Chinese companies have received millions in PPP loans, the analysis shows
Millions of dollars in taxpayers’ money went to Chinese companies through the $ 670 billion paycheck protection program, a central part of the U.S. government’s massive response to the coronavirus pandemic.
In late March, Congress set up the Paycheck Protection Program, a bailout fund designed to keep small businesses afloat and avert millions of potential layoffs during the recession caused by the virus.
By and large, the program is open to all companies with fewer than 500 employees per location, including American subsidiaries of overseas companies. As long as 60 percent of the money is used to keep the payroll up, the federal government will forgive her and essentially convert the loan into a grant.
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About $ 521 billion in tax-funded aid went to more than 5.1 million small businesses that are supporting around 51 million jobs amid the crisis caused by the virus.
This includes more than 125 companies that own or invest in Chinese companies that have received government-sponsored grants ranging from $ 192 million to $ 419 million, according to a study by strategy consultancy Horizon Advisory. The analysis was based on a review of publicly available data from the Small Business Administration released in June.
At least 32 Chinese companies received loans worth more than $ 1 million, with loans ranging from at least $ 85 million and up to $ 180 million. (The SBA did not disclose the exact dollar amounts of the loans and instead provided a range for each loan).
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“The size and nature of the PRC owned, invested, and affiliated companies among PPP loan recipients indicates that, without proper policy barriers, US taxpayers’ money can help ease, recover, and grow the US – The economy – and especially small businesses – are destined to pose a risk in supporting foreign competitors, namely China, ”write the report’s authors, Emily de La Bruyère and Nathan Picarsic, referring to the People’s Republic of China. “In doing so, they may be supporting an agenda that runs counter to US economic and security interests.”
According to the report, loans went to companies in a variety of sectors including defense and aerospace, advanced manufacturing, electric cars, pharmaceuticals and information technology. At least eight companies affiliated with the People’s Liberation Army, the Chinese military, received loans.
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Companies highlighted in the report include Continental Aerospace Technologies, part of a state defense company that received a loan of up to $ 10 million, as well as HNA Group North America LLC and HNA Training Center New York – both subsidiaries of China’s HNA Group – received up to $ 1 million in loans. The HNA Group, a Fortune Global 500, specializes in real estate, aviation, and financial services transactions.
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While the money that flowed into these companies is likely to help save American jobs, the companies “could conceivably access sources of capital from public or private markets to save their US businesses. Their PPP stake saved US jobs, but likely at the expense of other US small businesses, ”the report said.
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