Home Multimedia Pandemic Damages Already Soft Chinese Economy; External Aggressiveness More Likely (Audio)

Pandemic Damages Already Soft Chinese Economy; External Aggressiveness More Likely (Audio)

Dan Blumenthal March 26, 2020

Event Date: March 26, 2020

We apologize for the low-quality audio in the first few minutes of the recording.

The coronavirus pandemic that began in Wuhan, capital city of China’s Hubei province, may reduce Chinese economic growth to levels not experienced since the country’s partial opening decades ago to private businesses domestically and international markets globally. “The United States will go through hard times,” but China “will have to face difficult questions as to how to use its resources,” which still are more limited than those of America, in dealing with Covid-19-intensified economic friction ahead.

That is the view of Dan Blumenthal, director of Asian studies at the American Enterprise Institute in Washington, D.C. Blumenthal is a former Defense Department senior country director for China, Taiwan, Hong Kong and Mongolia, and past commissioner of the U.S.-China Economic and Security Review Commission.

He reminded participants on a March 26 Jewish Policy Center conference call that “in times of crisis the Chinese Communist Party” has shown “no evidence it just looks inward to take care” of its own people. “More often than not,” it acts aggressively beyond its borders. Among the actions spurred or strengthened by the pandemic’s effects on China and international trade, President Xi Jinping’s government is “keeping the pressure on Taiwan” and continuing “very aggressive” moves involving military displays in the South China Sea and towards neighboring countries including Vietnam.

The United States does not yet have the skills to build a coalition, particularly in Asia, to stand up to China, according to Blumenthal. “We’ve just been coming to grips with the China challenges. … It’s a generational problem.”

Making Matters Worse

Blumenthal said the Chinese Communist Party leadership “made matters worse” by not quickly reporting the outbreak of the new coronavirus in Wuhan and by stifling Chinese health care workers who tried to do so. These actions “delayed the World Health Organization’s declaration” of a global health threat. And when WHO acted, “it didn’t say much about human-to-human transmission” of the virus, in part because the organization’s leader depended on Beijing’s support for his job.

Xi’s party and government conducted “a really massive global p.r. [public relations] campaign” exaggerating China’s international aid efforts and attempting to blame the United States for the disease and its spread. Blumenthal said China’s leaders “need a distraction” and will try to portray China “as a leader in global health issues.” This despite the fact the virus that causes Covid-19 is “the third coronavirus originating in China in the past 17 years.”

Chinese disinformation campaigns in the United States are dangerous in part because a number of U.S. politicians, journalists, businesspeople and other influential individuals echo, often unwittingly, China’s often-repeated talking points. The country’s “massive propaganda apparatus helps it deflect blame while keeping the United States divided, Blumenthal said.

America cannot “contain” China the way it and its allies did the Soviet Union during the Cold War, Blumenthal said. The Chinese Communist Party focuses on staying in power at home and projecting military force further around the world, epitomized by its base in Djibouti in the Horn of Africa.

China is “a global competitor” from which the United States can’t easily disengage, since “Chinese people are so deeply entangled with the rest of the world.” This makes Beijing “one of the most complicated national security challenges we’ve faced,” Blumenthal stated.

“Washington “must do a better job with public diplomacy and … highlight [American] international relief efforts” for countries that cannot adequately help themselves, Blumenthal said. The State Department should go beyond “tit-for-tat” replies to Chinese allegations about how the virus began and “not allow China to propagate these narratives.”

Huge Ambitions & Huge Internal Problems

Beijing “has great ambitions but huge internal problems,” Blumenthal told those on the JPC call. “It will export its problems,” economic, social and political, with the Chinese Communist Party seeking to generate support at home by inciting nationalism through adventurism abroad.

Blumenthal said the Justice Department and FBI are learning more about extensive efforts by China to use Chinese students and researchers in the United States, or Americans with professional ties to China, to appropriate U.S. knowledge and technology. He noted major institutions and researchers such as the MD Anderson Cancer Treatment Center in Houston, Texas and the chair of Harvard University’s chemistry and chemical biology department have been investigated for hiding Chinese payments for research. “We have to be much more scrupulous as to what [information and technology] migrates directly to China” and then to the Chinese military.

President Xi’s government does not know how to manage challenges from Hong Kong’s democracy movement or the reelection of Taiwan’s independence-minded president. To China’s leaders, these “are great threats to their legitimacy.”

In these and other conflicts “the Chinese are trying to use as much force as possible without triggering a full-out conflict with the United States,” Blumenthal said. “That’s a tricky game. … all kinds of things can happen when you’re using as much  military force” in demonstrations in the South China Sea and elsewhere as China is doing, with “the United States increasingly preparing for that kind of conflict.”

Internal Problems & Repression

Internal Chinese Communist Party politics and government stability “are extremely hard to follow or predict. “Like with the Soviet Union, everything looks stable until the moment it is not,” Blumenthal said.

Xi “had made a lot of enemies” inside the party’s ruling elites. Although corruption reportedly is widespread in the party and government bureaucracies, Xi’s anti-corruption drive since taking office in 2012 “has been a purge.” It “broke the Mafia-like rules inside the Politburo,” Blumenthal asserted.

China’s “social credit” programs, by which citizens are kept under sophisticated and nearly universal  surveillance, their loyalty to the state and party graded and rewarded or, if found lacking, punished, means the number of political prisoner, while unknown, must be high. Yet “many people,” including intellectuals, political dissidents and others “find ways to get around it,” he said.

Another internal challenge to the regime is a “birth dearth,” Blumenthal said. China’s one child per couple policy, though modified, and a cultural preference for male babies, implemented by abortions, means the country will begin to age rapidly, like Japan and European nations already have.