Miles Yu, a former State Department China policy planning officer in the Trump administration, testified before Congress on Thursday (April 15), detailing the nature of the Chinese Communist Party’s internal control and external exploitation, and warning that the free world will be changed by the Communist Party if it is not resisted. He then detailed a series of anti-communist measures and emphasized that the United States can and must win.
Yu Maochun, now with the Hudson Institute, again warned Thursday at a hearing of the U.S.-China Economic Security and Review Commission that the Communist Party is using its access to the capitalist economic system to achieve global dominance and ultimately seek control of the world economy.
He said the U.S. must demand strict reciprocity in its dealings with the Chinese Communist Party to prevent Beijing from achieving its goals.
“If there is one thing that every American should understand about China, it is that it is a communist dictatorship ruled by a Marxist-Leninist party,” Yu Maochun said, adding that “the Communist Party is committed to maintaining and strengthening its monopoly on all power in the world’s most populous country and to free world poses the most serious challenge since the Cold War.”
“However, unlike most other communist countries, China has reaped the benefits of the global free market system and enjoys largely open access to international trade, capital markets and advanced technology,” He said.
Citing a July 2020 speech by former Secretary of State Mike Pompeo at the Richard Nixon Presidential Library, Yu said, “Our policies, and those of other free nations, have saved China’s declining economy, (in exchange) only to see Beijing go and bite the international helping hand that feeds it. “
Yu Maochun: Communist China’s Internal Control and External Exploitation
China is ruled by an authoritarian communist government that controls the Chinese economy and exploits the global free-market system,” said Yu Maochun. Today, we see this most clearly in the vast pool of cheap and skilled labor at the CCP’s disposal. This labor force has no meaningful labor protections and no right to form and operate independent unions to exercise collective bargaining and welfare bargaining rights. In Xinjiang – a place where the tragic genocide against religious and ethnic minorities took place – the labor force was put into (concentration) camps without any rights. The CCP has built a huge, state-sized sweatshop from which the world buys.”
He added, “The CCP’s monopoly on power has also given it tight control over financial resources, forcing non-state enterprises to rely on state-owned financial and banking institutions. Any company that dares to deviate from this dependence will meet with an end like Jack Ma’s Alibaba. All that has happened should serve as a warning to investors looking to expand into China.”
“Lacking Constitutional protections for private property and individual ownership, many Chinese who distrust the government are inclined to move their money out of China. But exchange rate controls severely limit the ability of Chinese citizens to send money abroad. This creates a destabilizing factor for the global monetary system, including rampant money laundering.” He said.
Yu Maochun said, “When the Chinese people succeed, the Communist Party feels threatened.” In the absence of private property protections under the Constitution, those with large amounts of private property are often targeted by the central government because they are too wealthy or too influential. They are subject to arbitrary extrajudicial arrests and economic collapse. At least 27 Chinese billionaires have been arrested in the last 15 years on bizarre and absurd charges. While in the United States we congratulate those who make the Forbes billionaire list, in China being on the Hurun billionaire list is like being on the list of those who will be hit.
Yu Maochun believes that giving the CCP unfettered access to the international capitalist system has contributed to China’s (the CCP’s) economic rise, empowered the CCP government, and undermined the democratic, free-market system. Beijing thus poses a “mortal threat” to the United States and the international economic system that enabled the Communist Party’s rise to power.
Under Beijing’s so-called civil-military integration program, the Communist Party is acquiring vast amounts of U.S. and Western technology and know-how. Yu Maochun said the Chinese Communist Party’s secrecy system poses a threat to Western companies.
He said, “The lack of transparency endangers U.S. investors because many Chinese (CCP) state-owned enterprises listed on Western capital markets provide vague and opaque information, often hiding their financial records from regulators and investors in free-market countries.”
What the U.S. should do Yu Maochun offered several suggestions
“First, the United States should no longer ignore the vast political and ideological differences between the CCP and the free world system. A completely free international trade market system and a ‘socialist market economy with Chinese Communist characteristics’ cannot peacefully coexist.” Yu Maochun said, “We should face reality and correct the biggest foreign policy failure of the past half century.”
The failed policy of the past, he explained, was the belief among political and economic elites that China and the United States could set aside political and ideological differences and engage uncritically, with the hope that democratic virtues and a free-market system would eventually allow communist China to change and become a responsible stakeholder. But “not only have we failed to change the Chinese Communist Party with such thinking, the CCP is now poised to change us. It is trying to reshape the global order in its own image.”
Thankfully, he said, we are witnessing a huge awakening (on) this issue (and) it seems that both parties agree that the old traditional view was wrong.
“My second suggestion is that we must institutionalize this new awakening. Congress, the elected representatives of the American people, can play an important role in this.” He said.
Yu Maochun also said that in the last administration, the United States adopted a new policy of engagement with China based on the principle of reciprocity. Economic reciprocity with China could be institutionalized through congressional action.
The first step, he said, could be to “respond reciprocally” to the Communist Party’s annual “negative list” on an item-by-item basis. The list identifies areas of China where foreign investment is not allowed.
“The reciprocal response (from the U.S. side) would be to prohibit Chinese (CCP) investment in the United States in areas such as agriculture, mining of important minerals, news organizations, film studios, movie theaters and theater chains, and cultural performance groups, among others.”
In a second step, private companies in the United States should also be protected by legislation in the U.S. Congress. Congress could create a mechanism that would allow them to file complaints against Beijing for economic discrimination. Based on this information, the U.S. government could take reciprocal action against the Chinese Communist Party.
In a third step, the United States should again realize the importance of leadership. “The economic challenge of the CCP is not a question of whether we should change Beijing’s contradictory economic reality. Rather, it is a question of how the free world will be changed by Beijing if we don’t change its behavior.”
He said Party leaders from Mao Zedong to Xi Jinping have repeatedly stated that their actions are guided by a “you die, I live” struggle. He emphasized that the Communist Party’s claim of a “win-win” situation in its dealings with the United States is nothing more than a big scam. At its core, the CCP’s internal approach is based on the understanding that China’s struggle with the United States and the free world is nothing more than a zero-sum game.
“In a world of geopolitical power competition, the United States can and must win.”
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