China and Economic Security in the Shadow of Ukraine

China and Economic Security in the Shadow of Ukraine

We must act without delay, for Beijing is an aggressor of similar malevolence to that which Ronald Reagan vanquished, but of greater might across the spectrum of power.

 

As with an emergent disease, there are warnings today concerning the primary basis for civilization, which involves economic relations between nations. Nowhere are these warnings more pronounced than in the actions perpetrated by the People’s Republic of China.

Economic life is a central concern of every state, for the subject of economics touches everything. Abundance and deprivation, resources and inputs, exchanges between parties, and processes wherein decisions are made all constitute parts of this vast topic, which begins with economic security—for, without it, freedom is forfeit. Since World War II, America’s economic might has lifted the better part of humanity out of dire poverty. We have done so by sharing our technology, by opening our markets, and by providing a standard for global development, which is based upon the example of our nation’s working men and women.

 

In my address at the Nixon Library on July 23, 2020, I discussed the massive imbalances, built up over decades, in our relations with China. I said we must “engage and empower the Chinese people— a dynamic, freedom-loving people who are completely distinct from the Chinese Communist Party.” During my tenure as Secretary of State, America’s conduct of foreign policy was based upon four principles: the dignity of the individual, fairness, absolute candor, and reciprocity.

The pandemic that began in China and Russia’s invasion of its neighbor have shattered the prism through which the United States must see the world, including our global economic relations. We have no option but to face new geostrategic realities that cannot be shirked, lest we face intractable conditions in the years to come. Therefore, we must comprehend that American weakness in the face of aggression will only beget further assaults against our country, our allies, and our friends.

Freedom and the Present Crisis

Freedom is crushed if virtue is not prized. Virtue is the prerequisite for freedom, for it provides the boundary that enables its exercise without unduly limiting or infringing on the rights of others, thus safeguarding the exercise of freedom in its totality.

Liberty is freedom from molestation by an obdurate government or authority. Liberty, as promised in our Declaration of Independence, is thus only possible if limited government is practiced and not enlarged, for expansive government, through its sundry actions, subverts individual agency and choice, ultimately destroying liberty.

The world is blistered by the war in Ukraine. Substantial portions of that country lie in ruin, the world economy is fractured, and supplies of cereals, fertilizers, and key industrial inputs such as neon have been obliterated. Russia has attempted to destroy Ukraine as a nation and as a people to mask its criminal regime, which has betrayed a nation so that a selfish elite might steal from everyone else.

This is a global disaster that could have been averted if America and our allies had acted in 2008, when Vladimir Putin invaded Georgia, or in 2014, when he invaded Ukraine. We dare not repeat the same mistakes with China, for it, unlike Russia, is a near-peer competitor to the United States. We, therefore, must rigorously challenge China where we must, while seeking opportunities to work with it where we can.

Failures within Russia have motivated Putin’s unrealized geopolitical objectives, which include seizing control of the immense energy resources in the Donbas, confronting NATO by creating a border that stretches from the Baltic Sea to the Carpathian Mountains, and disrupting Western economies. Russia, however, is not the People’s Republic of China. The challenge China poses is far greater, for it contests our nation in geostrategic reach, in economic power, and in technological advancement.

Moscow’s objectives in Ukraine are mirrored by Beijing in the Indo-Pacific. They hinge on the perception that America and its allies are dominated by political discord. Our past inaction in the face of Russia’s assaultive acts, combined with Western energy dependencies, created a tinderbox that exploded this year.

This series of mistakes, which failed to repulse a revanchist state, must never be replicated. China strives to make the West reliant on resources, on products, and on supply chains that it controls. Through this strategy, and its economic and military might, China seeks to seize territories, to create an empire of unmatched power. This augurs for America’s decline if China’s plans are not aggressively countered.

China has sickened the world through its treachery in hiding the origin of SARS-CoV-2, thereby permitting its worldwide transference. Its actions in Central Asia, in Xinjiang, in the South China Sea, and on its contested borders with India were prologue to what it has done to Hong Kong and what it seeks to do to Taiwan. China must not be permitted to supplant the United States as the world’s preeminent power, for if it does, freedom will be in jeopardy everywhere.

Our Nation’s Course

As Director of the Central Intelligence Agency, I began the recalibration of the intelligence community to focus on the time-urgent acquisition of information relating to Beijing’s use of hard, soft, and sharp power. In the wake of China’s recent actions, we must increase our surveillance and proliferate the results of our inquiries throughout our government, our businesses, and our institutions.

Hard power essentially uses force and coercive tools, which may be economic, to obtain policy objectives. Soft power, in contradistinction, involves cooption in the pursuit of shared ends. This had been a sphere of uncontested American supremacy, but such supremacy has now evaporated. China has penetrated Wall Street, our universities, our businesses, and our media, to devastating effect.

As can be seen in the NBA’s obsequiousness, Hollywood’s obedience, and hedge funds’ deference, the Communist Party of China has not only thwarted American soft power, it now exercises a degree of control over our institutions through sharp power, which is the imposition of “or else” tactics and stratagems. This form of intimidation lies between hard and soft power, and China is its master.

It is glaring that some still doubt Beijing’s earnestness concerning its stated aim to displace the United States as the world’s preeminent power. Such indolent myopia is contradicted by China’s rampage against the international economic order.

The pandemic that issues from China’s mendacity has sickened the globe, causing the deaths of millions. At the height of the global catastrophe it created, the Chinese Communist Party did not moderate its odious objectives; it accelerated them. With utter disregard for its commitments to the United Kingdom and to the people of Hong Kong, China broke the Sino-British Joint Declaration.

This declaration constituted a treaty, granting Hong Kong a high degree of autonomy; China was obligated to maintain Hong Kong’s market economy and its freedoms until 2047. It did not. Given China’s actions in matters concerning world health, biosafety, and Hong Kong, we must ask: On what important document is China’s signature meaningful?

As a nation, and on a bipartisan basis that persists over multiple administrations, we must compile the policy tools, laws, regulations, and customs that can be employed to block China’s usurpation of our institutions. Our intelligence community must be continuously tasked to investigate the illicit practices that China employs. American companies or institutions that submit to Beijing’s direction must be sanctioned and be excluded from participation in any governmental contract, grant, or activity.

Our government and our institutions must work together to ensure that America’s economy is not subject to China’s control of key sectors or bodies. This requires that all important elements of our nation’s relationship with this belligerent state be under constant examination.

America should not try to decouple itself completely from China’s economy, for this would be impossible given its size and the myriad of relationships between Chinese and American businesses. Active reciprocity in our relations with China should be our standard. This principle may be defined as awareness, comprehension, and action.

Countervailing actions are only possible if all Americans are vested with awareness, which is the result of scrutiny. Relations with China, of whatever nature, must not be allowed to place us in a dependent status. Neither should we divorce ourselves from China, for to do so would limit what suasion and leverage we have in facilitating needed change.

Once a state’s power is absolute, it is absolute until it is broken. Perhaps the most consequential crime of communism is that it cannot even live up to its philosophy of dialectical materialism, for communism allows no meaningful conversation. We must act decisively in contesting China’s tyranny, for a dictatorial state is bound to see international economic matters as the province of force, for to do otherwise would be to lose its grip on power.

By resolutely engaging with China and by potently unseating the dictates, plans, and parlays effected by its communist party, America gains footholds that may one day yield China’s transition to become a modern, democratic state. America owes the great people of China, who are the direct victims of communist rule, this opportunity, for our nation was founded in freedom, and this is a gift that must be shared.

Economic Warfare

We must not allow the communist model for development to proliferate, for it is a kleptocracy. It is rule by thieves as is demonstrated by the magnitude of China’s theft of intellectual property.