Washington is going hard after the proclaimed bully, China. Amidst the ongoing tariff war, the United States has now opened another front. The Trump administration has unleashed the Federal Bureau of Investigation (FBI) on China over the Dragon’s relentless campaign of stealing American Intellectual Property (IP). With this, the United States is now building a case for big and brutal sanctions on the People’s Republic of China.
There have been increasing demands within the US to take China to task over American IP theft. And now with the FBI being unleashed on Beijing, the US could be building a case for using the ultimate ‘Nuclear option’, that is, pushing China out of the global dollar-based system to destroy the Chinese economy.
FBI Director Christopher Wray has himself revealed that the domestic intelligence body of the United States is opening a China-related counterintelligence case every ten hours. This is a major pushback against the Chinese campaign to steal American Intellectual Property (IP).
Wray has warned against the Chinese counterintelligence and economic espionage. He terms it as the “greatest long-term threat” to the national and economic security of the United States.
In fact, the FBI Director has claimed that the Chinese IP theft is on a level “so massive that it represents one of the largest transfers of wealth in human history.”
Wray has also spoken about Beijing’s “broad, diverse campaign” that goes as far as exerting influence upon American officials at all levels.
Within the US, the Chinese intellectual property theft is becoming a huge issue. Washington understands that with such erosion of the American Intellectual wealth, Beijing is enriching its own companies in an unjust manner.
The top FBI official said, “China is engaged in a whole-of state-effort to become the world’s only superpower by any means necessary.” Wray added, “It can execute that campaign with authoritarian efficiency.”
The US has realised how China has emerged as a real threat to the Washington-led rules-based world order. Beijing has made a concerted effort to politically influence American universities and academia.
China runs a humongous “reverse technology” market that thrives on intellectual property theft. Most of the Chinese technology companies are just sub-standard copies of their American counterparts. Beijing is relentlessly stealing sensitive and proprietary research and development data and other such intellectual property from the US.
American focus also needs to shift onto China with the increasing realisation of the fact that the perception of a world order, with Russia being one pole and the US being another, is somewhat anachronistic.
China is today occupying much more space than Moscow. China’s economy is the second-largest in the world and eight times larger than Russia’s. If there is any country that can challenge American might, it is China.
Therefore, FBI investigations into Chinese IP theft and possibly some shocking revelations are bound to step up political pressure within the US.
As we have seen earlier, there has been a pattern of bipartisan bills in the US Congress on issues concerning China. The bills that aimed at de-listing Chinese companies, imposing sanctions on Chinese officials for violating human rights of Uyghur Muslims and expressing Washington’s support to Taiwan in strengthening its international relations were passed with bipartisan support.
There is every possibility that the FBI investigations will lead to another bipartisan bill getting introduced in the American legislature.
This is the moment that Washington can use to punish China. It can roll out full-blown sanctions against Beijing with bipartisan support in the American legislature. These sanctions would be one step ahead in the escalatory ladder and certainly more lethal than the tariffs that have been presently imposed on Chinese products.
American sanctions are painful as they weaponize the global dollar-based banking transaction system, and target every single company using the US dollars or operating Stateside subsidiaries.
And if the US actually kicks China out of the global dollar-based system, China will certainly not be the first country to be thrown out of the International trading system by Washington.
Iran, Venezuela, and Russia are already out of the international trading system due to the ban on using American financial infrastructure. And we have seen how the economies of these countries have landed in a terrible situation.
If and when the US decides to impose big and brutal sanctions on China pushing it out of the international trading system, Beijing’s hegemony would get uprooted. American sanctions can absolutely cripple the Chinese economy and annihilate Chinese companies.
Once kicked out of the global system, China will find it hard to return to the mainstream and its economy will consequently get dragged back irreversibly. Even if China manages to return to the mainstream, it will be a much smaller power than what it is right now.
In this context, the rampant FBI investigations into China’s economic espionage and IP theft can cost Beijing dearly. As Washington unleashes the FBI on China, the latter’s worst fears of punitive American sanctions might be coming true.