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The China Rethink

China prospered while buying off greedy American elites. Now that alarm bells are ringing in Washington, who will answer the call?

Lee Smith
April 27, 2020
Thomas Peter-Pool/Getty Images
Donald Trump at the Great Hall of the People, Beijing, Nov. 9, 2017Thomas Peter-Pool/Getty Images

The novel coronavirus that swept out of the Chinese city of Wuhan in midwinter to infect millions around the globe has now forced world leaders to reassess their relationship with the People’s Republic of China (PRC). The superpower conflict between the United States and Soviet Union helped push China onto center stage nearly 50 years ago. Over the past three decades, Beijing has come to dominate the international system, thanks not only to the world’s largest pool of cheap, unregulated labor and a burgeoning consumer marketplace, but also the craven delusions and greed of Western political and business elites, especially in the United States. COVID-19 has now compelled the most significant geostrategic rethink since the end of the Cold War.

Donald Trump was elected president of the United States in 2016 in part because large sections of the American public, especially in former industrial states, believed that Trump was the only candidate willing to protect them from the devastation wrought on the U.S. economy and social fabric by the Chinese Communist Party (CCP) and their partners in Congress. “China is not our friend,” Trump tweeted in 2013. “They are not our ally. They want to overtake us, and if we don’t get smart and tough soon, they will.”

Trump promised he’d take American manufacturing jobs back from China. He said he’d be tough with the Chinese on trade, and as president he imposed tariffs that brought Beijing to the negotiating table. In mid-January, as PRC officials were in Washington signing phase one of the deal, Beijing was lying about the nature of the coronavirus, saying there was no evidence of human-to-human transmission. There was. Perhaps as many as 5 million Wuhan residents left the city after the virus erupted and before the Jan. 23 quarantine. China’s mendacity prevented cautionary measures that might have been taken earlier to prevent the respiratory disease from spreading to the four corners of the world. Worse, according to historian Niall Ferguson, China had closed down domestic flights from Hubei province, of which Wuhan is the capital, but continued to let international flights leave the country—including to the United States.

The communists defended themselves while channeling death into the rest of the world—a catastrophe that they appear to have deliberately compounded, according to The New York Times, through sophisticated information warfare whose aim was to cause public chaos and panic in the United States.

The consequences of the plague alone, never mind the possible intentions of CCP leadership, show that Americans are right to wonder whether COVID-19 might possibly be a bioweapon rather than a viral mutation that jumped species in a wet market in Wuhan. The U.S. intelligence community is now reportedly investigating the possibility it may have escaped, accidentally, from a virology lab in Wuhan.

Whatever the origins of the virus, there is no question that the Chinese have leveraged it as a weapon of social and economic warfare. Could the ruins of a shooting war be much worse than those of a virus that, as of this week, has left more than 50,000 Americans dead and nearly one-tenth of the population unemployed, turning the businesses, life savings, and dreams of our neighbors to ashes?

But no one in Washington wants to call it war—and for good reason. The massive amount of wealth that America’s political and business elites have transferred to the CCP over the past 30 years has put the United States under China’s thumb. Our manufacturing base, as well as our debt, is controlled by the CCP. The United States, senior U.S. officials say, would likely lose in any major confrontation, financial or military, with China. Even the medicines we would need to treat our wounded are in Beijing’s hands.

According to a recent poll, more than three-quarters of Americans, including two-thirds of registered Democrats, blame China for the pandemic. Asked how he intends to deal with the PRC once the crisis subsides, President Trump has said he anticipates that the Chinese will honor the trade deal and buy $250 billion in goods as stipulated.

And if they don’t? Trump’s interactions with CCP media operatives at White House press briefings suggest his patience with Beijing has worn thin.

A cursory glance at history shows that pandemics accelerate events. The plague in 431 BCE hastened, for instance, the end of Athenian democracy. It was only a short time ago that America’s reliance on Chinese manufacturing was a stubborn fact of American life. And according to America’s political and business establishments, those jobs weren’t ever coming back to the United States, no matter what Trump said on the campaign trail. Now, things look different.

Given Japan’s long history with China, it’s not surprising that Tokyo was among the first to react, pledging $2.2 billion to its domestic manufacturers to get them out of China—Japan’s biggest trade partner. German Chancellor Angela Merkel, not known for populist rhetoric or extremism, has suggested that China has not been transparent about the virus, while Sweden, of all places, has shut down all Chinese government-sponsored schools and teacher exchange programs.

So what will the United States do? “This question will consume U.S. policy—foreign, domestic and economic—for the next decade,” says Wisconsin Congressman Mike Gallagher. “How do we responsibly decouple strategic sectors of our economy from China, while working with our allies to keep the free world united in the face of this totalitarian adversary?”

Gallagher is taking aim at the pharmaceutical sector, and how to put the supply of medicines vital to American citizens back in American hands. Last month Gallagher and Arkansas Sen. Tom Cotton introduced legislation calling to end U.S. dependence on China for pharmaceutical manufacturing and incentivize American entrepreneurs to make pharmaceuticals at home.

“It’s time,” says Cotton. “Most Americans are amazed to learn we are dependent on our main enemy for things like penicillin. We shouldn’t send all this critical stuff to China—a country that plainly has hopes to become our chief geopolitical rival.”

Both Cotton and Gallagher note that the PRC has become even more dangerous to American interests since Xi Jinping took power in 2012. “Xi’s anti-corruption campaign amounted to a crackdown on his political adversaries,” says Cotton. “He has more power than any Chinese leader since Mao.”

By almost any measure, Cotton is the most outspoken China hawk on the Hill. He explains how the China optimists and accommodationists who have dominated the American foreign policy debate since the end of the Cold War got it wrong. “It was clear about 15 years ago that capitalism would not change China,” says Cotton. “In fact, China was changing capitalism. Giving them permanent most-favored-nation status for trade in 2000 did not slow down their transgressions. It may have accelerated it. The experiment failed.”

In the first week of April, Cotton and Texas Congressman Dan Crenshaw introduced another China-related bill, which “would allow Americans to sue China in federal court to recover damages for death, injury, and economic harm caused by the Wuhan Virus.” Then on Wednesday, Cotton introduced the Forging Operational Resistance to Chinese Expansion (FORCE) Act—a $43 billion investment for military infrastructure, weapons, and other assets designed to counter the CCP in the Indo-Pacific region

Cotton’s Senate colleague Josh Hawley from Missouri has introduced similar legislation—the Justice for Victims of COVID-19 Act, while Texas Sen. Ted Cruz has drafted a bill calling to sanction CCP officials responsible for censoring doctors, medical experts, political dissidents, and journalists who “deliberately silenced those who tried to sound the alarm and provide the world with medical information.” Yet all of these congressional efforts come from the Republican side of the aisle.

There are Democratic senators who traditionally have a good record on warning about U.S. ties with the Communist Party, including Sens. Ron Wyden, Sherrod Brown, and Chuck Schumer, who in May urged Trump to stay tough on trade. “Strength is the only way to win with China,” he tweeted. Yet Democrats who wanted to join their GOP colleagues in calling out the CCP withdrew after members of the party—the Democratic Party, that is—reportedly warned that even stating facts by identifying where COVID-19 originated “would fuel anti-Asian racism in the U.S.”

Defending the United States against Chinese assaults on our economic and social fabric wasn’t always a partisan issue. During the 1988 election cycle, Missouri Democratic Congressman Richard Gephardt championed a message of economic nationalism quite similar to Trump’s message in 2016. The Democratic presidential candidate said that the American worker was hurting from foreign competition that was rigged against them by their own political and business class. Gephardt described the ruling class in much the same way Trump would come to define the “swamp.” The establishment, said Gephardt, was “a loose term for academics, editorial writers, and some who have a vested economic interest in not changing some of these problems, who believe you have to accommodate decline.”

In his efforts to defend the American worker from bad deals with Japan and South Korea, Gephardt was accused of every thoughtcrime conceivable in the new open-borders America—protectionism, xenophobia, and of course racism. When China became the central trade issue a decade later, he must have figured he was safer tacking to the language of human rights—that is, the human rights of foreign nationals.

“Human rights must be at the very core of our foreign and international economic policies,” Gephardt said in 1997, arguing to revoke China’s most-favored-nation trade status. “It is time for a new policy of firm engagement that finally advances our national interests and ideals.” He noted that the trade deficit with China had ballooned to nearly $40 billion, clear evidence that Clinton’s policy had failed American workers. “We can’t compete with slave labor,” said Gephardt, referring to China’s use of prisoners in the manufacturing sector. And he called China’s political system “free-market Stalinism.”

Gephardt’s description was apt, but it contained what proved to be a decisive political flaw. Tying the U.S.-China relationship to China’s human rights record, rather than to America’s own national self-interest, downplayed the likely impact that aligning with a hostile totalitarian regime might have on Americans. What would happen, for instance, if American industry handed off much of its manufacturing base to Stalinists? Obviously, it would impoverish American workers. What if, say, a pandemic erupted, and U.S. officials found themselves at the mercy of hostile officials who withheld vital goods like medical equipment or pharmaceuticals? The ensuing panic alone might cripple the entire country for weeks or even months. Few asked those questions at the time—and few have asked them since, until the beginning of March 2020, when American business and society were placed under lockdown.

Much like Bernie Sanders, mainstream political analysts marvel at the PRC’s success the past several decades in pulling hundreds of millions of people out of poverty. But what is truly remarkable is that virtually no one seemed to observe that the improved conditions of China’s peasantry coincided with the steady impoverishment of the American working class. When Trump made China a centerpiece of his 2016 campaign, President Barack Obama mocked him for what then seemed like hollow promises to take back America’s manufacturing sector. “Well, what, how exactly are you going to negotiate that?” asked Obama. “What magic wand do you have?”

Because according to Obama and Biden, there was nothing to be done about it and no use worrying about it—which is an attitude that people take toward problems that they see as affecting other people and not them. Besides, in the prevailing view, America wasn’t competing with China. Instead, we were integrating our economy with theirs in order to draw Beijing into the liberal international system and moderate its behavior. Entertaining that dream for decades, American policymakers slept while China actively destroyed the U.S. economy and undermined the country’s national security.

Chinese President Xi Jinping shakes hands with U.S Vice President Joe Biden inside the Great Hall of the People on Dec. 4, 2013, in Beijing
Chinese President Xi Jinping shakes hands with U.S Vice President Joe Biden inside the Great Hall of the People on Dec. 4, 2013, in BeijingLintao Zhang/Getty Images

As an example of the dangers of mixing China policy with doing business with the CCP, Trump often points at Joe Biden, the presumptive Democratic challenger. As vice president, Biden gave his son Hunter a seat on Air Force Two while on an official trip to Beijing in 2013. The younger Biden introduced his Chinese business partner to America’s No. 2 official. He also acquired a director’s seat and eventually became a shareholder in a multibillion dollar private equity firm that was 80% controlled by Chinese parties. According to the Financial Times, the state-run Bank of China International Holdings was one of the biggest stakeholders in the firm.

Yet as unseemly as it was for the vice president to let his son trade on his father’s high government position, there’s no evidence that Hunter Biden made a dime on his dealings with China. It appears that like virtually every other American, the younger Biden wound up on the losing end of an arrangement that U.S. officials like his father had promoted.

In October 2017, Hunter Biden paid roughly $425,000 for a 10% stake in BHR Partners, but resigned two years later to avoid bringing undue scrutiny to his father’s presidential campaign. As a Chinese private equity executive told the government-friendly South China Morning Post, BHR, the company that Hunter Biden was promoting, is “little known within the industry.” It also appears BHR didn’t come close to its $1.5 billion funding target. A fund it started in May 2018 raised a little more than $11.2 million that was used to finance the restructuring of a cheesemaker.

In other words, it seems that a Chinese firm controlled by Chinese state interests sought to use the name of the son of the American vice president to advance its business interests—but Hunter Biden said last July that he hadn’t been paid by the company, and his lawyer said his client had earned no money at the time from his investment. Hunter Biden’s China experience would therefore appear to be a microcosm of a larger American experience. Even after the Obama White House realized that the Communist Party was not liberalizing but rather digging in for conflict with America, Hunter Biden hung his hopes on China—and became just another sucker.

The Chinese are unlikely to let go of their influence over the U.S. economy and political system without a fight. They’ve got a stake in everything from finance to education, and they are assisted by complicit American partners whose economic interests are now tied to China. For instance, in February, a Department of Education investigation found that between 2012 and 2018, Hanban, a propaganda arm of the Chinese government, “contributed $113,428,509 to U.S. schools—more than seven times the amount U.S. schools actually reported.”

As the Trump administration has begun targeting Chinese state-controlled telecoms like Huawei and ZTE to protect American intellectual property, Chinese companies have increased their profile, hiring big names like former U.S. Sens. Joe Lieberman and Norm Coleman, and former Obama administration director of cybersecurity Samir Jain. Chinese telecoms also increased their lobbying budgets inside the Beltway.

But for the Chinese, lobbying is just fireworks. The real game is elsewhere. The CCP understood from the outset that Washington’s plan was to use business to drive China into the liberal international system, in part because the Americans were quite open about it. For decades they appeared at conferences alongside their Chinese counterparts explaining to international audiences what they had in store. Yes, we are enriching the party’s elite by handing off our manufacturing base, Americans told the world at Davos, and we are showing we are true partners helping them to legitimize their rule by enabling them to raise hundreds of millions of their own people out of poverty—a worthy humanitarian goal if there ever was one.

The premise of this generosity was known to the Chinese, too: American business with China will make it too costly for the Communist Party not to participate in its own destruction. Mao Zedong called the American strategy “Peaceful Evolution.” The PRC’s counter was elegantly simple: We will use business to enrich the Americans and thus dissuade them from protesting too much about how we conduct our politics—or about us taking jobs away from their constituents.

As Trump promised to curb Chinese ambitions, Xi used the globalist echelon class’s anti-Trump animus to try to turn the tables: “No one will emerge as a winner in a trade war,” Xi told a Davos audience in 2017.

American firms like Google, Qualcomm, and Intel are among the companies that asked the Commerce Department to lift the ban on selling chips to Huawei—for the sake of U.S. industry, of course. “For technologies that do not relate to national security,” an official at the Semiconductor Industry Association told Reuters, “it seems they shouldn’t fall within the scope of the order.”

Roughly eight months after Hunter Biden traveled to Beijing aboard Air Force Two with his father the vice president, the CCP circulated a major communique known as Document No. 9, which Xi saw partly as an instrument to consolidate power in relation to his weaker domestic adversaries. The new party line is as follows: America, leader of the West, was the CCP’s main adversary and was trying to weaken it through concepts like human rights and freedom of speech.

Washington may not be at war with China. But the Chinese are already at war with us.