UNITED NATIONS – The U.S. government is charging China with waging economic warfare and deliberately targeting American industries for extinction – even as it continues writing foreign aid checks to the surging economic behemoth in Asia.
The charge of an economic war came when a Commerce Department investigation found Chinese textile and clothing makers, advanced materials and metals companies, light industrial firms, specialty chemical manufacturers, medical product makers, and agricultural firms get subsidized IT services, subsidized product design services and subsidized training services for their employees.
These subsidies give Chinese companies a competitive edge that enables them to undersell American companies and drive them out of business, the Commerce Department charges.
The move to file a formal complaint with the World Trade Organization puts the lie to the notion that China practices free-market capitalism and exposes a battle within Washington over U.S. policy toward Beijing.
Meanwhile, at virtually the same time, the Washington Times was reporting that in 2014, the U.S. State Department and its USAID program sent nearly all the $12.3 million set aside for China.
The plans are to send another $6.8 this year, the report said.
Regarding China’s subsidies to its own industries – through currency manipulation, low interest loans, free land and other assistance, Michael Pillsbury, a former Pentagon official who crafted China policy for presidents from Nixon to George W. Bush, said one group “feels the Chinese conduct has been outrageous and needs major punishment.”
He said another faction believes free trade and economic engagement will transform China into a free-market democracy “and therefore no cases should be filed against China.”
“The Republican Party, generally speaking, has been the party of free trade, and Majority Leader McConnell is right in the middle of his party’s ideological view that free trade saves the world, causes peace and brings about democracy. China is quite aware that these Republican free traders are friends of China. They’re given extraordinary access and praise by the Chinese,” Pillsbury told WND.
However, “the tea party tends to be much more aware of the growing domination of China. There are some military hawks who have written about China’s aircraft carriers, China’s space weapons program. But Mitch McConnell is not one of those – he is much more of the free trade leader,” Pillsbury said.
The policy of economic engagement plays into China’s long-term plan to use America’s own know-how to overtake the U.S.
“They need American investment, they need exports to go to America with very low tariffs, they need our science and technology, they need our good will. They must not confront us or provoke us – that would be a violation of how their strategists read their ancient military history,” he said.
Chinese military strategy places a premium on deception and winning over influential advisers in the opponents’ leadership circle to breed complacency and turn the opponent’s house in on itself.
Defectors told Pillsbury how China turned around American policy toward China in 1993 in what they call “the Clinton coup.”
Threatened with legislation that would cut off China’s low tariff exports to the U.S., Beijing went to work on advisers in President Clinton’s circle. They targeted “people who believed in free trade. They didn’t have to subvert them or compromise them in the classic espionage sense,” Pillsbury tells WND.
“They identified about five people who were known from their writings. [Deputy Treasury Secretary] Larry Summers was one, [Treasury Secretary] Bob Rubin was another, and Laura Tyson [Chair of the Council of Economic Advisers]. [These advisers] have made speeches ever since the 1993 turnaround – they are quite proud of their role.”
The pro-free trade lobby argues that America benefits from low-priced Chinese imports. Pillsbury counters, “In the short term, yes, you can buy cheaper things at Walmart, but longer term we’re going to be the No. 2 or No. 3 country in the world. If you measure things over two or three decades, it means the consequences for America’s economic primacy in the world are going to be really grave.”
As assistant under secretary of defense for policy planning under Ronald Reagan, Pillsbury was responsible for implementing covert aid under the Reagan Doctrine and shipping Chinese arms to Afghan rebels fighting the Soviets in the 1980s. He is currently the director of the Center of Chinese Strategy at the Hudson Institute.
Pillsbury wants to see Americans unite to face the threat from China. While conservatives may be concerned about the Chinese military buildup, they’re less concerned about human rights issues or the Dalai Lama. Meanwhile, environmentalists turn a blind eye to the fact that China is the greatest polluter on the plant.
“What the Chinese are very happy about and hope will continue is that we don’t have a grand coalition here inside the U.S. where people concerned about Christian issues and house churches, or the Dalai Lama, or military issues all cooperate together. Everyone is fragmented and there’s no cooperation among these different interest groups.
“This frankly is part of China’s recipe for success – to make sure conservatives only care about military issues and liberals only care about inequality. There’s no effort to recognize the Chinese challenge to us is a comprehensive one that threatens our primacy in the world,” he says.
The Times report about the handouts from America said, “In the big picture of things, China’s aid package – mostly centered around pollution and pro-democracy programs – is a mere drip from a foreign aid spigot that has been as great as $50 billion annually in recent years. But taxpayer watchdogs say it’s a classic example of the U.S. government not being able to rein in aid on projects whose effectiveness is immeasurable and could easily be funded by the country itself.”