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Doing Business with China: Strings Attached

What does it mean to “increase our leverage” over China?

As we grow more dependent on China, China gains leverage over us. Matt Pottinger gives a clear example of this in his article “Red Lines”:

After building significant trade volume with Australia over the years, Beijing last year suddenly began restricting imports of Australian wine, beef, and barley for purely political reasons. Beijing released a list of fourteen “disputes”—political demands of the Australian government. They include rolling back Australian laws designed to counter Beijing’s covert influence operations in Australian politics and society and even muzzling Australia’s free press to suppress news critical of China.

Australia’s experience should be a wake-up call for America. Businesses must confront the reality that business with China presents ideological challenges as well as economic ones. Gaining leverage over China means becoming less dependent on it. This might include diversifying supply chains and giving second thought to concentrating American corporations in an autocratically ruled country.