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Members of a Chinese military honor guard march during a welcome ceremony for Chairman of the Joint Chiefs of Staff Marine Gen. Peter Pace at the Ministry of Defense in Beijing, China, March 22, 2007. DoD photo by Staff Sgt. D. Myles Cullen. (Released)

China’s Not-So-Secret Weapon Against America: Capitalism

The big tariff confrontation going on between Washington and Beijing, on which the markets are currently so focused, is in the larger scheme of things a sideshow. Over four decades, as China has opened itself to the world, the United States has allowed itself to become the Celestial Empire’s largest trading partner, it having surpassed Canada in 2015 with the exchange of goods well in excess of $600 billion a year.

Economically we are one flesh, divorce impermissible, with an imperious power whose long-term strategy clearly includes being able to win a war versus us. War or not, however, American decline is expected and welcomed by China’s rulers.

To which the oft-heard retort is that the free market will ultimately free the Chinese people. That underlying hope over these many years, however, is taking an awfully long time even to begin to be fulfilled.

In the meantime, the multitude of American businesses that depend on their association with China, especially those that tap into its vast ocean of cheap labor, be it directly or indirectly, will fight tooth and nail to maintain and expand U.S.-Chinese commerce. Boeing, Starbucks, Westinghouse, Apple, Ford – they’re all committed for the long haul, and not interested in withdrawing.

So addicted are American businesses to China, they give in to demands for trade secrets, intellectual property, and even Chinese ownership of parts of their enterprises. Of course, the economic relationship is a two-way street, with Chinese investment the source of at least nine times as many American jobs as a decade ago, employing more than 140,000 as of 2017.

The real matter of concern is not any of the ones so often given attention by the establishment media. Factory work practices in China fall far below American standards, sometimes criminally so, but capitalism, even when it’s undemocratic, beats Great Leaps Forward and Cultural Revolutions. It’s also debatable whether buying American, as admirable as it is, is more humanitarian than helping underpaid Chinese workers stay underpaid rather than unpaid.

What’s more, contrary to popular mythology, the trade deficit does not shrink our economy.

The free market is good for ordinary Chinese people, and good for the American consumers and businesses who benefit from the low prices and costs a Chinese market economy has provided.

The Real Reason China is a Problem for the U.S.

These, though, at the end of the day are irrelevancies; plenty of condemned men have been served wonderful last meals by their executioners. The problem with our profound and irreversible-seeming economic interdependence with China is that the country is an existential military threat that long observance tells us is resistant to democratization.

China is, in fact, becoming less free. Freedom House this year reports: “The ruling Chinese Communist Party (CCP) is tightening its control over the state bureaucracy, the media, online speech, religious groups, universities, businesses, and civil society associations, and it has undermined its own already modest rule-of-law reforms.”

Americans never look at the Chinese premier, well-mannered and always dressed in a subdued business suit, and find themselves reminded of a Kim Jong-un-style cult of personality. Yet this year Freedom House reports: “The CCP leader and state president, Xi Jinping, has consolidated personal power to a degree not seen in China for decades.” In March, “the National People’s Congress amended the country’s constitution to enshrine ‘Xi Jinping Thought’ and remove the two-term limit on the presidency.”

Meanwhile, “Internet censorship and surveillance reached new heights as implementation of the 2017 Cybersecurity Law continued to be rolled out, various new measures restricting online and mobile communications came into effect, and advancements in artificial intelligence and facial recognition technologies were incorporated into the regime’s information control and public surveillance apparatus.”

There are at least a million Chinese being held in “political reeducation” centers, with “torture and other abuse at the camps” recently reported. And there were “arrests and criminal prosecutions of bloggers, activists, and human rights lawyers.”

Internal political change appears impossible, since “all candidates are vetted by the CCP” in elections to the national legislature, while “party organs and the State Council, or cabinet, effectively control lawmaking.”

Even in the freer local elections, “independent candidates for these posts are often kept off the ballot or out of office through intimidation, harassment, fraud, and in some cases detention,” according to Freedom House.

Nixon and Kissinger may have enticed Communist China onto a new path in 1972 that extensively changed Chinese society in many ways, but still, 46 years later, “China’s one-party system rigorously suppresses the development of any organized political opposition, and the CCP has ruled without interruption since . . . 1949. Even within the CCP, Xi Jinping has steadily increased his own power and authority since 2012” and “Xi’s official contributions to party ideology were formally added to the CCP and national constitutions in October 2017 and March 2018, respectively, elevating his status above that of his immediate predecessors.”

Beijing’s Frightening Goal Before 2050

And as freedoms lessen within China, the regime magnifies its military abilities and ambitions. This month, the Pentagon published its annual report to Congress on China’s military. It warns that one of China’s goals is to overtake the U.S. as “the preeminent power in the Indo-Pacific region.” Establishing artificial islands in the South China Sea for use as jet fighter bases is only the most audacious and sensationalist manifestation of seeking that goal.

Far beyond that, from 2020 to 2035 “China sees itself as growing its economic and technological strength ‘by leaps and bounds’ . . . The next stage, 2035 to 2050, is identified as the period during which China will become a prosperous, modern, and strong socialist country with a ‘world-class’ military” — meaning equal, at least, to that of the U.S.

Its means of doing so includes propagandizing “to condition foreign and multilateral political establishments and public opinion to accept China’s narrative surrounding its priorities,” which include expanding military overseas basing “and South China Sea territorial and maritime claims.”

In 2017, for instance, China opened its first overseas military base, in the horn of African nation Djibouti at the southern entrance to the Red Sea, and it will seek to establish additional bases in countries with “similar strategic interests, such as Pakistan,” according to the Pentagon report.

“China’s leaders employ tactics short of armed conflict to pursue China’s strategic objectives through activities calculated to fall below the threshold of provoking armed conflict with the United States, its allies and partners, or others in the Indo-Pacific region,” says the Pentagon, citing Beijing’s “continued militarization in the South China Sea by placing anti-ship cruise missiles and long-range surface-to-air missiles on outposts in the Spratly Islands,” in violation of a Xi pledge in 2015.

China’s People’s Liberation Army is engaged in “the most comprehensive restructure in its history to become a force capable of conducting complex joint operations” and “be capable of fighting and winning . . . regional conflicts defined by real-time, data-networked command and control (C2) and precision strike.”

Beijing acquires advanced military technology through “targeted foreign direct investment, cyber theft, and exploitation of private Chinese nationals’ access to these technologies, as well as harnessing its intelligence services, computer intrusions, and other illicit approaches. In 2018, Chinese efforts to acquire sensitive, dual-use, or military-grade equipment from the United States included dynamic random access memory, aviation technologies, and anti-submarine warfare technologies.”

Since at least 2003 the PLA has employed a “Three Warfares” strategy “of psychological warfare, public opinion warfare, and legal warfare” that includes “influence operations against cultural institutions, media organizations, and the business, academic, and policy communities of the United States, other countries, and international institutions to achieve outcomes favorable to its security and military strategy objectives.”

Disturbingly, a “cornerstone of China’s strategy includes appealing to overseas Chinese citizens or ethnic Chinese citizens of other countries to advance CCP objectives through soft power or, sometimes, coercion and blackmail.”

A China-Russia Axis

Then there is Beijing’s partnering with Moscow against U.S. interests. “China and Russia share a preference for a multi-polar world order and frequently jointly oppose U.S.-sponsored measures at the United Nations Security Council (UNSC).” In a counterpunch against Western sanctions on Moscow, China has increased its investment in the Russian economy.

Among China’s more provocative military exercises was its participation in VOSTOK 2018, in which “approximately 25,000 Russian forces and 3,200 Chinese forces from units based in the Northern Theater Command conducted training at Russia’s Tsugol Training Area.”

Moreover, last year “China’s arms sales increased, continuing a trend that enabled China to become the world’s fastest-growing arms supplier during the past 15 years,” as it made from 2013 to 2017 “more than $25 billion worth of arms sales,” over $10 billion of it to the Middle East, mostly Saudi Arabia, Iraq, and the United Arab Emirates.

At the height of the Cold War in 1987, Toshiba Corporation apologized after it was discovered selling machines for milling propellers to the Soviet Union, which would enable Moscow’s nuclear submarines to run as quietly as their U.S. counterparts, thus making them more difficult for U.S. sonar to detect. Lawmakers held rallies urging a boycott of the large Japanese electronics maker because the Russia it was trading with was a totalitarian enemy of both political and economic freedom.

Whether the coming weeks see the completion of a trade agreement or more trade warfare, there is no doubt Communist China believes capitalists are, once again, selling their enemy the rope with which it will ultimately hang us.


Issues & Insights is a new site formed by the seasoned journalists behind the legendary IBD Editorials page. We’re just getting started, and we’ll be adding new features as time permits. We’re doing this on a voluntary basis because we believe the nation needs the kind of cogent, rational, data-driven, fact-based commentary that we can provide. 

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Thomas McArdle

Tom McArdle @MacArdghail, longtime Senior Writer for Investor's Business Daily, was a White House Speechwriter for President George W. Bush, National Political Reporter for Washington political columnists Rowland Evans and Robert Novak, Managing Editor of Human Events, and has worked as a writer for CNN and the Catholic League for Religious and Civil Rights. His work has appeared in National Review, the American Spectator, The Hill, the Washington Examiner, Newsmax, and the National Catholic Register. He has appeared on Fox News and numerous talk radio programs. He is a graduate of Trinity College, Dublin, M. Stanton Evans' National Journalism Center in Washington, Cardinal Hayes High School in the Bronx, and at 17 was one of Curtis Sliwa's original "Magnificent 13" Guardian Angels.

2 comments

  • Thank you, Tom. When I discovered how much China money influenced Silicon Valley tech firms, the VC process, the Wall Street IPO, I wrote my first novel about it. Then, I discovered how reliant our tech and defense companies are on China for our minerals enabling all the advanced technology, and I wrote its sequel. After that, I co-authored a non-fiction book laying out these issues in detail for the average reason to understand how much the geopolitical issues had become intertwined with America’s economic & military security. Still, there seems to be a denial or at best purposeful ignorance of how China’s leadership through the CCP and its policies is a tyrannical regime. Threats of being called xenophobic or against free trade has added to the fear of harming a company’s value on the stock market, as well as tanking lucrative stock options handed out to all employees. The Chinese people I have met are by and large wonderful, hard-working, and freedom-loving. Yet they, too, must bend to the CCP’s will if they are to be allowed to to travel to China visit family each New Year, a very important cultural tradition. There are many aspects to this “trade deal”, and more of us need to communicate each and every element when and where we can.

    • The odd thing is how Russia and the Soviet bloc Democratied (though not into what it should be in Russia’s case), while mainland China didn’t. And it can’t be cultural because Hong Kong and Taiwan are perfectly democratic. We can thank the State Department for keeping Chang Kai-chek out of power in the 1940s, as Stan Evans chronicled in his book.

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