A Chinese firm acquired an insurer specializing in liability coverage for US intelligence agents, a transaction that contributed to revisions in US investment legislation.
Acquisition of Wright USA
In 2015, Wright USA, an insurer providing liability coverage to FBI and CIA agents, was purchased by Fosun Group, a private Chinese company reported to have close ties to China's leadership. This acquisition raised concerns within the United States regarding potential access to the personal details of American intelligence personnel. The transaction involved financial backing from four Chinese state banks, which provided a $1.2 billion loan, routed through the Cayman Islands, to facilitate Fosun's purchase of Wright USA.
Journalist Jeff Stein reported on this acquisition in Newsweek magazine, which led to an inquiry by the Committee on Foreign Investment in the United States (CFIUS), a branch of the US Treasury responsible for screening investments. Following this inquiry, Wright USA was subsequently sold back to American ownership. High-level US intelligence sources have confirmed that the sale of Wright USA was among the cases that prompted the first Trump administration to tighten US investment laws in 2018.
China's Global Investment Strategy
New data from AidData, a research lab tracking government spending, reveals that China has engaged in a significant global investment strategy. Since 2000, Beijing has spent an estimated $2.1 trillion outside its borders, with investments distributed almost equally between developing and wealthy countries, including the US, the UK, and Germany.
China operates the largest banking system globally, which enables the government to control interest rates and direct credit allocation. These overseas investments serve dual objectives: generating financial returns and aligning with strategic goals. A key initiative, "Made in China 2025," outlined a plan to dominate 10 cutting-edge industries, such as robotics, electric vehicles, and semiconductors. Although public mention of this plan was reduced, its strategic objectives have reportedly remained active. China's leaders recently emphasized accelerating "high-level scientific and technological self-reliance and self-improvement" as a goal until 2030.
AidData's database highlights state-backed spending overseas that corresponds with these targeted sectors.
Government Responses and Legal Context
Initially, wealthy governments often perceived Chinese investments as individual initiatives by private companies. Over time, however, they recognized the involvement of Beijing's state apparatus in funding these acquisitions. Consequently, countries like the United States and the United Kingdom have tightened their investment screening mechanisms.
It is important to note that these investments and purchases are conducted legally, even when they involve routing funds through shell companies or offshore accounts. The Chinese embassy in London has stated that Chinese enterprises operating overseas are required to comply strictly with local laws and regulations, supporting international cooperation based on mutual benefit and contributing to local economic growth and job creation.
Specific Cases
China's investment patterns are evolving, with state money increasingly flowing to countries that welcome Chinese investment. An example is Nexperia, a Chinese-owned semiconductor company in the Netherlands. Chinese state banks provided an $800 million loan for a Chinese consortium to acquire Nexperia in 2017. Ownership later transferred to another Chinese company, Wingtech. In September, Dutch authorities took control of Nexperia's operations, citing concerns about technology transfer, which resulted in the separation of its Dutch and Chinese manufacturing operations. Similar patterns of government-bankrolled acquisitions have been observed, such as a Chinese government-supported purchase of a UK semiconductor company.