Convictions for Sale

An article in the NYT and the IHT today discusses American investment in Chinese companies developing sophisticated surveillance equipment. Because the companies do their technology development in China they're exempt from US export controls, but they're still welcome to take funding from US investors and hedge funds. So, with a $110 million loan from the Citadel group, a Chinese company called China Security and Surveillance Technology is buying up all of its competitors, celebrating each acquisition with a banquet for potential acquisitions and public officials. From the article.

“When they come, they hear central government officials endorsing us, they hear bankers endorsing us or supporting us, it gives us credibility,” Mr. Yap said. “It’s a lot of drinking, it’s like a wedding banquet.”

While that's a very Chinese way of doing business, the idea of one company buying out all of its competition with money it receives from the US, all the while cozying up to the Chinese government and in effect bribing its remaining competitors, is sickening and scary. In fact the Minister of Public Security is now director of the company, meaning the number of degrees of separation between the US investors and the Chinese government is frighteningly small. China just passed a law restricting monopolies, and The China Daily recently condemned monopolies as bad for the nation, calling them the major obstacle in the promotion of social interests. I don't know the full story behind this company, but a government minister is in control, the company is consolidating the industry, the competition's bosses are being wined and dined, and unrestricted money is flowing in from Wall Street.


The equipment China Security and Surveillance Technology develops is ostensibly for public safety and crime reduction. Surveillance companies in China point out that the UK has a more sophisticated and extensive camera network already in place, and Manhattan is setting up a similar system, so they argue that we're in no location to criticize. Representative Tom Lantos, chairman of the House Foreign Affairs Committee, argues that surveillance in China is not the same as surveillance in the West, as China is a one-party state with little to check its actions. Mr. Lantos also plans to investigate “the cooperation of American companies in the Chinese police state.”

I don't like China's government, and I don't like its restrictions on its people, but I'm simply appalled by the idea of Americans directly supporting its worst characteristics. Institutions like the NYT are good at getting attention, though, for example when the UAE wanted to buy a controlling interest in our ports. Hopefully I'm not the only member of the American public who feels this way, and the attention will lead to support for Mr. Lantos and his investigation.