Confronting the Influence of China's 'Friends'

Former US Secretary of State Henry Kissinger, left, meets Xi Jinping at the Great Hall of the People in Beijing on December 2, 2016. (AP)

Former US Secretary of State Henry Kissinger, left, meets Xi Jinping at the Great Hall of the People in Beijing on December 2, 2016. (AP)

At Long Last, a U.S. Policy Shift toward China

After more than 40 years, U.S. policy toward China has changed, finally recognizing China as it is, rather than the China we wish it were. A strong and still growing consensus has emerged among U.S. officials, the U.S. Congress, and American elite, media, and public opinion, and even many business people, that the U.S. relationship with China is unbalanced and does not serve U.S. interests.

Although some China experts have been saying this for many years, the public acknowledgment of how badly U.S. policy toward China has failed was perhaps most notably announced in the March/April issue of Foreign Affairs in the essay “The China Reckoning: How Beijing Defied American Expectations” by former U.S. Assistant Secretary of State Kurt Campbell:

“Nearly half a century since Nixon’s first steps toward rapprochement, the record is increasingly clear that Washington … put too much faith in its power to shape China’s trajectory…. All sides of the policy debate erred ….the liberal international order has failed to lure or bind China as powerfully as expected.”

Predictably, some stalwart U.S. defenders of the status quo have sharply objected. Nonetheless, the surprise is not that U.S. policy toward China is finally changing. The wonder is that it took so long.

After all, U.S. policies toward the PRC have repeatedly proven to be wrong, and consistently failed to promote U.S. interests and goals. The original geostrategic justification for U.S. relations with China as a counter to the Soviet Union was simplistic and short-sighted, and died with the fall of the Berlin Wall in 1989 and the collapse of the Soviet Union in 1991. The concrete benefits of supposed US-PRC cooperation on key issues have been few to none, whether the issues have been ending the Vietnam War sooner, non-proliferation (Pakistan, Iran, or North Korea), UN Security Council votes, the South China Sea, or human rights.

The argument that economic cooperation and trade with China would positively transform China also proved to be wrong. And while bilateral trade with China may have benefited some U.S. business sectors, such as investment banks, it did not benefit the U.S. economy overall, especially if IPR theft and manufacturing job losses are taken into account.

Meanwhile, while investing so much hope in the PRC, U.S. Administrations consistently underestimated and often ignored Taiwan, a modern miracle that over the same period of time transformed itself into a vibrant and prosperous democracy.

American “Friends” Who Profit from Enabling China

In trying to understand why Washington has persisted so long with policies that have not served U.S. interests, we should not overlook the continuing enormous influence of U.S. officials, both in office and after retiring, on U.S. policy. Beijing has consistently used these “American friends” as agents of influence to promote Chinese interests, and has richly rewarded them, even if only indirectly, for doing so.

The most famous example is Henry Kissinger, former National Security Adviser and Secretary of State. Ever since leaving government, Kissinger has continued to serve as a loyal supporter and advocate of the appeasing policies toward China he initiated. Every time there was a fissure in U.S.-China relations, Kissinger could be counted on to rush into the breach.

Thus it was on Nov. 7-10, 1989, when U.S.-China relations were still roiled by the Tiananmen Massacre, that Kissinger visited Beijing to meet with all the top Chinese leaders who warmly received him as an “old friend” who had spoken up in defense of the Tiananmen crackdown. “No government in the world,'' he had written, ''would have tolerated having the main square of its capital occupied for eight weeks by tens of thousands of demonstrators….'' Kissinger had also criticized U.S. sanctions on China imposed in response to the Tiananmen massacre, and repeatedly called for preserving a special Sino-American relationship despite differences.

Another of the more than 50 visits Kissinger made to Beijing was on December 2, 2016 when he met with President Xi Jinping in an apparent effort to assure the PRC leader that, following the election of President Trump, he expected Sino-U.S. relations would move ahead in a “sustained and stable manner.” More recently, on November 8 this year, in a clear sign that the orthodox Sino-U.S. relationship he had helped create was again in trouble, we saw Kissinger -- now 95-years old -- once again rushing to Beijing to try to assuage Sino-U.S. tensions.

While few doubt Kissinger’s personal belief in the strategic importance of Sino-U.S. ties, it is also true that the consulting firm he founded, Kissinger Associates, has earned many millions of dollars over the years arranging access to senior PRC leaders in Beijing for U.S. corporations. In a telephone interview with The New York Times on December 13, 1989, Kissinger described as "McCarthyism" any linking of his views on China to his business interests. Nonetheless, his profits from connections in China have certainly created the impression of a conflict of interest.

This is an issue that goes well beyond Kissinger. In China Fantasy: Why Capitalism Will Not Bring Democracy to China (2007), James Mann described how China indirectly employed retired U.S. officials as agents of influence for U.S. policies in China's favor. Mann cited some of the many former officials -- Democrats as well as Republicans -- who left office and became paid “consultants” to introduce Americans seeking business to Chinese officials. Besides Kissinger, Mann named former Secretaries of State Alexander Haig and Madeleine Albright, former National Security Advisers Brent Scowcroft and Sandy Berger, former Secretary of Defense William Cohen, and former U.S. Trade Representative Carla Hills.

“Friendship Business”

More recently, American author Peter Schweizer in Secret Empires: How the American Political Class Hides Corruption and Enriches Family and Friends (2018) has documented a number of other troubling cases involving both Democrats and Republicans that illustrate how “China employs a strategy … to make friends with foreign officials and politicians to advance [its] … interests….” Among his examples are the son of former Vice President Joe Biden and the stepson of Secretary of State John Kerry who jointly profited immensely from secret deals involving billions of dollars with companies connected to the Chinese government, even as their fathers dealt with Beijing on sensitive issues. Senate Majority Leader Mitch McConnell and his Taiwan-born wife, current Secretary of Transportation Elaine Chao, have both enormously profited from personal and business ties Chao’s mainland-born father and other family members enjoy with the Chinese military-industrial complex. Schweizer and others have also documented the extensive business ties President Trump and his family have with China.

Aside from U.S. officials, we should not overlook the enormous influence in Washington of investment firms whose profitable business interests in China mandate that they do everything possible to ensure a positive U.S. relationship with China. One example is John Thornton who retired as Chairman of Goldman Sachs in 2003, took up an academic position at Tsinghua University in Beijing, but continued to advise Goldman Sachs on China matters, and to pursue business deals. In 2006 Thornton funded the establishment of the John L. Thornton China Center at the Brookings Institution and a parallel Center in Beijing. In 2009, he also became a member of the International Advisory Council of the Chinese sovereign wealth fund China Investment Corporation.

Another American corporate booster of Sino-U.S. ties is Stephen Schwarzman, chairman and CEO of the Blackstone Group. In 2013 he announced a $100 million personal gift to establish and endow a scholarship program in China -- Schwarzman Scholars. In 2008, he was awarded the Friendship Award of the People's Republic of China, the highest honor accorded to a non-Chinese citizen, and was named as one of fifteen “foreign experts” who have made the most significant contribution to China's development over the past three decades. It is evident that for such corporate giants their philanthropy is closely tied to their business interests in China.

Notably, on November 9 White House National Trade Council Director Peter Navarro called attention to the influence of Wall Street billionaires whom he accused of trying to sabotage President Trump's handling of trade relations with China. In a speech in Washington, Navarro said "Consider the shuttle diplomacy that is now going on by a self-appointed group of Wall Street bankers and hedge fund managers between the U.S. and China….As part of the Chinese government influence operations, globalist billionaires are putting a full-court press on the White House in advance of the G-20 [meeting between Donald Trump and Xi Jinping] in Argentina … The mission of these unregistered foreign agents [sic]… is to pressure this President into some kind of a deal…."

Foreign “Friends” as a Tool of Sharp Power

The influence of foreign “friends” of China meets Joseph Nye’s definition of “sharp power” which includes “coerced or purchased loyalty.” This is a not a problem confined to America. Former Australian officials have also served as PRC cheerleaders. After former Foreign Minister and New South Wales Premier Bob Carr was appointed head of the Australia China Relations Institute at the University of Technology in Sydney in 2014, he has consistently praised the achievements of Xi Jinping and criticized his detractors. Former Prime Minister Paul Keating, who now serves on the International Advisory Council of the China Development Bank, has criticized the Australian government for having a “containment strategy” against China. Former Prime Minister Kevin Rudd, who is reportedly now on the boards of several major Chinese state-owned corporations and whose daughter enjoys an internet business with China, maintains the guise of a neutral observer but regularly calls for the West to accommodate Chinese interests.

How to Counter China’s Foreign “Friends”

Needless to say, China also has “friends” in Taiwan. Whatever the country, however, the basic strategy for confronting domestic agents of Chinese influence includes four essential measures:

1. Support media, police, and intelligence efforts to unmask hidden profits as well as illegal or corrupt connections to China.

2. Create laws making it more difficult for all family members of government officials to do back-door deals with China. We do not see family members of current or former Chinese officials advocating in Beijing policies favorable to the United States.

3. Prosecute those found guilty of violating such laws.

4. Ensure that China receives reciprocal treatment, whether the issue is the number of journalists, diplomatic offices, or Confucius Institutes, or restrictions on investments, business, travel, or education.

(Image courtesy of American Institute in Taiwan)

William A. Stanton has served since 2017 as Professor of the International College and the Center for General Education at the National Taiwan University. Dr. Stanton previously worked for four years as the founding Director of the Center for Asia Policy at National Tsing Hua University (NTHU). From October 2014 through January 2016, Stanton also served as the NTHU's Senior Vice President for Global Affairs. Dr. Stanton previously served for 34 years as a U.S. diplomat. His final posting was as Director of the American Institute in Taiwan (2009-2012).