Tuesday, November 30, 2021


China’s global ambitions pose an existential threat to western democracy, prosperity and security but the Biden Administration — captive to isolationist and radical-progressive ideologies — offers no comprehensive policy to lead our allies or defend American interests.

U.S. Trade Representative Katherine Tai’s nine-month review of China policy resulted in a five-page speech and offered nothing new. She will continue negotiating with a belligerent foreign power that won’t offer substantive concessions or honor commitments from past agreements. China is embarking on a radical transformation of its socialist-market economy aimed at burying democratic capitalism.

Secretary of Defense Lloyd Austin has been studying and forming committees for 10 months, has yet to articulate a comprehensive plan and budget requirements to counter Chinese intimidation in the Pacific or reverse the deteriorating combat readiness of the U.S. fleet.

China could easily overwhelm Taiwan’s defenses. The U.S. military would be unable to respond effectively because Chinese forces could deny sea and air access due to distance from U.S. bases.

Secretary of State Antony Blinken is busy negotiating support from our allies, but those with heft have other agendas — France’s vanity, Germany’s export dependence on China and India’s debilitating poverty.

Among partners in the Pacific, Japan is constrained by its constitution and Australia, whose commitment to purchase eight nuclear submarines is impressive, only has an economy one-thirteenth the size of ours.

America simply must do what White House protectionists are incapable of conceiving, rebuild the international economic system based on solid market disciplines but in a fashion that cordons off China. Lest it abuse markets to buy, steal and surpass the West in the technologies that will define the second quarter of this century — semiconductors, biotechnology and medicine, artificial intelligence, non-fossil energy generation and batteries.

The Chinese recognize that manufacturing — not the internet or finance — is at the center of all this. A nation can find a critical and lucrative place in the semiconductor value chain without a Facebook or Alibaba — consider Taiwan’s chip foundries.

The software industry will follow the hardware. The country that leads in electric vehicles will provide the market that drives the development of self-driving technology.

In these critical areas, the United States must wholly disengage from China. As the pandemic demonstrated in a host of industries, even partial dependence on China can severely disrupt U.S. and broader western supply chains. Think of what the leverage means in a faceoff over Taiwan.

The U.S. market is too small to support R&D and production of sufficient scale to rival China if Beijing negotiates preferential market access, through regional agreements, with European or Pacific nations. And then establishes industry standards while America is on the sidelines.

Ousting China from the WTO is unrealistic, making rules for market access through the global body next to useless. Beijing has demonstrated it can violate those and wholly subvert dispute settlement.

The China-EU investment deal is on hold, but the United States must remove that threat to co-opt Europe by completing a comprehensive EU-U.S. trade pact. Those negotiations have repeatedly stalled.

Consequently, the Biden administration should respond positively to Japan’s invitation to rejoin the Trans-Pacific Partnership and the U.K.’s request for a free trade agreement. As the E.U. and U.K. both want to join the TPP, the opportunity for a grand alliance that is Pacific-based and freezes out China is at hand.

Wall Street firms like BlackRock are too much in bed financing China’s ambitions. We should heed George Soros’s warnings to limit or prohibit American investments in Chinese and Chinese affiliated entities by U.S. money managers, pension funds, individual investors, and IRA direct stock and index fund choices.

Just as we increase pressure on banks and businesses to disclose their support for socially responsible and green activities, we should do the same for their stakes in Chinese enterprises in technology industries and firms that are principal customers.

The U.S. fleet must be strengthened to include smaller ships, drones and other agile forces capable of operating closer to China’s territorial waters and quickly inflicting crippling damage on its fleet within a few days. And strengthen Taiwan’s inadequate defenses against an invasion with more U.S. support.

Beijing must be told quietly, lest President Xi lose face, that invading Taiwan or occupying one of its small islands, such as Quemoy and Matsu, or even unoccupied Pratas, would result in an immediate naval war and blockade of access to Middle East oil with no time or interest in diplomacy.

Mr. Xi has made clear his intentions to take back Taiwan, and only with a drawn and sufficiently sharp American sword can war be avoided.

Only with China contained will the world be safe for our children.

• Peter Morici is an economist and emeritus business professor at the University of Maryland and a national columnist.

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