Politics

American Elites Have Deep Ties To A New Chinese Spy Chief

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• Chen Xu, the former party secretary for one of China’s most prestigious universities, has been promoted to deputy head of the United Front Work Department, an agency known for conducting espionage and spreading propaganda focused on influencing foreign elites and coopting Chinese expatriates.
• During her tenure at Tsinghua University, Chen forged ties with influential Americans, including Stephen Schwarzman, the CEO of The Blackstone Group, an investment company the Chinese Communist Party supplied with $3 billion in 2007, resulting in one of history’s largest IPOs.
• In 2013, Tsinghua University’s Schwarzman Scholars was announced, a program which attracted the attention of many high-ranking Chinese Communist Party figures, such as President Xi Jinping, Vice Chairman of the Chinese People’s Political Consultative Conference Tung Chee-hwa, and Vice Premier Liu Yandong, among others.

The new deputy head of a propaganda and espionage agency in the People’s Republic of China (PRC) has documented ties with business tycoons, university heads and other elite members of American society.

Chen Xu, former party secretary of one of the PRC’s most prestigious universities, Tsinghua, was promoted to deputy head of the United Front Work Department (UFWD), according to an updated leadership roster on the Chinese Communist Party (CCP) portal, which was first reported in Chinese media on Feb. 28.

The United Front Work Department

The Department of State described the operations of the UFWD as including “the use or threat of physical violence, theft and release of private information, espionage, sabotage, or malicious interference in domestic political affairs, academic freedom, personal privacy, or business activity” in a 2020 press statement.

The general secretary of the CCP, Xi Jinping, labeled the UFWD a “magic weapon” for “realizing the great rejuvenation of the Chinese nation” in a 2014 speech celebrating the 65th anniversary of the Chinese People’s Political Consultative Conference (CPPCC), a state organ which oversees the UFWD.

Recently, Beijing’s espionage operations have garnered increased scrutiny in the U.S. following the FBI’s charging of five individuals with “transnational repression schemes” on Mar. 16, crimes which allegedly included the targeting of a Congressional candidate.

The Justice Department’s announcement comes just two months after MI5 named a London solicitor, Christine Ching Kui Lee, as an alleged UFWD operative acting to financially influence British politicians in a January “security service interference alert” issued to the House of Commons.

Republican Rep. Michael McCaul of Texas, who is the lead of the House Committee on Foreign Affairs and chair of the group’s China Task Force, spoke with the Daily Caller News Foundation about the dangers of associating with CCP, UFWD and CPPCC members.

“The Justice Department’s indictments this week are yet another wakeup call that the CCP is actively reaching into American society and trying to limit our freedoms,” McCaul said, making reference to the FBI’s Wednesday press conference as evidence of the looming espionage threat. “Years of law enforcement activity, including this week, clearly show that this transnational repression can raise to the level of criminal activity, and Americans should be aware when they are dealing entities who carry out the CCP’s objectives abroad.”

Blackstone’s Chinese Communist Party-Backed IPO

The UFWD’s new deputy, Chen, has spent years cultivating relationships with U.S. politicians, leaders in the Chinese-American community, student associations, and other high-profile individuals, such as the billionaire CEO of The Blackstone Group, Stephen Schwarzman.

Schwarzman’s connections to individuals tied to the CCP began years before meeting Chen at Tsinghua University.

Schwarzman began traveling to China in 1990, but by 2007, when his global investment business, Blackstone, opened its second Asia-Pacific office in Hong Kong, Schwarzman had already begun keeping regular company with figures directly and indirectly associated with the CCP, such as Antony Leung.

Before heading up Blackstone’s Hong Kong office, Leung was employed as the financial secretary of the Hong Kong Special Administrative Region. In that capacity, Leung reported to the Chief Executive of Hong Kong, Tung Chee-hwa, a man linked to PRC influence operations across America and someone the U.S.-China Economic and Security Review Commission reports is “clearly associated with the United Front.”

Mao Zedong’s right hand man, Zhou Enlai, was the first person appointed to the position of vice chairman of the CPPCC, a title Tung now holds.

Schwarzman credits Tung’s subordinate, Leung, with the lion’s share of Blackstone’s success in the PRC.

Schwarzman said it was Leung who was by his side when he first met with Xi Jinping during the future president’s short stint as party secretary of Shanghai in 2007, and it was Leung who helped arrange for $3 billion in funding for Blackstone’s June 2007 IPO from China Investment Corp (CIC), a sovereign wealth fund created by the CCP.

“When we were going public in 2007, we were planning a $4 billion IPO and the government of China came in and asked can we buy $3 billion of the $4 billion IPO?” Schwarzman told The Economic Times in 2020. “This was sort of a shock because I have not been to China since 1990 and nobody buys three quarters of an IPO.”

“So, what we did is, we just increased it to $7 billion and we became the world’s second largest IPO of the decade after Google,” Schwarzman told The Economic Times. “As a result of this, it was for the first time China had bought an equity interest in a public company outside of China, since modern China was established in 1949.”

After going public, Blackstone’s first earnings report arrived in August 2007, showing the firm’s profits had tripled over a year.

Today, Blackstone’s revenue sits north of $22 billion a year, up from just over $3 billion in 2007, according to their annual report, with the company now proclaiming itself the “largest owner of commercial real estate globally.”

The Tsinghua Clique

Schwarzman also credits Leung with helping him set up the 2013 deal for Schwarzman Scholars, a one-year English-language international program at Tsinghua University which required $300 million in fundraising. 

As a one-party government, the political power to control the PRC has historically been fought over by competing intra-party “cliques,” of which there are known to be at least three: the Shanghai Clique, the Communist Youth League Clique and the Tsinghua Clique, which Xi is said to lead.

Chen Xu was promoted to party secretary of Tsinghua University in December 2013 and thereafter became an important and frequent point of contact for Schwarzman time and time and time again.

As Tsinghua’s party secretary, Chen held an important position for both the university and the CCP, with Tsinghua serving as both a fertile training ground for domestic and international talent, as well as a capable vehicle for projecting the PRC’s soft power.

According to her station, Chen was expected to promote the interests of both her university, as well as the CCP, which more often than not were indistinguishable.

When Xi arranged for President Vladimir Putin to receive an honorary doctorate degree from Tsinghua University in 2019, it was Chen who “presided over the ceremony and read out the address of honor,” welcoming the Russian dictator into the “Tsinghua family,” according to a Chinese state-run media Global Times report.

Schwarzman Scholars

When the opening convocation for Schwarzman Scholars was held, the Great Hall of the People — Beijing’s prime CCP venue for “state affairs and diplomatic activities” — was selected to host the event in April 2013.

From its inception, Schwarzman Scholars attracted high-level CPPCC and UFWD attention.

David Daokui Li, a member of the CPPCC of which Tung was the vice chairman, was appointed in 2013 as the dean of Schwarzman Scholars. Among other things, Li would chair a seminar for the program’s admissions attended by CCP cadre from the UFWD, Communist Youth League and central committee, while Tung himself sat on the advisory board for the program.

Schwarzman sat beside the CCP’s highest-ranking female, Liu Yandong — the vice premier and former head of both the UFWD and Confucius Institute project — during the program’s opening convocation in April, then again in November 2013 when Liu visited Washington D.C., and again in 2016 when the program began its first semester.

“The Schwarzman Scholars program is extremely fortunate to have the support from China’s top leadership, exemplified by the gracious congratulatory letter from President Xi Jinping and by the unwavering support of Vice Premier Liu Yandong,” said Tsinghua University President Chen Jining in April 2014.

Liu reappeared in Schwarzman’s life again and again, with Schwarzman labeling Liu a “special friend” in the acknowledgment section of his 2019 book “What It Takes: Lessons in the Pursuit of Excellence.”

Schwarzman also thanked many other “friends and colleagues in the Chinese government” in his book, such as “President Xi Jinping, Premier Li Keqiang, Vice President Wang Qishan” and high-ranking influence operatives, such as Sun Chunlan, another vice premier and former head of the UFWD, with whom Schwarzman Scholars engaged at least once or twice.

Chen was also thanked in the acknowledgment section of Schwarzman’s book.

“Party Secretary Madame Chen Xu at Tsinghua has also been an essential part of the senior leadership who created the opportunity for Schwarzman Scholars to occupy a unique position at the university,” reads Schwarzman’s acknowledgment. “She and President Qiu have helped create broad support for the program within the Chinese government. I always enjoy meeting with her and President Qiu on my frequent visits to Beijing.”

While Chen and Tung worked off and on together over the years, Schwarzman and Tung also continued to stay in touch.

As honorary chairman of the China General Chamber of Commerce (CGCC) — characterized as a type of UFWD front organization in a 2018 Jamestown Foundation report — Tung often appeared at the body’s annual galas in New York, including with Schwarzman in 2017 and the following year.

On stage during the 2018 gala, Tung praised Schwarzman for “his remarkable and impactful contributions to a constructive and cooperative China-U.S. relationship,” before personally presenting the billionaire with the “Goodwill Ambassador for China-U.S. Exchange” award.

While Schwarzman Scholars did not immediately respond to request for comment, a spokesperson for Blackstone told the DCNF: “The insinuations are false and misleading. Schwarzman Scholars is an internationally recognized program designed to foster dialogue between nations.”

‘The UFWD And CPPCC Are Not Benign Entities’

Not long after helping establish Schwarzman Scholars, Schwarzman’s partner, Leung, left Blackstone in November 2013.

Today, the senior managing director of greater China for Blackstone is a man named Liping Zhang, another member of the CPPCC.

The addition of Schwarzman Scholars to Tsinghua was no less than a watershed moment for the university, coinciding with a sharp spike in the institution’s international prestige, an event which also dovetailed with Xi Jinping’s rise, offering Chen unprecedented access to a surplus of global elite and ample opportunity to advance her personal, professional, and political interests.

“The UFWD and CPPCC are not benign entities,” Rep. McCaul told the DCNF. “They are elements of the CCP charged with carrying out political subversion. Americans should be aware of their own exposure to the CCP, which is distinct from ordinary foreign ties.”

“Whether it’s spreading CCP propaganda, exporting sensitive technology to China, or lobbying for United Front groups, there are many activities that benefit the CCP that are legal in the United States — at least for now,” said McCaul. “As we saw with the passage of the Uyghur Forced Labor Prevention Act, which banned the importation of Uyghur slave labor goods, things can change fast as the CCP threat comes into focus. Even in areas where federal intervention isn’t appropriate, cooperation with the CCP is carrying increasing reputational, financial, and moral costs as Americans better understand our adversary.”

Blackstone and Schwarzman Scholars are just two of countless entities that became acquainted with Chen before she was elevated to deputy head of the UFWD, and this article is just the first in a series investigating the ties Chen cultivated with America’s elite.