Former Under Secretary of State for Economic, Energy and Environmental Affairs Keith Krach represented the Trump administration in Taiwan last September to attend a memorial service for former Taiwan President Lee Teng-hui, making him the highest-ranking State Department official to visit Taiwan in more than four decades.
During his tenure and for the Trump administration to plan the 5G Clean Network initiative, Krach has visited countries non-stop, hoping to urge them not to use equipment and technology provided by Chinese companies such as Huawei in the construction of their 5G networks.
In January, Clarkey, along with former Secretary of State Mike Pompeo and more than two dozen other Trump administration officials, were sanctioned by the Chinese government for “interfering in China’s internal affairs and harming China’s interests and U.S.-China relations,” banning them from entering China, Hong Kong and Macau, and banning their related businesses and institutions from dealing with China.
Before entering U.S. government service in 2019, Crutchy was an entrepreneur who started with nothing and worked in Silicon Valley for more than three decades. He was president and CEO of DocuSign, a leading Internet e-signature software company, co-founder, president and CEO of Ariba, a B2B e-commerce company; and the youngest-ever vice president of General Motors at the age of 26. He first visited China in 1981 when he was at GM, and has made many trips to China over the decades since.
How did Clarkey go from being an entrepreneur considering leading his own company into China to being labeled an anti-China politician by the Chinese government?
Reporter: Mr. Kratch, you are a veteran entrepreneur in Silicon Valley and a former State Department official. What has your experience been like in the private sector, particularly as it relates to China? Why did you decide to pursue a career in government?
Kratch: My earliest experience with China was in 1981, when I first went there, when I had just joined General Motors. I am a lover of Chinese history and Chinese culture. I’ve been to China a lot over the past few decades, mostly for official business. But my last trip to China before I went into government, when I was running DocuSign, the Internet e-signature company, it was a listening tour because we were deciding whether we were going to go into China or not, but it was that time that I could see how things had changed and I could see how aggressive General Secretary Xi was. And that’s what really made me feel a little concerned.
I didn’t know anyone who worked in the federal government at the time, except for one senior official that I had worked with before. I wanted to see if they really understood what was going on in China. They obviously did. Then they asked me, they said have you ever thought about serving your country?
I told them that would be a dream I never knew I had. I would be honored. They said can you move? I said I could, I could move anywhere in the world. So, it’s a great honor. My mission is to develop and implement a global economic security strategy that will maximize global economic security and the national security of nations and drive economic growth, as well as counter China’s economic aggression.
Reporter: When you visited Germany last year, you said on social media, and I’m quoting you here, “Mr. Xi, push down the firewall of China.” Why did you choose to say that in Berlin? What was your overall China strategy when you were Under Secretary of State at the State Department?
Krazy: I was right next to the Berlin Wall. It really reminded me, and I made a comparison, how the Berlin Wall separated the German people, just like the one-way firewall in China separated the Chinese people from the truth. It was then that I asked General Secretary Xi to tear down that firewall because all the data was coming in but not going out, all the propaganda was going out but the truth was not coming in. So if you look at my strategy at the State Department, which I said at the Senate confirmation hearings, it’s really about leveraging America’s three greatest competitive advantages: namely, strengthening our relationships with allies and friends, leveraging private sector innovation and resources, and expanding the moral high ground of democratic values.
Trip to Taiwan a Catalyst for U.S.-Taiwan Partnership for Economic Prosperity
Reporter: Last September you became the highest-ranking State Department official to visit Taiwan since 1979. Can you please share with us more details about this important trip from your perspective?
Krazy: It’s obviously a tremendous honor, and it really fits into our overall strategy. The purpose of my trip is to go to a memorial service for President Lee Teng-hui. We’ll call him the George Washington of Taiwan. I was greeted by 40 fighter jets and bombers. That visit gave me the opportunity to interact with many of the business people I had previously met while doing business. I also spent a lot of time interacting with the Taiwanese government, and I had a great dinner with President Tsai (English). That visit was the catalyst for a prosperous economic partnership between Taiwan and the United States.
Reporter: You said you interacted with business people in Taiwan. We know you also helped foster strong economic ties between the U.S. and Taiwan, including, in particular, a $12 billion deal with TSMC (TSMC). That was a big deal.
Krazy: It was the largest onshore deal in U.S. history. TSMC is perhaps the most important global company to U.S. national security. It was a great experience.
We actually closed the deal in two weeks, and they brought their ecosystem with them. I really think this really helps strengthen the U.S.-Taiwan relationship. It’s so important because Taiwan is a role model for democracy and capitalism in the region, and they’re actually a role model for the entire world.
Reporter: You also mentioned that the PLA sent nearly 20 fighter and bomber planes while you were in Taiwan. What was your reaction to that?
Krazy: My reaction was, why are you doing this? I think they wanted to show some military power. But I was there to honor a great man. I think that’s the classic Chinese Communist way of behaving.
Reporter: We know that tensions have actually increased significantly in recent months on both sides of the Taiwan Strait. Now we’re hearing a lot of people in Washington talking about what would happen if China tried to invade Taiwan. How worried are you that China could break out into war with the United States over Taiwan?
CLARKE: I think there is that possibility. And, you know, that’s an important purpose of achieving the U.S.-Taiwan Partnership for Economic Prosperity dialogue. A month later, we signed a technology agreement that normally takes a year to complete in the U.S. government and really set the stage for more trade and investment from the U.S. It also attracted investment into Taiwan from other countries and from our allies. I think that’s really important when it comes to the defense of Taiwan.
A Call to Action for American Businesses and People to Unite on Xinjiang
Reporter: You recently co-authored an op-ed in Newsweek in which you said, “The moral imperative to end the genocide in Xinjiang is one of the most bipartisan issues of our time.” You also called on corporate America to help stop the genocide in Xinjiang. What action do you think they can take to help? Why is it so important to you to take action on this topic?
Krazy: First of all, genocides should be punished. These are some of the most serious crimes against humanity that are happening in the world. So I think it’s very important to call for that. I think it embodies General Secretary Xi Jinping’s three C’s: concealment (concealment), absorption (cooption) and coercion (coercion). Now it has developed into genocide. I call on people around the world to unite and take action on this. I have written to all U.S. CEOs to make sure their supply chains are clean and free of slave labor from Xinjiang.
I also wrote to the governing boards of all the universities, I wrote to all the civil society groups. But I think at the end of the day, the loudest voice for American citizens to make is to ring the cash register on the Chinese side because there are so many companies that have allowed Chinese companies to help with government surveillance and atrocities in Xinjiang. So the whole point is to divest these companies and not invest in these companies.
Reporter: Do you think the U.S. should boycott the Beijing Winter Olympics because of the atrocities in Xinjiang?
Krazy: Genocide is happening there. I think it’s hypocritical for the International Olympic Committee to say, hey, let’s have this great, humanitarian Olympics there. I think they have an important decision to make.
Reporter: You’re a successful entrepreneur. But for businesses around the world, sometimes standing up to China’s human rights abuses is easier said than done. Xinjiang Cotton is a case in point. Having served as president and CEO of technology companies such as Ariba and DocuSign, I’m sure you are well aware of the difficult decisions companies must make between profit and ethics when doing business with China. What would you say to the leaders of multinational companies who often have to make these difficult decisions?
Kratch: I think it’s a question of your principles or interests. When I was growing up, where I’m from, at the end of the day, your integrity is everything. If you don’t have that, you don’t have anything. So yes, you have to make those decisions, and as a CEO or chairman of the board, you get paid that much to make those tough decisions, and they also have an ethical responsibility and an obligation of integrity to make sure that the people they do business with are of integrity, especially when you’re talking about a big issue like genocide.
Reporter: Let’s talk about a very intense competition for technology hegemony that is going on between the United States and China. As a prominent leader in the technology industry, how do you see this competition and what actions should the U.S. take now to make sure it doesn’t become the losing side in this U.S.-China technology war?
Krazy: Yes, I think there are three basic areas. The first is to provide a boost to our own economic competitiveness. The second is to protect our assets, our strategic assets, our technology, a lot of intellectual property that has been stolen over the years. The third is to form an alliance of business and civil society in a democratic country that operates on a set of trust principles in all areas of economic cooperation. Because if you think about what the Chinese Communist Party has done, they have used these principles of trust, such as honesty, transparency, reciprocity, respect for the rule of law, respect for the planet, respect for property of all kinds, to their economic advantage. So we’re using the Coalition of Democracies for Clean Networks against them. We say, if you don’t follow these principles, we won’t do business with you.
The Clean Network initiative defeats China’s master plan to own 5G communications
Reporter: When you were at the State Department your team developed the 5G Clean Network, which turned the tide against Huawei. How important is that 5G clean network, can you explain?
Kratch: I think it was really important because it defeated the master plan for China to have 5G communications. And 5G communications is not just about your phone, it’s about the grid, it’s about the Internet of Things, it’s about manufacturing processes, health systems, etc. So it’s a very important thing. But one of the very important things it does is it shows that the Chinese model can be defeated and exposes their biggest weakness, which is lack of trust.
The other two goals are to create a model that competes with the Chinese system, and to provide a beachhead for economic cooperation in many other areas, whether it’s clean infrastructure and energy with clean financial support, or other technology areas.
Reporter: Earlier this year, you and former Secretary of State Mr. Pompeo and 26 others were labeled anti-China politicians, and you were placed third on China’s sanctions list, which means you and your immediate family are banned from China and companies and institutions associated with you are restricted from doing business with China. What is your response to China’s sanctions against you, your business and your family?
Krazy: I was sanctioned because I did my job and got results. It doesn’t matter to me or my family, you know, it really doesn’t matter. Maybe you know, maybe it’s a badge of honor, but why should I react when I can take action? I’m not going to bend the knee to General Secretary Xi, and I don’t think anybody else should either.
Reporter: So what are your expectations for the future of the U.S.-China relationship?
Krazy: I’m certainly always hopeful, but I also think that General Secretary Xi has really stepped up the aggression, and even though they say, hey, it’s a win-win relationship, it’s not. It’s a zero-sum game.
And I think the world has woken up to his theory of the three C’s, the truth of concealment, absorption and coercion. And the world now understands that the New Crown pandemic is the result of concealing the virus. I mean, they shut everything down, people lost their lives, all that sort of thing. I think people can see that the absorption of Hong Kong has led to the denial of their civil liberties. And now the coercion of Xinjiang has grown to genocide, and the world sees and doesn’t like it. It’s the most unifying bipartisan issue of our time. If you look at it, the 800-pound elephant in the room is the Chinese Communist Party’s retaliation and intimidation.
That’s why the Clean Slate Network is so successful, because it represents a security blanket. There is strength in numbers, there is power, there is unity, and I think the world is now waking up.
Trying to tell Xi Jinping: The world doesn’t trust you
Reporter: Mr. Kratch, if you could send a message to Xi Jinping, what would it be?
Krutch: I think I would say the world doesn’t trust you. Your sanctions against me have no impact on me, but it sends a message to the Biden administration, it sends a message to business leaders around the world that you are not to be trusted and there will be consequences.
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