UPenn Can't Explain Mystery Donation From Chinese Company

Public records suggest that the Nice Famous Corporation, which funneled $3 million to the Ivy League school, is closely tied to the Chinese government

University of Pennsylvania (Wikimedia Commons)
August 3, 2020

The University of Pennsylvania pocketed a $3 million donation last year from a mysterious Hong Kong shell company that is owned by a Shanghai businessman with deep ties to Chinese government officials.

The donation from Xu Xeuqing, who has no apparent connection to the University of Pennsylvania and was previously embroiled in a Shanghai public corruption scandal, raises questions about the true source of the money. Documents reviewed by the Washington Free Beacon show Xeuqing has close ties to the Chinese Communist Party.

China has poured money into American universities in recent years, in part to buy influence on campuses, experts say. The donation comes as federal prosecutors have increased scrutiny on the Chinese government’s influence-buying and espionage operations at American universities.

"Unequivocally they’re using the money they’re providing the universities to garner influence there," said Ben Freeman, the director of the Foreign Influence Transparency Initiative at the Center for International Policy. "It’s not the sole motive, but it’s one of a variety of motives."

Foreign money has poured into the school over the past few years with a significant portion coming from China. The Ivy League school received $61 million in gifts and contracts from China between March 2017 and the end of 2019; over the previous four year period, it took in just $19 million from Chinese donors. 

The University of Pennsylvania received the $3 million in question from a Hong Kong-based company called "Nice Famous Corporation Limited," according to financial disclosures. And while a spokesman for the university, Stephen McCarthy, initially told the Washington Free Beacon that the money came from a Chinese national named Xin Zhou whose firm is "a large client" of the university's business school, a review of Chinese public records by the Free Beacon could not establish a connection between Zhou and the Nice Famous Corporation.

McCarthy did not respond to a request for further comment about why the university attributed the donation to Zhou.

In fact, corporate records indicate that the Nice Famous Corporation Limited is wholly owned by another Chinese national, Xu Xeuqing, a real estate developer well-connected in Chinese political circles.

The company does not appear to operate from its registered address in Hong Kong, according to an agent of the Free Beacon who visited the office. In fact, another company—Double Rich Development Ltd., which specializes in the import and export of ore and minerals—sits there.

The Double Rich Development company sits at the Hong Kong address listed by the Nice Famous Corporation. Photograph obtained by a China-based researcher retained by the Washington Free Beacon.

It is difficult to determine whether Chinese businesses are "truly independent of the government," Freeman said. "Even some of the contributions that we’re seeing ostensibly coming from Chinese businesses or Chinese charitable institutions, to some degree or another they are still connected to the Chinese government."

There are other indications that Xu is closely tied to the government. He is the chairman of the Jiuliting Street Chamber of Commerce, a position that requires him to work closely on economic issues with Shanghai public officials. He was also vice chairman of the Shanghai Golf Association, whose leadership includes senior Chinese Communist officials. And he owns another business, the Upstyle Fashion & Culture (Shanghai) Co. Ltd., that hosts an annual style award competition sponsored by the Shanghai Municipal Commission of Economy and other government entities.

In 2011, Xu was entangled in a bribery case involving a senior official at the Shanghai Housing and Land Resources Bureau. According to prosecutors, Xu provided a Cartier watch in exchange for favorable treatment from the government body. But while the bribe taker was sentenced to life in prison, Xu was not prosecuted.

The fact that Xu wasn’t prosecuted suggests that he has close connections with the Chinese Communist Party government, according to Michael Sobolik, a fellow specializing in China at the American Foreign Policy Council.

"Businessmen with high-level CCP connections can play by a different set of rules, as long as they are connected to the right Party faction," said Sobolik. "The fact that Xu escaped prosecution in Tao Xiaoxing’s trial, and especially his survival of Xi Jinping’s ‘anti-corruption campaign,’ suggest that Xu may have Party connections."

The purpose of China’s influence-buying on college campuses is twofold, said Freeman. China wants to gain access to intellectual property of American scholars and also bolster its image in the United States.

"I think that the most extreme concern about China is that they’re trying to garner influence on American campuses to gain access to our leading scholars and to gain access to what really at the end of the day is our intellectual property, our intellectual knowledge," said Freeman. "What’s looking much more common and what we’ve seen at a host of universities around the nation is that some of the Chinese funding is explicitly tied to changing the narrative about China."

Published under: China