We Need To Keep Cleantech Companies From Being Used Against Democracy (Part 2)

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This article is part of a short series. You can find Part 1 here.

Freedom of the Press and Freedom of Political Activism Are Also In Danger Outside of China’s Territories

1/ Hong Kong's trade office in London has warned the UK's Sunday Times that its article may be illegal under Hong Kong law which forbids the incitement of an election boycott. The letter says the law is applicable internationally. pic.twitter.com/3S2iIuJeGt

— Hong Kong Free Press HKFP (@hkfp) December 10, 2021

Even if you’re in an industry that the Chinese government doesn’t dominate, and you’re not affected by threats of arrest if you ever go to China (because you don’t plan on going), the government has made it clear that it still wants to find ways to intimidate you. Whole articles could be written (and have) about foreign activities meant to harass, intimidate, and even kidnap people. The government has made it clear that it think its laws have global jurisdiction. Other countries are very unlikely to actually extradite you to China for speaking against their leaders, but the process of refusing the extradition could still involve your arrest and needing to attend hearings to fight an extradition. In other words, the process itself could be the punishment if you pass through any of the dozens of countries with an extradition treaty.

The end result is that many publications and professionals would rather just avoid talking about China to avoid hassles. We wouldn’t tolerate this chilling effect out of our own governments, so we shouldn’t tolerate it from theirs.

Now that we’ve explored the big picture of the CCP’s intimidation and control of people overseas, let’s zoom in on the cleantech and automotive industries (which is what you’re here for, right?).

Some Current Examples In The Cleantech Industry

If you ask anyone why China dominates so many industries, the answer is usually that they’re able to achieve lower costs with cheap labor and lax regulations. However, in the technology industry that’s only partially true. When there’s a fast rate of innovation, such as with semiconductors, China tends to not be very competitive. American and Taiwanese companies tend to run circles around them because they innovate faster than Chinese companies can steal the intellectual property and replicate it.

With technologies that improve more slowly, and with high interchangeability, the advantage goes back to whoever can provide the lowest costs, even on older versions of the product or with stolen intellectual property. Solar panels are a great example of this — people just don’t care where they come from or if they’re slightly less efficient as long as they get the power they want from them at the lowest price.

So, the Chinese government does what it can to both dominate where it can easily dominate, and accelerate the acquisition of intellectual property when it cannot. It is using this strategy to dominate the automotive and cleantech industries.

When it comes to raw materials, China has pushed the three biggest state-owned rare earth mineral companies to combine into a behemoth company that can dominate the industry. China was already a dominant player in that industry, but this move will make it even easier to use rare earths as a big lever in diplomacy.

When it comes to obtaining technology, China has forced most foreign companies to work with a Chinese partner, who take a 51% or greater stake and control the joint effort. This accelerates the local company’s technological knowledge, and allows them to go on and become a bigger player later without the foreign automaker.

The big exception to this policy was Tesla. To draw Tesla in, the government allowed Tesla to move into Shanghai and set up shop without a local partner company.

Interestingly, Elon Musk is famous (or infamous, if you’re a fan of Joe Biden or Bernie Sanders) for his statements against US officials. But, you’ll never hear a peep of criticism from him when it comes to the Chinese government. In fact, he has praised China and its leadership multiple times.

Coincidentally or not, silence is not enough for Xi Jinping’s government. China’s officials have repeatedly warned US companies doing business in China that they can’t “make a fortune in silence”. They expect US companies to not just stay out of their way, but to actively work for Beijing when there’s a dispute with Washington.

“We hope that our friends in the business community will clearly oppose the politicization of economic and trade issues and the abuse of the concept of national security, push the Biden administration to lift the tariffs imposed on China, stop the suppression and sanctions against Chinese enterprises and provide a level playing field for enterprises of both countries,” Vice-foreign minister Xie Feng said.

He then added that on issues considered vital to Beijing, like their assertion that Taiwan is Chinese territory, there is no room for compromise.

How They’re Working To Expand Their Influence To Capture Governments

Only the most paranoid would tell you that they expect China to invade the United States or Europe. Not only is that absurd, but it’s also far from good for China to aim for direct world domination the way Imperial Japan or Nazi Germany did. Not only would that be prohibitively expensive, but it would also create massive military opposition from other countries. These pressures would likely act on domestic fault-lines and destroy the Chinese government. They definitely don’t want that.

Instead, they’re going to be smart and continue what they’re already doing: pursue “Finlandization” and use “Grey Zone” warfare to achieve their goals without the direct use of force against other states.

Finlandization refers to the relationship between the Soviet Union and Finland during the Cold War. The Soviet Union never invaded Finland, and they didn’t need to. Fear of the Soviet Union was enough to get Finland to do almost everything the Soviets wanted without taking their sovereignty away. Censorship of criticism of the Soviet Union, non-alliance with Western powers, and the elites’ adoption of pro-Soviet stances were all pursued to help Finland survive the Cold War intact.

In other words, whole countries did what today’s business and entertainment leaders are doing globally, and it’s not far-fetched to think that governments aren’t far behind.

In Part 3, I’m going to explore how the expansion of Finlandization, combined with Grey Zone warfare can lead to great losses of freedom and environmental disasters, especially when clean technologies become a tool for these techniques. Then, I’ll explore ways we can keep this from happening.