Hundreds of millions of dollars from the Paycheck Protection Program — which was designed to help struggling U.S. businesses stay afloat during the economic downturn caused by coronavirus — have gone to companies that are financially backed by China, according to a report from the New York Times:
“Millions of dollars of American taxpayer money have flowed to China from the $660 billion Paycheck Protection Program that was created in March to be a lifeline for struggling small businesses in the United States. But because the economic relief legislation allowed American subsidiaries of foreign firms to receive the loans, a substantial chunk of the money went to America’s biggest economic rival, a new analysis shows.
“According to a review of publicly available loan data by the strategy consulting firm Horizon Advisory, $192 million to $419 million has gone to more than 125 companies that Chinese entities own or invest in. Many of the loans were quite sizable; at least 32 Chinese companies received loans worth more than $1 million, with those totaling as much as $180 million.”
President Donald Trump, however, has repeatedly attacked China and Chinese businesses for taking jobs away from American workers. He has also suggested that his Democratic presidential rival, Joe Biden, would be soft on China at the expense of the United States.
But as the new data from Horizon Advisory makes clear, administration officials who are supposed to be overseeing what entities receive funds from the Paycheck Protection Program have clearly not done the research needed to guarantee that federal money wasn’t doled out to companies that are in a very real sense part and parcel of the Chinese government and that benefit the Chinese economy rather than the U.S.
Specifically, Horizon Advisory notes:
“’The extent and nature of P.R.C.-owned, -invested and -connected entities among the P.P.P. loan recipients indicate that without appropriate policy guardrails, U.S. tax dollars intended for relief, recovery and growth of the U.S. economy — and small businesses in particular — risk supporting foreign competitors, namely China,’ wrote Emily de La Bruyère and Nathan Picarsic, the co-founders of Horizon Advisory, referring to the People’s Republic of China.”
Additionally, the Trump administration has often accused China of stealing intellectual property from the United States and U.S. companies. And yet, millions from the Paycheck Protection Program were also given to companies that have been the hardest hit by theft of their patented or copyrighted materials:
“Larger loans went to businesses that spanned critical sectors such as pharmaceuticals, defense, advanced manufacturing, electric cars and information technology. In each case, the United States was indirectly funding the kinds of corporations whose owners the Trump administration regularly accuses of intellectual property theft.”
Contacted by the Times about their report, the White House said it had no comment.
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