In 2014, presidential candidate Donald Trump tweeted: “We can’t continue to allow China to rape our country, and that’s what they’re doing.”
After the election, President Trump began to deliver on campaign promises and made deals with China on beef and poultry. Beijing slow-rolled major issues until, in January 2018, the U.S. levied tariffs on Chinese steel and aluminum. China retaliated and, despite high-level talks, the trade war escalated with tariffs on hundreds of billions of dollars of Chinese and American products.
Today, analyses and counter-analyses of the U.S.-China trade war are bouncing around newspapers, boardrooms and think tanks on every continent. This article attempts to make sense of the motivations and goals of both antagonists and their allies.
Let’s start with China’s aspirations. Or better, let’s ask ourselves four questions: What motivates the Chinese Communist Party? Why are they perturbed by the commercial conflict with Huawei? What is “Made in China 2015,” and what is the “One Belt One Road Initiative?” To best answer those questions, we must review history to understand how they are intertwined in support of Chinese Communist Party (CCP) plans.
As early as 1979, the CCP’s determination to retain power at any cost was clearly signaled when they killed more than 10,000 student-led protestors in Tiananmen Square. Chinese propaganda and denials helped make it easy for western nations to view the massacre as a sad symptom of China’s growing pains, and the Beijing continued business as usual. But when the Soviet empire collapsed, the CCP was profoundly shocked. Worried they might suffer a similar fate, they studied the downfall of Russia’s communist party in great detail. They concluded that in order to maintain perpetual power they must dominate the United States.
An explanation of how the CCP would carry out that conclusion came eight years later. Two Chinese colonels published a book titled, Unrestricted Warfare. The book details a host of strategies to be used against the U.S., especially non-military tactics like hacking electrical grids, penetrating financial institutions, and even coopting the media. It stressed that the first rule of unrestricted warfare is that there are no rules, and nothing is forbidden. Translated into English and easily available, few in the west have bothered to read the slim volume.
During the twenty years following the publication of Unrestricted Warfare, the CCP Politburo Standing Committee, seven men who are the absolute rulers of China, accelerated their economic and military plans. Their work reached a pinnacle in 2012 with the elevation of Xi Jinping as China’s Communist Party General Secretary. As Xi eliminated rivals to become the leader-for-life, China’s military built modern weapons like stealth fighters and aircraft carriers. At the same time, Chinese industrial development, based on decades of forced technology transfers from western companies, theft of intellectual property, and massive penetration of the U.S. capital market, was proceeding as planned.
It has now become obvious that the CCP has carefully crafted deep thrusts into global telecommunications, manufacturing, global infrastructure projects, and the American capital market. Those multi-domain assaults have succeeded to the point that elites in America and the Western powers are becoming resigned to being overwhelmed by the rising Chinese juggernaut.
Nevertheless, the Trump administration recognizes that China poses an existential threat to the United States, and has initiated a rollback of China’s mercantilism, espionage, and influence in America’s educational system, capital markets, and government. That struggle is underway in four areas:
Huawei and 5G
Having stolen and coopted the technology of companies in the U.S. and elsewhere, Huawei is now a world-leader in telecommunications. The CCP created Huawei to leapfrog America in building a mobile communications system to replace 4G, today’s system that was largely designed and manufactured by the United States. 4G made America the hub of global telecoms, and becoming the new global hub is the CCP goal. Why? Because Huawei 5G equipment is a massive espionage system with “back doors” that allow China to intercept all traffic sent through it. The Commerce Department banned Huawei in the United States, and the Trump administration is convincing allies to do likewise. If all high-tech companies remain firm in shunning Huawei, it will be impossible for the CCP to control the global 5G system.
Made in China 2025
“Made in China 2025”is a CCP plan to upgrade China’s industries. It is designed to take China away from cheap labor and inexpensive products and into high value products. The plan is to increase Chinese content of domestic and exported products to 70% by 2025. Focused on pharmaceuticals, semiconductors, robotics, machine tools, and the automotive and aviation industries, “Made in China 2025” is aimed directly at the U.S. and other industrialized nations. American and European genius for innovation cannot alone deflect the CCP plan. It will be necessary to also monitor and control technology and know-how that is sold or otherwise provided to China.
The Belt and Road Initiative
“Belt and Road Initiative”(BRI) is a global infrastructure plan that promises to spend $8 trillion in 152 countries. The CCP’s plan is to make China a neo-colonial power via projects that include seaports, airports, railways, highways, power grids, and loans to BRI nations. To support the CCP plan for global domination, BRI will inject China into the economy and politics of countries representing 65% of the world’s population and 40% of global GDP. However, BRI built projects in countries unable to service the loans that are often necessary. Sri Lanka, for example, was forced to yield control of a new port to China. If the IMF bails out victims of the BRI “debt trap,” or of China itself, the U.S. will not support it, ultimately putting the very existence of the IMF at risk.
The key problem for the CCP in these three aggressive plans is that China is drowning in a sea of national debt that is now calculated to be as much 400% of China’s GDP. Even Beijing’s bogus official financial data cannot mask a growing awareness that China is teetering on the edge of a major crash that the United State will leverage to knock the legs out from under the CCP plan for global domination.
Chet Nagle is a founding member of the Committee on the Present Danger: China
China’s penetration of the U.S. capital market is examined in Part Two of this series describing China’s existential threat to America.