Bowing to a Tiger: The Danger of U.S. Ties to China
Treasury Secretary Janet Yellen is wrong again.
Last June, she conceded that she had been wrong about the severity of inflation. Having claimed inflation was only a “small risk” that could be managed, she acknowledged, “I think I was wrong then about the path that inflation would take.” Well, two cheers — as others have noted, it is unusual for a policymaker to admit an error.
Then, in December, she asserted that consumer purchasing has been one of the causes of higher inflation. People were, she said, “splurging” on such things as “grills, office furniture, and technology.” While a sudden increase in buying can cause prices to rise (merchants raise prices when there’s a run on the products they sell or if there is a shortfall of things people want to purchase), this is an unconvincing assertion. Invariably, sudden and significant “splurges” end as quickly as they begin, yet as anyone who’s paid for gas these days knows, significant inflation remains with us.
Discontent with ending her record of colossally wrong economic forecasts, Yellen is now in Beijing, adding humiliation to her record of ineptitude. Meeting Vice Premier He Lifeng, Yellen bowed “multiple times while enthusiastically shaking his hand.” A senior American official bowing to an avowed Marxist — this is so repugnant as to foster disbelief had it not happened.
In the “Great Hall of the People,” she told the assembled communists that “the U.S. and China should not let disputes over national security harm economic relations.” According to Yellen, “The United States will, in certain circumstances, need to pursue targeted actions to protect its national security. However, we should not allow any disagreement to lead to misunderstandings that needlessly worsen our bilateral economic and financial relationship.”
Some large American banks and companies of all sizes have, over the past quarter-century, become increasingly involved in — and, in some dangerous ways, dependent on — China. As the Heritage Foundation’s Brent Sadler reports, China supplies “a tremendous amount of our consumer and commercial goods, medical supplies, pharmaceuticals, and vital raw materials” and “also controls a huge share of the world’s shipping fleet and commercial shipbuilding capabilities.”
To put it simply, this is not a good thing. Reliance on what is an increasingly hostile and aggressive power is a fool’s bargain.
Additionally, we cannot separate “disputes over national security” from “economic relations.” The two are so entwined that pretending to segregate them from one another would be sort of like saying we can divide blood from flesh. Integrating our economy with China’s, until the latter has a government in which liberty and justice truly matter, is to walk into the lair of a hungry tiger and expect nothing more than a friendly chat.
China has been relentless in stealing information vital to American security. According to FBI Director Christopher Wray, “The greatest long-term threat to our nation’s information and intellectual property, and to our economic vitality, is the counterintelligence and economic espionage threat from China.” Jon Bateman, former director for cyber strategy implementation in the Office of the Secretary of Defense, has written that “China’s intelligence agencies have stolen a significant volume of U.S. military secrets in recent years, including aircraft designs … [and] they have compromised America’s own espionage networks, reportedly helping to expose and disrupt U.S. intelligence activities in China — a top American collection priority — and elsewhere.”
As The Stand has documented at great length, the Marxists in Beijing are brutal oppressors of their own people and shamelessly aggressive internationally, especially with respect to the security and vital interests of the United States. They have used their economic engagement with the U.S. as a platform for spying, massive intellectual property and other data theft, and the cultivation of business partnerships that make American industry vulnerable to Chinese threats of retaliation if our companies don’t do things their way.
I do not suggest an immediate and comprehensive end of all U.S. business ventures in and with China. But corporate America and the many small- and mid-sized firms that do business with Beijing should only conduct that business in the context of a priority far higher than profit: their loyalty to their country. This is not to suggest that everyone with professional ties to China is a traitor, but that turning a blind eye to Chinese misdeeds or being willfully ignorant of whom they are dealing with disserves the interests of the nation that affords them the rights, privileges, and prosperity they enjoy — and which they will lose if China’s insatiable desire for supremacy is not stanched. Business people are not specialists in foreign or military policy, but neither are they stupid. They shouldn’t act that way.
Janet Yellen is a misguided economist, but her call to keep economics apart from national security is worse than immature. It is reckless and unsupportable. At least, if we care about the future of our country.
Rob Schwarzwalder is Senior Lecturer in Regent University's Honors College.