Jakarta –
After iron, aluminum is the most commonly used metal, making it a very valuable commodity. Over the past few years, China has significantly increased global aluminum production. But there are clues that reveal the suspicion that one particular person is playing the market.
According to an investigation conducted by the Wall Street Journal, Chinese billionaire Liu Zhongtian, founder of Chinese metal conglomerate Zhongwang Holdings, used his company’s Mexican factory to hide most of the world’s aluminum supply.
That way, he can circumvent trade restrictions related to China while claiming the tax benefits shared with Mexico under the North American Free Trade Agreement (NAFTA).
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As quoted from IFL Science, the story begins in 2010, after suspicions were leveled against several Chinese companies (including China affiliate Zhongwan) by the US Department of Commerce. Liu’s aluminum shipments to the US fell sharply, as did its profit margins.
In 2014, a pilot commissioned by a Californian aluminum industry executive flew over the city of San José Iturbide. He saw about 1 million tons of aluminum piled behind rows of barbed wire fences. This amount is equivalent to 6% of the world’s current aluminum supply.
Some US aluminum industry executives think Liu is secretly controlling the plant by shipping commodities through Mexico under the guise of transshipping. In this way, he could avoid the Commerce Department’s exorbitant tariffs on Chinese imported aluminum.
Liu has not officially commented on these allegations. He claims to have no business interests in Mexico. However, a business associate named Po-Chi “Eric” Shen has commented extensively on his business relationship with Liu, particularly in Mexico.
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(rns/afr)
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