Our So-Called Foreign Policy: Advice From a Genuine China Expert That’s Genuinely Useless

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China, espionage, fentanyl, globalism, Mel Books, national interests, Nicholas Kristof, opioids, Our So-Called Foreign Policy, privacy, spying, Thomas Hobbes, TikTok

New York Times columnist Nicholas Kristof’s column on how the United States can avoid war with China generated two big takeaways that jumped out at me right away:

First, although his knowledge of the People’s Republic is impressive (he and his wife deservedly won a Pulitzer Prize for reporting on China’s democracy movement and its brutal suppression in Tiananmen Square), his foreign policy thinking can be dangerously childish for anyone primarily concerned with defending and promoting critical U.S. interests..

Second, this column is worth focusing on because such childishness has been all too typical of the globalist strategy that dominated U.S. foreign policymaking and thinking in the decades between the end of World War II and the advent of the Trump presidency.

The problems with Kristof’s column begin with the headline “How to Avoid a War with China” – which unlike many headlines, accurately reflects the main theme. This objective is troublesome because except for pacifists or those unconcerned about preserving acceptable levels of American political independence and prosperity, it can’t be the top priority for U.S. China policy or for any other dimension of U.S. foreign policy.

And in fact, it hasn’t been the nation’s top international priority for decades. That’s why Washington has long pledged to defend numerous treaty allies by threatening adversaries with nuclear attack in response to aggression. The domination of these allies by the Soviet Union and/or North Korea and/or China has been deemed an outcome worth endangering America’s physical survival.

It’s perfectly legitimate for Kristof or anyone else to question these priorities. I myself have opposed incurring nuclear war risk in any number of circumstances (most recently, on behalf of Ukraine, which in my view is of no intrinsic importance to U.S. safety, sovereignty, or prosperity).

But if Kristof or anyone else seeks to fold back some or all such American nuclear umbrellas based on cost-risk calculations demonstrating why various national security objectives (including, for example, America’s own independence) aren’t vital after all, or unless these critics are simply doctrinaire pacifists, they need to take one of two steps for the sake of full disclosure to their audiences and intellectual honesty.

They can either explain how the United States can achieve vital objectives without the deterrent effect of nuclear weapons. Or they can acknowledge that achieving such U.S. objectives regardless of risk isn’t their concern. Since Kristof hasn’t argued for any of these points, from this standpoint, it’s difficult to view his column as anything else but a simple expression of fear.

Except two points that Kristof has made exemplify one example of what I’ve long called a deepseated American failure – especially by generations of globalists in and out of government – to think of U.S. foreign policy as an exercise in promoting or defending specific interests at all. My first comprehensive stab at this argument came here.

And further research revealed to additional ways in which “interest-based” thinking was avoided, including that which Kristof demonstrates – which I called (not too catchily) a search for abstract standards for judging U.S. foreign policy decisions that are incapable in and of themselves of helping America cope with important challenges or capitalize on important opportunities

These standards can take many forms – i.e., advancing human rights or strengthening international institutions or promoting the economic development of low-income countries. The one that Kristof is pushing in his column seems to reflect the idea that it’s not legitimate (or doesn’t pass some more elemental smell test) for the United States to defend itself against or even object to any Chinese threats in spheres in which America’s record isn’t simon pure or outstandingly effective itself.

Yes, this sounds positively ditzy. But what other interpretation can be put on the following two passages?

>“I’m among those wary of TikTok because of the risk that it might be used for spying. But I also know that the United States has similarly used private businesses to spy on China. When China purchased a new Boeing 767 in 2000 to be the Chinese equivalent of Air Force One, American officials planted at least 27 bugs in it” and

>”I think the United States should press China harder on some issues, such as the reckless way Chinese companies export chemicals to Mexico that are turned into fentanyl. That Chinese-origin fentanyl kills many thousands of Americans each year, and it’s hard to see why the deaths of so many aren’t higher on the bilateral agenda.

“But we also need humility. America’s politicians, pharma companies and regulators themselves catastrophically bungled the opioid crisis. Why should we expect Chinese leaders to care more about young American lives than our own leaders do?”

Regarding the TikTok and spying point, sure Kristof professes concern about the Chinese app. But if his paramount aim is helping to prevent Beijing from jeopardizing the privacy of individual Americans, why mention America’s own espionage operations other than to foster the impression that they somehow excuse China’s? What else can this suggestion of moral equivalence accomplish?

I suppose that, in principle, Kristof (or someone else) could think that abstaining from some (or all?) U.S. spying on China might help the United States. Maybe by encouraging Beijing to reciprocate? But again, he never mentions how or why.

Someone prioritizing U.S. interests would recognize that the fact that Washington is “guilty” of the taking same kinds of actions that China carries out (along with every other country with such capabilities) is completely irrelevant to the imperative of defending Americans from its probes. That’s the only objective – or even subject of interest – that should matter to anyone concerned with this nation’s well-being.

Kristof makes a similar disclaimer about understanding the need to respond to the Chinese fentanyl ingredients threat. But then he introduces more distractions – namely (a) a call for humility because Washington has performed so miserably in dealing with opioid use; and (b) the suggestion that if U.S. leaders had cared more about their own people, China’s leaders would care about Americans more as well.

Let’s say, however, that President Biden publicly criticizes America’s opioid record. I’m a fan of humility. But exactly what purpose would such a statement serve? Awakening Americans to the dangers of opioids and/or to their own leaders’ incompetence and/or indifference? Spurring them to demand more effective domestic countermeasures? As if many Americans aren’t already angry about the crisis’ domestic roots and haven’t clamored for action?

Or perhaps Kristof believes that Beijing would be satisfied enough with the resultant propaganda victory to conclude that actively helping to kill so many Americans was no longer necessary? I can’t think of any other value that would be added to a public U.S. eating of humble pie. But again, he leaves this discussion hanging, too.

Or maybe Kristof is worried that if the Chinese sign some agreement, then U.S. leaders will believe that the fentanyl pressure is off them? He sort of indicates this at the end, with his contention that the United States can best fend off various Chinese threats by strengthening its own society and economy. And he’s certainly right about the need for better U.S. domestic policies. But would Washington really be let off the fentanyl hook until deaths fall dramatically? That’s doubtful, and in any event, the author’s analysis here is awfully skimpy.

But it’s distraction Number Two that’s more revealing, because, as with Kristof’s seeming views on spying, it raises the possibility that as long as Washington’s own anti-fentanyl measures haven’t reached some level of acceptability (in whose eyes? China’s?), it can’t reasonably expect Beijing to lend a helping hand…and perhaps shouldn’t even try changing Chinese policies?

I can’t say for sure that’s Kristof’s view. But even if current Chinese leaders ever would consider such a beneficial course of action under any foreseeable circumstance, it’s anything but clear here, either, why in Kristof’s view even mentioning the American fentanyl record matters. However lousy it’s been, shutting off the flow of precursors from China would indisputably help save American lives So this outcome should be pursued vigorously, period. Why muck up the issue with any other considerations?

It may seem that I’m calling emphatically for a foreign policy of double standards and of hypocrisy. But that would be missing the point. I’m arguing instead for anchoring America’s approach to the world first and foremost to the defense and advancement of specific, concrete national interests – that is, to no standards whatever except for whatever contributes to those goals.

As for the hypocrisy charge, I plead (as a Mel Brooks movie once memorably put it) “Incredibly guilty. Because in the kind of fundamentally Hobbesian world that I’m of course assuming, I’m perfectly fine with the United States resorting to methods whose use by others it opposes because I’m completely uninterested in creating or upholding norms to which all should adhere. I’m simply interesting in doing whatever’s necessary, whenever it’s necessary, for the United States to create advantage – of course subject to the approval at some point of the American people – and to ensuring that the nation retains the power to enable this approach to succeed.

This doesn’t rule out cooperation with other countries at various times on various subjects. And if the American people endorse such a course, it doesn’t even rule out U.S. efforts to conform with those non-interest-based, abstract standards of behavior. What it does rule out is making any of the above the alpha and omega of foreign policy. And if you believe that any other test should rule instead, let me know.

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Following Up: Podcast On-Line of Last Night’s National Radio Interview on China’s Spy Campaign

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CBS Eye on the World with John Batchelor, China, decoupling, espionage, Following Up, Gordon G. Chang, manufacturing, national security, spying

I’m pleased to announce that the podcast is now available of my appearance last night on the nationally syndicated “CBS Eye on the World with John Batchelor.” Click here for a timely discussion – with co-host Gordon G. Chang – on why the unsually wide-ranging nature of China’s spying on the United States means that U.S. leaders need to update their dangerously outmoded concepts of critical industries.

And keep on checking in with RealityChek for news of upcoming media appearances and other developments.

Making News: On National Radio Tonight on Lagging U.S. Responses to China’s Spying

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CBS Eye on the World with John Batchelor, China, decoupling, economy, espionage, Gordon G. Chang, Making News, manufacturing, national security, spying

I’m pleased to announce that I’m scheduled to be back tonight to the nationally syndicated “CBS Eye on the World with John Batchelor.” Our subject – why the unsually wide-ranging nature of China’s spying on the United States means that U.S. leaders need to update their dangerously outmoded concepts of industries that are critical for national security.

No specific air time had been set when the segment was recorded this morning, but the show – also featuring co-host Gordon G. Chang – is broadcast beginning at 10 PM EST, the entire program is always compelling, and you can listen live at links like this. As always, moreover, I’ll post a link to the podcast as soon as one’s available.

And keep on checking in with RealityChek for news of upcoming media appearances and other developments.

Our So-Called Foreign Policy: On Chinese Spying and Dual Loyalties

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academics, Biden administration, China, China Initiative, Chinese Americans, civil liberties, DOJ, dual loyalty, espionage, FBI, German-Americans, higher education, immigrants, Israel, Italian-Americans, Japanese internment, Japanese-Americans, Jews, Justice Department, Our So-Called Foreign Policy, profiling, spying, students, The New York Times, World War II, Yudhijit Bhattacharjee

As an American Jew, I’m extremely aware of the dangers of accusing members of various U.S. identity groups with ancestry from or associated with foreign countries of “dual loyalties.” The worst example of the injustices that can result was the World War II-era internment policy – which punished legal immigrants and even American citizens simply based on the assumption that anyone of Japanese descent could be spying for a wartime enemy.

(German- and Italian-Americans came under suspicion, too, but were placed in camps much more selectively than Japanese-Americans.)

Especially in the U.S. context, the dual loyalty charges levelled against Jews has come from those who claim that when they lobby for or just favor pro-Israel policies, they’re prioritizing the interests of the Jewish State over those of the United States. (For some typical – and unusual – recent examples see here.)

More recently, individuals of Chinese descent living in America have come under the microscope due to concerns about wide-ranging spying campaigns conducted by the People’s Republic. And because the targets have ranged from U.S. citizens to legal immigrants to Chinese nationals resident here as students and on various academic exchange programs, critics have claimed that racial profiling and dual loyalty overreach have marked the responses of American law enforcement agencies.

Indeed, these charges – along with contentions that valuable scientific progress is at risk – have been so persuasive to the Biden administration that last February, it shut down a Justice Department program begun during the Trump years to cope with the alleged threat.

But as a New York Times Magazins article today has made clear, despite the dangers of broad-brush approaches, something like the Justice Department’s disbanded “China Initiative” is absolutely necessary to safeguard U.S. national security adequately.

As explained in this detailed Times report on the FBI’s China-related counter-espionage work (and it’s worth quoting in full):

“…China has sought to exploit the huge numbers of people of Chinese origin who have settled in the West. The Ministry of State Security, along with other Chinese government-backed organizations, spends considerable effort recruiting spies from this diaspora. Chinese students and faculty members at American universities are a major target, as are employees at American corporations. The Chinese leadership ‘made the declaration early on that all Chinese belong to China, no matter what country they were born or living’ in, James Gaylord, a retired counterintelligence agent with the F.B.I., told me. ‘They started making appeals to Chinese Americans saying there’s no conflict between you being American and sharing information with us. We’re not a threat. We just want to be able to compete and make the Chinese people proud. You’re Chinese, and therefore you must want to see the Chinese nation prosper.’

“Stripped of its context and underlying intent, that message can carry a powerful resonance for Chinese Americans and expatriates keen to contribute to nation-building back home. Not all can foresee that their willingness to help China could lead them to break American laws.”

Keep in mind, moreover, that Times reporter Yudjhijit Bhattacharjee is by no means unsympathetic to the profiling and dual loyalty issues, as he wrote in the very next sentence,

“An even more troubling consequence of China’s exploitation of people it regards as Chinese is that it can lead to the undue scrutiny of employees in American industry and academia, subjecting them to unfair suspicions of disloyalty toward the United States.”

But however – genuinely – troubling they are, if you’re worried about Chinese spying and national security, and you acknowledge that much of Beijing’s strategy is based on an attempt to blur the distinction between Chinese nationals and Chinese-Americans, and that the latter can be all too susceptible to these appeals, what’s the alternative to casting a wide net? Pretending that there’s nothing to see here?

Which brings up another disturbing finding of Bhattacharjee’s: The claim of one FBI agent he interviewed that “When… agents go out to talk to companies and universities about the threat…skeptical listeners ask for the evidence that proves the theft of trade secrets is part of a campaign directed by China’s government.”

Given unmistakable evidence of decades of massive Chinese theft of U.S. and other foreign intellectual property, China’s systematic disregard for other long agreed-on global trade rules it’s promised to respect, and its increasingly hostile and expansionist foreign policies, what aside from willful ignorance – or on the part of universities, a naive faith that even a regime so repressive and belligerent would never dream of corrupting the global March of Science – could explain this skepticism?

Obviously no country with what I called yesterday a healthy sense of self-preservation could possibly base its China counter-espionage policies on such assumptions. Nor could any country with inevitably limited national security resources and a consequent need to set priorities.

So even though critics of the China Initiative were right in pointing out that some of those it had prosecuted have been acquitted, and even though that danger of overreach is always present, the Biden administration was seriously mistaken in not only closing down the China Initiative but sanctimoniously declaring that it’s completely scrapping any practices smacking of “standards based on race or ethnicity.”

And if China Initiative critics want to boost the odds of counter-espionage campaigns choosing their targets accurately, they might try getting their own heads out of the sand by helping the government less reluctantly and scrutinizing their own China ties with more realistically and vigiliantly.

Making News: Podcast Now On-Line of National Radio Interview on the Spy Balloon and China Decoupling

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CBS Eye on the World with John Batchelor, China, China spy balloon, decoupling, espionage, Gordon G. Chang, investment, Making News, spy balloon, spying, surveillance, Trade

I’m pleased to announce that the podcast of my interview last night on John Batchelor’s nationally syndicated radio show is now on-line.

Click here for a timely discussion – with co-host Gordon G. Chang – on how the spy balloon incident is giving companies in the United States and all over the world still more good reasons to reduce their ties with China.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Our So-Called Foreign Policy: If You Think the Chinese Spy Balloon Incident is Weird…

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Biden, Biden administration, CFIUS, China, Chinese spy balloon, Committee on Foreign Investment in the United States, espionage, foreign investment, Fufeng Group, Grand Forks, Grand Forks Air Force Base, North Dakota, Our So-Called Foreign Policy, Treasury Department, U.S. Air Force

However bizarre you think President Biden’s handling of the Chinese spy balloon was, another recent episode in U.S.-China relations could well top it for weirdness. Indeed, it raises the question of whether the administration will fall into a puzzling pattern of commendably tough and smart trade and tech transfer policies toward the People’s Republic while overlooking grave espionage threats.

Not that the spy balloon thing wasn’t plenty strange enough. I mean, the U.S. government found out that this Chinese surveillance craft entered U.S. airspace in Alaska nearly a week ago. (The New York Times has put together this handy-dandy timeline.) It let it float southward over the Canadian border and pass over numerous American strategic sites for days. It first explained its failure even to try shooting it down by citing fears about the debris harming civilians on the ground – when the target was drifting over virtually unpopulated regions. And it finally acted only after the balloon clearly had ample time both to snap pictures of key locations and send them back to China.

But in late 2021, an arguably stranger tale began. That’s when a Chinese agricultural entity (remember – no organization in China deserves the label “business” or “company” because in China’s state-dominated economy, all such groupings are either directly or indirectly controlled by the Chinese regime) announced plans to build a corn milling facility just outside Grand Forks, North Dakota.

Most state and local leaders welcomed the plan as a big jobs and growth boon. But there was this problem: The facility would be located 12 miles from a major U.S Air Force base.

Now you’d think that since the Biden administration deems China as America’s most dangerous strategic adversary, this prospective Chinese investment – from something called Fufeng Group Ltd. – would be vetoed immediately. And this expectation logically would be even stronger because in August, 2018, Washington’s authority to reject potentially threatening foreign projects was broadened to include purchases of real estate. In February, 2020, regulations issued by the Trump Treasury Department came into force that listed facilities, including military installations, near which such transactions could (but not must) be prohibited.

Yet the Grand Forks base never made the list. And it stayed off the list even after September, 2022, when a Biden Executive Order “reflecting the evolving national security threat landscape and underscoring the critical role of the Committee on Foreign Investment in the United States in responding to new and emerging threats and vulnerabilities in the context of foreign investment,” elaborated and expanded “on the existing list of factors that CFIUS considers, as appropriate, when reviewing transactions for national security risks, and describes potential national security implications in key areas.” 

As a result, when critics started protesting about the national security implications of these Chinese plans, CFIUS decided (after three months) that it lacked jurisdiction in the Grand Forks matter.

And there the controversy presumably would have ended. Except that on January 27, in response to concerns expressed by North Dakota’s two Republican Senators, Assistant Secretary of the Air Force Andrew Hunter stated that

“Grand Forks Air Force Base is the center of military activities related to both air and space operations. While CFIUS [the Treasury-chaired inter-agency task force charged with scrutinizing proposed foreign investments with national security implications] concluded that it did not have jurisdiction, the [Air Force] Department’s view is unambiguous: the proposed project presents a significant threat to nationa security with both near- and long-term risks of significant impacts to our operations in the area.”

And the base’s website makes it easy to see why. It explains that Grand Forks is headquarters of

“The 319th Reconnaissance Wing [which] provides a decisional advantage to our warfighters and national leaders through support of our Nation’s Global Hawk High Altitude ISR [Intelligence, Suveilllance and Reconnaissance] mission. Ensures strategic command and control through the operation of the Nation’s High Frequency Global Communication System.  Affords Combatant Commanders mission-ready Airmen anytime, anywhere. Provides airmen and families of the Grand Forks AFB team, to include geographically separated units, with responsive, tailored, and mission-focused support.”

In addition,

“Communication professionals with the 319th Communication Squadron maintain one of two high-frequency global communications systems in the Air Force, offering 24/7 global continuity for command and control in support of the Department of Defense, Executive Branch of the U.S. Government and Department of Homeland Security.”

But China’s intentions of building…anything…anywhere close to Grand Forks? Nothing to see here, according to Treasury and its task force.

To be fair, Treasury’s “What, Me Worry?” attitude toward national security ever since the task force – the Committee on Foreign Investment in the United States – and the screening process it’s supposed to operate was created in 1975.

At the same time, back then, and in the following decades, the main controversy surrounding CFIUS was whether it should be warier of proposed investments by American allies like Japan or Persian Gulf oil producers because critics (like me) argued that they could threaten the economic and technological foundations of U.S. national security.

Today, the China challenge obviously combines these economic and technological considerations with out-and-out military threats.

Fortunately, in the North Dakota case, Grand Forks’ mayor has reversed his stance and declared he will ask the City Council to deny the Chinese building permits. But clearly, these decisions can’t be left up to state and local officials. If President Biden is really determined to counter China with the comprehensive approach that’s needed, he’ll revamp CFIUS by removing Treasury from the driver’s seat, expand the list of strategic facilities near which Chinese and other foreign investments can be banned. And respond promptly the next time a spy craft from China, or anywhere else, violates American air space.

Im-Politic: The Swalwell Spy Scandal News Blackout Extends Far Beyond the NY Times

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ABC News, Associated Press, Bloomberg.com, CBS News, China, Christine Fang, Eric Swalwell, espionage, Fang Fang, Fox News, Im-Politic, Mainstream Media, McClatchy News Service, media bias, Michael Bloomberg, MSM, MSNBC, NBC News, NPR, PBS, Reuters, spying, The New York Times, The Wall Street Journal, USAToday

If you’re a news hound, you know that The New York Times, long – and long justifiably – seen as the most important newspaper in the world, has devoted exactly zero coverage to a bombshell report earlier this month that California Democratic Congressman Eric Swalwell several years ago was pretty successfully targeted by a spy from China.

And if you don’t know about this Swalwell story, you should. He’s a member of the House Intelligence Committee, which means that he’s been privy to many of the nation’s most important national security secrets. In addition, he has long been a genuine super-spreader of the myth that President Trump is a Russian agent. So although there’s no evidence so far that Swalwell either wittingly or unwittingly passed any classified or otherwise sensitive information to this alleged spy, understandable questions have been raised about his judgement and therefore his suitability for a seat on this important House panel. Further, he hasn’t denied having an affair with this accused operative, who was known as Christine Fang here, and Fang Fang in her native country.

In other words, it’s a pretty darned big story, and The Times decision to ignore it completely (not even posting on its website wire service accounts of developments) is a flagrant mockery of its trademark slogan “All the News That’s Fit to Print” and clearcut example of media bias – especially since the paper showed no reluctance to report on his abortive presidential campaign this past year or his (always unfounded) attacks on Mr. Trump.

At the same time, if you don’t know about l’affaire Swalwell, you’ve got a pretty compelling excuse. Because The Times has by no means been alone in its lack of interest. Joining it in the zero Swalwell coverage category since the China spy story broke on December 8 have been (based on reviews of their own search engines):

>The Associated Press – possibly the world’s biggest news-gathering organization

>Reuters – another gigantic global news organization

>Bloomberg.com – whose founder and Chairman, Michael Bloomberg, is a leading fan of pre-Trump offshoring-friendly China trade policies

>USAToday

>NBC News

>CBS News

>MSNBC (The FoxNews.com report linked above says this network covered this news once briefly, but noting shows up on its search engine.) 

>National Public Radio (partly funded by the American taxpayer)

>McClatchy (another big news syndicate)

Performing slightly – but only slightly – better have been:

>PBS (one reference on its weekly McLaughlin Group talk show – nothing on its nightly NewsHour)

>ABC News (one news report)

>The Wall Street Journal (one news article, one opinion column)

The Swalwell story isn’t the world’s, or the nation’s, or even Washington’s biggest. But it’s unmistakably a story, and the apparent blackout policy of so many pillars of journalism today, coming on the heels of similar treatment of the various Hunter Biden scandal charges, further strengthens the case that a national institution that’s supposed to play the critical role of watchdog of democracy has gone into a partisan tank.

The only bright spots in this picture? Social media giants Twitter and Facebook haven’t been censoring or arrogantly and selectively fact-checking Swalwell-related material. Yet.

(What’s Left of) Our Economy: How a U.S.-China Huawei Tech Disaster Unfolded

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5G, antitrust, AT&T, Bell Labs, China, espionage, Huawei, Lucent, national security, networking, offshoring, privacy, semiconductors, surveillance, tech transfer, technology, telecommunications, {What's Left of) Our Economy

It’s hard to think of a worse mess that Washington has gotten the country into than the loss of global leadership in advanced telecommunications knowhow to China. With the world on the cusp of a transition into the so-called 5G standard, the United States boasts exactly zero companies capable of creating complete networks based on this technology, which will increase by orders of magnitude the speed with which individuals, organizations of all kinds, and governments can send and receive digital information, and thereby bring much closer all kinds of game-changing breakthroughs. In particular, 5G can enable the creation of truly “smart” electronic networks that will greatly boost the efficiency of public transportation and energy infrastructure, healthcare, manufacturing, and so much more. (Here’s a good primer.)

Even worse, the world’s pace-setter in terms of both quality and price is Huawei, and Chinese entity with unusually close ties with China’s dictatorial and belligerent government.  Moreover, its lead over its other two 5G competitors (Finland’s Nokia and Sweden’s Ericsson) is enormous. Huawei’s dominance matters a lot because the advent of an effectively networked world also means the advent of a world in which hacking becomes much more dangerous – and the power to hack will translate into decisive strategic and economic leverage. Just think of the possibilities of national security and economic spying alone, let alone the implications for everyone’s privacy. And because of Huawei’s 5G leadership, Beijing holds entirely too many of these cards.

All is by no means lost yet. In particular, Huawei and other Chinese technology entities still rely heavily on U.S.-based companies for state-of-the-art parts and components – especially semiconductors – along with software. But thanks to 5G’s vast potential alone, Americans can’t assume that, before too long, China won’t be able to use it to cut into their lead in these information technology manufacturing and services sectors.

So how did this dangerous U.S. failure come about? When I first briefly answered this question posed by a Twitter follower, I emphasized the U.S.’ reckless pre-Trump administration China policies. These both greatly incentivized Americans businesses to offshore production and jobs to the People’s Republic even in the advanced manufacturing sectors in the public was assured the United States would always maintain matchless superiority, and turned a blind eye to China’s practice of extorting cutting edge knowhow from these U.S.-based firms in exchange for access to China’s huge and potentially huge-er market.

But as the author of an article last year focusing on the weird – and arguably perverse – relationship between recent American trade policies like these, and recent American antitrust policies, I was especially grateful to this Financial Times article for reminding me that the latter helped create this disaster as well.

Here are the key passages explaining the lack of a US telecom equipment manufacturer capable of producing the full-range of 5G kit:

“To understand how this came about, it is necessary to go back to the mid-1990s when the US passed a Telecommunications Act that weakened US champions such as Lucent Technologies by enticing a flurry of new entrants into the market. With its profit margins under pressure at home, Lucent targeted sales in a fast-growing Chinese market to prop up a flagging share price.

“But Chinese authorities insisted that all foreign equipment makers would — as the price of admission — be obliged to hand over technology and knowhow to state research labs and business partners. One by one, the chief executives of the largest telecoms equipment companies trooped through Beijing in the early 2000s pledging to localise their technologies and production bases.”

Neither American Presidents nor Congresses displayed any serious interest in the consequences. Yet submitting to China’s blackmail failed even to save Lucent. In 2006, it found itself in desperate straits, “and was sold to a French rival, leaving North America without a heavyweight telecoms equipment player. The company that was once the technology champion behind Bell Labs is now part of Finland’s Nokia.”

My trade/antitrust article focused on the bizarre situation that had prevailed in the pre-Trump decades, during which the U.S. leaders from both major parties seemed hell-bent on maximizing the competition faced by U.S.-based businesses from foreign economies (via offshoring-friendly and similar one-way trade deals and policies) even as they seemed equally determined to reduce the domestic competition faced by U.S.-based businesses by greatly weakening antitrust enforcement.

The Financial Times article shows that exceptions periodically appeared to this indulgent antitrust policy. But more troubling, it indicates that no national security or even global economic competitiveness considerations (and of course the two are closely related) ever significantly affected antitrust policy. That’s an indictment just as serious as simple neglect or actual encouragement of ever greater levels of corporate concentration.

It’s important to point out, moreover, that this telecommunications disaster’s roots run much deeper. Specifically, the federal government began back in 1949 to pressure AT&T’s ancestor Bell Telephone, which had dominated American telecommunications from its 19th century beginnings, to divest it manufacturing and research and development activities on the one hand from its services activities. And this even though that research arm, Bell Labs, invented the world’s first semiconductor device – the transistor.

First AT&T and then Lucent made plenty of their own mistakes, too. It’s a really complicated story, though, and two good short accounts can be found here and here. Nonetheless, clearly the voices in Washington during these decades that might have been encouraging a more comprehensive strategy to preserve U.S. dominance – or even competitiveness – in this crucial technology were way too weak. And now, for the near-term future in any event, the nation is dependent for this knowhow on a distant regime whose benign intentions can by no means be assumed.

Our So-Called Foreign Policy: A Call for More Idiocy on China

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China, cyber-security, espionage, Huawei, legalism, Michael Hiltzik, national security, Our So-Called Foreign Policy, precautionary principle, rule of law, state capitalism, The Economist, transparency

Anyone still harboring doubts that China’s government and its allies in the American offshoring lobby have snookered otherwise smart reporters about the nature of the PRC’s economic system and how best to cope with it? If so, look no further than Michael Hiltzik’s new Los Angeles Times column about Huawei.

According to Hiltzik, the telecommunications giant has been largely shut out of the U.S. market by “commercial xenophobia.” The U.S. government, he writes, has not officially banned the sale of Huawei products.  But it’s accomplished this aim for all intents and purposes “through bureaucratic winks and hints” that are based on a Congressional committee report that was “long on innuendo and short on hard information.” As a result, Huawei has been unfairly forced to prove a negative – that it is not assisting Chinese government espionage efforts.

Here of course is the problem. Hiltzik – and other apologists for China, like The Economist magazine he seems to consider gospel on such matters – apparently believe that Chinese companies like Huawei are as transparent as private sector companies everywhere. In their view, non-Chinese authorities have ready access to corporate records at Huawei and other Chinese companies, and face no difficulties in determining these firms’ ties to Beijing, and even any spying they may be carrying out. So it’s manifestly unjust to base policy on observation’s like the Congressional report’s conclusion that “China has the means, opportunity, and motive to use telecommunications companies for malicious purposes.”

Even if China didn’t have a scary record of government-sponsored cyber-hacking, these views might be reasonable – if China had anything remotely like a free market economy where reasonably bright lines separate the public and private sectors, or if China’s legal and corporate governance systems were based on anything remotely like the free flow of knowledge and rule of law. But who possessing a working brain really believes any of those propositions?

In fact, because China (and many other countries run by opaque bureaucracies and lacking rule of law traditions) are so fundamentally different from the United States, dealing with it with American legal principles that are justly revered in U.S. domestic affairs too often turns policy into an idiot.

As I wrote shortly after the Congress’ Huawei report came out, “because China is so thoroughly different and troublesome, handling it conventionally could amount to waiting for potential intelligence or security debacles to become actual. So the only responsible approach is precautionary — placing a heavy burden on China’s state capitalist system to prove its innocence.” Two years later, a major problem with America’s China policy is that Washington’s approach to Huawei remains an all-too-exceptional example of rejecting policy idiocy and embracing common sense.