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Nikki Haley: “Meeting the Challenge of Communist China”

June 27, 2023

Thank you…

Four years ago last month, shortly after I left the United Nations, I gave a policy speech about China.

I was in Seoul, South Korea. 

In part, the speech was about what I’d seen at the UN. In part, it was a broader look at the West’s approach to China over the past several decades.

I warned about China’s growing military power, its growing repression at home and aggression abroad, and its growing challenge to American interests and America itself. I specifically called out its military-civil fusion program, where the Chinese Communist Party exploits American companies to strengthen its military. I urged our leaders to, quote, “think about China critically, creatively, and courageously.”

That was four years ago. Much has happened with China since then. None of it good.

China’s police state is more comprehensive. It has destroyed freedom in Hong Kong. It has deepened its genocide of the Uyghurs. It is threatening Taiwan daily. Its “no limits” alliance with Russia has cemented. And of course, there was Covid. Despite its on-going attempts at cover-up, the Chinese Communist Party bears responsibility for the worst worldwide pandemic in a century – with up to twenty million deaths.

Through it all, the Chinese military has become even stronger. It is testing us like never before.

Last month, a Chinese fighter jet came within 400 feet of an American aircraft flying in international air space above the South China Sea.

Earlier this month, a Chinese naval ship came within 150 yards of an American destroyer in the Taiwan Strait.

We all remember the Chinese spy balloon that flew over our homeland just four months ago. It wasn’t taking pictures of our prairies and beaches – it was flying over American nuclear missile sites.

And this month it was revealed that China has developed a spy base in our own backyard on the fellow Communist island of Cuba.

These provocations are not coincidences or accidents. They are the purposeful actions of a Communist dictatorship that is determined to expand its power and defeat America militarily and economically. 

America is China’s number one target.

The question is, what are we going to do about it?

This is a central question of presidential leadership – both for the current president, and the next one.

Communist China is the greatest threat to American security and prosperity, by far.

It has the stated goal of diminishing American influence in the world and replacing it with its own.

To meet this threat, there must be a series of fundamental shifts in our policies.

Before I describe those changes, let’s first look at what we should shift away from.

China became a member of the World Trade Organization in 2001. This proved to be a fateful decision.

America brought China into the WTO. Democrats and Republicans supported it. At the time, and for more than a decade after, there was a bipartisan consensus that this was all reward and no risk. Our leaders told us it would bring China into the modern economy and open its huge market to the world.  They said it would make China more free, open, and democratic. That China would become more like us. 

I understand why this dream was appealing. We saw it happen with Japan after World War II, and then again with one Asian country after another. From South Korea to Singapore, they moved into the company of free and open nations.

But not China.

This American assumption proved disastrously false. Our thinking neglected the role of communist ideology. The Chinese Communist Party didn’t want to be like us. It still doesn’t. China grew stronger, by taking advantage of our open markets; but it also grew less free. 

President Donald Trump deserves credit for upending this bipartisan consensus. He made both parties take off their blinders. Despite the divisions in our politics today, both parties are now more clear-eyed about the Chinese threat than they have been in a very long time. That’s a good thing.

But being clear-eyed is not enough. It’s not the same as having the right solutions and the necessary determination to protect America.

President Trump was almost singularly focused on our trade relationship with China. He was right about Chinese trade abuses.  It was, and still is, a critical issue.

But Trump did too little about the rest of the Chinese threat.

He did not put us on a stronger military foothold in Asia.

He did not stop the flow of American technology and investment into the Chinese military. 

He did not effectively rally our allies against the Chinese threat.

Even the trade deal he signed came up short when China predictably failed to live up to its commitments.

He also showed moral weakness. In his zeal to befriend President Xi, Trump congratulated the Communist Party on its 70th anniversary of conquering China. That sent the wrong message to the world.  Chinese Communism must be condemned, never congratulated.

China was militarily stronger when President Trump left office than when he entered.

That’s bad. But Joe Biden’s record is much worse.

The list of President Biden’s failures on China is long.

He has refused to seriously investigate China’s cover-up of COVID’s origins.

He has done little to stop the expansion of China’s footprint on our homeland.

He has failed to address China’s major role in the fentanyl crisis.

He has weakened our own military.

His obsessive focus on climate issues naively plays into China’s negotiating hand.

And the situation is getting worse.

Secretary of State Blinken’s visit last week was a gold-plated invitation for more Chinese aggression, not less. Just look at what happened. First, China scolded us. Then President Xi pronounced it a good meeting. He only says that when he gets a lot more than he gives.  In fact, he gave us nothing.

Joe Biden has eighteen more months in office. Mark my words: He’s going to keep ignoring the Chinese threat. We’ll have wasted four more years.

We’re falling behind. But China is moving forward, faster than ever.

Its military is modernizing and expanding at a rapid pace.

It’s building infrastructure around the globe that can be used by its military.

It has new stealth bombers. It’s preparing to fight in outer space. It has hypersonic missiles that we don’t.

The Chinese Navy is especially concerning. Less than ten years ago, it was about the same size as ours. Today it has the largest fleet in the world, with 340 ships, and plans to hit 400 in the next two years.

We don’t have plans to hit 350 ships in the next two decades.

China has dramatically expanded its cyber capabilities. Its hackers and spies are targeting everything from our military bases to our critical energy infrastructure.

China has also deepened its infiltration of our homeland. It’s exerting influence on campuses and even setting up police stations on U.S. soil.

And China’s abuse of American businesses is worse than ever. Every U.S. company that works in China is effectively required to support the Chinese military. They don’t have a choice.

The Communist Party is stealing our innovations to the tune of $600 billion a year.  It’s using American enterprise to undermine American strength. And President Biden is letting it happen.

The Communist Party’s end game is clear.

China is preparing its people for war.

President Xi has openly said it.

We should take him at his word and act accordingly.

Instead, President Biden continues to dither.

His action makes conflict more likely.

We must act now to keep the peace and prevent war.

And we need a leader who will rally our people to meet this threat – on every front.

As President, my top priority will be strengthening America’s economy and America’s military. We will protect America’s prosperity and homeland from Chinese aggression.

We will tackle Chinese meddling in our society and its manipulation of our economy. And we will hold the Communist Party accountable, while putting it on the global defensive.

This is a sea-change in American policy. It’s grounded in the reality that our leaders have failed to admit.

China is much more than a mere “competitor.”

Communist China is an enemy. It is the most dangerous foreign threat we’ve faced since the Second World War. 

We have to stop wasting time. That was true four years ago, when I said as much in Seoul.  It is more so today.

It is time to marshal our strength and national will.

AN AMERICAN RESPONSE

We must respond in three ways: domestically, economically, and militarily.

Confronting China starts at home. We must systematically eliminate its interference and infiltration of our society.

The situation is worse than most people realize. The Communist Party has abused our openness in extraordinary ways.

It uses our economic freedom to threaten our security and food supplies – our academic freedom to corrupt our students and scholars – and our freedom of speech to spread lies and shape our laws.

China treats our homeland like its personal playground.

In recent years, Chinese investors have bought nearly 400,000 acres of land in our country. That’s twice the size of New York City.

We aren’t just talking about any old property. China has bought miles of farms near sensitive military facilities. And China has taken majority control of agricultural industries.

This must end. The line between Chinese investors and the Chinese Communist Party is exceptionally thin. The national security risk is too great. We must prevent China from buying more land, and force it to sell what it already owns.

We need similar resolve in our higher education system.

China has set up so-called “Confucius Institutes” that spread communist propaganda on college campuses. When they get shut down, they quickly re-open under different names.

And China is giving hundreds of millions of dollars to our universities. This funding gives Beijing a foothold in the best research institutions in the world. It wants our research for its military.

We should end this practice. We should ban all propaganda centers and eliminate federal funding for universities that take Chinese money.

Universities must choose – China or America. It shouldn’t be a hard decision.

There are other steps we must take to protect our domestic institutions.

Right now, the United States lets Chinese companies lobby our government. Yet Beijing ultimately controls them. These businesses are basically front groups for a foreign power.

We should ban all lobbying from the Communist Party and Chinese companies and prevent former Members of Congress and military leaders from lobbying on China’s behalf. Beijing should never be allowed to influence our laws.

China is also behind the fentanyl crisis that’s killing tens of thousands of Americans a year. Chinese companies make nearly all the precursor chemicals that Mexican cartels turn into fentanyl. China cannot plead innocence here. It knows exactly what it’s doing by putting these chemicals into the hands of the cartels.

We’ve tried sanctions but they’re not working. We must ratchet up the pressure. As president, I will push Congress to revoke permanent normal trade relations until the flow of fentanyl ends.

If China wants to start normal trade again, it has to stop killing Americans.

That brings me to the second big policy shift.

In addition to protecting our homeland, we must protect our economy.

I’m a firm believer in economic freedom.

But it has long been recognized that not all trade with all trading partners is the same. The father of capitalism, Adam Smith, wrote in The Wealth of Nations, that Great Britain’s interest in preserving naval supremacy was more important than free trade in the maritime sector. “Defense,” he wrote, “is of much more importance than opulence.”

The challenge today is that national security is affected by almost every part of our relationship with China.

No one understands that better than the Chinese. They have desperately pursued American investment and innovation precisely to strengthen their military.

American companies are banned from selling military hardware and services to China, but they still sell billions of dollars’ worth of other goods in the Chinese market.

We must look at these sales through a national security lens. Much of it has military application and slips through cracks in U.S. law. But Chinese law requires U.S. companies to transfer technology to Chinese companies as part of the price of doing business on Chinese soil.

This cannot continue.

U.S. businesses must recognize the threats to themselves and to American security. Beijing’s focus on military fusion demands it.

China already steals up to $600 billion of American intellectual property every year. Our loss is the Chinese military’s gain.

Advanced technology is especially important. Right now, our federal government keeps a detailed list of the most sensitive technologies that are dangerous to export. But it’s not a blacklist. We still let companies send this tech to China. They just have to file the right application.

It happens all the time. In 2022, the Biden administration approved 70% of licenses for exporting controlled technology to China. Think about that!

We must end the export of sensitive technology to China, full stop.

And we must keep China away from our biggest breakthroughs and cutting-edge companies. We know Beijing wants to beat America in AI, quantum computing, and a host of other advanced technologies. We also know that American innovation is still the best in the world.

The Communist Party knows it, too. Their approach is basically, “if you can’t beat ‘em, then buy ‘em, or steal ‘em.”

We should block any Chinese purchase of an American company specializing in advanced technology. No more exports and no more acquisitions – period.

For that matter, we should have no more investments that undermine America. China can’t buy certain technologies from American companies, but Americans can still invest in Chinese companies developing those same technologies.

Talk about a loophole. It’s a massive one. By one estimate, U.S. portfolio investment in China rose $800 billion between 2017 and 2020 alone.

Not all this money is funding military and technology breakthroughs. But much of it is. China is using our federally invested pensions to leapfrog America.

The American people deserve better. I will protect our investors and our national security. No more investments in any company that helps the Chinese military or supports the Communist Party – period.

These steps are needed to prevent war and preserve peace. We can no longer be complicit in China’s military rise.

For that matter, we cannot continue to neglect our own military. This is the third big task we must undertake.

It’s time to face a hard truth. Our military strength is not where it should be. It must be transformed to meet today’s and tomorrow’s challenges.

We’re falling behind in almost every area.

Look at recruitment. The Army, Navy, and Air Force all say they’ll miss their recruitment goals this year.

China is building more hypersonic missiles by the day. Our hypersonic missile project is barely off the ground.

Or how about nuclear weapons? China now has more ballistic missile launchers than we do. It’s building warheads at a rapid pace and deploying delivery vehicles we don’t have.

Meanwhile, our nuclear triad is old and getting older. President Biden is considering retiring some nuclear weapons – and even canceling new ones. Few things are more foolish in our dangerous world.

China is also investing more than ever in space and cyber warfare. These are the battlefields of the future. We have a long way to go, and in many respects, we’re playing catch up.

A stronger military is the linchpin to our national security and to preventing wars.

Some might wonder if such a build-up is possible in a short timeframe. Our supply chain dependence on China makes it a serious challenge. But it must be done, and it can be done.

The Pentagon has gotten lazy. Its procurement projects drag on for decades. We must cut through the bureaucracy, stop playing favorites with defense companies, and bring new weapons and projects to the field in record time.

We can’t wait fifty years for new ships and missiles. We can’t even wait five years.  If China can do it, America can too. And we can do it far better.

We must also rally more nations to our side. We should deepen our military ties with Japan, South Korea, and Australia, and forge stronger bonds with India and the Philippines.

And we must finally get Europe to recognize that China threatens it as much as us. European countries are even further behind than we are in recognizing the Chinese threat. It’s time to shake them from their slumber.

We need a united front across the world. And one U.S. partner is especially important.

Taiwan is the Communist Party’s most immediate target. If China invades, it will trigger the war that none of us want. We cannot let that happen.

We and our allies should give Taiwan everything it needs to defend itself. We should make sure the American naval presence in the Taiwan Strait remains strong. And we should let China know now that an invasion of Taiwan would not just be met with a few slap-on-the-wrist sanctions.

It would mean a full- blown economic decoupling that would massively damage China. 

We should stand with Taiwan without apology – because our security is intertwined.

CONCLUSION

The actions I have laid out today were needed yesterday. They should be implemented tomorrow.

Sadly, President Biden has shown he is not up to the task. A new president is needed – one who will do what’s necessary to defend America.

But there’s one thing that needs to happen before next year’s election. In fact, it must happen now.

The United States must help Ukraine defeat the Russian invasion. A Russian defeat would be an enormous loss for China – and a true victory for peace.

The events of this past weekend show how weak and shaky the Russian leadership is. Now is the time to seize the moment and help Ukraine bring this war to a decisive end.

Make no mistake: China is watching the war in Ukraine with great interest.

And what has it seen so far?

It has seen the failure of Russian aggression. It has seen the Russian military weakened for a generation. It has seen an unusual level of European unity, and previously neutral European countries join the western alliance. And it has seen a strengthened, not a weakened, Ukrainian resolve.

China is seeing what it most fears if it invaded Taiwan.

But that could change in short order.

If America and the West abandon Ukraine, and Russia succeeds in taking its territory and freedom, China will hear an unmistakable message. That message can only encourage China to invade Taiwan as soon as possible. 

The warning signs are already flashing. President Biden has been far too slow and weak in helping Ukraine. He has dragged out this war and given Russia and China reason to question our future commitment. That’s a recipe for more war in both Europe and Asia.

Our policy should not be to freeze the war on the current frontlines. That would only lead to stalemate and continued fighting. Our policy should be to help Ukraine reclaim its territory – and bring this war to a quick and decisive end. That does not require American troops or cash assistance. It requires us and our allies to supply the equipment, ammunition, and training to get the job done.

If we do that, China will see our resolve and rethink its plans for Taiwan. It will see the true cost of war before it launches one. It will realize that America will not roll over – that we will do what is necessary to defend our interests and defeat our enemies.

That is the surest way to peace. If we had sent this message years ago, there would have been no Russian invasion of Ukraine, and Chinese aggression would have been curbed.

China has spent decades preparing to fight. It has played us like a fiddle. Our leaders have responded with apathy, and even applause.

This inaction has weakened America and strengthened China. We’re now in a very dangerous situation against a very powerful enemy.

The hour is late. But it is not too late to wake up and take charge of our destiny.

Peace depends on it. Our freedom demands it.

If we rally now, the Chinese Communist Party will eventually end up on the ash-heap of history, like the Soviet Communist Party.

We still have the power to protect our country. We only need courage and leadership to meet this threat head-on.

Now is the time to stand up to China. And we must stand together to save America.

Thank you.

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