IV. GREAT POWER COMPETITION
A. Threat Vectors
The 2018 National Defense Strategy made clear China is now the primary U.S. national security concern.77 China is determined to fashion a “world-class” military.78 The U.S. risks losing strategic advantage to China across several critical domains.79 For instance, China is poised to surpass the U.S. in gross domestic product (GDP) while gaining technological advantages in critical scientific research areas, including artificial intelligence (AI), quantum computing, advanced battery storage and semiconductor technologies, genomics and synthetic biology, fifth-generation cellular networks (5G), and robotics.80 The differences between the U.S. and China are stark and the consequences for the world should China prevail are grave. The U.S. aspires to create a “free and open” world, complete with respect for sovereignty and the independence of nations, peaceful resolution of disputes, fair and open trade,
76 Swan, supra note 73.
77 U.S. DEP’T OF DEF., SUMMARY OF THE 2018 NATIONAL DEFENSE STRATEGY OF THE UNITED STATES OF AMERICA: SHARPENING THE AMERICAN MILITARY’S COMPETITIVE EDGE, 1-2 (2018).
78 U.S.-CHINA ECON. AND SEC. REV. COMM’N, 117TH CONG., ANN. REP. TO CONG. 541 (U.S. Gov’t Publishing Office 2019).
79 Adam Segal et al., *Absent a New National Strategy, the U.S. Risks Losing Its Edge to China in Technology and Innovation, Warns Task Force, *COUNCIL ON FOREIGN RELATIONS (Sept. 18, 2019), https://www.cfr.org/newsreleases/absent-new-national-strategy-us-risks-losing-its-edge-china-technologyand-innovation.
80 ELY RATNER ET AL., CTR. FOR A NEW AM. SEC., RISING TO THE CHINA CHALLENGE: RENEWING AMERICAN COMPETITIVENESS IN THE INDO-PACIFIC 3 (2019).
adherence to international law, greater transparency and responsible governance.81 By contrast, China’s global vision is largely illiberal, whereby Beijing sets the economic and military order and nations fall in line.82 If China triumphs, the world will be poorer for it; nations under China’s sphere of influence will be characterized by weak civil society and a cancerous authoritarianism bolstered by China’s surveillance state.83
China is likewise a threat to U.S. private sector interests.84 In 2012, former NSA Director Keith Alexander famously declared that Chinese hacking efforts into U.S. industrial and intellectual property constituted “the greatest transfer of wealth in history.”85 As Vice President Mike Pence explained in 2018:
[T]o win the commanding heights of the 21st century economy, Beijing has directed its bureaucrats and businesses to obtain American intellectual property … the foundation of our economic leadership by any means … and using that stolen technology, the Chinese Communist Party is turning plowshares into swords.86
To provide a comprehensive defense against Chinese hacking, the 2019 National Defense Authorization Act provided that the U.S.
81 Id.
82 Id.
83 Id.
84 China’s Threat to American Government and Private Sector Research and Innovation Leadership: Testimony before the House Permanent Select Committee on Intelligence, 115th Cong. (statement of Elsa Kania), https://www.cnas.org/publications/congressional-testimony/testimony-beforethe-house-permanent-select-committee-on-intelligence.
85 Josh Rogin, NSA Chief: Cybercrime Constitutes the “Greatest Transfer of Wealth in History,” FOREIGN POL’Y (July 9, 2012), https://foreignpolicy.com/2012/07/09/nsa-chief-cybercrime-constitutes-thegreatest-transfer-of-wealth-in-history/.
86 Mike Pence, Vice President Mike Pence’s Remarks on the Administration’s Policy Towards China, HUDSON INST. (Oct. 4, 2018), https://www.hudson.org/events/1610-vice-president-mike-pence-s-remarks-onthe-administration-s-policy-towards-china102018.
will employ all instruments of national power to defeat malicious cyber events.87 Nonetheless, most detected Chinese cyber operations against U.S. companies are directed against cleared defense contractors and information firms whose products and services support government, as well as private sector networks.88 Estimates vary, but according to the Ponemon Institute, the average malicious cyber event cost U.S. companies $7 million in 2017.89 Costs can quickly skyrocket, depending on the scale of the cyber event in question; the Equifax breach reportedly cost its insurers approximately $125 million.90 The Chinese private sector has its sights on U.S. industry secrets too. Huawei Technologies Co., Ltd (Huawei) is but a single example. Headquartered in Shenzhen, China, Huawei is the nation’s largest telecommunications manufacturer and the world’s second-largest manufacturer of smartphones, with over $90 billion in revenue in 2017 alone.91 Suspicion regarding Huawei dates back at least to 2012, when the House Intelligence Committee issued a report concluding that Huawei was a national security threat due to its wanton disregard for U.S. intellectual property laws.92 It is remarkable Huawei is unremarkable; in China Huawei is not an exception because, like any major company, its lines of business are supplicative to the CCP.93 In 2018, during a Senate Intelligence Committee hearing,
87 10 U.S.C. §394.
88 Naveed Jamali & Tom O’Connor, Chinese Spies Pose Unprecedented Threat to U.S. Beyond Elections to Mass Infiltration of Businesses, Intelligence Officials Say, NEWSWEEK (Aug. 27, 2020), https://www.newsweek.com/chinanumber-one-threat-us-intelligence-agencies-say-1527830.
89 Scott. J. Shackelford et al., Rethinking Active Defense: A Comparative Analysis of Proactive Cybersecurity Policymaking, 41 U. PA. J. INT’L L. 377, 384 (2019).
90 *Id. *
91Grace Sullivan, The Kaspersky, ZTE, and Huawei Sagas: Why the United States Is in Desperate Need of a Standardized Method for Banning Foreign Federal Contractors, 49 PUB. CONT. L. J. 323, 333-34 (2020).
92 Id.; see also MIKE ROGERS & DUTCH RUPPERSBERGER, INVESTIGATIVE REPORT ON THE U.S. NATIONAL SECURITY ISSUES POSED BY CHINESE TELECOMMUNICATIONS COMPANIES HUAWEI AND ZTE 3, 31, 42, 44 (2012).
93 Matt Burgess, Is China Really Using Huawei to Hack the World’s Communications? WIRED (Jan. 25, 2019), https://www.wired.co.uk/article/huawei-5g-uk-security.
FBI Director Christopher Ray testified that Beijing might use Huawei’s immense, global telecommunications infrastructure to compromise U.S. security interests.94 As a result, in August 2018, Congress passed the 2019 NDAA and section 889 codified a ban on Huawei.95 The difficulty is that, what made Huawei a possible threat vector, its necessary close association to the CCP, makes all Chinese telecommunication companies similarly tainted. For instance, in April 2020, Federal Communications Commission (FCC) Chairman Ajit Pai, made a compelling case against ZTE, another Chinese telecommunications giant. In his remarks, Pai said the U.S. will not allow the CCP to exploit network vulnerabilities and compromise critical communications infrastructure.96 On June 30, 2020, the FCC voted unanimously to designate ZTE and Huawei as national security threats, thus cutting them off from billions of dollars in federal broadband subsidies.
It is particularly concerning when U.S. technology companies capitulate to CCP talking points and are complicit in silencing speech. In June 2020, Sen Josh Hawley (R-MO) condemned the conferencing app Zoom for eroding its principles when it shut down the accounts of U.S.-based Chinese activists who held an event on the platform commemorating the 1989 anniversary of the Tiananmen Square Massacre.97 Zoom temporarily suspended the account of Zhou Fengsuo, the director of the nonprofit Humanitarian China, subsequent to his hosting a Zoom meeting with approximately 250 users remembering the massacre of antiCommunist protestors by Chinese government personnel. In a statement defending its action, Zoom acknowledged Zhou Fengsuo’s account was suspended because “when a meeting is held across different countries, the participants within those countries are
94 Sullivan,* supra* note 91 at 334.
95 John S. McCain National Defense Authorization Act for Fiscal Year 2019, Pub. L. No. 115-232, § 889(a), (f)(3)(A), 132 Stat. 1636, 1917 (2018).
96 David McCabe, FCC Designates Huawei and ZTE as National Security Threats, N.Y. TIMES (June 30, 2020), https://www.nytimes.com/2020/06/30/technology/fcc-huawei-zte-nationalsecurity.html.
97 Dean DeChiaro, Hawley Accuses Zoom of ‘Trading American Values for Beijing Profits,’ CQ ROLL CALL (June 15, 2020), 2020 WL 3172629.
required to comply with their respective local laws.”98 Chinese law forbids discussion of Tiananmen Square. In his letter to Eric Yuan, Zoom’s chief executive, Senator Hawley admonished Zoom for choosing censorship over free speech and using the convenience of Chinese “local laws … are what Party officials use to oppress more than a billion people, including more than one million Uyghurs who have been forced into slavery.”99 Hawley concluded his letter on an ominous note: “Trading American values for Beijing profits never ends well.”100
B. BRI: The Foreign Policy Vision
The Belt and Road Initiative (BRI) is the centerpiece of Beijing’s foreign strategy.101 In 2013, China mobilized vast resources and spearheaded a massive infrastructure development program; in its words, it began creating a modern Silk Road.102 The BRI includes over 125 countries and almost half of the world’s GDP.103 The BRI is creating a land, sea, and telecommunications network connecting China with much of the rest of the world104–– yet, it is so much more than a trade route. It is a “mega strategic initiative,” a “going-global strategy,” a “geo-economic vision” from the world’s second largest economy, biggest exporter of goods, and third largest investor for two-thirds of the global population.105 The BRI’s foundational normative blueprint, the Vision and Actions statement, co-authored by China’s National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of
98 Id.
99 Id.
100 Id.
101 Weixia Gu, China’s Belt and Road Development and A New International Commercial Arbitration Initiative in Asia, 51 VAND. J. TRANSNAT’L L. 1305, 1307 (2018).
102 August Nelson Dinwiddie, China’s Belt and Road Initiative: An Examination of Project Financing Issues and Alternatives, 45 BROOK. J. INT’L L. 745, 745 (2020).
103 Id.
104Gonzalo Puig, Free Trade Areas for China’s Belt and Road, 24 J. INT’L ECON. L. 3, 3 (2021).
105 Id.
Commerce, exhorts countries along the BRI to promote “unimpeded trade.”106 The tone of the Vision and Actions statement is noteworthy and pledges Beijing will work “to build a community of shared interests, destiny and responsibility, featuring mutual political trust, economic integration and cultural inclusiveness.”107
The BRI is a marketing campaign at heart.108 In 2017, President Xi Jinping gave an address at the Belt and Road Forum where he addressed the BRI’s five main goals: policy coordination, facilities connectivity, unimpeded trade, financial connectivity, and people to people bonds.109 China funds the projects via credit lending or “debt-trap diplomacy” – a predatory scheme aiming to hook poor countries Chinese loans.110Since the BRI’s launch, Chinese banks have given hundreds of billions of dollars in loans to participating countries.111 Debt-distressed and low-income nations, fearing its governments are falling into “debt-traps” which may threaten national security, have relied upon Public-Private Partnerships (PPP) using Build-Operate-Transfer (BOT) models to finance BRI projects.112 When developing a PPP via a BOT, the public authority grants a concession right to a private sector entity or sponsor to develop an infrastructure facility; the entity is responsible for financing, building, and operating the facility for a specified time. At the end of the specified time, the project hopefully should have generated sufficient profits to cover project costs, repayment of debt principal, and promised return on investor equity. At this point, the
106 Id.
107 Id.
108 Eyck Freymann, ‘One Belt One Road’ Is Just a Marketing Campaign, THE ATLANTIC (Aug. 17, 2019), https://www.theatlantic.com/ideas/archive/2019/08/beneath-the-veil-of-xijinpings-legacy-project/596023/.
109 Dinwiddie, supra note 102.
110 Freymann, supra note 108. As a counterpoint, emerging research is showing debt-trap diplomacy, though widely propagated in the West, may not have the anticipated deleterious effects on poorer nations thereby failing to give impetus for pushback against China. See generally, Deborah Brautigam, A Critical Look at Chinese ‘Debt-Trap Diplomacy’: The Rise of a Meme, 5 AREA DEV. & POL’ Y J. 1, 1 (2020).
111 Dinwiddie, supra note 102, at 746.
112 Id.
facility is transferred to the public authority free of charge.113 Not surprisingly, these speculations about the future are often wrong, giving rise to the “debt trap” designation.114 A few countries see China’s debt practices for what they are: a form of neo-colonialism. In 2018, Malaysian prime minister Mahathir Mohamad announced his country was canceling two multibillion dollar BRI projects because Malaysia could not pay its debts and “[w]e do not want a situation where there is a new version of colonialism.” It appears this and other high-profile BRI failures are teaching China to be more cautious of reputational risk factors. China is currently instituting a course correction and the government now publishes foreign investment guides.115
Table of Contents
- I. INTRODUCTION
- II. CHINA IN CRISIS
- III. STATE-SPONSORED DOMESTIC TERROR
- IV. GREAT POWER COMPETITION
- V. COLONIALISM
- VI. CHINESE NEO-COLONIALISM
- VII. CONCLUSION - AMERICAN PROTEST, GLOBAL FREEDOM