Published April 30, 2020
16 min read
Editor’s Note: One of the graphics contained in this piece has been updated to more clearly represent the Chinese Communist Party’s broad surveillance and attempted control of parts of the Chinese diaspora.
In mid-January, Chinese consulates in Canada and worldwide issued an urgent call. China was concerned that the new coronavirus raging in Wuhan was so deadly and infectious that its nurses and doctors would run out of safety supplies.
It needed personal protective equipment (PPE).
In just six weeks, China imported 2.5 billion pieces of epidemic safety equipment, including over two billion safety masks, Chinese government data shows.
And this raises big concerns on a number of fronts, say critics, including Conservative MP Erin O’Toole.
China was evidently hiding the extent of a pandemic that endangered the world while covertly securing PPE at low prices. This “surreptitious” operation left “the world naked with no supply of PPE,” Jorge Guajardo, Mexico’s former ambassador to Beijing, told Global News.
The result: starting in March, after COVID-19 had circled the globe, countries that provided masks to China in January and February were forced to compete for China’s supply.
By late January, sources in manufacturing and military circles were warning western governments that China seemed to be covertly seizing global PPE supply, O’Toole and Guajardo said.
But leaders in Canada didn’t act, according to O’Toole.
“One source told me in January it became well-known amongst military and emergency services that China was stockpiling masks and basically buying out as many quantities as it could,” he said in an interview with Global News. “And we know, … that senior officials, in the end of January and the early days of February, are equally aware at Public Works Canada, with respect to a run on PPEs.”
An investigation by Global News examines the troubling methods and underground actors used by Beijing to quietly corner the world’s supply of PPE in a state-level operation.
China used diplomatic channels, state-owned businesses and Chinese diaspora community associations that are thought to be increasingly under the influence of Chinese President Xi Jinping’s powerful United Front Work Department (UFWD).
And through clandestine United Front networks run out of Chinese consulates in cities from Vancouver to Toronto to New York to Melbourne to Tokyo, the Communist Party urged millions of “overseas Chinese” to bulk-buy N95 masks in order to ship “back batches of scarce supplies for the motherland.”
As troubling as China’s methods were, the operation looks even worse under a magnifying glass because some organizations seemingly involved in the United Front’s efforts in Canada include members that have previously been monitored or investigated by the RCMP and Canadian Security Intelligence Service (CSIS), according to RCMP and CSIS sources.
Under the radar
China’s PPE import operation was portrayed by its state media as a warlike effort. And it was a dramatic success.
According to a U.S. congressional report released in April, from Jan. 24 to Feb. 29, China ramped up its production of masks and slapped export restrictions on China-based foreign companies such as Canadian mask maker Medicom and U.S. mask maker 3M.
At the same time, China imported 2.02 billion safety masks, according to Beijing’s March 2020 customs records.
“To ensure sufficient domestic supplies to counter COVID-19 (Beijing directed) regional offices in China and overseas to work with PRC industry associations to prioritize securing supplies from global sources,” the report says.
The global callout for masks was posted to UFWD websites and sent to Chinese consulates where United Front officials are embedded.
The requests occurred around Jan. 14 and 15, when Chinese officials received confidential instructions from Xi, and all regions were warned to “prepare for and respond to a pandemic,” according to leaked documents cited in an Associated Press investigation. Hospital staff were ordered to don protective gear.
Guajardo, Mexico’s former ambassador to Beijing, told Global News that by Jan. 23, when China locked down Wuhan, he had recognized Beijing was involved in massive PPE imports.
Guajardo, who now works in a Washington, D.C., consultancy, said in mid-January, he was contacted by a source in Mexican supply chain logistics.
“They said, you know a funny thing, I’m being swamped by orders to send all the N95 I can find to China.”
He said he completed some checks in the United States and judged PPE stock was vanishing from retail locations through “under the radar” methods.
“I thought, ‘Oh my God, they are buying all the N95 supply in the world,’” Guajardo told Global News.
He was so convinced that he sent an ominous tweet on Jan. 27 forecasting an impending shortage of PPE in North America.
In March, the masks sold to China in January and February were being sold back to Mexico at 20 to 30 times the price, according to Guajardo.
And the Washington Post and CNN reported in April that PPE is sometimes costing more than 1,000 percent the prices seen in early January.
“This pandemic got complicated because of China’s coverup at the start,” Guajardo said. “And now it is further complicated by China leaving the world naked with no supply of PPE.
“They started the pandemic and now they are profiting from it.”
Guajardo added that in his experience with China, the masks being sold back now will not only come at exorbitant prices and with potential quality defects but with longer-term political demands.
The U.S. congressional report released in April similarly concludes: “The Chinese government may selectively release some medical supplies for overseas delivery, with designated countries selected, according to political calculations.”
In an interview, O’Toole, the Conservative MP, said that in Canada, he was hearing the same PPE warnings from his sources in January that Guajardo was getting from sources in Mexico and the United States.
O’Toole said he knows “for a fact” that senior Canadian bureaucrats in January were alerted that China was hoarding PPE. But instead of responding to the threat, Canada’s government shipped 16 tonnes of PPE to China.
O’Toole says he believes the methods Beijing used to secure PPE and Canada’s response need to be investigated in a broad national inquiry when coronavirus health risks finally recede.
“The Communist Party of China willfully withheld information on an outbreak for at least weeks, if not months,” O’Toole said. “It not only gave the world less time to respond, it downplayed the potential severity of the threat. Countries did not make decisions with respect to flight bans and (protecting) PPE stores.”
Asked by Global News to respond to O’Toole’s assertion, a spokesperson for Public Health Canada said that in January, officials started to monitor the coronavirus in China and “initiated work with Public Services and Procurement Canada to procure supplies needed to respond to a possible outbreak in Canada.”
Internal Public Health Canada emails indicate that on Jan. 31 Minister Patty Hajdu approved a donation of PPE to China from Canada’s emergency stockpile including “stuff that (would be) expiring in Feb. and March.” The ministry believed this donation would not compromise Canada’s PPE supply, the emails say.
Last week, Prime Minister Justin Trudeau acknowledged that two planes from Canada sent to purchase PPE in China have now returned empty.
Trudeau cited congestion at Chinese airports and restrictions that only allow planes to wait for cargo for short periods. But China called Trudeau’s claim “inaccurate.”
After this story was published Global News asked Trudeau whether he was aware in January that China was engaged in a global operation to secure PPE, and if his government was aware, why no action was taken to protect Canada’s supply.
“As of Jan. 2 our chief public health officer convened a group of provincial public health officers to advise that there were reports of a new virus present in China,” Trudeau said Thursday. “Our intelligence services were tracking and aware of the issues and we got regular updates through the month of January. Further than that, I don’t have anything to add.”
Chinese consulates and community associations named in this story have not yet responded to questions from Global News.
‘Every overseas Chinese is a warrior’
A review of official reports from state media such as Xinhua as well as UFWD web pages in China and reports from associated Chinese-Canadian community groups, record massive PPE shipments of at least 100 tonnes from Canada to China in January and February.
The efforts were organized through consulates in Vancouver, Toronto and Montreal. In Vancouver and Toronto, business associations officially tied to the UFWD appear to have taken the lead in the global drive for N95 masks, also securing and shipping PPE from other countries into China.
A Feb. 3 report in Xinhua documents one facet of the global operation involving millions of migrants from the southern China region of Fujian. The report — subtitled “Every overseas Chinese is a warrior” — bursts with militaristic descriptions that have the ring of propaganda.
“The menacing epidemic came suddenly. But majestic strength comes from front-line medical staff, party members and cadres, from the people, and from Fujian Chinese and overseas Chinese,” the Xinhua report says. “Fujians from dozens of countries on five continents joined this invisible battle … they travelled day and night and raced against time to send back batches of scarce supplies for the motherland.”
The report focuses on the Toronto Fuqing Chamber of Commerce. This is one of the groups that attended a United Front-linked anti-Hong Kong democracy rally in Markham, Ont., in summer 2019.
According to the Xinhua report, the Fuqing chamber president flew to China in January before China’s Spring Festival.
But after “seeing that supplies were becoming scarce, he boarded a flight to Toronto to help with the purchase (of masks),” the report says.
The report makes no mention of the potential COVID-19 risks presented by the Fuqing chamber president flying from China to Toronto at the time of the Spring Festival, when China’s government reportedly issued internal warnings that pandemic spread danger was high. However, there is no indication the Fuqing chamber president knew of pandemic travel risks at the time, because Canada and the World Health Organization were not advising against travel from China into Canada.
According to the Xinhua report — which Global News could not independently verify — after the chamber president landed in Toronto in -25 C weather, he immediately got in a vehicle and drove to Fuqing chamber headquarters and ordered: “Purchase (PPE) in partitions. Act now!”
“Immediately, nearly a hundred overseas Chinese drove to the chamber of commerce,” the Xinhua report says.
In the following days, 200 Fuqing chamber members travelled across Ontario buying up medical supplies, the report says, while in China, an official “worked with the United Front Work Department of Fujian, and customs in Fujian” and various Chinese airlines in order to receive “the medical supplies from Canada.”
The Fuqing chamber president could not be reached for comment.
The reports of large shipments of PPE from Toronto are corroborated by reports from the Toronto office of Hainan Airlines (HNA).
The reports say on Jan. 25, HNA “responded to the call of the state” and transferred loads of PPE to China that were donated by “foreign government departments, charities, social organizations, and overseas Chinese.” By mid-February, HNA had delivered 56 tonnes of PPE from Toronto to China, the reports say.
Meanwhile, on Jan. 26, the Chinese Consulate General in Montreal established an epidemic emergency team to secure PPE for China and “communicated with more than 10 Canadian government officials at three levels.”
Through businesses and “overseas Chinese and student groups,” the consulate in Montreal assisted dozens of groups to fly more than 30 tonnes of masks and protective clothing to various cities in China, Chinese state reports say.
And on Jan. 23 in Vancouver, Yongtao Chen, a real estate developer and the chairman of the Canadian Alliance of Chinese Associations (CACA), was alerted by the Chinese consulate of the desperate need for PPE in Wuhan, Chinese state reports say.
CACA is a “controlling level” United Front group in Canada, according to Chen Yonglin, a former Chinese diplomat who has defected to Australia.
And it is a member of the UFWD’s Overseas Chinese Affairs Office, an organ used by Beijing to influence the Chinese diaspora, according to the 2018 U.S.-China Economic and Security Review Commission.
CACA leaders worked with the Vancouver consulate through an epidemic-response WeChat group to raise funds and organize the purchase of PPE in Canada and elsewhere, a Jan. 31 report by a CACA-linked website says.
“Through various channels, the joint meeting has snapped up protective clothing, disinfectant, masks and other protective materials, and is stepping up arrangements to ship to Wuhan,” the report says.
CSIS and RCMP investigations
At least one of the Vancouver-led groups that appears to be involved with CACA in Beijing’s PPE drive, the Guangdong Overseas Chinese Federation, includes members who have attracted the attention of Canadian national security and law enforcement investigations, sources with knowledge of RCMP and CSIS files said. Leaders of the federation could not be reached for comment.
A March 23 report from the All-China Federation of Returned Chinese Overseas outlined PPE shipping efforts of the Guangdong federation, which has members in 131 countries. The report quoted Guangdong federation leader Ruji Feng, president of the Canada Chao Shan Association in Vancouver, saying “the local communities actively co-operate with the embassies and consulates to promote and contact all community overseas Chinese groups to prepare various medical supplies.”
READ MORE: Boosting PPE supply ‘not a top priority’ in years before outbreak
Feng’s group also assisted CACA in airlifting 60 boxes of PPE from Manila, Philippines to China, the report said.
A man who answered Canada Chao Shan’s listed number in Vancouver told Global News that he is not connected with the association and could not locate directors to comment for this story.
A review by Global News of Panama Papers offshore banking records and B.C. criminal and civil court records shows that some Canada Chao Shan members — who are mostly located in Vancouver but also in southern China — are connected to alleged underground financial activities.
In 2003, one of the Vancouver members, Xun Chuang, was given an 18-month conditional sentence on production of narcotics charges and a 10-year firearms prohibition, B.C. criminal records show. And according to B.C. Supreme Court civil case filings and sources, Xun Chuang and his Canada Chao Shan officer address are connected to suspects targeted in the RCMP’s E-Pirate investigation, Canada’s largest-ever casino money-laundering and underground banking investigation.
Xun Chuang could not be located for comment through the law firm that handled one of his real estate lending cases. He was not named as a suspect or charged in the E-Pirate investigation.
The suspects connected to Xun Chuang were allegedly involved in real estate lending and casino loan-sharking operations connected to drug trafficking and underground banking in Richmond, B.C., and mainland China.
However, money-laundering and tax evasion charges in the E-Pirate investigation were stayed before suspects went to trial due to evidence disclosure errors by federal prosecutors. The allegations have not been proven.
The group, Canada Chao Shan, and some associated with the group are known to CSIS agents, a source who could not be identified confirmed.
United Front links between Australia, Canada and southern China
Similar murky United Front networks have been investigated in Australia, where the Australian government implemented PPE export bans on March 29 after several Chinese real estate developers sent well over 82 tonnes of PPE to China, according to a U.S. congressional report.
One of the southern China-based United Front groups involved was connected to allegations of organized crime and suspicious “casino junket” activity, the Sydney Morning Herald has reported.
And the Guangdong and Chao Shan United Front groups active in Australia are also linked to Canadian group leaders, Chinese UFWD meeting records show. One prominent Guangdong federation United Front leader named Xiangmo Huang, who is a billionaire real estate developer and casino high roller, was barred from Australia in 2018 on national security grounds.
Alex Joske, a United Front expert and researcher with the Australian Strategic Policy Institute, said that the All-China Federation of Returned Chinese Overseas — of which the Guangdong federations in Canada and Australia are a part — is an increasingly important part of Chinese President Xi’s United Front diaspora control strategy.
Joske told Global News that China’s Communist Party uses organized crime and United Front groups for strategic uses abroad.
“In Australia, we’ve observed overlap between political influence operations, intelligence agencies and organized crime,” Joske said. “For example, a gambling junket operator and alleged criminal figure who also runs groups that report back to the United Front Work Department and collect information on politicians.”
Jonathan Manthorpe, a Canadian author and United Front expert, has reported that it is believed Ottawa blocked visas for 200 Guangdong federation officials seeking to visit Vancouver in 2018, based on national security grounds. However CSIS would not confirm to Global News whether it advised Ottawa to block the visas.
In an interview, Manthorpe told Global News that Xi has vastly increased resources of the United Front, which Xi calls a “magic weapon.”
“The United Front Works Department is, to put it very simply, a political warfare operation,” Manthorpe said. “It’s in all the embassies and consulates in Canada.”
And United Front operatives seeded in Chinese consulates worldwide create and take over “seemingly innocuous groups, most of them embedded in ethnic Chinese communities not only in Canada but in all the countries where the Chinese diaspora of around 50 million people now live,” Manthorpe said.
Manthorpe says a particularly troubling aspect of the United Front’s mass mobilization of Chinese immigrants for the collection of PPE is the Chinese Communist Party’s “ability to exert discipline and to demand patriotic loyalty.”
“To me, it is utterly unconscionable that here are Canadians who are being intimidated and pressured in their own country by foreign agents,” Manthorpe said. “These are assaults on our sovereignty, and they are assaults on our national interest. And they are assaults on our citizens. We should not allow that.”
However, Chinese officials have countered criticism that the country cornered the world’s PPE supply, claiming that after China has conquered its internal coronavirus threat, United Front groups including Guangdong Federation members are now distributing PPE to other countries and “overseas Chinese.”
“It is understood that at present, the Guangdong Overseas Chinese Federation is also actively coordinating a group of masks and other epidemic prevention materials to be donated to overseas Chinese groups in areas with severe epidemics in Italy, Spain, the United States, Peru, and the United Kingdom, hoping to relieve the current shortage of anti-epidemic materials for overseas Chinese,” a March 23 UFWD report says.
While United Front actors have been on CSIS’s radar since 1998, Manthorpe says, networks are growing rapidly in Canada under Xi’s regime.
And the current threat level was encapsulated in a 2018 CSIS report that says: “The CCP’s United Front activities incorporate co-opting elites, information management, persuasion, as well as accessing strategic information and resources. It has also frequently been a means of facilitating espionage.”
China does not acknowledge that its United Front is used for espionage, and Chinese consulates in Canada did not respond to questions for this story.
John Townsend, CSIS’ head of media relations, would not directly answer whether the national security agency could be investigating the PPE export operations involving United Front groups in Canada, such as Canada Chao Shan.
“Under our act, CSIS clearly has a mandate to investigate espionage and sabotage, terrorism, foreign interference, and subversion and we will continue to use our legal authorities to ensure the government of Canada receives intelligence on these critical issues,” he said.