{"id":437,"date":"2019-05-12T01:33:05","date_gmt":"2019-05-11T16:33:05","guid":{"rendered":"http:\/\/yuzb.net\/en\/?p=437"},"modified":"2019-05-12T01:33:11","modified_gmt":"2019-05-11T16:33:11","slug":"americans-fund-concentration-camps-in-china","status":"publish","type":"post","link":"http:\/\/yuzb.net\/en\/2019\/05\/12\/americans-fund-concentration-camps-in-china\/","title":{"rendered":"Americans Fund Concentration Camps in China"},"content":{"rendered":"\n

\n\nThere are over 650 Chinese companies traded in the US stock marketsBY EMEL AKAN<\/a>May 9, 2019 Updated: May 9, 2019\n\n<\/p>\n\n\n\n

WASHINGTON\u2014A rising number of Chinese companies in U.S. capital markets pose a risk for U.S. investors<\/a> as they unwittingly finance companies associated with concentration camps<\/a> in China<\/a>, an expert warns.<\/p>\n\n\n\n

Through public pension and retirement funds, investors are transferring wealth from the United States to Chinese entities that do not comply with U.S. laws, a problem that has been overlooked for more than a decade.<\/p>\n\n\n\n

\u201cWe\u2019re talking about hundreds of billions of dollars and moving rapidly toward $1 trillion,\u201d said Roger Robinson, a former member of President Ronald Reagan\u2019s National Security Council and president and CEO of RWR Advisory Group, which tracks Chinese investments worldwide.<\/p>\n\n\n\n

\u201cNow, that\u2019s a lot of financing that\u2019s being attracted from unwitting American investors,\u201d he said at a May 2 event hosted by the civil advocacy group Committee on the Present Danger: China<\/a>, launched this year.<\/p>\n\n\n\n

According to Robinson, there are more than 650 Chinese companies traded in the U.S. stock markets. Around 86 of these entities are listed in the New York Stock Exchange and 62 in Nasdaq. And more than 500 Chinese companies are traded in the over-the-counter market, \u201cthe least regulated and the most popular for those seeking to skirt transparency and disclosure requirements,\u201d said Robinson.<\/p>\n\n\n\n

There is a wide spectrum of companies traded on the U.S stock exchanges and many of them are \u201coutright bad actors,\u201d he said.<\/p>\n\n\n\n

After closely examining Chinese enterprises and their entire network of subsidiaries, Robinson found that some are linked to the Chinese People\u2019s Liberation Army, for example.<\/p>\n\n\n\n

These companies are \u201cnational security abusers of all stripes, as well as human rights abusers,\u201d he said, adding that they are associated with sanctions violations, proliferation of weapons of mass destruction, cyber hacking, or building and militarizing the islands in the South China Sea.<\/p>\n\n\n\n

And in terms of human rights, he said there are Chinese companies that provide \u201csurveillance cameras and facial-recognition technology and the like to help maintain the incarceration of some 1 million Uyghurs in Xinjiang,\u201d in so-called detention or concentration camps.<\/p>\n\n\n\n

The majority of U.S. investors are unaware of the identities of these companies and their malicious activities. Investment prospectus, legal documents issued by companies during stock offerings, don\u2019t disclose these potential risks to U.S. investors.<\/p>\n\n\n\n

\u201cYou start to see a trend where trillions of dollars are going to flow into our markets over the next two to three years,\u201d Robinson said. \u201cIt is conceivable that one morning, the American people wake up and find\u2014whether it\u2019s 12 percent, 15 percent, 17 percent\u2014some high number of their retirement portfolios are Chinese securities.\u201d<\/p>\n\n\n\n

There\u2019s been no penalty for these companies to date. Robinson warned, however, that any sanctions toward Chinese entities based on their malevolent behavior will damage the value of U.S. retirement and pension funds, putting Americans at risk.<\/p>\n\n\n\n

Activist Short Seller Chases Down Fraud In China<\/h2>\n\n\n\n

There are many victims in the United States whose life savings have been wiped out because of Chinese stocks. Public pensions and retirement funds have lost billions of dollars, according to \u201cThe China Hustle<\/a>,\u201d a documentary released in 2018.<\/p>\n\n\n\n

After the financial crisis of 2008, hundreds of Chinese firms listed on U.S. exchanges through a process called a reverse merger with a public U.S. company.<\/p>\n\n\n\n

In the film, whistleblower and activist short-seller Dan David explains how Chinese companies mislead U.S. investors through overstating their operations, revenues, and profits. He hired researchers to go to China and investigate dozens of companies. The researchers found out that the \u201cfraud is out in the open\u201d and some factories are \u201cPotemkin villages.\u201d<\/p>\n\n\n\n

For example, L&L Energy<\/a>, a company mentioned in the movie, stated to its shareholders that it produced coal at its LuoZhou and LaShu mines in China. Through inspections of these mines, researchers found that there was no production taking place at either mine. L&L had fabricated its production and revenue figures, according to the movie.<\/p>\n\n\n\n

His first inclination was not to short these stocks, David told The Epoch Times.<\/p>\n\n\n\n

\u201cThe first thing we did is naively talked to the investment banks about what the mistakes we thought they were making,\u201d he said. \u201cAnd then we realized that these weren\u2019t mistakes but purposeful business decisions on their part.\u201d<\/p>\n\n\n\n

After receiving dismissive answers from the exchanges and the Securities and Exchange Commission, David started short-selling these fraudulent companies.<\/p>\n\n\n\n

\u201cOnce we started shorting and making a lot of money, then all these people wanted to listen, if not sue us,\u201d he said.<\/p>\n\n\n\n

Short selling is when an investor borrows stock from a broker and sells it at its current market price, planning to buy it back later for less money. Short sellers bet on, and make profits from, a fall in a stock\u2019s price.<\/p>\n\n\n\n

\u201cIt was nice to make the money, but at a certain point in time, you have to sit back in your own skin and say, where does this money come from?\u201d David said.<\/p>\n\n\n\n

\u201cAnd the answer is, it came from my friends, my family, my neighbors, my fellow Americans. And that just didn\u2019t sit very well with me.\u201d<\/p>\n\n\n\n

David helped expose $15 billion in fraud in U.S. capital markets and had 12 companies de-listed from the exchanges.<\/p>\n\n\n\n

There is not any one culprit to blame, he said. The fraud is facilitated by U.S. lawyers, bankers, and auditors who have a vested interest in these bad practices outlined in the movie because they get business mandates and fees from these companies.<\/p>\n\n\n\n

\u201cIf you think about it, this is a cooperation between a China operator and the American banking system and American facilitators,\u201d he said. \u201cA Chinese chicken farmer doesn\u2019t wake up one day and know how to defraud the U.S. capital markets. They are helped by us.\u201d<\/p>\n\n\n\n

\u201cIt\u2019s not just the smaller companies,\u201d he continued. It is the bigger companies like Alibaba that pose the same risk.<\/p>\n\n\n\n

\u201cI can reverse engineer the financial statements from Amazon, Apple, Tesla,\u201d he said but \u201cyou can\u2019t do it with Alibaba. I mean, they have thousands of subsidiaries.\u201d<\/p>\n\n\n\n

David is frustrated with Congress for failing to recognize the problem, calling lawmakers \u201cclueless.\u201d<\/p>\n\n\n\n

\u201cI\u2019ve lobbied Congress, nobody is doing anything about it. It\u2019s just crazy,\u201d he said.<\/p>\n\n\n\n

\u201cWhen the money is raised here and taken to China, we have no apparatus to get it back.\u201d<\/p>\n\n\n\n

Follow Emel on Twitter: @mlakan<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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