US The President’s Executive Order on Hong Kong Normalization


Issued on: July 14, 2020


By the authority vested in me as President by the Constitution and the laws of the United States of America, including the United States-Hong Kong Policy Act of 1992 (Public Law 102-393), the Hong Kong Human Rights and Democracy Act of 2019 (Public Law 116-76), the Hong Kong Autonomy Act of 2020, signed into law July 14, 2020, the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), section 212(f) of the Immigration and Nationality Act of 1952 (8 U.S.C. 1182(f)), and section 301 of title 3, United States Code,

I, DONALD J. TRUMP, President of the United States of America, determine, pursuant to section 202 of the United States-Hong Kong Policy Act of 1992, that the Special Administrative Region of Hong Kong (Hong Kong) is no longer sufficiently autonomous to justify differential treatment in relation to the People’s Republic of China (PRC or China) under the particular United States laws and provisions thereof set out in this order. In late May 2020, the National People’s Congress of China announced its intention to unilaterally and arbitrarily impose national security legislation on Hong Kong. This announcement was merely China’s latest salvo in a series of actions that have increasingly denied autonomy and freedoms that China promised to the people of Hong Kong under the 1984 Joint Declaration of the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People’s Republic of China on the Question of Hong Kong (Joint Declaration). As a result, on May 27, 2020, the Secretary of State announced that the PRC had fundamentally undermined Hong Kong’s autonomy and certified and reported to the Congress, pursuant to sections 205 and 301 of the United States-Hong Kong Policy Act of 1992, as amended, respectively, that Hong Kong no longer warrants treatment under United States law in the same manner as United States laws were applied to Hong Kong before July 1, 1997. On May 29, 2020, I directed the heads of executive departments and agencies (agencies) to begin the process of eliminating policy exemptions under United States law that give Hong Kong differential treatment in relation to China.

China has since followed through on its threat to impose national security legislation on Hong Kong. Under this law, the people of Hong Kong may face life in prison for what China considers to be acts of secession or subversion of state power –- which may include acts like last year’s widespread anti-government protests. The right to trial by jury may be suspended. Proceedings may be conducted in secret. China has given itself broad power to initiate and control the prosecutions of the people of Hong Kong through the new Office for Safeguarding National Security. At the same time, the law allows foreigners to be expelled if China merely suspects them of violating the law, potentially making it harder for journalists, human rights organizations, and other outside groups to hold the PRC accountable for its treatment of the people of Hong Kong.

I therefore determine that the situation with respect to Hong Kong, including recent actions taken by the PRC to fundamentally undermine Hong Kong’s autonomy, constitutes an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security, foreign policy, and economy of the United States. I hereby declare a national emergency with respect to that threat.

In light of the foregoing, I hereby determine and order:

Section 1. It shall be the policy of the United States to suspend or eliminate different and preferential treatment for Hong Kong to the extent permitted by law and in the national security, foreign policy, and economic interest of the United States.

Sec. 2. Pursuant to section 202 of the United States-Hong Kong Policy Act of 1992 (22 U.S.C. 5722), I hereby suspend the application of section 201(a) of the United States-Hong Kong Policy Act of 1992, as amended (22 U.S.C. 5721(a)), to the following statutes:
(a) section 103 of the Immigration Act of 1990 (8 U.S.C. 1152 note);​
(b) sections 203(c), 212(l), and 221(c) of the Immigration and Nationality Act of 1952, as amended (8 U.S.C. 1153(c), 1182(l), and 1201(c), respectively);​
(c) the Arms Export Control Act (22 U.S.C. 2751 et seq.);​
(d) section 721(m) of the Defense Production Act of 1950, as amended (50 U.S.C. 4565(m));​
(e) the Export Control Reform Act of 2018 (50 U.S.C. 4801 et seq.); and​
(f) section 1304 of title 19, United States Code.​

Sec. 3. Within 15 days of the date of this order, the heads of agencies shall commence all appropriate actions to further the purposes of this order, consistent with applicable law, including, to:

(a) amend any regulations implementing those provisions specified in section 2 of this order, and, consistent with applicable law and executive orders, under IEEPA, which provide different treatment for Hong Kong as compared to China;​
(b) amend the regulation at 8 CFR 212.4(i) to eliminate the preference for Hong Kong passport holders as compared to PRC passport holders;​
(c) revoke license exceptions for exports to Hong Kong, reexports to Hong Kong, and transfers (in-country) within Hong Kong of items subject to the Export Administration Regulations, 15 CFR Parts 730-774, that provide differential treatment compared to those license exceptions applicable to exports to China, reexports to China, and transfers (in-country) within China;​
(d) consistent with section 902(b)(2) of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (Public Law 101-246), terminate the export licensing suspensions under section 902(a)(3) of such Act insofar as such suspensions apply to exports of defense articles to Hong Kong persons who are physically located outside of Hong Kong and the PRC and who were authorized to receive defense articles prior to the date of this order;​
(e) give notice of intent to suspend the Agreement Between the Government of the United States of America and the Government of Hong Kong for the Surrender of Fugitive Offenders (TIAS 98-121);​
(f) give notice of intent to terminate the Agreement Between the Government of the United States of America and the Government of Hong Kong for the Transfer of Sentenced Persons (TIAS 99-418 );​
(g) take steps to end the provision of training to members of the Hong Kong Police Force or other Hong Kong security services at the Department of State’s International Law Enforcement Academies;​
(h) suspend continued cooperation undertaken consistent with the now-expired Protocol Between the U.S. Geological Survey of the Department of the Interior of the United States of America and Institute of Space and Earth Information Science of the Chinese University of Hong Kong Concerning Scientific and Technical Cooperation in Earth Sciences (TIAS 09-1109);​
(i) take steps to terminate the Fulbright exchange program with regard to China and Hong Kong with respect to future exchanges for participants traveling both from and to China or Hong Kong;​
(j) give notice of intent to terminate the agreement for the reciprocal exemption with respect to taxes on income from the international operation of ships effected by the Exchange of Notes Between the Government of the United States of America and the Government of Hong Kong (TIAS 11892);​
(k) reallocate admissions within the refugee ceiling set by the annual Presidential Determination to residents of Hong Kong based on humanitarian concerns, to the extent feasible and consistent with applicable law; and​
(l) propose for my consideration any further actions deemed necessary and prudent to end special conditions and preferential treatment for Hong Kong.​

Sec. 4. All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:
(a) Any foreign person determined by the Secretary of State, in consultation with the Secretary of the Treasury, or the Secretary of the Treasury, in consultation with the Secretary of State:​
(i) to be or have been involved, directly or indirectly, in the coercing, arresting, detaining, or imprisoning of individuals under the authority of, or to be or have been responsible for or involved in developing, adopting, or implementing, the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Administrative Region;​
(ii) to be responsible for or complicit in, or to have engaged in, directly or indirectly, any of the following:​
(A) actions or policies that undermine democratic processes or institutions in Hong Kong;​
(B) actions or policies that threaten the peace, security, stability, or autonomy of Hong Kong;​
(C) censorship or other activities with respect to Hong Kong that prohibit, limit, or penalize the exercise of freedom of expression or assembly by citizens of Hong Kong, or that limit access to free and independent print, online or broadcast media; or​
(D) the extrajudicial rendition, arbitrary detention, or torture of any person in Hong Kong or other gross violations of internationally recognized human rights or serious human rights abuse in Hong Kong;​
(iii) to be or have been a leader or official of:​
(A) an entity, including any government entity, that has engaged in, or whose members have engaged in, any of the activities described in subsections (a)(i), (a)(ii)(A), (a)(ii)​
(B), or (a)(ii)(C) of this section; or​
(B) an entity whose property and interests in property are blocked pursuant to this order.
(iv) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to this section;
(v) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this section; or​
(vi) to be a member of the board of directors or a senior executive officer of any person whose property and interests in property are blocked pursuant to this section.
(b) The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order.​

Sec. 5. I hereby determine that the making of donations of the types of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to section 4 of this order would seriously impair my ability to deal with the national emergency declared in this order, and I hereby prohibit such donations as provided by section 4 of this order.

Sec. 6. The prohibitions in section 4(a) of this order include:
(a) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to section 4(a) of this order; and
(b) the receipt of any contribution or provision of funds, goods, or services from any such person.

Sec. 7. The unrestricted immigrant and nonimmigrant entry into the United States of aliens determined to meet one or more of the criteria in section 4(a) of this order, as well as immediate family members of such aliens, or aliens determined by the Secretary of State to be employed by, or acting as an agent of, such aliens, would be detrimental to the interest of the United States, and the entry of such persons into the United States, as immigrants and nonimmigrants, is hereby suspended. Such persons shall be treated as persons covered by section 1 of Proclamation 8693 of July 24, 2011 (Suspension of Entry of Aliens Subject to United Nations Security Council Travel Bans and International Emergency Economic Powers Act Sanctions). The Secretary of State shall have the responsibility of implementing this section pursuant to such conditions and procedures as the Secretary has established or may establish pursuant to Proclamation 8693.

Sec. 8. (a) Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.

(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.​

Sec. 9. Nothing in this order shall prohibit transactions for the conduct of the official business of the Federal Government by employees, grantees, or contractors thereof.

Sec. 10. For the purposes of this order:

(a) the term “person” means an individual or entity;​
(b) the term “entity” means a government or instrumentality of such government, partnership, association, trust, joint venture, corporation, group, subgroup, or other organization, including an international organization;​
(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States; and​
(d) The term “immediate family member” means spouses and children of any age.​

Sec. 11. For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to section 4 of this order would render those measures ineffectual. I therefore determine that for these measures to be effective in addressing the national emergency declared in this order, there need be no prior notice of a listing or determination made pursuant to section 4 of this order.

Sec. 12. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA as may be necessary to implement this order. The Secretary of the Treasury may, consistent with applicable law, redelegate any of these functions within the Department of the Treasury. All departments and agencies of the United States shall take all appropriate measures within their authority to implement this order.

Sec. 13. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to submit recurring and final reports to the Congress on the national emergency declared in this order, consistent with section 401(c) of the NEA (50 U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C. 1703(c)).

Sec. 14. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency; or​
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.​
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.​
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.​

Sec. 15. If, based on consideration of the terms, obligations, and expectations expressed in the Joint Declaration, I determine that changes in China’s actions ensure that Hong Kong is sufficiently autonomous to justify differential treatment in relation to the PRC under United States law, I will reconsider the determinations made and actions taken and directed under this order.

- - -

Jesus fucking Christ, okay. I guess the gloves are completely coming off and we're just going to start trading straight-up dick-punches with the CCP.
 
Why Hong Kong must suffer because of two warring countries? Trump needs to think this through; Hong Kong is already dealing with enough because of China.
That's built into the EO, though. It makes a very specific distinction that any effort whatsoever to curb the autonomy of Hong Kong or oppress its citizens are actions that are going to be met with hostility, sanctions, arrest, or even the outright seizure of assets. This isn't stabbing Hong Kong in the leg and leaving the corpse for China, this a direct declaration that our economy is being severed from theirs because we cannot guarantee that the CCP won't be trying to push its way through Hong Kong to reach the U.S., but that the U.S. is still allied with Hong Kong against the CCP.
 
There is no Hong Kong, not anymore. Its all just China now, and treating them differently is foolish. Further, to continue on with how fuck-massively broad Section 4 is, anyone or anything connected with Chinese tech such as censorship (because that's all being applied to HK under the new law), is boned. Google, Facebook, Twitter, anyone who helps China censor shit, no matter in what way is fucked because that censorship is being applied to Hong Kong. Yes, that includes Acti-Blizz as well as anyone else who runs a censored gaming server in China or otherwise sucks their dick by suppressing electronic speech. Wave bye-bye to everyone. Hell, anyone who does the least bit of business in China might be subject to this due to how broad the targeting is. China just let Donald Trump ass-fuck their international business dealings with a whale's dick wrapped in 80 grit sandpaper... and no lube.
 
There is no Hong Kong, not anymore. Its all just China now, and treating them differently is foolish. Further, to continue on with how fuck-massively broad Section 4 is, anyone or anything connected with Chinese tech such as censorship (because that's all being applied to HK under the new law), is boned. Google, Facebook, Twitter, anyone who helps China censor shit, no matter in what way is fucked because that censorship is being applied to Hong Kong. Yes, that includes Acti-Blizz as well as anyone else who runs a censored gaming server in China or otherwise sucks their dick by suppressing electronic speech. Wave bye-bye to everyone. Hell, anyone who does the least bit of business in China might be subject to this due to how broad the targeting is. China just let Donald Trump ass-fuck their international business dealings with a whale's dick wrapped in 80 grit sandpaper... and no lube.
Oh shit, I didn't even consider that angle. Yeah, if you were a company that was running an alternative server for China and you were censoring the platform in any way that benefited the CCP, you'd be on the chopping block under Section 4 wouldn't you?
 
Seems like not only the morally and politically responsible thing to do, but also a good presage of arguments made against Biden in the coming months. Whereas Biden's family personally profited from Chinese bribes, Trump will bring out how he's taken actual action against the Chinese annexation of Hong Kong and the individuals/firms complicit in their doing so. On the crest of the Wu Flu, this seems like another feather Trump will have in his cap at the debates to push Biden into tottering pushup-challenging fat-calling senility rants.
 
While I'm not in the least surprised at the lugenpresse not reporting on it, I am kind of surprised that the Trump fanbase didn't seem to have much to say about this. Wasn't that a key tenent of his platform when he ran? We're gonna build a wall, and Mexico's gonna pay for it! it seems that this is precisely what's happening.

Hmm.
It was reported on, even in the really blue region I live in, but through the lens of how angry some Mexicans were about the trip. They were also gushing over the fact he took a commercial flight and how he was stuck with a layover because of limited options.
 
Why Hong Kong must suffer because of two warring countries? Trump needs to think this through; Hong Kong is already dealing with enough because of China.
In addition to what the others have written in response to you, I'll add this:

China was using Hong Kong as a means of having it both ways. They could reap the benefits of Hong Kong's free society and open markets to lure in Western money. In doing so, Western entities would be able to say that they were not in fact dealing with a totalitarian Communist regime, they were doing business in Hong Kong. "One country, two systems" and all that jazz. This allowed the Chinese Communists to draw in huge amounts of money from outside that could be laundered and handed directly to the Communist Party to be used against the very people that handed over the cash.

Hong Kong was nothing more to China than a economic sponge that could be used to eliminate and co-opt naive foreign investors with their own money. And the 7.5 million people in Hong Kong are nothing more than a rounding error to the CCP.
 
Oh shit, I didn't even consider that angle. Yeah, if you were a company that was running an alternative server for China and you were censoring the platform in any way that benefited the CCP, you'd be on the chopping block under Section 4 wouldn't you?
Eh... Section 4 seems to apply only to the "Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Administrative Region", which while I'm not at all informed on what it says, as far as I know basically just puts HK on total lockdown with no civil rights, subject to the same bullshit as in the mainland by a different name (if not openly and blatantly more extreme as a result of the protests), so you'd probably know better than I would on how applicable my statement actually is, given the specificity there.
 
I'm mostly worried about the Hong Kongers who are now completely caught up in all of this.

Otherwise, Sina delenda est.
To be honest, they tried to get away from China and they failed. Revolutions don't always work.

Tl;dr - Trump plans on crashing the Chinese economy with no survivors.

Correct?
1594553017323.jpg
 
Now I may come across like an idiot here because I know very little about the HK situation but is Trump basically deciding that Hong Kong is his basket and now he has placed his eggs, waiting for China to crack them to get this omelette started?

Is he wanting a Tiananmen 2? It wouldn't even have to be close as big. Just something he can use to further vilify China? I doubt the main CCP unit is going to do something so brazenly stupid at least, not yet.
Hong Kong is a terminally important shipping, finance, and tech hub whose semiautonomy from the mainland allowed everyone else to shuffle money into China without having to directly deal with the horrific implications of the place. This ends that, and the sanctions make it worse. I feel bad for the people there too, but this became inevitable when the attempts at trying to “liberalize” China’s economy failed.
 
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From what I see, this is the confirmation that the world is in, without question, a second Cold War. More than that, this is Trump and Barr basically telling all American companies that the games are over. No more playing coy with the PRC. Before, companies could get away with it saying that they were doing business with Hong Kong, not China. That's over now if this EO is enforced. If you try and continue doing business in China, then it is considered that you are aiding and abetting the PRC.

This is about as nuclear as we're going to get. Now all that is left to see is if the politicians stick to their guns, or they decide to cuck out to China. We already know that the Dems and their companies will, now it's just a matter of seeing how "Conservative" governments across the world will react. We're looking at you, Boris.
 
From what I see, this is the confirmation that the world is in, without question, a second Cold War. More than that, this is Trump and Barr basically telling all American companies that the games are over. No more playing coy with the PRC. Before, companies could get away with it saying that they were doing business with Hong Kong, not China. That's over now if this EO is enforced. If you try and continue doing business in China, then it is considered that you are aiding and abetting the PRC.

This is about as nuclear as we're going to get. Now all that is left to see is if the politicians stick to their guns, or they decide to cuck out to China. We already know that the Dems and their companies will, now it's just a matter of seeing how "Conservative" governments across the world will react. We're looking at you, Boris.

Watch the Hong Kong citizenship debate. That's going to be our contribution.
 
One could aregue at least Trump is doing something about China's blatant aggression and land grabs (Tim Pool compared China with Hitler Germany suring the 1930's and it isn't so far off imho) The EU just waggles it's finger saying "naughty China" but does basically nothing while the Democrats bow before their overlords (inlcluding most of the liberal media). On the other hand it does give the feeling of a incoming confrontation at the worst of times. And maybe i am just paranoid but part of the EO sound like a "Ermächtigungsgesetz" (that's how Hitler called his law to safeguard Germany after the fire in the Reichstag in 1933)
 
Attorney General William P. Barr Delivers Remarks on China Policy at the Gerald R. Ford Presidential Museum
Archive

Thursday, July 16, 2020

Thank you, Andrew for that very kind introduction and for the excellent work that you and your team have done in protecting the people of the Western District of Michigan. I would like to thank the leadership and staff of the Gerald R. Ford Presidential Museum — especially Director Elaine Didier — for hosting today’s event. I’d also like to offer a special thanks to the Ford Presidential Foundation and Executive Director Joe Calvaruso. Even under normal circumstances, hosting an event can be a challenge, but these days, I know it is especially challenging. Thank you for accommodating us. I am also grateful to you, the audience, for honoring me with your presence today.

It is a privilege to be here to speak about what may prove to be the most important issue for our nation and the world in the twenty-first century — that is, the United States’ response to the global ambitions of the Chinese Communist Party. The CCP rules with an iron fist over one of the great ancient civilizations of the world. It seeks to leverage the immense power, productivity, and ingenuity of the Chinese people to overthrow the rules-based international system and to make the world safe for dictatorship. How the United States responds to this challenge will have historic implications and will determine whether the United States and its liberal democratic allies will continue to shape their own destiny or whether the CCP and its autocratic tributaries will control the future.

Several weeks ago, National Security Advisor Robert O’Brien spoke about the CCP’s ideology and global ambitions. He declared, and I agree, that “[t]he days of American passivity and naivety regarding the People’s Republic of China are over.”[1] Last week, FBI Director Chris Wray described how the CCP pursues its ambitions through nefarious and even illegal conduct, including industrial espionage, theft, extortion, cyberattacks, and malign influence activities.[2] In the coming days, you will hear from Secretary of State Mike Pompeo, who will sum up what is at stake for the United States and the free world. I hope these speeches will inspire the American people to reevaluate their relationship with China, so long as it continues to be ruled by the Communist Party.

It is fitting that we are here today at the Ford Presidential Museum. Gerald Ford served at the highest echelons of our government at the dawn of America’s reengagement with the People’s Republic of China, which began with President Nixon’s historic visit in 1972. Three years later, in 1975, President Ford visited China for a summit with PRC leaders, including Mao Zedong.

At the time, it was unthinkable that China would emerge after the Cold War as a near-peer competitor of the United States. Yet even then, there were signs of China’s immense latent power. In the joint report of their visit to China in 1972, House Majority Leader Hale Boggs and then-Minority Leader Ford wrote: “If she manages to achieve as she aspires, China in the next half century can emerge a self-sufficient power of a billion people …. This last impression—of the reality of China’s colossal potential—is perhaps the most vivid of our journey. As our small party traveled through that boundless land, this sense of a giant stirring, a dragon waking, gave us much to ponder.”[3] It is now nearly fifty years later, and the prescient ponderings of these two congressmen have come to pass.

Deng Xiaoping, whose economic reforms launched China’s remarkable rise, had a famous motto: “hide your strength and bide your time.”[4] That is precisely what China has done. China’s economy has quietly grown from about 2 percent of the world’s GDP in 1980 to nearly 20 percent today. By some estimates, based on purchasing power parity, the Chinese economy is already larger than ours. The General Secretary of the Chinese Communist Party, Xi Jinping, who has centralized power to a degree not seen since the dictatorship of Mao Zedong, now speaks openly of China moving “closer to center stage,” “building a socialism that is superior to capitalism,” and replacing the American Dream with the “Chinese solution.”[5] China is no longer hiding its strength, nor biding its time. From the perspective of its communist rulers, China’s time has arrived.

The People’s Republic of China is now engaged in an economic blitzkrieg—an aggressive, orchestrated, whole-of-government (indeed, whole-of-society) campaign to seize the commanding heights of the global economy and to surpass the United States as the world’s preeminent superpower. A centerpiece of this effort is the Communist Party’s “Made in China 2025” initiative, a plan for PRC domination of high-tech industries like robotics, advanced information technology, aviation, and electric vehicles. Backed by hundreds of billions of dollars in subsidies, this initiative poses a real threat to U.S. technological leadership. Despite World Trade Organization rules prohibiting quotas for domestic output, “Made in China 2025” sets targets for domestic market share (sometimes as high as 70 percent) in core components and basic materials for industries such as robotics and telecommunications. It is clear that the PRC seeks not merely to join the ranks of other advanced industrial economies, but to replace them altogether.

“Made in China 2025” is the latest iteration of the PRC’s state-led, mercantilist economic model. For American companies in the global marketplace, free and fair competition with China has long been a fantasy. To tilt the playing field to its advantage, China’s communist government has perfected a wide array of predatory and often unlawful tactics: currency manipulation, tariffs, quotas, state-led strategic investment and acquisitions, theft and forced transfer of intellectual property, state subsidies, dumping, cyberattacks, and espionage. About 80% of all federal economic espionage prosecutions have alleged conduct that would benefit the Chinese state, and about 60% of all trade secret theft cases have had a nexus to China.

The PRC also seeks to dominate key trade routes and infrastructure in Eurasia, Africa, and the Pacific. In the South China Sea, for example, through which about one-third of the world’s maritime trade passes, the PRC has asserted expansive and historically dubious claims to nearly the entire waterway, flouted the rulings of international courts, built artificial islands and placed military outposts on them, and harassed its neighbors’ ships and fishing boats.

Another ambitious project to spread its power and influence is the PRC’s “Belt and Road” infrastructure initiative. Although billed as “foreign aid,” in fact these investments appear designed to serve the PRC’s strategic interests and domestic economic needs. For example, the PRC has been criticized for loading poor countries up with debt, refusing to renegotiate terms, and then taking control of the infrastructure itself, as it did with the Sri Lankan port of Hambantota in 2017. This is little more than a form of modern-day colonialism.
Just as consequential, however, are the PRC’s plans to dominate the world’s digital infrastructure through its “Digital Silk Road” initiative. I have previously spoken at length about the grave risks of allowing the world’s most powerful dictatorship to build the next generation of global telecommunications networks, known as 5G. Perhaps less widely known are the PRC’s efforts to surpass the United States in other cutting-edge fields like artificial intelligence. Through innovations such as machine learning and big data, artificial intelligence allows machines to mimic human functions, such as recognizing faces, interpreting spoken words, driving vehicles, and playing games of skill such as chess or the even more complex Chinese strategy game Go. AI long ago outmatched the world’s chess grandmasters. But the PRC’s interest in AI accelerated in 2016, when AlphaGo, a program developed by a subsidiary of Google, beat the world champion Go player at a match in South Korea. The following year, Beijing unveiled its “Next Generation Artificial Intelligence Plan,” a blueprint for leading the world in AI by 2030. Whichever nation emerges as the global leader in AI will be best positioned to unlock not only its considerable economic potential, but a range of military applications, such as the use of computer vision to gather intelligence.

The PRC’s drive for technological supremacy is complemented by its plan to monopolize rare earth materials, which play a vital role in industries such as consumer electronics, electric vehicles, medical devices, and military hardware. According to the Congressional Research Service, from the 1960s to the 1980s, the United States led the world in rare earth production.[6] “Since then, production has shifted almost entirely to China,” in large part due to lower labor costs and lighter environmental regulation.[7]

The United States is now dangerously dependent on the PRC for these materials. Overall, China is America’s top supplier, accounting for about 80 percent of our imports. The risks of dependence are real. In 2010, for example, Beijing cut exports of rare earth materials to Japan after an incident involving disputed islands in the East China Sea. The PRC could do the same to us.

As China’s progress in these critical sectors illustrates, the PRC’s predatory economic policies are succeeding. For a hundred years, America was the world’s largest manufacturer — allowing us to serve as the world’s “arsenal of democracy.” China overtook the United States in manufacturing output in 2010. The PRC is now the world’s “arsenal of dictatorship.”

How did China accomplish all this? No one should underestimate the ingenuity and industry of the Chinese people. At the same time, no one should doubt that America made China’s meteoric rise possible. China has reaped enormous benefits from the free flow of American aid and trade. In 1980, Congress granted the PRC most-favored-nation trading status. In the 1990s, American companies strongly supported the PRC’s accession to the World Trade Organization and the permanent normalization of trade relations. Today, U.S.-China trade totals about $700 billion.

Last year, Newsweek ran a cover story titled “How America’s Biggest Companies Made China Great Again.”[8] The article details how China’s communist leaders lured American business with the promise of market access, and then, having profited from American investment and know-how, turned increasingly hostile. The PRC used tariffs and quotas to pressure American companies to give up their technology and form joint ventures with Chinese companies. Regulators then discriminated against American firms, using tactics like holding up permits. Yet few companies, even Fortune 500 giants, have been willing to bring a formal trade complaint for fear of angering Beijing.

Just as American companies have become dependent on the Chinese market, the United States as a whole now relies on the PRC for many vital goods and services. The COVID-19 pandemic has thrown a spotlight on that dependency. For example, China is the world’s largest producer of certain protective equipment, such as face masks and medical gowns. In March, as the pandemic spread around the world, the PRC hoarded the masks for itself, blocking producers — including American companies — from exporting them to countries in need. It then attempted to exploit the shortage for propaganda purposes, shipping limited quantities of often defective equipment and requiring foreign leaders to publicly thank Beijing.

China’s dominance of the world market for medical goods goes beyond masks and gowns. It has become the United States’ largest supplier of medical devices, while at the same time discriminating against American medical companies in China. China’s government has targeted foreign firms for greater regulatory scrutiny, instructed Chinese hospitals to buy products made in China, and pressured American firms to build factories in China, where their intellectual property is more vulnerable to theft. As one expert has observed, American medical device manufacturers are effectively “creating their own competitors.”[9]

America also depends on Chinese supply chains in other vital sectors, especially pharmaceuticals. America remains the global leader in drug discovery, but China is now the world’s largest producer of active pharmaceutical ingredients, known as “APIs.” As one Defense Health Agency official noted, “Should China decide to limit or restrict the delivery of APIs to the [United States],” it “could result in severe shortages of pharmaceuticals for both domestic and military uses.”[10]

To achieve dominance in pharmaceuticals, China’s rulers went to the same playbook they used to gut other American industries. In 2008, the PRC designated pharmaceutical production as a “high-value-added-industry” and boosted Chinese companies with subsidies and export tax rebates.[11] Meanwhile, the PRC has systematically preyed on American companies. American firms face well-known obstacles in China’s health market, including drug approval delays, unfair pricing limitations, IP theft, and counterfeiting. Chinese nationals working as employees at pharma companies have been caught stealing trade secrets both in America and in China. And the CCP has long engaged in cyber-espionage and hacking of U.S. academic medical centers and healthcare companies.

In fact, PRC-linked hackers have targeted American universities and firms in a bid to steal IP related to coronavirus treatments and vaccines, sometimes disrupting the work of our researchers. Having been caught covering up the coronavirus outbreak, Beijing is desperate for a public relations coup, and may hope that it will be able to claim credit for any medical breakthroughs.

As all of these examples should make clear, the ultimate ambition of China’s rulers isn’t to trade with the United States. It is to raid the United States. If you are an American business leader, appeasing the PRC may bring short-term rewards. But in the end, the PRC’s goal is to replace you. As a U.S. Chamber of Commerce report put it, “[t]he belief by foreign companies that large financial investments, the sharing of expertise and significant technology transfers would lead to an ever opening China market is being replaced by boardroom banter that win-win in China means China wins twice.”[12]

Although Americans hoped that trade and investment would liberalize China’s political system, the fundamental character of the regime has never changed. As its ruthless crackdown of Hong Kong demonstrates once again, China is no closer to democracy today than it was in 1989 when tanks confronted pro-democracy protesters in Tiananmen Square. It remains an authoritarian, one-party state in which the Communist Party wields absolute power, unchecked by popular elections, the rule of law, or an independent judiciary. The CCP surveils its own people and assigns them social credit scores, employs an army of government censors, tortures dissidents, and persecutes religious and ethnic minorities, including a million Uighurs detained in indoctrination and labor camps.

If what happened in China stayed in China, that would all be bad enough. But instead of America changing China, China is leveraging its economic power to change America. As this Administration’s China Strategy recognizes, “the CCP’s campaign to compel ideological conformity does not stop at China’s borders.”[13] Rather, the CCP seeks to extend its influence around the world, including on American soil.

All too often, for the sake of short-term profits, American companies have succumbed to that influence—even at the expense of freedom and openness in the United States. Sadly, examples of American business bowing to Beijing are legion.

(Too long to post, continued at source)

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I think it's safe to say that shit's probably going down behind the scenes, if these are the kinds of things we're seeing actually make it out into the public sphere. If anyone had any illusions that were aren't actively in a cold war with China, I think that these past couple of days have settled it.
 
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