Last week, the U.S.–China Economic and Security Review Commission, an agency set up to monitor and investigate national security, trade, and economic issues between the two countries, held a hearing to discuss China’s unfair trade practices.
Clyde Prestowitz, founder and president of the Economic Strategy Institute, a Washington-based think tank, said several large U.S. firms aggressively kowtow to or even lobby for Beijing in Washington.
Prestowitz said that the U.S. should make decoupling large U.S. firms from China the primary goal of U.S. trade policy.
Prestowitz said that Washington should question the CEOs of these firms about how their shifting production and technology development to China will bring forth benefits for the U.S.
He questions whether these leaders ever think about what’s best for America. Or perhaps they only think about how much money they can get from Beijing and then stash it in Bermuda or Singapore to avoid paying taxes in the U.S.
In the hearing, Prestowitz cited the example of Apple.
He said that all Apple products are developed from government-funded research initiatives. The company has received enormous funding from U.S. taxpayers since its start. But the fact is, all Apple products are made in China.
Prestowitz said that Apple wields enormous political power, employing a legion of attorneys and lobbyists. It has also made significant political donations.
Prestowitz cited two examples in which Apple showed double standards: a shooting investigation in California and Hong Kong’s anti-extradition movement a few years ago.
In 2015, a shooting occurred in San Bernardino County, California, where 14 people were killed and 21 injured.
Apple refused to unlock the shooter’s iPhone despite an FBI request, citing security and privacy concerns.
But four years later, during the “anti-extradition movement” in Hong Kong, Apple agreed to take down an app at Beijing’s request.
The said app allows the protestor to know which place has no police so that they can set up a protest there—this enraged Beijing. The state-run People’s Daily started to attack Apple. Within just a few days, the app disappeared from the app store.
Moreover, Prestowitz said China uses other countries’ economic dependence as a coercive weapon.
For example, when a U.S. basketball manager tweeted in favor of Hong Kong’s pro-democracy protest, Beijing suspended the broadcasting of National Basketball Association games in China.
Prestowitz said that China wants to replace the U.S. to become the world’s most dominant power. And it’s not just about politics and military force alone, but also in the technology field.
To achieve this goal, Beijing takes an approach contrary to free-market nations, including:
- Attract more foreign investment into China.
- Entice foreign companies to relocate their factories to the mainland.
- Forced technology transfer.
- Prestowitz said that many used to think that if China entered the WTO, then free trade would speed up the democratic process in China, but it has not.
On the contrary, China has grown into a much more dangerous power to democratic nations.
Prestowitz said that U.S. officials must quit trying to persuade China and instead take action.