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Hi all..I am a newbie here and hopfully I can make a contribution to this culture. I see a few familiars are here

Sidewinder
RCMP-CSIS Joint Review Committee

June 1997


Since the mid-1980s, a substantial immigration flow from Hong Kong has taken place and Canadian authorities were first alerted when a significant presence of Chinese organized crime elements among this group was detected. Many came through the "entrepreneur and "investor" immigration program and some of these criminals even have succeeded to obtain their Canadian citizenship. Although not all immigrants in these categories are suspected, two particular groups of individuals raised attention. Two other groups have also taken advantage of the "entrepreneur" and "investor" categories to immigrate and to invest in Canada. First, a certain number of very rich Hong Kong Chinese business people (tycoons) who are known to have been cooperating with the Chinese Government for years. Then a group composed of associates and relatives of China's leadership and the Chinese Intelligence Service (ChIS). Intelligence reveals that certain individuals of these three groups have been working for over fifteen years in concert with the Chinese government, and some of their "financial ventures" in Canada serve to conceal criminal or intelligence activities. (S)


Hand in hand with this situation, the ChIS [Chinese Intelligence Service] make very active use of their access to Canadian industries through exchanges of specialists and students, and also set up shell companies to pursue their acquisition of economic and technological intelligence. Cooperation between the Hong Kong tycoons, the triads and the Beijing leadership adds a new dimension to the well known "mass line collection" strategy followed by the ChIS. This situation substantially raises the level of the potential threat, revealing the effectiveness of Chinese efforts to obtain Canadian technology and their capability to interfere in the management of the country. Central points and essential for the understanding of the problem are the cultural singularities that characterize the Chinese as the concepts of "debt of honour", "duties",..[the Code\CD] "Hou Tai or backers" and "Guanxi or connections." ) (S)


By using these alliances, the Chinese government is trying to gain influence on Canadian politics by maximizing their presence over some of the country's economic levers. To that end, they proceed initially to buy and/or legally set up a company in Canada that, once under their control, buys other companies and so on. An effective domino effect ensues that acts like a well-spun web or network at strategic points. It is estimated that over 200 Canadian companies have passed into Chinese influence or ownership since the early 1980s through the triads, tycoons or China national companies. These businesses are found in various sectors of the economy, ranging from multinationals to banking, high technology and real estate (CITIC, Norinco, Husky Oil, Grand Adex Properties Inc, Merrill Lynch, Gordon Capital, Inc, Tai Foong International, CIBC, Ramada Hotels, China Vision and Semi-Tech Corporation, etc.). The triads' companies are also used to pursue their criminal activities, such as money-laundering and heroin trafficking, as well as assistance to the ChIS. (S)


Being Canadian these businesses are also eligible to receive government subsidies for research or classified contracts from Federal Departments. The risk is that after the research is done, there results can be transferred to China. Other form of risk is with the access gain through classified contract. As an example, a Canadian company under Chinese influence was in contention for a contract to set up and run a classified communications system linking the main agencies of the Canadian intelligence community. A company in Toronto specializing in video surveillance was originally Canadian, but was bought by a Chinese multinational. It is impossible at present to say how many or which Canadian companies are in the same situation. These examples, however, raise questions about the integrity of some companies that have already installed security systems for various Canadian government institutions or Canadian research industries. (S)


Significant portions of some large Canadian urban centres are also owned by Chinese entrepreneurs. For example, it is estimated that Li Ka-Shing [known PLA] owns with his son at least one sixth to one third of downtown Vancouver. (S)


These "corporate" figures have become an influential presence on the political and economic landscapes of Toronto and Vancouver and at the provincial and federal levels. The triads, the tycoons and the ChIS have learned the quick way to gain influence is to provide finance to the main political parties. Most of the companies identified in this research have contributed, sometimes several tends of thousands of dollars, to the two traditional political parties, that is, the Liberal and the Progressive-Conservative Parties. (S)


The Chinese leadership continues to gain much direct or indirect influence over the Canadian economy and politics. Having bought significant real estate holdings and established businesses in Canada, China has obtained access to influential figures who are now or once active at various levels of Canadian society. In many ways, China remains the greatest ongoing threat to Canada's national security and Canadian industry. (S)


"Be so subtle that you are invisible.

Be so mysterious that you are intangible.

Then you will control your rival's fate."Sun Tzu,

The Art of War (c. 509 BC)


HUNDREDS OF CANADIAN COMPANIES "MADE IN CHINA"




14. The influx of Chinese investors who are affiliated with the triads or new associates of Beijing poses a new challenge to Canada's national security. The central point of the strategy of the Chinese is first to buy a Canadian company so as to obtain a "local identity", legally concealing subtly their foreign identity. Then, using this acquisition, the Chinese-Canadian company invests heavily or buys other companies in various economic sectors, but always under the Canadian banner. In actual fact, control lies in Hong Kong or Beijing, and the financial benefits or fruits of research, often paid for by Ottawa or the provinces, are likely to make their way to Asia. (S)




15. Hand in hand with their ethnicity and their commercial ambitions, the financial network of the Chinese entrepreneurs associated to the organized crime and to the power in Beijing has grown exponentially and very rapidly in Canada. Their influence over local, provincial and national political leaders has also increased. In the game of influence, several of these important Chinese entrepreneurs have associated themselves with prestigious and influential Canadian politicians, offering them positions on their boards of directors. Many of those companies are China's national companies.




16. The analysis of the information demonstrates that their attention was not initially directed towards sensitive sectors like high technology or other even more sensitive areas, but towards what might be called "soft" sectors such as: real estate, hotels, transportation, oil companies and travel agencies. Commercial sectors that at first sight do not involve any security risks and did not attract the attention of the Canadian services responsible for security. The scale of their ventures or investments has now made them some of the most important figures present in the major centres, and their decisions to invest in one place or another are not a matter of indifference to anyone. Such projects are seen by the local or national business community as a "favour" or a "chance" not to be missed. (S)




CASE STUDIES




17. It is estimated at the present time that over 200 Canadian companies are under Chinese control. These business are to be found in myriad sectors of the economy, ranging from multinationals to banking, high technology and real estate. Some typical cases are presented here to illustrate the various scenarios that are clearly worrying for Canadian security. At first site, these individual cases do not seem to be a great threat. It becomes, however more disturbing when the ownership links between various sectors of Canadian enterprises are revealed. (S)




Multinationals




18. CITIC (Canada) China International Trust Investment & Company (China International Trust & Investment Corporation) is the largest Chinese operating internationally. It has subsidiaries operating in several Western countries, including the United States and Canada (Vancouver). Founded at the end of the 1970s, it now has assets worth US$23 billion. Its subsidiary in Canada CITIC BC Inc., opened it doors in 1986. By 1995, it reported a turnover of CDN$250 million (1995). The projections for 1996 aimed for $290 million. (UC)




19. CITIC was initially established to encourage foreign investment in China. It has since taken the lead in Chinese investments outside China, in all areas from real estate to electronics. In 1979 Beijing appointed to CITIC's board of directors three Hong Kong financial giants, Li Ka-Shing, Henry Fok Ying-Tung and Wang Foon-Shing. With their assistance, in the following years, the Beijing acquired important companies such as Cathy Pacific Airlines, Hong Kong Telecom and Star TV. In Canada, it is estimated that CITIC has invested nearly $500 million to buy up businesses in certain areas, such as Celgar Pulp Mill in British Columbia, Nova Corp Petrochemical in Alberta, real estate through Hang Chong Investments Ltd. and hotels. Eventually, CITIC developed also close business links with Power Corporation. (S)




20. CITIC recently attracted American media attention in the scandal over illegal contributions to the US Democratic Party and influence-peddling by the Chinese government (see section below). CITIC, China Resources and the Lippo Group (in which in both Li Ka-Shing is a large shareholder) are at the centre of the affair. CITIC chairman, Wang Jan, is also chairman of Poly Technology (see next section). CITIC has repeated the gesture by contributing through its Canadian subsidiaries to Canadian Political Parties. (UC)


----------------------------------------------------------------------------------------------these issues have curently raised their heads again with the  recent Tory \Beijing Xinhua spy scandal