Sidewinder
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Secret
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RCMP-CSIS Joint Review
Committee
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Draft Submission
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SECRET
Joint RCMP
Study
Information as of
24 June 1997
Translated
text
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Chinese Intelligence Services
and Triads Financial Links
in Canada
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Draft Submitted
to the RCMP-CSIS
Joint Review
Committee
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24 June 1997
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TABLE OF CONTENTS
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Table
of Contents (Note: pages are for
the original document not on this HTML)
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i
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Foreword
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iii
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Summary
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iv
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Introduction
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1
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Beijing's
Strategic Alliances, or the lessons of Sun Tsu
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1
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Immigration
to Canada
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3
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Hundreds
of Canadian Companies "Made In China"
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4
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Case
Studies
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5
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-Multinationals
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CITIC
(Canada)
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5
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Norinco
and Poly Technology (Poly Group)
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5
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-Banks
and financial institutions
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CIBC
and the Hong Kong Bank of Canada
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6
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Wood
Gundy, Merrill Lynch and Gordon Capital Corp.
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6
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-High
technology
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Semi-Tech
Corporation
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7
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China
Huaneng Group, Unipec Canada and Goldpark China Ltd.
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7
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-Entertainment
and Media
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Charles
Y. M. Kwan Promotions
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8 |
North
American Studios
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8 |
China
Vision and Fairchild Entertainment
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8
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Hong
Kong Telecommunications and Wharf Cable Ltd.
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9
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-Food-Services
industry
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Tai
Foong International
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9 |
-Real
estate and hotels
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Grand
Adex Properties Inc. and Concord Pacific Development Corp.
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9 |
World
Financial Properties
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10 |
Ramada
Hotels, Harbour Castle (Toronto) and others
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10
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-Universities
and research centers
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University
of Toronto and University of Western Ontario
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10 |
Chinese
Intelligence Services Penetration of Canadian Companies
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11 |
Interference
by Financing of Canadian Political Parties
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11 |
The
Importance of the Chinese Diaspora
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12 |
Consequences
for Canada
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12 |
Recommendations
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14 |
Appendixes
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-Appendix
I: Annual number of certifications
of permanent residence in Canada for persons
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from Hong Kong since 1990: "entrepreneur" and
"investor" categories
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15 |
-Appendix
II: Annual breakdown of the choice
of province by permanent residents from
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Hong Kong "entrepreneur" and "investor"
categories
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16 |
-Appendix
III: Origin and Description of the
Triads
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-Appendix
IV: Description of a Typical Triad Member
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Profile
A: Young Adult
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20 |
Profile
B: Mature Member
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-Appendix
V: Guanxi or networking
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22 |
-Appendix
VI: The Chinese Diaspora
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23 |
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FOREWARD
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In May 1996 a joint project was initiated by the RCMP Criminal Analysis
Branch and the CSIS Analysis and Production Branch to assess the extent
of the threat posed by the acquisition and control of Canadian companies
by members or associates of triads and with affiliations to the Chinese
Intelligence Services. The research team quickly realized that the
initial premise was the tip of the iceberg with only a minute portion of
a much more complex situation showing. It should be stressed that this
report is a prospective document that makes to claim to provide a full
survey of the issue; in fact, quite the opposite.
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This document does not present theories but
indicators of a multifaceted threat to Canada's national security based on
concrete fats drawn from the databanks of the two agencies involved,
classified reports from allied agencies and various open sources. This
study has departed from the conventional and sometimes confining
approaches followed by our respective methodologies. Although both
organizations have fairly extensive expertise on Chinese matters, it is
nevertheless very different. It is clear at the end of this exercise that
both organizations have gained from cooperating on this research. When put
together, these two bodies of expertise complement each other, providing a
broader and more substantial perspective of the Chinese issues. (S)
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The scope of the problem found after a few
weeks of research dictated that the initial research results had to be
presented in the form of case studies. At the moment, we estimate that
over 200 Canadian companies are under the direct or indirect control of
China. Although it was impossible to do all the research within the
parameters initially given; however, sufficient details have been found to
reveal the threat. It should be reiterated that this report presents
concrete facts, not just ideas or speculation. We trust that we have
demonstrated the need to continue the work within a broader and more
elaborate framework. (C)
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Chinese Intelligence Services
and Triads
Financial Links in Canada
SUMMARY
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Since the mid-1980s, a substantial
immigration flow from Hong Kong has taken place and Canadian authorities
were first alerted when a significant presence of Chinese organized crime
elements among this group was detected. Many came through the
"entrepreneur and "investor" immigration program and some of these
criminals even have succeeded to obtain their Canadian citizenship.
Although not all immigrants in these categories are suspected, two
particular groups of individuals raised attention. Two other groups have
also taken advantage of the "entrepreneur" and "investor" categories to
immigrate and to invest in Canada. First, a certain number of very rich
Hong Kong Chinese business people (tycoons) who are known to have been
cooperating with the Chinese Government for years. Then a group composed
of associates and relatives of China's leadership and the Chinese
Intelligence Service (ChIS). Intelligence reveals that certain individuals of these three groups
have been working for over fifteen years in concert with the Chinese
government, and some of their "financial ventures" in Canada serve to
conceal criminal or intelligence activities. (S)
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Hand in hand with this situation, the ChIS
[Chinese Intelligence Service] make very active use of their access to
Canadian industries through exchanges of specialists and students, and
also set up shell companies to pursue their acquisition of economic and
technological intelligence. Cooperation between the Hong Kong tycoons, the
triads and the Beijing leadership adds a new dimension to the well known
"mass line collection" strategy followed by the ChIS. This situation
substantially raises the level of the potential threat, revealing the
effectiveness of Chinese efforts to obtain Canadian technology and their
capability to interfere in the management of the country. Central points
and essential for the understanding of the problem are the cultural
singularities that characterize the Chinese as the concepts of "debt of
honour", "duties", "Hou Tai or backers" and "Guanxi or
connections." ) (S)
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By using these alliances, the Chinese
government is trying to gain influence on Canadian politics by maximizing
their presence over some of the country's economic levers. To that end,
they proceed initially to buy and/or legally set up a company in Canada
that, once under their control, buys other companies and so on. An
effective domino effect ensues that acts like a well-spun web or network
at strategic points. It is estimated that over 200 Canadian companies have
passed into Chinese influence or ownership since the early 1980s through
the triads, tycoons or China national companies. These businesses are
found in various sectors of the economy, ranging from multinationals to
banking, high technology and real estate (CITIC, Norinco, Husky Oil, Grand
Adex Properties Inc, Merrill Lynch, Gordon Capital, Inc, Tai Foong
International, CIBC, Ramada Hotels, China Vision and Semi-Tech
Corporation, etc.). The triads' companies are also used to pursue their
criminal activities, such as money-laundering and heroin trafficking, as
well as assistance to the ChIS. (S)
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Being Canadian these businesses are also
eligible to receive government subsidies for research or classified
contracts from Federal Departments. The risk is that after the research is
done, there results can be transferred to China. Other form of risk
is with the access gain through classified contract. As an example, a
Canadian company under Chinese influence was in contention for a contract
to set up and run a classified communications system linking the main
agencies of the Canadian intelligence community. A company in Toronto
specializing in video surveillance was originally Canadian, but was bought
by a Chinese multinational. It is impossible at present to say how
many or which Canadian companies are in the same situation. These
examples, however, raise questions about the integrity of some companies
that have already installed security systems for various Canadian
government institutions or Canadian research industries. (S)
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Significant portions of some large Canadian
urban centres are also owned by Chinese entrepreneurs. For example, it is
estimated that Li Ka-Shing owns with his son at least one sixth to one
third of downtown Vancouver. (S)
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These "corporate" figures have become an
influential presence on the political and economic landscapes of Toronto
and Vancouver and at the provincial and federal levels. The triads, the
tycoons and the ChIS have learned the quick way to gain influence is to
provide finance to the main political parties. Most of the companies
identified in this research have contributed, sometimes several tends of
thousands of dollars, to the two traditional political parties, that is,
the Liberal and the Progressive-Conservative Parties. (S)
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The Chinese leadership continues to gain
much direct or indirect influence over the Canadian economy and politics.
Having bought significant real estate holdings and established businesses
in Canada, China has obtained access to influential figures who are now or
once active at various levels of Canadian society. In many ways, China
remains one of the greatest ongoing threats to Canada's national security
and Canadian industry. (S)
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"Be so subtle that you
are invisible.
Be so mysterious that you are intangible.
Then you
will control your rival's fate."
Sun Tzu,
The Art of War
(c. 509 BC)
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INTRODUCTION
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1. With the announcement of the return of
Hong Kong to China in the mid-1980s, Canada witnessed the arrival of a
substantial immigration and capital flow from that region. For example,
between January 1990 and March 1997, 233,077 Hong Kong residents emigrated
to Canada, of whom nearly 70,0001
were in the "entrepreneur" or "investor"
category. This exceeded the "family" category over the same period.
Although the great majority of these migrants were legitimate, the
Canadian authorities detected a significant presence of Chinese organized
crime elements, among them, namely the triads and their associates, some
of whom succeeded in obtaining Canadian citizenship.2 (S)
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2.
Some wealthy Hong Kong Chinese investors
and Chinese from Mainland closely affiliated or related with the
country's
leadership and the ChIS also took advantage of the "entrepreneur"
and
"investor" categories to emigrate in and invest in Canada. Few
even bought
or established companies on Canadian soil through family members
who had
obtained Canadian citizenship. Intelligence indicates that these
specific
individuals with these three groups: triads, Hong Kong investors
and
people close to China's leadership, have been identified working
with concert with the Chinese government to gain influence through some
of their "financial ventures" in Canada. Some companies which are
also
used to conceal criminal or intelligence activities. At the same
time, the
ChIS use their access to Canadian businesses through exchanges and
technical or student visas to steal classified and technological
information. They have gone so far as to set up shell companies to
pursue
their economic and technological information acquisition
operations.
(S)
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3. A new triumvirate was born. This
cooperation between Hong Kong Chinese business people, the triads and the
Beijing leadership adds a new dimension to the known mass line collection
strategy followed by ChIS. Economic, political and security indicators
based on factual data revealed the potential threat and efforts made by
the Chinese to obtain Canadian technology, but above all to obtain
influence over economic levers and prominent Canadian figures. (S)
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BEIJING'S STRATEGIC ALLIANCES,
OR THE LESSONS OF SUN TZU
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4. When Deng Xiaoping came to power in the
late 1970s, he introduced his economic reforms with the slogan "to get
rich is glorious." To achieve that end, he had to move China onto the
international markets. The isolationism of the former regime, however,
handicapped the Chinese leadership. It therefore turned to the richest
Chinese business people of Hong Kong, including, among many others, Li Ka-Shing, Henry Fok
Ying-Tung, Wang Foon-Shing, Stanley Ho3 and the man
who
would eventually be chosen by Beijing to head Hong Kong after the
departure of the British, Tung Chee-Wa (C.H. Tung). On 23 May
1982, Li Ka-Shing and Henry Fok met with Deng Xiaoping and Zhao Ziyang
in Beijing
to discuss the future of the peninsula. Their task would be to
advise and
educate the Chinese authorities about the basic rules of
capitalism. In
return, Beijing gave them privileged access to the vast Chinese
economic
basin. These powerful international financiers played an important
role in
the preparations for the transfer of Hong Kong. (UC)
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5. In 1984, the British Government of
Margaret Thatcher announced that it would return Hong Kong to China on 1st
July 1997. This was not news to the Chinese or the rest of the world since
a treaty signed nearly a century before had stipulated that Hong Kong was
to revert to China in 1997. The reality of the impending transfer,
however, created insecurity that was strengthened by the tragedy of
Tiananment Square in June 1989. That incident made Beijing realize more
than ever that it would have to prepare the ground for its arrival not
only with regard to the financial community but also the population. In
the late 1980s, Western intelligence services reported the very active
presence in Hong Kong of the United Front Work Department (UFW).4
For that
purpose, the UFW was given the responsibility among other things for
building alliance with the triads already affiliated with many business
people. As early as 1992, Western intelligence services knew that, Wong
Man Fong, formerly Head of the New China News Agency, was instructed to
inform the triads bosses that if they agreed not to jeopardize with the
transition process and the normal business in Hong Kong, Beijing would
assure them that they will be allowed to pursuit their illegal activities
without interference.5 The Beijing authorities also created a front company
in Hong Kong for Wong Man Fong to facilitate his contacts with the triads
and so assist triads groups set up legitimate business in China,
particularly in Guangzhou and Shangai.6 Following these negotiations, Deng
Xiaoping himself was speaking of the triads as Chinese "patriotic groups",
and the Hong Kong press published a photograph of Charles Heung, a senior
officer of the Sun Yee On, conversing with the patriarch's daughter.7
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the same time, Interior Minister Tao Siji indicated that there were
patriotic members among the triads and they were welcome to do business in
China. (S)
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6. The political class has also been
targeted by Beijing's leaders. Without any doubts for the communist
masters it was essential to obtain the cooperation of key elements of
influential local personalities. Their collaboration or their resistance
in China's requests before July 1st was going to make the difference
between the possibility to do business with China after the transition. To
achieve this, political and business people have been approached and
enthusiastic collaborators received positions within various transition
committees. For example, in early February 1997, Rita Fan Hsu Lai-Tai was
appointed by Beijing, chair of the Hong Kong Special Administrative Region
(SAR) Provisional Legislative Council (LEGCO). Mrs. Fan Hus has been
identified as a secret cadre of the Chinese Communist Party and an
associate of Albert and Sonny Yeung, both officers of the Sun Yee On
triad. She is also the daughter of one of the leaders of the Shanghai
Triad criminal organization known as the Green Gang before the communist
takeover in 1949. This group was known for its political assassinations on
behalf of another triad boss, Chiang Kai Shek.8 (S)
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IMMIGRATION TO
CANADA
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7. Canada has always been a preferred
destination for the people of Hong Kong. It is estimated that 100,000
Canadians live on the peninsula, and most of them are natives of the city.
Hong Kong alone has been for the last 10 years the top source of
immigration to Canada, with over 500,000 Hong Kong people now living here
and accounting for 22 percent of all immigration to Canada. Over half of
the 66,000 persons who left Hong Kong in 1996 came to Canada. To that must
be added 17,000 students, amounting to a fifth of all foreign students in
Canada. (C)
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8. Among legitimate immigrants in recent
years, some persons affiliated with or members of the Chinese triads have
succeeded in slipping in and obtaining Canadian citizenship. Several triad
officers 9 and their associates even have family members residing in Canada.
Their choice of Canada was no accident. This country is an excellent place
to invest in companies to launder the profits derived from criminal
activities while securing a portion of their assets outside Hong Kong and
obtaining a Canadian passport. Most of these individuals are members or
associates of the upper echelons of the triads and own or run large
businesses in Hong Kong. As part of their secret agreements reached with
the Beijing leadership,10 these triads now use their Canadian acquisitions
to engage in intelligence activities, such as intimidating individuals,
identifying potential sources of facilitating visit of Chinese delegations
on behalf of China. (S)
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9. Two other types of investor represent
another danger to the Canadian economy, namely, the rich Hong Kong Chinese
business people and leaders of the Chinese civilian and military
authorities of China. Like the "entrepreneurs" affiliated with the triads,
Chinese investors from Hong Kong or Beijing have taken control of Canadian
companies in various sectors of the economy. Some of these businesses have
even obtained Canadian government classified contracts. The threat is more
significant because the strategic alliance between the Beijing leadership
and Hong Kong tycoons is reinforced by the powerful ethnic and cultural
ties associated with guanxi.11 This concept rules the links, the
obligations or duties and the type of relations between individuals and is
a characteristic of the Chinese culture. (S)
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10. In all three cases, their commercial
activities have enabled them to develop a position in the Canadian economy
that affords them the opportunity to engage in intelligence activities,
such as illicit transfer of technology, foreign influence and
interference, identification and cultivation of persons favourable to
China, and the acquisition of undue control in important Canadian economic
and political circles. (S)
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11. Even before Hong Kong's official return
to the Communists, it was established by several Western agencies that
their national immigration systems had been affected by illegal ChIS and
triad interference. Laurence Leung Ming-Yen, a former director of the Hong
Kong immigration service, is still under investigation after he had to
resign under the pressure of allegations of corruption and illegally
disclosing confidential information about residents of the peninsula. The
controversy surrounding Leung was fed by his business relationship with
the flamboyant tycoon Tsul Tsin Tong, well known for his pro-Beijing views
and a member of the notorious Chinese People's Political Consultative
Conference and Preparatory Committee. The murder of Leung's young daughter
in Vancouver in 1993 by a crossbow bolt has still not been solved. The
Vancouver police suspect the crime was committed by triad
members.
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12. In 1996, an extensive special
investigation within the American immigration service led to the arrest of
two former heads of this service stationed in Hong Kong. Jerry Wolf
Stuchiner was found in possession of illegal Honduran passports12 and was
recently released after he accepted to collaborate in the trial of James
DeBates.13 James DeBates and his wife Heddy, an American of Chinese origin,
were also arrested and questioned regarding their involvement in
Stuchiner's activities and the illegal entry of Chinese immigrates into
the United States. Canada has unfortunately its share of difficulties.
Different cases were investigated and like the case of Robert Geddes, a
former citizenship judge, whom was charged in May 1997 with 33 counts of
fraud and misrepresentation in 13 known cases involving Hong Kong
Chinese.
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13. Analysis of the destination of
immigrants broken down by Canadian province is an indicator of the
concentration of the activities of these groups. Between January 1990 and
March 1997, 39.1 percent of the persons registered in the entrepreneur and
investor categories chose to settle in British Columbia, particularly in
the south Fraser Valley. Ontario for its part received 28.5 per cent of
immigrants, who settled mainly in the Toronto area. This pattern is
explained by the large, long-established Chinese communities in these
areas which are essential in the activities of the triads, Chinese
investors and ChIS. Under the same program, 20.6 per cent of such
immigrants settled in Quebec while Alberta received only 7.3 per cent. (S)
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HUNDREDS OF CANADIAN
COMPANIES "MADE IN CHINA"
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14. The influx of Chinese investors who are
affiliated with the triads or new associates of Beijing poses a new
challenge to Canada's national security. The central point of the strategy
of the Chinese is first to buy a Canadian company so as to obtain a "local
identity", legally concealing subtly their foreign identity. Then, using
this acquisition, the Chinese-Canadian company invests heavily or buys
other companies in various economic sectors, but always under the Canadian
banner. In actual fact, control lies in Hong Kong or Beijing, and the
financial benefits or fruits of research, often paid for by Ottawa or the
provinces, are likely to make their way to Asia. (S)
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15. Hand in hand with their ethnicity and
their commercial ambitions, the financial network of the Chinese
entrepreneurs associated to the organized crime and to the power in
Beijing has grown exponentially and very rapidly in Canada. Their
influence over local, provincial and national political leaders has also
increased. In the game of influence, several of these important Chinese
entrepreneurs have associated themselves with prestigious and influential
Canadian politicians, offering them positions on their boards of
directors. Many of those companies are China's national companies.
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16.
The analysis of the information
demonstrates that their attention was not initially directed towards
sensitive sectors like high technology or other even more sensitive areas,
but towards what might be called "soft" sectors such as: real estate,
hotels, transportation, oil companies and travel agencies. Commercial
sectors that at first sight do not involve any security risks and did not
attract the attention of the Canadian services responsible for security.
The scale of their ventures or investments has now made them some of the
most important figures present in the major centres, and their decisions
to invest in one place or another are not a matter of indifference to
anyone. Such projects are seen by the local or national business community
as a "favour" or a "chance" not to be missed. (S)
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CASE
STUDIES
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17.
It is estimated at the present time that over 200 Canadian companies are
under Chinese control. These business are to be found in myriad
sectors of the economy, ranging from multinationals to banking, high
technology and real estate. Some typical cases are presented here
to illustrate the various scenarios that are clearly worrying for
Canadian security. At first
site, these individual cases do not seem to be a great threat. It
becomes, however more disturbing when the ownership links between
various sectors of Canadian enterprises are revealed. (S)
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Multinationals
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18.
CITIC (Canada) China International Trust Investment &
Company (China International Trust &
Investment Corporation) is the largest Chinese operating
internationally. It has subsidiaries operating in several Western countries,
including the United States and Canada (Vancouver). Founded
at the end of the 1970s, it now has assets worth US$23 billion.
Its subsidiary in Canada CITIC BC Inc., opened it doors in 1986.
By 1995, it reported a turnover of CDN$250 million (1995). The
projections for 1996 aimed for $290 million. (UC)
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19.
CITIC was initially established to encourage foreign investment in
China. It has since taken the lead in Chinese investments outside
China, in all areas from real estate to electronics. In 1979 Beijing
appointed to CITIC's board of
directors three Hong Kong financial giants, Li Ka-Shing, Henry Fok
Ying-Tung and Wang Foon-Shing. With their assistance, in the
following years, the Beijing acquired important companies such as Cathy
Pacific Airlines, Hong Kong Telecom and Star TV. In Canada, it is
estimated that CITIC has invested nearly $500 million to buy up
businesses in certain areas, such as Celgar Pulp Mill in British
Columbia, Nova Corp Petrochemical in Alberta, real estate through Hang
Chong Investments Ltd. and hotels. Eventually, CITIC developed
also close business links with Power Corporation. (S)
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20.
CITIC recently attracted American media attention in the scandal over
illegal contributions to the US Democratic Party and influence-peddling
by the Chinese government (see section below). CITIC, China
Resources and the Lippo Group (in which in both Li Ka-Shing is a large
shareholder) are at the centre of the affair. CITIC chairman, Wang
Jan, is also chairman of Poly Technology (see next section).
CITIC has repeated the gesture by contributing through its Canadian
subsidiaries to Canadian Political Parties. (UC)
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21.
Norinco
and Poly Technology (Poly Group). Northern Industrial
Corporation (Norinco) and Poly Technologies (a subsidiary of Poly
Group) are both owned by China and under the control of CITIC.
They have subsidies around the world, including Canada (Montreal) and
the United States. Poly Group was until recently head by Deng
Xiaoping's son-in-law, He Ping, and is part of the entrepreneurial drive
of the People's Liberation Army (PLA). Several large quantities of
arms manufactured by Norinco have been confiscated on Indian reserves,
especially those of the Mohawks. In May 1996, US authorities what
they described as the biggest arms seizure on American soil,
confiscating 2,000 AK-47assault rifles and other military weapons from a
warehouse in California. The US-based Chinese representatives of
Poly Technologies and Norinco were arrested in connection with this
affair. Although the final destination of the arms has not been
determined, the Amerindians "Warriors" and American militia
trails are strongly suspected by US authorities. (S)
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22.
In another incident, the Rex International Development company of Hong
Kong, in which Norinco is the majority shareholder, is currently under
investigation possibly subject to prosecution for exporting components
for the manufacturing of chemical weapons to Iran. Rex was
established in 1982 as a joint venture with Norinco by Tsui Tsin-Tong, a
financial partner of Li Ka-Shing. Tsui filed an application to
emigrate to Canada in 1985 which has been renewed several times.
His case is still not settled because he has never satisfied the
Canadian authorities by providing adequate explanations of his contacts
with the PLA and the ChIS. Silver
City Development Ltd., which holds shares in Rex, has been used for
several years by the ChIS and the Chinese leadership as an investment
front and cover. (S)
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23.
Through the power of its multinationals industries and the billions of
dollars they generate, China has been able to establish itself in the
Western economy. This gave to the country an enormous advantage in
the pursuit of gaining influence. In return through these
subsidies and influences, they are able to open channels to facilitate
access to Western power and traffic of illegal weapons and
technology. (S)
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Banks
and financial institutions
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24.
CIBC
and the Hong Kong Bank of Canada. The banking industry is
one if not the most important economic leverage in this country.
To control or to be able to influence the actions of a bank gives to a
single or a group of important shareholders a very influential and
privilege position in our society. In this domain, Canada might be
in a disadvantage position. Of the G-7 countries, Canada has the
fewest banks that is five major institutions including the CIBC which in
return creates the highest concentration of assets in the same
hands. Banks, as a whole, hold 57 percent of industrial
shares, 54 percent of private deposits and 65 per cent of personal
credit. Some analysts predict that the Canadian banks will hold 70
percent of the mutual fund market by the year 2000. (UC)
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25.
Rich investors like Li Ka-Shing and even the Chinese regime itself got
interested in the 1980s to invest in banks and Canadian banks too.
Li Ka-Shing owns 10 percent of the CIBC, which is the largest single
individual share holder. He is also in partnership with the CIBC
in many companies like development projects like of the land of Expo 86
in Vancouver (CDA $3 Billion). This bank seems to be particularly
used by Chinese investors. The 1980s saw several bank acquisitions
and mergers in this country. The Continental Bank was sold to
Lloyds Bank Canada which in turn was bought by the Hong Kong Bank of
Canada. The latter is the sixth largest bank in Canada, and the
largest foreign one. In 1986, it acquired the Bank of British
Columbia. Li Ka-Shing and Stanley Ho14 are share
holders and on the Board of Directors of the Hong Kong Bank in Hong Kong
which owns the subsidiary in Canada. The Government of China is
also a share holder of that bank. (UC)
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26.
Wood
Gundy, Merrill Lynch and Gordon Capital Corp. Other
important financial sector linked to banks is the brokerage house
business. In Canada, it is dominated by a few large banks.
In 1993, eight of the largest Canadian brokerage institutions were owned
by five banks and controlled 70 percent of the securities market.
In 1988, CIBC bought 65 percent of the shares of Wood Gundy at a cost of
CDA $190 million, or three times the book value. (UC)
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27.
In 1990, the CIBC took over Merrill Lynch Canada, one of the eight
largest Canadian institutions. Merrill Lynch International is
owned by Thomas Fung (see below, China Vision) and Li Ka-Shing business
associate. Another prestigious old Canadian firm is Gordon Capital
Corp. became 50.1 per cent owned by Richard Li, son of Li Ka-Shing, in
October 1995. That is two years after Richard began to work for
the firm. After Richard joined the board, William (Ken) Davidson,
former vice-president and executive director of the CIBC, received a
promotion to the board, and Bob Fung the position of
vice-president. His son Mark often travels on Team Canada trips to
Asia. Again, it is not only the financial leverage that should be
noticed but the gain of influence this sector offers. (S)
|
|
|
High
technology
|
|
|
|
28.
Semi-Tech Corporation. Semi-Tech Corporation is a Canadian
multinational corporation based in Markham, Ontario. It was formed
from various public companies listed on several shock exchanges,
including Toronto, Montreal, New York, Tokyo, Osaka, Nagoya,
Frankfurt and Hong Kong, and has revenues of over US $3.5 billion.
This corporation, and its chairman James Ting in particular, have
business ties with China. Stanley Ho is the principal shareholder
through his company Shun Tak (Hong Kong) and sits on Semi-Tech's
board. (UC)
|
|
|
29.
This company has concentrated in particular on information technology,
establishing Semi-Tech Microcomputers Ltd., Semi-Tech MicroElectronics
Corp., Semi-Tech Electronics, Singer and STM Systems Corp. The
last of these was established by the merger of Data Crown (Canada) and
Canada Systems Group, two companies that count various federal
government departments among their clients and some of whose employees
are regularly in contract with Chinese diplomatic representatives.
Of particular note is the fact that Canada Systems Group had applied to
undertake the development of COSICS, the Canadian On-line Secure
Information and Communication System that was to link the Department of
External Affairs, the RCMP, CSIS and National Defence. The project
was suspended by the federal government due to the lack of financial
resources. (S)
|
|
|
30.
China Huaneng Group, Unipec Canada and Goldpark China Ltd. On
January
1997 Canadian newspapers announced that the Chinese companies
China
Huaneng Group Group Hong Kong Ltd. (CHG(HK)) and China
International United Petroleum and Chemicals Co. (Unipec) had concluded
an agreement
whereby Huaneng would buy 70 percent of the shares of Unipec
Canada
Ltd. Unipec Canada Ltd., in turns, holds 57 percent of the
shares of Goldpark China Ltd. of Toronto which, holds exclusive
world
rights for the productions of photographic security systems.
CHG(HK) is a subsidiary of the fifteenth largest Chinese State
Company,
China Huaneng Group. Unipec for its part is a giant of the
Chinese
oil industry which has sought in recent years to diversify its
activities. It is also famous for the many lawsuits against it
and
for its illegal transactions involving large arms sales to Iraq
for
oil. (UC)
|
|
|
Entertainment
and Media
|
|
|
|
31.
It has been known for several years that the Hong Kong triads,
particularly Sun Yee On, control the Chinese entertainment
industry. In Canada, some promotion companies with affiliations to
Chinese organized crime and the ChIS have organized tours for artists
from China and Hong Kong. Significant investments have also been
made by these groups in the Canadian Chinese-language media, including
the Chinese-language television industry which is integrated into the
general Canadian television system. (S)
|
|
|
32.
Charles Y.M. Kwan Productions. Charles Kwan Yee Man15 has
been active in the Asian live entertainment business industry for years
through his companies, including china Cultural Promotions Limited and
Charles Y.M. Kwan Promotions Inc. In the course of his business
activities Kwan is regularly in contact with prominent members of the
Hung Lock and Sun Yee On triads. He also maintains relations with
the Chinese Free Masons (CFM) in Toronto which have always been used by
the ChIS to identify potential sources and promote Chinse policies.
(S)
|
|
|
33.
North American Studio (Canada). Although this company closed its
doors in 1996, it was well known in police circles for its criminal
origins. Also using the names North American (Canada) Motion
Picture Corp. and North American (Canada) Television Corp., this company
has been under the control of the Sun Yee On triad since its
beginning. The firm attracted media attention recently as a result
of the legal sage of Miranda Yuen, an employee of North American Studio
and the ex-wife of the top boss of the Wo Hop To triad. In the
early 1990s, members of the Sun Yee On triad bought a warehouse in
Markham, Ontario which was converted at a cost of $7 million into a film
and television production studio. The group has since been the
subject of ongoing investigation by police authorities in connection
with certain criminal activities. Some of the company's executives
were regularly in contact with representatives of the Chinese diplomatic
missions in Canada and were regularly involved in Canadian political
circles like servings as intermediaries in organizing a dinner between
the mayors of Shanghai and Toronto. (S)
|
|
|
34.
China Vision and Fairchild Entertainment. China Vision is a pay-TV
station in Toronto, established by Francis Cheung in 1981. In 1991
it had about 110,000 Canadian subscribers of Chinese origin in the
Toronto, Edmonton, Calgary and Vancouver areas. Pro-democracy
groups across Canada submitted briefs to the CRTC alleging that Cheung
received financial assistance from the Chinese government, and that
China Vision's reports on China were approved and influenced by the
government of that country. (UC)
|
|
|
35.
In 1992, the CRTC entertained an initial offer of purchase for China
Vision. This offer was made by John Sham, a Toronto resident, Hong
Kong film promoter and an employee of Television Broadcast Ltd. of Hong
Kong. Sham is an associate of Charles Heung, a senior officer of
the Sun Yee On triad. The potential buyers of China Vision
included John Sham and North American (Canada) Television Production
Corporation, which was affiliated with the Sun Yee On triad.16
This offer was withdrawn following information given to the CRTC by
Canadian authorities. (S)
|
|
|
36.
In 1993, Thomas Fung of Fairchild Communication Ltd. of Vancouver
submitted an offer to purchase China Vision to the CRTC for CDN $9.25
million. Fairchild Communications Ltd. is 80 per cent owned by
Happy Valley Investments Ltd., also of Vancouver, and 20 per cent by
Television Broadcasts Ltd. of Hong Kong, the largest global producer of
Chinese-language programming. Various Canadian groups of Chinese
origin opposed Fairchild's purchase offer because they were concerned
that this sale would open the door for the Chinese government to
influence Canadian television news broadcasting. They argue the
station would be vulnerable to political pressure from the Chinese
government, especially after 1997, and because the Hong Kong media often
practiced censorship where China was concerned for fear of offending the
government of that country. Although the CRTC shared some of the
groups' concerns, in October 1993 it approved the purchase of China
Vision by Fairchild Communications Ltd, granting it a license for four
years. It should also be pointed out that Fung has bought an
important amount of shares in Hollinger and Southam, two press giants in
Canada. (C)
|
|
|
37.
Hong Kong Telecommunications and Wharf Cable Ltd. In March 1997,
these two companies formed in consortium with Li Ka-Shing's Hutchinson
Whampoa Ltd., Cheng Yu-Tong's New World Development Co. and Heung
(Jimmy) Wah-Shing's Win Film Co. Jimmy Heung is known in Hong Kong
as a senior officer of the largest triad, Sun Yee On. He is the
younger brother of Heung Wah-Yim, the Dragon Head of this group, who was
officially identified in 1992 by the US Senate's Standing Committee on
Asian Organized Crime. The output of these companies is used by
the Canadian Chinese-language media. It should be noted that the
company was bought by another Hong Kong company, Fairchild
Communications, and CITIC is also the owner of Hong Kong Telecom.
The productions of all the above mentioned companies are used by the
Canadian Chinese language media. This transactions highlights well
the close relationship among Chinese business people, the triads and
China's power. (S)
|
|
|
Food-Services
industry
|
|
|
|
38.
Tai
Foong International. Triad members or their associates are
also involved in the food-services industy, witness the example of Tai
Foong International of Mississauga, Ontario. The company's
chairman and managing director, David Lam, is affiliated with the Kung
Lok triad.17 Tai Foong International sells seafood
around the world. The company has offices in Vancouver, Calgary
and Montreal with headquarters in Mississauga. It has divisions in
the United States, specifically Las Vegas and Seattle, and in Hong
Kong. According to our information, Tai Foong International is
believed to be involve in importing heroin into Canada from Hong Kong.18 In addition, various members of the management have for
several years maintained regular contacts with Chinese trade and
military representatives in Canada, organizing meetings, paid visits of
Chinese delegations and so on. Several, including David Lam, have
travelled frequently to China on business. (S)
|
|
|
Real
estate and hotels
|
|
|
39.
Everywhere in the world the core of Chinese economic activity is located
in large urban centres. In Canada, the bulk of the country's
economy is concentrated around a few large cities only. Real
estate has always been a preferred area for the Chinese, and several
have built large fortunes from it. In itself real estate is not a
obvious threat to the security of Canada but it becomes an excellent
vehicle to gain access to local politicians and their influence and
power. You own one building is one thing, you own 10 or 30
commercial buildings and your influence is considerable. If you
are located in the heart of the business activities, you are the focus
of attention. The business of centres of Toronto, Vancouver and in
part Montreal are now in large portion owned by Hong Kong or
Beijing. (C)
|
|
|
40.
Grand
Adex Properties Inc. and Concord Pacific Development Corp.
Grand Adex is wholly-owned by the Kaumo Hui and Li Ka-Shing
families. In 1987, the two tycoons' sons Terry Hui and Victor Li,
helped Li Ka-Shing acquire 80 hectares of Expo 1986 land in Vancouver
for Concord Pacific. They are now pursuing a residential
development mega-project estimated to be worth $3 billion. In
March 1997, Grand Adex and Concord Pacific repeated the same scenario by
going into partnership with the Toronto company TrizecHahn Corp (80
percent foreign own), obtaining a $2 billion project and 18 hectares of
prime land west of Skydome in downtown Toronto. They also obtained
an exclusive lease on the CN tower for the next 35 years with two
possible 15-year extensions. At 33, Terry Hui, who has now
obtained Canadian citizenship, heads up these two companies and is
considered the most important property developer in Vancouver. (UC)
|
|
|
41.
World Financial Properties. In 1992, when the Reichman brothers'
Olympia and York Development company faced a serious financial crisis,
the CIBC was the Reichmans' largest Canadian creditor, and the Bank of
Hong Kong the largest overall creditor. Li Ka-Shing's Dragon
Holdings Ltd. acquired 51 percent of Olympia and York Development's New
York office towers for $20 million, and, in 1996, bought Olympia with
the assistance of the Bronfman family, renaming it World Financial
Properties. (UC)
|
|
|
42.
Ramada Hotels, Harbour Castle (Toronto) and others. Large hotel
chains and almost all the prestige hotels in Canadian urban centres are
now owned by Chinese private or state interests. This is an easy
service sector and is used mainly to generate income while increasing
property holdings. Such is the case of the Ramada international
chain, owned by Stanley Ho (25 hotels in Canada), the Sutton Place in
downtown Toronto, acquired in 1993 for CDA $29 million and the Meridien
Hotel in Vancouver. The Harbour Castle Westin in Toronto was
bought by Li Ka-Shing in 1981 at a price of $93 million and a further
$20 million payment in 1989. Other examples, the Carlton Inn and
the Carlton Place in Toronto are owned by CITIC. This, of course,
is only a tiny part of what is to be found in Vancouver, Montreal and
other Canadian centres. (S)
|
|
|
Universities
and research centers
|
|
|
|
Sections
43-45 dealing with the University
of Toronto and University of Western Ontario are missing from
our copy of the report.
|
|
|
|
|
Source
Notes
|
1 See Appendixes I and II, tables on
Immigration from Hong Kong
|
2 See Project
Stopover. CID/RCMP.
|
3 In 1996 FORBES magazine estimated
the "official" personal fortune of Li Ka-Shing at US$ 10.5
billion, Henry Fok Ying-Tung
at $2.5 billion and Stanley Ho at $3.1 billion. (UC)
|
4
The United Front Work Department
is one of the five components of the ChIS. See CSIS
Report 95-6/33, The Future of
Hong Kong: New Dogma, Old Tricks
|
5
In May 1996 the publisher of the Hong Kong tabloid Surprise Weekly,
Leung Tin-wai, received two individuals in his office at
height of the day. They cut off his arms with a kitchen knife
because the newspaper was preparing to publish an article
unfavourable to Beijing in relation to Hong Kong's return in July
1997. (UC)
|
6
Wong himself recently confirmed this information in a public conference
in Hong Kong after defecting to Western authorities.
|
7
See Project Sunset. CID/RCMP
|
8
See Appendix III, Origin and Description of the Triads.
|
9
See Appendix IV, Profile of Typical Triad Member.
|
10
See CSIS report Report 95-6/06, Organized Crime Links to the
Intelligence Services of China and Taiwan.
|
11
See Appendix V, Guanxi or Networking.
|
12
Several thousands of Hondurian passports were reported stolen last
year
|
13
Stanley Ho, the Macao casino tycoon, is Honorary Counsel of Honduras in
Macao.
|
14
Stanley Ho holds a monopoly on the six casinos on the Island of Macao
which alone bring in US$6 billion a year. (UC)
|
15
See Project Shehang. CID/RCMP
|
16
See Project Shehang. CID/RCMP
|
17
ibid.
|
18
ibid.
|
19
|
|
|
|
|
|
|
"Sidewinder"
|
| |
Secret
|
|
|
RCMP-CSIS Joint Review
Committee
|
|
|
Draft Submission
|
|
|
SECRET
Joint RCMP
Study
Information as of
24 June 1997
Translated
text
|
|
|
Chinese Intelligence Services
and Triads Financial Links
in Canada
|
|
|
Draft Submitted
to the RCMP-CSIS
Joint Review
Committee
|
|
|
24 June 1997
|
|
|
CHINESE
INTELLIGENCE SERVICES PENETRATION OF CANADIAN COMPANIES
|
|
|
46.
All areas of the Canadian economy are targeted, but high technology is
the one most at risk. Several cases of theft of Canadian
proprietary information and/or technology have been reported to and
investigated by Canadian authorities. For example, Ontario Hydro
believes it was the victim of theft of information in the nuclear
technology field by an individual of Chinese origin. This
individual sent unauthorized faxes (some containing hours worth of data)
to a telephone number in China, associated with the State Science and
Technology Commission. In another case, a Chinese employee of a
major computer company based in Canada was accused of copying the
company's proprietary information onto diskette, for the purposes of
selling the information to China. In a third instance, a Canadian
company alleged that one of their former employees, who had previously
served in the Chinese military, stole proprietary information regarding
energy technology and sold it to the Chinese government. (S)
|
|
|
47.
The Chinese government also takes advantage of growing business ties
between China and Canada to provide cover for intelligence
activities. For example, a company owned by a Chinese-Canadian
sponsored what was ostensibly a Chinese business delegation to come to
Canada. In reality, the "delegation" was comprised of
Ministry of State Security officials travelling to Canada to conduct an
intelligence operation. Another delegation that travelled to
Canada under the cover of representing a Chinese company was actually
composed of officers from a sensitive sector of the People's Liberation
Army, who were attempting to make arrangements to purchase secure
communications technology for military purposes.
|
|
|
48.
The ChIS do not hesitate to expend great energy on pursuing their
activities. They have established companies on Canadian soil
solely for traditional and economic espionage purposes. These
companies are used as cover for ChIS agents to help gain them an entree
into Canadian business circles. These front companies have been
observed to have contacts with the triads in Canada. (S)
|
|
|
INTERFERENCE
BY FINANCING OF CANADIAN POLITICAL PARTIES
|
|
|
49.
One of the means used by the Hong Kong business people and triads
associated to Beijing is to seek influence and support among Canadian
politicians by financing political parties. This practice, is not
unique to Canada. Recently, a stir was caused in the US media over
the illegal Chinese funding of the Democratic Party. Over 2,000
American companies suspected of being used by Chinese are currently
under investigation by the FBI. In 1993, Britain was wracked by a
similar scandal when over £1.5 million (or nearly CDN $3 million) was
donated to the British Conservative Party by Hong Kong financiers such
as Li Ka-Shing (CDA $1.8 million), Stanley Ho ($200,000), Tsu Tsin-Tong
($100,000) and even C.H. Tung ($70,000) who is now Beijing's man in Hong
Kong. (C)
|
|
|
50.
Canada also allows "Canadian corporate citizens" to make
financial contributions to political parties, but the parties are
obliged by the Canada Elections Act to report the amounts. Many of
the companies identified in this research have contributed sometimes
several tens of thousands of dollars to the two traditional political
parties, the Liberals and the Conservatives. As examples, in 1994,
Merrill Lynch Canada gave the Liberal party $20,432.94. Between
1991 and 1194, Husky Oil, which is owned by Li Ka-Shing, alone
contributed over $100,000 to the same two parties. North American
Studio (Canada), which was affiliated with the triads, also
contributed. Set within their Canadian and regional contexts, the
total amount of these contributions to local organizations is
substantial. Further, an "entrepreneur" may have several
businesses in an area that will also contribute to the parties'
funds. In the end, large sums are distributed by various hands but
from the same wallet. It is precisely the total amount distributed
at several places that makes the interplay of influence and political 'friendships"
so important. (S)
|
|
|
51.
The information presented here represent only a very partial view of the
real situation and brings questions to the amount of influence gain
through donations. To obtain a complete picture, further research
would be needed. (S)
|
|
|
THE
IMPORTANCE OF CHINESE DIASPORA
|
|
|
52.
The key to the Chinese riddle lies in understanding the unique culture
of the Chinese people.20 The core of this culture is to be found
in the importance of developing and maintaining a very broad network of
privileged contracts based on the fact of being Chinese, your backers (Hou
Tui) and an individual's obligations towards others (Guanxi).
Furthermore, no other ethnic group in the world can equal the economic
power of the Chinese diaspora. Their numbers are estimated at over
60 million, and their financial power is put conservatively at over US
$2 trillion. With the wave of immigration from Hong Kong, this
financial power has grown again exponentially. Most Southeast
Asian countries have long found their national economics to be dominated
sometimes by as much as 90 per cent, by the Chinese community.
While not supporting its political views, most Chinese retain a strong
attachment to the Motherland remains. The Chinese diaspoa is
present on every continent and has always been, willingly or not, the
point of entry into and the centre of operations in a foreign country
for the ChIS and the triads. (S)
|
|
|
CONSEQUENCE
FOR CANADA
|
|
|
53.
Because of its strategic alliance with some important and influential
Hong Kong business people, and with organized crime syndicates, the
Chinese leadership appears to be today in a position to developing a
potential of influence over the international market and particularly on
the Canadian economy and political life of the country. Why
Canada? Because Canada always been somehow favourable in
China. It has also an important Chinese community and very
important economic tides with Hong Kong. Having bought significant
real-estate holdings and established companies in Canada, gain some
access to political leaders and business people, it is now in a position
to seek power by influence. What make it difficult to argue
against it the fact that most of it has been done legally. Even
more, the threat is manifold and very elaborated in a complicated web of
businesses. It diffuses itself through a not so tangible
network. If you look at a single individual, the threat does not
seem to be there but because of their associations and their alliances
with China, the facts analysed lead to the believe that a gain of
influence is been the object of a concerted plan and that could
constitute a threat to Canada. (S)
|
|
|
54.
Some Chinese owners are now in a position to use the Canadian companies
they have bought and some political channels that they have developed to
obtain subsidies for research and even classified contracts. Once
access is gained, little is in place to prevent them from repatriating
the fruits of the research or classified information to China. (S)
|
|
|
55.
The triads and their associates also used these positions to transfer
large sums of money derived from criminal activities into the Canadian
economy. Buying Canadian property or a Canadian business affords a
"window" of opportunity to pursue their illegal activities in
Canada, such as money-laundering and drug-trafficking.
(S)
|
|
|
56.
One of the important dimension of the Chinese financial holdings is its
ownership over important Canadian real estate. The nerve centre of
the Canadian economy is concentrated in three or four large urban
centres. Already, a large part of these financial centres are in
the hands of Chinese interests.21 Canada is not the
only country where we observe this situation. One has only to look
at the profile of the Southeast Asian economy or the investigations
currently underway in the United States. The Canadian economy,
however, is more vulnerable because of many legislative loop hole
governing finance and the concentration of financial power in the hands
of few. The potential of threat also lies in the fact that, at
present, a foreign power, China, seems to be in a position to influence
the Canadian economy and politics. (S)
|
|
|
57.
Several Canadian companies in the security field, such as computer
management and video surveillance, are now owned by Chinese interests.
When a contract is awarded by federal departments to private companies,
the usual security investigations are done on the persons who will
eventually be working on a project or installing equipment. Now a
new threat seems to be itself in relation with the ownership of some
companies. The case of Data Crown is a good example of this
situation. Although some verifications to investigate foreign
companies are done by a group of people at the Department of Public
Work, it is not impossible that this shortcoming has already been
exploited by no one is able at the moment to answer this question with
any certainty because of the complexity of the ramifications involving
Chinese companies owned or the ones with some special interest with
China. (S)
|
|
|
58.
There is no longer any doubt that the emigration process in Hong Kong
has been abused, and that individuals are being corrupted in some of the
Western immigration services. The entry of triad members and the
cases of 13 illegal migrants laid against an ex-judge of the immigration
services are not the only cases of malpractices and had caused in the
past problems to the immigration system. This situation places
Canada in a vulnerable position regarding illegal immigration and shows
the interest by the Chinese of the Canadian immigration system.
(S)
|
|
|
59.
China remains one of the greatest ongoing threats to Canada's national
security and Canadian industry. There is no longer any doubt that
the ChIS have been able to gain influence on important sectors of the
Canadian economy, including education, real estate, high technology,
security and many others. In turn, it gave them access to
economic, political and some military intelligence of Canada. The
great difficulties in determining the threat is that it is diverse and
multi-layered. It diffuses itself through elaborated networks hold
by a cultural practise that still is not well understood by Western
Services. (S)
|
|
|
RECOMMENDATIONS
|
|
|
1.
An expanded task force including analysts from at least the RCMP, CSIS,
DFAIT, Immigration Canada and Revenue Canada (Customs and Excise) should
be formed to pursue the research begun by this document. (S)
-
To
assess the actual control of Chinese companies over the Canadian economy.
(S)
-
To
review who the influential Canadian figures are on the boards of the
Canadian companies. (S)
-
To
consult the FBI, which has recently undertake a similar study; such
consultation could prove mutually beneficial. (S)
|
2.
Support a series of presentations to CSIS regional directorates and RCMP
divisions to alert operational managers to the need to investigate
Chinese activities the better to grasp the links among the Chinese
Intelligence Services, the triads and entrepreneurs in the service of
Chinese Companies. (S)
|
|
|
3.
Organize a series of presentations for senior members of the Canadian
security and intelligence community. (S)
|
|
|
4.
Organize presentations for specific government departments affected by
the problem other than those in the intelligence community, such as
Justice and Industry. (S)
|
|
|
5.
Undertake review of security companies which have installed security
systems for federal government departments and Crown corporations to
determine the real control and ownership of the companies and the
potential risk to the integrity of the systems. (S)
|
|
|
6.
Carry out thorough research to determine the extent of contributions to
Canadian political parties by Chinese companies established in
Canada. (S)
|
|
|
7.
Produce a strategic analysis of the activities and involvement of the
government of China and the triads in Chinese entertainment and media in
Canada. (S)
|
|
|
Appendixes
|
|
|
ANNUAL
NUMBER OF CERTIFICATES OF PERMANENT RESIDENCE IN CANADA FOR PERSONS FROM
HONG KONG SINCE 1990: "ENTREPRENEUR" AND "INVESTOR"
CATEGORIES22
|
|
|
|
Entrepreneur |
Investor |
Total |
1990 |
4294 |
2293 |
6587 |
1991 |
3622 |
2500 |
6122 |
1992 |
8130 |
4458 |
12588 |
1993 |
7698 |
5246 |
12944 |
1994 |
5758 |
5437 |
11195 |
1995 |
3623 |
2046 |
5669 |
1996 |
4352 |
2694 |
7046 |
1997
(March) |
504 |
268 |
772 |
1990-1997 |
37981 |
24942 |
62923 |
|
|
|
ANNUAL
BREAKDOWN OF THE CHOICE OF PROVINCE BY PERMANENT RESIDENTS FROM HONG
KONG: "ENTREPRENEUR" AND "INVESTOR" CATEGORIES23
|
|
|
|
1990 |
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997
(Mar)
|
1990-97 |
Newfoundland
|
13 |
3 |
9 |
8 |
9 |
1 |
0 |
0 |
43 |
P.E.I.
|
6 |
2 |
4 |
12 |
5 |
13 |
27 |
0 |
69 |
Nova
Scotia
|
22 |
42 |
79 |
160 |
243 |
168 |
204 |
19 |
(937) |
New
Brunswick
|
9 |
12 |
21 |
17 |
13 |
14 |
4 |
0 |
90 |
Quebec
|
1481 |
1555 |
4354 |
3379 |
855 |
586 |
738 |
64 |
(13012) |
Ontario
|
1857 |
1595 |
3099 |
3627 |
3399 |
1839 |
2196 |
346 |
(17958) |
Manitoba
|
76 |
89 |
142 |
119 |
143 |
22 |
28 |
3 |
(622) |
Saskatchewan
|
115 |
73 |
286 |
261 |
138 |
39 |
13 |
4 |
(929) |
Alberta
|
341 |
329 |
825 |
1048 |
1025 |
428 |
559 |
61 |
(4616) |
British
Columbia
|
2663 |
3417 |
3762 |
4313 |
5354 |
2559 |
3269 |
275 |
(25612) |
NW
Territories
|
4 |
5 |
0 |
0 |
7 |
0 |
4 |
0 |
20 |
Yukon
|
0 |
0 |
7 |
0 |
4 |
0 |
4 |
0 |
15 |
Total
|
6587 |
(7122) |
(12588) |
12944 |
11195 |
5669 |
7046 |
(772) |
(63923) |
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(corrected summations)
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ORIGIN
AND DESCRIPTION OF THE TRIADS
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1.
The origin of the triads remains blurred by romantic legend, heroic
myths and patriotic folklore. "Triad" is an English term
given to describe the three-sized symbols found on many of the early
flags and banners of various Chinese political and social
organizations. The three sides represent the three primary forces
of the universe-heave, earth and man. Triads originated in China
during the 17th century in the form of secret societies. They were
dedicated to the political cause of
overthrowing the Mongolian (Manchu (or Ch'ing) Dynasty. While
their original intentions were patriotic in nature, by the late 1800s,
triads had evolved into widely feared criminal societies.
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2.
During the upheavals in China in the early part of this century, they
aligned themselves with the nationalist Chiang Kai Shek, himself a major
triad leader. When the communists seized control of mainland China
in 1949, these syndicates fled to Hong Kong and Taiwan.
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3.
Triads today remain extremely secretive and closed criminal
fraternities. The triads also developed highly ritualized
initiation ceremonies meant to instill a strong sense of secrecy, and
more importantly, loyalty to other triad members. Thirty-six
oaths, most dealing with loyalty to the triad, traditionally are part of
these imitations. For example, Oath number 4 states: "I will
always acknowledge my Hung brothers when identify themselves. If I
ignore them, I will be killed by myriads of swords." Oath
number 20 states that if a brother gives away the secret ceremonies of
the society, may he be eaten by a tiger or have his eyes bitten out by a
snake. Each oath ends with a promise of death if the oath is
broken.
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4.
An individual gains considerable benefits from being a triad
member. These benefits include:
1)
FREEDOM OF MOVEMENT - membership gives the automatic right to operate
socially or criminally in an area controlled
by the triad.
2)
FINANCIAL AID - when arrested by Police, he can rely on fellow members
to provide financial aid for legal expenses and
his family.
3)
CONFIDENCE - triad members who are involved in syndicated crime require
continuous contact with their fellow
conspirators and the fact that all have taken a oath instills a greater
degree of mutual trust.
4)
FEAR - the fact that a criminal is a triad member and tells his victim
so, often reduces the necessity for violence.
5)
FACE - this is very important and there is no doubt that triad
membership increases one's status in the criminal
community.
6)
POWER OR PHYSICAL SUPPORT - if involved in a dispute he can summon
fellow members to his aid to intimidate or
assault the opposing party.
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5.
All triad societies display some degree of hierarchy, and a typical
triad has members organized by rank. Each rank carries a title and
a numerical value, based on triad ritual. The leader of a triad is
known as the "Dragon Head' or the Mountain Lord, and carries the
rank "489." Other "office bearer" positions
include the deputy head of a branch also known as Assistant Mountain
Lord, who carries the rank "438". This rank goes as well
to the Vanguard and Incense Master, both of whom officiate at
ceremonies. The White Paper Fan, who holds the rank
"415", is the advisor on administration, finance and
organization of the branch. The Red Pole, who holds the rank
"426", is the head fighter and battle strategist. The
Straw Sandal, holding the rank "432", is responsible for
organizing battle and meeting with other societies. He also
delivers demand notes when necessary, for ransom or protection
money. All other triad members are know as ordinary members or
soldiers, and hold the rank of "49".
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6.
the relationships among individual triad members are based on ties
between "Dai-Lo's" (big brothers), and "Sai-Lo's"
(little brothers). The Sai-Lo's give loyalty, support and
sometimes money to their Dai-Lo, in exchange for protection and advice.
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7.
Triad societies are in fact a collection of loose-knit groups or gangs
rather than a complete monolithic criminal organization, such as the
Mafia whose power is diffused from a central core through an organized
chain of command. Instead, triad members frequently branch out
into their own criminal enterprises. While the triad leadership
does not always initiate and direct the criminal activities of all the
triad members, triad clearly serve as international networks to facilitate
such activity. Moreover, monetary profits from criminal activity
of triad members often flow to the top in indirect ways, such as through
gifts.
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8.
Even though it is now a criminal offence even to be a member of a triad
in Hong Kong, that city is the undisputed capital of modern day
triads. While exact numbers are difficult to corroborate,
according to the Royal Hong Kong Police there are today in Hong Kong
over 50 triad societies, of which 15 to 20 regularly come to the
attention of the police through their involvement in crime. The
clandestine nature of the triad movement precludes an accurate
assessment of the total number of triad members, society membership
ranging in size by considerable degrees. In Hong Kong, triads can
be divided into four main categories:
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The
Chiu Chao Group
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9.
This group consists of four criminal syndicates. The oldest of the
four is know as the Fuk Yee Hing and it continues to operate in Hong
Kong. The membership of this triad is comprised mainly of
descendants of the earliest immigrants from China. The youngest
triad of this group is the Sun Yee On triad, established in 1919.
The Sun Yee On Triad is currently the most powerful of the Hong
Kong-based triads with extensive international interests (United States,
New Zealand and Canada.)
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The
Big Four
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10.
This group is composed of nine triad organizations whose name
characteristically starts with one of the following words: Tang, Tung,
Luen, and Ma. This group is involved in extortion, prostitution,
and robbery. The Luen Kung Lok is one of the most important triads
in Canada.
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The
Wo Group
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11.
Thirteen triad organizations now belong to the Wo, including the Wo Hop
To and Wo Shing Wo. The Wo triads are principally noted for their
large-scale robberies and gangland-style killings.
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The
14K
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12.
The 14K is the third largest society of modern times. The society
was formed in 1949 by refugees from the Chinese mainland. 14K has
a large number of sub-branches and independent groups. This triad
has become international in scope with branches in Japan, Taiwan,
Southeast Asia, Europe, United States and Canada.
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Taiwan
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13.
After 1949, the triads also fled to Taiwan. Today there are
believed to be 700 or so gangs and triads in Taiwan. One of the
most famous and largest is the United Bamboo Triad. The United
Bamboo has an estimated membership of over 20,000. It now operates
internationally in the United States, Canada and throughout the Far
East. The group is particularly active in Los Angeles, Houston,
New York and Vancouver, and has been linked to murder, kidnapping, alien
smuggling, illegal gambling, and loan sharking.
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PROFILES
OF TYPICAL TRIAD MEMBERS
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These
profiles are used by the Immigration Control Office and the RCMP Liaison
Office in Hong Kong to assess applicants.
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Profile
A: Young Adult24
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Sex:
Male
Age:
11-25
Occupation:
The status of an individual can range within this category depending on
the position within a society. At lower levels, some well be
unemployed and will be living off their girlfriends, who in many cases
may be willing prostitutes. If employed, employment will be in a
business of a cash generating nature, e.g. hawkers, night clubs,
restaurants, interior decorating firms, fish markets, health clubs,
massage parlours, mahjong schools, billiard halls, sports or martial
arts clubs, film or video distribution companies, and transportation
companies. Generally, the education level will not be beyond a
secondary education.
Travel:
Asian Counties, North America.
Residences
Outside Country of Origin: Generally, this group will not have real
estate outside their country of origin.
Foreign
Counties Used for Criminal Activities: Although this list is
by no means exhaustive, North America, Thailand China, Taiwan,
Singapore, Nepal and Vietnam have been identified as primary areas of
operation.
Outside
Activities: Gambling, Horse races, triad affiliation.
Arrest
Convictions: Juvenile record for minor violence, petty thefts,
gambling, fighting, and weapons offenses. In later years, a more
serious record of crimes of a more sophisticated nature will be noted:
i.e. extortion, pimping, drug trafficking, triad affiliations,
bookmaking and loan sharking. This would indicate an individual
being a member of a youth gang and then graduating to an affiliated
street gang and then as a senior gang member. Some may have
tattoos such as dragon, phoenix, snake, etc.
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Profile
B: Mature Member25
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Sex:
Male
Age:
Over 25
Occupation:
Within this age bracket, it is still possible to see some of the
characteristics of younger members, however, with age it can be assumed
that if triad associated, the individual will move farther and farther
away from the actual criminal activities and will appear as a
manager/owner of a cash generating business. Subjects will possess
a substantial amount of wealth and would apply under the business
immigration program, but may also appear in other immigration
categories. Likely has had involvement in past or currently with
businesses listed in Profile A on previous page.
Education:
The educational level will generally be no more than a secondary
education, although some exceptions do exist.
Travel:
Extensive in Asia and will show considerable travel to North America
prior to making application for immigration.
Residences
Outside Country of Origin: May have an interest in North American
businesses which will likely be in the form of a hotel, restaurant or
finance affiliated business. May already own property and/or
business in Canada.
Foreign
Counties Used for Criminal Activities: Asian countries such as
China, Vietnam and Thailand for drug-related activities, and Taiwan,
Hong Kong and Singapore for money laundering.
Outside
Activities: Will be involved in the business community to the
greatest extent possible in order to give the appearance of legitimacy
and may be on the executive or an active member of many well know
charitable organizations such as the Boy Scouts, Rotary clubs,
etc. By donating to charitable causes and organizations, may
attempt to cultivate political friends and make a habit of associating
with prominent members of the community to gain influence. May be
a gambler, frequent the races and attend triad-associated functions.
Arrest
Convictions: As in Profile A, a progression may be noted with
criminal convictions in early years. Later on, subject may have a
clean record, but intelligence may reflect triad association and/or
gambling offences or being a triad member. This would indicate an
individual may have progressed through a triad hierarchy and is now
controlling a certain criminal group.
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GUANXI
OR NETWORKING
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1.
Influenced by the Chinese, but practised in a variety of Asian societies,
"guanxi" means to gain access to social resources, acquire
social status and advance economically. Although this practice is
not totally foreign to Westerners, they would generally apply individual
initiative to advance themselves economically and socially. Asians
have mastered the art of gaining advancement through the development of
a network of relations.
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2.
Asian society is relational, while Western society is an individualistic
society. Asian society regulated by the collective morality of
relational networks and the rules of law plays a secondary role.
Western society, on the other hand, is a legalistic society in which the
individual is subordinate to the law. "These major
differences produce an Asian society that sees behaviour on a moral
continuum which proceeds from black through shades of gray to white,
while Western society only sees behaviour that is black and white."26
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3.
When a relational society is coupled with a monetary objective, any
venture that is profitable can and will be pursued. Therefore, one
can say that Asian crime is a form of business and Asian criminals
organize and conduct their criminal activities just as they conduct any
business; through vast networks of relations. A globally
distributed population and an influential and powerful infrastructure in
virtually every country in the world, enables Chinese crime groups to
carry out transnational and domestic criminal activities on a much
bigger scale than the Italian mafia, the Colombian drug cartels and
Russian-based organized crime.
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THE
CHINESE DIASPORA
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1.
the dynamics of Asian's extra ordinary growth cannot be understood without
a thorough examination of the Overseas Chinese also known as Hua Quiao.
The Overseas Chinese community is a borderless nation, united by ties of
family, clan, language and motherland. It is estimated that there
are some 60 million Overseas Chinese who contribute much to the overall
economic strength of their ancestral homeland, providing ready-made
linkages and networks (guanxi) for legal and illegal business.
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2.
Hua Quiao influence, power and wealth are disproportionate to its
size. "In some Asian countires, the small population of
Overseas Chinese control an amazing percentage of the economy. in
Thailand, the Overseas Chinese comprise only 10 per cent of the population
(8 million) but have 60 per cent control over the economy: in Malaysia 35
percent and 60 percent; in the Philippines, 2 percent and 60 percent; in
Vietnam, 5 per cent and 60 per cent; in Indonesia, 2 percent and 85
percent. In countries where Chinese have been the dominant group for
much longer, the percentages are higher: in Singapore, 75 per cent and 95
percent; in Taiwan, 100 percent and 100 per cent. 27
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3.
"The Overseas Chinese community has one of the world's largest pools
of liquid capital, amounting approximately US$ 2 trillion. Their
'GNP' is estimated to be one quarter larger that of China, that is,
approximately US$ 450 billion. This is a staggering amount considering
that Japan with a population double that of the Overseas Chinese, has only
US$ 3 trillion in assets in 1990."28 This
power base is the result of a pragmatic cohesion of ethnic solidarity
aided by official and unofficial networks. This cohesion is
complemented by sophisticated resources supporting information and
technology on a global scale.
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Source
Notes
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20
See Appendix VI, The Chinese Diaspora.
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21
For example, Li Ka-Shing owns several building in the core of Toronto
financial district. It is also estimated that he currently
owns
one-sixth of downtown Vancouver. Among some of his projects, he
bought the largest undeveloped site in any downtown
core in Canada: the
lands around the CN Tower and obtained with it the exclusive right to
use the tower for $2 billion dollars,
Expo '86 lands in Vancouver for
$3billion dollars, Harbor Castle Westin in Toronto ($93 million (1981)).
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22
Citizenship and Immigration Canada, Permanent Resident Databank, April
1997
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23
ibid.
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24.
Garry W.F. Clement, RCMP (Hong Kong) and Brian McAdam, Immigration
Canada (Hong Kong).
Triads and Other Organized Crime Groups.
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25
ibid.
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26.
Willard R. Myers III, Guanxi and Its Role in Asian Crime: A System of
Social Organization and Resources Distribution
Is the Foundation of Organized Crime, Center for the Study of Asian
Organized Crime, 1995
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27.
Douglas D. Daye, A Law Enforcement Sourcebook of Asian Crime and
Cultures, Tactics and Mindsets.
CBC Press, New York, 1997, pp. 170-171
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28.
Mark Craig, Chinese Organised Crime, Queensland Police Service,
Australia, 1996, p.10.
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