U.S. business leaders should be cautious about Chinese investments, Secretary of State Antony Blinken warned at a gathering of prominent leaders in business and politics.
Blinken sounded the alarm on Dec. 7 while speaking at The Wall Street Journal’s CEO Council Summit.
“There is no distinction between a so-called private enterprise and the state,” he said. “If a private Chinese enterprise makes the investment, the state has access to whatever that enterprise has access to.”
The Chinese Communist Party (CCP) can gain access to private companies in a number of ways. In China, Party branches or cells are embedded in most companies, institutions, schools, and other entities—allowing Party officials to keep tabs on their operations and access confidential information.
Chinese laws also grant CCP officials sweeping authority to collect data. For example, China’s Cybersecurity Law, which took effect in 2017, requires all companies operating in China to store their data within the country’s borders.
Additionally, China’s Counter-Espionage Law compels individuals and companies to “truthfully provide” information to assist state security organs in their investigations.
Blinken said he wasn’t calling for a U.S. economic decoupling from China, but for Americans to be “on guard.”
“There are very specific critical areas that have strategic importance, security importance, where we have to be on guard,” he said.
One Chinese company that has come under international scrutiny in recent years is Chinese tech giant Huawei, because of its extensive ties to the CCP and the Chinese military. The company is banned from supplying 5G telecommunications equipment to U.S. networks. Huawei equipment has also been found to have numerous security vulnerabilities.
Blinken also warned about the Chinese regime wanting to replace the current world order.
“The challenge is that the world order that China would prefer is a profoundly illiberal one, as opposed to a liberal one,” he said. “If China is doing the challenging, we’ll stand up.
“We are going to be much more effective if we’re doing it in concert with allies and partners who are similarly aggrieved by some of China’s actions.”
Blinken said if the United States works with its allies—a combined economic clout of about 40 to 50 percent of the world’s gross domestic product (GDP)—it would have “a much heavier weight” and “more impact” on China.
“Our purpose is not to contain China, to hold it back, to stop trade and investment,” he said. “Our purpose is to uphold the international order.
“We have a very profound stake in upholding the order, making sure to the best of our ability that countries—whoever they are, wherever they are—actually play by the established rules, the norms, [and] meet the standards.”