When President Xi Jinping met the executives of America’s top 200 corporations on the sidelines of the APEC Summit last November, corporate America gave the Chinese dictator a standing ovation – not once, but three times. The overzealous welcome was both appalling and worrying at the same time. After all, this is the man who conspires to steal technologies from western companies, engages in corporate and military espionage and is in fact preparing to go to war against America.
The spectacle revealed three realities. First, that corporate America does not fully grasp the Chinese threat. Second, that there is misalignment between America’s national security and business communities. Third and most alarming of all, it reveals that America has no overarching, coordinated plan to overcome the Chinese threat.
Worrying too is America’s seeming defeatist attitude. How many times has it been said in American media that “it is only a matter of time before China surpasses us.” For most, it is an accepted reality. Making matters worse is that this defeatist attitude has never been debunked or corrected by the Biden administration. It is as if the White House is consigned to hand over its preeminent superpower status to China and that its acts of deterrence are only meant to delay the inevitable.
America needs a change of mindset. First of all, it has to decide whether it really wants to quash China’s ambitions and retain its superpower status. If it does, then it needs a coordinated plan that leverages on its economic, hard power and diplomatic assets. All cylinders must fire in a synchronized manner, with its public and private sectors thinking and acting as one.
The bigger economy wins
In this race, victory will go to the country with the bigger, more influential economy. This is because economic gravitas is the basis to which military might and diplomatic influence are aggregated. The bigger the economy, the more influential a country becomes – it’s that simple. That said, if America is to preserve its position, it must not allow China to catch up, let alone surpass its economic size.
There are a lot of preparations to be done. To start, America must reclaim its manufacturing superiority in basic and strategic industries. These include semiconductors, high-technology defense, shipbuilding, iron & steel, manufacturing equipment, pharmaceuticals and the like. Although the process is in motion with President Biden’s Inflation Reduction Act and 100-day supply chain policy, the process needs to be accelerated.
Next-generation semiconductors are the “oil” of advance manufacturing and America needs to control this sector too. President Biden was right to champion the Chips Act. But as expected, the Chinese have found ways to circumvent America’s controls, principally through third-party importers. This calls for more stringent regulations to fortify the chips blockade. Similarly, the US, Japan and the Netherlands must ensure that China does not get its hands on manufacturing equipment for advanced chips.
America’s leadership in next generation technologies such as AI, biotechnology, quantum and edge computing must be sustained and secured. Doing so will widen the economic divide between the US and China. Never again should America allow China to lead in future-forward industries like it did with electric vehicles.
Electric vehicles can potentially grow to a $2.7-trillion industry and having global dominance in this realm is exactly what China needs to project its power. Biden’s plan to quadruple tariffs on Chinese EVs is correct and Europe was right to follow.
Next, America must regain its status as the dominant trading partner of the world. Economies, both developed and emerging, must have their proverbial bread buttered predominantly by the US, and not by China.
Reversing China’s momentum
China is a formidable adversary with a formidable strategy that is already in motion. Admittedly, the momentum is on Beijing’s side. But America still has the bigger economy today. It can crush China’s momentum if it consolidates its assets.
It’s all about suppressing China’s economic ascent. Squelch the wealth, subdue the strength.
The first order of the day is to stop empowering China. This is fundamental. Even today, corporations from America and her allies still look at China as a lucrative market and a place to minimize costs. They are woefully oblivious to the fact that every dollar invested, every export dollar earned and every bit of technology transferred to the communist nation makes them stronger. And this collective strength is used to topple America.
We should be alarmed that despite the Chinese threat, 90 percent of Apple products continue to be produced in China. The same is true for Boeing, Microsoft, General Motors and Intel to varying degrees. There is a need for the White House to hold its corporate sector accountable for how they abet the adversary, whether directly or indirectly. Corporate America cannot have their cake and eat it too. It must cede to the agenda of national security.
And then there is the issue of capital. Despite the knowledge that western capital helps fund the Chinese war machine, some $400 billion in American pension funds were invested in Chinese stocks and bonds from 2020 to 2022. This must stop.
Severe as these measures may seem, we must not forget that this is a war and what is at stake is America’s status, the rules-based world order and our democratic way of life. China is a hostile adversary that is growing in aggression and America cannot respond passively. To do so is akin to an open invitation for China to pursue its ambitions with impunity.
America needs to quash China’s ascent with resolve, leveraging on all its assets. In short, America needs to change its mindset. From a defeatist attitude, it must begin acting like the superpower that it is.
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Email: andrew_rs6@yahoo.com. Follow him on Twitter @aj_masigan