-Caveat Lector- <A HREF="http://www.ctrl.org/"> </A> -Cui Bono?- China�s Agents of Influence By J. Michael Waller [EMAIL PROTECTED] Communist China is using the weight and strength of U.S. business � including some of the nation�s largest defense contractors � to promote its military and security goals. It used to be that in the China debate the giants of the U.S. business community argued strongly to separate national-security issues from trade. Now big business is doing what it always argued against by opposing national-security legislation at Beijing�s behest. In an elegant act of political jujitsu, Communist China now is using the weight and strength of U.S. business � including some of the nation�s largest defense contractors � to promote its own military and security goals. The shift, under way for years, has emerged during the last few months as big business and related interest groups weighed in against legislation designed to cement the long-standing U.S. security relationship with the Republic of China on Taiwan. Last October, when the House International Relations Committee voted a lopsided 32-6 for the Taiwan Security Enhancement Act, or TSEA, the business lobbies that had focused almost purely on Red China trade issues sprang into action. They pressed the House Republican leadership to pull the bill lest it be called for a full vote of the House and to postpone consideration until later. The GOP leadership caved. �The American business community has crossed a Rubicon in pursuit of its deepening relationship with the Chinese government,� wrote liberal Los Angeles Times columnist and respected China watcher Jim Mann. �For the first time, American corporations have waged an intensive Washington lobbying campaign in seeming support of China on an issue that has no direct connection to trade, investment or other economic matters in which the U.S. business community has an obvious interest. The effort has succeeded for now, but its troubling ramifications may haunt the business community for years to come.� Now, the TSEA is back. Early this year it sailed through the House and is awaiting Senate consideration as the U.S. Chamber of Commerce in Hong Kong and other business groups launch another attack in support of Red China. Seasoned security experts are deeply concerned. Al Santoli, a senior adviser to Rep. Dana Rohrabacher, California Republican, and one of the most informed China experts on Capitol Hill, points to a recent joint CIA-FBI report to Congress on Communist Chinese espionage that says, �The Chinese government continues to seek influence in Congress through various means, including inviting congressional members to the PRC [People�s Republic of China], lobbying ethnic Chinese voters and prominent U.S. citizens and engaging U.S. business interests to weigh in on issues of mutual concern.� The intelligence report appears to refer to elder statesmen with decades-long business ties to China�s Communist leaders and to corporate giants such as the Boeing Co., Chrysler Corp., General Motors and Motorola that have made an indelible mark on the China-policy debate. �When American business lobbied Congress on China policy in the past, one could believe that corporate America was not doing China�s bidding but rather was protecting its own interests,� writes Mann. With the lobby campaign against reaffirming the U.S. security relationship with Taiwan, he argues, �this distinction is not so clear anymore.� Seduced by visions of selling consumer products to 1 billion Chinese, many business figures, including former national-security leaders who built personal relations with Communist officials, have moved from simply pushing policies that would increase trade with China to becoming, in effect, agents of influence for the Beijing regime. One of the most prominent is Boeing, the civilian jetliner manufacturer and Pentagon contractor. With potential 12-figure Chinese aircraft orders at stake, Boeing�s concern is understandable, as some of its critics admit. Beijing has exploited that concern to the hilt. If the company doesn�t deliver political influence for the Communist government, Boeing chief international strategist Lawrence Clarkson told the Seattle Times in 1996, �we�re toast.� To ensure its 70 percent share of the Chinese airliner market, Boeing, in cooperation with other similarly motivated companies, pushed hard not only for Congress annually to renew �most favored nation,� or MFN, status for China, but to change the way the people of the United States view the corrupt one-party regime. In partnership with Chrysler, General Electric, Motorola and other blue-chip companies, Boeing launched a �China Normalization Initiative� in late 1995 and early 1996 to influence Congress from below by �educating� grass-roots America. �But Congress and the American public are not the only groups Boeing has to influence,� the Seattle Times reported. �The company also must convince the Chinese that it�s working hard on China�s behalf.� Boeing and other companies seeking to sell their civilian and dual-use products to China are caught in a conflict with the parts of their business devoted to the national defense of the United States � a sector that has funded many of the defense and national-security think tanks and policy groups in Washington and around the country. And those groups that don�t toe the line are getting punished. �The China lobby used to be the Taiwan lobby,� says an Asia expert for a Washington think tank who, like others interviewed for this article, requested anonymity for fear of retaliation. �Now it�s swung solidly the other way, where you�re almost a wacko if you�re not with Beijing. You�re totally marginalized.� �The same companies will threaten to cut you off for writing a single piece that the Chinese government finds objectionable,� an official of a defense foundation tells Insight, saying he speaks from personal experience. Unlike Taiwan, which invests most of its lobbying in traditional public-relations firms that register with the Justice Department under the Foreign Agents Registration Act, or FARA, Beijing circumvents the law and avoids disclosure by getting U.S. companies, senior statesmen, academics and others to do its bidding. �It�s sort of seamless, in part because they�ve been doing it since Nixon,� says a China-watcher active on Capitol Hill. The central figure in President Nixon�s historic outreach to mainland China, former secretary of state Henry Kissinger, is considered one of the heaviest hitters in the China-policy debate. Critics, including former Time magazine Asia bureau chiefs Richard Bernstein and Ross H. Munro, have questioned whether Kissinger�s advice on national-security strategy for U.S. political leaders might be tainted from possible conflicts of interest with his consulting business concerning China. Kissinger is sensitive to the suggestion. When Insight asked him to address such criticism, he harangued this reporter and would not directly answer (see �McCain�s Senior Team,� Feb. 18). �What do you think entitles you to ask such an insulting question?� was his immediate response. Kissinger told Insight that he does not accept money from China, that he advises corporate clients about situations in other countries and that �my China views are well-known.� Furthermore, he added, �China is a minuscule part of my business.� Not content to place all its eggs in the Clinton-Gore basket, Beijing is intensely interested in making sure it can influence a future Republican administration. Chinese officials carefully monitor the U.S. news media, as much to influence it as to use it for leads to collect detailed intelligence. Last October, Communist Party escorts asked a visiting Republican delegation probing questions about the national-security team of the GOP presidential front-runner, Texas Gov. George W. Bush. They seemed concerned that parts of the Bush camp were quoted in a U.S. newsmagazine as wanting to help bring freedom to mainland China as Ronald Reagan did for the Soviet Union when he challenged the evil empire. When a delegation member asked to see the article, he was shown a translation in Chinese. It was Insight�s October 1999 cover story about Bush�s national-security team. The article had just gone up on Insight�s Website and still was on the presses. Beijing is demanding more and more that U.S. businesses account for what they have done to shape political debate in Washington and how their lobbyists are neutralizing supporters of democracy in Taiwan or responding to complaints about human rights on the mainland, according to a senior national-security analyst who works closely with defense contractors, the federal government and Congress. �Cross-straits [Taiwan], human rights, trade, sanctions, missile defense �they get points for all of them. If you�re a U.S. business leader trying to trade with China, you have to constantly go back and say, �This is whose head I cut off; we got rid of so-and-so.� The companies always have to go back and report what they have done for China today.� Nonsense, says Boeing. �I don�t think it puts any pressure on us,� says Boeing spokesman Larry McCracken. Asked about the Seattle Times report that Boeing did political work at Beijing�s behest, McCracken said, �I wasn�t here in 1995 so I don�t know what you�re talking about.� He added that Boeing supports China�s entry into the World Trade Organization, �and we believe that�s good for America.� The recipients, or former recipients, of some corporate and foundation grants disagree. One small think tank lost a major technology firm and a giant home-products company as donors when it hired an analyst considered too critical of Beijing�s Communist system. �They quit giving, so now they are not only not giving money, but they�re taking away money in order to threaten people not to [hire those on Beijing�s enemies list],� says a source close to the group. �They�re killing off a foundation�s [China] project before it even gets going.� A staff member of another nonprofit relates this story: �When their guy came to us at a [fund-raising] dinner, the Boeing rep made a point of mentioning afterward that they won�t be putting in a full corporate sponsorship but would cut their contribution in half because the [chief executive officer] is dissatisfied with an article we wrote. The CEO,� the source alleges, �can now go back and report what he did to the Chinese.� In a painful annual ritual, Congress faced public ridicule and scorn when voting to renew MFN trading status for Red China. The U.S. imposes relatively low import duties on products from countries with such status. But the words �most favored nation� were so awkward to apply to a place like Communist China that the Clinton administration and Congress changed the term to �normal trade relations.� Beijing and U.S. business long have favored �permanent MFN,� now called permanent normal trade relations, or PNTR. Beijing is applying grass-roots pressure on Washington from the American heartland to get PNTR. �The Chinese were all over Montana last week on a wheat-buying trip,� says a congressional aide. �Their message was, �We�re not going to place any more orders until PNTR is confirmed.�� China�s ambassador to Washington, Li Zhaoxing, is downright smug. He recently hosted an event for about 50 congressional staff and lobbyists. �The ambassador blatantly said to us, �We don�t have to lobby on PNTR. American business is taking care of that for us. All we have to focus on is Taiwan,�� one of the participants tells Insight. �No one flinched.� The Clinton administration long encouraged high-tech companies like Hughes Electronics Corp. and Loral Space and Communications, whose chiefs were big campaign donors, to sell rocket technology that Beijing happened to need for its nuclear missile force. The indebtedness was a two-way street. Then, stung by the scandal, the administration filed criminal charges. In April, it accused the nation�s largest defense contractor, Lockheed Martin, of export-control violations for helping Beijing perfect a satellite-launch device that also can carry nuclear warheads. Lockheed says it did so only after the Clinton Commerce and Defense departments gave the go-ahead. Now Beijing has taken a page from the lobbying playbook of defense contractors, according to a defense analyst who dares not be named. �China is using the lobbying model of the U.S. military-industrial complex, copying the lobbying campaign [in the 1970s] for the B-1 bomber, in which the contractors made sure that a B-1 part was made in practically every congressional district. To make sure the B-1 got funding, they made sure every last manufacturer with 400 grommet-makers in a district would come in and tell their congressman how important the issue is.� As the Seattle Times reported in its 1996 expos�, �Boeing�s strategy involves pressuring its vast network of suppliers to lobby their congressional representatives.� A Senate staffer who dealt with Boeing on trade issues says, �When it comes to China, they put out the full-court press. They�re everywhere and they�re smart. They do it through front organizations, they publish studies on exports, they know where their suppliers are and they get pressure on them.� Boeing says its critics exaggerate its influence. But the grass-roots campaigns it has sponsored through the Business Coalition for China Trade are state of the art. �They have notebooks on every congressional district. They know every player, everyone who can host a dinner, every local person who can appear on TV and they just bombard you,� says the defense analyst. �And that�s before they get around to inviting you to China and getting you free suits in Hong Kong.� The China lobby also pressures U.S. allies using U.S. recipients of corporate and foundation grants. China-related business, such as the American Industrial Group and its related Star Foundation, generously support favored U.S. think tanks and university programs that work with leaders elsewhere in Asia. �Use of the academic programs by the corporations is a well-worn track,� the defense analyst says. �They then use the programs to propagandize our allies. They bring over Taiwanese, South Koreans, Filipinos to these programs that most of the rest of us don�t even follow. These are the dialogues between the allies and us, between the foreign ministries and the think tanks, that really matter. They�re told what they can expect, what the reasonable dialogue is in America. The allies go home with that message.� Our Asian allies are getting spun up to have low expectations, says the analyst. �The Asians then decide, �We can�t count on the U.S.; what we understand from the strategic dialogue with the U.S. is that there is a condominium to split the world with China, so we have to go home and make plans accordingly.� The danger is that it creates misperceptions. Because on occasion, Congress does wake up.� That�s when the corporations reactivate to pressure Capitol Hill. The Foreign Agents Registration Act, or FARA, is intended to require such foreign-sponsored lobby activity to be registered with the Justice Department so that Congress and other decision-makers will know the origin of the political action. Violation of the law is punishable by up to a $10,000 fine � peanuts for big companies such as Boeing � and as many as five years in prison. But the Justice Department seldom pursues such cases. �FARA is just too full of loopholes and not serious enough a law for the FBI to investigate or want to prosecute,� an FBI source tells Insight. There are carrots and there are sticks. �Our developing will create many great opportunities that should probably go to U.S. firms,� PRC Vice Premier Li Lanqing warned Boeing�s Clarkson five years ago. According to the Seattle Times report, Li added, �But because of the unstable relationship between the U.S. and China, it will go elsewhere.� Sometimes the threats go further. The People�s Liberation Army, or PLA, is ratcheting up the rhetoric in its internal � but public �discussion. It recently published a book, Unrestricted Warfare, that advocates the assassination of U.S. in-vestors and traders whose financial activity harms Beijing�s �red-chip� companies (see �PLA Revises the Art of War,� Feb. 28). A more recent PLA publication advocates seizing the $25 billion in U.S. investments in China in the event Washington tries to help Taiwan defend itself against a Communist invasion. ___________________________________________________ Red China Lobbyists The main lobbyists for Beijing are the China Business Council, led by Boeing, Motorola, Caterpillar, AT&T, and the American Industrial Group Business Coalition for U.S.-China Trade, spearheaded by Boeing four years ago to work congressional districts nationwide to mobilize subcontractors and other companies that benefit from increased trade with China. Then there are cultural groups. Pro-Beijing interests have taken over Chinatown districts in U.S. cities. Festivals once featured the flag of the pre-Communist Chinese government that fled in exile to Taiwan but now sport the red-and-yellow banner of the People�s Republic. New Chinese-American groups with a pro-Beijing tilt quickly can place a spokesman on television in the name of the �Chinese-American community� to denounce federal espionage investigations as �racist.� Beijing even sponsors the 76-acre Splendid China theme park two miles from the main entrance to Walt Disney World, the entertainment giant that also is a part of the new China lobby. ___________________________________________________ China Gives (Some Sort of) Royal Treatment A political leader, congressional aide or journalist targeted for cultivation likely will receive an invitation to visit the People�s Republic of China. Hospitality is one of Beijing�s most effective ways to influence Americans and other foreigners. Chinese government officials are gracious hosts whose hospitality is leveraged by keeping close tabs on what their guests see, hear, say and think. �Americans go there and are met by nice, personable, friendly people. The guests might feel a genuineness about their hosts. That�s the face of China,� says Herman Pirchner Jr., president of the American Foreign Policy Council. �They might be genuine, but it masks a reality that no one sees.� They will be at least as professional as any high-priced Washington lobbyist. They will have a very strong command of all facts and arguments. If a guest is very high-level, someone will be assigned to him for a vigorous discussion. If the assigned person is not persuasive, the guest will be assigned a new argument with a new person in another city on the itinerary. The hosts take notes in meetings and are believed to monitor which arguments work and which don�t work. They let you alone often, periodically in guest houses. Some frequent travelers report that the authorities eavesdrop on their conversations once the government escorts leave. Even seasoned travelers have a tendency to talk among themselves about their impressions. The purpose of eavesdropping is to assess how the official arguments work with each member of the visiting delegation. Visitors may or may not find that their personal belongings, especially briefcases and computers, have been rifled. �You don�t feel a police state at all,� says Pirchner. �You�re always with your handler who has a government ID, so you are not exposed to the harsher aspects of the state. You can�t help but notice the economic growth and energy there.� Tips for Visitors to China: Understand the issues and positions that are the official party line. Knowing the party line can be useful, and discussions can help to clarify official Chinese positions. Economic issues are somewhat akin to the way Americans understand them. Everything else is party line. �There are acceptable arguments and nobody goes outside the box. No one gives an unapproved answer,� says Pirchner. Resist the urge to kowtow. �You can be tough with them on a protocol level and still be invited back, and disagree as much as you wish,� says Pirchner. �If comments are made in a serious, polite way that observes protocol, you can posit tough questions and lines and get the same back. The Chinese will get more emotional over style. If you are personally offensive, you will get an argument. Serious arguments are answered seriously within the confines of the party line.� Pirchner adds, �If you�re a public official, you�re there for Chinese-American relations. It doesn�t mean that you have to cave in.� Don�t permit familiarity. Always address official handlers as �Mr.� or a similarly appropriate title. Visitors to China often believe that they have made great friends. �The Chinese always want to help people who interest them to make money. They will make you think you�re a great businessman because things will go so easily. 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