【In-depth Report】The Governor of California, Warren Buffett, and Chuanfu Wang: The Chess Game Behind the $1 Billion Mask Deal

Author: Wen Hong
Translator: Christine
Editor: Lish

In April 2020, a picture appeared on Sina Weibo of investment guru Warren Buffett wearing a BYD mask that reads “My BYD mask is helping me meet my goal” and a shirt that reads “I intend to live forever, so far, so good.” Seriously? Warren Buffett is advertising a company that is only two months old!

Image Source:  Sina Weibo

This company is BYD Manufacturing Medical Supplies Branch, which was registered with the Chinese government on February 7 to begin “manufacturing and selling medical equipment and industrial protective equipment”. According to the records, there is no history of manufacturing PPE, but days after receiving FDA approval, the company landed a $1 billion deal to supply masks to California. California Governor Gavin Newsom signed this large order for masks but never received, and reporters suspect that state officials are sending large sums of money to China under the guise of buying “epidemic supplies,” and China offers financial kickbacks. (Vice News, 12/04/2020)

To date, the state of California has not yet made a public response, BYD company began to sue Vice News, the people are shocked that a small mask has the magic to get so many prominent people involved.

Governor Newsom of California (Image Source: Los Angels Times)

The first protagonist was undoubtedly California Governor Newsom, who remained silent just two weeks after the deal was announced. Consultants for the California Democratic Party declined the Los Angeles Times’ request for comment on the deal. The San Francisco Chronicle reports that the California Senate and Assembly have also been tight-lipped about the deal. Newsom administration officials refused to provide a copy of the contract to state senators at a budget oversight hearing in Sacramento last Thursday, even though the state had already paid half the cost. The chief deputy director of the state’s Office of Emergency Services told senators via videoconference that providing all the details of the deal could disrupt the state’s supply lines for masks. (As reported by the New York Post)

What is the governor’s ulterior motive for hastily signing a large contract with a new company affiliated with BYD and not responding under pressure to disclose details of the contract?

The second protagonist is undoubtedly BYD Medical Supplies. According to Vice News, this new company, hastily incorporated in February, spent $20,000 to get FDA approval through a mediator, and in April, it received a significant order form California. What kind of connections does BYD need to take on the decaying U.S. local bureaucracy? Perhaps BYD America Inc. played a role.

Vice News continues to report that BYD’s Lancaster plant (which produces electric cars) has been operating at the state level since it was built, spending more than $1 million on the land and later donating $50,000. It prompts California to pass the Motor Fuel Excise Tax Act of 2018, which increased the gasoline tax from 34.7 cents per gallon to 47.7 cents per gallon and the diesel tax from 34 cents per gallon to 67 cents.

It would be understandable if BYD only lobbied to get California’s state to adopt policies that would benefit its industry. However, it is doubtful that the government would pay considerable money to a new company for marks. We are not conspiracy theorists, but common sense dictates that the BYD mask factory would not have gotten the order without a special relationship or interest.

Warren Buffett,  one of the top investment guru in the world, was the key man on the scene. Many of Chinese nouveau riches are lining up to have a multi-million dollar lunch with him. How could Buffett give BYD free advertising on marks? October 30 at cnTech Post an article “Why did Buffett invest in BYD instead of Tesla?” It can provide us with some insight.

In 2008, Buffett’s partner Charlie Munger suggested that Buffett meets with Wang Chuanfu, and in September of the same year, Buffett acquired 225 million shares of BYD at HK$8, a cost of HK$1.8 billion. This article is an important reminder that Buffett’s partner “Munger, was not just interested in BYD’s prospects in 2008, but that Munger understood BYD’s layout and the Chinese government’s determination to move the new energy industry forward.

In January 2009, China’s Ministry of Finance issued the “Notice on the Implementation of Demonstration and Promotion of Energy-saving and New Energy Vehicles” new energy vehicle subsidies were implemented, and BYD’s stock price began to soar. At one point, Wang Chuanfu became the “richest man in China” on the Hurun China Rich 100 list. The current market value of the shares invested by Buffett is as high as 35.2 billion Hong Kong dollars, and Buffett has earned 33 billion Hong Kong dollars in 12 years, which is 18.6 times the original investment.

I believe we all read the so-called investment guru Buffett who is on behalf of Wall Street for the red capital. So the two sides immediately agreed and gained fortune after the sound policy was introduced. BYD’s current ten shareholders are the Hong Kong Stock Exchange, the Central Huijin, Hong Kong Securities Clearing Company, etc. BYD is a party company (Wang Chuanfu is just a white glove). The data shows that while Tesla’s total return far exceeds BYD’s because of the Chinese government’s endorsement (BYD has been the most heavily government-subsidized Chinese company in the EV industry), BYD is a sure bet. Buffett certainly chose BYD (here’s a chart comparing the two companies’ stock movements).

The left picture shows BYD’s stock movement increased 18.6 times from 2002 to2020

The right picture shows Tesla’s stock movement increased 60 times from 2010 to2020

Image Source: Securities website

It is unknown whether Buffett is still an “old friend of the Chinese people” because of his proximity to the Chinese Communist Party elites. His partner Charlie Munger spoke with Money.CNN.Com on May 11, 2010. China’s communism is considered good for business; the May China Daily also published an article, “Buffett, Munger Praise China’s System, Leadership.” It is now clear that Buffett is a representative of Wall Street’s investment in Communist China.

Moving on to Buffett’s political leanings, left-media CNBC reports, “As the son of a conservative Republican congressman from Nebraska, he did eventually break away from his dad politically. Buffett has been a longtime supporter of liberal causes and candidates going back at least to the civil rights era, including public and financial support for the campaigns of President Barack Obama and Hillary Clinton.” The left media’s view is direct evidence that Buffett is a huge fan of the Democratic Party. California is a long-running Democratic Party stronghold. Buffett-affiliated companies have considerable investments in California.

Since 2013 Warren Buffett’s MidAmerican Energy Holdings Inc. has acquired two SunPower solar photovoltaic projects in California for between $2 billion and $2.5 billion; in May 2016, Berkshire Hathaway began establishing a shareholder in Apple Inc. Today, the shareholding exceeds 250 million shares, representing approximately 5.8% of Apple’s outstanding shares. Buffett has other investments in California. Governor Newsom, a member of the Democratic Party, has been California’s 40th governor since January 2019 and served as lieutenant governor from 2011 to 2019. Having served as governor for a long time, and having crossed paths with Buffett in many ways, the media has documented two events in the last two years.

October 2019 “California Governor Wants Berkshire Hathaway to Bid for Bankrupt PG&E,” an ailing power company; July 2020 “California Governor Calls on Warren Buffett to Support Dam Removal” to Save Endangered Salmon Populations. In the end, Buffett did not buy PG&E and agreed to remove the dam (E&E News Journal, November 18, 2020, “Historic Deal Refreshes Dam Removal Plans”). So it seems that many of California’s performance projects could not move forward with Buffett’s cooperation, so it makes sense that the governor would take a pass on BYD.

Wikipedia records that in 2014 Newsom approved California’s Proposition 47, which reclassified certain nonviolent crimes such as drug and property crimes as misdemeanors; in July 2015, Newsom supported Proposition 64, which legalized the use and cultivation of marijuana for California residents over the age of 21. Newsom formally endorsed Joe Biden for president in May 2020; Biden’s running mate, Kamala Harris, is from the California Senate and is a close friend of Newsom’s, so it’s fair to say that Deep Blue California is very close to the Biden team.

At this point in the analysis, the reader can judge that in the deep Democratic Party turf of California (two consecutive terms as Democratic governor), Buffett has large capital investments consistent with the political philosophy of the Democratic Party.

This year is the treacherous time of the 2020 U.S. election. When the Biden team’s campaign is well-funded, the Domini voting system is being remotely manipulated by foreign powers to modify data. The Chinese Communist Party is deeply involved in the U.S. election. Then the chess game behind BYD’s big mask order is starting to become apparent.

The flowchart above illustrates the possibility that the Chinese Communist Party, with the help of the BYD masks, and with Wall Street finance capital’s cooperation, will funnel benefits to the Democratic Biden team to get Biden elected. Whether their scheme will succeed will be revealed when President Trump is re-elected in early January next year.

Reference:

1, Trump blacklisted the Chinese company. Now, it’s making coronavirus masks for U.S. hospitals.

Vice News 12/04/2020

https://www.vice.com/en/article/qjdqnb/trump-blacklisted-this-chinese-company-now-its-making-coronavirus-masks-for-us-hospitals

2、California Governor Newsom won’t share details of billion-dollar mask deal with China

New York Post 21/04/2020 

https://nypost.com/2020/04/21/gavin-newsom-wont-share-details-on-1b-mask-deal-with-china/

3. The ups and downs of California’s gasoline tax     

TAX POLICY CENTER 1/11/2018

https://www.taxpolicycenter.org/taxvox/ups-and-downs-californias-gas-tax

4. Historic Deal Refreshes Dam Removal Plan

E&E 18/11/2020

https://www.eenews.net/stories/1063718813

5、Why should Buffett invest in BYD instead of Tesla?

cnTech Post 31/10/2020

(The content of the article represents the views of the author only)

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