U.S. President Donald Trump’s special assistant and senior director for East Asian affairs at the National Security Council, Matt Pottinger.
Matt Pottinger, a former deputy national security adviser, said the Chinese Communist Party is strengthening its supply chain advantage in the hope that it can better use economic coercion to achieve more political goals.
Speaking at an online hearing of the U.S.-China Economic and Security Review Commission on Thursday, Pottinger said the Communist Party’s newly approved five-year plan reveals Beijing’s economic ambitions and that the Communist Party is institutionalizing an “offensive decoupling strategy.
Beijing intends to reduce China’s dependence on the world while making the world increasingly dependent on China,” said Bo Ming. The resulting leverage is then used to advance Beijing’s authoritarian political aims on a global scale.”
Explaining how this new strategy will be implemented, he said that the CCP first uses massive subsidies, non-tariff barriers and stolen intellectual property to reduce Beijing’s imports of high technology and make other countries heavily dependent on China for the supply of high technology.
He went on to say that in the meantime China continues to import raw materials, but will work to ensure that importers of those materials are readily substitutable.
The Trump administration-era official noted, “This strategy takes advantage of the size of China’s economy while exploiting the economic vulnerability of other countries.”
In recent years, Beijing has increasingly often weaponized trade. Australia, for example, called for an investigation into the origins of the new crown, which angered the Chinese Communist Party, and Canberra’s major exports to China were then restricted.
After months of punishing Australian companies, the CCP published a list of 14 items that Beijing was unhappy with in Australia, entries that were effectively political demands on the Australian government.
When accused of weaponizing trade, the CCP often cites ensuring supply chain security as a reason. Chinese Communist Party President Xi Jinping has said, “In order to guarantee our industrial security and national security, we should focus on building an independently controllable, safe and reliable industrial chain and supply chain, strive to have at least one alternative source for all important products and supply channels, and form the necessary industrial backup system.”
In response, Booming said, “Don’t be deceived by seemingly defensive wording. Beijing has demonstrated a strong willingness to use the offensive nature of its economic leverage to pursue political goals.”
Bomen suggested that the current administration could create an “Economic NATO” that would allow member countries to provide economic support for goods that are subject to Chinese Communist sanctions.
He also said the U.S. government and industry should think about whether they are providing leverage to Beijing before launching any policies.
He said, “In every budget that the United States passes, in every bill that is introduced in Congress, in every cooperation that the government and industry undertake, we should first ask whether the new measures increase our leverage in this competition or give it away to Beijing’s adversaries.”
At the same hearing Thursday, Yu Maochun, a former China policy adviser to former U.S. Secretary of State Mike Pompeo, also said that the democratic community’s acceptance of China has not and will not change the aggressive behavior of the Communist Party and that the United States and other democracies are facing a growing threat.
The Hudson Institute senior fellow noted that President Nixon’s 1972 initiative to open China may have created a Frankenstein, as he acknowledged in his later years.
Yu Maochun said, “The core ideology of the Chinese Communist Party is based on the perception that the Communist Party’s struggle with the United States and the free world is nothing more than a zero-sum game.”
He said the U.S. should confront its vast political and ideological differences with the CCP and engage with China on the principle of reciprocity, such as a fully reciprocal U.S. response to the CCP’s trade barriers and market restrictions.
The economic challenge posed by the Chinese Communist Party is not a question of whether we should change Beijing’s contradictory economic realities,” he stressed. Rather, it is a question of how the free world will be changed by Beijing if we do not change its behavior.”
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