China Rising
专制中国的崛起与克林顿们的绥靖

By William R. Hawkins
FrontPageMagazine.com | Friday, February 27, 2009

The global economic downturn, triggered by the U.S. financial crisis that sent tremors through European banks and plunged Japan into a deep recession, could not have come at a better time for China. The turmoil will pull the focus of rival governments inward. There will be no desire, and few resources available, to face new confrontations abroad for years to come. Beijing will use the time to continue its “peaceful rise” without fear of interference by other powers whose longer term interests are at risk as China creates a “multipolar” world it can shape to its advantage.

China is, of course, facing problems. Its economy is dependent on exports in a world where trade is shrinking. Beijing is clearly worried about the impact of declining overseas markets. During the last few months, more than 20 million migrant workers have become unemployed. Last year 2,400 factories in and around the vibrant coastal region of Guangzhou closed. Rapid, double-digit economic growth has become the main legitimizing theme of the Communist dictatorship, and there is a real threat of social unrest if the economy slows. At a meeting of the cabinet last month, Prime Minister Wen Jiabao told government leaders to prepare for trouble, “The country’s employment situation is extremely grim,” he said. More than 3,000 public security directors from across the country have been summoned to Beijing to learn how to suppress rallies and strikes before they turn into riots.

Yet, China’s trade surplus in 2008 set a new record, both in the aggregate and with the United States. Its aggressive export strategy, based on currency values set by the regime, massive subsidies, and dumping by state corporations that value jobs and production over profits, has meant that Chinese exporters can beat out foreign rivals to expand their share of whatever markets remain open. A $585 billion stimulus package was introduced in November; much of it aimed at labor-intensive construction projects. And China’s already largely closed market for imports is becoming more protectionist– even as Beijing demands that markets in America and Europe open further to its products.

China also has the world’s largest hard currency reserves, estimated at around $2 trillion, the result of accumulated trade surpluses. The United States alone has given China $1.5 trillion via its trade deficit between 2000 and 2008. This massive Chinese hoard of capital hangs over the debt-ridden world economy like the Sword of Damocles. In the ancient Greek fable, the wealthy and powerful ruler of Syracuse was constantly menaced by a sword that hung over his throne by a single horsehair. Secretary of State Hillary Clinton certainly behaved as if she was sitting under such a weapon when she visited China last weekend.

The United States and China sit on opposite sides of every arena of conflict across the globe, as well as represent contrary principles of government and human rights. Yet, none of these issues played a major role in the discussions between Secretary Clinton and Chinese leaders, and many were not even mentioned. Beijing was praised for its “positive” role in hosting the Six-Party talks on North Korea. These talks have served Chinese interests well, protecting the Pyongyang buffer state from any concerted foreign pressure and even getting sanctions lifted in exchange for very little in the way of verifiable changes in regime behavior. Chinese support for the Iranian regime and its nuclear ambitions, which have stymied sanctions and undermined international pressure, was mentioned only by Chinese Foreign Minister Yang Jiechi in the joint press conference of Feb. 21, not by Secretary Clinton. There does not seem to have been any mention of the genocidal Islamic dictatorship in Sudan, which is armed and funded by Beijing in exchange for control of its oil industry, despite Secretary Clinton’s long standing personal concern for what is happening there.

There was no public sign that Afghanistan was discussed in Beijing. China is strengthening its ties with Pakistan, providing new combat aircraft and warships. It is also giving Islamabad diplomatic support to resist U.S. pressure to take the offensive against Taliban sanctuaries in Pakistan’s border region from which attacks are launched against U.S. and NATO forces in Afghanistan. Chinese arms are also the mainstay of the Taliban insurgents.

At the Feb. 21 joint press conference, Secretary Clinton said “it is essential that the United States and China have a positive, cooperative relationship. Both of us are seeking ways to deepen and broaden that relationship.” A great deal of attention was devoted to environmental issues, as if the U.S. side was trying to create a common enemy in “global warming” so as to form an alliance with China that would overshadow all the traditional geopolitical conflicts that divide the two nations.

Secretary Clinton has taken flak from the human-rights community for downgrading their concerns in China. This should not have been surprising, since her husband Bill Clinton did exactly the same thing. President Clinton changed his campaign rhetoric about using trade as leverage for reform in China once he was in office under pressure from the business community. That corporate pressure is still in full force, but is now reinforced by the need to keep Chinese capital flowing to fund the U.S. budget deficit, even though that money originated from American consumers. Secretary Clinton tried to assure Beijing’s leaders that their considerable investment in Treasury bonds would remain safe.

Yet, in a world where banks and factories are failing, the potential returns from buying distressed real assets to take control of future production could be irresistible. Two days before Clinton arrived in Beijing, Fang Shangpu, deputy director of China’s State Administration of Foreign Exchange, said that China will encourage and assist its companies in expanding operations and acquisitions overseas. Beijing has for many years been buying up energy and other natural resources in Africa, Asia and Latin America, taking them off the market for exclusive use by Chinese industry. A considerable debate has been triggered in Australia by Aluminum Corporation of China’s (Chinalco) decision to invest $19.5 billion in British-Australian Rio Tinto Group and China Minmetals’ offer for a $1.7 billion investment in OZ Minerals Ltd. China Investment Corporation, the $200 billion sovereign wealth fund, is thought to be in talks with Fortescue Metals Group Ltd., Australia’s third-biggest iron ore exporter, about gaining a $3 billion stake.

The China Development Bank (CDB) is in final negotiations with Brazils Petroleo Brasileiro SA (Petrobras) to loan the company some $10 billion for deepwater energy development — a loan to be repaid in oil. Beijing’s approach is a resurrection of the 19th century colonial model. It buys raw materials and invests in infrastructure projects to develop trade routes, paid for by the export of manufactured goods on very favorable terms. Chinese mercantilism is not about profit in the sense used in Western capitalist theory. It is about the control of wealth and production capacity as the foundation of state power and international influence.

Beijing believes its rise to great power status is inevitable, but that it will take time to construct the economic, social and political foundations. During the period of emergence, China could be vulnerable to foreign pressure. It has played a wily came, posing as a fragile developing country that needs special treatment to alleviate poverty and establish a basis for reform; while at the same time using its economic and diplomatic clout to project its growing power and deter counteraction. This strategy has been very much in line with Sun Tzu’s ancient advice that, ““Warfare is the Way (Tao) of deception. Although capable, display incapability. When committed to employing your forces, feign inactivity.”

The “peaceful rise” line of propaganda was introduced over ten years ago in response to the “China threat” theory advanced at the time by Lee Kuan-yew of Singapore, whose strategic city-state built a dockyard designed for use by U.S. aircraft carriers in an attempt to pull American power back to Southeast Asia. In 2005, Beijing released a White Paper that tweaked the term from “rise” to “development” to make it sound less aggressive. A year earlier, Gong Li, vice director of the Institute of International Strategic Studies at the Central Party School of the Chinese Communist Party, had presented a conference paper arguing that only a minority of Chinese officials believe that common interests outweigh contradictions between Beijing and Washington. A majority believe that Washington could take action to “contain” China before it can become a threat to American “hegemony.” Beijing needed to buy time to grow strong in an environment of appeasement and accommodation. It will now have that time.

Japanese Prime Minister Taro Aso, who as Foreign Minister in 2005 told a press conference that China was beginning to pose a "considerable threat" because of its military buildup, is about to visit the White House. But he has an approval rating back home nearing single digits as Japan spirals into recession. President Barack Obama, looking to reduce the budget deficit even as massive stimulus packages are being passed by Congress, is planning major cuts in combat aircraft programs, missile defense and naval shipbuilding– the very capabilities that would be needed to contain a China that is modernizing and expanding its military in these same areas. As twilight is falling on the West, Beijing sees a new day dawning in the East.

The Dragon's Economic Conquest
龙对世界的吞噬

By William R. Hawkins
FrontPageMagazine.com | Tuesday, April 14, 2009

The April 2 Leaders Statement issued at the close of the G20 economic summit proclaimed, “We start from the belief that prosperity is indivisible; that growth, to be sustained, has to be shared.” A noble sentiment, but not one many of the participants actually believe. The Chinese certainly do not believe in sharing, as they are working hard to exploit the world-wide economic crisis to their own advantage. Beijing is staking out a position on the global stage as the strongest national economy so as to win entrance into international organizations and councils as a peer competitor to the United States. Its message is that the Western model has failed, and that American “hegemony” is at an end.

Speaking at the World Economic Forum in Davos, Switzerland in January, Premier Wen Jiabao blamed “inappropriate macroeconomic policies of some economies and their unsustainable model of development” for the current financial collapse. He admitted that the events have had a “rather big impact” on the Chinese economy, saying, “We are facing severe challenges, including notably shrinking external demand, overcapacity in some sectors, difficult business conditions for enterprises, rising unemployment in urban areas and great downward pressure on economic growth.” Yet, Wen nevertheless claimed that China would still be able to meet its 2009 target of 8 percent growth at a time when every other major economy is in recession. The Chinese economy grew 9 percent in 2008 while the U.S. economy declined by 1.1 percent.

Beijing's bravado impressed World Economic Forum Asian Department Director Frank-Jürgen Richter. He told The People's Daily, the official newspaper of the ruling Chinese Communist Party, “The US economy once had been the engine for world economic development, but now it is faced with predicament and plagued by chaos…. Then, who, after all, can replace the United States? Only China! China's economic situation is very good, not only its domestic situation is favorable, but also more and more overseas investments are turned to China which is hopefully to take the place of the United States in five years to become the main motive force for global economic growth.”

The key to China's perceived clout is its massive $2 trillion hoard of hard currency, mostly held in dollars, which is being added to constantly via its trade surplus. The U.S. has sent over $1.5 trillion to China since 2000 via its trade deficit. Everyone wants the Chinese store of capital and purchasing power to flow their way. By all reports, it was the main subject on Secretary of State Hillary Clinton's agenda when she visited Beijing in February. She was literally begging Chinese leaders to keep investing in U.S. Treasury securities to fund the rapidly expanding Federal budget deficit. She was thus willing to downplay all the geopolitical conflicts between Beijing and Washington.

Clinton's appeal was not something that had just materialized from the Obama administration. The Bush administration was also begging for Beijing to send back to the U.S. the money American consumers had sent to China to buy imports. In his opening statement to the U.S.-China Strategic Economic Dialogue last June, Treasury Secretary Henry Paulson said, “We will discuss the best way to promote and protect bilateral investment and to counter protectionist pressures.” A major result of the SED was the launch of negotiations for a bilateral investment treaty. Such an agreement could minimize national security reviews and give Beijing a freer hand in the American market. The Joint U.S.-China Fact Sheet released at the end of the SED states that an Investment Forum “will focus on practical investor concerns, such as the process of investment reviews.” It is also stated that “the United States welcomes sovereign wealth fund investment, including from China.” This means the purchase by the Beijing regime itself of American productive assets in the private sector as well as government bonds.

The American public and Congress have found the specter of greater Chinese penetration of the U.S. economy alarming. When state-owned China National Offshore Oil Company attempted to acquire the Unocal energy firm in 2005, the House of Representatives passed a resolution against the deal, prompting Unocal to accept an offer from another American firm instead. The Unocal deal was one of the cases that led Congress to enact the Foreign Investment and National Security Act of 2007. This was the first major piece of legislation of the 110th Congress, passed unanimously in the House and by voice vote in the Senate. It placed particular emphasis on investigating deals involving state-owned firms or which involved shifting control of infrastructure to foreign hands. Unfortunately, President George W. Bush confirmed Treasury's dominant role in the process by executive order. His action ignored a warning from the Government Accountability Office that the process “in protecting U.S. national security may be limited because Treasury- as Chair of the Committee on Foreign Investment in the United States- has narrowly defined what constitutes a threat to national security.”

The first successful test of the improved CFIUS process involved a Chinese firm. Huawei Technologies tried to purchase a stake in 3Com, a U.S. firm that makes computer network security software for the Pentagon. When it became apparent that CFIUS was not going to approve the deal, due in part to objections raised by the Director of National Intelligence (who had been named as an advisor to CFIUS in the 2007 bill), the offer to buy 3Com was withdrawn.

But in an alarming turn, Treasury Special Envoy Alan Holmer told a Chinese audience last May, “we often hear concerns from China about the U.S. investment review process and whether the United States truly welcomes Chinese investment. U.S. legal authority in this area is narrowly targeted to address acquisitions that raise genuine national security concerns, not broader economic interests or industrial policy factors.” So the GAO warning remains valid.

The New York Times reported Feb. 21 that “China is taking advantage of the economic downturn to go on a major shopping spree, investing in energy and other natural resources that could give it an economic advantage it has never had before. Some economic analysts say they believe that China's investments pose a threat to competitors like the United States.” Recent investments include oil production in Brazil, Venezuela and Russia; and mining operations in Australia. With world demand down during the recession, there are bargains to be had for a country with as much cash on hand as China.

In the United States, Beijing has been buying Treasury debt, which is the less dangerous course from the American perspective. Policy should seek to contain Chinese capital within the public sector where investments do not confer any control. Still, even this is not without risks. Writing in the Spring 2008 issue of the Army War College journal Parameters, business economists Felix K. Chang and Jonathan Goldman argue that China's large block of Treasury securities gives it the power to disrupt U.S. financial markets. “No bombs need fall from the sky. Yet damage can be inflicted on the United States through market manipulation that would be as costly to recover from as any conventional attack,” they warn.

Yet there is danger is overstating the amount of leverage Beijing can use against Washington. For years, the State Department has argued that the U.S. could not push China on economic issues like the trade deficit, currency manipulation or intellectual property protection because Beijing's help was needed against North Korean weapons programs. North Korea's test of a nuclear device in 2006 and its recent test of a long-range missile indicate that China has been more helpful in protecting the Pyongyang regime from effective countermeasures than it has been in supporting Washington's non-proliferation efforts. Now the argument from Treasury is that the U.S. cannot pressure China on issues like North Korea (or Iran) for fear that Beijing will disrupt American financial markets.

China tested its clout in the run up to the G20 summit. On March 24, People's Bank of China Gov. Zhou Xiaochuan wrote on the bank's Web site that it was time to step back from the U.S. dollar as the world's reserve currency and consider a global currency controlled by the International Monetary Fund. Russia had actually opened this challenge earlier when Prime Minister Vladimir Putin and President Dmitry Medvedev called for the ruble to become a regional reserve currency, while a new global currency was created.

Treasury Secretary Timothy Geithner took some heat when he initially said that the Chinese proposal deserved consideration. He clarified his position on March 30 saying, “The policy of the United States is that a strong dollars is in the interests of the United States. I believe the dollar will be the principle reserve currency for a very long time to come.” According to the White House, the issue did not come up when President Barack Obama met with President Hu Jintao on the sidelines of the G20 summit.

The Russian proposal was a clumsy attempt to create a ruble bloc to link the old Soviet republics to Moscow. Beijing has been trying something similar. China and Argentina recently agreed to exchange 70 billion yuan ($10 billion), of their currencies for use in trade and investment. “Dollars will not be needed for trade,” said The People's Daily, adding, “This measure will play a positive role in improving regional currency stability, preventing financial risk and reducing the spread of the crisis.” What it will actually do is tie the two countries together on a barter basis, confirming Beijing's neocolonial trade pattern of exchanging manufactured goods for Argentine raw materials.

China is the world's third largest economy, but keeps its financial system isolated. The yuan trades only in China, which allows the central bank to set the exchange rate by fiat to gain a competitive advantage in export markets. The yuan cannot be a world reserve currency, or even be included in a basket of currencies used to stabilize international rates.

Beijing has fewer options about how to use its dollar hoard than the United States has in regard to how it conducts trades and governs foreign investments. In theory, China could diversify its reserves to hold more euros, pounds, or yen, but China owns too many dollars to sell without driving down their market value. This would bring on the very dollar devaluation they see as the capital loss risk of holding so many dollars.

And this still does not to mention the unmentionable. The United States could cancel (default) on any sovereign debt owed to Chinese entities should the tensions between the rival powers erupt into war.

Beijing has gotten itself into this trap because managing its reserves was not its top priority. It has been happy to hold market safe, low-yield Treasury securities. Its focus has been on boosting employment at home, building production capacity and expanding the trade surplus that supports domestic development. The growth in the real economy is what keeps the Chinese people loyal to the regime. Rising unemployment as exports decline has Beijing worried. Prime Minister Wen Jiabao told a cabinet meeting in January that, “The country's employment situation is extremely grim.” Public security directors from across the country have been summoned to Beijing to learn how to suppress rallies and strikes before they turn into riots.

Chinese exports in February slid 25.7 percent from a year earlier, leading to the close of thousands of factories and the unemployment of millions. It is estimated that 60-70 million Chinese work in export industries. Of the major nations, China is the most dependent on trade, having engineered its rise on the massive transfer of wealth from overseas gained from trade surpluses, foreign investment, and technology transfers. Beijing is responding to the decline in trade in two ways. First, it is trying to grab a larger share of falling world exports by resorting to even more cutthroat competition against foreign rivals, many of whom in the Association of Southeast Asian Nations (ASEAN) are friends of the United States. Mexico is also a Chinese export rival. The second response has been to launch a massive domestic stimulus package of government infrastructure projects and expanded bank lending.

President Obama has said on several occasions, including at the G20 summit, that other nations cannot expect to base their economic recoveries on continued deficit spending by reckless American consumers. The United States must reduce its $700 billion global annual trade deficits to rebuild its own strength, and its must stop subsidizing Beijing's rise with $260 billion trade deficits with China. U.S. imports have doubled since 1999, hitting $2.5 trillion in 2008. This number can be brought down by moving high-end production back home, but America will always be the world's largest importer even as accounts are brought towards balance. This gives Washington substantial leverage as it decides who will be granted access to the rich U.S. market. That privilege should go to America's friends and allies, not its rivals.

In her book Allies, Adversaries and International Trade Princeton political economist Joanne S. Gowa argues that it is a mistake to abandon the traditional practice of having “trade follow the flag” because interdependence is too risky with any government that cannot be trusted on political grounds. Gowa writes, “power politics is an inexorable element of any agreement to open international markets, because of the security externalities that trade produces....trade enhances the potential military power of any country that engages in it.” Trade with an ally makes both parties stronger, whereas trade with an enemy creates what Gowa calls “a security diseconomy.” Such a security diseconomy exists today with China and should be ended.

The Beijing dictatorship has based its legitimacy with the Chinese people on economic progress accelerated by exploitive trade policies and on the promise that it can restore China to its rightful place at the center of world politics. The United States still has the power to deny both of these goals to the communist regime, thus not only preserving its own preeminence but hastening true reform in China by discrediting its current model of development.

The Dragon's Propaganda Threat
中国龙的宣传渗透的威胁

By: William R. Hawkins

FrontPageMagazine.com | Monday, May 11, 2009

A recent expert hearing proved a needed reminder that homeland security is about more than guarding against covert terrorist cells. A graver long-range enemy is funding larger operations and has penetrated deep into major American institutions, acquired U.S. technological secrets, and influences U.S. opinion-makers, as well as a large contingent of its own countrymen living overseas.

On April 30, the U.S.-China Economic and Security Review Commission held a hearing on Chinese propaganda and influence campaigns around the world. As scholars testified, Beijing’s ambitions dwarf those of madmen hiding in caves, and the one party state is mounting a full court press to achieve its aims. The Chinese Communists are promoting Chinese nationalism both at home and among the Overseas Chinese, while playing on the self-interest of foreign business leaders and the anti-nationalism of liberal intellectuals to further their rise at the expense of the United States and its allies.

The Commission was created by Congress and its twelve members are appointed on an equal, bipartisan basis by the Republican and Democratic leaders of the House and Senate.

The Commission invited six experts to testify on the propaganda issue, but I found the work of Dr. Anne-Marie Brady the most compelling. She is Associate Professor of Political Science at the University of Canterbury, New Zealand. She has run an international research team since 2005 studying Chinese influence operations and last year published Marketing Dictatorship: Propaganda and Thought Work in Contemporary China (Rowman & Littlefield).

The Chinese government puts a high value on propaganda work, describing it as the life blood (shengmingxian) of the Party-State. The Chinese Communist Party (CCP) divides propaganda into two categories: internal directed toward the Chinese people, and external directed toward foreigners in China, Overseas Chinese, and the outside world Internal propaganda is defensive, meant to support the status quo of one-party rule and to combat Western criticism of the dictatorship. External propaganda is both defensive and offensive. Defensively, it seeks to protect Beijing’s rise from foreign actions that might curb its growth in wealth and power. Offensively, it pushes “reunification” with Taiwan and the attainment of equal status among the leading world powers in a “multilateral” international system. This means undermining the “hegemonic” influence of the United States at every turn.

The CCP was shocked by the support the Overseas Chinese gave the pro-democracy protests that led to the 1989 Tiananmen Square massacre. The Chinese authorities needed to turn this sentiment around. They have used two methods. One has been the lure of profits to tap into the considerable economic resources of the Overseas Chinese for investment and technological transfer. China has drawn in large sums of foreign direct investment, with more than half of the money coming from the Chinese diaspora.

Hand in hand with the economic appeal is the appeal to ethnic-patriotic sentiment towards the Chinese Motherland. As Brady told the commission, the goal was to “encourage a constructive attitude towards Overseas Chinese helping to make China ‘rich and strong’ (fu qiang). These efforts have been remarkably successful.”

Beijing’s local Chinese language newspapers, radio and television stations; the Internet, and a China Central Television channel (CCTV 4) beamed into foreign markets. Beijing also supports overseas cultural activities; including the teaching of the Chinese language, cultural conferences, and ‘root seeking’ tours back ‘home.’ Confucius Institutes are being opened around the world to better coordinate the cultural campaign. Beijing wants the Overseas Chinese to reject assimilation into the foreign lands to which they fled Maoist China and return to a common allegiance to the ancient Motherland. In 2005, CCTV-9 was revamped into the Chinese version of CNN and BBC, a 24-hour news channel with a global audience. “The station has been granted substantial resources in terms of equipment; but has no editorial independence. CCTV-9 journalists are under constant pressure to present a positive account of China,” according to Brady.

The state-run Xinhua News Service currently provides free content to the Chinese language news media outside China. As Brady reported, “Formerly Hong Kong and Taiwan-based news groups were the main source of news for Overseas Chinese, but in the last ten years they have basically been driven out of the market by a plethora of free Chinese newspapers which derive virtually all their content from the Mainland media.” Few Chinese language newspapers outside China have the financial resources to resist the offer of free content. The same goes for Chinese language radio and television stations abroad. Chinese embassy officials work closely with the Overseas Chinese media in order to ensure their continued compliance with the party line.

In the West it is often argued that the Internet will open China to liberal ideas, but Beijing has been successful in using the Internet to rally patriotic bloggers and hackers. This outpouring of support for the Motherland was most evident in the reaction among Chinese both at home and overseas to Western coverage of unrest in Tibet in March 2008 and, a month later, in the battle between pro-Tibet and pro-China demonstrations during the global Olympic torch relay. Brady noted that “These protests and the later demonstrations were genuine and popular, which shows the effectiveness of China’s efforts to rebuild positive public opinion within the Chinese diaspora, but it should be noted that they received official support, both symbolic and practical. This development matches the rise of popular nationalism within China since 1989, which has been fostered from the top down, but has a genuine resonance with the Chinese population.” One of the evocative slogans promoted by Beijing and picked up online was simple: “Love China.”

During the question period following Brady’s presentation, there was discussion concerning whether the growth of “professionalism” within the Chinese media would work against nationalist sentiment. If professionalism is deemed to be the Western model which pits writers against government policy and national interests as the way of proving independence, Brady had her doubts. Feelings of national pride are alive and well in China. “The Party has high legitimacy” Brady noted, “the patriotic public flocks to CCTV.”

The Chinese people want their country to be come rich and strong, and to take its “rightful” place among the leading world powers, if, indeed, not become the new hegemon as it combines its massive population with advanced technology to create the planet’s largest industrial economy. Only in the decadent West can it be thought that as China modernizes and increases its capabilities, its people will become weaker in spirit and less ambitious.

Beijing wants to ensnare influential foreigners into the romance of a rising China. As Brady testified, “promoting the Chinese economy and encouraging further foreign investment and trade has become the primary task of foreign propaganda work, particularly after 1992. Throughout the 1990s China was certainly successful in promoting awareness of its economic growth and enthusiasm for the opportunities which the Chinese market offered international investors.”

Other witnesses before the Commission picked up on this theme. “China’s efforts to influence U.S. academics, journalists, think tank personnel and other shapers of public opinion are part of its overall aims in the world,” testified Ross Terrill, a historian and Research Associate with Harvard University’s Fairbank Center for Asian Studies. Dr. Terrill has written widely about China since the 1970s. One of his examples demonstrated how easily liberal institutions can fall for the blandishments of very non-liberal regimes. Terrill told the commissioners how, “Prior to the 2008 Olympic Games, the Nieman Foundation for Journalism at Harvard went far down the path to offering a workshop for public security officials from Beijing on how to handle the foreign press descending on Beijing for the Olympics. Not a workshop for Chinese journalists, but one for police on how to handle journalists. The workshop was cancelled at the last moment after Nieman alumnae raised questions. Sometimes American intellectuals are more trustful of a foreign government that puts on a good show than of our own government that operates within a cacophony of debate.”

Scholars friendly to China are granted access to officials and research materials, along with other benefits, to build their careers, whereas academics and journalists who are skeptical or questioning of the regime are denied visas and discredited in intellectual circles. But universities are not the only Chinese target. “Money may appear from a businessman with excellent connections in China and it is hard for a think tank, needing funds for its research on China, to decline it. But the money may bring with it major Chinese ideological input into the program of the U.S. think tank,” said Terrill, adding, “In the last year or two, Chinese companies have started making healthy donations to think tanks in Western societies.”

Larry Wortzel, the vice-chair of the Commission who had run the Army War College’s Strategic Studies Institute before becoming Vice President for foreign policy and defense studies at the Heritage Foundation, mentioned that the Center for International Trade and Security at the University of Georgia is working with the China Foreign Affairs University. Yet, as the CITS knows, the CFAU is not a real university, but an arm of the Ministry of Foreign Affairs. One CITS-CFAU project is on the non-proliferation of weapons of mass destruction, a major issue of contention in U.S.-China relations. Why the Beijing regime would want to influence how this issue is developed should be obvious. But greed can blind people in academe as well as in business. And to further raise concern, CITS projects in China are funded by the Ford and MacArthur Foundations, two left-wing organizations hostile to U.S. national security policies.

Terrill also noted the large number of Chinese students on U.S. campuses. He noted “the Soviet Union possessed no such human bridge into our society; no authoritarian country has ever had so many of its citizens living in the USA as China does today.” Most of these students are working in science and engineering, including on major technology projects in the private sector, some with military applications. As a sign of the deep problems in the U.S. education system, research centers, universities and corporations strongly oppose any restrictions on Chinese students because there are not enough American students or graduates in the technical fields. It is said that without Chinese students, who currently number around 100,000, many research projects would collapse. Of course, any breakthroughs gained from these American programs will find their way to Chinese industry.

Dr. Jacqueline Newmyer is President and CEO of the Long Term Strategy Group, a Cambridge, Mass.-based defense consultancy. She is also a Senior Fellow at the Foreign Policy Research Institute. Her main concerns have been the military expansion of China and Iran, but campaigns to undermine a robust U.S. response to these foreign developments are part of the problem. She noted that at Harvard there is much talk among American students and faculty about national decline, with many expressing the liberal view that it would be a good thing for the United States to give up its global leadership role and withdraw inward. In contrast, Chinese students at Harvard are encouraged by such talk, making them even prouder of their country’s rise and optimistic that China will replace America as world leader.

Newmyer noted that China is not the first foreign power to invest in cultural propaganda operations meant to mobilize opinion in sub-sectors of a target country’s population. She pointed out that Beijing is in many ways copying the model used by Saudi Arabia in funding mosques, Islamic schools, Middle East think tanks and academic studies programs in Western countries.

Brady was still the most explicit in the information she provided the commission, explaining, “The CCP has had a longstanding policy of utilising foreigners in its propaganda work. This is called ‘using foreign strength to promote China’ Historically, pro-CCP foreigners have been extremely useful in producing a wide range of propaganda materials, ranging from books, films and poetry, to public and private lobbying.”

The Communist Chinese lack the Islamist hijackers' faith, but both groups take the long view of history. They believe Beijing has a rightful role in world history and must displace the United States in order to fulfill it. As the experts proved, they are well aware of the tremendous foreign assets they possess, which may help them accomplish their goal.