Combined efforts to stem IP theft will have little long-term effect unless they are married with measures to prohibit or to take back the PRC’s ownership of key U.S. and allied businesses, which may have been facilitated using proxies or front companies. The Committee on Foreign Investment in the United States (CFIUS), a senior multiagency group chaired by the secretary of the treasury, is charged with the responsibility to determine if the security implications of foreign investments disqualify pending mergers or acquisitions of American companies or their operations.
The Exon–Florio Amendment (50 U.S.C. app 2170) was signed into law by President Reagan and grants the president the authority to block any investment or acquisition if a “foreign interest exercising control might take action that threatens to impair the national security.” CFIUS was designated by President Reagan as the bureaucratic mechanism that serves this decision process. Unlike the processes employed by many other countries, CFIUS is not directly chartered to review business transactions that threaten harm to the American economy or to its workers, though there has been movement in this sphere.
President Trump signed the Foreign Investment Risk Review Modernization Act (FIRRMA) into law in 2018. FIRRMA essentially enlarged the scope of CFIUS to include consideration of a transaction’s impact on U.S. manufacturing, competitiveness, and the protection of transformative technologies. The transactions now assessed include not only acquisitions, but licenses, sales, real estate, minority holdings, and stakes in venture capital or private equity funds. The expanded compass of CFIUS is critical, but more must be done.
To chart an enhanced course for CFIUS, the world’s nations should be categorized into five tiers. Kept classified, these groupings would comprise Allied, Friendly, Non-Aligned, Adversarial, and Belligerent nations. The latter two categories should be preclusive, in most circumstances, of ownership or of significant minority positions in U.S. enterprises. Present circumstances argue for a determination that the PRC is, indeed, an adversarial state.
One of our first actions in this sphere must be the prohibition, in the United States and across the world, of the deployment of Huawei’s 5G networks, systems, phones, and devices. It should be considered obvious that tools for espionage, industrial and otherwise, can be implanted in these systems and apparatuses.
Depending on the final U.S. Government verdict on Chinese responsibility for the spread of the virus, America might demand reparations; if so, such reparations should be scaled not as a function of the ravages of the disease, but as a function of the Communist Party of China’s duplicity in their presentation of the facts concerning the genesis of the disease, its evolution, its spread, and the party’s alleged acts to hoard personal protective equipment and to limit travel within China from Wuhan, while promoting international travel from that city and from its province, Hubei.
If reparations are sought, only those individuals and entities directly affected by the virus’s spread should be compensated. A precedent must not be set for reparations to be determined by a disease’s initial point of origin, for viruses do occur naturally and this process can only sometimes be controlled or mitigated. Instead, the demanding of compensation or the support of private lawsuits must be derivative of complex, preferably multinational, assessments of state malfeasance or criminality.
America’s actions in this regard must not be framed in such a manner that may call into disputation the Public Debt Clause section of the Fourteenth Amendment, which states: “The validity of the public debt of the United States, authorized by law . . . shall not be questioned.” To do so would cause irreparable harm to the global financial system. It would also initiate reprisals by China that would destabilize world markets and economies.
-Entrench principles and restrictions so that China can buy no more of our corporations, universities, or national assets.
- Strengthen CFIUS; create a new system for ranking nations, which will, in practice, exclude adversarial and belligerent states from amassing businesses or assets in our economy.
- Prohibit, where possible, Huawei’s planned deployment of their 5G networks.
- Permit the pursuit of reparations or private lawsuits against the PRC, if evidence is accrued, only if such actions are consonant with U.S. national objectives and are derivative of state malfeasance or criminality.
Elaboration of new American measures to counteract China’s coronavirus subterfuge, which is the costliest catastrophe in history aside from open warfare, should be structured to prevent a parallel event from occurring in the future. The key to such ability is the requirement for open, international inspections of biological laboratories in the same manner and with the same diligence as is required in the inspection of nuclear facilities.
A new, multinational initiative must integrate security and intelligence components to create a biological threat-response capability equivalent to that of our Nuclear Emergency Support Team (NEST), whose mission is to be "prepared to respond immediately to any type of radiological accident or incident anywhere in the world." This task will be complex and extremely difficult because biological inspections will require foresight and mastery over a far larger domain of possible agents than those involved in nuclear inspections and response capabilities. A multinational approach is indispensable, given the scope of this challenge.
Associated with this facility must be the creation of B Teams, of the type employed to assess Soviet strategic-force capabilities during the height of the Cold War. The function of such teams would be to provide a competitive and divergent view to that generated by a particular bureaucracy charged with making such assessments. This friction, caused by competing appraisals, forces all investigators to hone their analyses, providing the decision-maker with a far more comprehensive and robust assessment of capabilities and threats than that which could be generated by a single source.
Just as we have created gradated codewords that are used by the government to classify nuclear accidents and events, the United States and its allies need to craft a common vocabulary for biological incidents. These designative terms should mirror those in use as nuclear-incident descriptors (Broken Arrow is the most commonly known term of this type: it refers to a nuclear-related event in which escalation is not at risk). The ordering and the use of these new terms within government will allow greatly enhanced and task-specific response times to biological emergencies.
These difficult initiatives must rest on an unprecedented diplomatic offensive. The United States must make common cause with its traditional allies to confront and to contain China. Further, developing nations must be included, for they have seen their assets appropriated by a communist state that foregoes no opportunity to exploit corrupt officials who sell out their own countries.
Importantly, Islamic nations must form a barrier opposed to Chinese expansionism because of both the PRC’s rapaciousness and its doctrine. In addition, only an assembly of Islamic nations can press successfully for humane treatment for the 25 million Uyghur Muslims as well as other oppressed Muslim communities within China. The demand for a complete end to China’s reeducation camps must become a hallmark of American, allied, and Islamic efforts to end this atrocious abuse, which does not even leave the dead in peace, for it is the practice of the Communist Party of China to destroy Muslim cemeteries in Xinjiang, home to China’s Uyghurs.
Australia has demonstrated resolve in its efforts to hold China to account. Its position astride crucial sea lines of communication is of immense military value. Therefore, the strategic Port of Darwin, which was leased for 99 years in October 2015 by the Landbridge Group, which is based in China, must come under total Australian control, with the existing lease terminated.
Enhanced relations with Indonesia, the world’s fourth most populous country, must be pursued with vigor. Malaysia is also of great importance as are our traditional bilateral alliances with Japan and with the Republic of Korea.
Perhaps the most vital diplomatic action that may be taken would be the creation of a steadfast alliance between India and America. India’s and China’s respective populations are almost the same. India ranks third in the world in GDP (PPP) and will occupy at least this place for the foreseeable future. Fundamentally, America must move to a much closer relationship with India, which is democratic and is the product of many traditions, including its shared heritage with the United States of having once been part of the British Empire and thus enshrining both common customs and the English language.
Another component of this enhanced relationship could be greater coordination with the 54-member-state Commonwealth of Nations. India became the first Commonwealth republic in 1950 on the day its constitution came into force. This association comprises 20% of the world’s land and is a natural alternative for mutual development that may be substituted for China’s BRI. Many avenues for growth are present in these relationships.
If not returned to the United States, any manufacturing now done in China, for or by American companies, can be better accomplished in India, for it is the world’s largest democracy, and as such offers a degree of openness that the PRC will never match. Military cooperation between the U.S. and China should largely cease (except for crisis de-escalation exercises); equivalent exchanges and exercises with India should be substituted.