By Stephen Gowans
July 19, 2020
In a major speech, US Attorney General William Barr dwelled at length on the threat Chinese-owned firms pose to corporate America’s domination of the global economy, but said little about Chinese policy on Xinjiang, Tibet, Hong Kong, and the South China Sea, the usual reasons Washington cites for its growing anti-Chinese animus.
In a 17 July speech on China policy at the Gerald R. Ford Presidential Museum, US Attorney General William Barr explained why the United States has escalated its cold war on China. The cold war began in earnest when the preceding Obama administration initiated the US military ‘pivot to China,’ a project to ‘contain’ the rapidly developing nation.
The roots of the US-initiated war lie in the threat the People’s Republic of China poses to US technological supremacy, according to Barr.
In his speech, the attorney general argued that the “prosperity for our children and grandchildren” depends on the global economy remaining Americanized. Chinese-owned firms, in his view, must be prevented from dominating key emerging growth sectors, including 5G, robotics, and AI; these sectors must remain the preserve of Western (and preferably US) investors.
Barr’s analysis comports with the widely held view in Washington and on Wall Street that the PRC’s desired role in the global economy is one of facilitating US profit-making, not competing against it. China, in this view, must return to the role originally envisaged by US policy-makers of a vast consumer and low-wage labor market teeming with investment and profit-making opportunities for corporate America, not as a rival for economic supremacy.
Significantly, Barr’s speech was mostly free from the rhetoric that has marked the accustomed Sinophobic diatribes and slurs which nowadays are de rigueur in Washington. Mainly absent were references to alleged Chinese human rights violations in Xinjiang, Tibet, and Hong Kong and accusations of Chinese expansionism in the South China Sea.
These allegations and accusations ring hollow, coming from a US state whose principal allies in West Asia—Saudi Arabia, the UAE, Bahrain, Kuwait, Qatar, Jordan, and Israel—are hostile to the human rights and democratic values Washington professes falsely to champion, to say nothing of the United States’ own egregious human rights failings (witness, for example, the events that sparked the Black Lives Matter movement) and its robust imperialism (including continued direct colonialism; consider Puerto Rico, for example.)
Washington’s substantive grievance with China is that the Chinese Communist Party has pursued a state-directed development model which has vaulted China from the ranks of poor countries relegated to the role of serving US profit-making interests, to a level of technological and economic prowess which threatens to topple corporate America from its perch atop the global economy.
Barr’s speech is important in revealing the material basis of US anti-Chinese hostility. Washington routinely conceals its struggles for commercial advantage behind Olympian rhetoric about democracy, human rights, and selfless devotion to humanitarian causes. The practice resonates with an observation Hitler made in Mein Kampf. “[Man] does not sacrifice himself for material interests…[He] will die for an ideal, but not for a business.” Recognizing that its citizens will not support a struggle for Wall Street’s narrow interests, Washington, as much as Hitler, has resorted to rhetoric about ideals rather than plainspoken references to profit-making, to mobilize public opinion behind, what is at its base, a struggle for commercial supremacy.
The following excerpts from Barr’s speech elucidate the fundamental economic question underlying US hostility to China. Lenin observed in 1917 that it is “impossible to understand and appraise modern war and politics”, without understanding “the fundamental economic question”, namely, the “question of the economic essence of imperialism.”
Excerpts from Barr’s speech
“Since the 1890’s, at least, the United States has been the technological leader of the world. And from that prowess, has come our prosperity, the opportunity for generations of Americans, and our security. It’s because of that that we were able to play such a pivotal role in world history. … What’s at stake these days is whether we can maintain that leadership position and that technological leadership. Are we going to be the generation that has allowed that to be stolen- which is really stealing the future of our children and our grandchildren?
“[At] the dawn of America’s re-engagement with China, which began obviously with President Nixon in 1972 … it was unthinkable that China would emerge after the Cold War as a near-peer competitor of the United States.
“Deng Xiaoping, whose economic reform launched China’s remarkable rise had a famous motto: “hide your strength and bide your time.” That is precisely what China has done. China’s economy has quietly grown from about 2 percent of the world’s GDP in 1980, to nearly 20 percent today. And by some estimates based on purchasing parity, the Chinese economy is already larger than ours. The General Secretary of the Chinese Communist Party, Xi Jinping … now speaks openly of China moving closer to the center stage, building a socialism that is superior to capitalism…From the perspective of its communist rulers, China’s time has arrived.
“The People’s Republic of China is now engaged in an economic blitzkrieg—an aggressive, orchestrated, whole-of-government (indeed, whole-of-society) campaign to seize the commanding heights of the global economy and to surpass the United States as the world’s preeminent technological superpower. A centerpiece of this effort is the Chinese Communist Party’s “Made in China 2025” initiative, a plan for PRC domination of high-tech industries like robotics, advanced information technology, aviation, and electric vehicles, and many other technologies. Backed by hundreds of billions of dollars in subsidies, this initiative poses a real threat to U.S. technological leadership. Despite World Trade Organization rules prohibiting quotas for domestic output, “Made in China 2025” sets targets for domestic market share (sometimes as high as 70 percent) in core components and basic materials for industries such as robotics and telecommunications. It is clear that the PRC seeks not merely to join the ranks of other advanced industrial economies, but to replace them altogether.
“‘Made in China 2025’ is the latest iteration of the PRC’s state-led, mercantilist economic model. … To tilt the playing field to its advantage, China’s communist government has perfected a wide array of … tactics [including] tariffs, quotas, state-led strategic investment and acquisitions … [and] state subsidies,
“The PRC also seeks to dominate key trade routes and infrastructure in Eurasia, Africa, and the Pacific.
“Another ambitious project to spread its power and influence is the PRC’s “Belt and Road” infrastructure initiative. Although billed as “foreign aid,” in fact these investments appear designed to serve the PRC’s strategic interests and domestic economic needs.
“I have previously spoken at length about the grave risks of allowing [China] to build the next generation of global telecommunications networks, known as 5G. Perhaps less widely known are the PRC’s efforts to surpass the United States in other cutting-edge fields, like artificial intelligence. Through innovations such as machine learning and big data, artificial intelligence allows machines to mimic human functions, such as recognizing faces, interpreting spoken words, driving vehicles, and playing games of skill, much like chess or the even more complex Chinese game, Go. In 2017, Beijing unveiled its “Next Generation Artificial Intelligence Plan,” a blueprint for leading the world in AI by 2030. Whichever nation emerges as the global leader in AI will be best positioned to unlock not only its considerable economic potential, but a range of military applications, such as the use of computer vision to gather intelligence.
“The PRC’s drive for technological supremacy is complemented by its plan to monopolize rare earth materials, which play a vital role in industries such as consumer electronics, electric vehicles, medical devices, and military hardware. According to the Congressional Research Service, from the 1960s to the 1980s, the United States led the world in rare earth production. “Since then, production has shifted almost entirely to China,” in large part due to lower labor costs and lighter economic and environmental regulation.
“The United States is now dangerously dependent on the PRC for these essential materials. Overall, China is America’s top supplier, accounting for about 80 percent of our imports. The risks of dependence are real.
“For a hundred years, America was the world’s largest manufacturer — allowing us to serve as the world’s “arsenal of democracy.” China overtook the United States in manufacturing output in 2010.
“How did China accomplish all this? … [No] one should doubt that America made China’s meteoric rise possible. China has reaped enormous benefits from the free flow of American aid and trade. In 1980, Congress granted the PRC most-favored-nation trading status. In the 1990s, American companies strongly supported the PRC’s accession to the World Trade Organization and the permanent normalization of trade relations. Today, U.S.-China trade totals about $700 billion.
“Last year, Newsweek ran a cover story titled “How America’s Biggest Companies Made China Great Again.” The article details how China’s communist leaders lured American business with the promise of market access, and then, having profited from American investment and know-how, turned increasingly hostile. The PRC used tariffs and quotas to pressure American companies to … form joint ventures with Chinese companies.
“Just as American companies have become dependent on the Chinese market, the United States as a whole now relies on the PRC for many vital goods and services. The COVID-19 pandemic has shown a spotlight on that dependency.
“China’s dominance of the world market for medical goods goes beyond masks and gowns. It has become the United States’ largest supplier of medical devices.
“America also depends on Chinese supply chains in other vital sectors, especially pharmaceuticals. America remains the global leader in drug discovery, but China is now the world’s largest producer of active pharmaceutical ingredients, known as “APIs.” As one Defense Health Agency official noted, “[s]hould China decide to limit or restrict the delivery of APIs to the [United States],” it “could result in severe shortages of pharmaceuticals for both domestic and military uses.”
“To achieve dominance in pharmaceuticals, China’s rulers went to the same playbook they’ve used to gut other American industries. In 2008, the PRC designated pharmaceutical production as a “high-value-added-industry” and boosted Chinese companies with subsidies and export tax rebates.
“To secure a world of freedom and prosperity for our children and grandchildren, the [United States] … will need to win the contest for the commanding heights of the global economy. ”