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China’s Challenge to the U.S.

by Richard Laszok
Published with Permission

Competition between China and the U.S. does not have to result in a win-lose situation, but this requires both countries to renegotiate current trade policies.  The current negotiations can provide a win-win deal for both countries.  Factors that contribute to a nations global power are its economic policies, military strength, and technological development.  The U.S. is currently the hegemon because of its strong economy, superior military, support for innovation, and altruistic approach to foreign relations.  China’s rise as a global power will use these factors to challenge the U.S. domination and become the new global leader (Pillsbury, 2018, pp. 143-144).

As China’s economy strengthens it will have the resources to modernize its military to in efforts to protect its natural resources and sea-lanes.  China has a hybrid economic structure where the government subsides private companies that its government has interest in (Pillsbury, 2018, p. 149).  Such subsidies are used for research and development in the industries in which China sees as opportunistic.  Due to these factors, competition between foreign companies becomes largely one sided.  These companies also conduct economic espionage and steal intellectual property, challenging U.S. and foreign companies (Pillsbury, 2018, p. 189).

In the March 2018 address to China by President Xi, he stated that China was not interested in “seeking hegemony or [would] engage in expansion” (Fong, 2018).  This doesn’t necessarily mean China doesn’t aspire to become the global leader eventually.  As Michael Pillsbury outlines in his book “The Hundred-Year Marathon” China’s leaders would avoid using such rhetoric that might alarm the world of their true intentions (Pillsbury, 2016).  China does not want to be perceived as threatening while they build and grow.  An example of this is the slow build up and militarization of islands in the South China Sea.  China is using this as a way to secure the natural resources within the area such as fishing, oil, and minerals.  It also helps secure the sea-lanes surrounding China and provide a military buffer zone for Mainland China (Pillsbury, 2018, p. 143).

Another concern is how the government subsidies Chinese companies.  This practice makes it nearly impossible for foreign companies to compete in those industries.  One example of this is the information and communication company Huawei.  Huawei is becoming a global leader in this industry, but their relationship with the Chinese government raises security concerns to the U.S. and many European countries (Bey, 2018 June 28).  The fear is that the products and services provided by the company could be used to collect information on their customers (Pillsbury, 2016, p. 173).  What is also of great concern is the development of 5G technology and artificial intelligence (Bey, 2018 June 28).  Both have military applications and could rival the U.S. in the near future.  Therefore, as China continues to rise, “the U.S. will continue to expand investment restrictions on Chinese technology companies wishing to enter the U.S.” (Bey, 2018 June 28).

Despite these challenges and the recent threat of a trade war between the two countries, the use of military force or violence is unlikely as the two countries begin to discuss trade reform.  The countries are using and will continue to use the World Trade Organization (WTO) to settle trade disputes.  The U.S. has already “successfully litigated WTO disputes targeting unfair trade practices and upholding our right to enforce U.S. trade laws” (“President Donald J. Trump is Confronting China’s Trade Policies”, 2018).  Leveraging the WTO will ultimately help ensure both countries achieve fair trade deals and compliance with the organizations’ intellectual property and environmental policies.  If China commits to prevent intellectual property theft and encourage U.S. technology companies to compete in the Chinese market, it would benefit its people by allowing them access to more products.  Finally, the U.S. would benefit by having access to the new market.

 

References

  1. Bey, M. (2018, June 28). Huawei’s Success Puts It in Washington’s Sights. Retrieved July 26, 2018, from https://worldview.stratfor.com/article/huaweis-success-puts-it-washingtons-sights-china-technology
  2. Fong, L. (2018, April 15). What would Chinese hegemony look like? A lot like US Leadership. Retrieved July 26, 2018 from https://www.scmp.com/week-asia/opinion/article/2141661/what-would-chinese-hegemony-look-lot-us-leadership
  3. Pillsbury, M. (2016). The hundred-year marathon: Chinas secret strategy to replace America as the global superpower. New York, NY: Griffin.
  4. President Donald J. Trump is Confronting China’s Unfair Trade Policies. (2018, May 29). Retrieved July 27, 2018, from https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-confronting-chinas-unfair-trade-policies/

Update Andrew Ertl 7/18

UPDATE: July 2018

Andrew Ertl, previous winner of the Jim and Anna Hyonjoo Lint Scholarship in 2016, graduated last week with a Master’s of Management Science in Global Affairs from Tsinghua University in Beijing through the prestigious Schwarzman Scholars Program. Along the way, he made sure to take advantage of his location to extensively travel throughout China, meeting Chinese and foreign policy makers, and snapping a picture sitting next to a panda!

Currently he is home relaxing in Green Bay, WI; stopping by at the USO office at the Green Bay airport and Marine Corps recruiting office, and reading to prepare for his next graduate studies at Oxford’s Blavatnik School of Government, where he will pursue a Master’s of Public Policy. Andrew continues to be proud of his association with the Lint Center for National Security Studies and looks forward to when he can contribute more forthrightly to its mission.

Article: Chinese Cyber Information Profusion: Anti-Access, Area Denial in Summative Context

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The Lint Center is pleased to announce that International Policy Digest published a recent article by members of the Lint Center’s Communications Team.

Here is the lead paragraph:

China“A recent report by Northrop Grumman entitled, “Occupying the Information High Ground: Chinese Capabilities for Computer Network Operations and Cyber Espionage” presented to the U.S. China Economic and Security Review Commission (USCC) falls short of acknowledging that China’s increasingly modernized cyber capabilities are a product and part of its “anti-interventionism” doctrine that, at once, brings together its military, civilian, and economic spheres and creates a buffer and defense projection that affects China’s regional and global power.”

We encourage you to check out the full article from IPD HERE:

*Disclaimer: The opinions expressed by the Lint Center Bloggers and those providing comments are theirs alone, and do not reflect the opinions of the Lint Center for National Security Studies, Inc. or any employee thereof. The Lint Center for National Security Studies, Inc. is not responsible for the accuracy of any of the information supplied by the Lint Center Bloggers.


References:

Image Source: http://www.internationalpolicydigest.org/

Image Source: http://www.internationalpolicydigest.org/wp-content/uploads/2012/04/China.jpg

Ensuring Effective Food Safety Regulation in China?

Executive Summary: Recently, China has come under fire for its food safety standards by both export recipients and domestic consumers. Several of China’s largest trading partners have imposed punitive bans on Chinese food products, citing quality assurance concerns. Shortcomings in food safety have also precipitated instances of domestic social unrest. Reassessing the current food safety apparatus in China is necessary to determine the most effective response to deal with this issue.

Problem Statement: Food safety concerns have negatively impacted China in three main ways. First, publicized recalls and import bans on Chinese products have damaged the credibility of the Chinese brand. Secondly, several large trading partners have imposed bans and import restrictions on food products, undermining China’s export market penetration and impeding its long term economic growth. Thirdly, food safety concerns exacerbate domestic apprehensions regarding victuals safeguards, leading to instances of social instability. Policy Options: To address the need for improved safety regulations, three policy paths should be examined:

1. Essential Status Quo: In this scenario, China would implement minor bureaucratic and regulatory reforms. On the national level, oversight and food safety inspections would be consolidated slightly from six to four. Overhaul efforts would include a funding increase, deemed ‘significant’, for more food inspectors at the local level. The new regulatory regime would put the onus of day to day responsibility onto local jurisdictions with a Federal oversight role.

2. Moderate Reform Model: In this scenario, China would implement bureaucratic consolidation of its six major food safety regulators into two. In this new model, one agency would oversee food safety for exportation and the other agency would oversee domestic food safety. These two regulating and compliance bodies would report to the newly created Minister of Food Safety.

  • (a) A consolidated civilian command-and-control apparatus would mandate quality guidelines, increase frequency of unannounced inspections, and have authority to shutdown an operation or prosecute violators. Prosecutions would be conducted in civilian courts and victims could sue for punitive damages.
  • (b) To encourage higher food safety standards, a certificate program would be implemented. The program would certify a firm’s quality assurance program.

3. Securitize – Food Security, is State Security: In this scenario, China would implement wide sweeping changes focused on securing the Chinese food supply. A consolidated, unified singular regulatory body would be created and run by a former Chinese General with logistics expertise. The head of the new regulatory body would report directly to the Ministry of Defense.

  • (a) A mandatory registration process would be implemented requiring all contributors to the food supply chain be subject to inspection and quality standards.
  • (b) Violators would be prosecuted in criminal courts. Draconian sentencing guidelines including capital punishment would go into effect. Senior managers would be subject to prosecution including sentences to hard labor reeducation camps.
  • (c) A confidential tips hotline with a monetary award would be created to elicit greater input from citizens and workers.

Critique of Policy Options: In order to analyze the policy options, a clear criterion for evaluation is necessary. The policy options must meet four basic elements including short term impact on improving food safety, enhancing Chinese brand image, supporting export market expansion and continued economic growth, and alleviating domestic apprehensions surrounding food safety.

(1) In the first policy option, maintain the status quo, the emphasis is on minor modifications including a bureaucratic reshuffle. This is the easiest and least resource consuming choice. However, this policy will fail to improve food safety. This approach would also appear as window dressing by trading partners. Also, this policy would likely lack credibility for citizens still impacted by food safety concerns. As a result, the status quo policy option fails to qualify as an effective option.

(2) In the second policy option, moderate reform model, the consolidation of regulatory oversight, the creation of a Ministry of Food Security, and the enhanced authorities’ is a stronger path to ensuring food safety effectively. Such a policy program would send a strong message to trading partners and domestic constituencies that China was serious. The certification program would stimulate renewed interest in food safety efforts. However, this approach would be time intensive to create a truly viable food safety mechanism. Any delay could have serious repercussions. Additionally, food production is not a siloed process and the two regulatory bodies would likely find themselves fighting over jurisdiction if a plant produces food products for both the domestic and export market. As such, it falls short of being the most effective choice to improve food safety.

(3) In the third policy option, securitize food safety, a major reshuffling of regulatory oversight and the creation of a food safety department reporting to the Ministry of Defense would indicate the issue’s level of importance. It would serve to bolster China’s brand image because of the severity of Chinese actions. It would send a strong message to trading partners that food safety for the export market was a priority. Elevating the matter to a state security level would alleviate fears about the government’s inability to ensure food safety. Lastly, consolidating responsibility would reduce bureaucracy and ensure stakeholders were held to account.

Recommendations: China supplies nearly 20 percent of the world’s population with food (Ref: 1a). Additionally, China exports food products to more than 200 nations around the world and 99 percent of those exports comply with the required safety standards of export nations (Ref: 1b). While the quality of Chinese food exports is high, even a one percent failure rate has serious implications for China’s food industry. As a consequence, any breakdown in the food safety supply chain can have a wide reaching and profound impact on those China feeds both domestically and abroad.

The third option is the most radical in form and nature. However, it satisfies all four criteria for effectiveness. In addition pursuing such a policy course by pulling security resources into the issue would propel the reform measures along. In turn, implementation of this policy could be achieved expeditiously. As such, China should move forward and securitize food safety.


References

1a) China’s Government’s Official Web Portal, “Hu: Food Issue Concerns World’s Development, Security”, Wednesday, July 9, 2008, Assessed on October 20, 2008, http://english.gov.cn/2008-07/09/content_1040376.htm

1b) Embassy of the Republic of China in the United States of America, “China-US Relations: Chinese Food Exports Are Safe”, June 26, 2007, Assessed on October 20, 2008, http://www.china-embassy.org/eng/zmgx/t334047.htm


Bibliography:

1) Becker, Geoffrey S. “CRS Report to Congress: Food and Agricultural Imports from China”, Congressional Research Service, September 26, 2008, Accessed on October 20, 2008, http://assets.opencrs.com/rpts/RL34080_20080926.pdf

2) Becker, Geoffrey S. “CRS Report to Congress: Food and Agricultural Imports from China”, Congressional Research Service, October 9, 2007, Accessed on October 20, 2008, https://ncseonline.org/NLE/CRSreports/07Nov/RL34080.pdf

3) Blanchard, Ben “China says food safety scares threaten stability”, Reuters News, July 9, 2007, Accessed on October 20, 2008, http://news.xinhuanet.com/english/2008-09/20/content_10084798.htm

4) Bristow, Michael “China tackles tainted food crisis”. BBC News, July 10, 2007, Accessed on October 20, 2008, http://news.bbc.co.uk/2/hi/asia-pacific/6288096.stm

5) China Daily Staff, “Draft food safety law approved”, Peoples Daily Online, November 1, 2007, Accessed on October 20, 2008, http://english.peopledaily.com.cn/90001/6294558.html

6) China’s Government’s Official Web Portal, “Hu: Food Issue Concerns World’s Development, Security”, Wednesday, July 9, 2008, Accessed on October 20, 2008, http://english.gov.cn/2008-07/09/content_1040376.htm

7) Cutler, Thomas R. “The Impact of Six Sigma on Food Quality”, International Food Safety & Quality Network, September 4, 2007, Accessed on October 20, 2008, http://www.ifsqn.com/articles_detail.php?newsdesk_id=407&osCsid=a5066c1832252393e5bc4fca51858d44&t=The+Impact+of+Six+Sigma+on+Food+Quality

8) Embassy of the Republic of China in the United States of America, “China-US Relations: Chinese Food Exports Are Safe”, June 26, 2007, Accessed on October 20, 2008, http://www.china-embassy.org/eng/zmgx/t334047.htm

9) The Associated Press, “China To Execute Chief Food Inspector”, CBS News, May 29, 2007, Accessed on October 20, 2008, http://www.cbsnews.com/stories/2007/05/29/health/main2860989.shtml

10) Xinhua News Agency, “Hu Underscores Rural Development, Food Safety”, Beijing Review, October 10, 2008, Accessed on October 20, 2008, http://www.bjreview.com.cn/special/third_plenum_17thcpc/txt/2008-10/10/content_156236.htm

11) Xinhua News Agency, “HKSAR government to introduce food safety bill”, China Org, October 15, 2008, Accessed on October 20, 2008, http://www.china.org.cn/government/local_governments/2008-10/15/content_16615817.htm