Decoupling from China’s Economy ‘Is The Future’: Analyst

U.S. political leadership must work with the private sector to decouple critical technology development from mainland China, according to one expert.“One of the key vulnerabilities that we’re becoming more and more aware of is the degree to which Wall Street firms and American banks and investment companies continue to see China as this great market or this great investment opportunity,” Arthur Herman, a senior fellow at the Hudson’s Institute, a Washington-based think tank, said in a recent interview with EpochTV’s “Forbidden News” program. “Decoupling from China is the future and we need to establish timelines by which that is possible. We need to explain that both to private companies like Apple, for example, but also to Wall Street.” Hawkish lawmakers and strategists have increasingly called for a decoupling from communist China, wherein American economic and research interests would be severed entirely from the nation. Such action, they say, is necessary to prevent the use of American research and finances from fueling the continued exportation of the Chinese Communist Party’s authoritarianism. Achieving that decoupling would require a great amount of untangling with regard to America’s supply lines, however, and Herman believes that political leadership should immediately begin working with the private sector to make that happen. “How do we distance ourselves from dependence upon supply chains, manufacturing facilities, and investment in American industry and companies?” Herman asked. “How do we divest ourselves from those kinds of connections, in order to both build our modern high tech arsenal, so that it’s safe and secure and reliable in our hands?” With that in mind, large American tech corporations and investment firms have continued to invest heavily in china, regardless of the regime’s use of forced labor and its policy of coopting private data for military purposes. Nevertheless, Herman believes that American corporations will ultimately work for the American benefit if political leadership works to explain the severity of the situation to them. “They did it because no one said ‘don’t do it,'” Herman said of American investment in China. “So, what we need to do is to change that dialogue into one in which Washington stands up for our national security interest and stands up for our national interests, both for the growth of our economy and also for strengthening our national defense.” “Then, I think, companies and executives will come around and realize that they have a hugely important role to play in the development of the future arsenal of democracies, and in advancing high tech so it benefits everyone.” Quantum Technology That new “arsenal of democracies,” a play on the phrase originating from America’s World War II-era industrial dominance, is a reference to Herman’s belief that the United States needs to lead the Western world in becoming the globe’s preeminent creator of next-generation technologies, such as quantum computing devices. It is believed that quantum communications, which utilize quantum mechanics to allow secure wireless transmissions across apparently unlimited space, will reshape the nature of telecommunications security. Whoever guides the emergence of such a technology, will likely also guide the future shape of the international order. “In quantum computing, the United States still enjoys a lead, I would even say a comfortable lead because we’ve got major companies like IBM and Microsoft and Intel and Google, pursuing that avenue in the development of quantum technology,” Herman said. “And, although the Chinese are sprinting fast to catch up, they just don’t have right now the kind of spread of private initiative and know-how that the United States is able to enjoy in that area.” “In the area of quantum communications, however, I have to say the United States lags behind and the Chinese have understood the strategic as well as the technological significance of having instantaneous hack proof networks as a way in which to protect data and networks.” Herman noted that China launched the world’s first quantum communications satellite in 2016, and that its efforts to gain dominance in that field was tied directly to its ambitions for global hegemony. Continued Partnerships Still, there is a deeper problem at work, which drives Herman and others to push for decoupling from China’s communist regime. That is the fact that American companies are supercharging the regime through their work in mainland China. This is because Chinese security laws dictate that any data gathered or stored within its borders must be offered to the Chinese authorities if it is considered a matter of national security. Moreover, the regime’s policy of dual-use, wherein every civilian technology is expected to also serve a military function, means that even the most rudimentary technologies created there could unexpectedly wind up in a military role. One example of this was a touch

Decoupling from China’s Economy ‘Is The Future’: Analyst

U.S. political leadership must work with the private sector to decouple critical technology development from mainland China, according to one expert.

“One of the key vulnerabilities that we’re becoming more and more aware of is the degree to which Wall Street firms and American banks and investment companies continue to see China as this great market or this great investment opportunity,” Arthur Herman, a senior fellow at the Hudson’s Institute, a Washington-based think tank, said in a recent interview with EpochTV’s “Forbidden News” program.

“Decoupling from China is the future and we need to establish timelines by which that is possible. We need to explain that both to private companies like Apple, for example, but also to Wall Street.”

Hawkish lawmakers and strategists have increasingly called for a decoupling from communist China, wherein American economic and research interests would be severed entirely from the nation. Such action, they say, is necessary to prevent the use of American research and finances from fueling the continued exportation of the Chinese Communist Party’s authoritarianism.

Achieving that decoupling would require a great amount of untangling with regard to America’s supply lines, however, and Herman believes that political leadership should immediately begin working with the private sector to make that happen.

“How do we distance ourselves from dependence upon supply chains, manufacturing facilities, and investment in American industry and companies?” Herman asked. “How do we divest ourselves from those kinds of connections, in order to both build our modern high tech arsenal, so that it’s safe and secure and reliable in our hands?”

With that in mind, large American tech corporations and investment firms have continued to invest heavily in china, regardless of the regime’s use of forced labor and its policy of coopting private data for military purposes.

Nevertheless, Herman believes that American corporations will ultimately work for the American benefit if political leadership works to explain the severity of the situation to them.

“They did it because no one said ‘don’t do it,'” Herman said of American investment in China. “So, what we need to do is to change that dialogue into one in which Washington stands up for our national security interest and stands up for our national interests, both for the growth of our economy and also for strengthening our national defense.”

“Then, I think, companies and executives will come around and realize that they have a hugely important role to play in the development of the future arsenal of democracies, and in advancing high tech so it benefits everyone.”

Quantum Technology

That new “arsenal of democracies,” a play on the phrase originating from America’s World War II-era industrial dominance, is a reference to Herman’s belief that the United States needs to lead the Western world in becoming the globe’s preeminent creator of next-generation technologies, such as quantum computing devices.

It is believed that quantum communications, which utilize quantum mechanics to allow secure wireless transmissions across apparently unlimited space, will reshape the nature of telecommunications security.

Whoever guides the emergence of such a technology, will likely also guide the future shape of the international order.

“In quantum computing, the United States still enjoys a lead, I would even say a comfortable lead because we’ve got major companies like IBM and Microsoft and Intel and Google, pursuing that avenue in the development of quantum technology,” Herman said. “And, although the Chinese are sprinting fast to catch up, they just don’t have right now the kind of spread of private initiative and know-how that the United States is able to enjoy in that area.”

“In the area of quantum communications, however, I have to say the United States lags behind and the Chinese have understood the strategic as well as the technological significance of having instantaneous hack proof networks as a way in which to protect data and networks.”

Herman noted that China launched the world’s first quantum communications satellite in 2016, and that its efforts to gain dominance in that field was tied directly to its ambitions for global hegemony.

Continued Partnerships

Still, there is a deeper problem at work, which drives Herman and others to push for decoupling from China’s communist regime. That is the fact that American companies are supercharging the regime through their work in mainland China.

This is because Chinese security laws dictate that any data gathered or stored within its borders must be offered to the Chinese authorities if it is considered a matter of national security. Moreover, the regime’s policy of dual-use, wherein every civilian technology is expected to also serve a military function, means that even the most rudimentary technologies created there could unexpectedly wind up in a military role.

One example of this was a touch screen developed by Google, which was subsequently proposed to be used to improve the targeting screens of Chinese fighter jets.

“What we’ve seen is the unfortunate result of that [corporate] mentality has been that many of our best and brightest technology companies have been very willing to work with China on these technologies,” Herman said.

“We’ve seen [companies] also work with [China] on technology, scientific, and research and development projects, in ways that don’t take into account the degree to which what China wants to achieve with these technologies. And what the United States and these companies themselves want to achieve are two completely different and even contradictory things.”

To that end, Herman said that U.S. political leadership needed to promote a change of consciousness in the American business class, and encourage a proactive understanding of national security in product development.

“The basic principle is that whatever you do, whatever you make, whatever you develop as a commercial company, becomes the property of the Chinese military intelligence services,” Herman said.

“There’s no choice with the Chinese military industrial complex. What you do as a commercial company becomes automatically the property and the technology that the military and intelligence services can use as they not you see fit.”

Therefore, Herman said, if the United States was to succeed in developing a 21st-century arsenal of democracies and lead the West in the development of advanced technologies, it would have to effectively tap into the private sector and integrate it with national security priorities.

Then, Herman hoped, a more free and just international order could be secured.

“The arsenal of democracies for the 21st century, I think, can stand as a landmark event, both in the history of the United States, but also in the history of freedom, and its endless struggle against tyranny and totalitarianism.”


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Andrew Thornebrooke is a reporter for The Epoch Times covering China-related issues with a focus on defense, military affairs, and national security. He holds a master's in military history from Norwich University.


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Gary Bai is a freelance reporter currently based in New York, covering China-related news for The Epoch Times.