter Estlin joined a delegation to China to promote ‘fintech and green finance’ links, along with the City’s role in the Belt and Road Initiative, China’s Silk Road strategic plan to invest around the world.
He praised the BRI’s ‘win-win culture’, and said he sees the City playing a vital role in helping to finance ‘a fantastic initiative’ and a ‘very exciting’ vision.
The delegation was led by John McLean, a board member of the China-Britain Business Council, who declared that ‘London is open for business for Chinese financial and tech companies’.
In March 2019, two months before he banned Taiwan’s float in his parade, Lord Mayor Peter Estlin (pictured left) joined a delegation to China to promote ‘fintech and green finance’ links, along with the City’s role in the Belt and Road Initiative, China’s Silk Road strategic plan to invest around the world
Earlier in 2019, the chair of the City of London’s policy committee, Catherine McGuinness, welcomed the launch of the global edition of the CCP’s China Daily, noting that the paper ‘is based in the Square Mile and is a good friend of the City of London Corporation’.
As of 2019, more than 60 countries, accounting for two-thirds of the world’s population, had signed on to China’s BRI programme or intended to do so. There are justifiable fears that it could be a Trojan horse for China-led regional development, military expansion and Beijing-controlled institutions.
In Europe, Chinese companies now own airports, seaports and wind farms across nine countries. They also own the tyre-maker Pirelli, the Swiss agrochemicals company Syngenta, a large slice of Daimler, a slew of office towers in London’s financial hubs, and 13 professional soccer teams.
All, or part, of the ports of Rotterdam (Europe’s largest), Antwerp and Zeebrugge are Chinese-owned.
The state-owned China Ocean Shipping Company owns the major Greek port of Piraeus and has a majority share in the Spanish port-management firm Noatum, and so controls the ports of Bilbao and Valencia.
Barcelona’s huge new container terminal is owned by a Hong Kong–based company.
All, or part, of the ports of Rotterdam (pictured) – Europe’s largest – Antwerp and Zeebrugge are Chinese-owned
Although Beijing insists in public that its port acquisitions are about promoting trade, it has a long-term plan to build strategic pressure, including beneath-the-radar expansion of its military presence.
This shift in the strategic landscape is most advanced in the Indo-Pacific, but good progress is being made in the Mediterranean.
‘Meticulously select locations, deploy discreetly, prioritise co-operation, and slowly infiltrate,’ is how one expert on China’s Navy describes this strategy.
It’s a neat summary of Communist China’s ambition to rule the world. It may couch its incursions in language of ‘equality’ and ‘co-existence’, but what it is really promoting is Beijing’s own model of authoritarian, state-directed capitalism.
The language plays to the dream of global harmony through trade and cultural exchange. But when President of the People’s Republic of China, Xi Jinping, uses the phrase ‘community of shared future’, the sub-text is that China’s new world order will replace the post-war American hegemony.
To the outside world, Xi and other leaders talk about ‘win-win co-operation’, and ‘a big family of harmonious co-existence’, and ‘a bridge for peace and East-West cooperation’, but in discussions at home, the talk is of achieving global dominance.
Beijing is never slow in using its financial and political muscle to get what it wants, particularly when faced with criticism and dissent and feeling slighted. Many powerful bodies in the West are falling in line instead of resisting the bribery, threats and lies.
When under fire, China pulls out all the stops to protect its interests. When financial risks to the economy became serious in 2015, the CCP exerted subtle influence on international banks not to rock the boat with bad news.
UBS, the largest Swiss bank, has a long history in China but it came under pressure to rein in its public commentary about the country. In 2018, one of its employees was detained in China, for no apparent reason, causing UBS management to bar travel by its staff to China.
Expectations can be manipulated downwards too, to punish those who annoy the Party. During Hong Kong pro-democracy protests in 2019, airline Cathay Pacific earned Beijing’s ire when some of its staff members joined in.
An analyst at an investment bank, Zhao Dongchen, advised clients that Cathay had done ‘irreversible damage’ to its brand and predicted that its share price would collapse.
To the outside world, Xi and other leaders talk about ‘win-win co-operation’, and ‘a big family of harmonious co-existence’, and ‘a bridge for peace and East-West cooperation’, but in discussions at home, the talk is of achieving global dominance
Nothing is too small for Beijing not to want to interfere and get its way. When the manager of the Houston Rockets basketball team tweeted support for Hong Kong protesters, America’s leading sports network, ESPN, banned its presenters from any discussion of the politics of it.
ESPN also displayed a map of China that included disputed territory that China claims in the South China Sea and has been ruled contrary to international law. It is almost never used outside China.
In other examples, camera-maker Leica, spooked by patriotic netizens, immediately distanced itself from its own advertisement referencing the ‘Tank Man’ of Tiananmen Square fame.
Hotel group Marriott International fired a junior employee who ‘liked’ a Twitter post supporting Tibetan autonomy, and it changed the name of Taiwan to ‘Taiwan, China’ when Beijing expressed annoyance.
In Stockholm, the Sheraton Hotel, a Marriott subsidiary, banned the local Taiwan office from celebrating Taiwan’s national day at the hotel.
Perhaps the most prominent spot in the corporate hall of shame belongs to Apple. After challenging the U.S. government in court when the FBI wanted access to Apple users’ data, the corporation moved their Chinese iCloud storage operation for Chinese users to a Chinese state-run company.
Apple, whose iPhones are assembled in China, also came under fire for deleting an app that allowed Hong Kong people to avoid street clashes with the police. It acted a day after China’s state media accused it of protecting ‘rioters’.
Soon after, Apple CEO Tim Cook was appointed to chair a business school advisory board at Tsinghua University in Beijing.
To ingratiate themselves, German car manufacturers self-censor their comments on China. In an interview with the BBC, the chairman of Volkswagen denied any knowledge of the concentration camps in Xinjiang, where a million Uyghurs, China’s Muslim minority, are detained for so-called ‘re-education’. He said he was ‘extremely proud’ of the company’s activities in the region.
Mercedes-Benz was quick to apologise after using an innocuous quote from the Dalai Lama in one of its Instagram ads (which was blocked in China anyway).
Audi promptly and ‘sincerely’ apologised for using an ‘incorrect’ map of China (one that did not include Taiwan as part of China) during one of its press conferences in Germany.
The German industrial conglomerate Siemens has also tried hard to curry favour with Beijing, signing agreements with ten Chinese partners.
Asked to comment on the Hong Kong protests, its CEO Joe Kaeser argued that Germany should ‘balance’ its values and its interest: ‘When jobs in Germany depend on how we deal with sensitive topics, one should not add to the general outrage but carefully consider all positions and measures in all their aspects.’
In other words, the government should stop criticising China’s human rights violations and focus solely on business interests.
n Adapted from Hidden Hand: Exposing How The Chinese Communist Party Is Reshaping The World by Clive Hamilton and Mareike Ohlberg, to be published by Oneworld on July 16 at £20. Copyright © 2020 Clive Hamilton and Mareike Ohlberg.