When China was granted permanent “most favored nation” status in 2001, the Berlin Wall had fallen just over a decade earlier. The consensus in Washington was that just as communist Russia had fallen after being exposed to the wealth and freedom of American capitalism, so, too, would the Chinese Communist Party slowly lose its grip as it did business with U.S. corporations.
This was not an unreasonable belief at that time, and those who believed it should not be faulted. Two decades later, however, it is clear this consensus was wrong. The Chinese Communist Party has not lost its grip on the country. Instead, it has become more authoritarian, more ruthless, and more ambitious about expanding its power.
Instead of American corporations infusing China with values of dignity, accountability, and freedom, the value transmission has gone the opposite direction. It is our corporations that have had to learn to silence dissent and cooperate with the enslavement and persecution of millions of people.
Apple, for example, made a big bet on China as both a producer and consumer of its signature iPhones. It invested hundreds of millions of dollars in Chinese infrastructure so that Chinese workers could assemble iPhones as cheaply as possible. But as soon as all this infrastructure was completed, Apple learned that whatever leverage it thought it had over China, now China had over it.
“For Chinese authorities, this is no longer about, ‘How much money are you pouring into China?’ This is about, ‘What are you giving back?’” And what Apple appears to be giving to China is its soul. Apple has now built multiple data centers throughout China that house all the data Apple collects about its Chinese customers. But these data centers aren’t run by Apple employees. They are run by Chinese government employees. And the digital keys for all the data on those computers aren’t held by Apple, they’re held by the Chinese government. Apple has essentially become a spy for the Chinese government on its own people.
Semiconductor manufacturer Intel Corporation has also chosen to sacrifice its values for Chinese profits. When a new U.S. law restricting imports from China’s Xinjiang province recently came into effect, Intel dutifully told its Chinese suppliers it would have to comply. The law was designed to isolate China for its genocide against the Uyghur people in that region.
The Chinese Communist Party, however, was outraged that a corporation doing business in its country would dare acknowledge what was happening in Xinjiang and demanded that Intel apologize. Intel did exactly that, adding that it was “committed to becoming a trusted technology partner” and looked forward to “accelerating joint development with China.”
At least Intel still does business with the U.S. government, though. Google suspended a contract to help on an artificial intelligence project after some of the engineers learned the client was the U.S. military. Google had no such moral qualms about helping China’s dictatorship build a new search engine called Dragonfly that made it easier for the authoritarian government to censor search results. No wonder Google recently removed the phrase “Don’t be evil” from its corporate code of conduct.
We are a long way from the old adage, “What is good for General Motors is good for America.” So many of the largest and most powerful corporations operating in the United States, even if they were founded and are still incorporated in the U.S., are owned and operated by foreign investors and managers.
It is far past time to stop assuming corporations have our best interests at heart and instead question whether they, too, will put profits over patriotism.
