‘China’s Economy Is The Foundation … of Its Power Projection Around The World’ 

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The People’s Republic of China “has used the power of its economy beyond its borders to push its illiberal and authoritarian geopolitical objectives and to change the behavior of individuals, governments, companies, and multilateral institutions,” says Bethany Allen-Ebrahimian, author of “Beijing Rules: How China Weaponized Its Economy to Confront the World.”

“The reason I chose to focus on China’s economic power is that I have covered China’s power projection beyond its borders as a beat for about seven years, and I found that underlying much of China’s power is its economic power,” says Allen-Ebrahimian, who is the China reporter for Axios.

“Whether that’s its diplomatic power, it’s still, to this day, a lot of the foundation of that is its economic power, what we tend to call extraterritorial censorship,” says Allen-Ebrahimian, who has lived in Taiwan since August 2022, adding:

I mean, the NBA and Hollywood studios will self-censor. This is an extension of China’s economic power. And so I found that at least, I would say, until the first half of the 21st century, China’s economy is the foundation of much of its power projection around the world.

Allen-Ebrahimian joins today’s episode of “The Daily Signal Podcast” to discuss her new book and what she has seen as the biggest change that China has undergone since she lived there in 2004 and then again from 2008 to 2012. 

Listen to the podcast below or read the lightly edited transcript:

Samantha Aschieris: Bethany Allen-Ebrahimian is joining today’s episode of “The Daily Signal podcast.” Bethany is the China reporter for Axios and author of the brand-new book “Beijing Rules: How China Weaponized Its Economy to Confront the World.” Bethany, thanks so much for joining us today.

Bethany Allen-Ebrahimian: Thank you for having me.

Aschieris: Now, as I just mentioned, you have a new book out titled “Beijing Rules: How China Weaponized Its Economy to Confront the World.” First and foremost, tell us a little bit about the book and why you decided to write it.

Allen-Ebrahimian: Yes. As the book title suggests, what I am focusing on is the type of world that the Chinese government is trying to create, the rules that it wants to impose and has, in fact, quite successfully imposed around the world.

What I look at, primarily, is economic power, the ways, the quite innovative ways, in fact, that the Chinese government has used the power of its economy beyond its borders to push its illiberal and authoritarian geopolitical objectives and to change the behavior of individuals, governments, companies, and multilateral institutions.

The reason I chose to focus on China’s economic power is that I have covered China’s power projection beyond its borders as a beat for about seven years, and I found that underlying much of China’s power is its economic power. Whether that’s its diplomatic power, it’s still, to this day, a lot of the foundation of that is its economic power, what we tend to call extraterritorial censorship. I mean, the NBA and Hollywood Studios will self-censor. This is an extension of China’s economic power.

And so I found that at least, I would say, until the first half of the 21st century, China’s economy is the foundation of much of its power projection around the world.

Aschieris: Now, can you walk us through some examples of how China, as the title says, weaponized its economy to confront the world?

Allen-Ebrahimian: Yeah. There’s many well-known examples, and I also go through, in the book, some lesser known examples.

Ones that we’re all familiar with would be, well, probably all familiar with, would be, for example, at the beginning of the pandemic when then-Prime Minister of Australia Scott Morrison called for an independent inquiry into the origins of the coronavirus. That was in … April 2020. Very shortly thereafter, the Chinese government slapped a bunch of tariffs on all kinds of Australian imports—including wine, coal, barley—very transparently to punish the Australian government, to punish Morrison, for making this call for basic scientific fact-finding.

This is something that relates to the health and the well-being of literally every single person on the planet. Every time there’s a pandemic, we need to know how it started. And so the Chinese government was attempting to block this and to punish Australia for that.

Other examples would be the NBA. In 2019, when Daryl Morey, who has been the manager of the Houston Rockets, tweeted in support of the Hong Kong pro-democracy protests, immediately, the NBA lost contracts in the Chinese market. The Chinese streaming websites stopped showing NBA games. Chinese e-commerce websites stopped selling Houston Rockets swag. It’s estimated that the NBA lost about $200 million in revenue. And there are so many examples affecting retail companies, hotels, airlines, governments, celebrities, authors, academics, you name it.

Aschieris: Now, something that I thought was interesting, the last chapter of your book is titled “Building a Democratic Economic Statecraft.” Can you walk us through some of the recommendations that you highlight in this chapter and how they can be achieved?

Allen-Ebrahimian: I have two different types or two different buckets of recommendations. One of them is, we can put it under the category of adopting industrial policy or putting guardrails on economic behavior in order to promote U.S. national security and the national security of our allies and partners.

This is the area that the U.S. and other like-minded governments have already been taking concrete actions to work toward, starting with the Trump administration, continuing into the Biden administration and the EU really getting more on board now. This is things like putting sanctions or other kinds of trade restrictions on Chinese companies that have ties to the [People’s Liberation Army] or, as we’ve seen Huawei, blocking Huawei from 5G networks.

Something that we haven’t seen that is very important and more and more people are calling for is to create some kind of mutual economic defense treaty or organization or agreement where like-minded countries can come to each other’s aid if one of their industries or their government or their trade sector overall is targeted by Chinese government economic coercion. That hasn’t happened yet. It’s a very difficult thing to do, but there are a lot more people talking about it now.

However, the other bucket of recommendations, and I make 14 separate recommendations, are to accomplish what I describe as putting democratic guardrails back on economic behavior, which is something that I feel that the U.S. and other democratic countries have really ignored, to our detriment, for the past 40 years.

This is based on the understanding that economic behavior, that trade, and that money itself is morally neutral but will be used to project the values of the people who control it.

What we have now in the world is a situation in which the Chinese government has been extremely proactive in putting authoritarian guardrails on international economic behavior, but we haven’t seen very much of a countervailing democratic pushback to push back against those authoritarian values and try to push back with our own democratic values.

Some of my recommendations on this, and because of the political nature of them in our current environment in the U.S., I think it would be very difficult to adopt some of them, but just to put them out there, one of them is campaign finance reform. So trying to get corporate money out of U.S. politics so that it’s not money shaping our policies but rather the democratic voting populace.

Another one that is, I think, more achievable would be putting sanctions on Chinese companies that have been deeply complicit in constructing the censorship ecosystem, the censorship architecture, inside of China.

Why would that matter, to put sanctions on Chinese companies for doing that? Because it would create a halo of deterrence around U.S. companies and other foreign companies who would otherwise maybe have joint ventures with these Chinese companies or would otherwise maybe, perhaps, be self-censoring to get into the Chinese market. It would create an aura of illegality or a halo of deterrence around self-censorship to censor on behalf of an authoritarian foreign government.

One final recommendation, again, I have 14 specific ones, but one more I’ll share is to have a FARA structure, so a Foreign Agents Registration Act type of structure on the state level in the U.S.

Right now, the Foreign Agents Registration Act is that it’s only for the federal government, and this requires public disclosures from any person or entity or individual who is lobbying on behalf of a foreign government or entity. It doesn’t ban that behavior. It merely requires public disclosures, so that we know who is really behind some of these lobbying efforts. But those do not exist on the state level in any state.

And so to have a basic level of transparency about who is trying to influence our state-level government officials and lawmakers, it’s very important for each state to come up with a system and to implement a system that would work in their state.

Aschieris: Now, these democratic guardrails that you were just talking to us about, and what you write about in the book, what are some of the consequences if they aren’t put in place?

Allen-Ebrahimian: Well, these are things that we have already been seeing and have seen, in fact, for a very long time in the U.S. To talk about the influence of money and politics, which is something that I don’t think anyone really wants that in the U.S.—if you talk to anyone who cares about our democratic politics, our democracy, nobody wants politicians to be spending all of their time trying to raise money, but it’s how our system is.

What that has created—and there’s lots of records of this from the ’90s—is that the business community, in the business communities in the U.S., the corporate community has basically functioned as a pro-Beijing lobby and has worked to water down policies toward China, has tried to reduce some of these national security and democratic guardrails, in terms of our economic relationship with China. This is something that isn’t motivated by democratic values, but rather is motivated purely by money.

I think if we can work on getting some of that out, it can help the policymaking environment focus more on what is actually good for our country and good for our values.

Aschieris: Now, I also wanted to highlight that you live in Taiwan and over the last couple of years, and even more recently, we’ve really seen a heightened aggression … from China toward Taiwan. Just recently China flew over a hundred military planes toward the island. Based on your experience living there, how has living in Taiwan and the threat of the Chinese Communist Party changed since you moved there?

Allen-Ebrahimian: Yeah. … I have lots of thoughts on this, and I think I’ll highlight maybe three main thoughts.

The very most important one, the first one—if anyone remembers anything on this podcast, I want people to know that it is a little bit, I know this sounds counterintuitive, but it is a little bit of a red herring to focus on a Chinese invasion of Taiwan, a military invasion or a military attack on Taiwan. This is a little bit of a red herring. Let me explain what I mean by that.

The Chinese government has many forms of coercion in its toolkit, including economic and diplomatic, of course, military and cyber. It would be more than China’s Vietnam if it were to try to launch some kind of amphibious assault on Taiwan.

Many people I speak to, who have a lot of knowledge in this area, say that this would absolutely be the Chinese government’s last resort, but the U.S. discussion focuses about 90% on the threat of an actual military invasion. As long as we’re doing that, we are not coming up with deterrents for other forms of Chinese government coercion, such as economic coercion or diplomatic coercion.

So I would lay out a scenario that is, I think, much more likely, under which the Chinese government, at a certain moment of domestic vulnerability in Taiwan, simultaneously levies multiple forms of coercion such as maybe sort of an economic blockade combined with a lot of very intense political and diplomatic pressure, and essentially forces the Taiwanese government to sign over some degree of sovereignty. This is a much more likely scenario.

I think that in Washington, D.C., specifically, it is incredibly important that U.S. government officials and people at think tanks start gaming out these scenarios, talking about them, and working, pushing the U.S. government to have very clear forms of deterrence: “China, if you do an economic blockade, we will do this.” Because right now, as it stands, if something like that happened, the U.S. toolkit would be essentially zero. That’s my most important takeaway.

Then, my second main takeaway is that, in Taiwan, people don’t really feel like they’re under siege, but sort of average Taiwanese person—if you look at headlines in D.C., it seems as though surely people in Taiwan are in a constant sense of crisis, and mostly that is not true. Mostly people just think, “China’s been threatening us for 75 years. They’ve never done anything. They’re never going to do anything.” I think that in Taiwan that narrative is outdated and that people in Taiwan have an insufficient sense of crisis.

Aschieris: Now, I also wanted to ask you about—you previously lived in China from 2008 to 2012. Now, looking in from the outside, what have you seen as the biggest change that China has undergone?

Allen-Ebrahimian: Yeah. I was actually first in China for a few months even earlier than that, in 2004, for a study program. Then I went back in 2008. In 2004 and also in 2008, and less and less the longer I lived there, there was this sense of openness and optimism and kind of an openness to democratic ideas and an admiration, a really strong admiration, for democracy and a clear hope that China could become politically more open. It was safer for Chinese people to have warm and close friendships with Americans, for example. And 2004 was such a positive time to be in China, for that and other reasons.

What we have seen under the last few years of Hu Jintao, and very dramatically under Xi Jinping, is that because of the way that the Chinese government has really fanned the flames of anti-Western sentiment and anti-American sentiment and nationalism while simultaneously creating an almost totalitarian and very paranoid security state, many Chinese people truly feel very angry at the U.S., feel a sense of superiority to the West, believe that the Chinese government has a better model, and also know that there’s a growing risk associated with closeness with Americans and admiration for even nonpolitical American ideals.

That is such a shame because there’s 1.4 billion Chinese people. As with any very diverse populace, they’re all different, but Chinese people are so hospitable, so loving toward their families. They want what other people in the world want, which is to be happy and to be free.

There’s so many close people-to-people ties, historically, between the U.S. and China. I think it is really quite a tragedy the way that Xi Jinping has worked to sever that and create bitterness between the Chinese people and other people groups in the world, where really there shouldn’t be. There should be friendship. That’s just, to me, a deep—it leads to a deep sense of sadness.

Aschieris: Now, Bethany, just before we go, any final thoughts? Also, how can our listeners follow your work at Axios?

Allen-Ebrahimian: Well, you can subscribe to my newsletter, which is once weekly. It comes out on Wednesdays, the “Axios China” newsletter. You can just type in “Axios China subscribe” and it’ll take you to the right website. You can also follow me on Twitter, @BethanyAllenEbr. Follow me on LinkedIn.

For final thoughts, I would just say that, as we are increasingly focused on the challenge and the threat from the Chinese Communist Party, I hope that everyone remembers that, at the end of the day, the Chinese people are good and fundamentally want the same things that Americans want and to keep their well-being in mind, too.

Aschieris: Absolutely. Bethany, thank you so much for joining us. I will definitely leave a link to your book in the show notes for our audience members who want to take a look. Thank you so much for joining us. I really appreciate it.

Allen-Ebrahimian: Thank you so much for your interest and for your time.

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