WASHINGTON–Several-hundred million dollars from the Paycheck Protection Program have gone to Chinese companies, according to one new analysis.
The $660-billion economic relief package allowed American subsidiaries of foreign firms to receive the loans, meaning “a substantial chunk of the money went to America’s biggest economic rival,” according to the report.
According to a review of publicly available loan data by the strategy consulting firm Horizon Advisory, $192 million to $419 million has gone to more than 125 companies that Chinese entities own or invest in, the New York Times reported adding many of the loans were quite sizable; at least 32 Chinese companies received loans worth more than $1 million, with those totaling as much as $180 million.
“The extent and nature of (People’s Republic of China)-owned, -invested and -connected entities among the PPP loan recipients indicate that without appropriate policy guardrails, U.S. tax dollars intended for relief, recovery and growth of the U.S. economy — and small businesses in particular — risk supporting foreign competitors, namely China,” wrote Emily de La Bruyère and Nathan Picarsic, the co-founders of Horizon Advisory.
Unspecified Number of Jobs Saved
The Times noted the report acknowledges that the participation of these companies in the lending program most likely saved an unspecified number of jobs based in the United States, but it also suggests that many of the businesses probably had access to other forms of capital from public or private markets to support their American operations.
The PPP allowed American subsidiaries of foreign-owned companies to apply for and receive loans.
“The Horizon Advisory report, which analyzed public filings and loan data that was released by the Treasury Department in June, does not claim to be an exhaustive account of the more than five million loans that were initiated through the program,” the Times reported. “The data released by the Treasury Department, for instance, shared loan amounts in ranges only for businesses that borrowed more than $150,000, and information for private firms that took smaller loans was released only in aggregate.”
According to the analysis, among the companies highlighted in the report were Continental Aerospace Technologies, which received a loan of up to $10 million, and Aviage Systems, which received a loan of up to $350,000. The companies are owned by Aviation Industry Corporation of China, a state-owned conglomerate that the Department of Defense classified this year as a Chinese military company.