Hong Kong Democrats and the Triads

They formed banks, holding companies, and international trading companies like Everbright to market these goods worldwide. Now the PLA runs farms, factories, mines, hotels, brothels, paging and telephone companies and airlines, as well as major trading companies. The number of military-run business exploded during the boom of the late 1980s. The "third line" factories opened branches in the coastal areas, earning increasingly high profits from the manufacture of civilian goods. Even the lowest levels of the PLA set up production units. In fact the PLA had a largely captive audience of Chinese who had never really had the chance to acquire personal goods produced in China before. In addition to their international arms sales, their production of consumer goods for the domestic market soared.

Many of the PLA companies have become firmly enmeshed in the global economy. Hong Kong is the PLA's favoured stock exchange because of its loose disclosure guidelines. China Poly Group has two listed companies: Continental Mariner Company Ltd. and Poly Investments Holdings Ltd. Both Continental Mariner and Poly Investments have a large number of subsidiary companies in mainland China, Hong Kong, and tax havens like Liberia, the British Virgin Islands, and Panama. China Carrie's listed company in Hong Kong is Hongkong Macau Holdings Ltd. China Carrie also owns HMH China Investments Ltd. on the Toronto Stock Exchange and HMH Gold Mining on the Australian Stock Exchange. 999 Enterprise Group, another company controlled by the PLA General Logistics Department, operates Sanjiu Pharmaceuticals Group, the largest pharmaceuticals manufacturer in China. 999 has been listed on the Hong Kong exchange.

Smaller military enterprises, like the Songliao Automobile Company owned by the PLA Shenyang Military Region, have also listed in the domestic Chinese markets. China Poly Group is a commercial arm of the Chinese People's Liberation Army (PLA) General Staff Department. The PLA General Logistics Department operates China Xinxing. The PLA General Political Department owns and operates China Carrie and the PLA Navy runs China Songhai.

Military partners get the added security of knowing that the top "management" of many of the PLA companies are from the ranks of the "princelings," the children and relatives of senior Chinese Communist Party officials. These influential princelings assure that the business operations of the PLA will have the government connections that are so important in China's corrupt system. In the case of China Poly, chair Wang Jun and president He Ping act as brokers between the government and the military. Wang Jun is the eldest son of the late Vice-President Wang Zhen. He Ping is the son-in-law of the late Deng Xiaoping. Wang Jun's brother, Wang Bing, is the chair of the PLA Navy Helicopter Company. China Carrie's president is Ye Xuanning, the second son of late PLA Marshal Ye Jianying.

The co-operation between the triads and the Chinese military companies makes it easier to disguise the political aspects of Chinese investment by masking it behind a front of intermediaries with no military connections. The triad structure allows for secrecy to prevail. The triads can, and do, make a lot of money on their own and are not financially dependent on the corporations that broaden their face in any transactions. Many of the triad 'Dai-los' have moved from Hong Kong to Beijing, which emphasises their political clout.

The government first attempted to regulate PLA business activities in 1989 with a series of decrees, among them a prohibition on active military personnel concurrently holding positions at commercial enterprises. The reforms were intended to keep management of PLA enterprises under the control of senior military leaders and prevent lower-ranking officers from becoming involved in the daily functioning of the military companies. In the wake of the rejection of the Party in 1989 these government strictures fell away. The government tried again the early 1990s, when the central leadership of the military took steps to coordinate the production of the vast number of military factories by tying the plants together under "group companies." The groups, acting like conglomerates, have been fairly successful in centralizing management and production, running the trading companies and expanding the groups' business operations. The PLA now acts as a state within a state, with its power growing substantially in the latest wave of Chinese economic expansion.

This massive growth of Chinese companies was accompanied by a concomitant growth in corruption. In this the triads played a vital role in moving money, intimidating smaller businessmen, and muscling trade unions. All this was in addition to their normal drug-dealing, money-lending, and the range of other crimes usually conducted by the criminal fraternity. The triads were aided by the spread of corruption and helped perpetuate this corruption through their actions. They became a critical factor in the management of the interaction of corrupt politicians with the military-industrial corporations.

With the election of the new Chinese President, Xi Jinping, the President and the Chinese Communist Party (CPC), especially after the Third Plenum, have made a start against the corrupt officials in the country. In addition the new leadership has pushed to remove the military from their control of the giant corporations and international trading companies. He has recognised that the time has come for China to curtail the massive overhang of power offered by the continuation of the military-industrial complex. There are political as well as economic reasons. The operations of the military-industrial corporations in Africa and, increasingly, in Latin America emboldens and supports regimes and political movements which the CPC is less willing to support as these have posed an on-going conflict in the Politburo. Xi has started to take steps to weaken the military-industrial complex and to broaden the control of the CPC.

A side effect of this reform is the loosening of the bonds between corrupt politicians and the triads as well as diminishing their role in the military-industrial corporations. This is more true in Beijing than in Hong Kong, where the triads run a powerful economic and political empire. The efforts of the triads in suppressing the student movements is both for its own sake in preventing genuine democracy and reform in Hong Kong, which would seriously threaten its interests and to show their continuing value to the CPC leaders who, as yet, do not want to get their hands dirty in suppressing students.

It will not be surprising to see more interventions against the democracy movement by the triads. While they may not necessarily be conducted on the order of the CPC these attacks are, no doubt, welcomed. There may well be a more difficult struggle for the Occupy movement as more triads become involved in the struggle.

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