Andrew Birge: Well good morning everyone.
I’m Andrew Birge and I’m the United States Attorney for the Western District of Michigan.
It’s my honor this morning to introduce to you William Barr, the Attorney General
of the United States. But first I want to briefly recognize those from the business
and academic communities who have come here today to hear first-hand the Attorney General
speak about the global ambitions of the People’s Republic of China, and the challenge that
poses for business and our security. American innovation is often the target of PRC espionage,
exploitation, malign influence and outright theft. But we in law enforcement have pledged
to work with you to protect your essential enterprises from these threats. In fact we
have law enforcement representatives here today to talk to you and I would welcome you
to stay after the Attorney General’s remarks for a presentation on the Department’s China
Initiative by senior officials of the National Security Division. Specifically, Adam Hickey,
the Deputy Assistant Attorney General for that Division, my counterpart from the Eastern
District of Michigan Matthew Schneider and myself.
So now let me tell you a little about our Attorney General. Occasionally, our country
has the good fortune of seeing inspired leaders rise through the ranks of public service,
step away to take on leadership roles in the private sector, only to come back when we
needed them. Attorney General Barr’s career is punctuated by repeated calls to serve that
he has answered. After earning his AB from Columbia University and an MA in Chinese studies,
he began his first career in public service with the Central Intelligence Agency. While
at the CIA, he enrolled in law school and earned his degree with highest honors from
George Washington University. And after graduating he served as a law clerk with Judge Malcolm
Wilkey of the U.S. Court of Appeals for the District of Columbia Circuit. From there he
joined a private firm, but it wasn’t shortly thereafter that he joined the Domestic Policy
Staff of the White House in the Ronald Reagan Administration.
He returned to law firm life and soon made partner. But in 1989, under George H. W. Bush,
he was tapped in the role of Assistant Attorney General of the Office of Legal Counsel. In
1990, he became the Deputy Attorney General, then in 1991 he became our 77th Attorney General
of the United States – serving through the remainder of President Bush’s term. For
the 18 years that followed Attorney General Barr lent his leadership to the private sector.
His roles included serving as the Executive Vice President and General Counsel for GTE
Corporation, as well as for Verizon. And after returning from Verizon he returned to the
private practice of law with a private firm, before yet another call to serve came. In
December 2018, President Donald Trump announced his intention to nominate Mr. Barr to serve
as our 85th Attorney General. After Senate confirmation Chief Justice John Roberts administered
the oath and Attorney General Barr became only one of two people, in American history,
to serve twice in this role. So please join me now in welcoming Attorney
General William Barr. Attorney General Barr: Thank you very much,
Andrew for that very kind introduction and I’d like to say that I really appreciate
the work that Andrew and Matt, the U.S. Attorney’s for the Eastern and Western District of Michigan
are doing here for the people of Michigan and all the law enforcement community from
Michigan, that is here today. We really appreciate your work and as Andrew said, after my remarks
they are going to put on a presentation, on the China Initiative which I think you’d
find very interesting, so if you have the time I’d urge you to stay for that.
And I would like to thank the leadership and staff of the Gerald R. Ford Presidential Museum
— especially Elaine Didier — for hosting this event, and also thank the Ford Presidential
Foundation and its Executive Director Joe Calvaruso. Even under normal circumstances,
it’s hard to put together an event like this, but in the current circumstances it’s
especially challenging and I really appreciate it. And I rea¬¬¬lly appreciate all of you
who’ve come, I know many have come from around the state and I appreciate the effort
that was made to be here for these remarks. I was last in Grand Rapids maybe 30 years
ago John. John Smietanka from here was one of my Principal Deputies when I was Deputy
Attorney General, then stayed on while I was Attorney General. He was the Attorney here
in the Western District, so John it’s great to see you here.
I feel a special bond to the Ford Administration so it’s appropriate to be here today, for
these remarks, because I started out in the CIA in 1973 and then President Ford took office
and because of what was going on at the agency, I had the privilege of working closely with
many of the superb people that he brought into government, many of whom I had the opportunity
to work with over the years, and several of whom were my mentors. One of the people I
met was the Attorney General, at that time, Ed Levi who President Ford made Attorney General
and his portrait is up in my conference room and his grandson Will Levi is my Chief of
Staff. So, as I say, I feel especially close to the Ford Administration and though I wasn’t
a political appointee in that administration, many of the political appointees that I’ve
worked with over the years, really cut their teeth during the Ford Administration.
I’m privileged to be here to speak about what may prove to be the most important issue
for our nation and the world in the twenty-first century and that is, the United States’
response to the global ambitions of the Chinese Communist Party. The CCP rules with an iron
fist over one of the great ancient civilizations of the world. It seeks to leverage the immense
power, productivity, and ingenuity of the Chinese people to overthrow the rule-based
international system and to make the world safe for dictatorship. How the United States
responds to this challenge will have historic implications and will determine whether the
United States and its liberal democratic allies will continue to shape their own destiny or
whether the CCP and its autocratic tributaries will control the future. Since the 1890’s,
at least, the United States has been the technological leader of the world. And from that prowess,
has come our prosperity, the opportunity for generations of Americans and our security.
It’s because of that that we were able to play such a pivotal role in world history,
by turning back the threat of fascism and the threat of communism. What’s at stake
these days is whether we can maintain that leadership position and that technological
leadership. Are we going to be the generation that has allowed that to be stolen- which
is really stealing the future of our children and our grandchildren?
Several weeks ago, the National Security Advisor Robert O’Brien spoke about the CCP’s ideology
and global ambitions. He declared, and I agree, that “[t]he days of American passivity and
naivety regarding the People’s Republic of China are over.” Last week, FBI Director
Chris Wray described how the CCP pursues its ambitions through nefarious and even illegal
conduct, including industrial espionage, theft, extortion, cyberattacks, and malign influence
activities. In the coming days, you will hear from Secretary [of State] Mike Pompeo, who
will sum up what is at stake for the United States and the free world. Now, Chris Wray,
told me that shortly after his speech last week, one of the leaders of the Chinese Communist
Party pronounced that his speech was particularly disgusting. I told him that I was going to
aim to be despicable, but I’ll settle for especially disgusting.
But no matter how the Chinese seek to characterize it I do hope that my speech and Mike Pompeo’s
speech will encourage the American people to reevaluate their relationship with China.
So long as it continues to be ruled by the Chinese Communist Party. It is fitting that
we’re here today at the Ford Presidential Museum. Gerald Ford served in the highest
echelons of the government at the dawn of America's re engagement with China. Which
began obviously with President Nixon in 1972 and three years later in 1975 President Ford
visited China for a summit with PRC leaders including Mao Zedong. At the time it was unthinkable that China
would emerge after the Cold War as a near peer competitor of the United States. Yet
even then there were signs of China's immense latent power. In the joint report of their
visit to China in 1972, House Majority Leader Hale Boggs and then-minority leader Gerald
Ford wrote: “If she manages to achieve as she aspires, China in the next half century
can emerge a self-sufficient power of a billion people …. This last impression—of the
reality of China’s colossal potential—is perhaps the most vivid of our journey. As
our small party traveled through that boundless land, this sense of a giant stirring, a dragon
waking, gave us much to ponder.” It is now nearly fifty years later, and the prescient
ponderings of these two congressmen have come to pass. Deng Xiaoping, whose economic reforms launched
China’s remarkable rise, had a famous motto: “hide your strength bide your time.”.”[4]
That is precisely what China has done. China’s economy has quietly grown from about 2 percent
of the world’s GDP in 1980 to nearly 20 percent today. By some estimates, based on
purchasing power parity, Chinese economy is already larger than ours. The General Secretary of the Chinese Communist
Party, Xi Jinping, who has centralized power to a degree not seen since the dictatorship
of Mao Zedong, now speaks openly of China moving “closer to center stage,” “building
a socialism that is superior to capitalism,” and replacing the American Dream with the
“Chinese solution.” China is no longer hiding its strength, nor biding its time.
From the perspective of its communist rulers, China’s time has arrived.
The People’s Republic of China is now engaged in an economic blitzkrieg—an aggressive,
orchestrated, whole-of-government (indeed, whole-of-society) campaign to seize the commanding
heights of the global economy and to surpass the United States as the world’s preeminent
superpower. A centerpiece of this effort is the Communist Party’s “Made in China 2025”
initiative, a plan for PRC domination of high-tech industries like robotics, advanced information
technology, aviation, electric vehicles, and many other technologies. Backed by hundreds
of billions of dollars in subsidies, this initiative poses a real threat to U.S. technological
leadership. Despite World Trade Organization rules prohibiting quotas for domestic output,
“Made in China 2025” sets targets for domestic market share (sometimes as high as
70 percent) in core components and basic materials for industries such as robotics and telecommunications.
It is clear that the PRC seeks not merely to join the ranks of other advanced industrial
economies, but to replace them altogether. “Made in China 2025” is the latest iteration
of the PRC’s state-led, mercantilist economic model. For American companies in the global
marketplace, free and fair competition with China has long been a fantasy. To tilt the
playing field to its advantage, China’s communist government has perfected a wide
array of predatory and often unlawful tactics: currency manipulation, tariffs, quotas, state-led
strategic investment and acquisitions, theft and forced transfer of intellectual property,
state subsidies, dumping, cyberattacks, and industrial espionage. About 80% of all federal
economic espionage prosecutions allege conduct undertaken for the benefit of the Chinese
state, and about 60% of all trade secret theft cases have been connected to China.
The PRC also seeks to dominate key trade routes and infrastructure in Eurasia, Africa, and
the Pacific. In the South China Sea, for example, through which about one-third of the world’s
maritime trade passes, the PRC has asserted expansive and historically dubious claims
to nearly the entire waterway, flouted the rulings of international courts, built artificial
islands and placed military outposts on them, and harassed its neighbors’ ships and fishing
boats. Another ambitious project to spread its power
and influence is the PRC’s “Belt and Road” infrastructure initiative. Although billed
as “foreign aid,” in fact these investments appear designed to serve the PRC’s strategic
interests and domestic economic needs. For example, the PRC has been criticized for loading
poor countries up with debt, refusing to renegotiate terms, and then taking control of the infrastructure
itself, as it did with the Sri Lankan port of Hambantota in 2017. This is little more
than a form of modern-day colonialism. Just as consequential, however, are the PRC’s
plans to dominate the world’s digital infrastructure through its “Digital Silk Road” initiative.
I have previously spoken at length about the grave risks of allowing the world’s most
powerful dictatorship to build the next generation of global telecommunications networks, known
as 5G. Perhaps less widely known are the PRC’s efforts to surpass the United States in other
cutting-edge fields like artificial intelligence. Through innovations such as machine learning
and big data, artificial intelligence allows machines to mimic human functions, such as
recognizing faces, interpreting spoken words, driving vehicles, and playing games of skill
much like chess or the even more complex Chinese game of Go. In 2017 Beijing unveiled its “Next
Generation Artificial Intelligence Plan,” a blueprint for leading the world in AI by
2030. Whichever nation emerges as the global leader in AI will be best positioned to unlock
not only its considerable economic potential, but a range of military applications, such
as the use of computer vision to gather intelligence. The PRC’s drive for technological supremacy
is complemented by its plan to monopolize rare earth materials, which play a vital role
in industries such as consumer electronics, electric vehicles, medical devices, and military
hardware. According to the Congressional Research Service, from the 1960s to the 1980s, the
United States led the world in rare earth production. “Since then, production has
shifted almost entirely to China,” in large part due to lower labor costs and lighter
environmental regulation. The United States is now dangerously dependent
on the PRC for these essential materials. Overall, China is America’s top supplier,
accounting for about 80 percent of our imports. The risks of dependence are real. In 2010,
for example, Beijing cut exports of rare earth materials to Japan after an incident involving
disputed islands in the East China Sea. The PRC could do the same to us.
As China’s progress in these critical sectors illustrates, the PRC’s predatory economic
policies are succeeding. For a hundred years, America was the world’s largest manufacturer
— allowing us to serve as the world’s “arsenal of democracy.” China overtook
the United States in manufacturing output in 2010. The PRC is now the world’s “arsenal
of dictatorship.” How did China accomplish all this? No one
should underestimate the ingenuity and industry of the Chinese people. At the same time, no
one should doubt that America made China’s meteoric rise possible. China has reaped enormous
benefits from the free flow of American aid and trade. In 1980, Congress granted the PRC
most-favored-nation trading status. In the 1990s, American companies strongly supported
the PRC’s accession to the World Trade Organization and the permanent normalization of trade relations.
Today, U.S.-China trade totals about $700 billion.
Last year, Newsweek ran a cover story titled “How America’s Biggest Companies Made
China Great Again.” The article details how China’s communist leaders lured American
business with the promise of market access, and then, having profited from American investment
and know-how, turned increasingly hostile. The PRC used tariffs and quotas to pressure
American companies to give up their technology and form joint ventures with Chinese companies.
Regulators then discriminated against American firms, using tactics like holding up permits.
Yet few companies, even Fortune 500 giants, have been willing to bring a formal trade
complaint for fear of angering Beijing. Just as American companies have become dependent
on Chinese markets, the United States as a whole now relies on the PRC for many vital
goods and services. The COVID-19 pandemic has shone a spotlight on that dependency.
For example, China is the world’s largest producer of certain protective equipment,
such as face masks and medical gowns. In March, as the pandemic spread around the world, the
PRC hoarded the masks for itself, blocking producers — including American companies
— from exporting them to other countries that needed them. It then attempted to exploit
the shortage for propaganda purposes, shipping limited quantities of often defective equipment
and then requiring foreign leaders to publicly thank Beijing for these shipments.
China’s dominance of the world markets for medical goods goes beyond masks and gowns.
It has become the United States’ largest supplier of medical devices, while at the
same time discriminating against American medical companies in China. China’s government
has targeted foreign firms for greater regulatory scrutiny, instructed Chinese hospitals to
buy products made in China, and pressured American firms to build factories in China,
where their intellectual property is more vulnerable to theft. As one expert has observed,
American medical device manufacturers are effectively “creating their own competitors.”
America also depends on Chinese supply chains in other vital sectors, especially pharmaceuticals.
America remains the global leader in drug discovery, but China is now the world’s
largest producer of active pharmaceutical ingredients, known as “APIs.” As one Defense
Health Agency official noted, “[s]hould China decide to limit or restrict the delivery
of APIs to the [United States],” it “could result in severe shortages of pharmaceuticals
for both domestic and military uses.” To achieve dominance in pharmaceuticals, China’s
rulers went to the same playbook they used to gut other American industries. In 2008,
the PRC designated pharmaceutical production as a “high-value-added-industry” and boosted
Chinese companies with subsidies and export tax rebates. Meanwhile, the PRC has systematically
preyed on American companies. American firms face well-known obstacles in the Chinese health
market include drug approval delays, unfair pricing limitations, IP theft, and counterfeiting.
Chinese nationals working as employees at pharma companies have been caught stealing
trade secrets both in America and in China. And the CCP has long engaged in cyber-espionage
and hacking of U.S. academic medical centers and healthcare companies.
In fact, PRC-linked hackers have targeted American universities and firms in a bid to
steal the IP related to coronavirus treatments and vaccines, sometimes disrupting the work
of our researchers. Having been caught covering up the coronavirus outbreak, Beijing is desperate
for a public relations coup, and may hope that it will be able to claim credit for any
medical breakthroughs. As all of these examples should make clear,
the ultimate ambition of China’s rulers isn’t to trade with the United States. It
is to raid the United States. If you are an American business leader, appeasing the PRC
may bring short-term rewards. But in the end, the PRC’s goal is to replace you. As a U.S.
Chamber of Commerce report put it, “[t]he belief by foreign companies that large financial
investments, the sharing of expertise and significant technology transfers would lead
to an ever opening China market is being replaced by boardroom banter that win-win in China
means China wins twice.” Although Americans hoped that trade and investment
would liberalize China’s political system, the fundamental character of the regime has
never changed. As its ruthless crackdown of Hong Kong demonstrates once again, China is
no closer to democracy today than it was in 1989 when tanks confronted pro-democracy protesters
in Tiananmen Square. It remains an authoritarian, one-party state in which the Chinese Communist
Party wields absolute power, unchecked by popular elections, the rule of law, or an
independent judiciary. The CCP surveils its own people and assigns them social credit
scores, employs an army of government censors, tortures dissidents, and persecutes religious
and ethnic minorities, including a million Uighurs detained in indoctrination and labor
camps. If what happened in China stayed in China,
that would be bad enough. But instead of America changing China, China is leveraging its economic
power to change America. As this Administration’s China Strategy recognizes, “the CCP’s
campaign to compel ideological conformity does not stop at China’s borders.” Rather,
the CCP seeks to extend its influence around the world, including on American soil.
All too often, for the sake of short-term profits, American companies have succumbed
to that influence—even at the expense of freedom and openness in the United States.
Sadly, examples of American business bowing to Beijing are legion.
Take Hollywood. Hollywood’s actors, producers, and directors pride themselves on celebrating
freedom and the human spirit. And every year at the Academy Awards, Americans are lectured
about how this country falls short of Hollywood’s ideals of social justice. But Hollywood now
regularly censors its own movies to appease the Chinese Communist Party, the world’s
most powerful violator of human rights. This censorship infects not only the versions of
movies that are released in China, but also many that are shown in United States’ theaters
to American audiences. For example, the hit movie World War Z depicts
a zombie apocalypse caused by a virus. The original version of the film reportedly contained
a scene with characters speculating that the virus may have originated in China. But the
studio, Paramount Pictures, reportedly told producers to delete the reference to China
in the hope of landing a Chinese distribution deal. The deal never materialized.
In the Marvel Studios blockbuster Dr. Strange, filmmakers changed the nationality of a major
character known as the “Ancient One,” a Tibetan monk in the comic books, changed
it from Tibetan to Celtic. When challenged about this, a screenwriter explained that
“if you acknowledge that Tibet is a place and that he’s Tibetan, you risk alienating
one billion people.” Or as the Chinese government might say “[w]e’re not going to show your
movie because you decided to get political.” These are just two examples of the many Hollywood
films that have been altered, one way or another, to please the CCP. National Security Advisor
O’Brien offered even more examples in his remarks. But many more scripts likely never
see the light of day, because writers and producers know not to even test the limits.
Chinese government censors don’t need to say a word, because Hollywood is doing their
work for them. This is a massive propaganda coup for the Chinese Communist Party.
The story of the film industry’s submission to the CCP is a familiar one. In the past
two decades, China has emerged as the world’s largest box office. The CCP has long tightly
controlled access to that lucrative market—both through quotas on American films, imposed
in violation of China’s WTO obligations, and a strict censorship regime. Increasingly,
Hollywood also relies on Chinese money for financing. In 2018, films with Chinese investors
accounted for 20 percent of U.S. box-office ticket sales, compared to only 3 percent five
years earlier. But in the long run, as with other Chinese
industries, the PRC may be less interested in cooperating with Hollywood than in co-opting
Hollywood—and eventually replacing it with its own homegrown productions. To accomplish
this, the CCP has been following its usual modus operandi. By imposing a quota on American
films, the CCP pressures Hollywood studios to form joint ventures with Chinese companies,
who then gain U.S. technology and know-how. As one Chinese film executive recently put
it, “[e]verything we learned, we learned from Hollywood.” Notably, in 2019, eight
of the 10 top-grossing films in China were produced in China.
Hollywood is far from alone in kowtowing to the PRC. America’s big tech companies have
also allowed themselves to become pawns of Chinese influence.
In the year 2000, when the United States normalized trade relations with China, President Clinton
hailed the new century as one in which “liberty will be spread by cell phone and cable modem.”
Instead, over the course of the next decade, American companies such as Cisco helped the
Chinese Communists build the Great Firewall of China—the world’s most sophisticated
system for Internet surveillance and censorship. Over the years, corporations such as Google,
Microsoft, Yahoo, and Apple have shown themselves all too willing to collaborate with the CCP.
For example, Apple recently removed the news app Quartz from its app store in China, after
the Chinese government complained about the coverage of Hong Kong democracy protests.
Apple also removed the apps for virtual private networks, which had allowed users to circumvent
the Great Firewall, and eliminated pro-democracy songs from the Chinese music store. Meanwhile,
the company announced that it would be transferring some of its iCloud data to servers in China,
despite concerns that the move would give the Communist Party easier access to e-mails,
text messages, and other user information stored in the iCloud.
Recently, we were able to get into two cell phones used by the al Qaeda terrorist who
shot eight Americans at the Pensacola Naval Air Station and during the gun fight with
him, he stopped, disengaged, put his cell phones down and tried to destroy them shooting
a bullet into one of his two cell phones and we thought that suggested that there might
be very important information about terrorist activities in those cell phones. And for four
and a half months we tried to get in without any help at all from Apple. Apple failed to
give us any help getting into those cell phones. We were ultimately able to get in through
a fluke that we will not be able to reproduce in the future where we found communications
with al Qaeda operative sin the middle east up to the day before the attack. Do you think,
when Apple sells phones in China, that Apple phones in China are impervious to penetration
by Chinese authorities? They wouldn’t be sold if they were impervious to Chinese authorities.
And what we’ve asked for is when we have a warrant from a court we should be able to
get into those cell phones. That is the double standard that has been emerging among American
tech companies. The CCP has long used public threats of retaliation
and barred market access to exert influence. More recently, however, the CCP has also stepped
up behind-the-scenes efforts to cultivate and coerce American business executives to
further its political objectives — efforts that are all the more pernicious because they
are largely hidden from public view. As China’s government loses credibility
around the world, the Justice Department has seen more and more PRC officials and their
proxies reaching out to corporate leaders and inveighing them to favor policies and
actions favored by the Chinese Communist Party. Their objective varies, but their pitch is
generally the same: the businessperson has economic interests in China, and there is
a suggestion that things will go better (or worse) for them depending on their response
to PRC’s request. Privately pressuring and courting American corporate leaders to promote
policies (or U.S. politicians) presents a significant threat, because hiding behind
American voices allows the Chinese government to elevate its influence campaigns and put
a “friendly face” on pro-regime policies. The legislator or the policymaker who hears
from these American businessmen is properly more sympathetic to that constituent than
to a foreigner. And by masking its participation in our political process, the PRC avoids accountability
for its influence efforts and the public outcry that might result, if its lobbying were exposed.
America’s corporate leaders might not think of themselves as lobbyists. You might think,
for example, that cultivating a mutually beneficial relationship is just part of “guanxi”
— or system of influential social networks—necessary to do business with the PRC. But you should
be alert to how you might be used, and how your efforts on behalf of a foreign company
or government could implicate the Foreign Agents Registration Act. FARA does not prohibit
any speech or conduct. But it does require those who are acting as “agents” of foreign
principals to publicly disclose that relationship and their political or other similar activities
by registering with the Justice Department, allowing the audience to take into account
the origin of the speech when evaluating credibility. By focusing on American business leaders,
I don’t mean to suggest that they are the only targets of Chinese influence operations,
but they are principal targets today of Chinese influence operations in the United States.
The Chinese Communist Party also seeks to infiltrate, censor, or co-opt American academic
and research institutions. For example, dozens of American universities host Chinese government-funded
“Confucian Institutes,” which have been accused of pressuring host universities to
silence discussion or cancel events on topics considered controversial by Beijing. Universities
must stand up for each other; refuse to let the CCP dictate research efforts or suppress
diverse voices; support colleagues and students who wish to speak their minds; and consider
whether any sacrifice of academic integrity or freedom is worth the price of appeasing
the CCP’s demands. In a globalized world, American corporations
and universities alike may view themselves as global citizens, rather than as American
institutions. But they should remember that what allowed them to succeed in the first
place was the American free enterprise system, the rule of law, and the security afforded
by America’s economic, technological, and military strength.
Globalization does not always point in the direction of greater freedom. A world marching
to the beat of the Communist Chinese drums will not be a hospitable one for institutions
that depend on free markets, free trade, or the free exchange of ideas.
There was a time when American companies understood this. And they saw themselves as American
and proudly defended American values. In World War II, for example, the iconic American
company, Disney, made dozens of public information films for the government, including training
videos to educate American sailors on navigation tactics. During the war, over 90 percent of
Disney’s employees were devoted to the production of training and public information films.
To boost the morale of America’s troops, Disney also designed insignia that appeared
on planes, trucks, flight jackets, and other military equipment used by American and Allied
forces. I suspect Walt Disney would be disheartened
to see how the company he founded deals with foreign dictatorships today. When Disney produced
Kundun, the 1997 film about the PRC’s oppression of the Dalai Lama, the CCP objected to the
project and pressured Disney to abandon it. Ultimately, Disney decided that it couldn’t
let a foreign power dictate whether it would distribute a movie in the United States.
But that moment of courage wouldn’t last. After the CCP banned all Disney films in China,
the company lobbied hard to regain access. The CEO apologized for Kundun, calling it
a “stupid mistake.” Disney then began courting the PRC to open a $5.5 billion theme
park in Shanghai. As part of that deal, Disney agreed to give the Chinese government officials
a role in management. Of the park’s 11,000 full-time employees, 300 are active members
of the Communist Party and they reportedly display hammer-and-sickle insignia at their
desks and attend Party lectures at the facility during business hours.
Like other American companies, Disney may eventually learn the hard way the cost of
compromising its principles. Soon after Disney opened its park in Shanghai, a Chinese-owned
theme park popped up a couple hundred miles away featuring characters that, according
to news reports, looked suspiciously like Snow White and other Disney trademarks.
American companies must understand the stakes. The Chinese Communist Party thinks in terms
of decades and centuries, while we tend to focus on the next quarter’s earnings report.
But if Disney and other American corporations continue to bow to Beijing, they risk undermining
both their own future competitiveness and prosperity, as well as the classical liberal
order that has allowed them to thrive. During the Cold War, Lewis Powell — later
Justice Powell — sent an important memorandum to the U.S. Chamber of Commerce. He noted
that the free enterprise system was under unprecedented attack, and urged American companies
to do more to preserve it. “[T]he time has come,” he said, “indeed, it is long overdue—for
the wisdom, ingenuity and resources of American business to be marshaled against those who
would destroy it.” So too today. The American people are more
attuned than ever to the threat that the Chinese Communist Party poses not only to our way
of life, but to our very lives and livelihoods. And they will increasingly call out corporate
appeasement. If individual companies are afraid to make
a stand, there is strength in numbers. As Justice Powell wrote: “Strength lies in
organization, in careful long-range planning and implementation, in consistency of action
over an indefinite period of years, in the scale of financing available only through
joint effort, and in the political power available only through united action and national organizations.”
Despite years of acquiescence to communist authorities in China, America’s tech companies
may finally be finding their courage through collective action. Following the recent imposition
of the PRC’s draconian national security law in Hong Kong, many big tech companies,
including Facebook, Google, Twitter, Zoom, and LinkedIn, reportedly announced that they
would temporarily suspend compliance with government requests for user data. True to
form, communist officials have threatened imprisonment for noncompliant company employees.
We will see if these companies hold firm. And how long they hold firm. And I hope they
do. If they stand together, they will provide a worthy example for other American companies
in resisting the Chinese Communist Party’s corrupt and dictatorial rule.
The CCP has launched an orchestrated campaign, across all of its many tentacles in Chinese
government and society, to exploit the openness of our institutions in order to destroy them.
To secure a world of freedom and prosperity for our children and our grandchildren, the
free world will need its own version of a whole-of-society approach, in which the public
and private sectors maintain their separation but work together collaboratively to resist
domination and to win the contest for the commanding heights of the global economy.
America has done that before. And if we rekindle our love and devotion for our country and
each other, I am confident that we—the American people, the American government, and American
business together—can do it again. Our freedom depends on it.
