The ruling communist regime in China is exploiting international financial systems and engaging in predatory loan schemes to unfairly advantage itself, a a U.S. congressman says.
The Chinese Communist Party (CCP) is creating economic dependencies to ensure that nations worldwide can’t break away from its influence, Rep. Frank Lucas (R-Okla.) said.
“The Chinese operate by different standards than the rest of the world,” he said during a Feb. 5 talk at the Hudson Institute, a Washington-based conservative think tank.
“[They’re] creating an empire reminiscent of the colonial period.”
Mr. Lucas said that the regime was granting “lavish” spending terms for loans to authoritarian and underdeveloped nations, which he compared to victims of a loan shark. In many instances, he said, the regime knew that the recipients of such financing wouldn’t be able to pay and would be subject to stringent terms that further indebted them to Beijing.
The regime has effectively fused its communist political ideology with a one-sided, “mercantilist” international economic policy, he said.
“It looks almost like the colonial model,” Mr. Lucas said.
China Could Be Excluded From Global Forums
For CCP leadership, “blackmailing” is “just the pattern” of business, Mr. Lucas said. To counter it, he said the United States should work to limit the regime’s power over international financial institutions.Mr. Lucas has sponsored the PROTECT Taiwan Act. Signed into law last month, that bill directs U.S. leadership to exclude CCP officials from financial and intergovernmental forums if the regime attempts an invasion of Taiwan.
To participate in international institutions, he said, the regime should be required to behave more responsibly.
“They have benefited from our open society,” Mr. Lucas said. “If they’re not going to be a part of our open society, they should not be able to benefit from the chaos that they bring.
“It’s been contrary, it would seem to me, to the best interests of most of the planet.”
Similarly, Mr. Lucas said that the CCP unfairly advantaged itself by manipulating international prices in its favor. In one example, he noted how the regime stockpiles vast quantities of cotton, which it can release or hold at any time to effectively control the price of its imports.
One solution to that problem in high-tech sectors would be blanket tariffs or restrictions on U.S. exports to China.
Mr. Lucas said that such action is a highly contentious topic in Congress, however, and isn’t likely to be legislated any time soon. He says he’s opposed to sweeping restrictions on investing in China.
Beijing Seeks Leverage Over US Research
Another key area of concern, Mr. Lucas said, is the regime’s efforts to gain financial leverage over U.S. institutions of higher education.The CCP has long exploited the U.S. university system, providing large amounts of funding and using myriad talent programs to send its people to be trained in the United States with the requirement they return to China and help develop state programs, including in the military.
Mr. Lucas says Congress is working to help research institutions balance their funding sources and to help them “change the culture” that has fostered dependencies on China.
“There will always be a need for additional scientists and engineers and mathematicians and technologists,” he said. “We’re working hard to get their attention, and I believe that we have.”
More broadly, foreign funding at U.S. universities has become a topic of concern in national security circles since a 2019 Department of Education investigation found more than $6.5 billion in previously unreported foreign gifts to U.S. universities.
Many of those gifts were made by entities with ties to adversarial powers, including in China, Iran, and Russia.
“We’re dealing with a porcupine, and we’ve got to be real careful when we hug it,” Mr. Lucas said.
