On December 23 last year, Intel, one of the world’s biggest semiconductor firms, presented a beautiful Christmas gift to Beijing. It was an apology to the people of China for having instructed its suppliers not to source anything from the country’s northwestern region of Xinjiang.
Of course, Intel’s apology was not entirely voluntary. It had been directed not to buy anything in Xinjiang by the U.S. government as part of Washington’s sanctions linked to what some have described as a form of genocide being directed by Beijing against the Muslim Uyghur people.
There had be no demand for an apology from Beijing or the Chinese Communist Party. Instead, a “spontaneous” outpouring of anger towards Intel had erupted on Weibo (a popular but censored social media site) so virulently that Intel felt compelled to apologize for not aiding and embracing the genocide of the Uyghurs. If this sounds like George Orwell’s 1984, that is because it is.
When I first read of the incident, I could not help but recall my long-time friend and colleague Andy Grove. Originally a Jewish Hungarian, Grove had survived the Nazis by hiding and sheltering with a gentile family during the German occupation of Hungary during World War II. Then, during the 1956 Hungarian uprising against the Soviet-backed Communists, he escaped into Austria and eventually made his way to the United States. In New York, he waited tables and went to school at night at City College of New York. Upon graduation he won a scholarship to the University of California, Berkeley and earned his doctorate in chemistry. Later, he was hired by the founders of Intel, Bob Noyce and Gordon Moore, to be badge number 3, and is credited with having been the major builder who transformed the company into a powerhouse.
The irony of Intel, a company built by a refugee from Communism, apologizing to communist China for, in effect, not supporting genocide is both enormous and incredibly sad. (An Intel spokesman declined to comment on this op-ed.)
Significantly, on the day of Intel’s apology, Hong Kong University removed from its grounds the Pillar of Shame memorial to the victims of the Tiananmen Square massacre of June 4, 1989, when hundreds of students demonstrating for democracy in the center of Beijing were gunned down by the tanks of the People’s Liberation Army.
We call these corporations American companies, but they are not. Sure, they are chartered in one of our states, but their mission is to make money however they can, not to act in the interest of the United States.
These incidents should sound a loud warning to American and all free world policymakers, forcing them to face up to the reality that their perceptions of the world have been mistaken — and that their economic policies have been, and continue to be based on false assumptions and flawed reasoning.
They should realize that what they think of as their own domestic corporations are, in fact, quasi-Chinese. The Intel apology is particularly awkward, but it is only the latest in a long series of servile corporate responses to Chinese suzerainty.
Mercedes Benz apologized to China for including a comment from the Dalai Lama in an ad for its autos even though it had not been shown in China. The company had not understood that Beijing considers him an enemy because of his opposition to China’s control over Tibet. America’s National Basketball Association (NBA) has faced pressures from Beijing after a negative tweet on Hong Kong by a Houston Rockets general manager last year.1The general manager, Daryl Morey, is now working for the Philadelphia 76ers. A few years ago, virtually all free world airlines were threatened with loss of flight rights to China if they did not refrain from referring to Taiwan as a separate country. They all conformed.
Perhaps the most interesting and important example is that of Apple, much of whose supply chain is located in China. In December 2015, two shooters dropped an iPhone while killing a dozen people in San Bernardino, California. To learn the identity of the killers, the FBI asked Apple to open the phone. Apple refused even after the FBI filed suit against the company in court. Eventually a private security company opened the phone, but without the help of Apple.
Now fast forward to 2019. Students in Hong Kong were protesting against adoption of a Beijing backed national security law that would abandon the “One Country, Two Systems” freedom of the city-state and subsume it under the dictate of Communist China. In planning when and where to protest, the students used an app from the Apple store called Hong Kong Map Live. With it, a user could see Hong Kong in real time and quickly locate where the police were. Naturally, protesters using the app chose to demonstrate where the police were not present. The People’s Daily, an organ of the Chinese Communist Party began to inveigh against Apple: Within two days the app was removed from the Apple store. Like Intel, Apple appeared scared to death of what Beijing can do to it, as are all the free world companies operating in China.
We call these corporations American companies, but they are not. Sure, they are chartered in one of our states, but their mission is to make money however they can, not to act in the interest of the United States. Indeed, if they have extensive overseas operations, their CEOs often see themselves as “global citizens” rather than particularly as Americans. When they are dealing with other free world countries and markets such as the EU or Japan, any clashes tend not to be about fundamental human rights or national security. But when dealing with China they are, and this means that the extent of possible integration of the free world economies with that of China is inherently limited.
It is clear the Communist Party wants to erase any element of human rights that might be carried into China by free world corporations, while squeezing as much of their technology out of them as possible, in order to achieve its stated economic goals, as well as its broader political goals, which include bringing Taiwan under Beijing rule. An unstated but, in this author’s view, obvious goal is to make China the global hegemon.
These objectives are not compatible with deep economic ties between China and democratic countries. It is time for American and other free world leaders to get serious about decoupling from China and restructuring global and regional supply chains.
Clyde Prestowitz is founder and president of the Economic Strategy Institute. Prior to founding ESI, Mr. Prestowitz served as counselor to the Secretary of Commerce in the Reagan Administration. There, he led many U.S. trade and investment negotiations with Japan, China, Latin America, and Europe.
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