The Strategic Offensive Against the CCP – The Cipher Brief

Doowan Lee is a strategic advisor to the Institute for Security and Technology and adjunct professor of politics at the Univ. of San Francisco.

Phil W. Reynolds is a visiting scholar at the Center for Futures Studies at the University of Hawaii and is the author of Ouroboros: Understanding the War Machine of Liberalism.

OPINION The War Gods face has become indistinct. That line is from a 1999 China defense paper that delineates the Chinese Communist Party (CPP)s understanding of todays global battlefield. For China, a war with the world would encompass the fundamentals of strategic competition: economic warfare combined with information warfare. The battlefield the CCP envisions includes foreign economies and information environments as legitimate targets.

Worsening Strategic Asymmetry

In the ongoing conflict between China and the United States, the economic and information domains have become decisive. The United States is on the defensive but has the wherewithal to move to the offensive. We are not arguing for any kind of traditional military options Quite the opposite. The CCP sees traditional war as a strategic blunder. Accordingly, the CCP has chosen other means to achieve its end. That end derives from the CCPs basic operating principle, and its model of Leninist thought with Chinese characteristics which provides state supported capitalism with no political representation. In order to provide material choice in lieu of personal choice, Beijing is already at war with the U.S. As a result, great power competition, as noted in the current national security strategy, is taking place within a strategic asymmetry where the CCP gains faster in the economic and information domains than the U.S. An inconvenient truth is that the long-term prospect of strategic competition between the CCP and the US is stacked in favor of the former if the latter relies purely on defense. We layout potential options for the U.S. to regain the initiative.

On Defense

For now, the U.S. is playing defense in the economic domain. Unlike the Soviet Union, which was easy for the world economy to bypass, in this new Cold War, Beijing has co-opted the capitalist system. Unlike the Soviet Union, the U.S. cannot bypass the sprawling industrial and production infrastructure the CCP has built. The massive protections the CCP builds into its own market distorts the global economy and prevents other countries from building competitive advantages, particularly in value added scales. Official CCP policy provides easy credit to manufacturers to the tune of $44 trillion as of the end of June 2020, having more than quadrupled in size since the global financial crisis at the end of 2008. This distorts the market. Beijing provides massive subsidies to companies to keep production costs cheap, and it draws on a massive labor pool with few protections and regulations that raise the costs of labor. This moves the production system towards labor, a fixed resource, and away from capital, a fungible resource, which reduces system efficiencies. Intellectual property theft and forced technology transfers reduces the profit incentive of inventors and innovators and reduces investment in research and development. Increasingly, the CCP not only wants to control the products but control the subsidiary production of everything from iron ore, rare earths, and energy components. This makes it very hard for emerging economies anywhere in the world to develop their own industry and labor outside of the Beijing consensus. This model is fundamentally at odds with an open and rule-based international trading system, like the WTO, which China joined in 2001. The CCP plays in a cheap, export-based system, not a value-trading system like the rest of the world.

This hasnt stopped the rest of the world from playing with the CCP. In November 2020, China and 10 countries signed the Regional Comprehensive Economic Partnership (RCEP). Significantly, the RCEP includes the western oriented economies of South Korea, Japan, Australia and New Zealand. Beijing has left the door open for India to join. Australia, New Zealand, Japan, and South Korea participate with their strong regulatory states alongside Brunei, Cambodia, Laos and Myanmar. It is true that ASEAN started the RCEP talks, but China is the strategic winner. Japan and South Korea, who had no trade agreements between themselves will benefit to the tune of income growth of perhaps 1 percent.

The increasing weaponization of the CCPs economic expansion is not just physical but also virtual. For instance, the CCP and its affiliated outlets have extensively used social media to promote the perception that the CCPs leadership in the RCEP signals the rise of a new economic sphere. Given the extensive use of propaganda in social media to justify its political monopoly and domestic order, this is hardly surprising. However, the CCPs integration of information warfare during the COVID pandemic suggests three major developments.

First, CCPs information warfare has become increasingly external, targeting the US and its allies. Second, it relies on more technical means such as bots, trolls, hijacked accounts, and 3rd party outlets to magnify its messages. This indicates that the CCP understands how to create resonance without human interaction. Third, it works with other nondemocratic regimes to promote its foreign policy objectives in overseas information environments. The CCP controls the media to manipulate what people see and hear and runs a global influence campaign. In Kenya, the basic cable television package includes Chinese state news while omitting popular international outlets like CNN and BBC. The CCP has threatened media executives in the U.S. as revealed in this brief to the FCC. In South Africa, a reporter was fired when his newspaper was bullied by the CCP over his negative coverage of Chinese influence. In other words, the CCPs economic activities heavily incorporate elements that enhance its information operations at the expense of open competition.

Moving to the Offensive

This sets the conditions for an information offensive as the CCP becomes more exposed in foreign countries with its economic expansion. To gain the initiative in the information domain, mobilization of people-networks, in the sense that some groups are disadvantaged by their sustained interactions with the networks of the CCP, can provide common purpose, solidarity and energy. In order to address this, the U.S. must capture and take advantage of the repressive conditions China produces in the mainland and foreign countries. For instance, the CCPs discrimination against Africans during the COVID pandemic is well documented. Economic exploitation can be a powerful grievance that enables local resistance to Belt and Road Initiative projects.

As the world becomes aware of the human cost of doing business with the CCP, divestment campaigns could be mounted, such as the campaigns against South Africa, Israel and fossil fuel companies. Already, some colleges are distancing themselves from the Beijing funded Confucius Institutes because of their blatant attempts at propaganda dissemination and student control. The academy is seeing that easy money for research comes with strings. Chinas social credit system and experiments with student coercion mean that information elites in the U.S. find themselves in an ethical dilemma. Their colleagues in China have lost jobs in schools and universities from the CCPs spot-the-Spy game, in which students monitor and report on professors attitudes and lectures and disloyalty to the CCP. Here, there is great potential for division. Academic boycotts could potentially reach a vast audience with their built-in megaphones (professors) and captured audiences (students). The Israel and fossil fuel campaigns are popular on college campuses and todays eighteen-year-olds are the futures corporate leaders.

So, what can be done? Few can argue that the US currently has viable or immediate military options to stop the rise of the CCP. We propose a two-prong strategy to ensure long-term competitiveness of the U.S.

Find a Balancing Strategy

First, we advocate for a robust internal balancing strategy where economic vitality underpins the U.S. long-term competitive edge. The essence of internal balancing is endogenizing technological innovation and economic production. This will require some sacrifice. The most popular consumer products in the West have kept their costs low to western consumers because of low production costs and the revenue from Chinese markets.

Take a Stand

Use the U.S. International Development Finance Corporation (IDFC), created in 2018, to steer investments from the U.S. to countries under threat of Chinese economic hegemony and to incentivize corporations to move production from China. Japan has already paid companies to move production from China since the COVID pandemic revealed deep supply chain risks. The U.S. could do the same. There is other low-hanging fruit. The three biggest suppliers to Apple, the global juggernaut, are owned by Taiwan. Taiwan investments are a sixth of total internal investment in China and three of the biggest twelve manufacturers of Chinese consumer goods are Taiwanese. Foxconn has explored moving production to the U.S. and there is much policy that could encourage more moves in this direction.

To compete against pro-Beijing programming, some sort of private company-government partnership must emerge in the West. Already in Taiwan, the app LINE has done this. Facebook began informing users when they had interacted with posts that were flagged as false or misleading. Twitter suspends accounts that promote violence or misinformation. YouTube removed hundreds of channels that appeared to coordinate indigenous information with the Beijing led crackdown on the Hong Kong protests in 2019. Rules being drafted for hate speech or illegal content could be used to provide screening for CCP propaganda. Some proposed penalties are not token and could reach up to 10% of the companys global revenue.

The U.S. should also renew the battle over data sovereignty and privacy, looking closely at mobile apps like Tik Tok. The CCP gathers vast amounts of personal information from users that feed into its social control programs. The information offensive needs to harness cyber civics education to raise the cost of adversarial information operations that have freely roamed until now, which goes far beyond the defense mechanisms of cybersecurity. Education about online responsibilities must include teaching the skills to distinguish between disinformation and misinformation, and not just focus on individualism and rights heretofore parroted by digital mobs.

The U.S. should recreate the United States Information Agency as a cabinet level, independent agency with strong coordination with law enforcement, the intelligence agencies, and the departments of Defense and State. During the Cold War, USIA budgets approached $2 billion and the agency was credited with influencing generations of people throughout Europe. Acting today, these persistent exchanges would provide the seedbeds of networks and cross messaging with the organic resilience to withstand and overcome state repression. The local networks working the USIA can identify and push back malign influence propagated by the CCP, the Kremlin, and other strategic competitors in the information environment. The Great Fire Wall would make it dangerous for citizens inside China to resist. However it would be difficult for Beijing to stop networks around the world without resorting to exporting its surveillance technology at scale. While these are exceptionally anti-democratic developments, we also see great potential for a sustained backlash against the CCP and its aligned regimes.

Create Strategic Depth

The U.S. and its partners and allies make up to 50% of the worlds trading capacity. This is a big stick.

The U.S. should leverage the existing international organizations and create new ones to hold China accountable to the rules, which would level the playing field and slow Chinese expansion. The Paris Climate Agreement can be a vehicle for raising the costs of doing business in China. China, for ill or good, has become the world leader in renewable energy. A potential future problem is that China is vertically integrating the supply chains, controlling costs, and given the CCPs desire for leadership within the Paris framework, could control global environmental policies. Make no mistake that this would be to the U.S. detriment. The U.S. would become the dirty producer of coal and oil, a position that some backward-looking nationalists would attempt to sell as a benefit.

The U.S. should work to strengthen the World Trade Organization so it can become the anvil its creators wanted it to be. There are problems, not least the veto power that any one country can wield. This has allowed the CCP to keep the organization in line, defanged from any ruling that would hurt China. Hence, the worst policy the Trump administration proffered was its war against the WTO. In 2019, Trump blocked any new appointments to the WTOs Appellate Body, which governs the WTOs dispute settlement function. Under the Trump administration, the U.S. vetoed naming any new members to the appellate board, a critical body that adjudicates trade disputes. Reform is needed, but the WTO is the organization the West can use to curb China, given its mercantilist policies.

The Trans-Pacific Partnership must be immediately revived. The RCEP gives Beijing a big stick to herd what it will no doubt see as unfaithful bureaucracies but the RCEP has none of the constraints on moral imperatives like labor and environmental standards the U.S. led TTP had. The U.S. must provide a safe haven where those countries can turn once the gilt fades from their erstwhile economic overlords. Given the poor track record of Trumps limited trade war, with China, it will be a heavy lift for the Biden administration to revamp a real economic competition with China. However, combined with a renewed focus on information warfare, an economic strategy that weans the global supply chain from the CCP can impose disproportionate costs on the CCP. More importantly, it must be done to reverse the strategic asymmetry.

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The Strategic Offensive Against the CCP - The Cipher Brief