With the Chinese Communist Party taking advantage of this coronavirus outbreak to buy struggling companies worldwide, what can be done to protect American companies?
And what can be done to facilitate a successful economic and social recovery in America?
In this episode, we sit down with Tennessee Congressman Mark Green (R-TN). He serves on the House Committees on Oversight and Reform and Homeland Security, and was also recently named to the House Select Subcommittee on the Coronavirus Crisis.
This is American Thought Leaders 🇺🇸, and I’m Jan Jekielek.
Jan Jekielek: Congressman Mark Green, such a pleasure to have you on American Thought Leaders.
Rep. Green: It’s great to be on your show. Really appreciate it.
Mr. Jekielek: Congressman Green, you’re in the thick of all sorts of coronavirus-related government activity or proposals. Before we dive into all of that, I saw recently that you described what the Chinese regime, the Chinese Communist Party, did with respect to coronavirus as an ambush. And I’m wondering if you could dig into that for me.
Rep. Green: Sure. When I was talking about that, it was with the president, just basically using it as an analogy of being caught in a desperate situation where … you have to make quick decisions … China foisted an ambush on us. I think China failed to give us information, and the president was caught in this crisis situation where he had to make split second decisions.
Mr. Jekielek: How did this play out in your mind? What information was missing? We’ve covered this, of course, on the show. I’m just wondering if you could update us on your knowledge at the moment.
Rep. Green: Yeah, absolutely. … There was a recent article from The Economist that actually asserted that using how viruses spread and the R0 that the first patient probably was as early as October in China. And we know for a fact that they misled the World Health Organization and they misled us on not only the first cases, but it’s human-to-human transmission. We had Taiwan and Hong Kong, both saying, as early as Dec. 31, that … actually there was evidence of human-to-human spread, and China was denying it as late as Jan. 14. So, that simple information would have helped the world be better prepared for the virus, and China blocked that information.
Mr. Jekielek: What do you make of the fact that there were all these flights that were heading out of China around that time when you said they knew?
Rep. Green: Yeah, I think it’s very concerning that China allowed international travel out of Wuhan, but did not allow domestic travel inside China from Wuhan, and from the rest of China into Wuhan. So they blocked it, protecting their own citizens, but they allowed international travel. And that’s really very concerning; very questionable. Why did they do that? We want to know.
Mr. Jekielek: Your interest in China, is this something that is long-standing, or is this something that’s come out of this whole coronavirus situation?
Rep. Green: I was concerned about China after reading the book by Dr. Michael Pillsbury, and that prompted me to go back and read “Unrestricted Warfare,” [and “The Art of War” by] Sun Tzu. I had read Sun Tzu as an infantry officer many, many years ago, but I went back and re-read it with this new perspective that the current communist leadership in China really has a Warring States mentality and not a Confucian mentality, and that was brought to my attention in Michael Pillsbury’s book. I’ve since gotten to know Dr. Pillsbury, and I’ve had interactions with him many different times, many discussions about his book and follow on, and that’s made me dig into the stuff that’s out there on China.
Mr. Jekielek: When this whole coronavirus/CCP virus, as we call it, situation unfolded, what were you thinking?
Rep. Green: … The question is, did China keep information from the world with malicious intent, or were they just trying to cover their own image? I think probably they were just trying to cover their own image, but that has cost the world dearly. Tens of thousands of lives could have been saved. And so we’ve got to confront the Chinese Communist regime on this issue. That’s not going to be easy to do. They’re very protective of their image globally; they use disinformation to protect their brand. They censor their brand with information with their own populations—all these things have got to be confronted as we go forward with relations with China.
Mr. Jekielek: As an example of what you just mentioned, I just saw from the China Digital Times, which looks at internet censorship in China, I think it’s about a week ago now, the Deputy National Security Adviser Matt Pottinger gave this unprecedented speech from the White House where he spoke in Mandarin—as far as I read it at least, and someone else who was on the show read it—to the Chinese people directly. That speech now is being censored completely. There’s a directive that China Digital Times found saying, “This must be scrubbed in its entirety and if it’s not dealt with, you will be dealt with seriously, Mr. Censor.”
Rep. Green: Yeah. No, they have been doing this for many, many years. … Honestly, if you go back—and this is of course my readings, but if you go back—it really started as early as the Tiananmen Square incident. After Tiananmen Square occurred, the hawks in China really took over the Chinese Communist Party, and they immediately began censoring information and changing the perception of America to the Chinese people. Things like how we came to their rescue and got the territory [that] the Treaty of Versailles [gave] to Japan, and then got it back to China in a week, they changed the narrative of how America has interacted with China. And it’s just unfortunate. It’s actually devastating our relationship with China. And the current leadership is just continuing to propagate both that censor[ship] of pro-American stuff in China as well as how China’s interacting with us, … and international. So that’s a big issue and something we’re going to have to confront going forward.
Mr. Jekielek: We’re going to talk in just a moment about a couple of bills that you are introducing to counter this China threat . Before I go into that, you have also been named on to the House Select Subcommittee [on the Coronavirus Crisis]. I was reading your statement about it. You’re not necessarily thrilled with another committee. What are you looking forward to here and what do you expect to be doing?
Rep. Green: Well, I think there are really two thoughts that I have about that. First, we don’t need the committee for the purpose of drilling into the government’s response. There are so many other committees. There’s the original [House] Committee on Oversight [and Reform], which is a part of Congress anyway. There are other mechanisms that we put into the various acts that have been passed, like the CARES Act, to do oversight. So what I’m really concerned with [is] this is just another of the House majority party, the Democrat Party’s efforts to strike President Trump. So if you look at the people they selected to put on the committee on their side, and you look at their history, since they’ve had a majority, it’s all “attack Trump.” And so there’s no reason to suspect that this is going to be anything different.
Now, could this be an opportunity for us to hold China accountable for the mistakes that it’s made; for the deception that it’s had? Absolutely. That would be awesome. But I’m really concerned that’s not where they’re going to let us go on this—they’re just going to beat up the president. You can look at Speaker Pelosi’s actions. As late as I think it was the first week of February or something, she was actually in Chinatown, San Francisco, telling the president he’s a racist for blocking travel to China. Now they’re out there saying he didn’t act soon enough. What is it, Speaker Pelosi? It just reinforces the fact that this is, I think, going to be another political game for them when we really ought to be looking at why China lied to the World Health Organization, and encouraged and influenced the World Health Organization to lie with them. I think we ought to look into that, and hopefully we will.
Mr. Jekielek: Congressman Green, it’s interesting that you say that. I’ve been watching Speaker Pelosi’s record for the better part of 20 years, and she has been, frankly, very strong on China—a lot stronger than many Republicans, quite frankly. There may be an opportunity here. What would you envision that committee to do in a little more detail?
Rep. Green: Yeah, absolutely. So if we could look at things like our PPE supply lines. Why is it that all of our medications or many of our medications, the vast majority of our antibiotics—the precursors—are made in China? This is something that we have to rethink as a country. So, I’d love for us to dig into some of that stuff, but I don’t know if that’s what she’s going to allow to happen. That’s an example of stuff we should get into.
Mr. Jekielek: Let’s talk about these two bills that you have. … Why don’t we start with the bill that focuses on helping manufacturers move out of China, basically a corollary to what you just talked about, with the situation of the medical precursors?
Rep. Green: Yeah, absolutely. So my bill is actually designed to help those businesses in the middle of this pandemic, and its corresponding economic crisis, [to] return to the United States. So if they’re manufacturing in China and it takes $10 million to move that company’s manufacturing from China back to the United States, my bill would allow them to expense that on their tax return as a business expense. And then we would pay for that from the tariff money that we get from China. So in essence, the tariff money would pay for American businesses to move back home, and their manufacturing back to America—hopefully [to] Tennessee as much as possible. So that basically motivates all businesses to come back to the United States.
There are other bills out there. I think Marsha Blackburn has a bill that focuses specifically on PPE manufacturing, but my bill would allow expensing for all manufacturing businesses to come back to the U.S.
Mr. Jekielek: How is it looking? What kind of support is the bill getting at this point?
Rep. Green: So, that bill is being filed, actually, and the workload for me is to get co-sponsors. So I’m in the process of getting co-sponsors for that bill. And then we’ll drop that bill this week—hopefully this week—that’s the place I’m at in the process.
Mr. Jekielek: How is the bipartisanship, or not, looking for this one?
Rep. Green: Well, step one for me is to go get Republicans on board, and that’s where I’m at right now. Once I get 30 or so Republicans, that’s when we go and talk to others. The Democrats, it’s a little bit difficult because selling them to join a bill, bipartisan, is best done in person. So for me, I’d really like to sit down with them and say, “Hey, this is why you should support this bill.” I can’t do that right now because the Senate’s working, but the House isn’t.
Mr. Jekielek: This seems like something that would actually help contribute to the recovery.
Rep. Green: Economically—absolutely. We have 33 million Americans who are out of work right now. If we can bring manufacturing back to the United States—absolutely. It would create more job opportunities for Americans.
Mr. Jekielek: So, a little bit of nuts and bolts of this bill. Are we talking about any size enterprise? Any industry? What are the restrictions?
Rep. Green: So in my bill, it doesn’t restrict it to industry type. It just has to be a manufacturer, and they have to be in China, and a company based in the United States. It’s an American company manufacturing in China that wants to bring their manufacturing back to the United States. So it could be earphones; it could be washer parts; it could be anything. Any manufacturing that’s done; American company in China.
Mr. Jekielek: I understand that there’s a number of companies that are already in the process of doing this. Is this something that would work retroactively?
Rep. Green: Yes. So any company that makes the move this year and wants to expense the cost of that move this year, they could do that. So if they started, let’s say, January, [they can still expense the cost]. It’s for this tax filing year, 2020.
Mr. Jekielek: There’s this whole concept of supply chain dependence, as its described. This is, I think, part of what this bill is targeting. Can you flesh that out for us a little bit?
Rep. Green: We have manufacturers in the United States who assemble the final product in the United States, but they will have precursors, in the case of pharmacy or pharmacologic products, but it could be a washer part that’s made in China that’s shipped and then assembled in the United States. So those products right now … you can’t make them because the precursor parts—let’s say it’s a fan belt or the drum that’s in a washing machine—the delay in shipping and the problems that have been caused by disruptions in manufacturing in China because the virus in China, delay those parts getting to the United States.
So many, many manufacturing plants, [whose] products were assembled in the United States, they had to stop manufacturing because they didn’t have the precursor parts that would allow them to assemble the final washing machine. And I’m using that as a hypothetical example. I don’t know specifically that there’s a washing machine that’s being delayed because of that. But that’s happened all over America. Jobs have been disrupted and so has the economy, because of that supply chain disruption.
Mr. Jekielek: It’s been related to me by another guest that there’s actually at least one or a few [Lockheed Martin] F-35 parts that also come from there.
Rep. Green: So, that is another issue, and where we have defense-related stuff manufactured in, especially China… The question is “China: friend or foe?” and that debate is a debate we need to have. I’ve heard China called frenemy, but it’s very clear that China wants to be a global hegemon, and if you believe someone like Dr. Michael Pillsbury, they want to be the global hegemon. They want their value system to be sort of enforced throughout the world, and you can look at how they’re handling countries where their debt policy of addicting these countries to government debt from China and then basically seizing control of ports and things like that. There’s a question that needs to be asked: Is China a friend or foe? And these kinds of things, where we make a part for a critical aircraft, military aircraft, in China—we can’t continue that if the answer to that question is anywhere near foe.
Mr. Jekielek: Since we’re talking about this, there’s also this question of working with companies like Hikvision that produce mass amounts of surveillance technology.
Rep. Green: Yeah, they make cameras, yeah.
Mr. Jekielek: And these are used in the social credit project and so forth, and of course, in Xinjiang, in the [concentration] camp systems and so forth.
Rep. Green: Yes, that’s very concerning. … [But] I’m more concerned about our American-based companies that provide, for example, artificial intelligence that might be used in those systems to commit human rights violations. So I want to ask Google, “Assure me, Google, that none of your technology is being used by the Chinese to commit a human rights violation. And, for example, the Uyghurs, who are in these camps where reeducation is going on, their human rights are being violated. What’s happening in Hong Kong with dissidents being arrested? Google, is any of your technology being used to assist the Chinese government to do that?” That’s a question I think that’s even more important than whether or not a Chinese camera company is using its technology to suppress the Chinese.
Mr. Jekielek: Sure, I understand. Where I’m going with this is actually your second bill. Even the NATO Secretary General spoke to this recently, basically there are these large Chinese companies, which are effectively the Chinese state, going on shopping sprees at the time of this economic downturn, and you’re looking … to address this head-on for the US.
Rep. Green: Yes, that’s right. So my SOS ACT (Secure Our Systems Against China’s Tactics) is really designed to prevent China from buying up distressed companies that are distressed because of this COVID pandemic, buying up those that actually have a national security sort of ramification.
So let’s say there’s a company, and this is hypothetical—what I don’t want to do is talk about the companies that we are actually concerned about because that would tell the Chinese to go and buy that company—but let’s say there’s a company that has technology that allows their tank turrets to traverse. That small, very unique company with a specific technology is struggling right now, and it’s going to sell shares in order to continue its operations. Well, the Chinese could buy that company; a Chinese state-owned entity could buy that company. And then they own the technology that allows our tank turrets to shift left or right. So we have to prevent that from happening, and we want Americans buying those distressed companies, particularly where it relates to an American national security issue.
And so my bill, what it does is provide investment guarantees so that American investors can go out and purchase those shares of that company. And then if the company fails, because some of them, obviously, if they’re selling shares, they’re in trouble, so if the company fails, 50% of that purchase is backed by the federal government, much like a small business loan.
So if you went and got a Small Business Administration loan before COVID—you’re going to start a new company and you got a SBA loan—70% of that would be backed by the government. Even though you’re borrowing the money from a bank, the bank is making the investment in that company through a loan, and then it’s backed by the SBA.
So we’re creating those investment guarantees for American investors to go out and purchase these national defense, national security-related companies to keep the Chinese from buying them. I actually designate the money to come from the CARES Act, the corporate portion of the CARES Act, the $500 billion dollars that was set aside for corporations, so that the money has already been allocated and approved, so that we’re not appropriating new money for this.
Mr. Jekielek: So this buying behavior isn’t a new thing, right, for the Chinese Communist Party?
Rep. Green: No. There’s a very good article in The New York Times, and I am often reluctant to send people to The New York Times these days because of some of their bias, but this is a great article in The New York Times about China on a buying spree in 2017. And in that case, there’s a great example of artificial intelligence that they got. There was a robot company in Massachusetts, and the Air Force was looking to buy it, buy shares of the company and save the company and wound up choosing not to do so. And so when the Air Force chose not to buy it, China came in and bought it. The name of the company is Neurala. And you think, oh, robots. It’s a vacuum cleaner. Well, it may have appeared benign, but the company was developing artificial intelligence that supported the robots that now the Chinese have, and that artificial intelligence has a military application. So now China owns that, and we want to prevent that from happening.
Mr. Jekielek: Okay, let’s say your legislation has been passed. What happens in this scenario that you just described?
Rep. Green: So the way it would work, if it gets passed, is there’s a company that’s aware that it’s in a position where it needs to sell shares. They can notify investors. Those investors then make an application to the State Department and DOD. It starts with SBA. So they make an application to SBA, they administer it, they send the information about the company over to DOD and the Department of State, they both give a thumbs up that says, yeah, this has national security implications. They get a certificate from SBA that says, half of the investment is backed. Those investors then go and purchase those shares with the knowledge of a certificate that if the company fails, they can take it to the federal government and the federal government would reimburse half of their investment. …The investors still have to have some skin in the game, right? We don’t want them out there fully backed by the government. But we want them to make good decisions, knowing that they’ve got skin in the game in this company, but rescuing the company by an American investor. And then, they would be backed by the government. So, hopefully that makes sense.
Mr. Jekielek: Yes. So it’s the investors that trigger this, is that right?
Rep. Green: Yes, it’s the investor or the company. I am aware of, right now, a company with a technology that is used by the Department of Defense, and they don’t want to be bought by China, but they’re in a desperate situation. So they could let investors know and be a part of starting this process, knowing that they’ve got a defense-related technology.
Mr. Jekielek: I can imagine this sort of setup also spurring development in the small businesses related to the defense industry.
Rep. Green: Well, that would be fine. What we want to do is make sure that those companies that have technologies right now that we need don’t get bought by China, because China two weeks ago bought eight ports globally. That’s scary. Where does the United States Navy dock its ships?
They bought 22 aircraft from United. So this is an infrastructure thing. It’s not necessarily defense-related, but the United States military does use American airframes to deploy soldiers to, say, the Middle East, right? We lease aircraft from our own aircraft industry to ship people sometimes, to ship equipment overseas. Now, China owns 22 of United’s planes, and they’re leasing them back. And these are concerning things.
Mr. Jekielek: Let’s talk about your state a little bit. How is this playing out on the ground in your district?
Rep. Green: Well, in Tennessee, we’re in a pretty good place. Our curve, as far as the pandemic goes, is much different than the curve in New York and New Jersey. So we’re opening things back up. In fact, you can go to a restaurant here in my hometown of Clarksville, Tennessee. You can, I think starting this week, get a haircut and things like that, so, and I’m looking forward to that. We’re pretty much open for business with some precautions and with some social distancing requirements.
Mr. Jekielek: How much will these two bills that you are introducing affect your district and Tennessee?
Rep. Green: So the opportunity for us in Tennessee is we are one of the best states in the nation right now for foreign investment, for US investment. We’re creating jobs left and right. We … are the lowest per capita debt in the nation, and we’re one of either the second or third lowest tax burden for individuals and corporations in the country. So we’re a great place for manufacturing to come and locate itself. Here in my hometown of Clarksville, Tennessee. We have LG Electronics. They’re making washers and dryers right here in Clarksville, Tennessee. That’s a South Korean company. We have a South Korean tire manufacturer Hankook Tire, and they are making 12 million tires a year right here in my hometown. So manufacturing is a perfect “come to Tennessee” and any of these companies that I’m helping to incentivize to move back from China, they should come and think of Tennessee as a place to come and manufacture. And in terms of the SOS ACT, we have capital here in Tennessee. We’re not thought of like New York is for sources of capital, but we have venture capital right here in my state. So these are opportunities for investors in Tennessee to purchase these companies and hopefully protect America’s national security.
Mr. Jekielek: One thing I wanted to talk about before we finish up is that you were in the military, and then later you were an ER physician. And I think you describe yourself as being the only medical doctor that’s on this select Coronavirus Select Committee. What do you think you bring to it with this background?
Rep. Green: Well, my background is very interesting in that I am first an infantry officer in the army, a commander in the army as an infantry officer. And then I became a physician in the military and did disaster preparedness, chemical biological warfare preparedness as a physician, and basically ran disaster preparedness. I was also a special operator, so I deployed with the joint force at the tier one level— organizations that I can’t even technically talk about. And then I got out of the army, started a healthcare company that was in 11 different states and I ran emergency departments in 11 different states. So I bring a very interesting perspective to how the nation has responded and how different states have responded to this crisis point. So I’m excited about the opportunity to take that experience and use it on this committee. So we’ll see what happens.
Mr. Jekielek: This makes me think of this ambush. Now I understand what you meant when you described this. It’s basically you’re faced with decision making with very, very incomplete information. And of course, we know from what we talked about that that information is further incomplete because of what Communist China did or didn’t do.
Rep. Green: Yes, that’s right.
Mr. Jekielek: At this stage where we are at now, do you feel like there is enough information? And what information is still lacking to make good decisions?
Rep. Green: If you’re asking today versus when decisions were made January 31st, today, we have a lot more information. For example, and I know a lot of people have been critical of these serologic tests, mostly because of the specificity and sensitivity of the tests, but if you look at what happened in Santa Clara, California, look in Los Angeles, look in Miami-Dade, now New York, as you start to see, you can at least say this with certainty: that the virus penetrated our population far more than we ever thought it had. Now, to what degree? Well, let’s get better testing and let’s get there.
But we know for a fact that the case fatality rate is nowhere near the actual mortality rate of this. So that informs leaders to make decisions with information that they didn’t have several weeks ago. With a lower mortality rate, it’s easier to make the decision to open up the economy, and as we get more of the specifics about that, we’ll be better armed to make those tough decisions. But at least in Tennessee, I think we’re very confident on where we are on the curve. We can be open.
Mr. Jekielek: The goal of shelter at home was to prevent the overwhelming of the hospital system. But it wasn’t to eradicate the virus entirely, and I’m wondering if you could speak to that.
Rep. Green: Yeah, it looks like some of the Democrats have changed the goalposts on us, or moved the goalposts, so to speak. You know, when we first started looking at this, it was very clear that we wanted to flatten the curve, which in other words means prevent the maxing out of our ventilators and our ICU beds. We wanted to prevent overwhelming the healthcare system. So now that we’ve actually done that, I mean, not a single patient in the United States has died because there wasn’t a ventilator available. Not a single patient in the United States has died because there wasn’t an ICU bed available, even in our hardest-hit areas.
So now that we’ve done that, we’ve succeeded at that, some people want to move the goalposts to, well, we don’t want a single person to get infected. And you look at how some of these states like Oregon and Pennsylvania are responding to this. It is absolutely absurd and makes no sense whatsoever because you can’t stop the virus completely. Well, I guess you could wait till January when there’s a vaccine available if a vaccine works out to be safe for this particular virus. So I think you’re absolutely right. The area under the curve doesn’t change. You just flatten the curve and delay people’s getting the virus, but you can’t stop it.
Mr. Jekielek: I’m here in the heart of New York City, where it’s a very different situation, although [cases are] declining increasingly rapidly, from what I understand. What is the value of the social distancing precautions that you’re taking as your state is opening up?
Rep. Green: I think there’s still value to that because it’ll continue to flatten out the curve. But, at some point, our restaurants cannot function at half capacity for very long and still be economically viable. So that means tons of jobs, right? So if they’re at half capacity, they need half the waitstaff, they need half the cooking staff. We have to get to a point where we’re actually at full capacity, full operation. And that’s not a decision, I think, that we’re ready to make right now. We still have cases in Tennessee. And we just have to watch those curves very closely and make decisions on when we can go to full capacity again. But social distancing is still, I think, needed today.
Mr. Jekielek: So this is actually quite interesting, because the states that are opening up the quickest, everyone will be watching very closely to see what happens and that will help inform and help make decisions for the rest.
Rep. Green: Absolutely. I was just reading yesterday that Georgia, who pretty much open wide up, they just flipped the switch, that there’s not been an increase in case numbers there, so yeah, I think people will be watching Georgia, Tennessee, all the states that are opening up, Texas. And just see what the case rate is and what the hospitalization rate is. Those are all things that people will be watching very closely.
Mr. Jekielek: Any final words before we finish up, Congressman Green?
Rep. Green: No. Thanks for having me on the show. I really appreciate it. These are great questions.
Mr. Jekielek: Well, have yourself a wonderful day and look forward to having you back sometime in the future.
Rep. Green: Sounds good. Thank you. You too.