New Op-ed: Anatomy of China’s Influence Operation
Anatomy of China’s Influence Operation
Those concerned about a foreign power exerting undue influence in Washington should be paying closer attention to the activity of the People’s Republic of China.
Washington’s obsession with foreign interference in U.S. elections drove the three-year fixation on Russia and morphed into a compulsive fascination with the darker corners of the Ukraine (are there any bright corners in that benighted land?).
Once again the Pharisees strain at gnats but swallow a camel.
If they are concerned about a foreign power exerting undue influence in Washington, they should pay attention to the full-spectrum operation mounted by the People’s Republic of China.
President Trump, Vice President Pence, Secretary of State Mike Pompeo, and FBI Director Christopher Wray have made it clear: China is waging “war by other means” against the United States.
Calling our confrontation with China a “trade war” is like saying arresting armed robbers is “gun control.”
How China Gained the Upper Hand
Ever since President Trump imposed tariffs, Beijing has mounted a relentless influence operation to get him to abandon them.
Michael Pillsbury, author of The Hundred Year Marathon, describes how Beijing employs the classic Chinese military strategy of “use your enemy’s forces against him” to gain the upper hand in trade talks.
They used this tactic to turn around President Bill Clinton. After Clinton campaigned on getting tough on “the butchers of Beijing,” Beijing relied on Clinton’s Wall Street advisers, such as Robert Rubin, to persuade the president that free trade and investment would turn China into a Scandinavian democracy. Rubin wasn’t on Beijing’s payroll. He didn’t have to be. He knew where his bread was buttered.
Beijing has been using the same strategy ever since.
Last May, everyone was confident Beijing and Washington had reached an agreement. A draft 150-page text addressed market access, forced technology transfers, intellectual property theft and state-owned enterprises. It included verifiable dispute-resolution mechanisms and enforcement measures.
But at the last minute, China pulled back.
Beijing’s Spin Factory
It was a ploy on the part of China to extract further concessions. China gambled American negotiators would be tired of multiple rounds of talks, emotionally invested in achieving an agreement, and ready to accept less-than-ideal terms just to ink a deal the markets and Washington had been primed to believe was imminent.
When President Trump wasn’t buffaloed into accepting a “comprehensive deal,” Beijing planted the idea of a skinny or “phase one” deal. And after the skinny deal, the made-in-China narrative became rolling back tariffs to get that deal signed.
China stepped up its campaign to take advantage of our news media, financial system, and political divisions within the administration to achieve its goals. It would “use the enemy’s force against him.”
Here’s how the operation works.
A Chinese official claiming to have “inside information” feeds an American correspondent the spin that a deal (favorable to Beijing of course) is in the works.
The reporter passes it along to headquarters in New York, Washington, or London.
The newspaper, citing “anonymous sources,” then reports China’s spin as “fact.” The story has “no comment” from U.S. negotiators who prefer to negotiate in secret but includes comments from unnamed “administration officials” sympathetic to Wall Street who hint the proposal (originating from Beijing) is “being discussed.”
Once in print, broadcast media from CNBC to Bloomberg et. al., pick up the story, amplifying and cementing China’s spin as “fact.” Reporters ask the administration’s economic advisers on the record to respond to the “news” a deal is in the works.
The action then moves from Washington to Wall Street where financial markets have been primed like Pavlov’s dogs reflexively to move higher on reports “a deal to end the trade war is imminent.”
China’s American Shills
It is at this point Beijing deploys some of its more valuable American assets to apply pressure on the administration to accede to China’s demands for tariff relief.
Some prestigious “expert” will tell us it’s absolutely imperative President Trump scrap the tariffs to strike a deal immediately in order to ensure the American economy remains strong.
These people presenting their opinions as facts are typically of Wall Street pedigree and we’re typically not told where their money comes from.
There is, for example, Sheila Bair. You’ll see her on television and read her columns. We’re told she’s former head of the Federal Deposit Insurance Corporation, FDIC, the government outfit that insures your bank account against bank failure.
Bair will tell you the long-term interests of the United States and China are aligned and that the president should “work with allies” rather than take on China alone.
She will tell you tariffs target American consumers and the administration’s talk about China is reckless.
What we aren’t told is that Sheila Bair sits on the board of China’s biggest commercial bank, the Industrial and Commercial Bank of China, ICBC.
ICBC is owned by the Chinese government and controlled by the Chinese Communist Party.
ICBC paid more than $6 million in fines for money laundering violations in this country and, Reuters reports, was the conduit for a multi-million dollar money laundering, tax fraud and smuggling racket by Chinese criminal organizations in Europe. Beijing tried to kill the investigation that led to the arrest of several senior bank executives.
“ICBC is a flagship in China’s quest to become a global banking giant. At the direction of the ruling Communist Party, it and other Chinese state-run banks have aggressively expanded into offshore markets,” Reuters also reports,
Maybe that’s why China hired Bair, who helpfully tells us China should be involved in developing international banking rules and that “We should learn from China.”
Beijing funnels millions of dollars to think tanks, lobbyists and prestigious figures in finance and politics to buy influence in Washington. It’s why China put money in Hunter Biden’s private equity fund. (And why the Ukrainian energy company hired him, too.)
Beijing uses these people and our media to promote the pre-Trump status quo with China and the idea that the American economy depends on making a deal, any deal, with China as soon as possible.
Bair is not alone and she is hardly the worst offender.
Michael Bloomberg, who is thinking about entering the Democratic presidential primary, makes millions selling his financial terminals in Communist China. He says Xi Xinping is not a dictator while Xi orders Hong Kong protestors be shot and millions of Uyghurs be imprisoned in concentration camps.
Bloomberg dare not tell the truth about the world’s worst dictatorship and biggest polluter. Forget about global warming—he’s more afraid of being frozen out of China.
Do reporters at Bloomberg News self-censor?
What’s true for Bloomberg is also true for so many whose personal fortunes are tied to China, from Lebron James to Disney’s Bob Iger.
To protect Disney’s business interests in China, Bob Iger shuts his mouth. So does the rest of Hollywood.
We see how major influencers of our culture can be turned into agents of a hostile foreign power.
How long before TV networks steer clear of criticizing the CCP out of deference to sponsors beholden to China? Do producers at ABC, the Disney network, already feel the muzzle being slipped on?
-Curtis Ellis is Senior Policy Director for America First Policies.