China Uses 'Deception, Illicit Means' as Policy Tools

Manoj Gupta
·5-min read

The outgoing Trump administration brings out an unclassified policy paper to warn the new, Biden dispensation, of the Chinese Communist Party’s ultimate goal of “displacing the United States as the world’s foremost power and restructuring world order to conform to the CCP’s distinctive way of empire”. It warns of the brazen misconduct and unethical routes China takes to achieve its goals, citing specific instances.

The paper, released in November this year, by the policy planning staff of the US Department of State, titled “The Elements of the China Challenge”, is by far the most-damning condemnation of China’s expansionist policies under President Xi Jinping.

The objective of the paper is to identify the processes the CCP has adopted to achieve its ultimate goal of world domination and to arm the next US administration with the tools to re-negotiate America’s China policy for the years to come.

Summing up the CCP’s domestic policies of control, the paper says, “the CCP has consolidated authority and — by nefarious means ranging from digital surveillance to strict indoctrination to concentration camps for religious and ethnic minorities — intensified the subordination of PRC citizens to party-defined collective interests. The CCP has developed — and acquired illegally in many instances — advanced technologies not only to control its own population but also to collect data on persons across the globe and to build a world-class military.”

It remarks on China’s attitude towards its immediate neighbours. “The CCP has pursued extravagant claims in, and militarization of, the South China Sea in brazen defiance of international law while crushing freedom in Hong Kong and threatening to do the same in Taiwan.”

Without naming the BRI, the paper describes the CCP’s approach to expansionism. “The CCP has undertaken major infrastructure and investment projects, debt-trap diplomacy, and other predatory economic practices in every region of the world, the better to induce or compel sovereign nation-states, particularly their governing and business elites, to aid and abet China in the reshaping of world order. And the CCP has leveraged its integration into international organizations to infuse them with norms and standards rooted in the party’s authoritarianism.”

The crux of the paper is based on a quote from President Xi Jinping in 2013 where he proclaimed “building a socialism that is superior to capitalism, and laying the foundation for a future where we will win the initiative and have the dominant position”.

Examination of the CCP’s conduct in light of its communist and hyper-nationalist ideas demonstrates that “Xi means displacing the United States as the world’s foremost power and restructuring world order to conform to the CCP’s distinctive way of empire”.

The paper accuses the CCP of adopting unfair and illegal means to go about its expansionism. China’s long-term strategy uses a certain “approach to achieve — including by deceptive, corrupt, and illicit means — decisive advantage over the United States and other advanced industrial nations”. It lists seven such approaches the US has identified.

“First, China engages in massive intellectual-property theft… stealing technological innovation and trade secrets from companies, universities, and the defense sectors of the United States and other nations….China’s efforts — including forced technology transfer, cyberattacks, and a whole-of-nation approach to economic and industrial espionage — cost the US economy as much as $600 billion annually.”

Apparently, all 56 FBI field offices are conducting China-related economic-espionage investigations across nearly every industrial sector.

The second approach is about China gaining control over international supply chains and essential goods and materials.

“Since Beijing’s controversial 2001 accession to the WTO, US multinational companies have relied increasingly on the PRC’s low-cost labor force to produce and export cheaper finished goods. This shift resulted in lower prices for U.S. consumers and higher profits for U.S. companies. Among the costs, however, was a ‘China Shock’ that devastated small- and medium-sized manufacturing in the United States and other nations, wiping out as many as 2.4 million jobs in America alone and leaving crucial international supply chains dependent on China. The global pandemic has thrown this supply-chain vulnerability into sharp relief.”

The third approach is China seeking industrial dominance, particularly in critical high-tech sectors. The paper admits the US lost its manufacturing superiority even as China excelled at it, accounting for a near-dominant position in production of steel and aluminium, consumer electronics, drones, ship-building, integrated-circuit fabrication, advanced weapons systems, aerospace, artificial intelligence (AI), robotics, and other essential industries.

The paper warns of how the CCP is now intent on controlling global commerce and support its “Military-Civil-Fusion” policy for the PLA by gaining dominance by any means in 10 decisive areas through its “Made in China 2025” initiative.

Fourth, China aims to build the world’s fifth-generation (5G) wireless-telecommunications physical and digital infrastructure. “Beijing heavily subsidizes state-directed Huawei and ZTE, enabling these telecommunications behemoths to undercut rivals in the race to construct 5G networks on every continent. Since Huawei and ZTE are subject to China’s various national security laws…countries that use them as 5G vendors face growing threats to their network integrity, data privacy, economic stability, and national security.”

China’s Belt and Road Initiative (BRI) comes fifth, to help it “expand foreign markets for Chinese companies and as a means of drawing nations, particularly their political and economic elites, into Beijing’s geopolitical orbit”.

Sixth is how China leverages often unfettered access to foreign capital markets. For instance, “the US stock exchanges today list over 130 Chinese companies — including Alibaba, PetroChina Company Limited, China Life Insurance Company Limited, China Petroleum & Chemical Corporation, Baidu, and Tencent — with a combined valuation of over $1 trillion”.

The paper points out how brazenly China “is the only country that invokes its state security laws to block US regulators” from conducting inspections as per “US Congress enacted laws requiring regulators to inspect the audits of all US-listed companies”.

Lastly, the paper says, “China exploits the freedom and openness of the world’s liberal democracies to undercut their governance, prosperity, and national security. Beijing regularly threatens to cut off access to its vast markets to force foreign businesses in free countries to conform to the CCP’s political demands and speech regulations.”

The paper concludes that “by means of these and other initiatives and programs — and unconstrained by respect for international law and human rights — the PRC wields its vast economic power globally to bring countries under its sway.”