China gets away with a lot of bad things: economic malfeasance to threats of warfare to human rights abuses. Is there anything we can do to punish the CCP? We discuss with Jim Carafano and Jeff Smith.

John Popp: From The Heritage Foundation, this is Heritage Explains.

Mark Guiney: Hello, everyone, and welcome back to Heritage Explains. This is episode five of our six-part series on Countering the Threat of the Chinese Communist Party. And I'd like to start it off with a visit to a man who works just a few offices down from mine, an institution here at The Heritage Foundation, our audio producer, Mr. John Popp. In addition to being extraordinarily good at his job of producing Heritage podcasts, he's also well known for having the best stocked snack drawer in the office. In particular, he's a connoisseur of smoked meats, and if you're lucky enough to get on his list, he will occasionally bring around new and interesting snacks to sample. As you might guess, he's a difficult man to annoy, but I'm going to try by dropping in on a busy Tuesday afternoon unannounced with a microphone.

Let's go pay John Popp a visit. Just walking down the hallway. John Popp,

Popp: Yes,

Guiney: I'm just barging into your office mode with my recording equipment.

Popp: It's okay.

Guiney: I wanted to just come at you with a quick question.

Popp: Yes.

Guiney: So let's imagine that I barged in this every day when you were working hard trying to get your work done.

Popp: Yes.

Guiney: What do you think you would do to prevent me from doing that in the future?

Popp: Lock my door, pretend I'm asleep. Hide.

Guiney: What if I just looked very plaintive every time?

Popp: Maybe I would ask you why you keep barging in. How about that?

Guiney: What if it just got really bad? If I got a copy of your key, what would be the next step?

Popp: I think we'd have to have an intervention. You and I would've to sit down and say, Mark, I love you. But why do you keep barging in? You're really messing with my mojo, my flow, and we would try to work it out.

Guiney: What John is very gently and graciously trying to introduce into this situation is accountability. Being held accountable is more than just being made aware of situations where we've fallen short. It's taking responsibility for them and setting up ways to ensure that a more desired outcome happens in the future. So this week on Heritage Explains, we're talking about introducing accountability to the conversation with China. As we've talked about, the Chinese Communist Party gets away with a lot. Is it actually possible to hold them accountable for those actions, to exact penalties so that we can expect something better in the future? I sat down with one of Heritage's most prominent foreign policy experts to talk about just that.

Jim Carafano: I am Jim Carafano, I'm the Vice President for Foreign Policy and National Security at The Heritage Foundation, a think tank in Washington, D.C.

Guiney: Jim Carafano is an Army veteran, West Point graduate, college professor, National Security Advisor and author. He's written on everything from military history to cyber warfare, so he's a good go-to on this topic.
When did you start looking at China? Finding China interesting?

Carafano: What's interesting for me is we recently hired Mike Pillsbury, who's probably one of the most preeminent China scholars in the world.

Guiney: We talked to him on episode two of the show.

Carafano: I have known Mike Pillsbury for 30 years. Mike and I were together at the National Defense University in the late 1990s, early 2000s. This was really the birth of when people started to have a real serious debate about China. So I have been part of the whole watching the rise of the China threat since the 1990s.

Guiney: And we've had Michael Pillsbury come on here and talk about, and Kevin Roberts come on here and talk about in that time period for a long time, we, in the conservative movement, have gotten China wrong.

Carafano: With the benefit of hindsight, it's easy to say, oh, we should have known better. Anybody that's had one or more marriages can tell you that. I will say, the reality is the reason why we take China seriously today is not because of some introspective revelation that we've had about, oh, we should have known this all along. It's because Chinese aggressive and destabilizing behavior has become so obvious and serious that it cannot be avoided.

I often said if I was advising the Chinese in, say, 2014 or 2015, dude, just take a chill pill. Just do what you're doing for five more years. Don't get all in the face of anybody, don't be all, we're China and we're going after, don't do any of that stuff. Just keep doing what you're doing and in five years you'll own the world and everybody will wake up and it's your world. But what the Chinese did is, particularly if you go back really post-2010, 2011 era is the Chinese became much more overt about what they were actually going to do in the world. They were just public about it and it was so in your face.

What distinguishes Mike Pillsbury from a lot of other analysts who've worked on China was that, really, way back into the 1990s, Mike and other people who were actually fluent in Chinese would go to China and they would actually read the Chinese documents. Mike told us a story about when another guy worked at Heritage who, at the time, was a military attache, and they went into the Chinese bookstore and the other guy wore his uniform and Mike's like, oh, ixnay on the uniform, eh. And the old Dean Chang, who is famously one of the world's foremost China experts who's retired from Heritage, Dean used to do the same thing.

They would literally walk into the Chinese bookstore, government bookstore, and they would buy the Chinese government documents which were published and they would read them and say, this is what the Chinese believe. And so that knowledge was out there. But here's the difference is, there's a big difference between people writing something down and saying, this is what we're going to do, and actually doing it. And what we saw really, I would say certainly post-2010, but honestly post-2014, 2015 in such an overt and obvious way, they're actually doing the things that they said they were going to do. And I think the threat has just become unavoidable.

The amazing thing to me is not that we take the China threat seriously, the incredible thing to me today is that there are people that still don't take the China threat seriously. This is having Hannibal Lector over for dinner and going through the first three courses and not getting what's going on here. It's just unbelievable. The penultimate example of that is TikTok, which is demonstrably a true national security threat in so many provable ways, and yet you have people argue, well, we can't ban TikTok because the kids love it. It's just shocking and stunning to me that anybody would not be what we call today, a China hawk.

Guiney: We spent this series, really, talking about a lot of the issues that China presents to us. Really, what we want to talk with you today about is accountability. Are there ways that we can actually hold China accountable for some of these actions? And the first question is one that you've already just touched on, which is the question of big data, that the Chinese have a lot of aspirations for the collection and the utilization of American data with things like TikTok. What can we do there?

Carafano: So when you say hold China accountable, what do you mean by that? What we don't mean is, it's like you get caught cheating and say, ah, don't do that again. So it's not about exposing them and then thinking they're going to change their behavior. That is not what accountability is here or thinking in some ways you can punish them in ways that are meaningful. There's a couple of reasons why we talk about accountability and why it's important. So for example, a lot of people talk about reparations. The Chinese are responsible for the pandemic. No matter how debatable the actual source of the virus is itself, there's actually no question that China's responsible for triggering the global pandemic because of the way the government responded in its behavior. But the notion that somehow you're going to go collect reparations for that, if that's what you mean by accountability, you're living on the wrong planet. But there are things where you would hold them accountable, which will have a demonstrable effect.
Brand is one of them. China values its brand, that it offers an alternative to western values, western power, western influence, western economy. That's a thing they market and sell. And if you diminish the brand, that's important.

Guiney: What's their audience for that brand?

Carafano: It's everywhere. The one thing about the Chinese is they're incredibly opportunistic and ruthless, but they're not reckless and stupid. The Chinese do not but their head against a wall. They go where they're going is easy. And so their message is really designed global and then they will go and sell and emphasize that where they get traction and they find customers. It's the opposite of Bud Light. Our goal is to not drive the customers away, our goal is to say we're doing something appealing to people who like us to want to like us more and people who don't like us to think, Hey, let's give the Chinese a second look.

So you asked particularly about big data and why dealing with that is so important. China seeks to be the world's information superpower. They want to do with information what people did during the Cold War with nuclear weapons, which, if you were a nuclear armed superpower during the Cold War, I am so powerful and influential, not that people won't challenge me, but that everybody that goes up against me recognizes that this is a force to be reckoned with.

China wants to do the same thing with information and it's about controlling the pipes that move the information, collecting the information itself, which, of course, as modern technologies evolve, our ability to collect and hold data is almost limitless. It's not infinite, but it's to the point where we can collect so much data and hold it so cheaply it almost doesn't matter anymore. And then to process it and use it and that, which is why they emphasize technologies like Huawei, which controls how data is moved around. Artificial intelligence, the ability to analyze masses of unstructured data and quantum computing, developing new kinds of computers that can really plow through lots of data really quickly.

Cutting them off from that, from your data, will immeasurably reduce their ability to do that. It's not about banning TikTok as, oh, we're going to punish China, [Binance 00:11:16] will lose it. They don't care if Binance crashes, or the company, they could care less if people didn't get their stupid cat videos. What they care about is, they're going to lose easy access to data and that is going to diminish their power and influence. That's what they care about.

Guiney: I was watching on Twitter today that there was a clip that they were showing about how the Chinese surveillance networks works. In a city, there was this young woman who was demonstrating how she could get a Coke out of a vending machine without having anything on her. She just could have her face scanned by the machine and then it would deduct the amount from her account. All of that information is centralized. Somebody who goes to walk across the street and they jaywalk, their face can be scanned by the multiple cameras that are around and then that fine is assessed and applied and then a negative score is affects their social credit system [inaudible 00:12:08].

Carafano: And what's interesting now is the Chinese have gone to the next step, which is, they collect the data. That's step one, which is what we're already doing here. They transfer that into a social credit score, standing access ability. And now they've gone to the third step, which is, oh, your social credit score is low. You can buy social credit from the government. So now, it's actually a revenue generating system. So it is control, influence and actually increasing their power by actually making money off the Chinese people.

Guiney: So it has a clear application within China. But why do they want our data? Why is American user data interesting?

Carafano: In some ways the Chinese say we don't know the answer to that, but we'll figure it out. In other words, we're going to collect masses of data. We're going to collect unprecedented ways to manipulate that data and move it around and then we'll figure out how to use it later. And we've already seen signs of this. And to show you how desperate they are and how really evil and malicious this influence is, look at the Chinese response to the efforts to ban TikTok in the face of here's an app with unprecedented access to your digital system. Matter of fact, a lot of people say that if you downloaded the TikTok app, you might as well just throw the phone away because the damage is done. TikTok, the app, has already created access into your system and just deleting the app doesn't change that.

So actually, the device is useless, your system is compromised. It's not just the app. But in the face of this overwhelming influence of malicious influence, the data collection, the access that they've created, look at their response to that. TikTok is now running TV ads about TikTok. And what are they? They are the, "I teach kids to read and if TikTok is banned, then underprivileged kids won't be able to read anymore." "I'm a vet and I use TikTok to reach other vets and provide them services. If TikTok is banned, I won't be able to do that anymore."

First of all, the notion that you couldn't provide those goods or services on any one of a gazillion different apps isn't the point. But the fact is, their response is not to defend that, oh, it's not a national security threat, it's not owned by the Chinese. Their defense says, we are manipulating you on the things you value. We are disguising and hiding who we are. We are telling you that we are veterans. And guys who are teaching underprivileged children, we are not telling you that we are an instrument of the world's most dangerous power on the face of the planet earth. If stuff like that doesn't scare the hell out of you, then there is something really wrong with how you value your freedom and your safety and your security and your future and your freedoms.

Guiney: So if we did the right thing and we cut off the CCP's access to American data via TikTok, what else would you do to secure-

Carafano: The first thing I would say is, Mike Pillsbury, who you mentioned before, is one of the authors of the report and one of the world's foremost experts on China. I had this discussion. One of the things we had to do is we had Mike write an afterward to the paper, which I love. And the first sentence in the afterward is, the first person to read this report will be in Beijing because the first thing they will do is read this report and they will say, "What are the Americans going to do? How can we stop them? And if we can't stop them, how can we get around them?" So the first thing I would say, whether it's big data collection or land use or any other issues, is the Chinese are not going to give up. If they want to do something because they think there's value in it, if they reach a roadblock, they won't butt their head against the roadblock. They'll find a way around, do something else.

So they will try use other apps to do this. In the land use, they'll find other ways in third parties to buy land. One thing we talk about, for example, is why are we doing business with China and enriching an economy and a government that's turning around and using that money, that profit to buy military hardware and assets to basically challenge us. Why are we paying, I feel like it's the last scene in Ghostbusters where the ghosts or the evil thing says name your own destructor. And the marshmallow man shows up. We're naming our own destructor, we're paying the Chinese to build a military to threaten the United States. But one of the things we're talking about is, well don't do business in China, do business in Mexico. So what are the Chinese doing? They're going into Mexico, they're buying up companies in Mexico. So competition is an action and reaction.

So the first thing I would say is, when you shut the Chinese down and you take these things away, they're going to try something else. One of the things that we have to build in the future is rigorous situational awareness. We're in a sense, we see the Chinese coming. I think some of these areas are incredibly predictable, that the Chinese wouldn't go in all in for artificial intelligence. We should have seen that and yet basically we still have people arguing, we should be working in cooperation with Chinese universities on artificial intelligence because those cooperative research is delivering us far more knowledge than the Chinese are getting. This is just all nonsense. And so the next thing, big thing, whatever that is, we should be on guard for that.

So it's not just about the present. And as I'm sure you've talked about in your show, there's a hundred recommendations in this report. Because what we did is we went through and we said, what are all the critical things we need to do to not just stop the Chinese from coming after us, but diminish their capacity to do that? And we said, put the politics aside, just tell me the things that we really need to do. And we listed those out and there's a hundred of them, but that's not the end of the story because even if we did every one of those things today, the Chinese are going to try and find other ways to do them.

Guiney: Let's talk about more the economic side.

Carafano: Sure.

Guiney: We have China's abusing the World Trade Organization. Could you unpack that? People start talking about tariffs and non-tariff solutions.

Carafano: Probably the number one biggest way that Chinese really game the system is by getting something, what's called a developing nation status. Because when we set up a lot of these international partnerships, whether it's on the economics and dealing with the World Trade Organization, or health, for example, dealing with the World Health Organization or many other things, we created a status called developing nations because we said we're going to treat you a little different because you don't have the wealth and capacity that other countries do. So we're going to let you cut some corners. We're not going to hold you as higher standards and do some things. So China has habitually demanded and received developing nation status. Even though today they have the world's second largest economy, they continue to try to do that.

Guiney: That status is awarded through the World Trade Organization or who designates that status?

Carafano: It depends. There's many, many different ways they get that. So they WTO, WHO. So for example, the United States, this government that we are in right now in the United States of America just negotiated a new global pandemic treaty after COVID, and the Chinese said, well, we want to be treated like a developing nation in the new pandemic treaty because developing nations don't have to pay for intellectual property like vaccines. You have to share all that intellectual property with them. And so the Chinese demanded, and the United States signed off and said, yeah, no problem. So they still use this kind of fiction that they're just an innocent developing country essentially to game the system for enormous economic advantages. And they do it in the economics sphere and they do it in other international organizations, and it's one of the areas that they chalk up these easy wins.

And then when you ask, well, how do we let them get away with that? But it's because they're like the three-year-old that holds their breath and has a tantrum and oh, just give them what they want. How bad can it be? And as anybody that's raised a child knows, okay, it's not just the one tantrum in the grocery store, that becomes just a pattern of behavior that essentially you lose control of and the next thing you know, they're an ax murderer.

Guiney: So people talk about tariffs, putting economic penalties on our trade with China. Is that at all a viable solution or no?

Carafano: Yeah, so Alexander Hamilton, when he wrote the original treatise on the use of tariffs back when country begun, he said, look, recognize there are legitimate reasons to have tariffs. And he goes, one of them is national security purposes. Why would you allow a company to do trade and business that actually is undermined your own safety and security? And so one of the things we argue in the paper is, we have to get beyond a mannequin debate between tariffs and no tariffs. The right answer is somewhere in between. Chinese economic activity that's hurting the United States, we should stop that or diminish it. And tariffs are one tool to do that. This is often framed wrongly as a debate between people who are for free market and economic freedom and people who are for industrial policies and protectionist economies. Those guys can argue at that because they're passionate, but the reality is, that's not the situation we're in. China is not a free market economy. The Chinese are not playing by the rules. So it's like we're playing cops and cops and the reality is, no, we're playing cops and robbers here.

Guiney: There's been a lot of discussion about human rights issues within China, and one of the things we focus on in the paper is the exposure of these human rights abuses. For our listeners who might not be familiar, can you talk about-

Carafano: Sure. This, to me, goes back again to the branding issue. I think diminishing the China brand is really important and hammering on the human rights record is really important. Because at the end of the day, companies that do business in China, I think the National Basketball Association is a great example. I think it would be very difficult for them to do business in China and pretend everything's just hunky dory if the mass of Americans really understood how the Chinese treat their own people. And so we'll start with the example that most people know of, which is the Uyghurs. So the Uyghurs are ethnically Muslim. The Chinese don't even consider them Muslim. The Chinese government's actually made up some of the most racist people on earth. They fear their retaining of a collective identity, which is not considered authentically Chinese. And so essentially to suppress that, they've taken over a million people and essentially incarcerated them, forcibly sterilized women, put them into slave labor.

This is officially, even by governments who try to be pro-China, considered a genocide. It meets all the textbook definitions of a genocide and it is the world's largest genocide going on in the world today, and it is unquestionably the biggest human rights abuse that we have documented. And yet we still have companies in the United States who manufacture and buy clothing and equipment that are made by Chinese slave labor, including solar panels that everybody wants to buy from China in such vast numbers. Many of them are made in factories with not only appalling environmental conditions and very dirty and environmentally horrible, but also made by slave labor. But then there are the other ones that we either forget about it, tend not to talk about. People still forget that Tibet was not under the thumb of the Chinese communist government and the Chinese communist government has moved in and essentially wiped Tibetan culture off the face of the earth. They moved Chinese people there. They've banned Tibetan practices. It's essentially a cultural genocide.

We forget about Hong Kong. Hong Kong had a deal. China signed a law that guaranteed the rights and independence of the people of Hong Kong. The Chinese just plowed through it like it was a speed bump and they're on a super highway. The people of Hong Kong visibly rebelled and protested against it. Essentially, that entire movement was wiped out. People were thrown into prison for basically saying the Chinese government should do what the Chinese government agreed to in the law that it passed. To me, the most horrific one, which gets very little discussion, and I know it sounds like science fiction but is absolutely real thing is organ harvesting. In China, if you have enough money and power and influence and you want an organ, it suddenly appears. And yeah, they actually go and take people and they cut their organs out and they give them to other people.

Guiney: As a function of the CCP or it's just tolerated?

Carafano: Yeah, no, this is a thriving business in China that is sanctioned by the government. Declare people criminals, political enemies. Have you ever seen the movie, Turistas? It was a horror movie where these poor college kids go to the, and then they just basically incarcerate them and then take their organs away. That was a horror movie. This is really happening in China. It's actually coming out and being documented. And this isn't to mention what they do to everyday Chinese citizens. If you think, for example, the great Chinese firewall, they deny citizens access to information. They have the system of social credit, which destroys freedom and liberty. There's almost nobody in China that can tell you anything that happened in Tienanmen Square, of that entire notion of the government should treat its people justly was just wiped off the face of the earth and never to be recovered.

It is unquestionably one of the most brutal, in terms of size and scope, one of the most brutal regimes in the world today. And yet people will talk about doing business in China. The French leader, French president Macron, went to China and basically just gave them a get jail free card. Didn't talk about the human rights abuses, didn't talk about their support for Russia's war against Ukraine. It is as horrific as you could get. It is like going to the Munich Olympics and look at all the great swag I got at the Munich Olympics and not recognizing the horror show that went underneath that.

In many ways, the Chinese are even more brutal than the Nazis were because the Nazis really waited until after the Olympics, before they really began to demonstrate what brutal racists and fascists they were. They at least tried to pretend. The Chinese don't. The Chinese hosted Olympics in the middle of a genocide and doubled down on the genocide during the Olympics, and then they expect everybody to just come and pretend everything's fine. And shame on us. We go and we do that. I think it's in incredibly shameful that the US essentially said, okay, well we're not going to send any senior officials to the Olympics and our moral suasion is done here. We don't care if US companies profit billions of dollars, if they essentially become a propaganda arm in the CCP, if companies are sponsoring all kinds of athletic equipment and we don't care about any of that.

It was, I think, one of the most despicable moments in the morality of American history. And today, people just don't even remember it. The Chinese sat right there and listened to the Russians talk about how we're going to invade Ukraine as soon as this is over. And the Chinese are going, great. Just don't mess with our ratings. After the Olympics are done, if you want go invade 44 million people and kidnap innocent children and take people out and shoot them in back of the head, fine, but just wait till the Olympics are over and we get our medal count up.

Guiney: Do you think there has been any measure of success from publicization of these human rights activities?

Carafano: I think the fact that we could publish a report today that basically says, let's be candid here. We are in a cold war, a struggle with the Chinese that is every bit as serious as our struggle was with the Soviet Union. And people take the report seriously and not accuse us of scaring or fear mongering or anything else, I think that reflects on how much the public has moved.

Guiney: I think it's the most important issue that Americans face today. So I'm really proud of what you guys are doing, and frankly, proud of heritage that taking this issue so seriously because if we get this thing wrong, then it goes back to Reagan. The loss of our future is only a generation away. And honestly, I don't think we have a whole generation to get this right.
Believe it or not, there's even more to talk about in this topic to talk more about the role that the COVID pandemic can play in holding China accountable, as well as China's Belt and Road Initiative. Let's take the conversation now to Director of the Asian Policy Center, Jeff Smith.

Jeff Smith, welcome back.

Jeff Smith: Good to be here.

Guiney: As we speak, it is the week following The Heritage 50th Anniversary celebration. What did you think? How'd it go?

Smith: That was pretty incredible. I think we rented out half of the Gaylord at National Harbor for all of Wednesday and Thursday and Friday, and we had a celebration at Mount Vernon on Thursday night, fireworks over the Potomac Thursday night. We had Dirks Bentley on Friday night, who I've never heard of, but my girlfriend was thrilled by the surprise. All in all, it was a pretty incredible series of celebrations and warranted after a 50-year track record of impacting policy.

Guiney: That was cool.

Smith: And look, if he got 14 Grammy nominations, maybe I should have known who he was. Clearly, he's a pretty big deal.

Guiney: So we had our conversation with Dr. James Carafano. What'd you think? What'd you take away?

Smith: Jim is just such a fantastic communicator. He can make any conversation eminently interesting. I thought he did a really good job connecting some of the concepts that we talk about in the China paper to what people experience every day or at least framing it in terms that are understandable.

Guiney: So he talked a little bit about the whole dynamic with China and COVID, how we could really drop COVID right at the doorstep of the CCP. Is that your take as well?

Smith: Well, we could drop blame for certainly the early aspects of the outbreak on the doorstep of the CCP. There's just no question that, whatever the origins of the virus, and we can talk more about that if you like, even if it was as some people want to believe, a natural evolution of the virus, a zoonotic event that occurred from the virus jumping from an animal to a human. Even if that's the case, their behavior at the early outset of the pandemic was inexcusable and undoubtedly led to a weaker and more delayed response to the pandemic.

Guiney: Can you expound on that?

Smith: Sure. Yeah. We know for a fact that they were silencing Chinese scientists who were beginning to speak out about the virus, the early spread of the virus. Silencing and disappearing these people and locking down the facilities and shutting down social media, shutting down any conversation about the virus and critically blocking information from getting to the outside world, whether to the United States or the World Health Organization or outside scientists, they were essentially in damage control mode as a secretive totalitarian government often does. It's shut down all debate, keep everyone out and we're going to try to clean this up internally. And that's the way of the CCP. That's how they handle a lot of domestic crises.

But this one actually happened to impact the entire world. And so just by their nature of being secretive and totalitarian, they ended up contributing to the spread and the prevention of earlier responses that might have, at least, slowed the spread of the virus or allowed us to take measures earlier that could have saved lives. Maybe we would've shut down travel earlier. There are a number of ways in which we might have been able to mitigate the impact if we'd had a earlier, quicker response. And the CCP absolutely prevented us from doing that with their efforts to stonewall the international community and hide everything. And it's disgusting.

Guiney: They continue to allow travel out of, wasn't that part of it?

Smith: They did. And both out of China and within China. And so that was the other part of the problem is people that had the virus inside China were traveling throughout Chinese cities and then leaving the country and spreading it elsewhere. So there are multiple layers of malfeasance and responsibility, and it really is a shame that the international community and the US government has not been pressing more harshly and aggressively for accountability for this because millions of people died as a result. And this sort of international narrative is, well, we don't really know how the virus started and we all know China is a secretive place, so let's just move on. And that's unacceptable.

Guiney: What would that accountability look like?

Smith: Well, unfortunately, and this is something we've given some thought to so long as the CCP remains the CCP, we have limited ways to affect change inside China or hold the people who were silencing voices and disappearing scientists to hold them accountable. This is like a extremely closed hermetic society. So what we really would need to do is get a consensus among the global community of nations to penalize China, to impose costs on China for its behavior during the pandemic to ensure essentially that this never happens again. Unfortunately, China has corrupted not only the global narrative about the virus, but has corrupted global governance institutions and global health institutions, like the WHO, to absolve themselves of responsibility, to deflect blame, to spread propaganda that the virus actually started in Fort Dietrich in the United States. And nobody really believes that, but then it's like, oh, well we've created doubt about where it really began, so you can't hold us accountable.

And of course, they use coercive methods, so anyone, any country, any foreign diplomat who suggests that maybe China was responsible is going to be penalized somehow. You're not going to be allowed back into China or we're going to cut off cooperation with your country. And so they're really, frankly, very effective and clever about pulling the strings behind the scenes to shape the narrative in ways that they want to shape it and prevent themselves from being held accountable. Now, we can do some things on our end alone, but the impact ultimately will be limited unless we can build more of a consensus internationally.

Guiney: You talk about how China has made inroads with really corrupting some of these larger intra-national organizations like the World Health Organization, like the UN. Why does the CCP have more sway than, say, we do, or are we just not throwing our weight around in those organizations as we should be?

Smith: Yeah, it's a very good question. A lot of these organizations operate on some form of consensus, and one thing that China has done well traditionally is it essentially took on a role, a leader of the developing world, particularly in the prior century. So at the United Nations, there would be votes on contentious issues and China would sort of take it upon itself to be a leader of African nations and Latin American nations, poor and developing countries, and it would be kind of a fighter for their interests and it would vote with them on certain issues. And so it has a large number of capitals and votes at the UN that are supportive of it. And so if you're taking a vote at the UN, maybe America has a really strong 20 friends, but China's got 50 or 60 developing capitals in Africa and Latin America that support its position.

So in some of these organizations, it's a simple numbers game and China has built up the capital to get those numbers to side with it. China also does a much better job overtly coercing states with positive and negative incentives. If you vote with us at this next forum, then maybe you'll get a new development contract from a big Chinese company next week, or maybe someone will show up at your doorstep with a briefcase full of cash for you to distribute to your patronage network inside this small capital in South America, for example.
On the flip side, if you don't vote with us, some really bad things might happen to you, and that contract we signed with you last year might end up disappearing mysteriously. And so they're a little more Tony Soprano-like in being sort of shamelessly either bullying or coercing or incentivizing or bribing countries to go along with their position. And with that comes numbers and votes. And they're also a fairly large contributor financially to a number of key multilateral organizations, although in most, we remain the largest financial contributor despite our diminishing influence.

Guiney: So that leads us to the Belt and Road Initiative. Can you talk about what that is? Why is it called that? What are we talking about when we talk about Belt and Road?

Smith: Yeah, so it actually began as an initiative called the One Belt One Road. A first speech about this was by Xi in 2013, but it really took a few years for them to develop the idea, and it wasn't until 2015 that it began to take shape and receive a lot of funds, state directed funds, and eventually was enshrined in the Chinese constitution as a signature initiative of President Xi Jinping. Essentially what it is, is a infrastructure investment, a broad scheme by the CCP to pour billions of dollars into infrastructure projects across the Eurasian land mass and throughout the maritime space of the Indo-Pacific, which served several purposes from China's perspective.

It was a jobs program because most of the workers working on these infrastructure projects were Chinese citizens. So the local folks are not benefiting nearly as much. The local economies are not benefiting. It was a way to offer productive projects to Chinese infrastructure firms where China had surplus capacity. So there's been this giant infrastructure boom inside of China, and eventually that begins to trail off because the market's too saturated and you've actually got Chinese cities that are ghost cities. They're built too much too quickly and they couldn't even meet the demand. But now, you've got all these massive Chinese infrastructure companies with no work, so let's send them abroad and fund them to do projects elsewhere.

It's also expanding CCP influence abroad, and this is a big one. They are now able to dole out billions of dollars in contracts to various countries that genuinely do need investments that have been largely shunned by the west because they're higher risk markets. So they're developing countries in Eurasia or further abroad where maybe there's local instability, maybe there's civil conflict, maybe there's a history of corruption. Maybe these are just not particularly profitable projects that western firms say, that's a little too risky for me. I can't be sure I'm going to get a return on that. I can't get my project insured if something goes wrong, so I'm not going to touch it.

The Chinese will come in and touch it, and they'll say, we'll do the project and we might even lose money on it. But from now on, we're going to expect you're going to be voting with us at the UN. From now on, we're going to expect that you're not going to be having any kind of diplomatic relations with Taiwan. You're not going to support any legal action against us in the South China Sea. You're not going to support America's conception of freedom in navigation. And so it's this bartering, we'll bring you economic development, but we want geopolitical benefits in return. Some of the projects were even bigger. China comes in and says, we'll build a new port for you, but we want to have a control of that port after it's done, maybe on a 90-year lease. And so there's always, to a lot of these projects, ostensibly economic in nature, but there are geopolitical motivations behind them.

A lot of these projects have ended up going bust. And so what you've seen in the last few years is actually a significant decrease in the amount of money China is spending on the Belt and Road Initiative. The amount of time they spend talking about it, they're trying to sweep it under the rug now because they went and spent $50 billion abroad on all these infrastructure projects, and half of them failed. Some of these countries went into debt and they're struggling to repay, and they're asking China to cut our losses and forgive our debt. Some of these Chinese companies are going under because they've just assumed too much responsibility and they're not getting their loans repaid.

Some of these countries, there's geopolitical pushback. So one government signs a kind of a shady contract with China under the Belt and Road Initiative, and then there's an election and a new government comes in and says, no way, this is not good for our country. You're violating our sovereignty. We're canceling the deal. And so they've had a lot of problems with the Belt and Road Initiative abroad in these risky markets for a variety of reasons. In some ways, it's dying on its own.

Guiney: Wow. So there isn't really a strong need. The market has almost asserted more of a downward push on that.

Smith: In a way, yeah. And COVID, certainly, you see a significant tightening of lending and capital going abroad. And China has its own economic problems it's grappling with at home. And so there has definitely been a tightening, a natural tightening without America needing to do a offensive policy reaction. But there are still developing countries with major infrastructure needs and they're going to continue turning to China so long as there's not a western alternative. And so I do think we need to do a better job incentivize, working with our partners like India, Japan, Australia, and others, to find ways to incentivize higher standards, western firms and allied firms to be able to go in and do some of these projects.

And maybe that's saying, look, we'll foot the bill for the insurance. If you're willing to go in and build this new power plant in a risky market, we'll, at least, maybe we'll provide you some government backed loans to do so. You can repay them at favorable interest rates. We'll subsidize the insurance if something goes wrong. There are different ways that we can create incentives for western firms to do so, and we need to do a better job doing that.

Guiney: So we've been talking about accountability this whole episode. Big takeaways on accountability in the China situation.

Smith: I'm still hung up on COVID to a degree, and I think the China accountability question is a tricky one, but one that we ultimately have to figure out. But we also have to hold ourselves accountable. And part of what was so frustrating about the COVID debate was the lack of accountability at home and the scientists and media personalities and left-leaning ecosystem that tried to discredit the idea that this could have been a lab leak from the start, and that China had some responsibility in this. Thankfully, that narrative has shifted significantly over the past six months to a year, and they've essentially been forced to accept and acknowledge that they were wrong from the start, and they were, frankly, deliberately trying to mislead people by saying that there is zero evidence this was a lab leak. Anyone attempting to do so is a conspiracy theorist and a racist. And they essentially tried to discredit any conversation about the possibility of a lab leak or the possibility of Chinese culpability in this, and that's, frankly, disgusting.

I would like to see the US health community held accountable for the unscientific approach and overly politicized approach they took into COVID's origins. The issue is too important, and there's been too much death and destruction from this to sweep it under the rug and say, oh well, maybe we'll get it better next time.

Guiney: Would you say that that principle can be expanded to the larger conversation about China in the sense that if we were more accountable on our end to taking the actions that we should take within our own country in shaping our foreign policy, that we'd be in a much better position to actually get accountability from China on these things?

Smith: I do think so. Yeah. I think we're improving on that front in the sense that we no longer will accept without criticism the prevailing China wisdom, that engagement is the correct approach, and if we just trade more with China and we just talk nice with them diplomatically, that they'll get freer, that political and economic freedom will expand in China through engagement and interdependence. That was the prevailing narrative for decades, and there was no accountability despite the signs that thinking was fundamentally flawed.
What is heartening is that in the past five years, there finally is accountability, and there finally is serious scrutiny of those assumptions and the people that were advocating for those assumptions, and in many ways they've been discredited. And so I think part of the improvement in the China narrative now in the US and the move toward greater action is a result of holding the China watching community accountable for the narrative that it advocated for decades.

Guiney: It should come as no surprise to frequent listeners of our show that the takeaway here is a difficult one. There are reasons to be cautious, there are reasons to be optimistic. But at the end of the day, we have to have the will and the foresight to put into practice which should be common sense, that holding the Chinese Communist party accountable for their actions, be they military threats or human rights abuses should be a top priority. John Popp, and keeper of the organization's best curated snack drawer, can back me up on this.

Popp: I think it's important that we are all responsible for our actions. What we do, actions have consequences.

Guiney: It's safe to say that maybe if I barge into your office too much, I might not get to enjoy the things that you share with us culinarily.

Popp: Yes, that will be true, Mark Guiney, because right now in the snack drawer I have, yes, uncured turkey pepperoni meat sticks. And too much barging might mean that I can't find these for you.

Guiney: All right. I'm going to creep very, very quietly away.

Popp: Very good. Would you like to creep out with a meat stick?

Guiney: Yes, please.

Popp: There you go. Bring one for the boy.

Guiney: John Popp's legendary snack drawer.

Popp: One for you. One for Christian, Phillip, and-

Guiney: Thanks to Jim Carafano and Jeff Smith for contributing to today's episode. And thanks to you for listening to Heritage Explains. We want to know what you think about the new format, about the stories we're telling, about the voices that you're hearing. So send us an email at [email protected] to let us know what you think. If you want to help out the show, be sure to subscribe to Heritage Explains wherever you get your podcast. Be ready for our show next week where we wrap up our series with Jeff Smith. We've really enjoyed putting together this series for you and we are going to finish strong. We'll see you there.

Heritage Explains is brought to you by more than half a million members of The Heritage Foundation. It's written and produced by Mark Guiney, Lauren Evans, and John Popp. Production assistance by Alexa Walker and Jeff Smith.