After WW2, world leaders did a sense check to see what had gone wrong. They wanted to understand how dictatorships evolved and how best to stop Hitlers and Mussolinis from occurring. Eventually it was decided that one of the best ways to stop a dictatorship was to beat it economically. As a result, sanctions were imposed on countries who failed to toe the line.
Among others, the Soviet Union was cast out due to its communist beliefs. Communism was an anathema to democracy and thus the biggest threat to freedom. The way to beat this threat was by isolation. Absent access to western markets, the Soviets would bleed money and crash, which is eventually what happened.
The same strategy has been used against dictatorships across the globe and the results have been promising. By withholding access to markets and thus wealth, the people grow disillusioned with governments and either demand or force change. As a result, dictatorial regimes have been defeated and dictatorial regimes have mostly been curtailed (Competitive Authoritarianism – Levitsky/Way).
The Soviets were demonized for doing the exact same things that communist China of today has done and continues to do:
–> Genocide – check
China’s ex leader/president – Hu Jintao has been convicted of crimes against humanity in Spanish court. The Madrid-based Tibetan Support Committee originally filed a lawsuit against then-President Hu in 2006, alleging that the Chinese Communist Party leader was responsible for the torture and repression of the Tibetan people.
–> Violent repression of religion – check
–> Violent repression of democracy – check
China has even imprisoned the 10-year-old daughter of a man calling for democracy.
–> Intolerance of free speech – check
–> No rule of law – check
China has done this and so much more, but little is done about it. Beijing enjoys unfettered access to our markets, our technology and our secrets while the former Soviets were demonized. The Soviet Union fell and China is growing, and things do not look good for the West.
People like Henry Kissinger were only too willing to sell us down the river. He knew that Americans possess two crucial weaknesses which he could exploit for his own good – naivete/ignorance and greed. He opened the Pandora’s box and look what has happened. China is not changing.
James Mann posited that China may not change. As a matter of fact, he wrote a book claiming as much.
“What if China manages to continue on its current economic path, yet its political system does not change in any fundamental way? What if, twenty-five or thirty years from now, a wealthier, more powerful China continues to be run by a one-party regime that still represses organized political dissent much as it does today, while at the same time China is also open to the outside world and, indeed, is deeply intertwined with the rest of the world through trade, investment and other economic ties? Everyone assumes that the Chinese political system is going to open up—but what if it doesn’t? What if, in other words, China becomes fully integrated into the world’s economy, yet it remains also entirely undemocratic?” – Sinocism
Resistant to Change
He spelled out in careful detail why Beijing may resist change and what the impact would be, and he was right, but we did not listen. We are on a collision course with China because of this and things are not getting better.
Alexsandr Solzhenitsyn knew only too well how naive and accepting Americans are (Warning to the West by Aleksandr Solzhenitsyn (Sep 1, 1986). He was right when he wrote that this innocence would be our demise. His mistake was in concluding that the Soviets would bury us, he too failed to account for China. He hypothesized that the Soviet Union would exploit our open nature, infiltrate and destroy us. Fortunately for us, we destroyed the Soviets instead.
Mr. Solzhenitsyn claimed that we are an accepting people, slow to anger and easily deceived. He said it was this characteristic which had led to our greatness but would also be our downfall. (To understand how communism works, read Warning to the West by Solzhenitsyn. Many of his fears about our engagement with the Soviet Union are coming to fruition with China.)
He knew all too well that the success of the former USSR was based on our destruction. Mutual cohabitation was impossible due to the vast differences in beliefs. All that we cherish they sought to destroy and vice-versa – fortunately for us the USSR fell.
It is mystifying how pound-for-pound China of today is equal to or worse than the Soviet Union, and yet it still gets a free pass. We sell out our freedoms in order to earn a few pennies. We allow communists of Beijing to study at Harvard, and the trigger men of Tienenman are welcomed by the White House. We also allow Chinese ‘spies’ free access to our military, government, critical infrastructure and technological future. How naive we are.
Will China Change?
With profit and losses hinging on sales from China, mega corporations are only too willing to convince us that engagement is the key. “China will change”, they claim, “Democracy is around the corner” and “It only takes time, but China will come around”.
China’s new general secretary of the communist party, head of the military and leader has shown that during his reign no such thing will happen. He is jailing writers, quashing dissent and rolling up the welcome mat. Comrade Xi Jinping, as he is known on the news here, has glorified the Korean war and threatened Americans at every turn. These facts are conveniently swept under the rug, after all, Apple needs to meet its earnings projections and Starbucks is teaching its employees Mandarin. It would seem as if comrade Xi et al need not worry about storming our shores, we have raised the white flag already.
Rather than take a hard look at China and making tough choices, we complain that “everything is made there” and “what can I do about this anyway?”
I don’t have the answers, but the least we could do is try to decrease our China footprint. How about we take a look at Made in the USA or Americans Working. According to Roger Simmermaker, the Central Florida author of How Americans Can Buy American, there still are many American companies making things.
We conjecture that Chinese politicians have motivation to use cross-listing for pursuing national or private agendas (e.g., showcasing China’s economic power or fulfilling politicians’ self-interests). Consequently, we hypothesize that these agendas will induce the politicians to choose protected firms or politically connected firms to cross-list on overseas stock exchanges.
What Are Our Options?
Another option is to take a look at your stock portfolio and divest yourselves of companies such as PetroChina Company Limited (PTR), China Mobile (Hong Kong) Ltd. (CHL) and China Unicom (CHU); after all, these are state-owned-enterprises (SOE’s) which are operated by the communist party in Beijing.
Far from being free of the tentacles of a one party state, they support it. Each cent we plug into such companies goes directly into the pockets of the same government which ran the Soviet Union. The same government which has said that Beijing and Washington cannot cohabitate peacefully. Why in the world would we give American green backs to such a system?
If this is too ephemeral, then how about reconsidering buying stock in Chinese companies going IPO in America? Not only do we send cash to their economy and create jobs for the Chinese, but we also send a message, “yes America is for sale”. And even if this is too much to take then how about not buying their stock because so much of it is toxic.
The Chinese do not play by the rules. They refuse to allow American oversight on stock sold in our land and are frequently fraught with malfeasance and fraud. Why do we support things such as this?
The answers to that question are greed and ignorance. Corporations seek to maximize profits, it’s their reason to be. We, on the other hand, have different needs. I would suggest that safety, security and a life free of the threat of nuclear war are some good goals. By getting informed we can make wise choices, get in touch with our political leaders and minimize the China threat. Alternatively, we can do nothing and see what happens.
References & Image Credits:
(1) Mussolini
(2) Aleksandr Solzhenitsyn
(3) pierofix via Compfight cc
(4) sygyzy via photopin cc
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Engagement with China is Good and Other Lies – Part II
