BEIJING - Even as US presidential candidate Donald Trump aggressively condemned Beijing, his hotel firm pursued a lucrative business deal with a giant state-owned Chinese firm headed by a top Communist official, sources say.
Trump has long declared Beijing to be America’s “enemy”, but his Trump Hotel Collection (THC) negotiated with the State Grid Corporation of China -- an electricity company that is the country’s largest state-owned enterprise -- to brand and manage a major development in the capital, according to sources with direct knowledge of the talks.
The process resulted in a memorandum of understanding for a deal potentially worth between $100 million and $150 million over 15 years, Robby Qiu, the former director of Trump’s Greater China office told AFP.
The discussions were confirmed by a source who asked for anonymity to discuss sensitive business information.
Trump has repeatedly been accused of double standards during the election campaign, and questions have been raised about possible conflicts of interest due to his overseas deals.
China's state-owned enterprises (SOEs) are a key element of the Communist party's control over the world's second-largest economy, and seen as important tools for pursuing its policy and geopolitical objectives.
Unlike private firms, their top executives are directly appointed by the ruling party, and often hold senior party positions.
During his White House bid, Trump has frequently excoriated China, claiming it has stolen millions of American jobs through distorted trade policies and currency manipulation.
In his 2011 book "Time to Get Tough" -- released as he pondered a presidential campaign -- he called China’s leaders “our enemy".
“What else do you call the people who are destroying your children and grandchildren’s future... who are ruining our way of life?” he wrote.
“We shouldn’t entertain Communists and beg for a few tiny contracts."
The negotiations with State Grid -- whose then chairman Liu Zhenya had been an alternate member of the Communist Party's Central Committee -- began a little over two years later.
Derek Scissors, an expert on US-China business relations at the American Enterprise Institute, told AFP: “It does make him look considerably worse, in my view, to be working with branches of the Chinese state after so sharply criticizing the policies of the Chinese state.”
State Grid is listed as the world’s second largest company by revenues in the Forbes Global 500 and provides electricity around 1.1 billion people across China.
Earlier this year Australia rejected a bid by it to purchase a regional electricity utility over concerns the deal would be "contrary to the national interest".
Several attempts by Chinese SOEs to invest in US firms and infrastructure have previously been blocked by Washington on security grounds.
'A GREAT FUTURE IN CHINA'
THC, since renamed Trump Hotels, manages Trump’s portfolio of luxury accommodations and has struck licensing and management deals for Trump-branded hotels, residences and golf courses in countries from Panama to Azerbaijan and Indonesia.
Trump has said he has 121 projects abroad, telling Vanity Fair they include “numerous deals” in China.
His companies' current activities in the Asian country remain unclear.
Negotiations with other SOEs and at least one Chinese city government continued at least through the opening months of Trump’s presidential campaign, according to Qiu, who moved to a different employer late last year.
In July 2015, a month after Trump declared his candidacy, the company's office in Shanghai began recruiting for two employees with experience working with “large state-owned corporations”, according to a job posting seen by AFP.
Last October THC chief executive Eric Danziger told the state-owned China Daily newspaper that it was "actively" pursuing deals in major Chinese metropolises including Beijing, Shanghai and Shenzhen.
Trump has sought business in China since at least 2006, when documents filed with the Chinese government show he began trademarking his name in Hong Kong and on the mainland.
In 2008 he agreed with Chinese property developer Evergrande and Hong Kong-based Orient Property Group to try to build a development in Guangzhou, according to filings to the Hong Kong stock exchange. But nothing ever came of the collaboration.
The Trump family renewed its push into the country in 2012 -- just months after his book came out. In Hong Kong, his daughter Ivanka told the Wall Street Journal: “China is going to be one of our primary focuses going forward. There’s such interest in the brand being here."
Months later, THC opened its Shanghai office, its sole outpost in Asia.
Trump businesses already had longstanding relationships with Chinese SOEs in the US: New York's Trump Tower houses the American headquarters of ICBC, the country's biggest bank.
But Trump himself had a low profile on the mainland, despite his outsize personality.
“Very few people knew him,” Qiu said. “There was a lot of difficulty when we tried to sell his name, and tried to sell his brand as a hotel brand.”
Details of the State Grid discussions described to AFP suggest they focused on a 7 billion yuan (now $1 billion) development that State Grid and its subsidiary Luneng Energy were building in Beijing's prime Guomao neighborhood.
State Grid executives flew to New York for several rounds of talks and Trump and his family were "excited" about the deal, sources said.
But negotiations were put on hold after Chinese authorities opened a corruption investigation into State Grid, with China's National Audit Office saying it illegally used public land for the Guomao project. There is no suggestion Trump or his companies were implicated in the Chinese inquiry.
"We're not currently in talks with State Grid," a Trump Hotels spokeswoman told AFP.
She added: "We remain interested in key cities in Asia, including those in China, and will continue to explore such opportunities accordingly."
Neither State Grid, nor the Trump campaign responded to requests for comment by AFP.
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