[Joshua Kaplan and Justin Elliott at ProPublica]

I bet this practice is more common than anyone might think, and certainly isn't limited to China. As always, follow the money:

"In December, [SpaceX investor] Kahlon testified that SpaceX prefers to avoid investors from China because it is a defense contractor. There is a major exception though, he said: SpaceX finds it “acceptable” for Chinese investors to buy into the company through offshore vehicles.

“The primary mechanism is that those investors would come through intermediate entities that they would create or others would create,” Kahlon said. “Typically they would set up BVI structures or Cayman structures or Hong Kong structures and various other ones,” he added, using the acronym for the British Virgin Islands. Offshore vehicles are often used to keep investors anonymous."

The key point here is not that the Chinese investments are illegal - they probably aren't - or that anyone thinks SpaceX is being directed by the Chinese government. What's odd is that the company prefers the obfuscation: it sounds like they don't accept Chinese investment unless it's being channeled through an offshore vehicle designed to hide their involvement from regulatory scrutiny. That obfuscation is particularly important given that Elon Musk is now a part of the US government.

#Democracy

[Link]