The Chinese Communist Party’s Plan to Dominate Asia and the World
(Steven W. Mosher, August 24, 2020)
Transcript available below
About the speaker
Steven W. Mosher is an internationally recognized authority on China and population issues, as well as an acclaimed author, speaker. He has worked tirelessly since 1979 to fight coercive population control programs and has helped hundreds of thousands of women and families worldwide over the years.
In 1979, Steven was the first American social scientist to visit mainland China. He was invited there by the Chinese government, where he had access to government documents and actually witnessed women being forced to have abortions under the new “one-child policy.” Mr. Mosher was a pro-choice atheist at the time, but witnessing these traumatic abortions led him to reconsider his convictions and to eventually become a practicing, pro-life Roman Catholic.
Steven has appeared numerous times before Congress as an expert in world population, China, and human rights abuses. He has also made TV appearances on Good Morning America, 60 Minutes, The Today Show, 20/20, FOX and CNN news, as well as being a regular guest on talk radio shows across the nation.
He is also the author of the best-selling A Mother’s Ordeal: One Woman’s Fight Against China’s One-Child Policy. Other books include Hegemon: China’s Plan to Dominate Asia and the World, China Attacks, China Misperceived: American Illusions and Chinese Reality, Journey to the Forbidden China, and Broken Earth: The Rural Chinese.
Articles by Steve have appeared in The Wall Street Journal, Reader’s Digest, The New Republic, The Washington Post, National Review, Reason, The Asian Wall Street Journal, Freedom Review, Linacre Quarterly, Catholic World Report, Human Life Review, First Things, and numerous other publications.
Steven Mosher lives in Virginia with his wife, Vera, and their nine children.
Transcript
Robert R. Reilly:
Hello and welcome back to the Westminster Institute. I am Bob Reilly, the director, and welcome to our continuing series of Zoom lectures, which we are doing to cope with the peculiar circumstances of the time before we can go back into our normal venue.
We are extremely delighted to have as our speaker today, Steven Mosher, who is an internationally recognized authority on China and population issues. In 1979 Steve was the first American social scientist to visit mainland China. He was invited there by the Chinese government, where he had access to government documents, and actually witnessed women being forced to have abortions under the new one-child policy.
Steve has appeared numerous times before Congress as an expert in world population, China, and human rights abuses. He is the author of Mother’s Ordeal: One Woman’s Fight Against China’s One Child Policy. Other major books include Hegemon: China’s Plan to Dominate Asia and the World, China Attacks, China Misperceived: American Illusions and Chinese Reality, and Journey to the Forbidden China. And most recently his new book is Bully of Asia: Why China’s Dream is the New Threat to World Order.
Steve’s articles have appeared in many major publications, The Wall Street Journal, Reader’s Digest, The New Republic, The Washington Post, the Asian Wall Street Journal, as well as others. Today, he is going to address the topic for us of “The Chinese Communist Party’s Plan to Dominate Asia and the World.” Welcome, Steve.
Steven Mosher:
It is good to be here with you and all of the viewers, Bob. This is a topic, China’s Plan to Dominate Asia and the World, that has occupied me for some years now. As you mentioned, I was in China ‘boots on the ground’ as it were, in March of 1979 just a few months after former President Jimmy Carter had normalized relations with the Communist giant.
I spent the next year in China in a commune about eighty miles up the Pearl River from Hong Kong in a county called Shunde County in Guangdong Province. That was fortuitous in many respects, first of all because I had permission from then-supreme leader Deng Xiaoping to be there, and that came about in the following way: I was selected to be the only social scientist in the first wave of fifty American scholars that were going to go to China in the newly established scholarly exchange program.
Well, China, not surprisingly – and when I say China, I always mean the Chinese Communist Party, I do not mean the Chinese people, who are the first and foremost victims of the Chinese Communist Party – when China saw that there was an inquisitive social scientist on the list of exchange scholars, and one who had studied at the Chinese University of Hong Kong and who spoke both Mandarin and Cantonese, the language of Guangdong province, and who could read and write Chinese. They said no. They turned down my research proposal. They were happy to have nuclear physicists come to China and share their knowledge. They were happy to have chemical engineers. They were happy to have scholars of all kinds, especially in the STEM fields, but they were not enthusiastic to say the least about welcoming a social scientist from Stanford University.
So they turned down my proposal. At that point President Jimmy Carter went into a meeting with President Deng Xiaoping and my research was on a list of agenda items to be discussed between the two. And as soon as President Carter brought up the issue of my research and questioned why it had been blocked, Deng Xiaoping waved his hand and said in Chinese, “meiyou wenti.”
Well, meiyou wenti in Chinese means, “It will not be a problem.” And it turns out that in a one-party dictatorship where almost all decisions are made by a handful of elderly men – and of course primus inter pares in that group was Deng Xiaoping himself – when Deng Xiaoping says it will not be a problem, officials at all levels of government below him simply kowtow and obey.
So I arrived in Shunde County in Guangdong province with the blessing of China’s supreme leader Deng Xiaoping. And that penumbra carried me through the next year of research, so the Chinese authorities, the local authorities, provincial authorities, prefectural authorities, county authorities, Communist authorities were sometimes very upset about the things I was doing and seeing, but they dared not stop me because I had permission from supreme leader Deng Xiaoping himself to be there.
And so it was that when the one-child policy began in March of 1980, the local Communist Party official who had became a friend of mine came over to my house and said the Chinese Communist Party has ordered the population growth rate in China to be cut way back, and the Guangdong Provincial Party has interpreted that order to mean that the population will not be allowed to grow more than one percent in the year 1980.
Well, bare in mind that by then in March of 1980 all of the children who were going to be born over the course of that calendar year had already been conceived. It takes nine months of course to gestate a human baby. So I immediately asked him, “One percent means that you are going to have to go door-to-door and find out which women are pregnant, how many women are pregnant, and then decide who gets to continue their pregnancy and who doesn’t.” He said yes, that is exactly what we are going to do.
That is what they did. They went door-to-door. They identified the women they were going to allow to continue their pregnancies. These were mostly young women who were pregnant with their first child or their second child. Women who were pregnant with their third, fourth, fifth, higher order children were told they must go in for an abortion. Those who refused were arrested, taken, and incarcerated for however long it took to bend their will to that of the Chinese Communist Party.
I am going into some detail here because this is a classic Communist Party political campaign of the kind that we have seen on dozens of occasions throughout the seventy year history of the People’s Republic of China. This sort of thing happens again and again and again.
It is happening now. There is a new campaign in China to not waste food because supreme leader Xi Jinping, the new Red emperor, has said that the Chinese people must not waste food, and so everyone is being taught how to eat the last grain of rice on their plate. And we suspect there is a massive food shortage in China, but lest we get off onto that.
Political campaigns are the way that the Chinese Communist Party conducts its business. It is the way the Chinese Communist Party imposes its will on the Chinese people. The campaigns always begin with pronouncements from on high. In the case of the one-child policy it was a pronouncement that all couples should not have more than one child. And then they get passed down to local levels and local level officials compete to enforce the new dictate of the Central Committee because the better they enforce it, the greater the reward that they will receive.
So there is competition now throughout the length and breadth of China to not waste food, which means cut back on the amount of food that the Chinese people are eating. There was for thirty-five years competition among Chinese officials to see who could drive the birthrate down further and farthest.
And those officials who did drive the birthrate down the farthest were given bonuses. They were given promotions. Their portfolios, responsibilities, were expanded, and they were rewarded. Those officials who failed to meet their quotas, who allowed illegal children to be born, were criticized, they were demoted, and in very severe cases they would simply be fired completely from their jobs as Communist Party officials. So the stakes are very high when the Chinese Communist Party embarks on a campaign.
So let us go back to the Spring of 1980 when women who were pregnant with what the Communist Party was now calling ‘illegal children’ were arrested and taken, incarcerated for days or weeks at a time. What happened when they were in the lock-up?
What happened when they were in the lock-up was this: the Communist Party officials would harangue them all the live-long day in succession. You would have a good cop-bad cop scenario played out again and again. You would have the good cop come in and say nobody is going to force you to have an abortion, but for the good of the country, for the good of the province, for the good of your family, for the good of the village, you must not continue this pregnancy.
And then the bad cop would come in, and he would say sternly, none of you have any choice. Remember he is talking to young, pregnant moms, probably twenty-three, twenty-five, who are pregnant with their third or fourth child. In some cases they were pregnant with their second child. They were just declared to be over-quota children, illegal children, and their mothers were told to abort.
These women would be crying and sobbing. I was in the room as this was going on. As the bad cop would say, “You must have an abortion, whether you want to or not, and if you should go into labor,” he continued, “before you give us permission to abort your child, we will simply take you by force to the local medical clinic and there we will abort anyway, so there is no point in you holding out,” the bad cop would say. And that succession of psychological pressure, the haranguing, the brainwashing, the coercion would continue day after day after day until all of these women one-by-one went in for the abortion that was being demanded of them.
I was in the room as these brainwashing sessions were taking place. I went with these women as they went to the local medical center. I was in the operating room when doctors were performing cesarean section abortions on women who were seven, eight, and nine months pregnant. In some cases when the women would come in, while she was already in labor and the baby’s head was crowning, they would simply give a lethal injection into the soft spot of the baby’s skull, killing the baby at birth.
Now, you can imagine local officials were very unhappy that I was in that operating room, that I was observing these crimes against humanity. Now, the Nuremberg Tribunals years ago declared that forced abortion was a crime against humanity because Nazi doctors had forcibly aborted [the fetuses of] an estimated seven thousand Polish women during the course of the Second World War.
Well, in the case of China these doctors, the Chinese doctors acting under orders of the Chinese Communist Party, aborted a couple hundred million women over the course of the long-running one-child policy, China’s longest running political campaign.
I would add here that local doctors refused to do these procedures, by and large, and so doctors from the Red Army had to be brought in. The People’s Liberation Army doctors were brought in who had no local connections, no sympathy for the women, no acquaintance with their families or their villages, and they were simply doing assembly-line abortions all day long.
I go into this in some detail because I think this shows you in quite clear relief the inhumanity that the Chinese Communist Party is capable of vis-à-vis the Chinese people. I have long regarded the Chinese Communist Party as a terrorist organization because of the kind of terrorism and horrors that it has inflicted upon the Chinese people and also minorities living within China’s borders.
I think that the one-child policy, forced abortions, and forced sterilizations clearly show what the Chinese Communist Party is capable of. A Party capable of killing babies at birth is probably capable of just about any atrocity you can imagine. And in fact, if we were to go through a list of human rights abuses, an exhaustive list of human rights abuses from political persecution, the arrest and imprisonment of political dissidents, to the arrest, and imprisonment, and torture of those who advocate for free labor unions, if were just to go down the list, to the persecution of Catholics, Christians and other religious believers for their religious faith, we would see that China is either the topic or certainly close to the top of the violators in every given category of possible human rights violations both in terms of the severity of the violations and certainly in terms of the sheer number of violations because after all China does have a population of 1.4 billion.
But aside from just illuminating the sheer barbarity that the Chinese Communist Party is capable of, it also illustrates the downside – that is putting it mildly – of state planning because in 1980 the Chinese Communist Party embarked upon the one-child policy because a systems engineer by the name of Mr. Song, engineer Song Jian, who had traveled overseas a couple years before, came back with a report by something called the Club of Rome, which projected that humanity was running out of resources, and that we would run out of zinc, and chromium, and copper, and all of these various resources by the end of the twentieth century and that the only solution that was proposed by the Club of Rome was a drastic reduction in the human population.
Engineer Song translated that study into Chinese and he managed to get an audience with supreme leader Deng Xiaoping. And he told Deng Xiaoping that he had brought back from his first foray to the West the cutting edge science when it came to population and the environment and resources. And Deng Xiaoping listened, horrified as engineer Song projected a complete environmental and economic collapse in China unless the population were controlled, and Deng Xiaoping asked engineer Song what should we do? Engineer Song said we have no choice but to embark upon a one-child policy.
Now, Communist Party dictatorships have no feedback mechanisms. They are incapable of the kind of self-correction that characterizes an open society. They have no freedom of the press, no freedom of assembly, no right to petition the government for redress of grievances, so once that policy was imposed by Deng Xiaoping himself on the Chinese people it became a counter-revolutionary act to criticize it. Any suggestion that the one-child policy was a grievous mistake, not just in human rights terms but in economic terms, was regarded as a counter-revolutionary act, and people were arrested and punished for questioning the decision of the supreme leader. That is why the policy was able to go on for 35 years.
China is missing 400 million people today because of the one-child policy. That is roughly the number of abortions that were performed over the course of the years from 1980 to 2015. In other words they are missing 400 million of the most productive enterprising hardworking people the planet has ever seen as a result of the complete economic insanity of the Chinese Communist Party, and its penchant for five-year plans, and its penchant for making top-down decision-making that does not take into account the real-world effects of their actions.
Today, China’s population is aging and I believe this year in 2020 will begin to die in the sense that there will there are fewer young Chinese being born than elderly Chinese who are dying so that China’s population this year or perhaps the next will pass its population peak. China before it released the China virus on the world had a labor shortage. The labor shortage was four million workers in 2016. The labor shortage grew ever more severe in 2017 through early this year when of course the China virus shut down the economies of many countries around the world, including China’s for months at a time.
But the point is this that China by eliminating 400 million people has set up a demographic trap for itself. Its population is aging more rapidly than any human population has ever aged, and among the problems that it now faces is a demographic recession. So even if we did not have the tremendous foreign policy achievements vis-à-vis China that we have seen under the Trump administration over the last three years where we have seen a complete recalibration of policy towards China, putting China on the defensive with trade tariffs, putting China on the defensive by stopping the massive theft of intellectual property, by putting China on the defensive by stopping forced technology transfers, and all the other things that have taken place over the last three years, even without this China’s future economic prospects would be grim simply because they have eliminated half of the last two generations.
It is young people after all who, with their long time horizons, buy homes and cars, and start businesses, and invest for the long haul. And China is sorely lacking in the ultimate resource, which is to say people because in their wanton cruelty, in their top-down decision-making, they decided again to eliminate 400 million of the ultimate resource, the Chinese men and women who now are missing in large numbers.
So this is as I say a quintessential Chinese political campaign. They all start with a decision at the top to embark upon a certain course of action, a decision made without full knowledge or forethought of the consequences of that decision. The decision is carried out in often brutal fashion against the wishes of the Chinese people, and at the end of the day it causes calamity. We saw that with the Great Leap Forward in the 1950s when China abolished the family farm and forced all Chinese into communes run by Communist Party officials who had no idea when to plant, when to weed, when to fertilize, when to harvest, and left crops rotting in the fields as they pursued political goals, which led to the worst famine in human history.
The famine following the Great Leap Forward from 1960 to 1962 cost 42 and a half million lives. That is 42 and a half million people who starved to death. The one-child policy, of course, [cost] 400 million lives. The other political campaigns, the Cultural Revolution, the Anti-Rightist Campaigns of the 1950s, the land reform of the early 1950s all cost millions or tens of millions of lives, so one way of looking at the Chinese Communist Party is to call it the greatest killing machine in human history because in terms of the sheer numbers of Chinese people that it has eliminated from the face of the earth it has no peer either now or in in human history. So that gives you a sense I think of what the Chinese Communist Party is capable of.
It is carrying out right now a brutal campaign against on a number of fronts. It is I think hard for outsiders to understand the kind of pressures that are being brought today on minorities in China; the Tibetans in the ancient land of Tibet, the Uyghur Muslims in the ancient land of eastern Turkistan, the Mongols who live in China and not in their own country of Mongolia are all under tremendous pressure. The Chinese Communist Party has stopped the one-child policy when it comes to Han Chinese, but because it believes that the Uyghurs are having too many children it has restarted the one-child policy in Eastern Turkistan. And it is the case today that Uyghur women are being aborted and sterilized following the same game plan that was imposed on Han Chinese women for so many so many decades, so the persecution of minorities is going on today in China.
[There is] persecution of Christians, of Catholics, of Muslims, of people of all faiths in China, Tibetan Buddhists, Falun Gong, Buddhists, even the ancient Chinese folk religion of Taoism is now under pressure. And the reason is that the Chinese Communist Party under president for life Xi Jinping is reenacting the mistakes made by Chairman Mao in the 1950s and especially in the 1960s during the first Cultural Revolution.There is a new Cultural Revolution underway in China today, a second Cultural Revolution sparked by a decision made by the new red emperor, Xi Jinping, who models himself in in all things on the first red emperor, Chairman Mao Zedong. And Xi Jinping has declared that the official ideology of China is something called ‘Socialism with Chinese Characteristics.’
Well, the Chinese characteristics in question are an extreme nationalism so we can we can summarize socialism with Chinese characteristics by saying that it is national socialism or ultra-national socialism or we can shorten that even further by calling it simply fascism or nazism because that is what it is, a xenophobic, racist elevation of the Han Chinese people, refining them under the leadership of the Chinese Communist Party into a kind of god-like status where China itself becomes the church and the acolytes in the church are the members of the Chinese Communist Party, 92 million members of the Chinese Communist Party, and the supreme pontiff of the church of China, of Han Chinese China, by the way, is of course president for life Xi Jinping himself.
So in a sense there is an echo of Chinese history in all of this because throughout history the emperors used a secular religion called confucianism, which had no transcendent elements to unify the people behind the government, behind the bureaucracy, and behind the emperor. And so today we see a new secular religion of Communism, really national socialism, being used in attempt to unify the people behind the Chinese Communist Party, behind China itself, and behind the supreme leader, core leader as he is called, core leader Xi Jinping.
And what that means is that this atheistic political party (the Chinese Communist Party is officially atheistic after all) has created a kind of secular religion, using different terminology than confucianism used but for the same purpose of social control. Anyone who is not in that religion is an enemy of that religion. That is why there is now a war inside of China on all religions outside of national socialism.
That is why the Catholic Church in China is under extreme pressure. That is why Buddhist temples are being torn down or converted into national instruction centers to teach this new national socialist faith. That is why home churches are being closed down and pastors arrested. That is why the Mongols and the Tibetans and the Uyghurs are told that they can no longer teach their children to read and write in Tibetan and Turkish and Mongolian but all instruction must be in the Chinese language. That is why all faiths in China are under tremendous pressure even those that are supposed to be acceptable to the Chinese Communist Party. They are all under pressure. They are all being closed down.
There are new restrictions on religious behavior and actions in China that put all religious activities under the direct control of the Chinese Communist Party’s United Front Department. The United Front Department exists to co-opt and control and turn existing organizations into arms of the Chinese Communist Party, so putting the United Front Department in charge of all religious activities in China, all religious activities of Catholics and Christians and Tibetan Buddhists, etc. means that the goal is to subvert these religious organizations and turn them into arms, extensions of the Chinese Communist Party.
We could talk about other things like the Xi Jinping app that everyone in China has to download on their smartphone. If you have a smartphone in China and hundreds of millions of people do, you are required to download the Xi Jinping app. And what the Xi Jinping app does is every day it requires you to read a lesson from the collected works of Xi Jinping. Think here of Mao’s Little Red Book and millions of Red Guards in Tiananmen Square back in 1966 and ‘67, waving their Little Red Books in the air and quoting, shouting the slogans, the quotations of Chairman Mao.
Well, today we have a high-tech version of that same kind of collective hysteria, but everyone every day is required to download their daily lesson from the collected works of Xi Jinping, and not only read it but they are required to answer questions about it to make sure that they simply don’t download it, leave their phone on for thirty minutes, and then turn it off, so you have to pass the test and you are given a test every day.
There are more surveillance cameras in China than in the rest of the world combined. Of the 20 cities with the most surveillance cameras 19 are in China. The most surveillance cameras per million people in the population in Beijing today. If you jaywalk, a surveillance camera will note your crime. Facial recognition technology will identify you and a fine for jaywalking will be automatically deducted from your bank account, no human intervention necessary.
So when I talk about a new Cultural Revolution I do not mean the kind of old clunky Cultural Revolution where you actually had to gather people together in a room led by a Communist Party cadre who teaches you to shout in unison the quotations of Chairman Mao. That still happens, there are Communist Party cells in every company, in every office in every bureaucracy in China that has regular meetings and does still do those kinds of things, shout the slogans of the Chinese Communist Party, but it is also a high-tech Cultural Revolution. Invisible walls have gone up around China, turning China itself into a kind of high-tech virtual prison, and the walls are getting higher all the time. So domestically that is what is happening in China.
The Chinese Communist Party is parasitical upon the Chinese people in this sense. It produces nothing, its decisions are often mistaken. It is corrupt in several ways. First of all, the Chinese Communist Party literally lives off the blood, sweat, and tears of the Chinese people. The buildings, the chauffeurs, the limousines, the homes of Chinese Communist Party officials are all paid for out of taxes extracted from the Chinese people so the Chinese Communist Party probably consumes about a trillion and a half dollars of wealth every year. That is about 10 percent of China’s GDP. That is just to cover the functions, the banquets, the chauffeured limousines, the salaries, and so forth of these non-productive communist bureaucrats who do not produce goods, they produce tyranny for the most part.
But then besides that there is the tremendous corruption that is enabled by the Chinese Communist Party. There was recently a gentleman, Liu Xiaomin, who was arrested and charged with corruption, and found to have $250 million dollars in bribes hidden in 100 homes that he owned in and around the capital city of Beijing. In one home he had 100 renminbi bills in bundles stacked to the ceiling. In each of these hundred homes he also had a concubine. He was a very busy man, but he is a third tier corrupt official because $250 million dollars is really not that much money when you start talking about the corrupt Chinese oligarchs who run the country of China. We hear a lot about russian oligarchs. There are many, many more Chinese oligarchs.
If you are a premier of the People’s Republic of China for 10 years as Wenjiabao, who was the premier of China from 2002 to 2012, you can amass $2.3 billion dollars in ill-gotten gains. I expect that all seven standing members of the Politbureau have fortunes in the billions of dollars because every decision they make is guided by how much money they are going to gain by making that decision. The level of of graft and corruption in China is almost unbelievable for someone from any Western society. In our society we regard corruption as not the norm. In China it is the norm. In our societies it is the exception. In China it is the normal thing that any official does. [What a Chinese official does] is guided by how much money he can make in bribes and graft in taking up this project or making this decision. So the top level officials after a few years in government accumulate billions of dollars in ill-gotten gains from the Chinese people.
The second-tier officials, the members of the central committee, several hundred million probably amass over the course of their tenure a billion dollars or so. The third tier, we are talking about people like the man with a hundred concubines, he amassed $250 million dollars, and so on down the list through provincial level officials, amassing fortunes in $100-$200 million dollar range, to county level officials amassing fortunes in the $5 or $10 or $15 million range. But corruption is pervasive and it is bleeding the Chinese people dry.
So that gives you a sense of the kind of of misdeeds in terms of human rights, the kinds of mistakes that the Chinese Communist Party makes directly in economic matters, and the kind of a burden that the Chinese Communist Party through its salaries and its lavish lifestyle, and also through its corruption imposes on the Chinese people and prospects for economic growth in China’s future.
Let me just say one more thing about the the economic decisions made by the Chinese Communist Party officials. There are now an estimated 60 million apartments in China that are vacant because China has so overbuilt. Those decisions to build apartment buildings, to build factory shelves, to build warehouses, to build commercial shopping centers are not made on the basis of market analysis and studies, they are made by local officials who are able to get low interest rate loans from the local branch of the Bank of China or some other branch.
They pay as a bribe some of the loan back to the bank official in order to get the loan. They take the loan and give it to a building contractor who then gives them back part of the money, a third of the money, perhaps as a corrupt payment, and the building constructure goes. The building contractor goes on and builds the building, using very, very shoddy standards with the rest of the money. And there the building stands empty. The bank manager has made a great deal of money. The local party official has made a great deal of money. The building contractors made money and the building stands empty.
It was built without regard to whether or not anyone would ever come to live in it or not. That story could be repeated all over China. This is a story of the massive misallocation of resources, misallocation of trillions and trillions and trillions of dollars in resources.
Another example is China Rail. China Rail is the state-owned company that builds high-speed rail throughout the length and breadth of China. High-speed rail trains look very pretty but they are largely empty. China Rail is $700 billion dollars in debt. That money will never be repaid, but the officials in charge of China rail are probably not at all disturbed by that fact because in building China Rail they have all become multi-millionaires, and the money is owed to state-owned banks and state-owned banks are not eager to default the loan because that will make their balance sheets look bad. So everyone is content in China to make huge amounts of money in graft, on corruption, and to not worry about the balance sheet if they can even read a balance sheet. The misallocation of resources along with the Chinese Communist Party create tremendous headwinds for China’s future development.
So how did we get to where we are today where China has the second largest economy in the world? The reason that China was able to develop so rapidly over the last 25 years is because of the United States of America.
The United States of America made what I think is probably the biggest strategic blunder in human history in enabling the rise of the country that does not just want to replace it as the dominant power but it wants to completely destroy the industrial base of the United States, and turn the United States into a supplier of raw materials for China’s factories, of agricultural products to feed China’s workers, and a country of consumers of Chinese-made goods. That is China’s plan for the United States.
It kind of resembles the policy of Japan towards Taiwan during the period of the Japanese occupation of the island nation for fifty years when the policy was to industrialize Japan and agriculturalize Taiwan. Taiwan was to be the food basket, the rice bowl for the Japanese empire. China I think sees the rest of the world in the same way. It wants to industrialize China and then use the rest of the world as a source of food and raw materials and as consumers of the products made by the world’s factory floor, which is supposed to be the People’s Republic of China.
That is the ultimate goal here, and the reason why China was able to come close to succeeding in that goal was because we very short-sightedly allowed China to join the World Trade Organization back twenty years ago, which gave it virtually free access to American markets and yet allowed China to use tariff and non-tariff barriers to keep American products and goods out of China itself.
We also turned a blind eye to the massive theft of intellectual property, which continues today. The FBI estimates that China steals up to $600 billion dollars, that is a billion with a b, of intellectual property from the United States each year. Over ten years that is six trillion dollars in stolen intellectual property, including the designs for the latest weapon systems, including the latest designs for chip manufacturing and design from Silicon Valley, including everything. China is like a giant vacuum cleaner using cyber attacks and cyber penetration, cyber sleuthing, to extract as much in the way of information, useful information, from the United States as possible.
So given all of that, given the fact that we turned a blind eye to their currency manipulation, to their cheating on trade, to their cyber espionage, to the fact that they were forcing technology transfer; every American company that went to China had to transfer its technology, cutting-edge technology, to Communist Party officials. They were supposedly in a joint venture but in many of the cases, in many of these joint ventures, you found the original joint venture factory after a couple of years had a new Chinese competitor located just a few miles down the road, using the same technology to produce the same goods but selling them even cheaper because they were being subsidized by the state with the goal of driving the American company out of business in China, preventing it from expanding its market share and then from there going in to penetrate the American market of that American company and using its same its own technology to defeat it.
So those kinds of cheating on trade, those kinds of violations of international rules governing trade and international interactions enabled China to dramatically increase its GDP and play catch-up over the last 25 years. Fortunately, we are beginning to call China to account for its cheating, but make no mistake we, the United States of America, created the monster that now wants to destroy us.
Robert R. Reilly:
If the new ideology of the Chinese empire is nationalism, how would it work if so many of its people have been alienated by the repressive policies and corruption that you have described?
Steven W. Mosher:
Well, the Chinese Communist Party is an interesting organization because in the year 2000 the then-Chinese Communist Party General Secretary Jiang Zemin decided that the party would abandon its traditional reliance on workers and peasants, and it would instead move to a policy of Three Represents the San Dai Biao, and it would represent not just the workers and not just the peasants but it would also represent the new class of entrepreneurs, so that it would stop being a ‘Communist Party,’ quote unquote, but it would be a party of elites, it would be a party of of oligarchs, combining elites from all sectors, from the military, from the Party, and from the nominally private sector.
And so by inducting the new class of entrepreneurs into the Chinese Communist Party they in effect have seized the high ground of society. They have been able to combine all of the leading elements of society into one political party, which is no longer of course communist in any sense. That is why I call it national socialist, and it is really no longer even socialist in the sense of that we commonly understand the term. It is a party of elites. It is a party of oligarchs who are primarily interested in feathering their own nest, and lining their own pockets and the pockets of those in their family and in their factions.
So that is what this has become, and because it is so large, 92 million members strong, and because it is constantly recruiting, and because membership in the Party is almost a sine qua non, it is almost imperative if you want to succeed in any enterprise you have to be a Party member. Otherwise the headwinds are simply too great so a lot of young people out of ambition, not out of ideology but out of ambition, want to join this exclusive club, which in effect promises its members that as they rise in the Party ranks, they will become wealthy and powerful, they will become millionaires or if they rise high enough, they will become billionaires.
So this is the kind of political animal that we are dealing with in China and it really is fascism in the the sense of the German national socialist. After all Hitler never expropriated the Krupp steel mills. He simply inducted Krupp into the Nazi Party and Krupp faithfully turned out steel and cannons for him after that fact. The same thing is happening with the big companies in China today with Tencent and Alibaba.
I would say this: there are no private companies in China today in the sense that we understand them. The rule in China is that any company with more than fifty employees has to have a Communist Party cell headed by a Communist Party Secretary. So that means that anything bigger than a McDonald’s, even a large restaurant with more than fifty employees, must have a Communist Party cell, must have a Communist Party Secretary to watch over the activities of the entrepreneur who runs it, who is probably a Communist Party member himself.
He may be a member of the cell ,and to make sure that the other employees do not violate the teachings of the Chinese Communist Party, to make sure they are all good followers of the Party as well. And then you have this: that any company that is listed on the stock exchange must sell at least one percent of its stock directly to the Chinese Communist Party and the Chinese Communist Party must have a a seat on the board of directors.
Now, if I am a nominally private entrepreneur in China, I am the chairman of my company, I am sitting at one end of the board room and at the other end of the boardroom sits the representative of the Chinese Communist Party who has the final say. Obviously, the party secretary has veto power over every action that I take or contemplate taking. So that is why I say that the there are no private companies in China today. They are all controlled fairly directly by the Chinese Communist Party.
Huawei, for example, claims to be owned by its employees. It is not owned by its employees, it is owned by the Chinese Communist Party. The Party Secretary is the number two guy in the ranking of the company’s organizational chart so it follows the dictates of the Party. It receives subsidies from the Party. It is not a private company at all. It is a convenient ruse for Chinese companies to claim that they are privately owned because that creates the impression in the minds of gullible, naïve Westerners that yes, it is a private company.
Why don’t we list it, allow it to list on the New York Stock Exchange? Why don’t we allow it to raise, to issue an IPO and and raise billions of dollars from unwitting naïve American investors, who might not be quite so willing to invest in a company if they knew it was controlled by the Chinese Communist Party, perhaps by the People’s Liberation Army, perhaps by the military or perhaps was engaged in research into dual use technology that might one day be used to kill American servicemen? So all of that is hidden by this façade that these are private companies.
Robert R. Reilly:
I have been on those high-speed trains of which you speak and indeed, they are very impressive but they have taken me by those empty apartment buildings. It is staggering to see them so you can see the misallocation of resources but if that is of the proportion that you indicate and if indeed the corruption is so staggeringly pervasive, yet you have against that the enormous growth in GDP in China such that it has become or at least is offered as an alternative model to the free market economies of constitutional democracies, that now its success is such that there is another way to wealth and China has showed us that way.
Steven W. Mosher:
I would say to that, Bob, that China is in a sense a giant Ponzi scheme. They keep borrowing money. The Chinese Communist Party-controlled banks keep issuing money. They do not properly value the assets on their balance sheets. They are carrying an awful lot of bad debt, which they hide. There is a tremendous amount of off-the-books loans in China made by local Party officials. For example, at the county level or at the prefectural level if you add up the total debt of China, it is probably in excess of 300 percent of GDP. That is over three years of the entire GDP of the country would be required to pay off the debt and that debt is not only staggering, but it is growing.
So there are those who believe that China can forestall the day of that house of cards comes tumbling down forever because with a controlled currency can’t it just keep printing money? Can it just keep directing the economy by dictating what prices will be? I think that only abides you so much, and one day, probably because of our actions over the last three years of getting tough on China, China will fall over the precipice of debt that [it] is currently walking upon. Those kinds of collapses I think always take longer to materialize than we think, but when they happen they happen quicker than anyone will imagine.
Now, I am not saying that China’s collapse is necessarily inevitable. It depends on the actions of the United States. Remember that back in 2016 Forbes and Bloomberg and most of the Wall Street firms were convinced that by this year, 2020, China’s GDP would be larger than that of the United States. They regarded China’s growth rates of five, six, seven percent that China was claiming. They regarded those as facts, hard facts, and given what we were told by the Obama administration, that the new normal of one or two percent GDP growth a year for the United States, given the disparity between the rapid growth occurring in China and the dismal growth occurring in the United States, that China would overtake the United States in total GDP by 2020.
That has not happened. In fact, up until January, of course, it is hard to know what the numbers look like from January to now because of the China virus, but up until January we were actually opening wider the gap between the U.S. GDP and the Chinese GDP in part because their growth rates claimed growth rates of 6% or 6.2% were clearly exaggerations. Last year in 2019 their economy was barely growing at all. Exports were shrinking. There were a number of signs from smog levels in the major cities to the amount of rail freight on the railroads, showing that China’s economy was slowing down while ours was speeding up.
Well, now, of course, we have to get through the China virus to see where things stand, but China’s overtaking of the United States is by no means inevitable. We control our own destiny and if we continue to keep the tariffs in place to ensure that we have fair trade with China, if we continue to sign bilateral trade agreements with other countries in Asia modeled on NAFTA, which treats American workers fairly and keeps American factories in business instead of offshoring them, I think we can stay ahead of China until China’s contradictions, its internal contradictions, catch up with it. And those contradictions eventually will, I believe, catch up with it and we will see what Gordon Chang wrote about in 2002.
Gordon wrote a book called The Coming Collapse of China, and of course here we are eighteen years later and China has not collapsed. The reason is that we have been allowing China to rip us off for the last two decades, to steal our intellectual property, to cheat on trade. We have, in short, been postponing the day that the Communist chickens come home to roost in China and we are postponing that day no longer. So I think we will see Gordon’s projection come true.
Now, I also wrote a book called The Bully of Asia, a copy of which is over my left shoulder, sitting on my desk, and I do not think the bully of asia will go quietly from the world scene. We have talked about China’s domestic human rights and economic and political problems, but overseas China, especially after it spread the China virus throughout the world, has begun to behave in incredibly aggressive fashion, I would say. Of course, they have been aggressive throughout their 70-year history, but they have become more overt about it in recent months.
There has been a clash on in Ladakh on the China border with India where China has now encroached again on Indian territory, crossing over the line of control, and refuses to withdraw. China to the west is claiming that it owns historically half of Kyrgyzstan. The Palmira mountain range they say was historically part of China and they want Kyrgyzstan to give it back. That is fifty percent of Kyrgyzstan that China is now claiming. We have Chinese officials pointing out that until the the unequal treaty of 1860 that Vladivostok was a part of China, that the Russian Far East was ceded to Russia under an unequal treaty. We have China now to the east, looking at the Senkaku Islands, which are near the Ryukyus between Japan and and Taiwan, and saying the Senkaku Islands are ours. They call them the Diaoyutai islands, and they have also claimed that because the ruler of Okinawa used to pay tribute to the Qing Dynasty that they actually actually have a historical claim to the Okinawa and all of the Ryukyus as well, which does not make Japan very happy.
Of course, they are constantly threatening to invade Taiwan, which has been an independent country for a long time now since before the founding of the of the People’s Republic of China. It was never governed by the People’s Republic of China. It does not belong to the People’s Republic of China, although they claim it as a wayward province. But right now they have moved their mobile missile launchers, which carry these long trucks, which carry short and medium range ballistic missiles. They have moved them to the Fujian coast 100 miles away from Taiwan, and had them all pointing on the tarmac towards Taiwan in an obvious, threatening gesture.
In the south they have militarized the South China Sea after promising four years ago [to] the Obama administration that they would not militarize their bases in the South China Sea, that they were just there to aid in navigation. They are not. China has claimed the entire South China Sea as its sovereign blue territory. It has created a new administrative district to create at least the pretense that it is being administered by the government of the People’s Republic of China. This, of course, violates the Exclusive Economic Zones and the the sovereign territory of no less than six nations; Vietnam, Malaysia, Indonesia, all the way to the south [to] Brunei and so on. So the claim in the South China Sea is roughly like it would be if the United States claimed the entire Caribbean as its sovereign territory.
It is an extraordinary, aggressive territorial claim that should not be allowed to stand, but China right now is striking out in all directions, and I think one of the reasons it is doing so is because of the internal political and economic crises that it is now facing. If it is no longer able, if we cut the umbilical cord between the United States and China, which we have begun to do, China will not be able to sustain its current economic growth. Its economy will shrink because domestic demand in China is simply not going to be sufficient to sustain the kind of economic growth that the Chinese Communist Party would like to see.
Robert R. Reilly:
Steve, I have asked a couple of China experts a question about exactly what you are discussing now and that the Chinese policy, as you know, for so many years was to grow strong and do not talk about your strengths right until the point at which you are so strong no one can do anything about it. And I thought why didn’t President Xi simply keep that low profile and in ten years they would certainly be at that point where it would be too late for the United States. And the answer I got was, well, they already think it is too late for the United States. Do you think that is accurate?
Steven W. Mosher:
I think it is. I think that one thing you will hear Chinese officials say frequently is how naïve, how innocent, how gullible Americans are. For example, in signing agreements in China the phrase win-win is a joke. To us it means that China wins and we win, we negotiate an agreement that is mutually beneficial and we both win. That is what we mean by win-win. That is not what a Chinese Communist official means by win-win. He means that China wins in the negotiations by getting very favorable terms and then wins again after the agreement is signed by cheating on the agreement. That is the common understanding of win-win in China, and they think that we are simply naïve and gullible by believing that words on paper, things like honor and the laws and justice actually matter because in the Communist Chinese scheme of things they do not matter at all. These are all simply ploys in order to gain and keep an advantage in negotiations, whether they be over trade or intellectual property or Hong Kong or you name it.
China signed an agreement with the UK in 1984 over the future of Hong Kong. That agreement called for the current socio-economic situation in Hong Kong to remain unchanged for 50 years after the 1997 takeover. Three years ago in 2017 the head of the Taiwan office of the Chinese Communist Party said that that agreement had only historical value, and today we see the result of their effectively tearing up the agreement. They have imposed a new security law. They are quickly turning Hong Kong into just another Chinese city, no different in surveillance and control terms than Shanghai or Beijing or Tianjin.
So an agreement with China is actually for the United States worse than no agreement because an agreement deludes us into thinking that we have actually bound the Chinese Communist Party to a certain kind of behavior when in fact that is not true. The Chinese Communist Party simply goes and does what is in their interest in the first place and simply hides it from us under the pretext of an agreement. I mean I cannot think of an international agreement that the Chinese Communist Party has signed that they have not violated. It is really that bad.
Deceit and deception are not the exception, they are the rule. The first thought in the mind of a a communist official negotiating with an American official is how can I deceive the American official into doing my bidding and into giving China an advantage. And it is sad to say, Bob, but if you gave a an official in China a choice between achieving his negotiating goals by being open, honest, and direct or achieving the same negotiating goal by being dishonest, deceitful, and indirect, he would choose to be deceitful, dishonest, and indirect because that would enable him to count himself clever in the process.
Robert R. Reilly:
What about the reaction to the aggressive behavior from China that you have described, the reaction in India, Japan, and Southeast Asian nation countries? I recall at a defense minister’s conference (so this must have been at least 10 years ago or more) the Chinese defense official present said, ‘You are small countries and we are a big country,’ making it clear to them who is in charge. Now, are they so much in charge today that the reaction they provoke with their aggressive behavior will not amount to much for them?
Steven W. Mosher:
Yes, there was a conference in Singapore. I think it was a Singaporean official who objected to China’s actions in the South China Sea and China’s Minister Foreign Affairs said, ‘We are a big country, you are a small country,’ that basically, you know, you have to do what we say. Well, I think that is one of the reasons why we have U.S. ships visiting Singapore on a regular basis and I think we do have a vessel stationed in Singapore full-time now, home-ported in Singapore. So China’s actions have been so aggressive of late that they have succeeded in doing probably in the last six months what it would have taken the United States, oh, five or ten years to do, and that is to create such fear and animosity among the populace of India and Australia, and even New Zealand and Japan, that we are now in discussions to form a Quad.
The Quad would be joint, not an Asian NATO yet, but perhaps a first step down the road towards an Asian NATO where India and Japan and Australia and the United States would together conduct joint exercises. Our ships are sailing together, not just with the Japanese Navy these days but with the Australian Navy and with the Indian navy. We are conducting joint exercises so that we can enhance our interoperability in the event of a conflict with China, obviously. So China has succeeded I think in creating the beginnings of an anti-China alliance by its aggressive behavior.
Robert R. Reilly:
So why didn’t they abide by Deng Xiaoping’s dicta, which was bide your time and hide your capabilities?
Steven W. Mosher:
That worked well in the 70s, 80s, and 90s. It worked well in the first 12 years of of this century and then we had Mao clone, president for life Xi Jinping come to power. And I think he thought that China had already won, that America was so weak and so dissolute and of course in the aftermath of the housing crisis of 2008, 2009 that its economy was in such shambles and that was barely growing because of the excessive regulations and the green energy projects of the Obama-Biden years that China could almost coast into dominance.
And I believe, Bob, that had it not been for the surprising election results in 2016 that history might well have proven Xi Jinping correct because if Hillary Clinton had been elected and continued the failed Biden-Obama policies towards China, China would probably now have a larger economy than the United States. The industrial base of the United States would be so hollowed out that bringing a manufacturing back to the United States would take more than – what did Obama say? A magic wand? – it would simply be conceived of as impossible. China would have grown so large and so powerful that no nation or combination of nations would would feel free to challenge it. Well, instead you know fortune has a way of smiling upon the United States, and I think it has smiled upon the United States again.
Robert R. Reilly:
Steve, that leads to my last question. Has there been or is there forming a bipartisan consensus in the United States regarding the Chinese threat comparable to what existed in the United States during the Cold War regarding the Soviet threat, and that would lead to the question of the upcoming election and the effect it may have on the future U.S. foreign policy toward China?
Steven W. Mosher:
The discussions that I have had and many others have had with members of the House and the Senate suggest that there is a now a bipartisan consensus forged again by China’s actions, by the China virus, by its constant aggressive actions towards America’s allies in Asia, towards its economic aggression in trade and and cyber espionage terms. I think there is now a bipartisan consensus. There are still some outliers. There are still people like Senator Dianne Feinstein who has made huge sums of money, her husband from his investments in China. I do not think the return on his investment is necessarily a result of his investing prowess as much as it is a result of China’s ability to pick off elites in the United States and other Western countries. They call it elite capture where they give Western elites, Western politicians, sweetheart deals in China, invite them into joint ventures. And once, of course, you participate in a joint venture, take the sweetheart deal, in effect you become hostage to Beijing.
Not long ago there was a hearing in the Judiciary Committee on the Senate side when they were considering sanctions against China, and the only one to speak out against it on the Democrat side was Senator Feinstein who said that if you impose sanctions on China, that they will certainly reciprocate, it will not be good for the United States. And she said I have that on the authority of the Chinese ambassador with whom I spoke just last Saturday, so there are still a few people who are looking for policy suggestions from leading members of the Chinese Communist Party but I think most American politicians, Democrat or Republican, now are beginning to stand shoulder to shoulder on this side of the Pacific and against our obvious adversary on the other side of the Pacific.
And Joe Biden I think will be bound to follow the the lead of the majority of his party in the House and Senate if by chance he is elected. He also I think is vulnerable, very vulnerable to suggestions that he is soft on China, and so I think he might recoiling from that characterization. He might well be harder on China than the Chinese now imagine, make no mistake, though the Chinese Communist Party has a preferred candidate to win on November 3rd. They constantly criticize in their propaganda broadsheets President Donald Trump. Just today the Global Times, which is the English propaganda arm of the Chinese Communist Party, said that nations around the world prefer Joe Biden to be elected president because he is smoother than Donald Trump.
Well, you know if I were Joe Biden I really would not appreciate being endorsed by the Chinese Communist Party, but there you have it. [In China] wu mao is fifty cents. There are a couple hundred thousand or more people in China who are paid fifty cents a tweet or post to follow the Party line and try to capture likes on social media. And I will tell you that the wu mao are working overtime to promote the candidacy of Joe Biden and to undermine the re-election of Donald Trump. Now, that is not to say there is any collusion mind you, but it is to say that the Chinese Communist Party has made clear who its preferred candidate is for President of the United States.
Robert R. Reilly:
Steve, I want to thank you very much for your lecture. I am delighted finally to have you at the Westminster Institute and I hope you will come back. For our audience I invite you to go to the Westminster Institute webpage, where you will see our past lectures listed, and you can go to our YouTube channel and sample the wares. Thank you for joining us.
Steven W. Mosher:
Thank you.