By Francis Rooney
Tuesday, May 05, 2020
We have known about the People’s Republic of China’s
exploitation of American enterprise for years. The problem is that we have not
wanted to confront it. Ever since China joined the World Trade Organization in
2001, it has been a relentless and pernicious economic adversary, routinely taking
advantage of the greed and weakness of American companies. We should have taken
actions previously to address imbalances in our trade relationships, but we
didn’t. Now the pandemic has put these issues front and center.
In early December, China knew an infectious virus had
been discovered in Wuhan. It was not until December 31 that China reported to
the World Health Organization (WHO) that there was a risk of human-to-human
transmission of the virus. The WHO failed the world by not publishing this. However,
our intelligence services briefed the president on January 3, and eleven times
after that throughout January and February about the magnitude of the
coronavirus threat. Nothing happened.
While the world suffers from health and financial
challenges, China has touted its ability to take advantage of the American
economy and our weakness in trade. China controls many critical products and
components of America’s supply chains. Of U.S. imports, China accounted for 95
percent of ibuprofen, 91 percent of hydrocortisone, and 80 percent of all
antibiotics. Our dependence on Chinese medicine has crippled our ability to
fight COVID-19 and various illnesses. This must change.
China’s scope of power goes beyond its domination of the
production of everyday medications. Its exploitation of intellectual property
led me to introduce the SHEET Act to prevent countries such as China from
stealing technology and intelligence from educational foreign-exchange
programs, a method which illustrates the Communist country’s desire to steal
and misuse intellectual property from the U.S.
Since China’s addition to the WTO, it has been carefully
but fully abusive toward American companies and businesses. The Institute for
Supply Management estimates that three-quarters of American companies report
supply-chain disruptions in China. Their manipulation goes beyond
supply-chains. When Marriott and Delta posted maps showing Taiwan as an
independent country, China objected and demanded that they remove these maps
from their websites. Sadly, both companies buckled to authoritarian China and
changed their maps. As Lenin said, “the capitalists will sell us the ropes we
will hang them with.”
How can American business and government oppose China’s
outsized influence? One way is to create new supply chains and reinforce
existing ones with U.S. allies in Asia, and in the Western Hemisphere and
Europe. Chinese leaders do not think that our leaders and businesses have the
resolve to accept higher costs in a less efficient supply chain for imported
products, and we need to call their bluff. Policymakers should create new
incentives for businesses to reorient supply chains away from China and
disincentives for companies to invest there. A “sovereignty tax” on American
investment in China, reflecting the value that U.S. companies derive from U.S.
sovereignty but the damage they are doing to our strategic position by
investing there, could be an example. It is worth incurring higher costs to be
strategically secure.
As the pandemic abates, the U.S. and our allies should
clearly and openly call out the abuses that China has perpetrated on the
Western world since its admission to the WTO. The mantra of accommodation to
China to mollify the PRC and slowly integrate them into existing global trade
relationships has failed — or, more precisely, has worked for China but no one
else. China’s leaders are repressive, they violate trade norms, and they steal
intellectual property. They project hegemonic power wherever they can. We need
to develop a partnership with American, European, and Asian businesses and
governments to bring China’s exploitation to an end.
No comments:
Post a Comment