BY REP. MICHAEL CONAWAY (R-TEXAS).
This opinion was originally published on The Hill.
At the Shangri-La Dialogue in June, worldwide threats presented by China were a consistent theme. The delegation from the United States, including myself, Secretary of Defense James Mattis and colleagues from the House Armed Services Committee, expressed significant concerns regarding China’s increasingly aggressive behavior in the region and around the world. Officials from Japan, Australia, and India also subtly chastised China’s actions by reiterating calls for a free and open Indo-Pacific, democratic principles, and respect for both territorial rights and international law.
Many of these threats are not new, like China’s easily identifiable and definable illegal actions in the South China Sea. However, there are other long-term threats, such as China’s economic warfare, that are intentionally imperceptible, making them difficult for Americans to spot and appropriately counteract.
At a House Intelligence Committee hearing last week, experts reiterated that China is waging a dangerous and multi-front war against the United States, specifically targeting American businesses.
China relies on economic tactics to destabilize their opponents, hoping to cause enough commercial chaos to threaten their strength and security. These economic threats fall under the communist Chinese government’s strategy of “unrestricted warfare,” meaning that all facets of our nation’s workings, including our economy, can and should be targets in China’s strategy to undermine the United States.
At the same time, China is directing their efforts and dedicating significant resources towards reshaping their own industries. While some say China is moving toward a free-market system, this could not be further from the truth.
Understanding Beijing’s approach of unrestricted warfare is key to understanding the inherently dangerous moves that are being made against the United States right now. For example, Beijing’s Made in China 2025 initiative is a government-sponsored, centralized plan to refocus the Chinese economy on advanced, hi-tech industries. Their goal is not just to join the ranks of hi-tech economies like the United States, but to replace them completely by driving entire U.S. industries out of business.
To accomplish this, China has begun building its industrial capacity with stolen or mimicked U.S. intellectual property (IP) and technology. Chinese companies have also aggressively increased their partnerships with American companies, gaining access to valuable intellectual property by requiring these companies to sign over their IP as a condition of accessing Chinese markets. Unlike U.S. companies, China does not incur any cost developing this expensive technology. They then use it to develop their industry, producing cheaper products all with the intention of undermining U.S. businesses.
Beijing’s aggressive actions have led me to introduce several pieces of legislation this year, including H.R. 4747, the Defending U.S. Government Communications Act, H.R. 5116, the Stopping Foreign Businesses Sanctuary Act, and most recently, H.R. 6001, the Fair Trade with China Enforcement Act.
These bills all work to protect U.S. businesses and the government from Chinese aggression, but the Fair Trade with China Enforcement Act directly challenges Beijing’s attempts to undermine U.S. national security through economic means.
Firstly, this legislation takes the crucial – and obvious – step of protecting our country’s interests by prohibiting the sale of national security sensitive U.S. intellectual property and technology to China.
Beijing has continually proven its willingness to exploit its trading relationship with the United States. As American companies share their intellectual property and technology with Chinese companies, the financial damages include both lost tax revenue as well as the lost value to U.S. national security. The Fair Trade with China Enforcement Act increases taxes on multinational corporations’ income earned in China at a rate comparable to the lost value of these technologies. Significantly, this bill would also tax Chinese investments in the U.S. which are currently not being taxed per an agreement from the 1980s. Without financial penalties, China will continue to manipulate the current, outdated system to their benefit.
In addition to undermining the U.S. economy, Beijing is also taking more direct approaches where possible – including using Chinese commercial technology to spy on the U.S. government. Allowing Huawei, ZTE, and other related entities access to U.S. government communications would be inviting Chinese surveillance into every corner of the U.S. government, which is why this bill prohibits the federal government and contractors from purchasing or leasing Huawei or ZTE equipment or services.
National security is often viewed solely as interactions with foreign nations and military security, but national security goes far beyond that narrow definition. Any threat to our people, our businesses, our economy, or our safety is a threat to the security of our nation.
In order to safeguard our country and our economic future, we must change the way we think about and react to China. The Chinese government’s zero-sum game goes against every free-market tradition America holds dear.
Chinese government officials are no fools – they understand a central source of American strength is our economy. China has made a concerted, consistent effort to undermine American businesses at every opportunity. This is a dedicated, long-term effort, and while it’s not easily recognizable, there is nothing accidental about it. If left unchecked, there will be inestimable damage to the United States.