Free Trade Isn’t Free
We need to seriously evaluate trade policies with China.
China remains a communist country. The central government owns everything. When a company from a democracy transitions production overseas, it continues to own production. When a company transitions production to China, it must partner with a factory owned by the central communist government. So, when a Chinese “company” steals technology, the central Chinese government stole it. This is not “corporate espionage.” It is government espionage. Many times, it may not even be espionage. The communist company owns the production process. So, companies must give industrial secrets to agents of the government for production. We give the technology away voluntarily. When Chinese “companies” “copy” American products, it is often made on the exact same assembly line that made the official versions. The central government simply decided to rebrand American products. Or, may improve it by using other stolen technologies other companies depended on keeping secret. Either way, the government is fully benefiting.
The government officials who are given American technology will likely review for defense and intelligence purposes. All consumer technology used in military equipment will be exploited by the central Chinese government.
Since the Chinese government is centrally managed, it can direct production for non-economic gain. Steel is a strategic asset. Destroying American steel is militarily advantageous. When tariffs were introduced steel prices temporarily went up until American steel production capacity caught up. This caused several nuts, bolts, nail, and other fasteners companies to temporarily close. Imagine what would have happen if Chinese steel was cut off today by a war and we didn’t have enough bolts for military production. This is a long game. Luckily we still have enough steel production institutional memory remaining to rebound. If in two generations we have no steel capacity we would be at disastrous military disadvantage.
When American companies pay to have their products made in China, the money isn’t going to the company. All earnings go directly to the government. The central government then decides how much to pay workers and administrators. The money is now going to artificial reefs in the South China Sea, a massive military buildup, and intelligence resources. From a humanitarian perspective the money is going to suppress workers’ rights and basic individual freedoms so more money can be made.