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ECONOMIC D-DAY: China's Sudden Assault on Military Supply Chains By Evan Anderson Why Read: From steel to autos, Chinese dumping of goods specifically required for the fielding of a modern military has drastically accelerated, threatening to upend world markets and leave China as the world's sole supplier. At the same time, other key industries are already dominated by Chinese suppliers. Thus, we enter a new era on the economic front of an accelerating all-front war. This week, we cover the rate at which these massively subsidized exports are speeding up and the threat they pose to the sovereign nations on which they are perpetrated. _______
Overcapacity is a feature, not a bug, of China's model of state capitalism. China intends to let export gluts drive its growth. It is even using other markets as backdoors to ship its excess capacity to the United States. Countries like Vietnam and Mexico have become routes for Chinese manufacturers to flood the American market with the products they have difficulty sending here directly. - Alliance for American Manufacturing
To achieve its strategic goals, China relies on state-directed plans, which provide insight into the kinds of intellectual property and trade secrets the country targets and seeks to acquire from foreign sources. These plans govern foreign acquisition in science and technology, and their scale and influence are impressive. - "China: The Risk to Corporate America," Federal Bureau of Investigation
For years, we have covered in these pages the critical threat posed by the system of rampant IP theft, below-market pricing, and predatory economic policy supported by the government of the People's Republic of China (PRC). (New SNS members can catch up in the Global Report archives or our publications Theft Nation and Disengagement.) Now, the proverbial chickens are coming home to roost: the cost of engagement with the Chinese model is rapidly becoming too great to bear. A surge in exports has flooded the ports of the world's largest economies. Defined by stolen foreign intellectual property, below-market dumping, and myriad predatory business practices (from internment camps used for slave labor to corporate sabotage to the hacking of competitors' business plans), this system is run by the Chinese government. It is an intelligent national strategy, defined by the combination of clearly articulated concepts such as unrestricted warfare, Go Out policy, Made in China 2025, IP theft as a modus operandi, and the Belt and Road Initiative. Working in tandem, these strategies aim to hollow the world's production capacity, replacing the global economy with a Chinese one. As we are reminded by (likely) thousands of pages we've written in the GR over decades, these are not new problems. It is the continuation of the All-Front war already taking place. What's new today, and over the past few years, is the level of acceleration. In the midst of a global pandemic and a domestic economic crisis, China has dramatically increased the unprofitable export of numerous products in the key industries required to fight a kinetic war. We are now, in every way that matters, faced with an economic D-Day.
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