Investment banker Howard Lutnick’s connections to China came under scrutiny on Wednesday after Republican President-elect Donald Trump appointed him to lead key US agencies involved in the trade war with China.
Lutnick’s financial services firms, including BGC Group and Cantor Fitzgerald, have profited from Chinese ties. BGC Group operates a joint venture in Beijing with state-owned China Credit Trust, while Cantor Fitzgerald has assisted in taking Chinese companies public in the United States.
These financial links have raised concerns among lawmakers and ethics experts about whether Lutnick might face undue influence from Beijing when deciding on tariffs and export restrictions as the next United States Trade Representative and Commerce Secretary.
“Mr. Lutnick’s conflicts of interest in China appear to be substantial. How can the American people expect someone who is on the Chinese government’s payroll to help level the playing field with China for working Americans?” asked Democratic Senator Ron Wyden, chair of the Senate Finance Committee.
Neither Cantor Fitzgerald, BGC Group, nor the Trump campaign responded to requests for comment.
Democratic Senator Tim Kaine, a member of the Foreign Relations and Armed Services Committees, said Lutnick’s financial connections to US adversaries would likely face close examination.
“It’s crucial that our Commerce Secretary’s top priority be the American people, not their personal business dealings,” Kaine added.
BGC Group holds a 33% stake in a joint venture with China Credit Trust, valued at nearly $28 million. China Credit Trust’s largest shareholder is the state-owned China People’s Insurance Company. The joint venture’s website states that in 2023, the company will
“actively practise the mission and responsibility of a financial state-owned enterprise.”
The partnership, China Credit BGC Money Broking Company Limited, was licensed in 2010 as Beijing’s first currency brokerage company. It provides brokerage and data services for domestic and foreign exchange, money, bond, and derivatives markets.
According to a BGC press release, the collaboration was “the first Sino-foreign joint venture inter-dealer broking company to have been granted a business license by the China Banking Regulatory Commission to operate in Beijing.”
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