Posted on 05/14/2002 11:12:57 PM PDT by maui_hawaii
Global "bad actors" have been defined as companies or governments that could constitute a higher risk for investors due to their being suspected or known proliferators; firms partnering with terrorist-sponsoring regimes; intelligence or technology-theft front companies; companies owned or controlled by potentially hostile foreign militaries; governments that abuse human rights and/or deny religious freedoms; and funding vehicles for organized crime-affiliated firms or money launderers. "Bad actors" can also include those companies -- or their subsidiaries, affiliates and/or parent companies -- that help underwrite entities under U.S. sanctions regimes.
One of the primary challenges in identifying "bad actors" in China is navigating successfully the intricate web of affiliates, subsidiaries and financial flows that are integral to the Chinese economy. (See Appendix 1.) For example, despite a well-advertised campaign by the Chinese government calling for the divestment of businesses owned and operated by the country's military apparatus in 1998, it is still believed that the PRC possesses an impressive network of companies with military connections that merit additional scrutiny before being taken into U.S. investor portfolios.97 According to a 1997 AFL-CIO report,
"While the true extent of military commercialization in the PRC - including PLA-non-military enterprises as well as defense industry operations - is difficult to discern, estimates suggest that China's commercial-military complex has some 50,000 companies employing as many as two million people. In 1993, these companies are thought to have earned more than $5 billion. Taken as a whole, the combined earnings of these activities would place China's s commercial-military operations among the ranks of the top 100 corporations of the Fortune 500...
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