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Free markets versus China’s statist system

H.R. McMaster offers National Review Online readers an important economic contrast.

The CCP views its centralized, statist economic system as bestowing advantages, especially the ability to successfully coordinate efforts across government, business, academia, and the military. And it views America’s and other nations’ decentralized, free-market economic systems as rendering them unable to compete with China’s centrally-directed strategies, such as Made in China 2025, OBOR, and Military-Civilian Fusion. That is why the United States and other free-market economies need to demonstrate the competitive advantages of decentralization and unconstrained entrepreneurialism while defending themselves from Chinese predation. Here, the private sector plays a vital role. Companies and academic institutions at the forefront of developing and applying new technologies must recognize that China is breaking the rules to take advantage of our open societies and free-market economies. A first step toward preserving competitive advantage is to crack down on Chinese theft of our technologies. Although there have been significant reforms in national-security reviews of foreign investments, another effective defense would be to enforce requirements that U.S. companies report investment by China-related entities, technology transfer requests, and participation in the CCP’s core technology development or PLA modernization programs.

There is much room for improvement in the effort to prevent China from using the open nature of the U.S. economy to promote not only its state capitalist model, but also to perfect its surveillance police state. Many universities, research labs, and companies in countries that value the rule of law and individual rights are witting or unwitting accomplices in the CCP’s use of technology to repress its people and improve PLA capabilities. For dual-use technologies, the private sector should seek new partnerships with those who share commitments to free-market economies, representative government, and the rule of law. … Companies that knowingly collaborate with CCP efforts to repress the Chinese people or to build military capabilities that might one day be used against those companies’ fellow citizens should be penalized.

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...