ANY STORM IN A PORT
China's Trojan horse in NZ
[The following story initially ran in the April 06 edition of Investigate magazine, but is directly relevant to the purchase announced April 28, 2008 of Vector Energy's Wellington grid by the same businessman]
The Hong Kong business conglomerate trying to purchase a stake in some of New Zealand's biggest port companies [and now the purchaser of energy company Vector] has been named as a front for the People's Liberation Army of China, and some of its associates have been caught shipping weapons and alleged WMD technology. IAN WISHART has more
His name is Li Ka-shing, and if his name sounds like a cash register there's a very good reason: this 77 year old Chinese businessman has just been ranked by Forbes magazine as the tenth wealthiest person in the world, with a fortune estimated at nearly US$20 billion. His companies, including Hutchison Whampoa, account for 10% of the value of the Hong Kong stock exchange and have tentacles that reach across the globe – more than forty countries according to one estimate – and in industries as varied as mobile telephone networks, electricity grids, retailing, shipping and real estate.
Many New Zealanders may have become familiar with Li's work in the sixties and seventies, when his main business was making plastic toys with the infamous "Made in Hong Kong" imprimatur.
But there are two sides to the Li Ka-shing story. One is the traditional fodder of business magazines, lauding the rags to riches story of a billionaire whose father died after the Japanese invasion of China before World War 2, leaving a 12 year old boy with the task of earning enough money to feed his mother and siblings. It's a story of a man making wily business decisions, building an empire and showing aspiring MBA graduates how it's done.
And here's how one of those gushing business stories reads:
"The move by the richest man in Asia and one of the richest in the world to take a stake in the operation of the Port of Lyttelton is one that has potentially great benefits for Christchurch and Canterbury and ultimately the rest of the country," said the Christchurch Press in an editorial mid February.
"There is no need to be starry-eyed about the proposed venture. Li Ka-shing has risen from complete destitution as a refugee who fled the raping and pillaging of China by the Japanese in the 1930s to become a multi-billionaire.
"He did it by being an astute and hard-nosed businessman. He also did it, according to one account in a business journal, by 'remaining true to his internal moral compass' and operating with integrity."
Like we said, that's one side of the Li Ka-shing story.
The other side of Li Ka-shing is much darker, and less likely to be taught in graduate classes. It's the story of a man whose companies are regarded by Western intelligence agencies as nothing more than a money-making front for Chinese military intelligence as China prepares for what it sees as an "inevitable" conflict with the US.
As this 1996 diplomatic cable release by the US Government under a Freedom of Information request shows, Li Ka-shing's businesses didn't make money the hard way.
""Embassy Panama has received information to the effect that HIT (Hutchison International Terminals) is controlled by mainland Chinese, perhaps through a Macao front which allegedly recently invested $400 million in HIT," states the cable. "Such control would have security implications and might affect the Panamanian government's views on awarding the port concessions."
The "mainland Chinese" referred to in 1996 have turned out to be the Chinese Government itself, and more specifically its People's Liberation Army – more of which in a moment, but first some background….