July 4, 2020 | The Sunday Guardian

Watch China’s actions, don’t listen to its words

Beijing’s parasitic model weakens the global economy, its traditional hosts are becoming poorer. Which is likely one of the reasons why Beijing is now so focused on leeching off of Africa, South America, and others. It’s also why being blocked from a market such as India could be a serious problem.
July 4, 2020 | The Sunday Guardian

Watch China’s actions, don’t listen to its words

Beijing’s parasitic model weakens the global economy, its traditional hosts are becoming poorer. Which is likely one of the reasons why Beijing is now so focused on leeching off of Africa, South America, and others. It’s also why being blocked from a market such as India could be a serious problem.

Words matter. They shape your thoughts and your thoughts shape your actions. The more complex the situation, the more important the need to use precise words. They are the solid stepping-stones that can lead you to real solutions, and help you avoid the sucking quagmire of obfuscation.

One of the most complex situations at the moment is the changing nature of nation-to-nation relationships with China. The words China wants us to use are telling.

In the case of the US-China relationship, the Chinese Communist Party has been very keen to use words (both positive and negative) that create an impression of equality between Beijing and Washington.

A few years ago, Beijing promoted the idea of China and the US being the “G2”—two equal governments, with primacy over the rest. The G2 construct allowed Beijing to imply that the world should be divided into two colonial-style spheres of influence, one for the US, and one for China.

This was explicit. In 2008, US Navy Admiral Timothy J. Keating told the Senate Armed Services Committee about a comment a senior Chinese officer made to him: “As we develop our aircraft carriers, why don’t we reach an agreement, you and I? You take Hawaii east. We’ll take Hawaii west. We’ll share information, and we’ll save you all the trouble of deploying your naval forces west of Hawaii.”

While American allies west of Hawaii took China at its word, and became increasingly concerned, Washington insiders seemed largely to accept the inevitability of the G2 narrative—that also conveniently provided substantial financial returns and opportunities for key bridging individuals, including some American CEOs, academics, policy analysts, politicians, consultants and others. When pressed by doubters, obscuring verbal dust was thrown in the air in the form of the term “China’s peaceful rise”.

More recently, especially as a result of Beijing’s mismanagement (at the very least) of the Covid-19 outbreak, its aggression along its land and maritime borders, its repression in Hong Kong, and its overt talk of doing things like withholding antibiotics to put pressure on the US, the terminology has turned to, at least economically, “divorce” from China.

The word “divorce” again implies the situation involves equals, with the added element that divorce is a loaded, negative word, with deep emotional baggage for many—something to be avoided if possible.

“Divorce” is a word that suits Beijing. It is also completely inaccurate.

The US and China were never “married”, economically or otherwise. A marriage is a partnership of complimentarily, of sharing, of trust, in which both members are enriched, and become stronger.

The US-China relationship is much more like the relationship between a host and its parasite.

Let me tell you about the castrator barnacle (sacculina carcini). The female slug-like barnacle finds a crab and probes its hard shell until it finds a weak point where it can inject part of itself into the crab’s bloodstream. Once inside, it spreads its tendrils throughout the crab’s system, feeding on it, controlling its behaviour, and growing. If the victim is a male crab, the parasitic process castrates it. Sacculina carcini uses the crab to host its reproduction and help it spread across the ocean—riding in it until it dies. At which point, the parasite also dies, because it depended on leeching off the host for sustenance.

Can you see where I’m going with this?

Since at least the 1970s, and accelerating since joining the WTO, the Chinese Communist Party and its related entities have latched on to the US (and others) probing for entry points, enmeshing with systems, sucking out capital and intellectual property, weakening defences, modifying behaviour, neutering response, and spreading from there. It left its hosts sickened and disoriented. Even though, more often than not, the host at least initially, welcomed the barnacle.

China calls this approach comprehensive national power—and includes opaquely intermeshed tendrils such as economic, diplomatic, military, cyber and soft power.

Think this is an overstatement? The effects can be seen more clearly in smaller economies. Take, for example, the Kingdom of Tonga in the South Pacific, population 100,000. Within the last twenty years or so, recently established Chinese-run shops have taken over about 90% of the retail sector. The vast majority of the products sold are sourced from China, and most of the profits are repatriated to China.

This isn’t normal economic engagement. There are links between major Chinese investors, the Chinese Embassy, and some key decision-makers in the country, facilitating illegal and corrupt behavior, further distorting the market and politics. There are regular issues with these shops selling expired or mislabeled items, hiding revenue and attempting to illegally transfer money out of the country. They are operating, essentially, like they would operate in China—doing what they can get away with. The Chinese Embassy does not help in investigations, background checks, or information sharing.

This isn’t about the individual, hard-working ethnic Chinese. If they have family or business ties to the mainland, and someone with power in the Chinese system wants them to do something, they don’t have much choice. The system travels with them.

This is about the export of the fundamentally extractive and exploitative Chinese system and what it is doing to its host country. The result for countries such as Tonga is a constant leeching of capital back to China both for the purchase of the Chinese imports to sell in the shops and from shop owners then sending their profits back to China. It also creates an environment in which local shops can’t compete, it embeds corruption and it distorts the decision making process.

To some degree or another this focused takeover of soft and/or strategic areas has happened in myriad other sectors in myriad other countries. Recently Beijing complained because India blocked 59 Chinese-made apps from its market. Global Times tweeted that the ban could result in a loss of $6 billion to Chinese internet company ByteDance, which gives an idea of how much money Chinese apps suck out of host economies. Another reason for the decision was that Delhi was concerned that the apps were a threat to national security, including allowing for espionage.

In mid-June, at roughly the same time Chinese and Indian troops were fighting in Ladakh, a Chinese company won a major construction contract in Delhi by underbidding an Indian company by a marginal amount. Questions were immediately raised if the Chinese company had somehow accessed the electronic bids of competitors in order to win the contract. It’s very difficult to know. But policymakers in India seem to think it’s consistent with what they know of China’s behavior, and don’t want to take any more chances.

Beijing may complain but, of course, it has consistently blocked foreign apps from operating in its own market. This has not only allowed it to protect itself from the sort of leeching it is inflicting on others, but it has protected its own technology ecosystem as it develops and prepares itself to expand outwards. The same protection for its own development is true in a range of other sectors, including the forced transfer of intellectual property for companies setting up in China. In those cases, it didn’t even have to go to its hosts, its hosts allowed themselves to be desiccated in China.

The Chinese Communist Party is not interested in, and not capable of, being an equal partner, where everyone grows together. Beijing wants to be able to control the economies of others, siphoning growth to sustain its own goals.

If you want to see what that looks like, just go to the atrophied manufacturing towns across the US that targeted, Chinese-government supported competition has sucked dry.

If you want to watch the process in action, just keep your eye on Hong Kong. As the CCP extends its tendrils into its economy, society and political system, Hong Kong will shrivel and stagnate, going from a thriving global center to a zombified proxy for Beijing.

The same is true for international organizations targeted by Beijing, such as the WHO. As was seen during the initial stages of the virus outbreak, WHO seemed more like a carrier for Beijing’s narrative than an independent, healthy science-based organization.

Of course, the irony here is that as Beijing’s parasitic model weakens the global economy and its institutions, its traditional hosts are becoming poorer and so less sustaining. The Chinese Communist Party’s economic heyday will likely have been when the US, European and Japanese economies were big and strong and it could ride them like a young castrator barnacle.

Which is likely one of the reasons why Beijing is now so focused on leeching off of Africa, South America, and others. It’s also why being blocked from a market such as India could be a serious problem. It is running out of healthy targets to infest. So, it is latching on to still developing economies, stunting their growth with predatory economics (and in many cases unviable loans) to feed Beijing.

Those who really care about the Chinese people, should work towards creating conditions where China’s economy becomes “normalized”. Where there is rule of law, transparency, accountability—elements that allow organic and sustainable growth so that China can truly become the global partner it should be. Of course these are all the things that are antithetical to the Chinese Communist Party.

Which brings us back to words. Disengaging from the noxious elements of the Chinese economy isn’t a divorce, it’s a deworming. It may be the only way the host survives, and it’s the best way for the parasite to evolve to a self-sustaining organism. Anything less, and we will may all stagger towards an interlinked extinction.

Cleo Paskal is a non-resident senior fellow for the Indo-Pacific at the Foundation for Defense of Democracies. Follow her on Twitter @CleoPaskal.

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Issues:

China COVID-19 India Indo-Pacific International Organizations