Money intended to help American small businesses stay afloat during the economic shutdown has flowed into Chinese corporate pockets. A new analysis shows that they took hundreds of millions of dollars.
At least 125 companies owned or invested in by Chinese entities received forgivable loans from the Paycheck Protection Program. The $660 billion federal fund launched in March to incentivize worker retention during the economic crisis. Questionable legislation permitted American subsidiaries of international corporations to obtain the loans, when an alarming number of the nation’s small businesses received nothing at all.
A minimum of 32 companies got over $1 million each, but the total amount authorized by the Small Business Administration and Treasury Department is estimated to be as high as $419 million.
Horizon Advisory’s report does recognize that allowing foreign subsidiaries to take loans probably saved a yet to be determined amount of American employees from losing their jobs, but US businesses were irrevocably damaged by the losing out on nearly half a billion dollars earmarked for their survival.
Not only did this critical oversight directly funnel American funds into the People’s Republic of China, some are companies the US has flagged as national security threats. Eight of the entities are directly linked to the People’s Liberation Army and considered to be complicit in the state sanction genocide of Uighurs.
Many of the recipient Chinese companies operate in critical sectors of the US economy, including defense, manufacturing, pharmaceuticals, aerospace, telecommunications, and media. The report firmly asserts that China is taking advantage of the pandemic crisis to weaken the US economy and national security.
Tensions have been mounting between the United States and communist China over the autonomy of Hong Kong, trade, and espionage. In recent weeks both countries have forced shutdowns of diplomatic embassies.