Thomas Duesterberg, a Hudson Institute Senior Fellow, proposed five steps for our Federal government to take to address the People’s Republic of China’s economy and growing technological prowess. They form the foundation for a good start in countering that nation’s rise against us.
• tighten export controls on technology and expertise related to AI or national defense. …also coordinate export controls with allies on semiconductor production and equipment
This should be expanded to include sourcing the raw materials, intermediate processed components, and finished products of any type from sources outside the PRC.
• work with Congress to limit Chinese access to US financing, with stronger outward investment controls and limited access to listing on American stock exchanges
This should include enforcing existing requirements that any company, foreign or domestic, must meet to be listed on an American exchange. Chief among these are that those listed must subject themselves to stringent American accounting practices and audits. The current requirements vis-à-vis PRC-domiciled companies listed or seeking listing are under discussion with the PRC; however, there is nothing to discuss here: either those companies satisfy, or they must be delisted or cannot be listed in the first place.
• impose sanctions on Chinese banks. Washington has largely not pursued them, though reporting indicates Chinese banks have facilitated and financed illicit commerce such as technology transfer to Russia, drug trafficking, and money-laundering, as well as the purchase of sanctioned Iranian and Russian oil
• show Chinese tech companies reciprocity. China effectively bars most American firms from its markets by either forbidding them or making entry contingent on ridiculous requirements, such as revealing source code. Washington should bar firms tit-for-tat, especially in response to intellectual property transfers demands from China
Not tit-for-tat, as that would work in both directions: were the PRC to reduce or drop those restrictions, we would then need reciprocate. The mistakes here are two: one is that the PRC cannot be trusted to stop its parallel…sub rosa…thefts of our companies’ source code, intellectual property, technologies. The second mistake is that we should be doing no economic business with the PRC in the first place.
• enlist allies in the fight. The administration has competing foreign-policy priorities, but limiting China’s ability to compensate for losing the US market would measurably enhance success
President Donald Trump’s (R) protectionist tariffs against friends and allies and others work at cross purposes with his foreign policy tariffs against the PRC (and against Russia, Iran, and northern Korea, albeit for these three the moves primarily are sanctions). Leaving aside the broader counterproductive nature of protectionism, such tariffs are counterproductive by reducing or eliminating the targeted nations’ incentive to work with us against the PRC, even with the PRC’s inimical practical and operational moves toward those friends and allies, and others.
In fine, more is needed for Duesterberg’s proposals. The PRC is an avowed—by it—enemy nation, committed to overcoming us economically, militarily, and so politically. The sort of steps proposed by Duesterberg need to be broadened in reach to address the entirety of the PRC economy, which would directly limit that nation’s military growth and improvement as well as its technology growth and improvement, which would indirectly limit its military. That, in turn, would limit its ability to overcome us politically.
There is, though, only so much our government can do by itself. Our private enterprises, small, medium, large, and international, need also to recognize the enmity the PRC has toward us and to recognize how much their own interactions with the PRC and with PRC-domiciled companies facilitate the PRC’s effort to dominate us. They need to move apace in withdrawing from those interactions and find non-PRC related sources for their production, from ores to processed ores to components for assembly to finished products. They need also to stop aiding and abetting the PRC through helping it develop its own technology base.
