Putting a Price on Human Rights

A few days after Nike CEO John Donahoe called his shoe company a “brand of China and for China” in June 2021, Beijing’s Foreign Ministry Spokesperson Zhao Lijan slammed a Biden administration fact sheet highlighting forced labor in Xinjiang as “lies and disinformation” based on the “systematic implementation of the conspiracy to contain China.” Donahoe is one of many American executives who turn a blind eye to the Chinese Communist Party’s (CCP’s) human rights abuses. Not only is it in their interest for U.S.-China relations to remain warm, but also—and more unsettling—Donahoe’s company relies on these abuses to generate enormous profits.

In The Decisive Decade, China observer Jonathan Ward argues that U.S. national security can be revitalized if economic, political, military, and ideological might are synchronized with one another. This will be impossible if the hypocrisy at the heart of America’s private sector is left unaddressed. When American multinational companies subsidize China’s rise, this undermines the U.S. Treasury Department’s efforts to support the dollar’s use globally and the State Department’s response to Chinese diplomacy in the Global South. Washington, Silicon Valley, and Wall Street must work together to enable the United States to prevail in the current era of great power competition.

The CCP does not have to worry about a disconnect between its ambitions and the decisions made by its industries as a result of its political system. The United States, on the other hand, must balance democratic principles with any government pressure on private enterprise to ensure that its global influence is not eroded from the inside. This presents a challenge: American companies today are much more likely to put profits ahead of any adherence to national ideals. Ward opens his book by exposing the most egregious examples, such as Caterpillar’s public enthusiasm in supporting China’s “ambitious, forward-looking” Belt and Road Initiative that, it says (parroting the CCP), will “improve living standard throughout multiple nations.”

A majority of Americans remain ignorant of the full extent of the CCP’s domestic oppression and the global means through which it is enforced. At a basic level, American and other media organizations should dedicate more coverage to China’s mistreatment of its Uyghur population and forced labor in Xinjiang Province. This is especially crucial in light of recent investigations into TikTok that reflect the extent to which Beijing can influence the social media habits of millions of Americans. Non-profit news sources and media organizations can provide more outlets to the Uyghur journalists reporting from abroad, while also covering the CCP’s detention of these refugees’ family members, as a method to blackmail political dissidents.

Providing more realistic coverage of China’s domestic policies alongside the hypocrisy of well-known business executives will help American consumers make informed choices about the products they buy. While American news outlets have not completely neglected China’s human rights abuses, they have failed to emphasize how the CCP’s actions conflict with private companies’ promises to support human rights. For example, at a 2018 keynote address in Brussels, Apple CEO Tim Cook said, "Every day, we work to infuse the devices we make with the humanity that makes us.”

The irony, however, is that Apple has sacrificed legal ownership of its devices to CCP-controlled companies in China to maximize its profits. It is rare for the media to shed light on this fundamental contradiction. Too often, investigations into multinational companies’ corporate promises and the CCP’s inhumane domestic policies are kept separate from one another. Unable to see the link between the two issues, Americans remain apathetic about U.S.-China corporate deals­–an apathy that encourages the private sector to keep undermining Washington’s foreign policy goals.

Lawmakers must diminish the ability of these companies—no matter their size—to lobby U.S. policymakers on changing U.S.-China policy for profit-driven motives. Ward notes, for instance, that Apple, Coca-Cola, and Nike deliberately weakened the Uyghur Forced Labor Prevention Act by lobbying Congress. The American public could more forcibly hold these companies accountable for such actions if it received more and better information on Chinese human rights abuses from independent journalists.

The debate about human rights is intimately related to the concern that the dollar will soon no longer be the world’s reserve currency. When American private companies source their materials from Chinese provinces that inflict human rights abuse, they fuel Beijing’s economic rise. At the same time, the CCP knows it can rely on a large American market to export its products, which bolsters the yuan. This is especially the case when American companies operating in China, such as McDonald’s and Nike, bend to the CCP’s demands to allow customers to use the digital yuan for their financial transactions.

Accordingly, as Chinese President Xi Jinping aligns with Russian President Vladimir Putin to shape a new world order in opposition to the West, one of their principal goals will be to replace the dollar’s predominance with multipolar, regional economic spheres. If dependence on the dollar is reduced, the health and stability of multinational institutions will come under threat. Russia spearheaded this effort after it launched its war against Ukraine by requiring financial transactions to be conducted with the Chinese yuan or with gold reserves. Meanwhile, as Ward explains, China is gaining hefty profits from stealing American technologies, accessing U.S. capital markets, and importing American goods.

Washington’s best response to these threats is for Wall Street and policymakers to jointly use the dollar—what Ward calls the United States’ “ultimate economic weapon”—to create an “economic divergence” that maintains the U.S.-led world order. He recommends that Wall Street dramatically cut investments in Beijing and delist Chinese equities while the Treasury Department simultaneously works with its Alliance System to punish the CCP’s espionage and to prevent Chinese businesses from investing in Western markets.

These will be necessary steps to contain the foremost economic rival of the United States. Nevertheless, Ward’s book could have benefited from a discussion about the unintentional secondary effects that such sanctions and punitive economic tools may have in other parts of the world that Washington is attempting to court. It is much easier to minimize spillover effects from sanctioning Russia than it is for China, for instance, since the latter has a significantly larger global reach.

During a February press conference with Kazakhstan’s foreign minister, U.S. Secretary of State Antony Blinken was asked, “[B]ecause of these sanctions imposed on Russia, the economies of Kazakhstan, Uzbekistan, and Kyrgyzstan are suffering as well. What are the compensations for our countries?” Blinken pointed to the U.S. Economic Resilience Initiative for Central Asia and to conversations with partners in the region, but such mechanisms of relief will not be so intuitive when applied to China. As more countries sign onto the Belt and Road Initiative, the United States will have to be careful not to antagonize them in its effort to isolate China from certain American markets.

Ward’s The Decisive Decade takes on the diplomatic side of great power competition as well, but through an often-neglected economic angle: He explains that Washington’s “diplomatic deficit” in Africa, Latin America, and Asia “is partly due to the fact that China’s economic profile is much closer to those of many emerging markets,” encouraging developing countries to open the door to Chinese financial or infrastructure projects—sometimes despite their better judgment.

Indeed, Chinese business executives are often the ones leading the way when it comes to expanding the CCP’s global reach. Huawei is a case in point: While it deploys its information and communications technology across Southeast Asia, West Africa, and the Middle East, the company has pioneered programs that send students to China to receive technical training. In rural Bangladesh neighborhoods, a Huawei Digital Training Bus carries hardware, Wi-Fi hotspots, and instructors to schools and communities. Huawei also awards certificates to students from Saudi Arabia, Singapore, and the Philippines through generous scholarship programs. American private companies have failed to undertake comparable efforts. This undermines the State Department’s public messaging about the importance of improving individuals’ quality of life, especially in regions that have turned into diplomatic battlegrounds with China.

Ward complements the economic and diplomatic sections of his book with a discussion on American military preponderance because the latter cannot exist without the first two. This has become increasingly true in the last few years as private companies assume larger roles in developing military technologies. Aware that industry and government continue to drift apart in terms of policy objectives, Ward addresses his remarks to private companies as much as to generals and defense planners. He also focuses on the importance of acquiring rare earth minerals for supply chains, a process that will require private companies to offer competitive deals to countries tempted by Chinese offers.

Washington will have to strike a delicate balance as it fights to regain influence in the Global South. Treating countries like pawns in a great U.S.-China struggle is an unsustainable strategy that can allow Chinese diplomats to frame American involvement as a desire to perpetuate U.S. hegemony. Instead, the United States should recognize the respective national interests of other states as it pursues policies that are mutually beneficial to both sides. If a country in Latin America is willing to grant an American company a stake in the Lithium Triangle, for instance, policymakers should quickly follow up with economic incentives and commitments to demonstrate that the United States is a reliable long-term partner for that country.

This public-private synchrony is at the heart of Ward’s The Decisive Decade, a book that Admiral Jonathan Greenert has summarized as a “call to action… for Washington, Silicon Valley, and Wall Street.” These three pillars of American prosperity must work together to enable the United States to prevail in the current era of great power competition. To emphasize the necessity of domestic unity, Ward concludes his book with a discussion of “the arena of ideas.” Among the ideas he forwards: It is impossible to reclaim the United States’ global influence if enormous swaths of the country fail to recognize the urgency of the current geopolitical situation, or if they disagree substantially on who the adversary really is.

An American grand strategy that succeeds in repelling China’s military, financial, and political expansion will need to be both multidimensional and consistent. As Washington improves relations with the Global South and rallies Allied countries, the Treasury Department must restrict Chinese access to American markets and trade secrets. It is only through a concerted effort that the United States will triumph in The Decisive Decade ahead.

Axel de Vernou is an undergraduate at Yale University majoring in Global Affairs and History with a Certificate of Advanced Language Study in Russian. He is a Research Assistant at the Yorktown Institute.

Image: Laborers from Kashgar and Hotan in transit to the Zhonghai Group Korla Industrial Park (Source: Xinjiang Bazhou Government Website, via Bitter Winter magazine).