Huawei and China: Not Just Business as Usual

Journal of Political Risk, Vol. 8, No. 1, January 2019 

By Douglas Black

A man looks at his phone near a giant image of the Chinese national flag on the side of a building in Beijing, during the 19th Communist Party Congress on October 23, 2017. GREG BAKER/AFP/Getty Images

To the average consumer around the world, Huawei is likely thought of as a Chinese company that makes nice phones — a “Chinese Apple” of sorts. The average American consumer might associate the firm as one that makes nice phones but, for some vague, political reasons, is not trustworthy. As of early December, the average Canadian consumer might recognize Huawei as the company at the focus of some political gamesmanship between the US, Canada, and China. All of these lay-interpretations are indeed valid, but there is a great deal more going on than revealed by a cursory glance. This article is intended as a brief explainer of Huawei’s history and current market position, the importance of the company to the ruling Communist Party and their strategic goals, and the far-reaching implications of the outcome of the arrest of Chief Financial Officer Meng Wanzhou.

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Wall Street Elites Against Democracy? A Case Study in Pro-China Media Bias

Press Reaction to the November 2018 speech by Dr. Peter Navarro, Director of the White House Office of Trade and Manufacturing Policy, was biased in a negative direction.

Journal of Political Risk, Vol. 7, No. 12, December 2018 

By Anders Corr, Ph.D.

U.S. President Donald Trump delivers remarks before signing ‘Section 232 Proclamations’ on steel and aluminum imports with (2nd L-R) Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer and White House National Trade Council Director Peter Navarro in the Roosevelt Room of the White House on March 8, 2018 in Washington, DC. Trump signed proclamations that imposed a 25-percent tarriff on imported steel and a 10-percent tarriff on imported alumninum. (Photo by Chip Somodevilla/Getty Images)

Dr. Peter Navarro, Director of the White House Office of Trade and Manufacturing Policy, gave a speech on November 9 at the Center for Strategic and International Studies (CSIS) in Washington, D.C. The title of the speech was “Economic Security as National Security”, which Dr. Navarro, a Harvard-educated economist, argues is the maxim of the Trump Administration. After the speech, Dr. Navarro was attacked in the media, but not about his main points. The negative, and one might argue biased, coverage came from the Wall Street Journal, CNBC, the Atlantic, and Director of the National Economic Council, Larry Kudlow, among others. The negative response centered on Dr. Navarro’s controversial claim that Wall Street elites have undue influence on U.S. policy having to do with China.  Tempers were likely frayed at the time due to planning, negotiations and internal maneuvering in advance of a high stakes late November meeting then being planned between Presidents Trump and Xi Jinping at the G-20 meeting in Argentina. Worries were high that lack of progress on at least the outline of an agreement at the meeting could lead to deepening tariffs between the countries, and fears in the financial sector of falling stock markets or even a recession. But the bias and infighting of the attacks were unbecoming of these media outlets, and of Mr. Kudlow, the Director of the National Economic Council.

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Boycott the Chinese Language: Standard Mandarin is the Medium of Chinese Communist Party Expansion

Journal of Political Risk, Vol. 7, No. 11, November 2018 

By Anders Corr, Ph.D.

These urban traffic signs in English and Mandarin are located in the Chinatown district of Seattle. Consciously preferring the use of traditional characters and Taiwanese Mandarin in the U.S. would be a statement against the Chinese Communist Party and its usage of Standard Mandarin and simplified characters. Interestingly, the characters in these street signs are the same in the traditional and simplified sets.

China is one of history’s most dangerous countries. In August, the United Nations reported that China is holding approximately one million minority Muslims in Xinjiang concentration camps. China supports anti-democratic regimes and terrorist groups worldwide. Its military is seeking to expand its territory in: Japanese and South Korean areas of the East China Sea; Philippine, Malaysian, Bruneian, Indonesian, and Vietnamese parts of the South China Sea; and Indian and Bhutanese territory in the Himalayan mountains. President Xi Jinping has since 2013 increased military spending, hyped China’s nationalism, repressed minorities and human rights activists, eliminated term limits on his increasingly personal form of rule, and extended the geographic reach and individual depth of state surveillance.

Average citizens in democracies who see this trend can feel powerless in response. But there are tools at the disposal of empowered citizens and social movements to encourage, complement and accentuate actions taken by our democratic governments. Both citizen and government action is essential to encourage democracy and democratic elements in China, history’s most powerful totalitarian state.

These tools include consumer boycotts and protests at Chinese embassies, for example. But there is an additional social movement tactic that could powerfully communicate the world’s criticism: a boycott of mainland China’s national language, Standard Mandarin, a combination of the Putonghua dialect spoken in Beijing with simplified characters. Putonghua is also called Modern Standard Chinese, which was promoted since the 1940s, and which the People’s Republic of China (PRC) and Chinese Communist Party (CCP) have zealously promoted since 1956 as a form of increasing state control beyond Beijing. I here call the combination of simplified characters and Putonghua, “PRC Mandarin” or “CCP Chinese”. Taiwan uses traditional characters and speaks a slight variant of Mandarin called Taiwanese Mandarin (Guoyu).

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How China Interferes in U.S. Elections

Journal of Political Risk, Vol. 7, No. 10, October 2018 

By Anders Corr, Ph.D.

US President Donald Trump flanked by Secretary of Transportation Elaine Chao and Stephen A. Schwarzman, Chairman, CEO and Co-Founder of Blackstone. Mr. Trump speaks during a strategic and policy discussion with CEOs in the State Department Library in the Eisenhower Executive Office Building (EEOB) on April 11, 2017 in Washington, DC. Mr. Schwarzman and the Chao family are influential with Mr. Trump, and have extensive business interests in China. Credit: Olivier Douliery-Pool/Getty Images.

China is powerfully influencing U.S. elections, as President Donald Trump alleged, but one will not necessarily find a Chinese intelligence agent stuffing ballot boxes in the local City Hall, or tampering with a voting booth. Facebook and Twitter claim they found no coordinated messages from the Chinese government. Bloomberg news and three digital security firms all claimed they found no evidence of digital or web-based misinformation campaigns. They apparently don’t count China’s ongoing anti-Trump propaganda, available through state-run media like China Daily and radio stations in the U.S. Nor do they count a new China-linked propaganda film advertised on Facebook, called “Better Angels“.

Plus, China’s immense wealth gives it more sophisticated and effective means to influence the general public, districts that voted for Republicans, the candidates themselves, the businesses that fund candidate elections, the universities and think tanks that hire politicians after they leave office, and the news media that voters will rely upon to choose their representatives on November 6, 2018. That is a far more powerful set of tools than anything the Russians used in 2016.

Vice President Mike Pence had it right when he said, “There can be no doubt: China is meddling in America’s democracy.” He said that Beijing was involved in “an unprecedented effort to influence American public opinion, the 2018 elections, and the environment leading into the 2020 presidential elections.”

Perhaps the most powerful influence that China wields over the U.S. public is the leverage that its $8.59 billion in box office sales provides to its “Propaganda Department” in Hollywood. American movie producers and directors actively self-censor in order not to alienate Chinese censors who could cut millions of dollars of ticket sales by denying access to the Chinese market. This leads Russians or terrorists to be the main villains in most Hollywood films, rather than China. Perhaps in part for this reason, 53% of Americans view China favorably according to a February 2018 poll, despite China’s human rights abuse at home, and ongoing economic and military transgression against the U.S. and our allies. That latent pro-China sentiment will make elections more difficult for Mr. Trump and the Republicans on November 6. This is China’s growing soft power, and is only infrequently commented upon in the media.

China’s sharper power to interfere with elections was demonstrated by the country’s recent attempt to use targeted tariffs to cause economic pain in districts that voted for Trump in 2016. In two rounds of tariffs, including over the summer, China hurt states and congressional districts that voted for Trump and other influential Republicans with $110 billion of targeted tariffs, focusing on commodities like soybeans, sorghum and pork that are overwhelmingly produced in rural pro-Trump districts. China also hit whisky, produced in Kentucky, and cranberries, produced in Wisconsin. Senate Majority leader Mitch McConnell represents Kentucky, and House Speaker Paul Ryan represents Wisconsin. “Mapping the counties that voted for Mr. Trump in 2016 and those affected by China’s tariffs shows the extent to which Trump voters’ jobs rely on the products being targeted,” according to the New York Times. “Beijing hopes it can convince those voters — and their elected representatives — that the president’s trade war could hurt them.” China’s counter-tariffs threaten more than double the jobs in districts Trump won in 2016, compared with those that Clinton won.

But China has many other ways to influence voter opinions in the U.S., and thereby interfere with how voters vote. China also does an end-run around voters by influencing the political choices provided at the voting booth, in that most politicians of both parties are influenced to be soft on China by an environment conditioned by Chinese money and giveaways, including to U.S. students, the media, professors, congressmen, businessmen, and even U.S. military officers.

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China’s Targeting of Overseas Chinese for Intelligence, Influence and Drug Trafficking

Journal of Political Risk, Vol. 7, No. 7, July 2018 

By Anders Corr, Ph.D.

Davao City Vice Mayor Paolo Duterte (L), son of Philippine President Rodrigo Duterte, and the president’s son-in-law, Manases Carpio (R), take an oath as they attend a senate hearing in Manila on September 7, 2017.
Paolo Duterte and the president’s son-in-law, Manases Carpio, appeared before the inquiry to deny as “baseless” and “hearsay” allegations linking them to large-scale illegal drugs smuggling. NOEL CELIS/AFP/Getty Images

On June 12, Philippine protesters staged coordinated protests against China in Los Angeles, San Francisco, and Vancouver. Protest organizer Ago Pedalizo said, “Duterte’s government pursues the ‘sell, sell, sell’ approach to sovereignty as a trade-off to all kickbacks he’ll get from the ‘build, build, build’ economic push of China.” His protest group, Filipino American Human Rights Advocates (FAHRA), charged that “Duterte is beholden to the $15-billion loan with monstrous interest rate and China’s investments in Boracay and Marawi, at the expense of Philippine sovereignty. This is not to mention that China remains to be the premier supplier of illegal drugs to the country through traders that include the son, Paolo Duterte, with his P6 billion shabu [methamphetamine] shipment to Davao.” 

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Duterte’s Immigration Agreement with China: Subversion by Numbers

Journal of Political Risk, Vol. 7, No. 6, June 2018 

By Demetrius Cox

A PLA Air Force (PLAAF) military transport plane (IL-76) in Davao City on 8 June 2018. Source: Philippine Plane Spotters Group (PPSG).

“The supreme art of war is to subdue the enemy without fighting.”
― Sun Tzu, The Art of War

On June 9, 2018 the Philippine Star published an article titled “More than 3 million Chinese allowed entry into Philippines since 2016 — Immigration data”.

In what may become one of the most remarkable subversions in recent history, the article describes how the immigration floodgates have been thrown open by Philippine President Rodrigo Duterte.  With a current national population of 103 million, Duterte has allowed a 3% direct population increase (3+ million) of Chinese immigrants to the Republic of the Philippines in less than three years, which is enough to keep most demographers up at night.  And there is no end in sight.

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Trade Strategy is a Proper Part of National Security

Journal of Political Risk, Vol. 7, No. 6, June 2018 

By William R. Hawkins

Chinese-chartered merchant ship Cosco Shipping Panama crosses the new Cocoli Locks during the inauguration of the Panama Canal expansion in Panama City on June 26, 2016. A giant Chinese-chartered freighter nudged its way into the expanded Panama Canal on Sunday to mark the completion of nearly a decade of work forecast to boost global trade. Photo: JOHAN ORDONEZ/AFP/Getty Images.

On June 4, the Koch brothers (Charles and David) announced the launch of a “multi-year, multimillion-dollar” campaign against the tariffs and trade restrictions imposed by the Trump administration; especially those levied on China. The billionaire brothers are regularly called “conservatives” because they make large campaign donations to Republican candidates. But they are not conservatives; they are libertarians, a very different breed of cat. And their donations to the GOP are meant to sway the party in their ideological direction, not merely support it. The liberal media tries to tarnish conservatism by placing libertarians on “the Right” even though this is not their intellectual origin. This is done to further the left-wing narrative that “conservatives” are self-interested, greedy individuals who are enemies of organized society and the common good. This is true for libertarians, who doubt the very legitimacy of the nation-state or the “higher” norms of society. Too often they define right and wrong on the basis of whether it turns a profit.

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A Peculiar Chess Game in North Korea《奇怪的棋局》

Journal of Political Risk, Vol. 6, No. 5, May 2018

By Wei Jingsheng (魏京生)

Wei Jingsheng (魏京生) was the most famous Chinese dissident in 1979, when Deng Xiaoping put him on a nationally televised trial for writing the essay, “The Fifth Modernization: Democracy.” He received 15 years in prison. After meeting with President Clinton’s Assistant Secretary for Human Rights in 1993, he was put back in jail for another 14 years. He served 4 years of his second jail term before being exiled to the United States in 1997. A number of points are new in his latest article, published in English for the first time here. In particular, the discussion of China’s President Xi obstructing the Trump/Kim summit has very serious implications for the future of U.S.-China relations, and the credibility of President Xi as an interlocutor in Korean peace negotiations. Wei Jingsheng’s piece was originally published on Radio Free Asia’s blog and dated May 17, 2018. The article, including its Beijing slang, has been translated into English below.

Chinese human rights activist Wei Jingsheng (left) and American politician US President Bill Clinton talk together in the White House, Washington DC, December 8, 1997. (Photo by Robert McNeely/White House/Consolidated News Pictures/Getty Images)

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The Price Of Paramount Power: Xi Jinping’s Ascension Could Make China A Much Riskier Place To Do Business

Journal of Political Risk, Vol. 6, No. 3, March 2018

By Richard Hornik

One of the peculiar pathologies of western businessmen active in China is an almost religious reverence for its lack of due process, enthralled by the combination of free(ish) markets and political stability proffered by China’s Market-Leninism (a term coined by Nicholas Kristoff). What they miss, however, is the price that must be paid for such short-term control, and during the course of Chinese history that price has proven to be very high.

The latest convert to this envy for authoritarian efficiency is Tesla’s Elon Musk who has spoken and written extensively about China’s ability to conceive, approve and build enormous infrastructure projects in a matter of a few years – or less[1].  No zoning rules, environmental regulations, cost-benefit analyses — much less property rights — can stand in the way of the gleaming high-speed rail lines, shiny new airports, massive harbors and 12-lane highways and bridges that have covered the Middle Kingdom in the past two decades. Likewise with housing developments and mega industrial installations like petrochemical plants, steel mills and refineries.

The fact that many of these projects made little or no economic sense and often created enormous capital, environmental and human costs for decades to come does little to take the shine off the power to command society and the economy to do the bidding of a brilliant meritocracy. Japan went on a similar splurge in the last three decades of the 20th century, also directed by brilliant technocrats, ending in two decades of economic stagnation, but at least Japan had its flawed democracy to serve as a break and a safety valve, something missing from authoritarian regimes.

A vendor (R) takes a nap next to posters showing the late Chinese chairman Mao Zedong (C) and Chinese President Xi Jinping (L) at a market in Beijing on May 15, 2016. Fifty years after the Cultural Revolution spread bloodshed and turmoil across China, the Communist-ruled country is driving firmly down the capitalist road, but Mao Zedong’s legacy remains — like the embalmed leader himself — far from buried. Credit: AFP / NICOLAS ASFOURI / Getty Images

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We Need a New Approach to China Even if We don’t Care About Human Rights and Free Trade

Journal of Political Risk, Vol. 6, No. 2, February 2018

By Ho-fung Hung, Ph.D.

Obama era officials Kurt M. Campbell and Ely Ratner recently published “The China Reckoning: How Beijing Defied American Expectations” in Foreign Affairs, arguing US’ assumption underlying its China Policy over the past several decades has been wrong. They admit that China has not changed in the direction most China hands in the US had expected. Rather than becoming more liberal and democratic, it became more authoritarian; rather than more opening to trade, it became more protectionist. They call for a reorientation of Washington’s approach to China. This article has triggered some internal debate and soul searching in the China watchers’ community.

It is understandable that many who expect China to embrace liberal democracy and more economic openness have been disappointed. What is missing in the discussion is that even many realists and corporations who do not care too much about the ideals and principles of economic and political liberalism are frustrated with China too. Over the last few years, another China reckoning is that China is unable, or never intended, to deliver and keep its promises even on many economic and geopolitical issues that are unrelated to the sensitive areas of political reform and change.

Graffiti depicting a portrait of former Chinese leader Mao Zedong with Chinese yuan signs in his eyes, on a wall in Shanghai on March 1, 2017. Source: JOHANNES EISELE/AFP/Getty Images.

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