U.S. Units of Chinese Companies Got American Bailout Funds
China’s HNA Group Got U.S. Bailout Funds Through American Units
(Bloomberg) -- Chinese companies including conglomerate HNA Group Co. and affiliates of a state-owned defense giant were among recipients of the billions of dollars in coronavirus-relief loans handed out by the U.S. government.
HNA Group North America LLC and HNA Training Center NY LLC got between $350,000 and $1 million each in bailout loans meant to help struggling businesses pay American workers hit by pandemic lockdowns, according to a list posted by the U.S. Department of the Treasury. Continental Aerospace Technologies Inc., a maker of aircraft engines owned by Aviation Industry Corp. of China, received between $5 million and $10 million, the data showed.
Under the Paycheck Protection Program, the U.S. Small Business Administration has approved about 4.9 million loans totaling $521 billion as of Monday, according to its website.
The disclosures come at a time when the Trump administration is seeking to curb Chinese influence in the U.S. and around the world, as the rivalry between the two superpowers escalates. Citing security concerns, the U.S. has tried to constrain the global reach of Huawei Technologies Co. and moved to block Chinese wireless carriers from entering its home market. AVIC, one of the beneficiaries of the emergency loans, figured last month on the Pentagon’s list of 20 Chinese companies facing increased scrutiny because of ties to the Chinese military.
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One more AVIC affiliate received funds under PPP as well, according to the list. Aviage Systems, an Arizona-based joint venture between the Chinese defense conglomerate and General Electric Co. that makes flight recording and management systems, got between $150,000 and $350,000. Beijing-based AVIC makes fighter jets, bomber aircraft, helicopters and unmanned aerial vehicles. AVIC representatives didn’t immediately respond to a request for comment.
Read more: U.S. Virus Bailout: Trump Ties, Investors, Chinese Companies
But the most prominent of the recipients is HNA, which shot into the international limelight between 2016 and 2017 after spending more than $40 billion on acquisitions across six continents. It is now facing liquidity risks following the debt-fueled binge. Earlier this year, Chinese authorities announced the government would start taking control of the group, likely paving the way for speedy asset disposals and boosting HNA’s ability to repay about $75 billion of debt.
A representative for HNA declined to comment.
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HNA Group North America was established to facilitate the conglomerate’s inroads in the U.S., directing investments and identifying suitable joint venture partners or acquisitions, according to a 2015 interview with then company president Daniel Chen by Leaders Magazine. Chen is now chairman and chief executive officer of the company, as well as the president of HNA Group, according to the group’s website.
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