On Wednesday, Xi Jinping, the chairman of the Chinese Communist Party, met with preeminent business leaders of the United States. The American leaders fawned over Xi in their pursuit of short-term benefits.
China faces steep economic problems:Â a demographic implosion, a real estate bubble, very high youth unemployment, stagnant household consumption, and declining international competitiveness because of a Chinese government preference for state-owned enterprises and not the more dynamic private sector. In order to address these challenges, China requires foreign direct investment by the largest U.S. companies, including Apple. In turn, China puts on a propaganda show for American business leaders.
The American business leaders do not break American laws by kowtowing to Xi, but they undermine U.S. national security. As U.S. Ambassador to Japan Rahm Emanuel put it on social media: “The People’s Republic of China’s version of a charm offensive: wooing U.S. execs with lavish dinners and sweet words of encouragement while green lighting cyber-attacks on U.S. companies and utilities — not to mention stealing their intellectual property.”
Bowing to the global master of deceit, Xi, does not violate U.S. laws, but the U.S. government should not quietly accept such behavior. The government can and should respond to actions that border on treason. Â
The U.S. should use the Securities Exchange Act of 1934 to focus a bright light on business leaders who are willing to sacrifice U.S. national security to achieve short-term economic gains. Under the act, in order to protect investors, Congress legislated a mandatory process that forces U.S. companies to disclose information that investors would find relevant in making business decisions. The U.S. should use the act to force publicly quoted U.S. businesses to acknowledge the risks of doing business in China as well as the risks in engaging in international transactions with China.
U.S. companies should be compelled to disclose to their American consumers the common consensus that China has blatantly violated the Sino-British Joint Declaration, which committed China to respect Hong Kong’s democratic character until 2047. They should be compelled to disclose that there are strong indications that China is preparing to invade Taiwan. That China is aggressively pursuing territorial expansion in the South China Sea against a U.S. treaty defense ally, the Philippines. And that China openly persecutes its minority Muslim population as well as its minority Uyghur population. Most importantly, as Emanuel highlighted on X, these U.S. companies should be forced to disclose the U.S. government’s assessment that, on a daily basis, China practices cyber espionage against the federal government, against American private businesses and public utilities, and against specific American citizens.
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China poses as great a threat to the nation as that of the Soviet Empire in the 1950s and 1960s. The Securities and Exchange Commission should mandate that U.S. businesses fully disclose that they are harming the U.S. by engaging in business in China and with China.
The threat is imminent. The threat is real.Â
James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes a daily note.
