China and the crucial choice America needs to make

Rep. Robert Pittenger,

Over the past several decades, American foreign policy towards China has been primarily economic in nature. In 1979, we granted Most Favored Nation trading status with China, and in 2001, China became a member of the World Trade Organization. For years, the theory has been that China will reform government dominance and communist tendencies with increased access to global markets. Our leaders have believed that open market access would permeate the Chinese culture with greater personal freedoms and liberties.

Unfortunately, the outcome of continuous and unrestricted market access has not yielded the intended results. China remains a significant human rights abuser, censoring everything from news and journalism to religious freedom, women’s rights, and political dissidence.

Furthermore, China has used the economic benefits of global market access to blatantly undermine international adversaries through cyberespionage, corporate IP theft, market manipulation, illegal naval expansion, and the significant development of domestic military capabilities.

When I hosted Dr. Henry Kissinger for a speech in Charlotte in 1991, he contrasted Russia and China, with Russia being an outward expansionist regime and China being still relatively unengaged in the world. Today, however, through the favor of economic expansion granted in large part by the United States, China has aggressive visions to expand its global footprint across multiple continents. Through economic expansion, China has emerged from its reclusive traditions to become a major economic and military power.

China has built its economy from a $300 billion GDP in 1985 to over $11 trillion today. This is largely a result of the theory that open markets would transform culture.

As a member of the Congressional Executive Committee on China, I have heard scores of testimony from victims who detail the continued egregious violations of human rights, religious liberties, and freedoms of conscience by the Chinese government – proving our original economic theories wrong.

Hope for a culture change in China has been diminished by the dominance of the Communist Party and their underlying vision to stay in power and suppress their citizens. With this in mind, the United States must shift its foreign policy towards China and use our various economic resources to compel the Chinese government and force change. We must impose a severe price on China to change their mindset.

Today, China pursues their economic and expansionist interests seemingly unchecked.

For example, Chinese investment in the United States has skyrocketed, growing from approximately $4.6 billion in 2010 to $45.6 billion in 2016. Many of these investments come from state-sponsored firms and strategically target our critical and financial infrastructure, as well as American start-up companies who produce emerging foundational technologies with broad military applications.

One way we can counter strategic Chinese economic warfare is to strengthen our export control laws and rules associated with the Committee on Foreign Investment in the United States (CFIUS). Through denying market access to Chinese state-sponsored firms, we can more effectively leverage government action, particularly related to human rights and North Korea. The key to compelling change in North Korea is through imposing serious economic penalties on the Chinese government for providing material and political support to the oppressive Korean regime.

We must approach every action and every economic transaction with China as directly related to Chinese support for North Korea, Chinese abuse of human rights, Chinese cyberespionage, and Chinese military development.

Over the past several years, through multiple Congressional letters co-signed by dozens of my colleagues, I have fought for heightened government scrutiny over various Chinese state-sponsored transactions, both domestic and abroad.

Our efforts led to an unprecedented economic penalty imposed on the ZTE Corporation for selling embargoed technologies to Iran in 2012.

We have raised public concerns related to Chinese state-sponsored attempts to purchase American financial institutions, including the Chicago Stock Exchange and MoneyGram. Additionally, we have analyzed global Chinese efforts to invest in semiconductor technologies and have targeted certain transactions that will disrupt our Defense Department’s supply chain for critical military applications.

As our government moves forward with China, we must consider policies that impose a strategic disadvantage to the Chinese economy.

Our policies must include efforts to sanction Chinese officials who engage in cyberespionage or human rights abuses and Chinese entities that provide critical or financial services to North Korea.

Further, we must consider punitive action against Chinese trade-based money laundering, as well as money laundering that emerges from Macau.

As China continues to modernize its military and emphasize capabilities intended to disrupt and challenge the United States, our government must respond by using our strong markets, economy, and trade policies to compel immediate action by the Chinese government.

America has a choice. We can have prescriptive economic and trade policies with China – including tariffs, sanctions, improved export control laws, and strong CFIUS review authorities – or we can continue to allow them to advance their human rights abuses, execute massive corporate theft and cyberespionage operations, and deliver material support for North Korea.