Trump Indonesia Real Estate Project Gets Chinese Government Ally

https://www.nytimes.com/2018/05/15/world/asia/trump-hotel-china-indonesia.html

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HONG KONG — The Trump Organization’s partner in a lavish Indonesian development project boasting a six-star hotel and golf course with President Trump’s name has brought on a new ally: a Chinese state-owned company.

The Indonesian partner, the MNC Group, said Tuesday that it had struck a deal with an arm of Metallurgical Corporation of China, a state-owned construction company, to build a theme park next door to the planned Trump properties.

The timing is awkward.

Trade relations between the United States and China have become increasingly strained, with the Trump administration imposing tariffs on Chinese-made goods and threatening more. A senior Chinese official, Liu He, is set to arrive in Washington on Tuesday for talks meant to defuse the tensions.

Also the deal between the Chinese state-owned company, M.C.C., and the Indonesian developer falls under the umbrella of China’s Belt and Road Initiative, an ambitious plan to spread the country’s money and influence around the world by financing infrastructure and other projects. The initiative is a high priority for President Xi Jinping.

The Chinese state-owned construction company, in an announcement of the deal, did not provide any details on the agreement. The announcement, which was initially published on its website, was later taken down. A representative for M.C.C. declined to comment.

Both the theme park and the Trump-branded hotel and 18-hole golf course are being developed by the billionaire Hary Tanoesoedibjo, head of the MNC Group, and packaged together as part of a splashy $500 million complex called Lido City that it has marketed as an “integrated lifestyle resort and theme park.”

Hatunggal Muda Siregar, a spokesman for MNC, said the theme park and the Trump properties are separate projects within the Lido development. The agreement with the Chinese company to build the theme park does not include any financing for the project, he said.

The company will use a different contractor to build the Trump resort at Lido and a second Trump resort and golf course on Bali, he said. The company has its own resources to finance the resort projects, he added.

There isn’t any evidence that the agreement with the construction company was intended to sway the Trump administration on any matters. Still, Mr. Trump has threatened China with tariffs on $150 billion in Chinese-made goods if it doesn’t back away from plans to use state support to finance a new generation of high-tech industries.

And China has protested Washington’s punitive measures against ZTE, a Chinese telecommunications company, that threaten to deprive it of badly needed American-made microchips, software and other equipment. On Sunday, in a surprise reversal, Mr. Trump said he had directed the Commerce Department to resolve the issue to save Chinese jobs.

Critics say Mr. Trump faces conflicts of interest by continuing to hold on to his real estate business even as he serves in the White House. In lawsuits, Democratic lawmakers and others have accused him of violating the Constitution’s emoluments clauses, which prevent a president from accepting government-bestowed benefits either at home or abroad.

Both the Justice Department and Mr. Trump’s lawyers have said the suits are groundless.

There is no indication that the president or the Trump Organization was involved in helping arrange the Chinese role in the Lido City project. The deal was first reported by Agence France-Presse.

The Lido resort and theme park, about 50 miles south of Jakarta, the Indonesian capital, is one of two projects in the country that the Trump Organization has signed onto with Mr. Hary, who ran for vice president of Indonesia in 2014, and who is the founder and president director of MNC.

Mr. Hary, 52, is ranked 31st on Forbes magazine’s list of wealthy Indonesians, with a net worth of $1.1 billion. His business interests include television stations, newspapers, telecommunications, land development and financial services.

Mr. Hary has used the Trump brand to help add cachet to Lido City, an “integrated lifestyle resort and theme park” in the lush hills of West Java. Under the partnership with Mr. Hary, the two luxury hotels and golf resorts will bear the Trump name and a Trump company will manage them.

Mr. Hary attended Mr. Trump’s inauguration last year and stayed at his Trump International Hotel in Washington. He also arranged for two Indonesian power brokers to meet with Mr. Trump in Trump Tower, including the then-Parliament speaker, Setya Novanto, who was sentenced last month to 15 years in prison for his part in embezzling more than $170 million from a national identity card program.

Mr. Hary has a reputation for being hard-nosed in both business and politics. He founded his political party, the United Indonesia Party, in 2015.

Mr. Trump’s business dealings in Indonesia prompted scrutiny even before his inauguration, and he pledged not to embark on any new deals while in office. But the Trump Organization held onto the projects in Indonesia, saying the contracts with Mr. Hary were signed in 2015 and were binding.

Mr. Trump has reported receiving between $2 million and $10 million in royalties from the project. In 2016, Mr. Trump said he received $380,952 in management fees from the projects, according to his most recent financial disclosure.

At the old Lido Lakes Resort, the site of the Trump resort and theme park, the only work underway for the Trump project appears to be the moving of dirt on the site.

“It’s fine to do a business deal with an offshore magnate, but he’s still got to translate it into business success, and at the moment there’s not much sign of progress,” said Keith Loveard, a senior analyst at the Jakarta-based firm Concord Consulting.