The Wall Street Journal reports that the U.S. government is requiring a Chinese company, the HNA Group, to sell its stake in a 21-story building in New York City near Trump Tower.
Among other tenants, the building at 850 Third Avenue (see map) houses a police precinct tasked with protecting Trump Tower.
According to WSJ:
The Committee on Foreign Investment in the U.S., which reviews whether foreign investments in the U.S. represent national-security risks, informed the Chinese company a couple of months ago it had to divest itself of its holding in the building, according to these people. CFIUS, as the committee is known, didn’t explain to HNA why it had to sell the property, one of these people said.
Reportedly, the HNA Group acquired its 90% interest in the building in 2016, shortly before Trump was elected. The article doesn’t mention it, but ordinarily, that 2016 purchase would have required a CFIUS review, and presumably got one. CFIUS is empowered in some cases to require foreign owners to sell after the fact, however, as well as being involved in initial purchase bids.
The HNA Group has come in for heavy criticism from U.S. lawmakers, who are concerned about its opaque ownership structure and ties to the Chinese government. In 2017, the investigation of a pending HNA deal in the U.S. revealed the following, for example:
In late August, Pactera [an HNA subsidiary] disclosed “for the first time” that Chen Feng, HNA’s co-chairman, “held a current government position in China,” according to the lawsuit.
It is unclear what government position Ness was referencing. Mr. Chen was a delegate to the Chinese Communist Party’s national congress for over a decade, and until July was the chairman of the Hainan Province Federation of Industries and Commerce, a business chamber-like organization that has government endorsement.
There is more than one reason to be concerned about Chinese ownership in NYC. As the map shows, Chinese companies have purchased several tall buildings in Midtown Manhattan in the last decade. (See here as well. The skyscraper at 100 East 53rd Street was completed in late 2017. The Chinese investors are China Vanke and China Cinda Asset Management.)
Although what qualifies as a “skyscraper” by Manhattan standards is pretty, er, lofty, China’s ownership of tall buildings is fully adequate to a very useful purpose: electronic surveillance.
Certainly, some of the surveillance would be of great utility from inside the hotel rooms and offices hosted in these buildings. But sucking in trons from the airwaves would be equally useful.
In Manhattan’s concrete forest, no one knows where all the antennas and black boxes are, who put them there, or what they’re being used for. But foreign intelligence agencies know where the commercial microwave towers are, and satellite service dishes for the landmark multipurpose buildings.
WSJ’s Friday article on the HNA Group mandate points out that in 2012, the Obama administration blocked a Chinese company’s attempt to invest in a wind farm in Oregon. The reason was the wind farm’s immediate proximity to a U.S. Navy weapons training range.
It would be downright fatuous to suggest that the Chinese company’s interest in that particular wind farm was unrelated to its location next to a Navy training range. The Boardman facility is used for training and system testing by EA-18G Growler aircraft, the Navy’s most advanced electronic warfare platform on an F/A-18 Super Hornet airframe, and the follow-on to the old EA-6B Prowler. Boardman is also used for advanced Navy drone testing.
Of course China is using privileged owner access to buildings in Manhattan to conduct surveillance. The question is not if, but how much, and what kind.
The possibilities if China could snoop on the police precinct housed at 850 Third Avenue, and combine real-time information from that source with other collection from around Trump Tower, are eye-opening. (The General Motors Building is particularly well placed. The distances on the map are not about optical visibility, but about proximity to local transmitters, and response time for optical or other surveillance if cued by persistent-monitoring means. China is well positioned to have a complex network of responsive surveillance in place, and not just a few static, passive collection measures.)
Fascinating modern world we live in. No wonder the U.S. wants Chinese ownership to exit the building at 850 Third Avenue.