OPINION:
A conservative think tank called American Compass recently offered a set of proposals called “Rebuilding American Capitalism.”
It included recommendations on topics as varied as how best to strengthen American families and what we should do about income inequality and falling life expectancy.
It’s an impressive catalog of ideas. Everyone involved in the presidential campaigns should read it.
One set of proposals dealt with how best to address our principal international rival — the genocidal regime led by the Chinese Communist Party.
Among the most direct and useful recommendations is that American investment firms should not be allowed to hold Chinese assets, nor — more importantly — should Chinese firms be allowed to access U.S. capital markets in any form.
Banks should be prohibited from making loans to Chinese firms. Investment firms, pension funds and endowments should be prohibited from holding Chinese assets. Current assets should be divested within five years.
American Compass, which aims to “restore an economic consensus that emphasizes the importance of family, community, and industry to the nation’s liberty and prosperity,” according to its mission statement, is clear:
“The fundamental problem is that America’s free market economy is incompatible with China’s state-controlled one, and American liberty and democracy are incompatible with Chinese communism. America must sever its economic relationship with China to protect its market from subversion by the CCP.
“Disentangling our economies will be costly, but the alternative of accepting CCP control of our assets and investments, dominance in our supply chains, and influence over our institutions will cost far more.”
Despite that sound reasoning, it is important to note that some in the federal government — including Republicans — seem to have little interest in following it.
As recently as a month ago, Rep. Patrick McHenry, chairman of the House Committee on Financial Services and close friend of Speaker Kevin McCarthy, sent a letter to Treasury Secretary Janet Yellen expressing his concern over a pending executive order that would seek to reduce investment in China.
It wasn’t his first letter. He sent a similar letter last October to national security adviser Jake Sullivan.
And as recently as last month, Mr. McHenry’s House Financial Services Committee passed and sent to the floor a batch of mostly anodyne messaging bills on China.
Oddly enough, the one bill that got held back — sponsored by Andy Barr, Kentucky Republican — would have prevented companies with close ties to the People’s Liberation Army from accessing capital markets.
No explanation has been offered for why the bill was withdrawn from consideration.
American Compass is not alone in opposing investment in China.
In May, the Coalition for a Prosperous America headed up a letter to President Biden that said:
“We write to you today as members of the American foreign policy and national security community to indicate our support for the establishment of an outbound investment review mechanism. While Congress continues to review legislation intended to address this matter, we respectfully request that expeditious action be taken by the administration in the near-term to address the risks and threats associated with U.S. capital bolstering the CCP’s ability to modernize and advance its military and build other advanced technologies.”
Finally, at a hearing of the House Select Committee on China held on May 17, former Google CEO Eric Schmidt indicated that China is close to catching the United States with respect to artificial intelligence and other important technologies.
Our investments in China are no doubt accelerating that process. It’s time to stop funding our own demise.
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