The new House of Representatives, with its Republican majority, should work with the Senate and President Joe Biden to ban U.S. investments in China’s technology sector. Continued significant investment of U.S. investment firms such as BlackRock is incompatible with U.S. national security.
The need for bold, expedient action is twofold.
EUROPE COWERS AND KISSES UP TO CHINA
First, China’s tech sector is not so much an industry as it is an extension of the Chinese security state. Beijing’s authoritarian system of government means all industries are subordinated to the Chinese Communist Party’s ambitions. This is particularly true in the technology sector, the development of which President Xi Jinping has prioritized. Recently coronated as the most powerful Chinese leader since Mao Zedong, Xi pledged to “focus on national strategic needs, gather strength to carry out indigenous and leading scientific and technological research, and resolutely win the battle in key core technologies.”
His “battle” rhetoric is not accidental. It reflects the paranoid security prism through which Xi views technology. He intends that it provide the foundation for economic, espionage, and military capabilities to help China defeat the U.S.-led democratic international order and replace it with China’s feudal mercantilism. If Xi is successful, people everywhere will be poorer, less secure, and less free.
Second, there is the immediate threat that China may attack Taiwan, possibly before 2027. Were the People’s Liberation Army to do so, it would have a good chance of defeating a U.S. military task force sent to defend the island. That’s partly because Chinese technology is so much better than it was 20 years ago, with a powerful navy, anti-ship ballistic missiles, and artificial intelligence abilities.
Some of these emerged from China’s vast spying campaign against the West. Others were developed by China’s manipulation of civilian technology research to benefit its military. Considering the fact that 6,000 Americans serve on each aircraft carrier, and that China‘s strategy to defeat the United States would include sinking those ships with high-tech missiles, the risk of Chinese tech development should be obvious.
It is unconscionable that American investors would continue to profit from this risk to the lives of their citizens. America’s economic identity is centered on free markets and free trade, bound by the rule of law. It is a fine system allying the pursuit of profit to the service and prosperity of many.
But that isn’t the case with investment in China’s technology, which, though offering high returns, serves the interests of America’s preeminent adversary. We lament that BlackRock’s Larry Fink thinks this an acceptable price to pay for new profits.
Congress must step between China and Americans and recognize the unique security challenge posed by Xi’s technology agenda. Congress should restrict U.S. entities and people from direct or fund-based investment into Chinese technology firms and their controlling bodies. China will wail, but this should not be controversial here at home.
The U.S. should also consider retaliating against nations that continue to provide high-end technology to, or investments in, China. Too many close U.S. allies, such as the Netherlands, Israel, and Germany, continue to support China’s technological development. Their actions are no longer compatible with America’s exigent security interests or, ultimately, their own. This isn’t about trade or simple politics — it’s about protecting America’s ability to prevail in a major conflict with China.
