by Yahoo Finance October 25, 2019
Lawmakers and leaders across the political spectrum are sending a message to American businesses: don’t sacrifice democratic values for profit in China.
Vice President Mike Pence called the NBA a “wholly-owned subsidiary” of China’s “authoritarian regime,” for its initial response to the Houston Rockets’ general manager’s tweet supporting Hong Kong. He also took a jab at Nike in a speech in Washington on Thursday.
“Nike promotes itself as a so-called social justice champion, but when it comes to Hong Kong it prefers checking its social conscience at the door,” Pence said in a speech.
The issue has united lawmakers including Sen. Ted Cruz (R-TX) and Rep. Alexandria Ocasio-Cortez (D-NY). Cruz and Ocasio-Cortez are among a bipartisan coalition of lawmakers who recently wrote letters to heads of the NBA, Apple and Activision Blizzard, scolding them for bending to the wishes of the Chinese Community Party.
“The Chinese government is growing more aggressive in its attempts to dictate terms to U.S. corporations,” the lawmakers said in a letter to Apple CEO Tim Cook.
Rep. Mike Gallagher (R-WI) signed the letters and told Yahoo Finance he doesn’t think he’s ever seen a matter unite such a diverse group of politicians.
“I think the American people, and by extension the representatives, are waking up to the threat posed by the Chinese Communist Party, in a sense that what they’re trying to do runs counter to basic American values, particularly free expression,” said Gallagher.
Gallagher acknowledged American companies are in a tough position when trying to do business in China and stand up for American values at the same time.
“There’s no rubric, there’s no set rule that allows you to navigate every situation,” Gallagher said in an interview with Yahoo Finance.
So far, Gallagher said he hasn’t gotten a response to any of the letters.
“I hope to engage them in a dialogue. I understand the economic incentives,” he said. “China’s a huge market, and they don’t want to jeopardize their bottom line, but I would just urge them to consider bigger problems here.”
Friction from trade war
The situation is made more complicated by a trade war between the United States and China that has dragged on for more than a year-and-a-half.
“I think the trade talks sort of illustrate or heighten the overall economic competition that we’re in right now, and certainly the Chinese Communist Party and General Secretary Xi in particular, sort of view all of these things as part of a broader chessboard,” Gallagher said. “My worry is that we’re not always acting as strategically as they are right now, and that’s why I think it’s so critical for members of Congress to speak up about this stuff.”
Gallagher argues China thinks about the long-term picture, while the United States thinks only two to four years ahead. “That’s just a function of our political process,” he said. “The values that we’re fighting for, free speech, free expression, bottom-up innovation, belief in the American people — that’s our secret weapon at the end of the day, as opposed to the Chinese Communist Party model of stifling expression and top-down clunky management.”
For the moment, it appears tensions between the two countries have cooled, as President Trump insists negotiators are putting the final touches on a “Phase 1” trade deal. However, during periods of heightened tensions in recent weeks, some have wondered if the trade dispute could eventually lead to a decoupling of the two nations. On Thursday, Pence denied that was the Trump administration’s goal.
Gallagher said the two countries’ economies are too intertwined to make a complete split, but a “small amount of decoupling” has to happen in the name of national security.
“I do think we need to be willing to draw, for lack of a better term, a moat around sensitive technologies that our military is going to need, that our broader national security establishment is going to need, and make sure that we’re protecting those and invest domestically in areas where our production has lapsed,” said Gallagher. “At the same time, I want Wisconsin farmers to be able to sell soybeans to China. That’s perfectly fine as we consider these higher-order questions.”
As more and more high-profile athletes, executives and politicians find themselves at the center of the debate over China’s influence on American organizations, Gallagher said his goal is to explain why he believes Americans should care.
“Because for whatever reason, we haven’t yet had that Sputnik moment when it comes to waking up to the stakes in this competition,” said Gallagher.