According to reports from official mainland media, on June 3, Chinese Vice President Han met with the Chairman of the U.S. Fumao Group, 97-year-old Zhao Xicheng, and Zhao Xiaolan in Beijing. Prior to that, Zhao Xicheng and others had first visited Shanghai and met with Shanghai Mayor Gong Zheng.
Zhao Xicheng is the father of Zhao Anji, the former Chairman and CEO of Fumao who mysteriously died in February this year. Zhao Anji was the youngest daughter of Zhao Xicheng. Zhao Anji was also the sister of former U.S. Labor Secretary and Transportation Secretary Zhao Xiaolan, whose husband is U.S. Senate Minority Leader Mitch McConnell. Zhao Anji’s death has drawn attention to his close relationship with the Chinese Communist Party.
At that time, U.S. financier Kyle Bass had revealed on Twitter the cause of Zhao Anji’s death, suggesting that Zhao Anji was almost certainly a senior member of the Chinese Communist Party. Information shows that Zhao Anji served as a director of the Bank of China, one of China’s five major state-owned banks, and a board member of China State Shipbuilding Corporation, which was sanctioned by the U.S. government in 2020 for building ships and weapons for the Chinese navy.
Furthermore, there were online revelations that Zhao Anji was a guarantor of Evergrande’s foreign debt. Zhao Anji’s current husband, Breyer, is a venture capitalist who has invested in Chinese tech startups and is also a guest of honor of the Chinese Communist Party.
After Zhao Anji’s passing, 97-year-old Zhao Xicheng returned to take over as Chairman of Fumao once again. Was this due to the Zhao family’s inability to find a suitable successor, or out of concern? The reasons behind this move are complex and not simple.
Perhaps, less than four months after Zhao Anji’s death, the fact that Zhao Xicheng, at his advanced age, traveled to Beijing sheds light on some issues. During the meeting, Han expressed that the relationship between China and the United States is “one of the most important bilateral relationships in the world today,” and both sides should “strengthen exchanges and cooperation in economic, trade, and cultural fields to promote the steady, healthy, and sustainable development of the two countries’ relations.” He hoped that Fumao Group would “continue to make positive contributions to the development of Sino-American relations,” while Zhao Xicheng “highly praised the great achievements made in China’s economic and social development” and stated that the Fumao Group would “continue to deepen its presence in the Chinese market and actively promote Sino-American economic and trade cooperation and cultural exchanges.”
From the reported remarks of Han and Zhao Xicheng, there are three main implications: firstly, the importance of Sino-American economic and trade relations, which are facing major challenges under U.S. sanctions and encirclement, implying the need for Zhao Xicheng and the Fumao Group to continue serving the Chinese Communist Party.
Secondly, Zhao Xicheng’s flattering comments on China’s economic development under the Communist Party’s rule actually indicate a renewed submission to the CCP.
Thirdly, Zhao Xicheng’s declaration to increase investments in China and contribute to the development of Sino-American trade may involve actions at the political level in the United States, such as leveraging McConnell to reduce sanctions against the CCP.
What leverage does Zhao Xicheng have in the hands of the CCP to make him disregard his old age and travel across the ocean? The article “Five points you should know about the close connections between the Zhao Xiaolan family and China” from The New York Times on June 3, 2019, may provide some answers.
The article reveals the deep commercial relationship between the Zhao family and McConnell, who prospered through Zhao’s shipping company’s business in China. Zhao Xiaolan was one of the main promoters of the company during this process.
The relationship between the Zhao family and the CCP dates back decades. Before 1949, Zhao Xicheng fled China after studying navigation at a university in Shanghai, where he was classmates with Jiang Zemin. In 1964, Zhao Xicheng established Fumao Group, based in New York, securing its first major contract from the U.S. government to transport rice to Southeast Asia during the Vietnam War.
In 1984, as China gradually opened up to the world, the Zhao family invested in a state-owned maritime electronics manufacturer. The company mainly sold to the Chinese military and other departments, maintaining a close relationship with the Ministry of Electronics Industry, led by Jiang Zemin at the time.
After establishing a close relationship with the CCP, most of Fumao’s cargo ships were built by Chinese state-owned shipyards, some of which were funded by government loans. Fumao signed at least two long-term contracts with Chinese state-owned steel manufacturers to transport iron ore using ships built and supported by China. Shipping data shows that over 70% of Fumao’s cargo is sent to China, with a large portion being iron ore. These goods help sustain China’s industrial engine and steel production, a major point of contention in the deepening trade disputes between China and the United States.
During Zhao Xiaolan’s tenure as Transportation Secretary in the Trump administration, although shipping industry budgets were targeted for cuts, they were not actually reduced, and Congress even passed appropriations for it. Zhao Xiaolan, while not holding a formal position at Fumao, used her relationships and status to enhance the company’s reputation and visibility.
With the support of the Zhao family, McConnell successfully ran for Senator. They married in 1993, and even before that, the Zhao family had begun providing campaign donations to McConnell. The initial ten thousand dollars was in June 1989, and over the next 30 years, they provided over a million dollars. In 2008, Zhao Xicheng even gave the couple a gift worth up to twenty-five million dollars, helping McConnell ascend to the ranks of the wealthiest Senators.
After Zhao Anji’s death, McConnell announced he would step down as Senate Republican leader in November, citing that it “might be providential.” Perhaps he realized something.
The article from The New York Times confirms the close relationship between the Zhao family and the CCP. Having derived so many benefits from the CCP, the Zhao family is now tied to China’s red boat. Zhao Anji’s role in a Chinese state-owned enterprise was likely approved by Zhao Xicheng.
Undoubtedly, getting on the red boat is easy, but getting off is difficult. Zhao Anji’s death, Zhao Xicheng’s current trip to Beijing, and his statement of continued service all seem connected to this. In the broader context of anti-communism becoming a consensus in the U.S., Zhao Xicheng and the Fumao Group’s limited actions, along with the CCP’s high-level meeting, demanding increased investments and efforts in Sino-American economic and trade relations, once again prove that China’s economy is truly in trouble with the CCP leadership struggling to find a way to salvage it.