Off the Rails: New Report by Corporate-Funded Think-Tank Reveals How
Profit-Driven Motives Drive New Cold War against China
By Danny Haiphong - June 5, 2021 0
Silk and Steel Podcast EP#86-US China Tech War w an Industry Insider
[Source: silknsteel.podbean.com]
The same report paradoxically acknowledges the failure of the economic model
the U.S. has tried to impose on the rest of the world
Anew report published in Railway Age magazine and written by the Information
Technology Innovation Foundation (ITIF) has sounded the alarm about Chinas
growing high-speed rail sector. The report comes amid escalations in the
U.S.s New Cold War against China, of which technology is a key component.
China is by far the world leader in high-speed rail investment and
development, sporting more than 35,000 kilometers (21,700 miles) of
high-speed rail, or 68 percent of the worlds total. The ITIF itself admits
to Chinas rapid success in this sector since its first high-speed rail line
was completed in 2008:
Since then, China has opened thousands of kilometers of high-speed lines
with speeds ranging from 200 to 350 kph. To do this, China spent hundreds of
billions of dollars on the worlds most expensive public-works project since
President Eisenhowers Interstate Highway System of the 1950s.
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High-speed bullet train in China. [Source: railwayage.com]
The United States might learn from Chinas success in investing in
high-speed rail and try and emulate it; however, according to the ITIF,
Chinas high-speed rail policies damage innovation by privileging domestic
market development and state-owned enterprises over the interests of
private, foreign firms primarily residing in the West. China is accused of
employing a form of mercantilism to manipulate the global market at the
expense of the superior capabilities of Western, Japanese, and American
investors.
The term mercantilism has been used by big business interests in the U.S.
and West to portray Chinas policy of indigenous development as a high crime
against the free market. In fact, the ITIF has been sounding the alarm about
Chinas prioritization of its own tech sector since 2013.
It lamented that China was no longer keeping its promise to be a low-cost
production platform for foreign multinational corporations (MNCs). As if
the Chinese governments function was to serve the latters needs and not
that of its own people.
The ITIFs latest report focusing on Chinas high-speed rail sector comes
amid escalating U.S. attacks on Chinas tech sector. Most associate this
tech war with the Trump administrations sanctions on Chinas Huawei
Corporation and social media apps such as WeChat and TikTok. However, the
Biden administration and its allies have been just as aggressive in their
attempts to forestall Chinas technological development.
Huawei store
The telecommunications giant was a target of the Trump administrations tech
war on China. [Source: wired.com]
Biden has proclaimed that the U.S. is in a battle against China to win the
21st century and has expanded the list of Chinese telecommunications and
supercomputing companies on the U.S.s blacklist. In a recent speech to the
UK-funded Chatham House, neo-con hawk and twice-failed presidential
candidate Hillary Clinton passionately claimed that the U.S. is at the
mercy of China and demanded that the U.S. take back the means of
production.
What Chinese people think about Hillary Clinton
Hillary Clinton has supported the tech war against China. [Source:
brookings.edu]
The U.S. war on Chinas tech sector therefore shares widespread bipartisan
support. As this analysis will demonstrate, far from calling for more public
investment in the needs of an increasingly destitute U.S. workforce, the
ITIFs new warnings about Chinas high-speed rail sector reveal how powerful
economic interests are pushing for a new Cold War with China alongside the
perpetuation of neoliberal economic policies that prioritize the interests
of multi-national corporations.
Who Is behind ITIF?
Richard Haass, the President of the Council on Foreign Relations noted in a
2002 speech at the State Department that think tanks serve as an important
bridge between policy and action, and have been shaping U.S. foreign policy
for over 100 years.
Richard Haass [Source: cfr.org]
What Haass leaves out is that the majority are funded by corporate and
military interests to help condition the public and skew public policy in a
direction that favors capitalist elites and not the public at large.
The Information Technology Innovation Foundation (ITIF) claims to be an
independent public policy think-tank based in Washington, D.C. However, a
closer look into its background demonstrates that ITIF is a pillar of
free-market fundamentalism and the military and corporate domination in
world affairs required to maintain the U.S.-led neoliberal order.
The Information Technology and Innovation Foundation - Idealist
[Source: idealist.org]
Currently, it is one of several players driving a false and demonized view
of China that may very well provoke a new world war.
The ITIF receives the vast majority of its funding from U.S. corporations in
every sector of the economy. This includes the two largest employers in the
United States, Walmart and Amazon.
More notable in the realm of technology and militarism is the host of donors
from the defense and U.S. big-tech industries. Northrop Grumman, Boeing, and
leading Silicon Valley corporations as well as the Charles Koch Institute
join an alliance of U.S. monopolies and industry associations backing the
ITIF.
The same corporations backing the ITIF have led the charge in pressuring
Washington to take a hostile approach to Chinas tech sector, whose success
threatens them. Amazon and Northrop Grumman, the major arms manufacturer
also are top sponsors of the Australian Strategic Policy Institute (ASPI).
Logo, company name
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[Source: antinuclear.net]
ASPI has produced several dubious reports on Chinas supposed repression of
Uyghurs in Xinjiang. Some of these reports attack journalists who have
challenged the official narrative, notably at the Grayzone project. ASPI
publications have generally been used by Washington to enhance sanctions
against China over human rights claims.
A group of people standing in front of a building
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Cover of ASPI report on the persecution of Uyghurs in Chinas Xinjiang
province. Military-funded think-tanks are playing up Chinas alleged human
rights abuses in Xinjiang to mobilize public opinion against China. [Source:
saveuighur.org]
ITIF founder and President Robert D. Atkinson is a champion of global
neoliberalism who is regarded highly in elite circles as a tech policy guru.
Prior to founding the ITIF, Atkinson served as Vice President of the
Progressive Policy Institute, a think-tank of the Bill Clinton-led
Democratic Leadership Council (DLC) that sports initiatives such as the
Neoliberal Project. Atkinson has served as an adviser for every U.S.
administration from Bill Clinton to Donald Trump.
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Robert D. Atkinson [Source: youtube.com]
Atkinson currently holds a post as an adviser for the Minister of Science,
Research, and Innovation in the UK. He also serves on the Markle
Foundations Task Force on National Security, which helped write the 9/11
Commission Report and regularly lobbies for the privatization of the
national security state in Congress on behalf of the Foundations president,
Zoë Baird, Bill Clintons failed Attorney General nominee.
Zoe Baird (@ZoeBairdMarkle) | Twitter
Zoë Baird. [Source: twitter.com]
In a testament to his commitment to Clinton-era neoliberalism, Atkinson
argued in a 2011 article that progressives should drop social welfare
policies and instead support corporations in their fight against foreign
mercantilism.
More recently he has been warning about the China threat which he uses as
a pretext for promoting the implementation of his conservative economic
ideals.
Chinas High-Speed Rail Ascendency a Nightmare for Neoliberalism
Given Atkinsons history, it should come as little surprise that the ITIFs
report Heading Off Track: The Impact of Chinas Mercantilist Policies on
Global High-Speed Rail Innovation reads like a cartoonish screed against
public investment.
Authored by Nigel Cory, the report provides an inside look into the
nightmare that Chinas high-speed rail presents to the global order of
neoliberalism.
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Description automatically generated with medium confidence
Nigel Cory [Source: itif.org]
Mercantilism is a derogatory word devised by free-market fundamentalists to
describe the prioritization of domestic market development. According to the
report, Chinas largest rail manufacturer, the CRRC, is state owned and has
the largest share of the global high-speed rail market due to its dominance
of the Chinese market.
What is particularly troublesome to the ITIF is that Chinas early reliance
on foreign technology to develop its high-speed rail sector has been
gradually replaced with domestic alternatives.
The report blames Chinas dominance over its own market for the failures of
European, Japanese, and U.S. rail manufacturers to keep up with high-speed
rail production. European firms such as Alstom or Japanese firms such as
Hitachi are described as innovative more than a dozen times yet have seen
their market share in the industry decrease as much as fifty percent since
2007. The United States does not have a single high-speed rail firm capable
of developing high-speed rail and has thus fallen the furthest behind.
US High Speed Rail Association
[Source: ushsr.net]
That more innovative firms in the U.S. orbit have fallen behind China is
an obvious contradiction. To explain away failure, the ITIF outlines
measures China has taken to unfairly keep foreign corporations out of the
Chinese market. Many of these claims are contradicted in the report itself.
Forced technology transfer is a particular sore point for the ITIF and
forms the basis of claims of stolen intellectual property constantly made
by the United States and its allies. China is accused of forcing foreign
firms to share technology on an unequal basis. Yet so-called forced
technology transfers are not forced at all. Rather, as the report explains:
Chinas ongoing requirement for 100 percent Chinese-owned technology in many
procurement contracts, combined with foreign firms having to engage with
majority-Chinese owned JVs [joint ventures] in order to submit a bid,
amounts to a de facto mandate to transfer technology to local partners.
Foreign firms continue to capitulate because they have no choicethey either
give up their technology or lose out to other competitors in the growing
Chinese market.
Describing this scenario as forced obscures the actual problem: that China
does not allow its high-speed rail market to be controlled and dominated by
foreign, mainly U.S. and European, firms. Rather, China allows foreign firms
to invest in rail development only if Chinese firms maintain majority
ownership and are allowed access to information which allows them to develop
the technology domestically.
While the ITIF claims foreign rail firms had no choice in doing business
with China, it also admits that these same firms entered into such
agreements willingly in part because China was not expected to catch up to
its foreign peers so fast.
Another particularly sore point for the ITIF is Chinas bidding process.
Foreign rail firms must partner with a Chinese firm just to hold a license
to operate and compete for procurement contracts in the Chinese market.
Foreign firms are allowed no more than forty-nine percent of the shares in
any joint venture.
As the report laments, only a limited number of entirely state-owned
companies are allowed to contract for projects in China, thereby ensuring
little flexibility in the way revenue is spread between foreign and Chinese
partners.
A huge fear among the industrial and financial magnates that fund ITIF is
that Chinas model for infrastructure development in the high-speed rail
sector will spread globally. The report expresses anguish over the Belt and
Road Initiative directly, the massive government-led global infrastructure
plan that China hopes will create sustained trade relations between itself
and nations along the old Silk Road.
High-speed railways in Wudang district in Guiyang city, southwest China's
Guizhou province
High-speed railways that are part of Chinas New Silk Road project. [Source:
dw.com]
China has appointed CRRC, its foremost state-owned rail company, to develop
rail projects abroad such as the Sino-Laos railway set to debut before
2021s end.
607e271da31024adbdc2eb97
Workers carry out construction of the Sino-Laos railway. [Source:
Kunming.cn]
The global expansion of Chinas high-speed rail sector is particularly
problematic because of its disregard for profit. High-speed rail is a costly
endeavor which requires massive investments in research and development and
components that can range from $17 to $21 million per kilometer of rail. The
report quotes an unnamed executive who makes clear that foreign firms lack
the full weight and money of the state behind them in the way the Chinese
rail companies do.
In sum, China is accused by the ITIF of unfairly gobbling up market share
from foreign firms by stealing intellectual property and forcing
technology transfer. No proof is provided by the ITIF that verifies either
claim. More importantly, the report simultaneously admits that foreign (read
U.S. and EU) firms are unable to compete with China in large part because
high-speed rail requires massive public investment rather than the
prioritization of private profit.
Sanctions: Economic Weapon of the New Cold War
To punish Chinas public investment in high-speed rail, the ITIF recommends
first and foremost that foreign competitors, principally the United States
and Europe, pursue sanctions against China. Thirty-nine countries around the
world currently suffer from starvation sanctions imposed by the U.S. or EU.
Sanctions are an act of war that cuts off a countrys access to the
international market and, in the cases of Iran and Venezuela, prevent the
import of crucial supplies necessary to sustain human life.
The World Must End the US' Illegal Economic War. Sanctions Imposed on 39
Countries - Global Research
CodePink activist protests U.S. worldwide sanctions. [Source:
globalresearch.ca]
The ITIF specifically calls on the EU and the United States to work together
to prevent Chinese acquisition of rail firms and contracts abroad. This
would amount to a de facto blockade of Chinas access to European and U.S.
technology required for the development of high-speed rail and is not
dissimilar to existing U.S. sanctions on the semiconductor industry meant to
slow Chinas progress in the realm of smart technology.
The ITIF also suggests that U.S. and European governments adopt higher
prices for public procurement contracts for foreign investment in rail
projects and more stringent screening processes to essentially prevent
Chinas high-speed rail sector from expanding into the industrialized world.
Perhaps most damning is the ITIFs inclusion of the demand that the World
Bank withdraw financial support to China. Historically, the World Bank has
operated alongside the IMF as an enforcer of global privatization,
particularly in the Global South.
Structural adjustment programs implemented in countries across Asia, Latin
America, and Africa have reinforced neocolonialism and massively increased
extreme poverty around the world to the benefit of financial elites in the
U.S. and Europe. That the ITIF would demand the withdrawal of World Bank
funds from Chinese-backed high-speed rail projects demonstrates the lengths
the U.S. and its allies will go to contain the rise of China.
Sanctions are indisputably the economic weapon of choice in the U.S.-led New
Cold War on China. While many who politically identify as left in the U.S.
and West see China as a capitalist country, it is clear that the U.S. and
its allies employ targeted sanctions not on capitalist firms but on
socialist development in China and elsewhere.
The ITIF specifically targets state-owned enterprises in China for sanctions
in the same manner that the U.S. currently enforces targeted sanctions on
state-owned enterprises in Belarus and Myanmar.
Regardless of whether the justification is human rights or competition,
the effect of sanctions is to starve countries of their capacity to meet the
needs of their people in the hopes that they will either play ball with
U.S. and EU hegemony or see their political systems replaced with more
compliant regimes.
China does not play ball with U.S. hegemony. China maintains public
ownership over key sectors of the economy such as high-speed rail and
disregards U.S. and European sanctions placed on poor nations across the
Global South. This is evidenced by Chinas massive bilateral relationships
with Iran and Russia. China is also Europes, Latin Americas, and Africas
largest trading partner.
Furthermore, high-speed rail marks only one area where China has surpassed
the U.S. and European powers technologically. China leads the world in
artificial intelligence, regenerative medicine, and a host of other sectors
that once were dominated by private U.S. and European firms.
china
Visitors check their phones behind the screen advertising facial recognition
software during the Global Mobile Internet Conference (GMIC) at the National
Convention in Beijing, China, April 27, 2018. [Source: pri.org]
Sanctions are thus deemed necessary to arrest the development of Chinas
large publicly driven tech sector from taking the reins as the foremost
economic power. The ITIF published a follow-up article authored by Robert
Atkinson himself which anguished over the reality that Chinese state-driven
development is fast becoming the engine of the global economy.
This article appeared to reflect a tacit admission of the failure of the
economic model Atkinson and his ilk have tried to impose on the rest of the
world, and reaffirmation of Chinas policies.
Free-Market Fundamentalism Spells Doom for Humanity
The ITIF not only calls for sanctions but also for direct public investment
to spur innovation and make the U.S. and its allies competitive again. The
U.S. Senate Commerce Committee has followed these recommendations by
approving $110 billion in basic research in the tech sector.
Still, there is an obvious contradiction in the demonization of Chinas
state-owned economy and the U.S.s decision to increase government spending
in tech research to counter China. This contradiction is unlikely to be
resolved given that the New Cold War is predicated upon the religion of
free-market fundamentalisman ideology which is foundational to U.S.-led
neoliberal capitalism.
As economist Michael Hudson remarks, the New Cold War on China is
essentially a clash of two systems:
Todays Cold War 2.0 aims to deter China and potentially other counties from
socializing their financial systems, land and natural resources, and keeping
infrastructure utilities public to prevent their being monopolized in
private hands to siphon off economic rents at the expense of productive
investment in economic growth.
Michael Hudson
Michael Hudson [Source: michael-hudson.com]
Free-market fundamentalism spells doom for humanity. It is that which
Secretary of State Tony Blinken chastised China when he said they were not
following the rules-based international order.
Free-market fundamentalism is behind the massive bailouts and stock buybacks
Biden supported under the Obama administration and the massively bloated
U.S. military budgets, which pad the profits of private weapons
manufacturers.
Abroad, free-market fundamentalism inspired the 1973 CIA-backed coup in
Chile, sanctions on Zimbabwe for its engagement in land reform, and the
dozens of societies destroyed by the U.S. in the name of freedom and
democracy.
Chinas high-speed rail sector is now under fire from the U.S.-led
neoliberal order precisely because the titans of big tech and finance cannot
imagine development that does not place the massive profits of capitalists
such as Jeff Bezos and Bill Gates in command of international politics.
A picture containing person, person, clothing, indoor
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Yang Jiechi, the top Chinese foreign policy official, left, and Antony
Blinken, U.S. Secretary of State, in Anchorage, Alaska, in March. Blinken
angered the Chinese by lecturing them on human rights even before the
meeting began. [Source: ft.com]
Think-tanks such as the ITIF serve as mouthpieces for their Wall Street and
Silicon Valley funders. It is quite clear from ITIFs report on high-speed
rail that, beneath the bellicose rhetoric and policies of the U.S.-led New
Cold War on China, is a very real attempt to stymie the progress of
alternative economic arrangements to neoliberalism on the world stage.