The American economy may be teetering on the brink of a recession, but there’s an industry the US hedge fund gurus believe has an almost limitless future: the Chinese police state.
A report in The New York Times, last week, documented the rise of China’s electronic surveillance industry, whose leading companies have incorporated themselves in the US and obtained the lion’s share of their capital from US hedge funds. Though ostensibly private, these companies are a for-profit adjunct of the Chinese government.
Li Runsen, technology director of public security and the top cop policing China’s internet usage against the occasional appearance of a dangerous idea, now also moonlights as a director of China Security and Surveillance Technology (CSST), a company soon to be listed on the New York Stock Exchange.
CSST, according to Terence Yap, its chief financial officer, produces security cameras and computer software that can monitor crosswalks and cross-check the faces of internet cafe users against photos of known troublemakers.
By one estimate, high-end surveillance will expand from a $500 million industry in 2003 to a $43 billion industry by 2010. These numbers have drawn Wall Street’s notice.
CSST has received $110 million in convertible loans from the Citadel Group, a Chicago-based hedge fund, which it has used to buy up smaller Chinese surveillance companies.
Some Wall Street executives have even defended their investments by equating the Chinese surveillance system with the surveillance cameras of London and New York.
Once China turned Communist repression into an investment opportunity, however, capitalism responded as capitalism is supposed to respond: It wanted in. There are mega-bucks to be made, the hedge funds concluded, in hedging against democracy.
Capitalism is global now; democracy is not. The US is moving towards one unified world market that is home to democratic and authoritarian systems alike. The Chinese model of Leninist capitalism poses a systemic challenge to the democratic capitalism that the West espouses. It promises continuing power and greatly increased wealth to the ruling elites of developing nations.
LA Times
