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Gordon Chang on Virus Explosion in China, Xi Jinping Losing Control, and CCP Gearing Up for War

Is Omicron the COVID-19 variant spreading in China? Or is it something else? And what does the explosion of the virus—and the associated real death toll in China—mean for Chinese leader Xi Jinping, the author of China’s draconian “zero-COVID” policies? We sit down again with China analyst Gordon Chang to discuss the complicated realities the Chinese regime is facing.

“I don’t know what’s going on in Xi Jinping’s head, but I do know that he’s engaged in the most rapid military buildup since the Second World War,” Chang says.

Why is the Chinese Communist Party (CCP) collecting DNA profiles of Americans? Why are CCP-linked companies buying up land next to U.S. military bases? And is an attack on Taiwan imminent?

FULL TRANSCRIPT

Jan Jekielek:

Gordon Chang, such a pleasure to have you back on American Thought Leaders.

Gordon Chang:

Thank you Jan and Happy New Year.

Mr. Jekielek:

Happy New Year to you too, Gordon. It’s a very strange new year in communist China right now. CCP virus or SARS-CoV-2 is running rampant through China. I want to get your take on how we got here, because we didn’t really know about this until about a month ago.

Mr. Chang:

If we go all the way back, this does look like it was an engineered pathogen. But that is a long conversation. But we do know something, and it does set a context for where we are today, and that is whether this was an engineered pathogen or not, China turned it into a biological weapon. They lied about contagiousness. They knew that it was highly transmissible human to human. But for three weeks in January 2020 and maybe even the last week of December of 2019, they told the world it was not.

And then, while they were locking down their own country later in January, they were pressuring other countries to take arrivals from China without travel restrictions or quarantines. You put those two things together and it means they deliberately spread this disease beyond its borders. The reason why we need that context is because we’re seeing something similar today.

As this disease is ripping through China, they are now opening up the doors to Chinese leaving the country for tourism, and they are not sharing sequencing. They’re not telling the world what’s actually going on in China right now. Yes, we think it’s some sort of Omicron variant, but what we are reduced to doing is taking the wastewater out of planes that arrive in our country and in others, and then trying to get the genetic material out of that. That’s entirely wrong. If China is doing this again, and it’s clear that they are, then we should not be allowing arrivals in from China until we know what the devil is going on.

Mr. Jekielek:

That makes a lot of sense. But again, it would seem so odd to the typical lay person when we know this virus is ripping through. There was this long, long period of various forms of lockdown policies. We saw Australia try to do it. We saw New Zealand try to do it, but as they say, virus is going to virus, and the virus basically has to go through the population.

From what we understood this, the virus was already starting to really build and start going through the population before the CCP officially lifted the lockdowns, and then also there were these protests. There are multiple things going on. Maybe you can shed light on how these things interact.

Mr. Chang:

From about the last week in October and especially after the November 24th fire in Urumqi, the Chinese people participated in these extraordinary protests. It was in the central part of China in Zhengzhou at what is known as iPhone City, a factory which builds more than half the world’s iPhones.

Workers just wouldn’t put up with it. They were scrambling over fences, and they were escaping through fields. What was really important was that the people who lived around there helped the workers flee. And by helping the workers flee, they put themselves at great risk.

But what was really fascinating was after the November 24th fire, it was clear from the videos that fire trucks couldn’t get to the scene of the apartment building, because of barriers that had been put in the streets because of COVID. Also, people couldn’t get out of their apartments in the burning building, because they had been shut in from the outside for quarantine purposes.

And then, you had those protests across China—north, south, east, west—these were spontaneous. There was no organization, no coordination, and no leadership. What really frightened the Communist Party was that people were of course saying they didn’t like the COVID lockdowns. But they were also saying, “Down with Xi Jinping, down with the CCP.” That means that the mood was revolutionary.

In the face of that, it was one of four reasons that that the Chinese leadership on December 7th just abandoned zero-COVID, which was the most draconian set of lockdowns in the world. Suddenly, just like that, they disappeared. That’s because the Chinese people wouldn’t put up with it. But there were other reasons.

Mr. Jekielek:

A second reason is that the virus was already getting out of control despite these lockdowns, as many epidemiologists that I’ve spoken with have said.  It’s something inevitable, especially with a respiratory virus, a coronavirus. It’s almost like they had no choice. But tell me what you think.

Mr. Chang:

The World Health Organization said that the virus was surging through China before the lockdowns were lifted on December 7th. They were saying the lifting of the lockdowns didn’t cause the surge, because it was already there. When you start looking at the data, which we’re starting to get, we’re seeing that they really were infections.

Now, it is just completely out of control. On December 20 from those leaked minutes of China’s National Health Commission, almost 37 million people were infected in one day. That’s 2.6 per cent of the Chinese population, in one day. People estimate somewhere between 5,000 and 7,000 fatalities a day.

And this has not peaked, because the modeling suggests it will peak sometime in the third week of this month, and then there’ll be another wave in March. Just as you say, a virus has got to virus. The Communist Party’s draconian lockdown just could not stop this.

Mr. Jekielek:

I want to mention one thing. Because the virus has gone through many populations in the West, in the U.S. the estimate is there’s about 90 per cent natural immunity. People have already been exposed, and that provides some level of protection.

You might get the virus again, but it’s not going to be nearly as severe. But in China I don’t for a second believe the official numbers that they had. Of course, there’s a lot more death. But at some level, they actually did stop it. But that created this huge immune deficit now. We are seeing again and again, and this is for the last three weeks, a steady pace of these huge lineups at crematorium. There’s significant death happening and there’s a lot of debate about whether this is real.

Mr. Chang:

Yes, it is real. We can see from those videos that in city after city, at the crematoria the lines are backed out a kilometer or so. In Shanghai, people were burning the corpses of their relatives on the street. That doesn’t happen unless this is absolutely real.

This means when you look at it, Communist Party policy was a failure. There’s this notion that goes back to Mao, and Xi Jinping shares it, that communism can do anything. Mao talked about conquering nature. Xi Jinping obviously thought he could conquer the disease and eventually the disease conquered communism. We saw the Communist Party, despite its great efforts, was not able to stop this. That’s why we’re having this unfolding tragedy in China right now.

Mr. Jekielek:

And not only that, but Xi put his personal seal of approval behind these lockdown policies. That is very significant. Please tell me about that.

Mr. Chang:

Yes. Xi Jinping is known to be the author of zero-COVID. When he gave his work report, that nearly two-hour speech on October 16th which opened the Communist Party’s 20th National Congress, he doubled down on zero-COVID. But he failed, because starting November 11th, you had that one announcement which people took to be a minor adjustment in zero-COVID, but it really wasn’t really implemented. It wasn’t until December 7th when there was a complete repudiation of Xi Jinping’s policies.

But what’s fascinating is that this occurs while we’re seeing his other domestic policies are now being repudiated. The Communist Party and the state council held its central economic work conference and they didn’t mention common prosperity, which is Xi Jinping’s signature program for the economy. It’s not just COVID, and it’s not just the economy, we are seeing the Communist Party move in a different direction from Xi Jinping.

This is striking, because remember at the 20th National Congress in the middle of October, Xi Jinping gets his precedent-breaking third term as general secretary, and everybody says, “He’s going to be president for life.”

I don’t think so, or his life’s going to be pretty short, one or the other. The problem is that even in the middle of October, we could see that as Xi Jinping was cementing his control over at the top of the Communist Party, the Communist Party was losing control over Chinese society. Now, Xi Jinping is losing his control over the party, and you have to conclude that the country looks a little volatile and looks unstable.

Mr. Jekielek:

I want to catch up a bit. You mentioned there were four reasons. We have, of course, the lockdown policies themselves and the virus basically surging despite that. And you also have these protests. What were the other two?

Mr. Chang:

Okay. The other two were that municipalities were financially responsible for zero-COVID, which was extremely expensive to implement, because we have these lockdowns, we have the contract tracing, we have daily testing, and sometimes more than once a day testing for COVID-19.

Municipalities had to pay for it. Even Beijing as rich as it was running out of money to implement zero-COVID. They just didn’t have the cash. But you also have the Chinese economy starting to contract or going deeper into contraction. There you have those two other reasons. It was just not possible anymore for the party. They just didn’t have the resources to do it, and they could see the country’s economy was failing.

When you add the policy wasn’t working, as we talked about and the protests were occurring, as we talked about, those are essentially the four reasons. The Communist Party didn’t change its policies on December 7th. It just capitulated to the disease. This is the collapse of Communist Party policy.

Mr. Jekielek:

I really want to talk more about the economy. We’ve certainly seen in the West the devastating consequences of these types of policies. We know that even communist China, who has all sorts of tricks up its sleeves, can’t escape this.

I want to talk about these. You were talking about the bureau, the top cadres. There seems to be a significant number. Let me qualify this. In case anyone isn’t aware, COVID has this huge gradient. The greatest risk by far from COVID is for people of older age or immunosuppressed situations.

Mr. Chang:

People like me.

Mr. Jekielek:

No, hardly. But to make a long story short, even knowing this, there’s a disproportionate number of high level cadres who have just simply passed away. We’ve actually been covering this, because we’re very interested in all those people here at Epoch Times. What are you seeing there?

Mr. Chang:

Yes, it’s true. You have a lot of senior officials succumbing to COVID and we don’t know. I have heard a lot of rumors. The rumor that makes most sense to me is that senior cadres get preferential access to organ transplants.

When you have an organ transplant, you have all sorts of drugs to suppress the immune system of the body. These people are immune-compromised, and we know that COVID attacks the immune-compromised. I can’t say this for sure, but it makes sense to me that this is what’s going on. But whatever it is, it does look like senior Chinese leaders are disproportionately dying from the disease.

Mr. Jekielek:

It’s very interesting. I’ll frame this a bit. I’m remembering some of the first reporting I did on the organ industry in China back in 2006, when I realized there was this whole murder for organs reality happening which was unfathomable.

Mr. Chang:

Horrific.

Mr. Jekielek:

Absolutely horrific. I had interviewed David Kilgour, who had been doing research on this. He had interviewed a Taiwanese national who had gone to China, and had a rare antibody condition. The guy had gone on two trips and had been fitted with a total of eight kidneys across something like six months, because of this rare condition.

They kept being rejected. Finally the eighth one held. But you can just imagine the reality there. So, when you were talking about these cadres getting preferential treatment, this is the kind of stuff we’re talking about.

Mr. Chang:

Yes. We first heard about this going back 15 years or so, people were saying, “Oh no, no. It can’t be right.” But since that time, we’ve got more and more evidence that there is murder, people are being murdered for organs.

China has set up the infrastructure for that with mobile organ units and all the rest of it. It’s in China that you can get an organ on demand, whereas you have to wait years in the United States to get a match for a kidney. Yes, it’s happening, and it is one of the crimes against humanity that the Communist Party is committing.

Mr. Jekielek:

I want to highlight that, this on-demand idea. If you’re a high level cadre in the Communist Party of China, there’s nothing that is off the table for you on this.

Mr. Chang:

Yes. The question is, why do they do all this DNA testing of everybody, especially Uyghurs and Kazakhs and other Turkic minorities? Why do they do this on prisoners? It is because people are being killed on demand for organs.

Mr. Jekielek:

And matched. I think that’s what you’re suggesting.

Mr. Chang:

And matched.

Mr. Jekielek:

Yes, exactly. It’s just an unbelievable reality. About two weeks ago we had the head of Doctors Against Forced Organ Harvesting on the show. I’ll recommend that our viewers check out that episode if you want to know more about this harsh reality.

Let’s jump to this. There’s been multiple reports from doctors that we have verified that show that some of these people are dying from white lung, which is reminiscent of the original or Delta strains of COVID.

It’s interesting. But as you pointed out earlier, there’s no good data coming out of China. We can’t trust any of it. You’re watching these patterns. Multiple doctors that we have verified are saying that people have died of what seems to be an earlier version of the virus. But we don’t know, of course.

Mr. Chang:

Because China’s health authorities are not sharing information. We don’t even know if COVID is the only disease that is going through China right now. We just do not know. We make assumptions, but we don’t know. That’s why the world needs to close its borders to China until they start sharing data. Because without sharing data, we can’t protect ourselves.

Mr. Jekielek:

And isn’t it so bizarre? I need you to speak on this, but they’re demanding that Chinese be let out to any country possible. They’re enforcing this reciprocity where if you don’t do that, we won’t let you in either. With this reality of COVID surging through China, what’s going on in their minds?

Mr. Chang:

This is just Chinese arrogance. What they’re saying is that they object to these testing requirements where Chinese travelers need to get a negative test before they board a plane. Do you need that to go to China? Yes. But nonetheless, just Tuesday the foreign ministry said, “We’re going to impose countermeasures on countries that impose travel restrictions on China arrivals.”

It’s just Chinese arrogance that they get to set what they want to do. You can’t defend yourselves. That’s why China is too dangerous to deal with. Whether we’re talking about COVID or talking about something else, we cannot have relations with China, as long as it’s ruled by the Communist Party. Because the Communist Party, just by its inherent nature, is malicious. We’ve got to defend ourselves and we’re not doing that.

Mr. Jekielek:

I had Dr. Aseem Malhotra on this program not too long ago and he had a phrase, and I immediately thought of the Communist Party when he said it. He was talking about a psychopathic entity. And I think I know the original psychopathic entity. Or maybe not the original, but one that’s been around for quite a while, and I don’t think people grasp this.

Mr. Chang:

Yes.  Look, the Communist Party is responsible for more deaths than any other organization in history. Mao Zedong, people don’t know exactly how many people he killed, but the minimum is 20 million. Most people say the minimum is 30 million. Other people say, “On the upside you’re talking 50, 60, or 70 million people.” Unnatural deaths. That’s from the Great Leap Forward, the Cultural Revolution and other assorted murderous activities.

Take a look at Xi Jinping. Right now, according to the Johns Hopkins Coronavirus Resource Center, you have 6.7 million deaths from COVID, worldwide. China counts for only 5,000 of those, because that’s their number. Obviously, it’s more, but what goes into the Johns Hopkins number is what China tells them.

Xi Jinping’s toll from Coronavirus alone, 6.669999 million deaths. Those are the deaths outside of China. This disease should have never left Central China. But Xi Jinping made sure that he would do it. So, each of those deaths is a murder.

This is more than just COVID, it’s fentanyl, and it’s all the other stuff that they’ve been doing. This is murderous activity. This is a psychopath. It’s a psychopathic regime. That’s the nature of the regime. You take a good person, you put them into it, and he becomes a psychopath or she becomes a psychopath.

Mr. Jekielek:

In this vein, there is this huge age gradient in risk in COVID. I’m not actually sure of the reality, because I’ve heard different numbers and I don’t know what to trust exactly. But it’s either that the elderly people in China have a much lower level of vaccination, or the Sinovac vaccine isn’t particularly effective. If they had it, it would have waned by now, because there’s been quite a bit of time.

There’s going to be a disproportionate number for a lot of assumptions. But there’s going to be a disproportionate number and there isn’t natural immunity nearly to the extent. So, there’s going to be a lot of older people dying. This is the  terrible conclusion that I came to, and I’m curious what you think about this.

Because of the one child policy, and because of this huge demographic hole that the CCP has created for itself and its psychopathic nature, it’s almost convenient for the CCP to lose some of the older population. This is the kind of thing that they would be thinking.

Mr. Chang:

Now that you mention it, the most conspiratorial theories of what China did in 2019 and 2020 come from the Chinese themselves. One of those theories was that Xi Jinping wanted to test out his biological weapon. The other theory that you’ll hear is that they wanted to kill off old people, because it would be good for the age distribution in Chinese society.

I don’t agree with either of those. Those are too far along, but that’s what the Chinese people say. We have to be mindful that this is a society where obviously there’s no trust of the regime and that’s what people think. As I said, I don’t think so. I think this was an accidental leak from a biological weapons lab. The circumstantial evidence points to that.

The other theory is zoonotic transfer. No one’s been able to document the links from bat to intermediary mammal to humans, even after all this time. You can go back to the Black Death in Europe and see what happened after it. You have this flourishing of European society, because it killed off so many people.

Chinese leaders, they look at our histories, and who knows what they’re thinking. These guys are malicious in the extreme. I don’t think that they’re capable of that. But the point is, we know that they murdered a lot of people, almost 6.7 million people.

Mr. Jekielek:

Okay. So, you’re talking to this very high level CCP planner and he says, “Isn’t it interesting that this is killing all sorts of older people and we have this huge demographic problem.” My point is that in this view of the world, human beings are kind of protoplasm. They’re not seen as individual valuable beings.

Mr. Chang:

Communism believes that there is a dynamic to history, that there is an overarching purpose and that societies have to get there. Humans are not important in that, because it’s history, it’s determinism.

Also, in order to enforce equality, you have to kill people. It’s no coincidence that the Chinese flag is blood red. It is specifically meant to signify blood. That’s in the nature of the regime. Whether these crazy conspiratorial theories from the Chinese are right, which I don’t think they are, the point is communism kills a lot of people, and often kills intentionally.

Mr. Jekielek:

Let’s pivot to the economy. We were talking about the terrible impact of these rolling lockdowns for these last few years. The Chinese Communist Party is saying that there’s still significantly less than normal growth. You mentioned you think there’s a contraction happening. Please explain to me the reality around the Chinese economy right now.

Mr. Chang:

That’s certain from the numbers we’ve seen in the fourth quarter of last year. There’s no reasonable basis to say that the economy expanded. That’s largely COVID. But you need to put some context in this. Go back to 2008, and you have the great downturn. You have the United States and a lot of free market economies take their medicine. They don’t take as much medicine as they should, but they take medicine. They go through the cycle. China decided it wasn’t going to do that. So, it went through the biggest stimulus program in history, just pouring money into all sorts of projects.

To give you the dimension of it, in 2008, Chinese economy was less than the third the size of America’s. But from 2009 to the following four years, they created an amount of debt which was basically equal to the amount of debt in the United States, the credit running through the banking systems.

They blew up their banking system. Of course, they created growth. But eventually it creates a point where economies become exhausted. They start to get a debt crisis and they worry about it. Then, you get to September 2020 where the Chinese leadership puts the breaks on the property sector. The property sector is important.

It’s somewhere between 25-30 per cent of gross domestic product depending on how you count it. And it’s really important, because about 70 per cent of the wealth of the Chinese middle class is in property. It’s a critical sector. Then you have Evergreen, which was once the largest property developer in China, then the second largest, and then it defaults. And then, you have rolling defaults to the property sector.

That is obviously going to cause not only a diminution in growth, it’s going to cause a contraction in the economy. Now, we’re starting to see it. Trade is being hit because of demand around the world is down because of supply chain disruptions in China, making China less desirable as a factory floor. The trade numbers for November were disastrous. Exports were down 8.7 per cent, or something like that.

But more importantly, imports show domestic demand down 10 point something. At the same time, retail sales are down. Then, they’re starting to get December numbers, and the December numbers are negative as well. This is an economy that is getting smaller. It had gotten smaller, if you look at all of 2022. A couple of days Xi Jinping ago says, “It grew at least 4.4 per cent.” That’s crap. China’s economic numbers are becoming as unreliable as their COVID numbers.

Mr. Jekielek:

This unreliability of numbers seems to be a theme. But we have to remind ourselves of that, because even institutions like John Hopkins give them credibility.

Mr. Chang:

Everybody does. All the news organizations report, “China grew 5.4 per cent last year.” They’re just basing it on what Beijing is saying, and that number gets fed in. But these numbers don’t make sense.

They do all sorts of statistical tricks and then they just out and out lie. Especially with the COVID fatalities. They were reporting like 12, 13, 14 fatalities for the entire month of December, something ridiculous like that. Even China’s friends can’t justify this anymore.

Mr. Jekielek:

The reason this is important for people here is that when you hear, “Oh, China is still growing despite all these challenges and lockdowns. But look, we’ve still got 4.4 per cent growth.” There are still huge amounts of cash flows from huge investment coming from the West into China. Even given all the realities that you just described, it’s still this amazing place that you must invest in. How is that?

Mr. Chang:

It mystifies me. Part of it is the foreign money that goes into China’s equity markets is hot money. It flows in, it flows out. The money actually going into direct foreign investment, I think is down.

China says its numbers are up. But that doesn’t seem right, because we have witnessed, especially since about the middle of 2021, companies starting to diversify their supply chains which means they’re not investing in China as they once did. Or in some cases they are just out and out disinvesting from China.

With the supply chains issues, I think companies are not fooled. There’s always a quick buck that people in the financial markets want to make. But then again, that money comes right out again. I get distressed by it, but I realize that eventually, the market reality will prevail.

Mr. Jekielek:

You have a recent piece, and I can’t believe we’re still talking about this, because we first talked found out about this in 2019 and I was just shocked. The military Thrift Savings Plan is investing not only in Chinese state companies, but in Chinese military companies. If that isn’t, I don’t know, ironic maybe is the term. It’s worse than ironic, but this is still happening.

Mr. Chang:

The Thrift Savings Plan is the federal government’s 401(k) plan for federal employees. Since 2001, it’s been opened up to members of the military, which means they can invest in the various units that the Thrift Saving Plan sponsors, like their mutual fund window.

If you look through all of the investments of the Thrift Savings Plan, TSP, you’ll find companies that are on the Commerce department’s entity list. In other words, Americans can’t do business with these companies without getting a license from the Commerce Department, but you can invest in them. That’s nuts.

But the thing here is that we have to remember that the communist system is very different from ours. President Trump banned investment into 31 Chinese military-linked companies and that’s a good start. But we’ve got to remember that all Chinese companies are military-linked, because of the nature of the Communist Party system.

Communist Party gets to do whatever it wants. That’s why they have this doctrine of military-civil fusion, which means that everything that a nominally civilian institution has is available to the Chinese military. We should be banning investment into all Chinese companies, because it is one system. It is a very different system from ours. We tend to think that China is just like us, except they’ve got better food. No, it’s not. They’ve got a Communist Party system, which is top down.

Mr. Jekielek:

To go back to the Wuhan Institute of Virology, given what you’ve said, it’s obvious that the Wuhan Institute of Virology had military applications going on there. There’s no scenario where that would not have been the case.

Mr. Chang:

Just after the problems there in February 2020, what does China do? It sends in its top biological weapons expert, Major General Chen Wei, to clean up the place. Her task is to clean up the Wuhan Institute of Virology.

Whether it’s nominally military or not, it is military. And so, we can see it from everything. We can also see what the Chinese themselves are saying about their own military research into pathogens. They call them specific ethnic genetic attacks. In other words, they’re developing pathogens that will leave the Chinese immune and sicken and kill everybody else.

Mr. Jekielek:

Yes. This isn’t a conspiracy theory.

Mr. Chang:

No, this comes from the science and military strategy, which is the authoritative publication of the National Defense University of China. You go back to the 2017 edition of Science and Military Strategy, there it is. They’re talking about specific ethnic genetic attacks.

So, these guys are doing it. That’s why they’re hoovering up the world’s DNA. You want to find the biggest collection of DNA profiles of Americans? You’re not going to find it in this country. It’s in China. We’ve allowed the Chinese to buy it up, steal it, whatever. So, this is on us.

Mr. Jekielek:

The military-civil fusion doctrine that you’re talking about becomes very relevant. I was just reading your recent piece about that. Actually, it was one of the most popular opinion pieces on the Epoch Times website for a little while.

Mr. Chang:

Oh, thank you.

Mr. Jekielek:

There’s yet another example. A large Chinese company is setting up right beside a U.S. military base, which has some incredibly sensitive operations. And CFIUS (The Committee on Foreign Investment in the United States), the body that’s supposed to prevent things like this from happening, has nothing to say about it. Please tell me about this.

Mr. Chang:

Fufeng, which is the U.S. subsidiary of a Xiangdong-based agribusiness giant bought 370 acres within 12 miles of Grand Forks Air Force Base. At the Grand Forks Air Force Base, they’ve got two primary functions. They maintain links to drones, and they have uplinks to satellites. Fufeng wants to build this $700 million corn milling facility. That’s the perfect place to hide passive listening devices so they can steal signals. But it goes beyond that. That’s a perfect place to be able to put devices to disrupt our drone and satellite communication links.

The Committee on Foreign Investment in the United States, which is a Treasury Department-led interagency task force, decided it did not have the authority to block the purchase of 370 acres. What they did was they looked at the Defense Production Act of 1950, which is where they get their statutory authority.

Land purchases are not covered. It gets even worse than this. Actually, their statutory reading is correct. In 2018, they amend CFIUS’s enabling legislation to be able to block land purchases for national security reasons. And then, they have a list of military facilities that people can’t buy land nearby. Guess what? They did not include Grand Forks Air Force Base.

How could they let this happen? This is, as a friend of mine says, just regulatory and legislative malpractice. But there’s a solution here and this is where the American people come in. I agree that CFIUS does not have the legislative authority to block that purchase of land, but the President of the United States has the authority. He has enormous authority under two pieces of legislation.

There’s the International Emergency Economic Powers Act of 1977 or for an alternative, there’s the Trading with the Enemy Act of 1917. President Biden can use his authority under either of those two pieces of legislation to block the sale of land. And by the way, he hasn’t done it. I know that it’s just so incomprehensible that it leaves you speechless.

Mr. Jekielek:

The rhetoric around the Chinese Communist Party or the understanding to some extent of the foreign policy establishment around the China threat has changed over the last five, seven years. It’s been very stark to me.

But looking at all this, I can’t help but think that we haven’t really shifted in our approach and the threat of the Chinese Communist Party. We just had Cleo Pascal on the show recently talking about comprehensive national power and how the CCP is hellbent on beating the U.S. in every measure. But we don’t seem to be doing too much to prevent this from happening.

Mr. Chang:

We’re taking little steps which are obviously inadequate, and which are not being taken with the sense of urgency that the situation demands. We have an Oval Office, we’ve got a Pentagon, and both senior civilian officials like Defense Secretary Lloyd Austin and the three and four stars that don’t have a sense of urgency.

They do not comprehend the nature of China’s system and they’re getting it wrong. What they’re doing is making our military now less able to confront China. Because they believe if there’s a war with China, the reasoning goes, it won’t happen until 2027 at the earliest. Or it probably won’t happen until the middle of next decade.

What they’re doing is retiring cruisers. They’re retiring America’s most capable plane, the F-22, because they want to pay for the modernization of the fleet and the modernization of our air wings. Yes, I can understand that. But the threat of China, I believe, is now.

Whatever it is, there is a lack of a fundamental appreciation of what China is doing. I don’t know what’s going on in Xi Jinping’s head, but I do know that he’s engaged in the most rapid military buildup since the World War II. We know that he’s trying to sanction-proof the Chinese regime. We know, and this is the most ominous, he’s mobilizing China’s civilians for war. He’s preparing for war.

Mr. Jekielek:

Tell me more about how he’s doing that, the mobilizing of civilians.

Mr. Chang:

At the beginning of 2021, amendments to the national defense law went into effect, which took powers away from the State Council, which is a civilian unit and gave it to the Central Military Commission of the Communist Party, which runs the military. These were powers for mobilizing China’s civilians for war. But it’s not just giving themselves legal authorization to do this stuff.

A Chinese entrepreneur told me last July, and this guy has factories. He makes medical products for the civilian sector. He told me that Chinese Communist Party cadres came to him and demanded that he convert his production lines to make stuff for the Chinese military. He said that he was not the only one who got these demands.

In fact, there were so many factories now that were under these demands that factory owners just fled. The Communist Party is operating factories that once were owned by private entrepreneurs because the owners said, “We’re not sticking around for Xi Jinping’s war.” That’s what they’re doing and they’re doing other things of course. But the point is, these guys are ready to go to battle.

I can give you a lot of good reasons why China won’t go to war, but they are from the perspective of the American mentality. When you start putting yourself in their position, you have to understand that they are prepared to go to war for reasons which make a lot of sense if you’re a Communist Party senior official. They make no sense to us. But then again, that doesn’t matter.

Mr. Jekielek:

I want to touch on one thing. As you’re describing mobilizing the civilian population for war, I can’t help but think of the commercial fishing fleet of-

Mr. Chang:

The little blue men.

Mr. Jekielek:

The little blue men. I didn’t even realize that that’s what they were called. It makes perfect sense. This is a great example of military-civil fusion. And they’ve actually been employed and this is a huge population. You can imagine what role these commercial fishing boats would play, for example, in a Taiwan invasion.

Mr. Chang:

They’re called little blue men because their fishing trawlers are painted with blue hulls and they are given additional money for fuel by the military. They are given military radios and they act in coordinated fashion.

We have seen this, and their actions have actually taken the lives of South Koreans, for instance. They move into a country’s exclusive economic zone, which under the UN Conventional Law of Sea, of which China is a party, is that band of territory or water between 12 and 200 nautical miles, where only the coastal country can exploit the economic resources.

In other words, the fish. The Chinese just move in there and they do it in coordination and they get support from the white hulls, which are the Coast Guard and from the gray hulls, which are the Chinese Navy. So yes, that’s effectively part of the military.

Mr. Jekielek:

So again, this paints this picture of this kind of coordination. This is the thing that I suppose some people in the West are envious of, this unbelievable ability to coordinate and affect desired outcomes. There’s a trap here obviously, but you can imagine why people are thinking this.

Mr. Chang:

Communist states can be incredibly effective. This is true of any hard-line state. China right now is totalitarian. People say, “Oh, authoritarian.” No, it’s not. It’s totalitarian. And so, totalitarian states can mobilize very effectively and to number of purposes.

They can take the national resources, and buy diesel for the fishermen. They can do all sorts of stuff like this. Their weakness is that they do stupid stuff. President Obama once said, “We’re not going to do the stupid stuff.” Well, China does a lot of stupid stuff. That is occurring, and we’re seeing that with Xi Jinping and his policies.

Remember, he came into power at the end of 2012 when he became general secretary. It was a consensual system. No Chinese leader got too much power and too much blame or too much credit, because every decision was shared across the spectrum of political thought at the Politburo standing committee and the Politburo.

You make a big mistake and it doesn’t really matter. Xi Jinping grabs power from everybody else. He also grabs accountability, and that has all sorts of consequences. One of them is that nobody’s telling him, “You’re doing something which is really stupid.” He’s been doing zero-COVID for instance, and that has led China off the cliff. That’s where it’s heading really, really, fast right now.

The other thing that makes China a little bit dangerous, even more so, is that Deng Xiaoping, who was generally considered to be Mao Zedong’s successor, lowered the cost of losing political struggles. In the Mao era, if you lost a political struggle, you often lost your life.

Deng said, “We’re done with that. You know, lose a political struggle. You’re getting a nice house in Beijing. You have no incentive to destabilize the Communist Party, because we’re going to take care of you.”

Xi Jinping, by jailing his opponents, has raised the cost of losing political struggles. Xi Jinping knows this. He’s now got total accountability, which means he can be blamed, plus he knows that he can lose everything. He can lose not only power, he can lose wealth. His family can be jailed, and he can be killed. You’ve got a guy who has a different set of calculus. That is really, really dangerous, and we’re not taking that into account.

As I said, I can give you a lot of reasons why it makes no sense at all for China to invade Taiwan. It doesn’t. But it doesn’t matter because if you are in a political system where one guy gets to say and do everything, then you’re in trouble. If you’re in a political system where that one once powerful, all powerful guy is losing power, he knows he’s got very little risk, because he knows he’s going to be offed anyway.

So, he might as well roll the dice, which means he can take us by surprise. That is what makes China extremely dangerous  right now . This is not theoretical, Jan. In December, as China was falling apart internally, what did Xi Jinping do?

He had the incursion into Arunachal Pradesh in India. We see the increased pressure against Japan in the East China Sea around the Senkakus. We see increased pressure on the Philippines in the South China Sea on certain shoals. And of course, they doubled their incursions into Taiwan’s air defense identification zone. By the way, they take on our Air Force reconnaissance plane over the South China Sea. So, this is a system that’s going off the rails.

Mr. Jekielek:

You mentioned that there’s all sorts of reasons why they wouldn’t, according to the Western calculus. But there is one piece that strikes me as fitting in the Western calculus, and that’s when your economy is failing. That’s often when people are ready for war, isn’t it?

Mr. Chang:

That’s why China can take us by surprise. We know what they’re preparing to do, which means they’re developing the capability to do it. You can fully never know intentions a hundred percent, but you can see capabilities and we can see where they’re doing this.

As I said, it’s not just building up their military, it’s trying to sanction-proof their regime and it’s mobilizing China’s civilians for war. That means we need to prepare for war ourselves. I know that that sounds drastic, but that’s what they’re doing.

We’re American, so we think we’re entitled to be oblivious about what our enemies say about us. Osama bin Laden in 1993 killed six people by detonating a bomb under the North Tower of the World Trade Center. We couldn’t care less. We couldn’t care less until 9/11 when Osama bin Laden killed 2,977 Americans in one incident. China is so much more powerful than Al-Qaeda. We can lose our country.

Mr. Jekielek:

Gordon, these are very strong words. At the moment, we are very, very focused on a very different part of the world, on Ukraine specifically. Is the CCP taking advantage of this?

Mr. Chang:

It certainly is. Here, we need some context. In August of 2021, there was the catastrophic withdrawal from Afghanistan. Communist Party propaganda was very clear that the United States could no longer deter China. This is something that we heard in the preceding March when China sent its then top two diplomats, Yang Jiechi and Wang Yi, to Anchorage to meet Secretary of State Anthony Blinken and National Security Advisor, Jake Sullivan.

Yang’s opening statement was a rant saying that you Americans can no longer talk to us from a position of strength. Then it was just words. But in the following August with the withdrawal from Afghanistan, we saw propaganda come out from Beijing. This was actually the day that Kabul fell, they said, “When we invade Taiwan.” They said when, not if. They said, “When we invade Taiwan, two things will happen.”

They said, “Taiwan will fall in hours, and the United States will not come to help.” This is their mentality. What happened is that Xi Jinping and Vladimir Putin believed that the United States was not in a position to stop the Russian invasion of Ukraine. We’ve got to remember that in 2021, the coalition that was arrayed against Vladimir Putin, that was the United States, the 27 nations of the European Union and Great Britain had an economy that was collectively 25.1 times larger than Russia’s. And yet we failed to stop the invasion.

We failed to stop the invasion because they felt that the United States was done, and that there was no deterrence. The Chinese were looking at this and taking away a couple of lessons. Since we’re Americans, we take away the optimistic lesson that because of the heroic resistance of the Ukrainian people, that China won’t invade Taiwan, because the Taiwanese people will also be heroic in their resisting Chinese invaders.

That’s not what China thinks about the people of Taiwan for one thing, but I’ll put that aside. But what they’re seeing is the initial failure of deterrence. They’re also seeing the failure to impose sanctions, which are strong enough to stop Putin in his tracks.

We have sanctions that have hurt Putin, but the war is still continuing. Here we are basically 11 months into it. That’s what the Chinese see. And the Chinese are arrogant. They’re thinking, “Yes, maybe the West will impose sanctions on Putin, but they won’t do it to us because we’re Chinese.” The lessons they’re taking away are the wrong ones. But nonetheless, those are the lessons that you see in Chinese propaganda, which is the best window into the mind of the Communist Party right now.

Mr. Jekielek:

With America projecting weakness, we know that when that happens, all sorts of bad actors come out to play to take advantage of this. This is what we’ve been seeing.

Mr. Chang:

Yes, we see this for instance. When Putin was making these threats to use his nuclear arsenal, what happened? China started making threats as well. And North Korea for the first time. There’s a decade worth of comments from the Kim family saying, “We’ll nuke you.” But they’ve always been in the context of, “If you attack us, we will destroy your cities.”

After Putin’s invasion of Ukraine for the first time ever, North Korea said, “We have the right to preemptively use our most destructive weapons.” They’re all taking clues from each other. People say, “Oh, Gordon, you’re just walking around with a cloud over your head, which is raining just like the cartoon characters.” And my wife says that too, of course. But the point is, you look at the facts right now and it really looks extremely dangerous. It looks like the period just before the second World War.

Mr. Jekielek:

To talk about North Korea, it’s astounding how many missiles North Korea has been testing even just in the last year. It’s more in the last year than I don’t know however many more than the past.

Mr. Chang:

Than they’ve ever tested.

Mr. Jekielek:

Than they’ve ever tested, perhaps. I don’t fully understand the implication of that, but it’s bad.

Mr. Chang:

It’s basically saying that they think the Biden administration can’t stop them. And let’s look at that. North Korea can only test ballistic missiles and nuclear weapons, all violations of UN security council sanctions, by the way, only with money. They have money because they launder it through China’s banks.

Most of those transactions are dollars and every single dollar transaction in the world other than with paper currency, every single banking transaction involving dollars clears in the city where we are now. As a matter of fact, just a few blocks south of us. They clear through New York. We know exactly what’s happening. We can see all these transactions, and we can stop this. We can starve Kim Jong-un and we’re not doing it.

And the Chinese look at this and they say, “Well, look, we are openly money laundering, committing violation of federal law after federal law. And this federal government won’t do anything about it.” Trump, in 2017, he had the Treasury Secretary in post Section 311 of the Patriot Act on the Bank of Dandong, a small Chinese bank laundering money for the North Koreans. We disconnected it. We basically put it out of business.

But then Trump did not use his Section 311 powers on three of the four big four Chinese banks, which were also clearly laundering money for the North Koreans. The Chinese look at that and says, “You’re not enforcing your own law. You’re a weak country.”

By the metrics, the United States is so strong, but we’re feeble. We are one of the weakest countries in the world, because we will not use our powers to protect the American people from known dangers. The North Koreans have a missile called the Hwasong-17 that can hit any part of the United States. They tested that thing, and we can stop it, but we’re not doing it.

And the American people, they should be upset at North Korea and the Chinese sponsors of North Korea. But they should really be upset at American presidents who had the means to stop this, and who chose not to do so. By the way, their last names are Clinton, Bush, Obama, Trump, and Biden.

Mr. Jekielek:

How much of an influence does this multi-billion-dollar DC Chinese Communist Party lobby have on this type of decision-making?

Mr. Chang:

I have never been in the federal government myself. I can’t tell you from firsthand experience, but I can tell you that China is a known danger. We’re not doing anything about it. They’re pouring tons of money into Washington. What does that lead you to believe? Yes, it’s a very effective lobby.

Mr. Jekielek:

One of the things that concerns me deeply is how much influence the Chinese Communist Party is able to wield, for example, through the TikTok app, but also through in other communicators. WhatsApp, for example, is being censored ostensibly at the behest of the Chinese Communist Party.

But there does seem to be some sort of reaction, especially in state governments to block the TikTok there. But ultimately, there’s millions upon millions of millions of young American kids who are on this app, which frankly, we know is terrible for them and is controlled by the CCP, which is going to use any means at its disposal to subvert America.

Mr. Chang:

Yes. There are two primary threats that TikTok poses to the United States. There’s the one that we talk about most of the time, which is surreptitiously and illegally taking data. There was the BuzzFeed revelations of last year and then revelations in December about TikTok using location data on journalists who were involved in the BuzzFeed leaks.

Buzzfeed reported that there were 80 tape recordings from September to January 2022. Basically, these recordings showed that all the data in TikTok was being shipped off to Beijing and that the people who worked for TikTok in the U.S. had no access to that data. And so TikTok, being a powerful app, they just tracked the location of journalists.

That’s all illegal and we focus in on that. But the other thing is even a more serious threat, and it’s only recently been talked about, and that is the algorithm. The TikTok algorithm is the most sophisticated algorithm of its type. It knows what you like, it knows what you don’t like and so it can feed you stuff. And it has been feeding Russian disinformation on the war in Ukraine this last year.

It has been glorifying drug use, and pushing critical race theory. And in 2020, according to Radio Free Asia, an intelligence unit of the Chinese military based themselves in the Houston consulate. From there they were using artificial intelligence and big data to identify Americans likely to participate in violent protests. And then, through TikTok videos, it was sending them instructions on how to riot, which is more than subversion. That’s an act of war.

TikTok has been able to do that, and President Trump wisely banned it. Biden not to his credit, reversed the ban. Now, they’re talking about Oracle controlling the data from TikTok, but still TikTok would be owned by ByteDance, which is a Chinese private company.

But the problem there is that it gives the federal government so much control over TikTok. That’s a potential First Amendment violation. The best thing to do is there’s only two acceptable solutions to TikTok. One of them is that you ban the app in the US. India banned it in India, so we could ban it as well. Or force a sale to a U.S. company which controls the algorithm.

Trump tried to force a sale. The sale cratered, not over price or anything that normally would end up undermining a deal. The deal cratered because of the algorithm. China would not give up control of the algorithm, which shows you how important that is to Beijing. Not only does TikTok have to be sold to a U.S. company, that U.S. company has to control the algorithm. China has to be completely cut out of TikTok for that to be an acceptable solution.

Mr. Jekielek:

It seems like one option is that we could just follow what the Chinese Communist Party does in China.

Mr. Chang:

That’s the issue of reciprocity. They don’t allow American apps into China.

Mr. Jekielek:

They don’t allow TikTok into China.

Mr. Chang:

They don’t allow TikTok. So, why do we allow China’s apps to our country? It’s a basic issue of reciprocity. Even if they weren’t trying to promote drug use, even if they weren’t stealing our data, we have every reason in the world to ban them. And the fact that we don’t do it shows you the influence of China’s lobbying, which is what you just talked about a little while ago.

Mr. Jekielek:

Gordon, as we finish, we’re at the beginning of a new year here. There’s all sorts of people who have all sorts of conjecture. Will China try to invade Taiwan? What will happen? Will the Chinese economy collapse? What are your thoughts here?

Mr. Chang:

I wrote the book, The Coming Collapse of China, in 2001. I said, “These guys are going to be gone in 10 years.” So, maybe I’m not a good person to talk about predictions. But what we are seeing is the international systems erode and fall apart and thank God, we made it through 2022 without even greater disasters.

But we’re going to that place as the Chinese become more aggressive. And when we have conflicts on both ends of the Eurasian landmass, then it starts to look like global war. We’re just not prepared for that.

Mr. Jekielek:

I just want to comment quickly on the coming collapse of China. People have often asked me, “You like having Gordon on your show. Gordon was so wrong with the coming collapse of China.” But I actually think you were right on a lot of the fundamentals.

One area where you were wrong is you didn’t anticipate how much money the West was going to put into Communist China. It’s one of the few. This is the thing that keeps that very compromised economy alive.

Mr. Chang:

And I didn’t anticipate the 2008 downturn, which I think changed a lot of thinking about China, and which allowed more money to come in. It gave the Chinese leaders confidence that they didn’t have before. For a lot of reasons, I was wrong, but we can see what’s happening inside of China right now. The trends show a weaker and weaker state.

It’s not the mighty Communist Party. It’s trying to cling to power. When a hard-line group like that tries clinging to power, nothing good ever happens.

Mr. Jekielek:

Gordon Chang, it’s such a pleasure to have you on the show.

Mr. Chang:

Well, thank you so much, Jan, and have a safe 2023.

Mr. Jekielek:

Thank you. Thank you all for joining Gordon Chang and me on this episode of American Thought Leaders. I’m your host, Jan Jekielek.

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