China’s Serbian Proxy Highlights How Beijing Captures Elites

The growth of China’s global ambitions, especially since Xi Jinping’s announcement of what is now known as the Belt and Road Initiative, or BRI, in 2013, includes an increase in “influence” operations and what is called United Front work.

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The United Front system, which recalls those entities known as National Fronts in many former communist regimes, comprises a network of organizations tasked with managing non-Chinese Communist Party actors both at home and at abroad.

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More generally, United Front work refers to political warfare tactics used to co-opt elites and other entities that are willing to cooperate with Beijing, while ostracizing those that are not.

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While United Front work is a task of the whole party, operations mobilized to advance the political goals of the BRI are often delegated to ostensibly purely commercial interests.

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This appears to have been the case with CEFC, a mysterious company whose operations turned out to resemble a Ponzi scheme, and with links to a front organization known as the China Association for International Friendly Contact., CAIFC.

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CEFC has engaged in United Front work, with the company’s chairman, Ye Jianming, a high-ranking official in the organization. While it has been active in BRI projects all over the world, the most detailed cases concern African states, the Czech Republic, Georgia, Kazakhstan and Serbia.

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This is where Vuk Jeremic comes in; the former foreign minister of Serbia became one of its main intermediaries during his tenure as President of the UN General Assembly.

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The Jeremic case offers a characteristic example of how China utilizes foreign politicians and their connections to serve its own political agenda.

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Using business to achieve political goals:

CEFC, established in 2005, is a conglomerate led until recently by its “chairman” Ye Jianming until he was “disappeared” last February, possibly by the Communist Party’s disciplinary organs.

The head of the CEFC’s NGO wing, the former Hong Kong minister Patrick Ho, was found guilty of corruption and sentenced to three years in jail in the US in 2019 for bribing African and UN politicians.

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According to Caixin’s report published in 2018, China’s leading business-oriented investigative journal, the CEFC conglomerate fraudulently used complex methods and deals to fake itself into the Fortune 500 list, mainly by taking money from China’s state-owned enterprises and banks with no actual profit.

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Looking at the company’s deals in the Czech Republic, which it entered in 2015, it becomes clear that the CEFC’S activity in the Czech Republic had more to do with politics than business.

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As in Georgia, CEFC’s foray in the Czech Republic was mediated and promoted by former communists and entities heavily involved in the privatization process that followed the collapse of communism in 1989.

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CEFC established itself in the country with the help of officials-turned-lobbyists, using their contacts to gain influence in the country and the wider region.

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CEFC’s chairman, Ye Jianming, became a special advisor to Czech President’s Miloš Zeman even before it entered the country. He kept his position despite his sudden disappearance and alleged role in a corruption case in China.

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Despite the glamour, it made no significant investment; the CEFC only bought luxury and non-profitable assets. After the 2017 arrest of Patrick Ho, things went south fast.

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Chairman Ye “disappeared” in early 2018, soon after which the company basically went bankrupt. The Czech consolidation agency, CITIC, took over CEFC’s Czech assets, a process finalized in the Czech Republic this April. A part of the conglomerate is currently being investigated for fraud.

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UN officials turn into lobbyists:

CEFC was among a number of entities supporting China’s drive to impose the Communist Party’s views at the United Nations.

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A key goal is to erase the role of civil society and human rights from UN language, and in particular align the UN’s Sustainable Development Goals with the BRI, Xi Jinping’s own geopolitical initiative.

The CEFC’s role included donations to three UN General Assembly presidents, one which became the basis for the indictment against Ho.

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They include Vuk Jeremic, who currently leads a minor opposition party in Serbia.

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According to Radio Television Hong Kong’s 2019 documentary Hong Kong Connection: Patrick Ho's List even while at his UN post, Jeremic was helping CEFC establish new contacts and making deals in the conglomerate’s name.

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In return, he allegedly received hefty donations from the network and Ho helped him gain prestige by arranging meetings with world leaders, such as Xi Jinping, and speeches at forums. Ho accompanied – or perhaps supervised – Jeremic’s meetings in Mexico, China, Hong Kong and Mongolia.

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In Hong Kong, Jeremić also met Ye at what seems to be the CEFC office.

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After Jeremic left his UN job in 2013, he immediately became a consultant for CEFC and South China Morning Post states that he was receiving 330,000 USD annually during his two years advising “the top leaders of the company”. According to Inner City Press, an investigative media organization covering UN affairs that had access to the documents used for Ho’s trial, “CEFC paid Jeremic as a consultant a total of $ 5.3 million”.

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In 2013, Jeremic established his own think tank, the Center for International Relations and Sustainable Development, CIRSD with the help of CEFC as the Chinese company states on its website:

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“CEFC helped to establish and fully funded the Center for International Relations and Sustainable Development (CIRSD)”

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Patrick Ho also lectured at Jeremic’s institute.

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According to a Serbian investigative network Antidot Media that first broke this story as early as March 2017 (eight months before Ho was arrested), the think-tank and Jeremić’s PR agency have received 9 million US dollars from the CEFC network. This is from their 2019 updated report.

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By 2013, shortly before Jeremic left the UN and established his think tank, a Chinese government entity took an important role in Jeremic’s activities – the State Council Development Research Center, DRC.

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Its director, Li Wei, invited Jeremic to speak at a development forum in China while he was still President of the UN General Assembly. Later that year, Jeremic established CIRSD and began closely cooperating with the DRC on BRI projects.

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According to a forthcoming study by BRI specialist Nadège Rolland, from the US research institution National Bureau of Asian Research the DRC is engaged United Front work among academia and think-tanks along the BRI countries.

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One of the platforms for this is the Silk Road Think Tank Network, SiLKS, established in 2015. Jeremic’s CIRSD was, unsurprisingly, one of the 43 founding members.

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DRC chairman Li Wei continued to interact with Jeremic quite often, especially between 2014 and 2015. Li even became an “international consultant” for the CIRSD, as did Senegalese diplomat Cheikh Gadio, who according to a US indictment helped Ho to bribe African politicians.

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Gadio was first on trial for corruption alongside Ho, but became a key witness instead. Jeremic was a witness from the beginning.

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When Jeremic was asked during trial procedures Inner City Press about his connections to the CEFC, he replied: “I am not the defendant here”. Gadio is still at CIRSD.

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Since all these connections became known in Serbia, especially thanks to Antidot Media, Jeremic has been trying to downplay the issue, according to Antidot, and deflect public scrutiny by criticizing the current President, Aleksandar Vucic instead.

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This has partially backfired and Vuk’s involvement with China has become a political issue in Serbia, with Vucic accusing him of lobbying on behalf of China and taking Chinese money this June.

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However, although Vucic and Jeremic seem political enemies, Jeremic appears to have introduced Vucic to Li Wei, when he ran for Secretary-General of the UN in 2016.

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Jeremic’s case illustrates the methods of China’s United Front work. Beyond the party-state’s institutional United Front system, it can use “other means” – including “private” companies – to achieve its goals.

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After Jeremic agreed to cooperate with China, it extensively exploited his status at the UN and in Serbian politics to advance its goals. To this day, Jeremic still continues to promote China’s interests within the SiLKS network.

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BRI is an initiative established and run by China in order to serve its own interests. It employs various means, including the type of “elite capture”, as described earlier. Cases of corruption, non-transparent deals and suppression of civil society and the rule of law and the increase in China’s military presence have also been highlighted in several BRI-led projects.

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Countries meanwhile risk falling into debt traps under the BRI as leaders use unregulated Chinese loans to promote their own interests and buy voters with often unsustainable projects – while keeping silent about China’s human rights violations.

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China’s goal is to change world standards and norms to a model that aligns with its interests and worldview. This includes trying to marginalise civil society and human rights to achieve its development goals.

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With help of its UN allies, China has already managed to influence the language that the UN uses when discussing and defining development and human rights.

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More research is needed to clarify the interactions between politics, business and lobbying, especially when it comes to foreign powers. A clear understanding of China’s intentions, goals and methods is needed to ensure more transparency. China’s United Front work, meanwhile, can also lead to conflicts of interest when it targets local and international actors – and rules and regulations should be implemented to prevent it.