China is bent on world domination — but not in the way you think

Washington Post
By Fred Hiatt Editorial Page Editor

China is bent on world domination — not with its missiles and aircraft carriers,
but by controlling solar energy, cloud computing and other industries of the
future.

That is an only slightly exaggerated version of a warning coming from the American
chamber of commerce in China. It sent a delegation to Washington last week to
warn that “China’s aggressive mercantilist policies are one of the most serious
threats facing the future of U.S. advanced technology sectors,” as their policy
paper says — and that the U.S. government isn’t doing enough to counter the threat.

The warning is especially startling coming from AmCham China, as it calls itself,
which for years flexed its advocacy muscle persuading the United States to let
China into the world trading system and rebutting Americans who it felt were too
hard on China.

“Now we’re saying that things are really lopsided, and the government needs to wake
up and take action,” James McGregor, chairman of APCO Worldwide in China and part
of last week’s delegation, told me during a visit to The Post. “This is aimed at
domination of the industries of the future. We’re talking about artificial intelligence
and all the things that are important to the American economy.”

Given President Trump’s anti-China rhetoric during the campaign, you might expect U.S. executives in Beijing and Shanghai to feel optimistic about the prospects for a U.S.
response. They are hopeful — but they are also nervous, for reasons I’ll get to in a
minute, that the administration may miss this opportunity to course-correct.

First, though: Why has AmCham changed its tune so dramatically since the upbeat days
of China’s entry into the World Trade Organization? The chamber’s answer: China has
changed, not us. Its policy has shifted, McGregor said, from “reform and opening” to
“reform and closing.” The Communist regime still wants economic growth and market
mechanisms, in other words, but without subjecting its economy to open competition
from outside. In fact, a recent survey showed that more than 80 percent of the chamber’s
members “feel less welcome than before,” another delegation member, Lester Ross of the WilmerHale law firm, told me.

China has a well-developed, long-term industrial strategy, the chamber says. It limits
U.S. firms’ access to its market; demands that American companies share their advanced technology to get even that limited access; buys foreign companies that possess
technology it needs while preventing U.S. firms from investing in China; shovels
resources to Chinese companies as they ramp up; and then, once those Chinese firms have
fattened on the vast and protected Chinese market, sends them out to compete in the world.

“The economic relationship is critical to both the United States and China,” said
William M. Zarit, a former U.S. diplomat and now senior counselor at the Cohen Group and chairman of AmCham China. “But as strong as it might be, we have an investment and trade relationship that is out of whack. . . . We need to address this.”

During the campaign, Trump maintained that China was “ripping us left and right.”
“There are people who wish I wouldn’t refer to China as our enemy,” he wrote in 2015.
“But that’s exactly what they are.”But will his earlier skepticism translate into smart
policy?

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