US Funding Chinese Communist Party Economic Growth: Experts

From less than 1% of the world's gross domestic product to a massive 19%. That's the marker of China's development in just three decades. How did the communist country grow so fast and who helped it along? Never in history has one country funded the rise of its enemy, which is what the United States has done. It's an existential threat where the Chinese Communist Party is seeking to essentially destroy the United States who they believe is the one country that can stand in their way of achieving this great rejuvenation of China. Across the board, you can pick a topic and you can see the pernicious influence of the Chinese Communist Party. And we're in this Cold War situation, this period of intense security competition that we must now resolve. A virus unleashed, hordes of spy balloons, rounds of disinformation attacks and theft of American jobs. These are just some of the covert weapons the Chinese Communist Party has used against the United States. How has the beacon of freedom helped the communist adversary grow strong enough to take on the West? We spoke with Captain James Finnell, Government Fellow of the Global Fellowship Initiative, and Bradley Thayer, Senior Fellow of the Center for Security Policy. For more, they're also the authors of Embracing Communist China, a new book exploring the threat our nation faces from the CCP. We have two special guests with us, Captain James Finnell and Bradley Thayer with their new book. Now, what got you started on this book especially? Well, Tiffany, it's great to join you and thank you for the opportunity to discuss our book's argument and its importance. What got us started on this was the recognition of the greatest problem that we face as a country, where we allowed the Chinese Communist Party to grow from 1990 when they were about 0.6 of world gross domestic product to just before COVID when they were about 19% of world gross domestic product. So how did that happen? How is it that a country grew spectacularly to become the most formidable threat that the United States has ever faced? And also, why did the U.S. do nothing about it? Why did the U.S. year after year allow this to occur without taking any type of balancing action against the People's Republic of China? So that's the heart of the book. That's the central question. And it was provoked by our curiosity to answer the big questions of the day that reflect the strategic reality of the 21st century, where now the United States and the People's Republic of China are locked in a Cold War. And you've been talking about this for years, but why now specifically to really send this message out? Well, I think Brad and I live in different parts of the planet. I live in Switzerland. He lives here on the East Coast. But we both came to the same realization that the problem that he described was really serious and significant, and it's an imminent threat. And we feel that we needed to get this message out, I think, in this year where people are paying attention to politics a lot more to see about what we could do to raise awareness in the country to this imminent threat. And it's not just—it's imminent in so many ways, from military threat to economic to information to diplomatic. It's an existential threat where the Chinese Communist Party is seeking to essentially destroy the United States, who they believe is the one country that can stand in their way of achieving this great rejuvenation of China that they talk about all the time. On that note of China becoming a hegemony, it seems that's been in the communist China doctrine since the very beginning. But has the world understood that? This is one of the challenges that we see even today, is that you have a lot of the so-called experts try to— they've created this kind of idea that it's Xi Jinping is the problem. And if we could just get rid of Xi Jinping as the general secretary of the Chinese Communist Party, that everything would go back to some kind of golden era where things were so good. But the fact of the matter is, from Mao to Xi, all five paramount leaders— Mao, Deng, Jiang Zemin, Hu Jintao, and Xi— all share the same ideological perspective on the Chinese Communist Party's centrality to govern the world. And they have been pursuing that. And it was only Deng who kind of, for many years, said, let's hide and bide. Let's wait, because we're not strong after what Mao did to essentially destroy the country. Deng was brilliant enough to say, we need to do something to hide our weaknesses and infiltrate the United States, which we can talk about a little bit later. But the fact is, is that each one of these leaders has carried on the same goal, just in different ways. And it's only now that China is strong and large and has a large—this military in Asia, largest navy in the world, that they're now able to say confidently, hey, this is what we're going to do. And we're going to no longer abide by these agreements like the status quo and the cross-strait relationship. We're going to threaten people, and we're not going to be ashamed of it. We're going to have wolf-warrior diplomacy, and we're not going to be ashamed of it. And so might makes right is part of their ideology. And they're now expressing that because they have the confidence and the capability to do that. Given that China is now the world's second-largest economy and how intertwined the two economies are, many people are saying, we can't have decoupling because that would then destroy America. How did we get to this stage? Well, we got to it really for two major reasons. As Jim referenced, it was Deng Xiaoping's strategy of hiding and biding, but really reaching out to Wall Street, American manufacturing, the Chamber of Commerce, and New York investors to invest in China and manufacture in China in the 1990s. That started in earnest. And then Deng recognized also that he could use some of those profits to invest and to support his message in Washington and in New York and in the West more broadly, and could have political influence, economic influence, influence in media, influence in film, influence in universities around the world, and particularly in Western capitals. He could achieve that. But it takes two to tango, and so it also required that the West was a willing participant to do this. And so in the book, we detail in considerable degree how really it was the Clinton administration that removed any restrictions in terms of most favored trade status or most favored nation trade status for China, which was based on an annual renewal that could be linked to human rights, for example, to put pressure on the Communist Party of China to promote religious freedom or to reform or to take measures. And once the Clinton administration removed those restrictions and placed them on the path to the World Trade Organization, right, then that was rocket fuel for the growth of the Chinese economy. When it comes to the U.S. willingness, it seems, especially with, say, the World Trade Organization letting China join, that was on the premise that that would make China more liberal, more democratic. You know, with access to free markets, it then become more free. It seems the opposite has happened, if you will. The free markets are less free. We're seeing more of the Communist influence here in America. What is exactly the fallout of that exchange on Americans? Well, we are now seeing that, for instance, during COVID, we had states in the United States that adopted essentially Chinese Communist Party COVID mandate procedures, you know, telling people they couldn't leave their home without, you know, having some kind of verification of a vaccination or verification that they didn't have the, they had to get testing multiple times. And all of this authoritarian, top-down control to limit people's freedom and autonomy, treating people in collective sense, not in an individual sense. So we're seeing it in all sorts of things in terms of how it's seeping into, for instance, into the military with this woke-ism and DEI. We're allowing TikTok to be, you know, used in our country. Our children are being educated by a system that's seeking to demoralize them, and that's coming from China. Or we have, for instance, you know, people are being killed every year from fentanyl. So if you add up all the fentanyl deaths over the last five years, we're starting to approach the numbers of people that were killed in the World War II, Americans. And yet we're not talking about it. So it really is something that's not just an ideological, theoretical discussion. It's a real discussion that's really affecting people's lives. It hollowed out our manufacturing centers in America. A lot of people lost their jobs. So across the board, you can pick a topic and you can see the pernicious influence of the Chinese Communist Party. Why do you think in America there isn't that recognition of the threat of communist China, even when all the things you just laid out, fentanyl, all these other aspects, many in Congress call China a competitor, not an adversary. Why is that? Well, I think there's a rich answer there, and it's certainly a rich problem. Three elements come to mind. First, the end of history moment. We thought in the wake of the defeat of the Soviet Union that great power competition was a thing of the past. And we knew it worked, and that was free market capitalism and liberal democracy. And if that were to spread, then there would be peace. So if there were good ideas, we knew it worked, and if those good ideas spread, including to the Chinese Communist Party, we'd have peace in perpetuity, conceivably. So that legacy of that is very important. Secondly, it was also the case that there were other concerns. That is, on a day-to-day basis, the immediate concern, or the immediate small war of today, as we describe in the book, always trumped the 800-pound gorilla in the room, which is the People's Republic of China. And so within the military or the intelligence community, we're more broadly focused on what was in front of them rather than what was coming down the pike. And the third element of that really was, again, an aspect of the Chinese Communist Party's expert political warfare campaign, which was to fund think tanks, to fund media, to fund academics, and so many others, to, again, consistently threat deflate. That they were obviously always, at one level, able to tout that they were just interested in the common destiny of mankind, as they put it today. And so many people went along with that. And I think, in an unseemly way, their money, for example, at the Penn-Biden Center, and in so many other think tanks in Washington, D.C., and elsewhere, in Europe, of course, Canada, Australia, New Zealand, so many other places, they were buying influence, right? Their money had a pernicious and a profoundly pernicious effect, really, on our ability to understand the threat, identify it, and act against it. And we're in this Cold War situation, this period of intense security competition that we must now resolve. When it comes to money as leverage, we're also seeing that in terms of lobbying efforts on Capitol Hill, right? You have TikTok or ByteDance even getting a say in the National Defense Authorization Act, removing parts. Trump tried to ban TikTok. Biden's talked about banning it. It's still operating quite happily. It's growing in followers. Given all that we are seeing, though, switching now to the military, we're seeing wars in Russia against Ukraine, in the Middle East, Israel, Hamas, that are expanding. And in terms of Ukraine, it's running out of arms and ammunition. And now in Congress, the idea is this drawdown act where we're sending our own arms over there but without any talks of replenishing the U.S. stockpile. If that does happen, and we are seeing all these aggressions in Asia, say China against Taiwan, against the Philippines, it's getting quite hairy out there. What happens if the U.S. does have to enter a war and we don't have our stockpile? Well, before we even get to a war, a kinetic war, part of the purpose of having a military is to deter action, deter violence. So part of the deterrent effect is to have the kind of military that has overmatch so that your adversary would not consider taking action for fear of serious harm to them. And so in that sense, we've kind of already seen in this last few years, last three years, that we didn't deter anybody in Afghanistan and the Taliban is running Afghanistan now. We didn't deter Putin to take the Ukraine. We have this situation you described with our arsenal being diminished and depleted. That's not going to deter Xi and the Chinese Communist Party. And we argue in the book that for the last 25 years, we have not deterred Xi and the growth of the PLA. If you go back 25 years ago, the US Navy had an overmatch of plus 100 warships than the Chinese Navy, and that's flipped in 25 years. They have more ships in total in their Navy compared to ours and they're concentrated in the areas that they want to take. So we have a lot of work to do to build that up and in the nuclear forces. Because China's, in the last couple of years, built 350 ICBM silos out in Central and Western China. They're building their nuclear arsenal. And so, you know, some people would say building up our nuclear arsenal would be a provocation and it would be an arms race. But the fact of the matter is China's been in an arms race with no other competitor, or a track race with only one runner. They're well down the road to military modernization and nuclear force development, and we're still standing still basically with the same force posture in Asia that we've had for 40 years. I think in my opinion, they're a very real threat. This issue, Brad and I were discussing this yesterday, this idea that people say that the PLA hasn't fought a war since 1979. But in terms of the conflict that will occur, whether it's to take Taiwan, to take the Senkakus, or to dust off with the Philippines, most of that is a naval war. And the United States Navy has not fought a naval war to that kind of degree against a superior force since World War II. They just appointed the new Minister of Defense, who was the head of the Navy. But before that, 10 years before, he was in charge of the first Joint Command Center in the Fujian province. So this man has devoted most of the last, over 10 years of his life, to training to take Taiwan. You know, in the United States Department of Defense, we're distracted. We have many different areas that we need to be responsible for. But the Chinese military has had a clear agenda, a clear-set goal. You mentioned what you saw in the last two years that really made this more concerning. What happened in the last two years? Well, just for instance, crossing the center line PLA aircraft. If you go back to 1954, when the center line was kind of de facto declared or de facto recognized by both the PRC and Taiwan, the Republic of China, from 1954 to 2020, only four times did PLA aircraft cross that center line. And now you know, in the last two years, they've been crossing the center line multiple times, sometimes as many as 100 in a day in the last few years. The firing in August of 22, 11 ballistic missiles around Taiwan. Aircraft carriers operating east of Taiwan that never used to, you know, they just got aircraft carriers. In the space of 10 years, they went from zero aircraft carriers to three. And two of them are now training and operating east of Taiwan and even close to Guam. Just across every facet of Chinese military power space. We ultimately funded this. It was our dollars that went in that, with manufacturing, with trade, and with investment. So, Tiffany, what's happened is simply a remarkable and startling fact. China rose, and it rose very quickly. Well, that's happened before. It happens rarely. Bismarck's Germany. Japan after 1868. But never in history has one country funded the rise of its enemy, which is what the United States has done. Given where we are now with all the military threats, also all the, say, internal issues that we're seeing in America, fentanyl, the influence in our education, politics, even cultural and scientific exchange that's happening, or just pure intellectual property theft that we're seeing happening here. What is the solution? Is there any hope? The list of actions is quite large. But from my perspective, the deterrence to be able to deter the PRC from acting rests largely in the economic arena and the military arena. We have to be able to regrow our economy, which means it's going to be difficult because part of attacking their military without kinetic force is by cutting off funding to them. So we're going to have to decouple, and decoupling's going to put a strain on our economy, which means we're going to have to work twice as hard to find different markets and new markets in Africa and Latin America and with our partners in India and whatnot, in the movement of the non-communist country. So we're going to have to pull away. We're going to have to do it smartly. We're going to have to do it in the areas that affect their military growth immediately. We have to stop the ability of their military to continue to be funded. And on the note of the nuclear missiles and warheads being placed in the region, just to highlight, that's to push deterrence, right, not provocation, as many like to say. Right. Well, as I said earlier, the Chinese have already done that. They've already introduced 350 of these new DF-41 ICBM silos. So when people talk, or read our book, or hear us make this recommendation, I know people gasp. But what they need to recognize is China's already done that. This is just a measure to try to keep up and to deter them because they have thought, well, I can take Taiwan because there's no risk of going nuclear. Well, maybe now, if we have that capacity there, Beijing's going to have to go back and recalculate. Captain James Fennell, Bradley Thayer, thank you both so much for your time. Thank you. It's our pleasure. Thank you, Tiffany. That was Captain James Fennell, Government Fellow of the Global Fellowship Initiative, and Bradley Thayer, Senior Fellow of the Center for Security Policy. Thank you for joining us for this special report and for watching China In Focus right here on NTD News. See you soon.