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Feb. 26, 2021 - Epoch Times
17:18
Gordon Chang: Will Biden Allow Investment in Companies Tied to China’s Military? | CAPC 2021 | American Thought Leaders
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China has this doctrine of military-civil fusion, which means that every Chinese company can be raided for its technology if the People's Liberation Army wants it.
So that means every Chinese company is military-linked in one way or another.
This is a unified communist state.
It's not like us, who have divided sovereignty, state, federal, all the rest of it.
This is a unified state, and we need to adjust our thinking to understand how China operates.
Joining us today is Gordon Chang, China analyst.
You've been on the show a number of times.
You also organized the national security component here at CPAC, and you're a board member of the American Conservative Union, which puts on CPAC. So why don't we just start with the bigger picture?
What are the biggest national security threats facing America right now?
Well, certainly you have China.
But it's not just China.
It's China's allies and friends.
So you've got Russia, Iran, North Korea.
The list goes on and on.
And so it really is a new axis of evil.
When George W. Bush talked about that, people said, oh, no, you didn't have an axis of evil of Iran, Iraq, North Korea.
Well, we do have one now with China, and China is actually giving these other societies the ability to challenge the international system and the United States.
That's really fascinating to hear, because this is kind of a whole new paradigm of sorts, I think, that you're advocating for here.
And is Russia really China's friend, actually?
Well, the two of them have worked very closely together.
Now, historically, they've been adversaries.
They've traded territory with each other.
They've fought wars and all the rest of it.
But really what we have right now is Vladimir Putin and Xi Jinping, they look at the world in the same way, they view their interests in the same way, and they identify the same adversary, which is us.
So, although there are things, of course, that divide the Russians and the Chinese, we have to say that they've developed an enduring partnership.
And so, therefore, we have to say, look, it's not just Russia.
It's Russia and China.
And then, of course, you have, like you said, Iran and North Korea, and they're all working together?
Well, neither Iran nor North Korea could develop nuclear weapons, ballistic missiles, and engage in all sorts of dangerous activities were it not for the backing that China gives them.
We've talked many times about China and North Korea, but look at Iran.
Just a couple months ago, Tehran and Beijing announced their strategic partnership of 25 years, this new arrangement.
It's supposed to be $400 billion and all the rest of it.
And, of course, we don't know how it's going to work out, and some people doubt that it's going to be as close a relationship as they make it out to be.
But very much this means that Iran is able to fund its terrorist laws like Hezbollah and Hamas.
It's able to work in Lebanon in ways that destabilize that society because China gives it backing.
So we've got to realize that it is effectively a working relationship and it's going to be much closer.
So we've had about a month now to start seeing how the Biden administration's China policy has started to form.
And I kind of zeroed in on a couple of things.
On one hand, I'm seeing that there's this Call to really look at the supply chains and how they're connected to China.
I'm not even sure how possible it is to figure that out.
That's something I want to ask you about.
On the other side, we also see this situation where there is an allowance for actually doing business with the Chinese military, which I find very disturbing.
We're kind of seeing two directions, multiple directions.
I don't know.
What do you think is happening here?
I wish I knew.
First of all, the Biden administration, like every new administration, is trying to figure out its China policy.
And there is a formal review.
And it probably will take until March or April for them to actually start to think in real concrete terms about what they want to do.
But in the interim, we've seen a number of things which are really disturbing.
So, for instance, in Biden's executive orders, he's taken down protections that the Trump administration put in place.
Most notably, there was Trump's May 1, 2020 executive order, which prohibited grid operators in the U.S. from buying equipment from China.
And that prevented China from selling sabotaged equipment.
Well, in January 20, one of the first things that Biden did just hours after taking the oath of office, he repealed that protection.
And the idea was that he wanted to do this review of China policy.
Well, okay, I can understand he wants to review Trump policy, but at least leave the protection in place, because this review will take months.
And so we can go through the list of things that Biden has done, I believe, really without justification.
Because I can't see any reason why he would allow the Chinese to sabotage the American grid, especially when we saw what happened in Texas right now, what happens when a grid is not resilient.
And a grid is certainly going to become less resilient if it's going to have sabotage transformers in it.
What about this executive order?
I guess it expired.
I don't know exactly how it worked out with them.
There is no truly independent companies in China, and certainly the Chinese military is not in any way independent.
And of course, they can always basically just take whatever technology they feel is useful to them.
We know that.
I think we've talked about this before.
How does this work?
What you're referring to is the Treasury's Department of Office of Foreign Asset Control on January 26th, I think it was, deferred the application of President Trump's Executive Order 13959, if I got the number right.
13959, very, very technical.
But what it did, and this was issued in November of last year, was it prevented Americans from investing in military-linked companies.
In other words, companies in China that had a very close tie with the Chinese military.
And what Biden has effectively done is he's deferred the application of a portion of 13959 from January 28, when that part of the executive order was supposed to go into effect, and he deferred it into May 27.
Now, this doesn't sound like a big deal, but what happened is Wall Street was very much against Trump's original executive order, because they want to continue to invest in every Chinese company, no matter what it does.
And so they now have additional months in which to work to make sure, from their perspective, that they can continue to do that, which in other means is repealing all of Trump's 13959.
This is wrong.
The point is, there are companies in China that have clear links to the Chinese military.
But, as Trump pointed out in his November executive order, China has this doctrine of military civil fusion, which means that every Chinese company can be raided for its technology if the People's Liberation Army wants it.
So that means every Chinese company is Military-linked in one way or another.
And one other point, Jan, and that is that we tend to think of military-linked companies as state enterprises.
Now, China has a lot of state enterprises.
Some of them have direct connections to the military.
Others of them We don't.
But the point is, this is all tightly controlled by the Communist Party.
Every state enterprise is party-controlled and military-linked.
And so, therefore, we shouldn't be distinguishing between them because the distinctions among these state enterprises are artificial.
This is all the Chinese party state.
And so, if we're going to ban one of these companies, we have to ban all of them.
And as I said, I believe we should be banning private companies, investment into private companies as well because of this doctrine of civil-military fusion.
This is a unified communist state.
It's not like us with divided sovereignties, state, federal law, the rest of it.
This is a unified state.
And we need to adjust our thinking to understand how China operates.
Because if we don't understand how China operates, we're not going to be able to do anything about it.
It's hard to fathom how it is possible to work with companies given the reality you just painted.
What's really interesting is the Biden administration is also studying the supply chains.
It appears to be a very strong emphasis on figuring this out.
I think that's very interesting because it's actually a very difficult question to figure out in the first place.
What do you think they're going to find in this study?
All this stuff is known anyway, because the Trump administration put a lot of emphasis on making our supply chains more resilient.
But Trump only started the process.
He didn't complete it.
And I think President Biden deserves great credit yesterday for signing his executive order.
Now, that EO only applies to a study of what is supposed to happen.
And what they're going to find out is basically China is embedded in our supply chains and they pose substantial risks.
So they're going to find that out.
They don't need months to study it.
Anyone can tell them that.
I think they're going to start to do things which are going to be a continuation of what President Trump did, which was to try to decouple, as the term is, to try to make sure that we are more resilient, to make sure that China can't cut off of pharmaceutical ingredients, for instance.
We need to do all this stuff.
There's this one element which I find really fascinating, the rare earths question.
The Chinese Communist Party has been threatening to cut off these supplies, which are very instrumental in all sorts of technology, military applications for the US. That seems like a lot of leverage for someone to have over you, but how does it actually work?
Well, we know how it actually works because in 2010 China actually imposed a boycott on the sale of rare earths to Japan.
This was over the detention of a Chinese fishing boat captain who was in Japanese waters.
The Chinese got enraged and so they said, we're not selling you rare earths anymore.
The boycott didn't work.
Because, first of all, Japan was able to buy from Chinese state enterprises what they wanted, unofficially.
Also, they were able to buy rare earths from other suppliers around the world.
And Japanese companies then went to work on technologies that meant that they were not so reliant on rare earths in the first place.
So it didn't work then.
The Chinese also tried this With even less enthusiasm against South Korea, it didn't work then either.
It's not going to work against us now.
But the point is, not whether it'll work or not, but we are reliant on China for rare earths because they have a A substantial portion of the world's production capacity, plus they have a near monopoly on reprocessing, processing rare earths.
I mean, we can dig up rare earths in our country, and Canada can do the same, but we can't process them, at least at this present time.
So this is what we need to do.
And although I don't think that China would be able to effectively impose a ban of rare earth in the long run, In the short term, they could do great damage to our ability to build an F-35 or whatever in the short term.
So we can't give them even that short term advantage.
So let's talk to finish up a little bit more about the Biden administration.
The Biden administration has reaffirmed multiple times that what is happening in Xinjiang from the perspective of the American government is genocide, as the previous administration had determined in the final days or day even.
Now, at the same time, we heard this, I guess it was a town hall where President Biden mentioned cultural differences, which kind of stunned a lot of people, including myself, frankly.
There was a disgraceful comment.
There is only one word for it.
It was disgraceful.
Because what Biden did was he was saying that genocide and crimes against humanity really flow from China's cultural norms.
And what he was saying was that the Chinese culturally are brutal, that they're racist.
This was very dangerous in what Biden was saying.
But yeah, sorry to interrupt.
No, no, no, that's fine.
And so the question is, but that said, they've reiterated, the administration has reiterated, no, this is really genocide.
Which to me suggests that that invokes the Genocide Convention of 1948.
There's actually action that has to be taken.
So, you know, you have people that are thinking, oh, this means that some action is going to be taken.
And then you have folks that are doubting any action will be taken because of comments like the one we just talked about.
What do you think is going to happen?
I don't know, but I do know that the United States is a party to the Genocide Convention of 1948, and the convention requires signatories like the United States to punish and prevent, quote-unquote, acts of genocide.
And that gives us that obligation to punish China and to prevent China from continuing genocide.
So this is something that I'm sure that you and the Epoch Times are going to continue to talk about if we don't see punishment and prevention.
Because clearly, the Biden administration, I'm sure Biden doesn't want to do anything.
But the point is, he's a democratically elected president.
He's subject to pressure.
And I'm sure you guys are going to put a lot of pressure on him.
Well, we're going to keep basically getting these issues out into the open so as many people to hear as possible.
I think that's probably the most important thing.
No doubt about it.
I'm sure you're going to do it.
And it's really important that you do that because there are so few voices in the U.S. that are talking about these issues in the way that you do.
Well, I appreciate that, Gordon.
Any final thoughts before we finish up?
The United States needs to recognize the fundamental nature of the Chinese challenge.
So there are a number of things that they've been doing.
We've now got, what, 503,000 deaths from a virus that China deliberately spread beyond its borders by lying about the contagiousness and by forcing countries to accept arrivals from China while they were locking down their own country.
China was fomenting violence on American streets last year.
They were doing it this year in connection with the January 6th riots on Capitol Hill.
This is not just a country that's competing against us.
This is a country that wants to overthrow us.
We have to understand how malicious it is, because if we don't understand it, we're not going to take those steps that are necessary to defend our republic.
Gordon, before we actually finish up, I want to get you to kind of qualify what you said about what they did around January 6th, because this is a very contentious time period, and there's a lot of different thoughts about it.
Tell me what you're thinking.
What they did through their internet troll operations, through their social media functions, was to urge Americans to commit acts of violence.
And they did that both before and after January 6th.
So this is a continuation of what they were doing last year, urging Americans to engage in violence.
This is more than just an act of subversion.
This is an act of war.
So, again, I know we're finishing up here, but Internet companies, our big tech companies, Facebook, Twitter, Google, they're doing all sorts of what certainly appears to be censorship and deplatforming, including the former president of the United States.
What are they doing with China?
Well, they're not doing anything.
I'll give you an example.
On October 8th of last year, the European Bureau Chief of China Daily, which is an official Communist Party newspaper, actually urged Americans to throw petrol bombs.
That is an act of subversion.
That's an act of war.
And by the way, it's a violation of Twitter's terms of services.
But Chen Weihua is still on Twitter.
It's incredible.
It's incredible.
Gordon, such a pleasure to have you on.
It's great to be here.
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