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11. How to Engage and Prevail in Political Warfare against China

Author:
John Lee
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
In his report to the Twentieth National Congress of the Communist Party in October, Xi Jinping praised the progress made over the past decade under his leadership to advance the great rejuvenation of the Chinese nation domestically and internationally. According to Xi, this is taking place in an era of “momentous changes of a like not seen in a century [and which] are accelerating across the world.”1 For Xi, these “great changes” comprise “a significant shift [that] is taking place in the international balance of power, presenting China with new strategic opportunities in pursuing development.”2 A pillar of Xi’s plan to realize the rejuvenation of China and to emerge as the preeminent nation in the region and beyond is to shrink the strategic, military, economic, political, and normative ground in the region on which the United States can sustain, build, and demonstrate its power and influence. This is because China knows there is no material or nonmaterial counterbalance without the US. Additionally, the more China can weaken the resolve of US allies and other countries to support American-led initiatives to counter China and the credibility of the US-led alliance system, the smaller and weaker the ground for Washington to maintain its footholds in distant lands becomes, and the closer China draws to its goal of preeminence. The Chinese plan relies on building unmatched “comprehensive national power,” or CNP, which China can use to seduce, compel, or coerce other nations.3 CNP has material and nonmaterial elements. Regarding the latter, Beijing places enormous emphasis on political warfare in the form of information and influence operations. The first three memos in this series on Chinese political warfare argue that the Chinese Communist Party (CCP) makes no distinction between wartime and peacetime and believes it is engaged in a perpetual “struggle” against the West.4 Regarding political warfare, the previous memos noted that the People’s Liberation Army (PLA) plays a central and often dominant role in leading doctrine and operations when it comes to informational and influence warfare.
Topic:
Foreign Policy, Defense Policy, and Chinese Communist Party (CCP)
Political Geography:
China and Asia

12. Xi Jinping’s Evergrande Dilemma

Author:
John Lee
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
Evergrande is one of the top-two real estate developers in a still highly fragmented Chinese sector. Its main strategy is to achieve ever-increasing scale (rather than profitability) in order to move ahead of and crowd out commercial competitors. It has also amassed the largest land reserves of all Chinese developers, which were financed through massive borrowings. By 2018, Evergrande held 822 pieces of undeveloped land in 228 cities, with a planned gross floor area of 3.28 billion square feet of new homes—the equivalent of 10 percent of Germany’s entire housing stock. It paid $75 billion just for this undeveloped land. Although Evergrande’s market share is only around 4 percent, its borrowings stand out. Its current balance sheet liabilities amount to an estimated 2 percent of China’s gross domestic product (GDP), while its off-balance-sheet liabilities could be another 1 percent of China’s GDP. This makes Evergrande the most indebted property developer in the world. Burdened by this debt, struggling to meet its debt interest and repayment obligations, and viable only if property asset values and sales continue to increase, Evergrande faces possible financial collapse—an event bound to have flow-on effects for the Chinese economy. However, the unusually high global interest in Evergrande has arisen because its woes are increasingly seen as symptomatic of those faced by the broader Chinese economy, which is struggling with enormous levels of indebtedness and overreliance on the real estate sector. Debt held by nonfinancial institutions in China increased from about 115 percent of GDP in 2010 to around 160 percent of GDP currently. This is the most rapid and largest increase in a 10-year period for any major economy and makes the level of debt held by Chinese nonfinancial institutions one of the highest in the world. The real estate sector accounts for around 15 percent of GDP, while property services account for another 14 percent—the highest in any developing economy. The share of the real estate sector as a proportion of GDP was only about 4 percent in 1997 and 9 percent in 2008. Since 2008, up to a third of all domestic fixed investment has gone into real estate, and up to half of total national debt is linked to the real estate sector.
Topic:
International Relations, Foreign Policy, Debt, Economics, Markets, and Business
Political Geography:
China and Asia

13. Winning the Geo-Tech Battle and Building the Quad Alliance in the Indo-Pacific

Author:
Eric B. Brown, John Lee, and Thomas J. Duesterberg
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
Under Xi Jinping, the People’s Republic of China (PRC) has established as its paramount geopolitical objective the replacement of the free and open, rules-based order in Asia with an alternative world order, one that is to be dominated by the interests and values of the Chinese Communist Party (CCP). This decision presents a danger to the entire world, not just to any one state or group of states. For, as US Secretary of State Antony Blinken said at the March 2021 US-PRC meeting in Alaska, the alternative to a rules-based order “is a world in which might makes right and winners take all, and that would be a far more violent and unstable world for all of us.” In furtherance of its objectives, the PRC is in the midst of a large military build-up, but there is much more. For today’s CCP, political power grows not only from the “barrel of the gun,” as Mao Zedong once put it, but also from cutting-edge technologies. Thus, while Beijing pours billions into artificial intelligence and surveillance tech to impose its new “digital totalitarianism” inside the PRC, from Hong Kong to Xinjiang, it is also using its growing technological prowess to press its larger geopolitical agenda in the Indo-Pacific and beyond. It is weaponizing technology and connectivity, along with trade, finance, and other policy instruments to try to rule the key technologies and industries of the future, as well as to improve its strategic positioning and acquire political power over other countries—for instance, through its bid to dominate other nations’ most sensitive data networks, or via the export of its suite of “social stability” technologies, i.e., the “techno-tyrant’s toolkit.” In all this, the CCP’s intent is to entrench its power and Leninist norms and practices to the extent it can do so beyond the PRC’s borders, and to make other nations, or at the least their ruling elites, beholden to it. So in addition to the PRC’s militarily destabilizing activities in the West Pacific and incursions into India’s Himalayas, there is also a “geo-technological front.” If Xi’s CCP succeeds at enmeshing other countries in its expanding “PRC sphere of technological influence,” it could unlock and be able to exploit decisive military, economic, diplomatic, and ideological advantages.
Topic:
International Relations, Security, Economics, and Alliance
Political Geography:
China, South Asia, East Asia, and Asia-Pacific

14. US Support for Australia and the Region Against PRC Coercion: A Six Point Agenda

Author:
John Lee
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
Since around 2016, Australia has been transitioning away from a “small target” hedging mindset toward a more proactive countering and balancing approach vis-à-vis the People’s Republic of China. This is largely a response to the increasingly assertive and coercive activities of the Chinese Communist Party (CCP), which is the predominant cause of instability, uncertainty, and anxiety in Canberra and throughout the Indo-Pacific region. The CCP has implemented a sustained and cascading array of economic and diplomatic punishments against Australia in an attempt to intimidate Australia and force changes in Australian policy. Beijing is explicit that this is the purpose of the ongoing series of punishments against Canberra. In November 2020, its embassy in Canberra went to the extraordinary lengths of releasing the infamous “14 grievances” against the Australian government[i] to justify the ongoing punitive measures. These included mainly domestic Australian policies such as restrictions on Chinese investment, the funding of Australian think tanks critical of the PRC, the passing of foreign interference legislation to root out Chinese interference in Australian institutions, and the banning of Chinese firms from the Australian 5G telecommunications roll-out. Australia is widely seen as the proverbial canary in the mine and needs American support. If Australia can hold its ground and continue to find the courage and creativity to pursue its national interest, then the PRC will suffer an enormous blow. On the other hand, if Australia is eventually cowed by the PRC and relents on key policy settings, then other sovereign nations might well lose the courage to stand firmer against the PRC’s coercion and intimidation. Strengthening the fortitude of Australian leaders is the assurance that the United States is behind its ally. That assurance was previously given to Canberra by the Donald Trump administration and has been continued by the Joe Biden administration. Indeed, the Biden administration has declared it will go further and do better than the previous administration in reinvigorating and deepening its alliances and friendships with Indo-Pacific nations to better manage the PRC challenge and threat. This brief has been prepared to assist the Biden team in doing just that. It gives some context to Australia’s evolving Indo-Pacific strategy: how a nation that is not a superpower is thinking about the PRC’s policies and activities in the region, why Canberra is taking proactive and forward leaning actions to counter and balance the PRC, and what Canberra is hoping will be some priority areas for the Biden administration with respect to the Indo-Pacific approach and strategy by the US.
Topic:
Foreign Policy, Geopolitics, Joe Biden, and Strategic Planning
Political Geography:
China, Australia, United States of America, and Indo-Pacific

15. The internet of things: China’s rise and Australia’s choices

Author:
John Lee
Publication Date:
12-2021
Content Type:
Commentary and Analysis
Institution:
Lowy Institute for International Policy
Abstract:
The Internet of Things (IoT) is connecting a growing range of economic and social activity across national borders, while simultaneously expanding the security challenges implied by these connections, including to Chinese state power. Despite US-led efforts to exclude Chinese actors from digital networks worldwide, the economies of East and Southeast Asia are becoming more densely integrated with China through evolving IoT ecosystems and supply chains. These trends threaten to disadvantage Australia and require policies to build up the country’s own technological capacities while devising innovative ways to manage, rather than avoid, the risks entailed in growing digital connections with China.
Topic:
Security, Economics, Science and Technology, Internet of Things, and Supply Chains
Political Geography:
China, Asia, Australia, and United States of America

16. The Opportunity is There: South Koreans’ Views of China and the Future of the US-ROK Alliance

Author:
John Lee
Publication Date:
04-2021
Content Type:
Special Report
Institution:
Pacific Forum
Abstract:
Officially, relations between the Republic of Korea and the People’s Republic of China remain cordial. Because of China’s economic heft and South Korea’s reliance on unmolested trade with the former for its continued economic development, South Korea takes great pains to be as neutral as possible between the United States and China despite its formal alliance with the US. As such, many pejoratively refer to South Korea as “the weak link” in America’s Northeast Asia alliance system. However, on a civil society level, an overwhelming majority of the South Korean public has a negative view of China—a view that has steadily gotten worse over time. Being a democracy that reflects voters’ popular will, growing anti-Chinese sentiment among voters means South Korea’s current policy of placating China will not be sustainable indefinitely. Meanwhile, the Trump administration largely neglected the alliance between South Korea and the United States. That neglect notwithstanding, an overwhelming majority of South Koreans either strongly or somewhat support the alliance with the United States. Conditions are perfect for the Biden administration to seek to repair and strengthen relations with South Korea to empower the alliance to serve as a credible bulwark against Chinese expansionism—this paper offers solutions on how to do so.
Topic:
International Relations, Foreign Policy, Economy, Alliance, and Trade
Political Geography:
China, Asia, and South Korea

17. Ambition and Overreach: Countering One Belt One Road and Beijing’s Plans to Dominate Global Innovation

Author:
John Lee
Publication Date:
02-2020
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The first monograph in this series, China’s Economic Slowdown: Root Causes, Beijing’s Response and Strategic Implications for the US and Allies, examined the structural problems in the Chinese economy that have led to a recent permanent slowdown after three decades of double-digit growth rates. The monograph focused on the political and economic costs of the slowdown and efforts to stabilize an economy that has poured far too much national wealth into commercially unproductive areas. Yet the Communist Party is not passively awaiting an unhappy economic fate in connection with its mounting imbalances and domestic economic dysfunction. In many respects, its leaders have been highly creative in seeking solutions that do not entail a weakening of the party’s hold on economic power. On the contrary, the party has been busily shaping and pursuing grand strategic policies such as the Belt and Road Initiative (BRI) and Made in China 2025 (MIC 2025) to solve or alleviate many of its domestic political-economic problems. This monograph, part two in the series, examines how the US and its allies can confront and counter these Chinese strategies and initiatives. It will do so by taking seriously the challenge they present and suggesting responses that take into account Chinese vulnerabilities and the points of leverage available to the US and its allies. This linking of China’s vulnerabilities and weaknesses, on the one hand, and its ambition and purpose with respect to its outward-focused policies, is essential for effective policy responses. If the domestic is not linked with the external, US policies are much more likely to become complacent, counterproductive, or susceptible to overreaching. In linking analyses of Beijing’s domestic political economy with its external policies, the monograph will challenge some enduring but incorrect grand narratives that play into the hands of the CCP.
Topic:
Foreign Policy, Economics, Science and Technology, and Trade
Political Geography:
China and Asia

18. Combating China’s COVID-19 Propaganda Offensive to Undermine the United States on the Global Stage

Author:
John Lee
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Hudson Institute
Abstract:
Throughout the United States, it is becoming increasingly clear that the Chinese Communist Party (CCP) is exploiting COVID-19 in an effort to reshape the global order and enhance China’s international leadership at the expense of the US. A range of prominent commentators further assert that the Trump administration bears much of the blame for this turn of events. This argument tends to rest on twin assumptions:1 China is winning the battle of narratives when it comes to comparative national competence and its decisiveness in responding to its COVID-19 outbreak. The Trump administration is damaging America’s standing by getting off to a bad start in its response to the pandemic, exposing the underlying weaknesses of American institutions and preparedness for such a crisis. These arguments correctly acknowledge that the global pandemic is occurring within a context of US-China strategic, political, and economic competition and/or rivalry. This is the point of warnings to the administration that there is more at stake than containing and managing the virus, even if that is the immediate priority.
Topic:
International Relations, Foreign Policy, Economics, Health, National Security, and COVID-19
Political Geography:
China and East Asia

19. A Global Survey of US-China Competition in the Coronavirus Era

Author:
Eric B. Brown, Patrick M. Cronin, H.R. McMaster, Husain Haqqani, Aparna Pande, Satoru Nagao, John Lee, Seth Cropsey, Peter Rough, Liselotte Odgaard, Blaise Misztal, Douglas J. Feith, and Michael Doran
Publication Date:
05-2020
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The outbreak of the novel coronavirus has introduced a series of new stresses and factors in the US-China relationship. While the world has struggled to contain the pandemic and its tragic repercussions, the People’s Republic of China has used the outbreak to launch a global campaign of misinformation, further its economic coercion through the Belt and Road Initiative, and continue military expansion efforts in the South China Sea. China’s attempt to exploit the pandemic for political, strategic, and economic gain is problematic in the current environment, yet it is consistent with, and a continuation of, China’s long-term strategy. This report offers a global survey and assessment of attempts by the Chinese Communist Party (CCP) to expand its influence, including by exploiting the pandemic. As the United States and its allies focus on combatting the virus and salvaging their economies, there is an opportunity to better understand China’s strategy and develop a unified response.
Topic:
International Relations, Foreign Policy, Economics, Strategic Competition, and COVID-19
Political Geography:
China, South Asia, Asia, North America, and United States of America

20. Boosting Taiwan’s Economic Status is Good Strategy, Economics, and Domestic Policy

Author:
John Lee
Publication Date:
06-2020
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
This report makes the following arguments: From Taiwan’s perspective, the greater its economic presence and importance to the world, the better positioned it is to reduce its dependency on China and maintain its autonomy. This also serves US interests. From the US perspective, deepening the economic relationship with Taiwan in strategic ways will assist it in achieving greater economic distance from China and reducing the extent to which China can capture and dominate global supply and value chains in the future. The US and Taiwanese economies are largely complementary, and this can become even more so. Thus, a deeper bilateral economic relationship will be generally consistent with domestic economic objectives, such as prioritizing high-value job creation and preventing high-value supply chains from remaining in China or leaving the United States. The report offers recommendations to: help prevent the hollowing out of Taiwan’s competitive strengths; help Taiwan broaden and deepen its participation in the regional and international economic space, which is currently being narrowed by China; assist with Taiwan’s desire to lower dependency on China-based supply chains, especially with respect to high-value-added processes; encourage more bilateral investment, intra-industry relations and firm-to-firm activity between the United States and Taiwan.
Topic:
International Relations, Foreign Policy, Economics, and Domestic Policy
Political Geography:
China, Taiwan, and Asia