EETimes is a great source of information about the technology world that I’ve long found invaluable for following and understanding the development of the microelectronics industry in particular and its implications. So it genuinely pains me to report that this news site did a major disservice to its readers yesterday by posting a column on Chinese investment in the U.S. economy written by an author whose close ties to the Chinese government went completely unmentioned.
The column, by venture capitalist Ray Bingham, failed badly on substantive grounds, too – so badly, in fact, that it represents a significant failure of the site’s editorial process. After all, it’s one thing – and an entirely legitimate thing – to argue, as per the author, that the federal government’s process for screening prospective foreign acquisitions of American companies for national security reasons (known by the acronym CFIUS) might be making some serious mistakes. Its mandate is to balance the national security threats with the economic benefits that such investments might create, and it’s always possible when such judgment calls are involved to overemphasize one consideration and underemphasize the other.
But EETimes should by no means have had Bingham to get away with simply describing China as a “perceived threat” and a country that is thought “to have motivations beyond the standard economic drivers.” The site should have at least required to the author to acknowledge that Beijing is mounting a serious challenge to American security interests throughout East Asia, and especially in the South China Sea, and that China’s state-dominated system as a whole operates in ways having absolutely nothing to do with “the standard economic drivers.” By letting Bingham off the hook, EETimes wound up publishing not an opinion article, but a piece of propaganda.
At the same time, even this serious failing pales against EETimes‘ blunder on the transparency front. Readers of all opinion pieces must always be told by media organizations when the author or authors of these articles have self-interested stakes in propagating certain viewpoints. (Think tanks and individual researchers should be held to the same standards.) Bingham qualifies in spades.
As EETimes told its readers:
“Ray Bingham is co-founder and partner at Palo Alto-based Canyon Bridge Capital Partners, a global private equity investment fund focusing on the technology sector. He has considerable experience in identifying growth and mature technology firms for investment, giving them new life and helping them to reach their full long-term growth potential.”
As it should have added, Canyon Bridge (in the words of the Financial Times newspaper) “sits at the end of a long chain of Chinese funds and investors with ties to the government. “
“The parent company of its largest backer, Yitai Capital, is China Venture Capital Fund Corporation Limited, which Chinese state media reported last year has a mandate to ‘carry out our national strategies and to mainly invest in projects about technological innovation and industrial upgrading’.
“One of CVC’s state-owned investors, China Reform Holdings Corporation, aims to help state ventures invest domestically and internationally. Benjamin Chow, Canyon Bridge’s [other] founder and managing partner, previously worked for a CRHC-controlled fund, China Reform Fund Management. The website for China Reform Fund Management describes CRHC as a ‘state-owned assets management corporation under direct supervision from central government” that among other priorities makes strategic investments in “new emerging industries as well as other sectors related to national security and economic lifelines.'”
In other words, Bingham and his company work for the Chinese government. He contends that Canyon Bridge’s Chinese investors were merely “‘limited partners’, with no active role in how the fund is run. ‘They have no decision-making authority over what we invest in, how we manage it or the disposition of those assets ultimately,’ he said. But so what? Can anyone seriously doubt that when these ‘limited partners’ say ‘Jump!’, Bingham and colleagues respond, ‘How high?’”
Therefore, Bingham’s job, along with Canyon Bridge’s, is representing Chinese government interests. Whatever you think of the morality or wisdom of this choice, the information is absolutely essential to a reader’s ability to judge the accuracy of his claims, merits of his arguments, and the critical issue of what he might be concealing about the subjects he discusses.
And in this vein, something else EETimes should have forced Bingham to disclose: He and his Chinese backers had just been rebuffed by that same U.S. government investment-screening system in their effort to take over the American-owned microchip semiconductor firm Lattice Semiconductor. So small wonder the author has problems with its operations. It’s crimped his own income stream.
Again, Bingham asd others like him have every right to work for the Chinese government, and EETimes has every right to publish them. But EETimes failure to reveal Bingham’s enormous personal stake in loosening Washington’s foreign direct investment policies is a flat-out breach of journalistic ethics. And the site should correct this mistake and tell its readers the whole story without delay.
