How Can Biden Counter China While Allowing America To Bankroll the CCP?
Biden is speaking loudly but carrying no stick
Not once, not twice, but at least three times, President Joe Biden has declared that America would defend Taiwan in the event of an invasion by China—only for his handlers to walk it back.
Does this reflect "strategic confusion," or is it of a piece with a broader China policy that is strategically incoherent on its face?
In a new piece at Newsweek I make the case that the answer is the latter—and not just because the action fails to match the rhetoric on Taiwan.
If America was serious about countering China, as the president’s Taiwan remarks would seem to suggest, among the first steps it would take to thwart Beijing’s malign efforts would be to cut off its access to U.S. capital markets.
Yet consider that the retirement dollars of federal employees including even servicemen are poised to underwrite Chinese companies aimed at brutalizing their own people and burying ours, while the Biden administration, which nominates the board that administers their retirement plans, stands idly by.
The FRTIB [FederalRetirement Thrift Investment Board, which controls the Thrift Savings Plan under which 6.5 million federal employees including armed servicemen had invested more than $800 billion as of 12/31/21] plans to open a so-called "Mutual Fund Window" that could allow participants to invest up to 25% of their savings in one or more of approximately 5,000 funds.
Here's the problem: …As a group of concerned members of Congress, led by Sen. Marco Rubio (R-FL), wrote in letters to the FRTIB, government employees and warfighters might inadvertently invest in companies "currently sanctioned by the U.S. government for human rights abuses or otherwise blacklisted for the threat they pose to U.S. national security," or implicated in CCP human rights abuses. We cannot be sure because, as the congressmen write, "the FRTIB has explicitly acknowledged...that 'monitoring approximately 5,000 mutual funds for any investments in Chinese entities would prove too costly for the plan.'"
Consequently, the lawmakers are calling on the board to postpone the "Mutual Fund Window" until it can account for these potential problems.
When the Trump administration faced a similar threat of the FRTIB shifting investment options to include one that would fund some of China's most notorious companies, it ordered the plan halted. Then, it called for a broader review of Chinese companies' exploitation of America's capital markets, later signing legislation threatening to delist en masse Chinese enterprises from American exchanges.
This is critical because Chinese companies exist to serve the CCP and its military, the People's Liberation Army, pursuant to China's strategy of civil-military fusion. Access to American capital markets is vital to those companies' operations.
Some 148 of more than 250 Chinese companies listed on U.S. exchanges are reportedly slated for delisting because they fail to provide financial audits to be inspected by the U.S. Public Company Accounting Oversight Board, as other foreign companies do, thereby exposing investors and the markets more broadly to considerably greater risk.
China is said to be working to hammer out a deal with American authorities to avoid such a fate.
China's companies had been able to skirt these requirements—that is, have gotten preferential treatment—in part because of a toothless memorandum of understanding agreed to under the Obama administration, reportedly following China's lobbying of then-Vice President Joe Biden.
If the Biden administration is serious about dealing with China, with respect to both Taiwan and elsewhere, it should be moving heaven and earth to ensure not one penny goes from the federal government and its employees to Chinese entities.
It should be adamant that Chinese companies be delisted from U.S. exchanges, and on an accelerated timeline. Access to our capital markets has proven one of the greatest contributors to China's rise to become our most formidable geopolitical adversary.
Wannabe-emperor Xi Jinping may have myriad shortcomings, but he will seize upon the weakness of an American emperor who wears no clothes.
Read the whole thing here.
For those on the West Coast, I’ll be speaking on a panel regarding the “Ministry of Truth,” disinformation, and the War on Wrongthink at #AMPFestWest the weekend of 6/2. Details here and registration info here.