The Bush family: Middle Kingdom
rainmakers By Zach
Coleman
HONG KONG - George Herbert Walker Bush
arrived in Beijing 30 years ago as the official United
States representative to China with one goal above all
else: expanding his buddy list.
"My
hyper-adrenaline, political instincts tell me that the
fun of this job is going to be to try to make more
contacts," he wrote in his first diary entry. "And it is
my hope that I will be able to meet the next generation
of China's leaders - whomever they may be. Yet everyone
tells me that that is impossible."
Bush Sr,
already a champion networker, wasn't to be denied. In a
final triumph at the end of his stay, Deng Xiaoping,
then vice premier, threw a farewell lunch for Bush Sr
and his wife.
"You are our old friends," said
Deng, according to a Chinese government website. "You
are welcome to come back anytime in the future."
Bush Sr and his relatives have turned that open
invitation into a family franchise over the years,
setting themselves up as gatekeepers between lucrative
business opportunities created by the opening up of
China's economy and the US corporate and political
establishment. If Iraq is the place where the Bush men
fight once they leave the oil fields of Texas, China is
where they have made money.
China policy has
been a hot-button issue in US presidential campaigns for
more than half a century. This time around, many
politicians are linking US job losses to the country's
exploding trade deficit with China, leaving the family
trade in promoting US-China commerce with the potential
to embarrass President George W Bush in his 2004
re-election drive.
Bush Sr and his brother
Prescott both lowered their profile in the family
business last year. Yet the Bushes' business suddenly
hit the headlines again in November, when documents and
testimony from the divorce trial of the president's
brother Neil showed that he had signed a contract to
receive US$400,000 a year from Grace Semiconductor
Manufacturing, a Chinese company co-founded by a son of
former president Jiang Zemin, in return for business
information and advice. Fair enough, but Neil Bush has
no background in technology. His brother's
administration, however, is leaning on Beijing to reduce
tax discrimination against imported semiconductors.
There is no evidence that Chinese companies or
officials have influenced US policy under Bush Jr by
playing up to his relatives. Indeed, last May, Bush Jr
penalized China North Industries (Norinco), a company
with which Prescott once worked, by halting Norinco's
$150 million annual export trade with the US for two
years, after concluding that the company had shipped
missile technologies to Iran.
Yet Chinese
companies and officials continue to hold Bush family
members in special regard.
Last month, the
government Xinhua News Agency reported discussions that
took place between President Hu Jintao and Bush Sr in
Hainan Island province during the Boao Forum for Asia
about "issues of common concern". Hu delivered the
barely veiled message that the US needed to be more
sensitive to China's position on Taiwan's independence
in order to get more cooperation on the US priorities of
trade and terrorism. Bush Sr replied, according to
Xinhua, that Bush Jr "highly valued the important role
that China has made in the efforts for peaceful solution
to the nuclear issue on the Korean peninsula".
US companies also still see the Bushes as Middle
Kingdom rainmakers. In December, Bush Jr invited a
business group founded by Prescott to send 50 members to
a reception on the White House lawn for visiting Premier
Wen Jiabao. And a group of bankers and financiers
travelled from the US with Bush Sr last month to an
environmental protection conference in Shanghai that
featured top officials from the standing committee of
the National People's Congress and other government
bodies, according to the Shanghai Star.
It all
makes for a lucrative niche. There are no publicly
disclosed figures on how much the family has made
overall in the last three decades as China brokers. But
the deals continue to add up.
Prescott Bush
Jr: Prescott Bush only made his first visit to
China after his brother Bush Sr had moved into the White
House as vice president in 1981. He quickly became a
regular, leaving behind his 33-year career in the
insurance brokerage business in preference for Chinese
deal making. A 30 percent stake in one early project, an
$18 million golf club in Shanghai, gave Prescott the
opportunity to strike up a friendship with then-mayor
Jiang Zemin (who now heads the communist party's
powerful standing committee of Central Military
Commission).
Now 81, Prescott Bush still travels
to China two to four times a year, according to the
website of Plus Holdings, a Hong Kong-listed company
focused on China, which hired Prescott as a special
adviser three months after Bush Jr's inauguration. The
website features Prescott's picture at the top of its
home page. "He has many friends in China," the site says
in its biography of the special Bush family adviser.
Prescott Bush Resources, his consulting company,
has put together more than 30 joint ventures in China
since 1978, according to the website of Global Access, a
US consulting company active in China, which retains
Prescott as chairman of its advisory board. "Mr
[Prescott] Bush has also facilitated meetings and
approvals at the highest levels of the Chinese
government," the site adds in its biography.
"I
don't get a lot of business because my nephew is
president or my brother was president," Prescott
insisted in an interview with USA Today in 2002, though
he admitted, "You can meet a lot of people because of
it."
Prescott capitalized explicitly on the
family tie-in by forming the US-China Chamber of
Commerce in 1993 after serving on its predecessor, the
Hong Kong-US Business Council, during his brother's
presidency.
"My brother, George, has been
instrumental in the development of US and China
relations since 1974," he wrote in his letter to
prospective members. The chamber pitches itself as a
networking hub, which "provides the business communities
in both countries with direct access to leading business
people and government officials who are important in
their business development efforts".
Members of
the chamber's "Chairman's Circle" include US
agribusiness giant Archer Daniels Midland (ADM) and
Wanxiang America, whose parent company markets products
made in China to US customers. ADM and Wanxiang are also
among the China clients listed on Prescott's corporate
biographies, which also typically mention Norinco,
Anheuser-Busch and China National Cereals, Oils &
Foodstuffs Import & Export Corp (Cofco).
In
an e-mail reply to the Weekend Standard, Prescott said
his work with Norinco consisted of trying to help the
company secure the assistance of a US automotive
manufacturer to set up a truck factory. "It was dropped
because of lack of financing," he said. "My relationship
with Norinco was finished long before 2000."
Norinco has operated under a cloud of suspicion
in the US for years because of its links to the Chinese
military and a case involving the smuggling of thousands
of Norinco AK-47 assault rifles into the US in 1996. The
Bush Jr administration last month slapped new sanctions
on Norinco for its Iranian activities, which involved
shipping missile technologies to Iran.
By
contrast, as president, Bush Sr granted a "national
interest" waiver to allow a deal to proceed for shipping
$300 million of Hughes Aircraft satellite equipment to
China in December 1989, overriding sanctions imposed by
Congress a month before in response to the Tiananmen
Square incident - regarded as a massacre of peaceful
demonstrators by most observers. Prescott had visited
China just before his brother that February and returned
weeks after the Tiananmen violence for talks with
officials on several deals, including one for a US
company pitching a satellite communications network that
would utilize the Hughes equipment.
"We aren't a
bunch of carrion birds coming to pick the carcass,"
Prescott told the Wall Street Journal at the time. "But
there are big opportunities in China, and America can't
afford to be shut out."
Then in April 2001,
Prescott flew to Beijing hours after news broke of a
collision between a US spy plane and a Chinese fighter
jet off Hainan Island. He was an an invited passenger on
United Airlines' first Chicago-Beijing flight, and
stayed on in the country well after the other passengers
had returned home.
He told USA Today a year
later that he didn't get involved in the settlement that
resolved the high-tension spy plan crisis during his
stay. Certainly he had business to do.
Since
Bush Jr's election, Prescott's China clients have closed
a flurry of deals, including some with each other.
Anheuser-Busch signed a deal in 2002 to ramp up its
stake in Tsingtao Brewery and this month announced a
HK$1.1 billion ($141 million) investment in Harbin
Brewery. With Prescott Bush's help, ADM opened and
expanded a slew of joint-venture factories - including
some with fellow client Cofco - to become China's
largest oilseed processor. In January, Wanxiang America
took a stake in Sageworks, a US financial software
company that appointed Prescott to its board of advisers
in 2002, and took up Chinese distribution of its
products.
Prescott himself, though, has kept a
low public profile of late. He says he resigned the
chairmanship of the US-China Chamber in April 2003
because "it was time to let younger people take over".
Neil Bush As a member of the younger
Bush generation, Neil only entered the China trade 10
years ago, setting up Interlink Management Corp as a
matchmaker between US and Asian firms, especially the
Charoen Pokphand Group of Thailand, a conglomerate
controlled by a Sino-Thai businessman. Through
Interlink, Neil helped CP Group form a joint venture
with Koll Real Estate for a $300 million mall in
Shanghai and a joint venture with Beaulieu of America to
sell carpet in China.
George Herbert Walker
Bush Since his presidency, Bush Sr has stayed out
of the undignified business of actual deal making.
Instead, he has been collecting hefty fees from US
companies to be their icebreaker.
It's easy
money. Companies pay Bush Sr $125,000-$150,000, plus
first-class expenses for three, and must fly him over by
private jet, according to his representative, Brooks
International Speakers & Entertainment Bureau. In
return, Bush gives a speech at a banquet or conference.
His presence alone usually draws dutiful attendance by
top Chinese officials, who are then chatted up by
sponsors.
Companies that have hired Bush Sr to
talk in China have included the CP Group, Arco, the
Chubb Group, IMC Global and the Carlyle Group. Carlyle,
a US investment firm, appreciated Bush Sr's 1998 China
trip on its behalf so much it made him a senior adviser
to its Asia advisory board the next year, a position he
resigned from last October.
"If you're unknown
in China and trying to get known, and you're trying to
get a license there, having a former president at a
reception might get people to come who might not come
otherwise," a Chubb official told the Los Angeles Times.
"We get to rub shoulders with them and get to know them
better."
Chubb got its insurance license a year
after Bush Sr's visit. Similarly, IMC closed a deal to
sell fertilizer to a Chinese government agency two
months after Bush Sr's talk at its Beijing conference.
With his son in office, Bush Sr's recent trips
have more often been sponsored by Chinese government
organizations. Last month's Shanghai conference was
co-sponsored by the Association for International
Understanding of China, the China United Nations
Association and the US-China Foundation. The sponsors
threw a birthday party for Bush Sr, who will turn 80
next month. The subsequent stop in Hainan Island, where
Bush Sr met with President Jintao, came under the banner
of the annual Boao Forum.
In 2002, the northern
city of Tianjin, together with Business Week magazine,
hired Bush Sr to headline a conference in the city. The
Chinese People's Association for Friendship with Foreign
Countries, an affiliate of the Foreign Ministry, picked
up the tab for trips that year to Shanghai and Beijing
and last October to Beijing. The association also
co-sponsored a conference at Texas A&M University in
November together with the university, its George Bush
School of Government and Public Service and the George
Bush Presidential Library Foundation that featured a
who's who of past and present officials, such as former
vice premier Qian Qichen, Secretary of State Colin
Powell and Henry Kissinger. The Bush Foundation lists
the Chinese government as a $50,000- $100,000
contributor in the lobby of the presidential library.
Regardless of who's picking up the tab, a visit
by Bush Sr to China is usually an occasion to call on
Jiang Zemin and, since his official retirement, his
successors. On his October trip, his hosts hustled Bush
Sr to separate sessions with Jiang, President Hu and
Premier Wen. Bush Sr also met up with Jiang on Jiang's
visits to Texas in 2002 and 2003.
Although he
has not held a government post in 11 years and has been
collecting fees for promoting China trade in the
meantime, Bush Sr often speaks up on current US-China
relations both at and away from his meetings. In 2000,
he weighed in strongly in favor of US legislation that
set the stage for China's entry to the World Trade
Organization. A year later, with his son in office, he
praised China's support for Bush Jr's anti-terrorism
drive as "a rather courageous stand". In October, he
told Hu that, in the words of Xinhua, "The US side
understood China's concerns over the Taiwan issue."
Jiang Zemin made clear to a Washington Post
editor two months after Bush Jr's inauguration what he
expected from Bush Sr. "The father of President Bush,
Bush Sr, came over to China many, many times and had
many meetings with me in the seat you are now
occupying," Jiang said. "We believe Bush Sr will
definitely push Bush Jr to bring US-China relations to a
new level."
George W Bush Bush Jr
arrived in China for a six-week visit on June 4, 1975,
after finishing Harvard Business School and stayed
through his 29th birthday. His father commented in his
diary that his son was impressed by China's universal
health-care system after getting his tooth fixed for 60
cents - US.
As president, Bush Jr hasn't asked
China for help in fixing the US health-care system, but
he has drastically changed his policy toward China since
the early months of his presidency. In those days, his
administration focused on China as a strategic threat
and the president had expressed unqualified support for
Taiwan, even referring to it directly as a country.
Relations reached a low point with the standoff over the
return of the US spy plane and crew involved in the
Hainan collision.
Bush Sr has sidestepped
questions on how much he's talked to his son about China
during his presidency. Outside the family, Bush Jr
counts among his biggest campaign donors two businessmen
deeply invested in China, Hank Greenberg of AIG and Sam
Fox of the low-profile Harbour Group.
Certainly
the Bush Jr administration's views on China have been
affected by the need for Beijing's acquiescence to US
actions in Iraq, Afghanistan and North Korea, countries
that soared ahead of China as priorities after the
September 11, 2001, terrorist strikes.
"He is
able," Bush Sr recorded in his diary when his son left
town in 1975. "If he gets his teeth into something
semi-permanent or permanent, he will do just fine."
