Congressional Republicans are right to question the efficacy of the COMPETES Act to confront the Chinese Communist Party (CCP).
Citing the General Administration of Customs, the journal states that “Chip imports were up 15.4 percent year-on-year in 2021, a figure China hopes to see decline as domestic technological capacity increases.”
Yet, as Ip points out, the impact of external influences on the operation of capital almost always results in the opposite effect to the one desired: namely, muted innovation and decreased productivity. Entrepreneurialism requires free license to evolve in dynamic and unscripted ways. This is much harder in a constrained market environment like the one artificially created by Beijing.
If Venture Capital fails to produce the stated CCP goals in the allotted time frame, where then is Beijing to turn? As evidenced by previous example, China will fall back on intellectual property theft and trademark violations. Additionally, the CCP maintains stringent controls on foreign direct investment entering the country from abroad. This raises further concerns when one considers the tightening control over how capital functions in the country as mentioned above.
In reality, this argument is actually closer to CCP ideology than the tenets of liberal free trade espoused by its purported proponents. Economics as the undergirding force of all sociopolitical development belongs to Karl Marx, not Ludwig von Mises. An international system of free trade only works if every participant is abiding by the established rules.
The tariff regime carried out by Washington in 2008-2012 was the result of predatory CCP economic behavior in the international market. Beijing allotted subsidies to state-owned enterprises in the production of various products for exports, engaging in its standard practice of market-manipulation and anti-competitive behavior.
The fact that the United States cannot rely on these type of multilateral institutions—including the World Trade Organization, United Nations, International Monetary Fund, etc.—to protect its national interest is because the sole purpose of these bodies is to strengthen and expand the globalist ethos upon which they were founded. This is a design feature, not a flaw.
That is because the individuals who staff these outfits and believe in that ethos often disdain electoral politics. The latter is viewed as a hindrance to effective policymaking and enlightened problem solving. Believing themselves to be the individuals in possession of the technical expertise to address the constantly adapting problems of the global community, centralization of authority is justified as a necessary step to the full prospering of the human race. It is always important to remember that this type of individual genuinely interprets the congregation of power in their own hands as an act of altruism.
Chinese leader Xi Jinping represents the ideal leader-archetype for these individuals. Not necessarily for any personality characteristics or goals of his regime, but rather in the means he possesses for achieving those ends.
Pointing to the U.N. World Economic Situation and Prospects 2022 report on challenges for global economic recovery posed by the CCP virus pandemic, Xi called upon the international community to recognize an increasing need for the governance of economic globalization. It is logical to presume that there is only one logical way for this to proceed—political globalization, and hence more centralized decision making.
“Despite the countercurrents and dangerous shoals along the way, economic globalization has never and will not veer off course,” he said. According to Xi, this means that countries must understand the world as one global community, and subsequently coordinate global policy in a more systematic and coordinated way.
The United States systematically undermines its own national interest by funding globalist institutions that operate under the stewardship of individuals with this mindset. The $4 billion allotment for the U.N. climate fund (another Davos-devotee favorite premise for aggrandizing the need for centralized power) subtly incorporated into the bill under the EAGLE Act is not a random occurrence, but is rather indicative of the purposeful—if gradual push—to slowly hand power to centralized bodies of unelected officials that then turn around to dictate policy to national “partners.”
A push for national autonomy in the production of semiconductors is essential, but the Republican Study Committee congressional caucus was right to highlight the need for “tough measures like sanctions that would limit the Chinese Communist Party’s ability to subvert our nation’s institutions and steal our intellectual property.”
Members of Congress should continue to push for more concrete steps in place to counter CCP economic malevolence. A convenient place to start would be redirecting a portion—if not all—of the $4 billion for the U.N. toward this task.
