Kerry Owns Stake in Chinese Investment Group That Funds Company Blacklisted for Human Rights Abuses

Climate czar John Kerry and his wife have at least a $1 million stake in a Chinese investment group that is a major funder of China’s artificial intelligence sector—including a tech company blacklisted by the United States for human rights abuses against the Uyghurs, according to financial records reviewed by the Washington Free Beacon.

Kerry holds “over $1,000,000” in investments in Hillhouse China Value Fund L.P., according to a financial disclosure report he filed at the beginning of the year. Hillhouse is a top shareholder in YITU Technology, which is involved in China’s high-tech surveillance operation against the Uyghur people and helped develop a facial surveillance software for the Chinese government that sorts individuals by race and ethnicity, according to the New York Times.

In 2019, the U.S. Department of Commerce added YITU to its trade restriction blacklist for being “implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uyghurs, Kazakhs, and other members of Muslim minority groups.”

As special presidential envoy for climate, Kerry has been heavily focused on diplomatic discussions with China, which is the top global greenhouse gas producer. Kerry has downplayed China’s persecution of the Uyghur people while attempting to negotiate climate change agreements with the Chinese government. “Life is always full of tough choices,” said Kerry last month, when asked if it was necessary to trade human rights for climate concessions. Republican lawmakers expressed concern last month that Kerry was quietly lobbying against a Senate-approved bill that would ban Chinese imports linked to Uyghur slave labor after the legislation stalled in the House.

Anders Corr, an intelligence analyst and the publisher of the Journal of Political Risk, called Kerry’s investment an “astonishing and disappointing revelation.”

“Kerry leads on the China issue, not just climate talks, and he and his family should be forbidden from investing in a manner that creates even the appearance of a conflict of interest,” said Corr.

Corr said China views the artificial intelligence industry as “one of a very few most important strategic sectors for its economic and military development,” and the expansion of this sector will “enable the achievement of its goal to become globally hegemonic.”

“No American should invest in China’s AI capabilities, which only empower the country in its economic growth, and ultimately the military strength with which it will challenge the benign leadership of the United States,” Corr said.

The White House did not respond to a request for comment.

Kerry’s Hillhouse stake is through a trust in which his wife is the beneficiary. While Kerry’s wife is a beneficiary of the trust, he stated in the disclosure that they are not involved in managing the investments.

Hillhouse is one of the top shareholders in YITU Technology, according to a copy of an initial public offering prospectus YITU filed with the Shanghai Stock Exchange’s Science and Technology Innovation Board last November and obtained by the Free Beacon. The investment group led a $55 million capital injection into YITU in 2017, according to news reports from the time.

The Hillhouse China Value Fund is part of the Hillhouse Capital Group, an investment powerhouse run by Chinese businessman Zhang Lei.

Zhang sits on Shanghai’s Artificial Intelligence Strategy Expert Advisory Board, a committee created by the Chinese government as part of its efforts to ramp up its artificial intelligence industry. As recently as 2019, he was listed as a member of the China-United States Exchange Foundation, an organization tied to the Chinese government’s overseas influence operations. Zhang and Hillhouse group also bankrolled the Gaoling School of Artificial Intelligence at the government-run Renmin University, according to the school’s website.

The Chinese government has set a goal of becoming the global leader in artificial intelligence by 2030, prompting concern from U.S. national security experts who say it is using the technology for militarization and exerting totalitarian-like control over dissidents and domestic minority groups.

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