Coronavirus: US lawmaker calls for review of stimulus loans to China-linked firms
- Congressman Jim Banks cites a report that suggested more than 125 Chinese companies received US$419 million via a lending programme to keep employees on payroll during shutdowns
- Loans went to businesses whose parent companies are considered by the US to be owned or controlled by the Chinese military
A US Republican congressman urged the Trump administration to review millions in coronavirus stimulus loans paid to US companies with ties to China’s aviation and defence industries, amid deepening tensions between Beijing and Washington.
The letter by Jim Banks, a congressman from Indiana, is addressed to Small Business Administrator Jovita Carranza and Treasury Secretary Steven Mnuchin, who are tasked with overseeing the Paycheque Protection Programme.
That programme, which loans money to firms to encourage them to retain employees during the coronavirus-related shutdown, has drawn fire for technical glitches, a lack of transparency and for doling out funds to large companies with ample access to credit.
Banks called for the investigation, citing loans to companies whose Chinese parents, including aircraft manufacturer Aviation Industry Corporation of China (AVIC) and weapons maker China Aerospace Science and Industry Corporation (CASIC), were recently designated as owned or controlled by the Chinese military by the US Defence Department.
“China’s activity in … defence and aerospace, presents a direct and present threat to America’s national security. These companies’ entire mission is to make America less secure,” Banks wrote in the letter dated Wednesday. “A review of the … loans to firms affiliated with the PLA is warranted.”
The companies include Continental Aerospace Technologies, which is owned by AVIC and received US$5 million to US$10 million from the programme. It also includes Honghua America, the US-based subsidiary of Chinese drill rig manufacturer Honghua Group, which is in turn owned by CASIC. Honghua received up to US$1 million, according to Small Business Administration (SBA) data.
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Continental and Honghua did not immediately respond to requests for comment and the SBA declined to comment. A Treasury Department representative confirmed receipt of the letter but declined to comment further.
Banks also cited a report suggesting that more than 125 Chinese companies obtained up to US$419 million through the lending programme.
“It’s unacceptable for the Chinese Communist Party to receive taxpayer funds intended to relieve American businesses from a crisis that the [party[ significantly worsened,” he added.
