ARI SHAPIRO, HOST:
We're about to hear about the connection between a stage where Patrick Swayze's mom once performed and a Chinese company that has invested billions of dollars in U.S. properties and businesses. The company HNA Group has been in the news the past few months because of those investments. Noel King from our Planet Money podcast found HNA Group in an unlikely place and tried to figure out why.
NOEL KING, BYLINE: HNA's list of investments in the U.S. is impressive - a $6.5 billion stake in Hilton hotels, all of the Radisson hotels. HNA is even in talks to buy a stake in SkyBridge Capital. That's the investment firm founded by President Trump's short-lived communications director, Anthony Scaramucci. HNA also bought a hotel in my rural hometown, Kerhonkson, N.Y., which made me curious. I worked there when I was a kid, and the hotel needed some fixing. The roof leaked. It smelled moldy. It was millions of dollars in debt. So a few days ago I checked in...
UNIDENTIFIED WOMAN: Welcome to the Hudson Valley Resort and Spa.
KING: ...To see if this giant conglomerate had spruced the hotel up. But it was the same old carpet, the same musty smell. And on my way to my room, I heard someone yelling in the hallway.
LOUIE ST. GEORGE: (Shouting).
KING: Is everything OK?
ST. GEORGE: No, the key won't work again.
KING: Louie St. George is in town for a line dancing event, and he's locked out of his room.
What do you think of the hotel?
ST. GEORGE: The hotel's a piece of crap - worst hotel in the circuit.
KING: Can you tell me why?
ST. GEORGE: The hotel probably hasn't been updated since the 1950s, when Patrick Swayze's mom performed on that stage over there.
KING: Patrick Swayze's mom performed here?
ST. GEORGE: Yeah, on the stage.
KING: So why would this huge Chinese company buy the hotel and then just leave it? HNA declined an interview, so I called up an economist, Derek Scissors of the right-leaning American Enterprise Institute. For more than a decade, he's been tracking Chinese investments in the U.S.
DEREK SCISSORS: Of $100 million or more.
KING: Oh, so you look at where big Chinese money is going.
SCISSORS: That's right.
KING: China has been encouraging outbound investment for years. The country has a policy called the Go Out policy. China wants its companies to diversify. But most investments were not that big, not a hundred million dollars.
SCISSORS: When I started this, there were very few investments and I could remember them all.
KING: Then in 2015, Derek saw a striking shift. Chinese companies started investing billions abroad in everything from hotel chains to Park Avenue properties to Cirque du Soleil. One company caught his eye, the HNA group.
SCISSORS: HNA has something like a growth steroid.
KING: One thing that happened that year, 2015, was the head of China's central bank made a big announcement. China, he said, would unpeg its currency from the U.S. dollar, stop following the dollar's every up and down. China wanted its currency, the yuan, to be a reserve currency like the dollar or the euro. But for that to happen, the yuan had to float more freely and run the risk that it would sink. For big Chinese companies this was frightening.
SCISSORS: If you're holding yuan you're thinking, I don't like this. This asset's going to be worth less. It's going to have less buying power. Let me get out of it. I want to send my money overseas.
KING: So that's what these companies did. And what happened next might explain why that hotel in my hometown hasn't been fixed up. China in the past few months realized how much money is leaving the country. It started squeezing companies like HNA.
SCISSORS: They didn't shout from the rooftops, we are imposing very strict capital controls. They, in fact, were imposing capital controls.
KING: This is like HNA getting a smack on the head and being told, uh-uh (ph), guys. You're done.
SCISSORS: That's right.
KING: Some Chinese banks have stopped lending money to HNA. All of this has illuminated something else. HNA is a bit mysterious. How it got so big so fast, who owns the company, what their long-term plans are - none of this is clear as of yet. Noel King, NPR News.
(SOUNDBITE OF DEAN WAREHAM AND BRITTA PHILLIPS' "TRACY AND TONY") Transcript provided by NPR, Copyright NPR.