On China, It Isn’t Just the Economy, Stupid

CommentaryFor many years, a great many very smart people in America believed that capitalism was slowly but surely bringing freedom to communist China, that the Beijing regime at some point in the not-very-distant future will cease being the enemy of the free world, and our national security policies today should reflect that welcome long-term development. Ten years ago, a couple of analysts went so far as to say that the Chinese Communist Party (CCP) “has distanced itself from radical ideology; it is no longer communist except in name,” adding that “in recent years, the internet has increasingly empowered the Chinese to exercise their political voice.” In recent days, however, there were two additions to the mountain of evidence that these smart people were not as smart as they thought. The first was more than half of House Democrats in the new Congress voting with Republicans to pass legislation to stop President Joe Biden from selling any more oil from the nation’s emergency Strategic Petroleum Reserve to China or Chinese companies. It was a bipartisan acknowledgment that economics has long been part of the CCP’s global strategy to upend the United States as the world’s lone superpower. Since 2015, Beijing has lavished 10 industrial sectors within China with state cash in pursuit of global dominance, including artificial intelligence, aerospace, biotech, robotics, transportation, solar cells, and software/information technology. Chinese companies are investing in microchip firms all over the world. And since at least the late 1990s, China has been seeking to end the dominance of the U.S. dollar as the global trading currency and cultivate a commodities trading system that relies on the yuan. Indeed Russia, Iran, Venezuela, and other oil suppliers now accept the yuan in their transactions with China, which imports more oil and liquefied natural gas than any other country in the world. Less than two years ago, yuan-valued oil futures, spanning 23 countries and regions, exceeded 44 trillion yuan, or $6.7 trillion. This will help China become sanction-proof—very handy in the event of an invasion of Taiwan or some other outright military aggression that attracts outrage from Western powers who up to now have been tolerant of Beijing’s misbehavior. China’s $1 trillion-plus Belt and Road Initiative (BRI) entices third-world nations into debt for dubious projects like “a high-speed rail line in Laos that will cost equivalent to half the country’s GDP.” In Ethiopia on Wednesday, Chinese foreign minister Qin Gang got testy when addressing the matter of saddling Africa with debt, calling the charge merely a “narrative trap.” But recent revelations regarding the Chinese-funded multibillion-dollar Mombasa-to-Nairobi rail project in Kenya show that, among other corrupt stipulations, the loan involved requires that disputes be arbitrated only in Beijing without any right to appeal and that the contract is governed completely by communist China’s laws. The military dimension is clear; for instance, after convincing Sri Lanka to borrow from Chinese banks to fund new infrastructure at its Hambantota port, the island nation found itself in default when the project turned out to be a commercial flop. Beijing ended up with control of an invaluable naval asset, close to its adversary, India. The second development quashing whatever remaining bullishness there is among observers regarding mainland China is the FBI raid last fall of what is fantastically being referred to as a “Chinese police station” in Manhattan’s Chinatown. It’s just one of more than 100 “overseas service stations” operating illegally in the United States and dozens of other countries in which law enforcement personnel of various Chinese provinces conduct activities apparently ranging from renewing Chinese driver’s licenses to harassing anti-regime dissidents living in America. Last year, federal prosecutors charged more than a dozen U.S. residents with crimes related to such activities at the behest of the Beijing regime. Former Republican House speaker Newt Gingrich told The Hill in 2019 of allowing China into the World Trade Organization (WTO).“We thought getting them into a rules-based system would gradually permeate their culture and that’d be a big step in the right direction… That was all wrong … The Chinese, in fact, decided to corrupt the WTO rather than be changed by it.” Four months into Bill Clinton’s presidency, in 1993, making a point of noting the “tireless dedication to the cause of freedom in China” of future House Speaker Nancy Pelosi nearly a decade before she became a member of the House Democratic leadership, he made the case for most favored nation status for mainland China. “The residents of Shanghai and Guangzhou are far more motivated by markets than by Marx or Mao,” Clinton declared, adding that “we are hopeful that China’s process of development and economic reform will be accompanied by greater political freedom. In som

On China, It Isn’t Just the Economy, Stupid

Commentary

For many years, a great many very smart people in America believed that capitalism was slowly but surely bringing freedom to communist China, that the Beijing regime at some point in the not-very-distant future will cease being the enemy of the free world, and our national security policies today should reflect that welcome long-term development.

Ten years ago, a couple of analysts went so far as to say that the Chinese Communist Party (CCP) “has distanced itself from radical ideology; it is no longer communist except in name,” adding that “in recent years, the internet has increasingly empowered the Chinese to exercise their political voice.”

In recent days, however, there were two additions to the mountain of evidence that these smart people were not as smart as they thought. The first was more than half of House Democrats in the new Congress voting with Republicans to pass legislation to stop President Joe Biden from selling any more oil from the nation’s emergency Strategic Petroleum Reserve to China or Chinese companies.

It was a bipartisan acknowledgment that economics has long been part of the CCP’s global strategy to upend the United States as the world’s lone superpower.

Since 2015, Beijing has lavished 10 industrial sectors within China with state cash in pursuit of global dominance, including artificial intelligence, aerospace, biotech, robotics, transportation, solar cells, and software/information technology. Chinese companies are investing in microchip firms all over the world.

And since at least the late 1990s, China has been seeking to end the dominance of the U.S. dollar as the global trading currency and cultivate a commodities trading system that relies on the yuan. Indeed Russia, Iran, Venezuela, and other oil suppliers now accept the yuan in their transactions with China, which imports more oil and liquefied natural gas than any other country in the world. Less than two years ago, yuan-valued oil futures, spanning 23 countries and regions, exceeded 44 trillion yuan, or $6.7 trillion. This will help China become sanction-proof—very handy in the event of an invasion of Taiwan or some other outright military aggression that attracts outrage from Western powers who up to now have been tolerant of Beijing’s misbehavior.

China’s $1 trillion-plus Belt and Road Initiative (BRI) entices third-world nations into debt for dubious projects like “a high-speed rail line in Laos that will cost equivalent to half the country’s GDP.” In Ethiopia on Wednesday, Chinese foreign minister Qin Gang got testy when addressing the matter of saddling Africa with debt, calling the charge merely a “narrative trap.”

But recent revelations regarding the Chinese-funded multibillion-dollar Mombasa-to-Nairobi rail project in Kenya show that, among other corrupt stipulations, the loan involved requires that disputes be arbitrated only in Beijing without any right to appeal and that the contract is governed completely by communist China’s laws.

The military dimension is clear; for instance, after convincing Sri Lanka to borrow from Chinese banks to fund new infrastructure at its Hambantota port, the island nation found itself in default when the project turned out to be a commercial flop. Beijing ended up with control of an invaluable naval asset, close to its adversary, India.

The second development quashing whatever remaining bullishness there is among observers regarding mainland China is the FBI raid last fall of what is fantastically being referred to as a “Chinese police station” in Manhattan’s Chinatown. It’s just one of more than 100 “overseas service stations” operating illegally in the United States and dozens of other countries in which law enforcement personnel of various Chinese provinces conduct activities apparently ranging from renewing Chinese driver’s licenses to harassing anti-regime dissidents living in America. Last year, federal prosecutors charged more than a dozen U.S. residents with crimes related to such activities at the behest of the Beijing regime.

Former Republican House speaker Newt Gingrich told The Hill in 2019 of allowing China into the World Trade Organization (WTO).“We thought getting them into a rules-based system would gradually permeate their culture and that’d be a big step in the right direction… That was all wrong … The Chinese, in fact, decided to corrupt the WTO rather than be changed by it.”

Four months into Bill Clinton’s presidency, in 1993, making a point of noting the “tireless dedication to the cause of freedom in China” of future House Speaker Nancy Pelosi nearly a decade before she became a member of the House Democratic leadership, he made the case for most favored nation status for mainland China. “The residents of Shanghai and Guangzhou are far more motivated by markets than by Marx or Mao,” Clinton declared, adding that “we are hopeful that China’s process of development and economic reform will be accompanied by greater political freedom. In some ways, this process has begun. An emerging Chinese middle class points the antennae of new televisions toward Hong Kong to pick up broadcasts of CNN. Cellular phones and fax machines carry implicit notions of freer communications.”

It’s worth remembering that not everyone opining on China from a conservative or libertarian perspective over the past decades were drunk with wishful thinking about the transformational power of markets and cable TV to turn the post-Mao mainland into Hong Kong. Erstwhile investigative reporter, ex-Michigan state representative, and for well over two decades the executive director of the Arkansas Policy Foundation, Greg Kaza’s knowledge of modern Chinese history kept him consistently skeptical of the effectiveness of economic engagement to turn Beijing into a friend. And he was prophetically warning over a decade ago of China’s determination to replace the dollar with the yuan, after earlier sponsoring a state house resolution urging Congress not to regularize China’s international trade status.

The sustained prosperity of South Korea hasn’t been able to budge North Korea an inch from its totalitarian oppression of its own people. It may make no sense to a Westerner for Chinese premier Xi Jinping to see Hong Kong, Taiwan, and Japan and not recognize the advantages of liberty for his people. But it was Rudyard Kipling, recognizing such arrogance, who warned in his short story “The Man Who Was”: “Asia is not going to be civilized after the methods of the West. There is too much Asia and she is too old.”

Xi also no doubt remembers that his predecessor, the founder of the state over which Xi now has full, apparently permanent control, Mao Zedong, said in 1927, “Political power grows out of the barrel of a gun.”

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

Thomas McArdle was a White House speechwriter for President George W. Bush and writes for IssuesInsights.com