by Gordon G. Chang –
Originally Published by The Gatestone Institute –
We can, of course, cooperate with a China that is a partner or a friend. We can even cooperate with a China that is a competitor; all nations to some degree compete. The question is this: Is China merely just a competitor? Can we, for instance, cooperate with a China that is an opponent or an enemy?
Multilateralism, the core ideology of the UN, is failing. Countries are bypassing the UN because they realize it cannot provide security.
Countries are defending themselves.
China’s unrestricted warfare — a term Beijing has been using for at least 21 years — now includes biological attack.
In late January, US Customs and Border Patrol agents seized 900,000 counterfeit one‑dollar bills from China at the International Port of Entry in Minnesota…. By the way, counterfeiting another country’s currency is more than just subversion. That is an act of war.
Xi has always believed that China should rule the world. He has always believed he had to get the United States out of the way, especially because Americans promote ideals that are anathema to totalitarianism.
Beijing leaders know they are running out of time. It is really no mystery why they may feel this way. China’s demography is in the initial stages of accelerated decline. We know that China’s environment is exhausted. Think scarcity of water, despite all the flooding.
Up to now, the primary basis of legitimacy of the Chinese Communist Party has been the continual delivery of prosperity. Without the assurance of prosperity, the only remaining basis of legitimacy is nationalism. Nationalism, as a practical matter, means military misadventure abroad.
A Chinese enterprise is now pouring about three billion dollars into Freeport in the Bahamas, 87 miles east of Palm Beach. I think that we are going to see, unless the US stops it, the People’s Liberation Army with a naval base 87 miles east of Palm Beach.
We cannot afford to have these consulates not only engaging in espionage but also trying to bring down the government of the United States…. Everyone wants to maintain friendly relations with every country, but we cannot maintain friendly relations with a country that is trying to subvert us in the way China’s been doing.
We cannot afford to lose any time giving grace periods to a regime that is relentlessly attacking us. We have to be concerned that an incoming president will do what every president has tried to do. That is the impossible: to attempt to develop cooperative relations with a militant Chinese state.
It is up to the President of the United States to change companies’ incentives. He can do that with the use of the International Emergency Economic Powers Act of 1977. Trump used that on TikTok. A US federal judge in the District of Columbia overturned, or at least stayed, his order, which means President Trump needs, first of all, to start thinking about not only the ’77 act but also the 1917 act, which is the “Trading with the Enemy Act ” because judges would have less scope for overturning a designation of that sort…. We need to do much more because China is not going to let us alone in our own hemisphere.
Because China killed 20 Indian soldiers on June 15, India has gone in a good direction, cutting off Huawei, cutting off TikTok, cutting off Chinese companies. We need to do the same thing. Remember, China declared a “people’s war” on the United States in May of last year. They told us we’re the enemy, so we might as well take them at their word.
In the Atlantic, there are two other places that China would like military bases. One of them is Walvis Bay in Namibia, and the other is Terceira, in the Azores. Terceira is home to the Lajes US Air Force base. The US Air Force has redeployed, basically making it a ghost base. From there, China could control the mouth of the Mediterranean, control the North Atlantic, put Washington, DC and New York at risk. I think it is up to the US Air Force to start putting people in Lajes, so the Chinese realize that they cannot take over the airfield. Its runway is almost 11,000 feet long. It can accommodate any aircraft and can threaten the United States. The Atlantic, which we have seen as a preserve, could very well become a Chinese lake.
In terms of whether there might be another biological attack or not, you have to remember that China has been sending seeds, unsolicited, to Americans, to people in Britain, to people in Taiwan. That could very well be an attempt to cause havoc in the United States.
The point here is, we have to be prepared for anything. We need to make a clear declaration in public that the United States will defend Taiwan because Taiwan is crucial to maintaining our Western defense perimeter…. Taiwan is absolutely critical because it protects us from a surging Chinese air force and Chinese navy, trying to get to Hawaii.
A Chinese enterprise is now pouring about three billion dollars into Freeport in the Bahamas, 87 miles east of Palm Beach, Florida. That container port in Freeport never made economic sense, but it certainly does not make economic sense now that we have COVID‑19 and global trade volumes are declining. We might see, unless the US stops it, the People’s Liberation Army with a naval base 87 miles east of Palm Beach. Pictured: The Port of Freeport, Bahamas. (Image source: jonworth/Flickr via Wikimedia Commons)
This is a crucial time in the history of our republic.
UN Secretary‑General Antonio Guterres, speaking to the General Assembly on September 22, said the world must do everything to prevent a new Cold War. “We are headed in a very dangerous direction,” he said.
We can agree with that dangerous-direction assessment, but we might not agree with his recommendation. Guterres recommended that the world embrace multilateral cooperation.
We can, of course, cooperate with a China that is a partner or a friend. We can even cooperate with a China that is a competitor; all nations to some degree compete. The question is this: Is China just a competitor? Can we, for instance, cooperate with a China that is an opponent or an enemy?
We have to remember that Guterres was speaking at the event marking the 75th anniversary of the formation of the United Nations. It was a rather somber event, because multilateralism, the core ideology of the UN, is failing. Countries are bypassing the UN because they realize it cannot provide security. Countries are defending themselves.
The same thing happened in the 1930s. Countries then bypassed the UN’s predecessor, the League of Nations. They realized it was ineffective. Countries could not, in a multilateral setting, cooperate with that era’s aggressors: Imperial Japan, Fascist Italy, and Nazi Germany.
So is China merely a competitor, or is it an enemy? To answer that, I would like to look at four things ‑‑ China’s spreading of disease, China’s meddling in US elections, China’s subversion of the United States, and China’s militarism.
First, disease. The People’s Republic of China has attacked us with a microbe. This attack shows how, and to what lengths, China will go to injure other societies.
Everyone talks about how Chinese generals and admirals are changing the definition of war. Unfortunately, we now have an example of how they are doing so. China’s unrestricted warfare — a term Beijing has been using for at least 21 years — now includes biological attack.
China’s leaders knew for at least five weeks, maybe as much as five months, that the coronavirus was highly contagious, but during this period they propagated the narrative they knew was false.
They were telling the world that this was not readily transmissible from one human to the next. Chinese leader Xi Jinping enlisted the World Health Organization in propagating that narrative, which by the way, senior doctors at WHO knew was false. They knew this virus was highly contagious.
That is why it was right for President Donald Trump to defund and withdraw from WHO.
To make matters worse, Xi Jinping pressured countries not to impose travel restrictions and quarantines on arrivals from China. WHO helped him in this regard.
At the same time as Xi Jinping was leaning on other countries, he was imposing those same travel restrictions and quarantines internally. That means he thought these measures were effective. That means he thought his efforts regarding other countries were going to spread the disease.
Fortunately, President Trump imposed travel restrictions and quarantines on arrivals from China quickly, on January 31. He took a lot of heat, not only from Beijing, but also somebody called Joseph Biden. Biden called the president “xenophobic” for those travel restrictions, which saved tens of thousands of lives.
Now, President Trump is making China pay. We must make China pay. We must make China pay because we need to establish deterrence. As of this morning, more than 200,000 Americans have been killed by this disease and more will be killed later on.
Worldwide, we recently passed the one million death mark. We cannot allow Beijing to think they can maliciously spread another pathogen ever again.
Trump was cruising to reelection before the disease, but this reversal of fortune — the result of China’s actions — shows the lengths to which they will go.
Beijing is working hard to unseat President Trump. They are doing so not only with their social media feeds but also with their public pronouncements and other efforts. These efforts are much greater in scope than Russia’s in 2016 or Russia’s this year. It is not “Russia, Russia, Russia.” It really is “China, China, China!”
As an initial matter, Chinese state media and Communist Party media have gone on a bender with unprecedented numbers of news stories, pronouncements, articles, all the rest of it. As a part of this campaign, Beijing has unleashed its trolls and its bots against Trump. The New York Times reported in March that Beijing propagated, through social media feeds and text messages, the rumor that President Trump was going to invoke the Stafford Act and lock down the entire United States. Of course, Beijing knew that was false.
Beijing has also been running operations and networks, including the one called Spamouflage Dragon, which relentlessly attacked the president. YouTube, Facebook, and Twitter have since taken down that network.
China’s effort is massive. We have seen periodically American social media companies take down fake Chinese accounts. In June alone, Twitter took down 174,000 fake Chinese accounts. That is just one month, one social media platform, 174,000 accounts.
This blends into the third topic, which is subversion. TikTok, the wildly popular video sharing app, employs the world’s most sophisticated commercially available artificial intelligence. It uses that artificial intelligence to pick videos to send to people.
TikTok, because of its artificial intelligence, knows what you like, so it sends you more of it. It knows what you do not like. It does not send you videos you do not want. This gives Beijing an opportunity to change American public opinion.
The Chinese Communist Party probably changed public opinion in connection with this spring’s riots. Some observers think TikTok got college-attending white women to believe they were oppressed and therefore motivated them to demonstrate.
As Paul Dabrowa, an Australian national security expert told me, “Because of TikTok’s artificial intelligence and because of its sophistication, it can get people to do things which could end up, for instance, triggering wars, economic collapse, insurrection.”
This weaponized propaganda can turn people against one another and also ruin the credibility of their governments. Engineers working for Douyin, TikTok’s sister app in China, develop the algorithms for TikTok’s use. That is the reason China does not want TikTok sold to an American company: it wants to keep control of that algorithm.
The algorithm curates content and can motivate people to do things they otherwise might not do. People believe Beijing “boosted the signal” this June to help a “prank” against President Trump. Teens were using TikTok to spread videos to encourage people to reserve seats at his June rally in Tulsa but not go. That is exactly, in fact, what happened.
While on the subject of TikTok, we should talk about China’s Houston consulate. The question is: Why did the State Department, in July, out of all China’s five consulates in the US, pick the one in Houston to close?
The State Department said Houston was being used for espionage. I think State picked Houston — although there are a lot of other consulates involved in espionage, especially the one in New York and the one in San Francisco — because in Houston it was providing financial and logistical support to violent protesters in the United States.
Radio Free Asia reports that an intelligence unit of the People’s Liberation Army actually based themselves in the Houston consulate. Using big data and artificial intelligence, they identified Americans who were likely to participate in Black Lives Matter and Antifa protests.
The PLA unit then created videos and sent them out through TikTok. Those videos instructed people how to riot.
There are also other indications China has been involved in these protests. For instance, on the night of May 31st, one block north of the White House on 16th Street, there were demonstrations. This was the burning, for instance, of St. John’s Church.
At that time, there were Chinese demonstrators in the streets. A number of people observed that protesters were not only speaking Mandarin but also seemed to be acting in a coordinated fashion. Some of them were actually overheard talking about how the Chinese government had organized them to do this.
These reports are unconfirmed, but they mirror what people saw of Chinese protesters in Los Angeles, as well as other southern California locations. This month we have also read reports linking Chinese Communist Party front organizations with Black Lives Matters affiliated people.
Further, there have been a number of reports of suspicious activity. In late January, for example, US Customs and Border Patrol agents seized 900,000 counterfeit one‑dollar bills from China at the International Falls Port of Entry in Minnesota.
In China’s total surveillance state, no one can counterfeit American currency without Beijing’s knowledge, so it appears that this operation had at least the tacit support of the Chinese government. The question is, who counterfeits one‑dollar bills? People certainly do not do that for profit: the cost of counterfeiting those bills and getting them across the Pacific is higher than one dollar.
What probably happened in this case was that China was trying to support violent protesters financially. It is just a guess, but it is the only explanation that makes sense.
By the way, counterfeiting another country’s currency is more than just subversion. That is an act of war. If you want another act of war, that is indeed what the PLA did at the Houston consulate.
We just covered subversion. Let us go on to the fourth topic: China’s militarism. Chinese leader Xi Jinping has ambitions that span the world and are greater than we have seen since Mao Zedong or the dictators of the Axis in the 1930s and 1940s.
Xi has always believed that China should rule the world. He has also always believed he had to get the United States out of the way — especially because Americans promote ideals that are anathema to totalitarianism.
Xi Jinping has targeted America from the beginning. This is what makes the situation so dangerous. At the same time, Xi’s political position seems to be fragile. To bolster his position, Xi has looked to certain flag officers, generals and admirals, to be the core of his political support.
Many now say that, after his purge of “corrupt officers” and after his top-to-bottom reorganization of the military a half‑decade ago, Xi is in control of the military. One can say this, but one can also say Chinese military officers are now so powerful that they can effectively tell him what to do. To put it another way, maybe Xi Jinping realizes that to survive politically he has to let Chinese officers do what they want. We know that the Chinese military, the most cohesive faction in the Communist Party, and other hardliners in Beijing are now setting the tone.
China’s military officers are making their “military diplomacy” the diplomacy of the country. We now know that in Beijing, only hostile answers are considered to be politically acceptable.
Xi Jinping is under pressure, things are not going his way. Chinese leaders, civilians and perhaps military officers as well — know that there is a closing window of opportunity. This became clear in January when the Xinhua News Agency, the official media outlet, ran a story titled: “Xi Stresses Racing Against Time to Reach Chinese Dream.”
This is a clear indication that senior Beijing leaders know they are running out of time. It is really no mystery why they may feel this way. China’s demography is in the initial stages of accelerated decline. We know that China’s environment is exhausted. Think scarcity of water, despite all the flooding. Also, China’s people are restive. China is losing support around the world. The Chinese economy is in distress. That was true even before COVID‑19.
The reason this is important is because, up to now, the primary basis of legitimacy of the Chinese Communist Party has been the continual delivery of prosperity. Without the assurance of prosperity, the only remaining basis of legitimacy is nationalism. Nationalism, as a practical matter, means military misadventure abroad.
To understand military misadventure abroad, think what is going on in India and what China is doing to threaten Taiwan at this moment — and not just India and Taiwan. The whole periphery of China has now become a danger zone.
Let’s put this hostility in the context of what is occurring inside Beijing. Xi Jinping, since he became general secretary of the Communist Party at the end of 2012, has accumulated almost unprecedented power — and with it, unprecedented accountability. Unfortunately for him, there is no one else to blame.
At the same time, Xi Jinping has raised the cost of political failure in Communist Party circles. This means Xi knows that should he fail, he could lose everything. He could lose not just power. He could lose assets, his freedom, maybe even his life.
China’s ruler right now has a low threshold of risk, meaning there is very little stopping him from engaging in especially dangerous conduct. The concern, of course, is if he thinks he is going to lose everything, he may believe that one way out of his problems is to cause history’s next great conflict.
We may think that Xi Jinping should be cautious. Unfortunately, he now has incentives to cause a crisis — one that for us would be unimaginable.
Question & Answer
Question: On the economic front, here was a deficit primer report from Bloomberg News indicating that Chinese ownership of US Treasuries is down to a little over a trillion dollars. In the Obama years, Chinese ownership was approaching three trillion when total debt was a fraction of what it is today. This suggests the Chinese now have no more power to disrupt the Treasury than a fly on an elephant unless, of course, that fly is carrying the Wuhan flu. Where has China spent or invested that money? There is not another government debt market that could have absorbed two trillion dollars without raising a lot of noise. If it has gone to the Bridges, Roads, and Ports Initiative, isn’t that going to end up as one of the worst economic decisions ever?
Chang: First of all, we do not know exactly the full extent of China’s Treasury holdings. We have not known that for a very long time. The reason is that China holds a number of its Treasuries through nominees, especially in London.
Those numbers seem roughly correct, especially the one about one trillion dollars now. I am not exactly sure what the number was in the Obama years. Obviously, it was a big number. The reasons there was a fall in their Treasury holdings… two come to mind.
First, since the middle of 2014, China has actually dumped about a trillion dollars or so of Treasuries. They have done that to defend their currency, the renminbi, because the fall in their own currency’s value is, perhaps, the most critical problem they face. They have got to defend their currency. They use Treasuries to do that. They use the dollars they receive when they sell Treasuries to buy their own currency, thereby supporting their own currency’s value.
The other reason is because Xi Jinping, as we know, has announced his Belt and Road Initiative: a huge infrastructure development plan spanning the world. They spend a lot of money on that.
This spending has resulted in a decrease in their foreign reserves.
These reserves, by the way, although they put out a number every month, that number is probably inflated. China is counting assets that do not meet the definition — the IMF’s definition — of what may be counted as a reserve asset.
China actually may not have as much money as it says it does. All of this is critically important because of the question of the sustainability of China’s initiatives. We may be seeing some very interesting developments. Their Belt and Road investments were may be the worst ever because a number of countries around the world are not paying back China on their loans. These loans were extended under terms that were onerous. Countries nevertheless accepted them.
The point is, these projects are not economically viable. China’s ability to achieve its ambitions is very much dependent on the amount of money it has, specifically the amount of Treasuries.
Even China does not have enough to affect markets, at least for more than a month or so. The reason is the world is awash with liquid assets. It still is.
Although China’s holdings are big, they probably cannot use them to permanently to undermine the ability of the US Treasury to borrow. The US should not borrow as it is doing, but if it wants to, it does not need China’s permission.
Xi Jinping, as mentioned, had two separate initiatives. One was the Belt. The other was the Road, the road being the sea routes between China and Europe, the Belt through central Asia. Basically railroads and highways.
The idea was to be able to get Chinese goods from its east coast over to Europe. These two initiatives have now been amalgamated into the Belt and Road and now span the world. There’s a Polar Belt and Road, a Latin American Belt and Road, a Caribbean Belt and Road, and so on. China wants countries to build infrastructure. This is infrastructure generally the private sector would not build. These projects, in general, are not economic. The loans that China extended actually have high interest rates.
The reason leaders in countries accepted these loans was because China just bribed them. Countries took on very high interest loans, and countries cannot now pay them back, including, maybe most importantly, Pakistan, where China’s Belt and Road Initiative contemplates something like $60 billion in loans.
Pakistan has now gone to the IMF to get relief on a portion of its indebtedness.
What we are seeing right now is a number of countries, including African countries, that are not able to pay back. People ask, “Why is China’s only military base in Djibouti in the Horn of Africa?”
One reason is that Djibouti owed China a lot of money and could not pay back. So, China was able to get a concession on a former US military base and now has turned it into China’s first offshore base for the People’s Liberation Army.
If we want to understand why this is important to us, it is because a Chinese enterprise is now pouring about three billion dollars into Freeport in the Bahamas, 87 miles east of Palm Beach. That container port in Freeport never made economic sense, but it certainly does not make economic sense now that we have COVID‑19 and global trade volumes are declining.
I think that we are going to see, unless the US stops it, the People’s Liberation Army with a naval base 87 miles east of Palm Beach.
Question: Dr. Li-Meng Yan has said the COVID-19 virus was released intentionally. Have you please any information on that? [Dr. Yan escaped to the US, but her mother, who had nothing to do with the virus, was arrested in China on October 3. Ed.]
Chang: Dr. Yan released a non‑peer reviewed paper, which looks at this strain and analyzes the splicing of protein into it. When we first heard of the outbreak of the coronavirus in Wuhan, my wife said to me, “All diseases in China come from southern China, either Guangdong or Yunan. How come this outbreak is in central China, in Wuhan? There’s something suspicious about this.”
Of course, China’s only P‑4 biosafety lab, that is the highest level of biosafety, is located in Wuhan, about 20 miles away from the seafood market that everyone originally suspected was the origin of the disease. There is certainly a lot of reason to be suspicious.
Also, we know that the State Department sent a team to the Wuhan Institute of Virology, this P‑4 lab, in 2018. They reported a shocking disregard of safety protocols there.
Indeed, China Daily, an official newspaper for China, actually published photos on their website trying to convince the world how safe this lab was, but people who looked at the photos noticed that the seals on refrigerators where vials of coronavirus were being stored were broken.
There is another reason to be concerned. The Chinese themselves have admitted they stored more than 1,500 strains of coronavirus at the Wuhan Institute.
Also, they have, in Nature in November 2015, published a paper about gain-of-function experiments. In other words, artificial manipulation of coronaviruses to make them more deadly.
You put all of these things together and you have to be suspicious. There is also some physical evidence that something went on in that lab in October.
We have been monitoring their cell phone traffic. All of a sudden, there is a big two‑week period where there are no cell phone transmissions from the lab. Something may well have gone on there in October or maybe earlier.
Also, in late January, China sent its top bioweapons expert, General Chen Wei, to the Wuhan Institute. She was possibly sent to clean up the lab.
The question is, why did they send their bioweapons expert to head the lab after the outbreak?
I do not have any proof that Dr. Yan is correct in her assertion, but it does not matter how this started because we know what Xi Jinping did after it crippled his country. He took steps he knew or had to know would lead to the spread of the disease beyond his borders. This is a deliberate spread. That is why this is mass murder. There is no other way to term it. China deliberately spread this disease, causing infections and deaths around the world. One million deaths and counting.
Question: Do you think Xi might try any aggression before November 3rd to derail the presidential election and derail Trump?
Chang: Xi Jinping does not want President Donald J. Trump to be reelected. Whether Xi would do anything or not, I do not know. With a president who is behind in the polls, Xi may decide he doesn’t want to disrupt anything. If you listen to what domestic political experts are saying, Xi Jinping looks as if he is going to get the result he wants.
Question: What is going on in the other consulates? What should the US do with China? Decouple? If so, partially? Totally?
Chang: Just a couple of days ago, a former CIA director of Counterintelligence, James Olson, said there are more than a hundred Chinese spies in the City of New York and that many of them report and get directions from the New York consulate.
The remaining ones probably get direction from China’s UN mission. Some of them must be directly monitored from China itself. We do not know.
This was brought to light because of the Tibetan who was a NYPD Community Outreach Officer and who is alleged now to be a spy for Beijing. This highlighted China’s intelligence operations in Manhattan. Beijing has basically overwhelmed the city with spies.
We can also say the same thing about San Francisco. About two months ago, a Chinese researcher at the University of California Davis failed to disclose her relationship with the People’s Liberation Army on her visa application and was questioned by the FBI.
She immediately ran to the San Francisco consulate, where she held up for about two weeks or so while trying to evade capture by the United States. Eventually, China surrendered her.
It is not just a question of the consulates. It is also the embassy itself. China’s ambassador, Cui Tiankai, was revealed in FBI transcripts to have been trying to recruit a US scientist in Connecticut as a spy for China. By the way, Ambassador Cui did that in connection with somebody from the New York consulate.
One other thing that happens out of the New York consulate, and happens out of the other consulates, as well. That is, China monitors universities in the United States. A good friend at the City University of New York talks about being visited by Chinese consular officials whenever he gets in their face. He is very much a pro‑democracy guy. He gets sat on by the Chinese consulate.
They are very much involved in trying to manipulate American public opinion and engage in activities that are inconsistent with their status as diplomats.
In terms of what to do about it? I think these consulates should be closed when we find they’ve been involved in inappropriate activities. I think we should also close much of the embassy because there is so much inappropriate activity.
I would leave the Chinese ambassador in place because we need someone to talk to, but I would expel the current ambassador because of his attempt to recruit a spy. I would tell China, “Look, we would be happy if you want to send a replacement, but in the Chinese embassy itself the only people that will be allowed are the ambassador, his family, a secretary or two, and a bodyguard.”
To maintain diplomatic relations with China, the only thing that we need is a phone. Unfortunately, we may get to that point because we cannot afford to have these consulates not only engaging in espionage but also trying to bring down the government of the United States.
I know people are going to say, “We close their consulates. They close our consulates in China.” People are going to make the reasonable argument that because China’s a closed society, we need our consulates there more than China needs consulates in the United States.
That is a perfectly reasonable argument. It has a lot of validity, but because what China’s doing is so dangerous, we have to make a political point to China that we are willing to take a hit to stop their attempts to bring down our government.
No one really wants to do this, everyone wants to maintain friendly relations with every country, but we cannot maintain friendly relations with a country that is trying to subvert us in the way China’s been doing.
Question: What changes in China’s behavior do you expect, based on your analysis, if there is a new administration?
Chang: Beijing will always test a new American president. And so, for instance, George W. Bush was tested with the Hainan incident on April 1st, 2001, when a Chinese jet clipped the wing of a US Navy EP‑3 reconnaissance plane. The Bush administration was certainly found wanting as it allowed China to strip the plane. The administration even offered China a ransom to get our aviators out of China — a low point in American history.
We know what they did to Obama. After Secretary of State Hillary Clinton said that human rights was not important — in February 2009, the second month of the Obama administration — the following month, China interfered with the operation of two US Navy vessels, the Impeccable and the Victorious.
The interference with the Impeccable was so serious that it actually constituted an attack on the United States. The US let it slide.
Ultimately the issue of Biden’s China policy is not so much a question of what Biden thinks or what his advisors think. It is a question of what Beijing will force America to do. No one know what that will be.
We know one thing. Every new president will give China a grace period. President Trump did that for about 15 months to try to develop cooperative relationships with Beijing, to see if they could work something out. We know that Xi Jinping did not reciprocate Trump’s generous overtures. That is why Trump, starting around the spring of 2018, actually started to impose severe costs on China.
The problem right now with a new president — this is not just Biden himself, what he thinks — is that we cannot afford to lose any time giving grace periods to a regime that is relentlessly attacking us. We have to be concerned that an incoming president will do what every president has tried to do. That is the impossible: to attempt to develop cooperative relations with a militant Chinese state.
Question: Would you think that one of the key lessons companies have learned from having their supply chain in China, that replacing that manufacturing capacity outside China may potentially reduce employment and create greater security for those very companies?
If the US encouraged companies to replace Chinese labor in Central America, for example, would that take care of enhancing employment there and reduce the pressure of people wanting to enter the US?
Chang: I think the Trump administration clearly wants to decouple. It wants to reduce American vulnerability to China. We have seen that, of course, in the coronavirus epidemic where China actually nationalized an American factory making N95 masks and also turned around ships on the high seas because they were taking to the US personal protective equipment that China felt it needed for itself.
Companies are reluctant to move out of China because they do not set US foreign policy. They do not consider issues of national vulnerability. They go where they think they can make the biggest profit. That is business.
It is up to the President of the United States to change companies’ incentives. He can do that with the use of the International Emergency Economic Powers Act of 1977.
Trump used that on TikTok. A US federal judge in the District of Columbia overturned, or at least stayed, his order, which means President Trump needs, first of all, to start thinking about not only the ’77 act but also the 1917 act, which is the “Trading with the Enemy Act,” because judges would have less scope for overturning a designation of that sort.
On the question of Central America, that is important. These societies started to experience real problems after China’s accession to the World Trade Organization in 2001 because factories not only left the United States but they also left Central America. That shift destabilized those societies.
It’s important to bring manufacturing back, not only to the United States but also to our neighbors to the south because with employment, with factories, with prosperity, that would stabilize those societies. That would mean much less pressure on our southern border.
We Americans — this goes back, president after president after president — just ignore our own hemisphere when it comes to security. It is important for us to refocus.
Trump has made some initiatives in this regard. They are good ones. Not only with regard to Mexico, the USMCA, the replacement for NAFTA, but also with his Caribbean initiative. We need to do much more because China is not going to let us alone in our own hemisphere.
Question: Do you think we should treat China as we are treating Iran: imposing sanctions and cutting off countries that do business with China? Also, have thoughts on China’s attempt at overtaking globalization of communications with 5G?
Chang: On 5G, go back to the beginning of this year. It looked as if Huawei Technologies, the Chinese telecom equipment manufacturer, was going to take over the world’s 5G networks.
The Trump administration — and this is a triumph — Huawei is dependent on American chips, semiconductors. President Trump, through various actions, has restricted and cut off the sale of chips to China and to Huawei.
That means Huawei may not have a future. You have to see how dramatic this is. Huawei is the world’s number one supplier of telecom networking equipment. As of the last quarter, it is also the world’s number one maker of smartphones.
Now, Huawei’s future is in doubt. If Trump’s policies in this regard are continued, we are probably not going to see Huawei as a challenger.
There are other developments that I think will undercut Huawei, as it will undercut Ericsson and Nokia, the other two suppliers of 5G equipment. We are going to go away from these one-company telecom networks. We are going to go to a diversified plug-and-play model where many companies supply 5G equipment and software for a network. This is what happened in the computer industry, for instance.
That model has certainly created a lot more innovation and lowered costs. The Lego model, as it is sometimes called, is certainly going to help the US because we have the companies that can actually compete. This model will undercut China’s position.
Other countries have made it clear that they are cutting off Huawei, as well. Perhaps the best example is India. Because China killed 20 Indian soldiers on June 15, India has gone in a good direction, cutting off Huawei, cutting off TikTok, cutting off Chinese companies.
I believe we need to do the same thing. You’ve got to remember, China declared a “people’s war” on the United States in May of last year. They told us we’re the enemy, so we might as well take them at their word and start defending ourselves with the vigor that is needed.
There is a lot that we can do. I know the president wants to do that. Right now is not a time for him to do that, of course, because of the sensitivity of the election.
If he is not reelected, others, I hope, will work to make sure that the new president does the same things as Trump would do.
We have a lot to learn from India. China is trying to dismember that country. That has been clear from the writings of Chinese security analysts and goes back to the first decade of this century.
China has been increasing its territorial claims on India and would break the country apart because it has claims not only on Ladakh, which is the area of the fighting since the first week in May, but it also wants the entire state of Arunachal Pradesh.
There would not be much left of India if China gets its way. That is why India, right now, has a very resolute stance. We have seen some extremely important developments.
The first week of May, China invaded India, essentially, in Ladakh, in the Himalayas. The Chinese, in a premeditated act, killed 20 Indian soldiers on June 15. India actually responded. They counterattacked. They took back territory that the Chinese grabbed from them.
What we have found is really interesting: That is China’s Ground Force, which is the army portion of the People’s Liberation Army, has been incapable of fighting Indians in an area where they had initial success.
In addition to India actually engaging in successful military operations against the Chinese, more importantly, India banned TikTok and 58 other Chinese apps, which was a crippling blow. It also has cut off Chinese contracts in India. It is also, as mentioned, going after Huawei. If India can do it, the question is why can’t the United States?
Question: What are the places near the United States besides Freeport is China trying to encircle?
Chang: In the Atlantic, there are two other places that China would like military bases. One of them is Walvis Bay in Namibia, and the other is Terceira, in the Azores. Terceira is home to the Lajes US Air Force base. The US Air Force has redeployed, basically making it, as they say, a ghost base.
China has been eyeing Lajes. Lajes is actually not far from Washington, DC. From there, China could control the mouth of the Mediterranean, control the North Atlantic, put Washington, DC and New York at risk.
I think it’s up to the US Air Force to start putting people in Lajes, so the Chinese realize that they cannot take over the airfield. Its runway is almost 11,000 feet long. It can accommodate any aircraft and can threaten the United States. The Atlantic, which we have seen as a preserve, could very well become a Chinese lake.
Question: There is talk that China owns the presidential challenger because of $1.5 billion that China paid his son. Have you thoughts on that?
Chang: Most China analysts believe Beijing favors Trump. I don’t buy it — for two reasons. First, in the Democratic primaries, Chinese propaganda favored Biden over Sanders. Then we have seen Communist Party media, Chinese state, government media, overwhelmingly done its best to tar President Trump.
Chinese media has also said some nice things about Biden recently, so I think that’s a real indication of where Beijing is going.
Also, if you look at their troll activities, their bots and things, we do not know the full extent of it, at least people who do not have security clearances. What we have seen, however, is that this underground Chinese social media activity is overwhelmingly directed against President Trump.
This is different than Russia. Russia in 2016 was going after everyone. They were just totally trying to create chaos. China has been much more thoughtful in the way it has been doing it. It is directing its activities against the president. That is an indication of what it wants.
Further, Biden’s son, Hunter, has had unusual business dealings with China. Now, there are a lot of Americans who have been entrusted with a billion, $2 billion in Chinese money to invest. If Hunter Biden got a billion and a half, that by itself does not say anything.
What says a lot, however, is that Hunter Biden did not have experience as a fund manager. He still got a billion and a half to manage. This is extremely suspicious, along with all the other facts that are now out in the public. It is evidence of a bargain that certainly looks corrupt.
Question: Should the US ban TikTok if China keeps the algorithm?
Chang: I think we should ban TikTok this very moment. I would not wait. If I were President Trump, I would do everything possible, including the designation under the 1917 Act. I would say that TikTok’s operations in the US are over.
Part of the reason the district judge overturned President Trump’s 1977 act designation to stop downloads is because it looks like an attempt to permit a US company to buy, to grab TikTok. Now, I think there is nothing wrong with that, but it does not look good.
The president would be on stronger legal grounds if he just said, “Look, we’re banning all of TikTok’s operations this very moment, and then we will let the chips fall where they may.” This would mean that Oracle could still buy it.
The terms of the deal that we know about, Oracle/Walmart, on one hand, and ByteDance, the owner of TikTok on the other, are completely unacceptable. They leave the algorithm in the hands of China.
Oracle with its cloud-providing services could deal with the issue of China using TikTok to surveil Americans. China has been using TikTok to get metadata from Americans, and then use it to power their artificial intelligence back home.
They have also been inserting malicious software on the devices of users that allows China to spy. They have been doing some other stuff like grabbing the data of minors, which is illegal. All of those things could be taken care of if Oracle hosts the data. That is not the problem. What is the problem is the control of the algorithm because that allows China to manipulate US public opinion.
The Radio Free Asia report shows how dangerous this can be. This is an act of war. I do not see why we allow a company that has committed an act of war against the United States to continue to operate here.
Question: If China purposefully released or spread the virus as an act of war, do you think they predicted the economic damage lockdowns would do to the Western economies? And would they continue to propagate data supporting lockdowns to do further damage? Would they release an additional pathogen, or intensify support of domestic groups like Black Lives Matter destabilizing US society?
Chang: I guess all of the above. The thing about what their next step would be, well, we know they are propagating the narrative that China’s response to the coronavirus was superior to that of the United States and superior response shows China’s form of government is superior to America’s.
They had been continually attacking democracy before the coronavirus, but they are especially doing that now. They are going to use their vaccine, which I think will be out first. It might not be reliable, it might even be dangerous, but it will be out first, and they will tout that.
They are going to tout their vaccine in a massive public relations campaign against the United States. In terms of the initial part of the question, whether there might be another biological attack or not, you have to remember that China has been sending seeds, unsolicited, to Americans, to people in Britain, to people in Taiwan. That could very well be an attempt to cause havoc in the United States.
All of these things indicate a real maliciousness. In going back to that earlier question of what we can do about it, we first need to talk about these things in a realistic, blunt way. These go to the core of China’s attack on the United States.
Question: Why wouldn’t Trump or Pompeo get on the media and announce this, since our media refuses to report on it? Also, didn’t we know about this virus in 2016 from the CDC. If not, why was our CDC not prepared?
Chang: The CDC was not prepared. Not only did China lie about the disease, not only did it pressure countries to accept arrivals from China, thereby spreading the pathogen around the world, China did something else. China, on January 20, finally admitted the coronavirus was contagious. On January 21, one day after that, they started a campaign to convince the world that the coronavirus was no big deal. Their line was that the coronavirus would be no more deadly than SARS, which is the 2002, 2003 epidemic that infected, according to the WHO, 8,400 people worldwide, killed 810.
Dr. Deborah Birx, the White House Task Force Coordinator on Coronavirus, at her March 31 press briefing actually said, when she looked at the data from China, she thought this was not going to be a big deal. She first thought this was going to be another SARS‑like event. She also said it was only after she saw the devastation in Italy and Spain did she realize that the Chinese had misled her. Because they misled her, we did not take precautions that we otherwise would have adopted. By the way, Dr. Anthony Fauci has also publicly talked about being deceived by China.
That is probably one of the reasons the response in the US was not as fast as it could have been. Remember, President Trump acted on his gut on January 31, really fast, cutting off arrivals from China. The administration then became lax on this. The Democrats say it is because of the failure of Trump’s governance.
A large reason why, if that is true, is because China told the Trump administration, “Don’t worry about this.”
Question: Would it not be best for Trump to create an alliance to contain China? He has not, it seems, made efforts to create a multiple-country front. Had China not killed the Indian soldiers, India would also not be pushing China back. Do you think there could be an alliance of more countries to counter China?
Chang:: Actually, this is one criticism that a lot of people make about the Trump administration, that it does not work well with allies. I think that is wrong. For instance, here are two examples from recent headlines. One, of course, is the Bahrain, UAE deal with Israel, which is going to be expanded when perhaps Sudan joins, and maybe even Morocco.
You are going to see a Sunni Arab coalition in the Middle East — a really important development. It is historic. It is important from so many different aspects, and part of it is, it is the real beginning of a US‑led initiative in the region. We have been working with the Gulf States and Israel. They have been happy on their own, to cooperate below the surface. The Trump administration brought this out into the light and is sheparding really important developments.
Of course, the other thing is the Quad: India, Japan, Australia, and the United States. The Quad is actually becoming an effective grouping, and we are going to see other countries join that as well.
US relationships in Asia are actually stronger now than they were under Obama, with the exception of South Korea.
South Korea is not Trump’s fault. That is because the South has a communist as a president. Moon Jae‑in is very happy with what China is doing, and very happy with North Korea, and he wants to merge South Korea out of existence.
That is not Trump’s fault. As a matter of fact, Trump’s South Korea diplomacy has actually been the best under the circumstances.
The administration has worked hard with other countries around the world. The question is, could Trump have done more? One always could do more, but also, let us give the president a lot of credit for some really historic accomplishments that will be remembered, not just during his administration, not just next year, not just next decade. We will be talking about his accomplishments for a very long time.
Question: If after November 3rd, there is no definitive result for a month, would China risk attacking Taiwan with US leadership unknown?
Chang: Yes, I think so. I think that if Trump looked as if he was going to win the election, they might even attack before then. Now, the attack very well may not be a full‑on military attack. They might grab some of the outlying islands, which are just one or two miles away from the Chinese coast.
They could also do something to destabilize Taiwan, which could have consequences that would lead to a full‑on military conflict.
China right now knows the US eventually could win a full‑scale war, so they are reluctant to start one. The point, however, is that China is engaging in conduct that risks accidental military encounters, which could spiral down into history’s next great conflict.
We cannot control these things. Especially with Chinese generals and admirals out of control, anything can happen.
So we have to be concerned about China provoking an incident. China has regularly been sending its planes into Taiwan’s Air Defense Identification Zone. They have also been initiating especially provocative island-encirclement missions with their nuclear‑capable H‑6 bombers. They have been doing a lot of stuff.
The point here is, we have to be prepared for anything. We need to make a clear declaration in public that the United States will defend Taiwan because Taiwan is crucial to maintaining our western defense perimeter.
Since the end of the 19th century, we Americans have drawn our western defense perimeter off the coast of East Asia. Taiwan is at the center of that crucial line. It is where the East China Sea and South China Sea meet.
Taiwan is absolutely critical because it protects us from a surging Chinese air force and Chinese navy, trying to get to Hawaii. We need to be very clear about this. If we are not clear, China may try to do something that leads to tragedy. ||October 30, 2020
The above are from a briefing to Gatestone Institute on September 30, 2020.