Warner, speaking at the U.S. Institute of Peace this week, portrayed a rising China as both a competitor playing by its own set of rules and a threat to “free inquiry, free travel, free enterprise and other values that have animated decades of global stability and prosperity.” While Warner, a Virginia Democrat, credited President Donald Trump for highlighting the urgency posed by the Chinese threat, he criticized the administration’s approach. Instead of building a coalition of countries affected by China’s behavior, the current policy mistakenly frames the challenge as a conflict between two nations, he said.

“Moreover, while China and the U.S. are competitors in many areas, we also confront many common challenges,” Warner said. “From climate change, to water scarcity, to North Korea—the stakes are too high for each country to simply retreat into its own corner.”

Spotlight on China

Warner, the vice chair of the Senate Select Committee on Intelligence, has been spotlighting the Chinese challenge over the past year, bringing together leaders of Congress, the intelligence community, business, and the academy to spark broader dialogue on how to manage the countries’ relationship. USIP has increased its focus on China in recent years, assessing the country’s impact on conflict dynamics around the world, and providing recommendations for ways the United States government and other stakeholders may account for China’s impact in their work to manage conflict and support lasting peace.

Warner said he previously subscribed to the view that the U.S. and a rising China might have points of conflict but generally would trend toward greater cooperation and mutual benefit. Reports from U.S. businesses about theft of intellectual property and unfair competition from state-financed and subsidized rivals, however, gave him pause. And his opinion was fully revised after 2015 by the intelligence community’s unanimous view that as Xi Jinping amassed power, the Chinese Communist Party no long wanted to collaborate or compete but to dominate America in multiple fields. President Obama should have done more in the later stages of his term to develop a tougher policy, he said. But it is now clear to both political parties that China is the leading foreign policy challenge of our time.

In Warner’s view, the conflict between Xi’s China and democratic nations stems largely from different sets of values. For example, in systems organized around individual liberty, rule of law and democratic values, companies operate by and large in a trading environment for the benefit of owners and stakeholders. In China, every company by law must act in support of “national security” and the government. No Chinese company is genuinely “private,” said Warner, a founder of the wireless services provider Nextel and a venture capital firm that invested early in technology companies.  

China’s Strategies

“The Communist Party is exploiting all elements of state power to strengthen China’s position in the world,” Warner said. “And they’re doing this at the expense of human rights and human dignity,” using military strategy, political influence campaigns, economic ambition, and science and technology policy. 

Besides overseas basing and extending naval reach, Beijing, under the doctrine of “military-civil fusion,” has pursued leading edge, 21st century technologies such as AI, unmanned systems and hypersonic weapons at far lower cost than the U.S., sometimes by theft of intellectual property. The U.S., by contrast, has a $750 billion defense budget to update legacy systems, “buying the best 20th century military that money can buy,” but that seems increasingly unable to defend against cyber attacks and space-based weapons.

• Influence campaigns range from forcing global companies to hew to Communist Party lines to do business in China to using Chinese student groups and Confucius Institutes on campuses to “shape and stifle debate.” Disinformation is spread through YouTube, Twitter and Facebook—all banned in China. The party controls information through domination of Chinese-language social media such as WeChat with all the reach that implies in the Chinese diaspora.
• Xi’s “Made In China 2025” plan focuses the country’s economic future on dominance in strategic areas including 5G, AI, quantum computing, robotics and biotech. Meanwhile, it leverages aid relationships to promote exports, exploits an open international trading system for foreign market access while constricting domestic access to foreign companies, forces joint ventures and technology transfers, and uses state financing to lower its companies’ costs.
• China’s government is using ex-pat students and academics overseas to funnel sensitive university research back to China. Out of 363,000 Chinese nationals studying in the U.S. last year—a third of all foreign students—almost half were in STEM fields. Warner said that most are “blameless and make significant contributions to research,” but that the fact is “Chinese intelligence often preys on the overseas Chinese population by threatening family back home.” He stressed repeatedly that the U.S. must be careful not to demonize or alienate Chinese citizens and Chinese-Americans as its pushes back on Chinese government interference.

Setting Standards

Warner said the U.S. had gotten a bit lazy from its long period of technological dominance, and its companies were caught off guard by China’s rapid advance in 5G, AI and other cutting-edge technologies. In the past, even when innovations didn’t come from the U.S., the size of the American market meant industry standards were set in the U.S., locking in an American advantage. China is now threatening that dominance with lower-cost products that perform well and sales that are financed by state lenders. A move into a standard-setting position has ramifications that go beyond commercial, he said, citing the example of the telecom firm Huawei. The risk of building systems with its networking comes from software updates; if the Chinese government someday orders the company to insert malware, it will have no choice.  He commended steps the administration has taken to check Huawei’s penetration in the U.S. and elsewhere.

The first step to meeting the challenge of China is to work with allies and partners who share American values, Warner said; operating in isolation allows Beijing to play countries off against one another. That cooperation should embrace helping create industry standards for technology products, developing secure telecom infrastructure, and coordinating on export controls and allowable foreign investment. 

“This is where the Trump administration has gotten it all wrong—underestimating the importance of partners in advancing our most fundamental interests,” he said.

Taking Actions

Warner detailed a number of immediate, concrete steps the government and the private sector should take to blunt China’s trajectory—many of them addressed in pending or recently enacted legislation:

• The U.S. government must secure supply chains, particularly for military needs, along with all internet-connected devices used by government. 
• The country needs to seriously address the vulnerabilities of its telecom systems, especially 5G, by relying on trusted companies for infrastructure. Warner said he supported the administration’s steps to restrict use telecom equipment from China.
• The U.S. should stop Chinese investments in critical and dual-use technologies and crack down on investors’ ability to operate through shell companies. 
• Export controls must be strengthened further and quickly, and imposed in coordination with U.S. allies.
• The U.S. needs to do more to protect American research and development in universities and government labs, including through security and compliance requirements.

Finally, Warner said American citizens and institutions must be made to pay a price for, in effect, supporting bad behavior by China—at least by bringing into question their eligibility for federal contracts. Corporations must reflect values beyond simply maximizing the bottom line with short-term market opportunities, he said, and universities need to overcome their dependence on Chinese students’ tuition.

“Equally troubling, we’ve seen American investors pour money into Chinese companies that advance the PRC’s military capabilities,” Warner said. “We’ve also seen American companies develop technologies that directly enable the censorship, surveillance and social control efforts of China and other authoritarian regimes.”

“Where America doesn't make part of its foreign policy human rights, individual liberty, freedom of expression, we lose our moral force.”