Page:The Elements of the China Challenge (November 2020).pdf/11

 Today, thanks in part to globalization and to the CCP’s rapid modernization over the last forty years, the known world for China has expanded to encompass the globe. The CCP has adapted the old approach to China’s new circumstances. All major economies are vulnerable to the CCP’s economic co-optation and coercion because of their extensive commercial ties with the PRC and their desire to maintain access to China’s low-cost labor force and enormous consumer markets. America’s own economic entwinement with China dwarfs U.S. commercial relations with the former Soviet Union.

As China reaped the benefits of modernization and accelerated economic development, the CCP set its sights on dominating the global economy by leading in the cutting-edge sciences and the high-tech revolution. On its way to building the world’s second largest economy after the United States, the party developed various initiatives and programs integral to Beijing’s long-term strategy of using a “whole-of-nation” approach to achieve — including by deceptive, corrupt, and illicit means — decisive advantage over the United States and other advanced industrial nations.

First, China engages in massive intellectual-property theft. The PRC has perpetrated the greatest illegitimate transfer of wealth in human history, stealing technological innovation and trade secrets from companies, universities, and the defense sectors of the United States and other nations. According to research cited by the Office of the United States Trade Representative, China’s efforts — including forced technology transfer, cyberattacks, and a whole-of-nation approach to economic and industrial espionage — cost the U.S. economy as much as $600 billion annually. This staggering sum approaches the Pentagon’s annual national defense budget and exceeds the total profits of the Fortune 500’s top 50 companies. All 56 FBI field offices are conducting China-related economic-espionage investigations across nearly every industrial sector.

Second, China pursues control over key international supply chains and essential materials and goods. Since Beijing’s controversial 2001 accession to the World Trade Organization, U.S. multinational companies have relied increasingly on the PRC’s low-cost labor force to produce and export cheaper finished goods, especially in high-technology and advanced-manufacturing sectors. 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 Rh