What’s next for U.S., China relations?

Surveillance balloon issue signals that more challenges are on the horizon

For someone rarely at a loss for words, I am struggling as I write this column. Do I start with “sending up a trial balloon,” or should I go with “burst their balloon” or maybe “the plan went over like a lead balloon”?

By now, I’m sure you’ve figured out I want to discuss the issue of China’s surveillance balloon, its demise and what this could potentially mean to already strained relations between China and the U.S.

My first thought is, plain and simple, countries spy on each other. But what’s not so plain and simple is that this latest incident comes at a time when our relationship with China is already strained to the point of being frayed.

Recall how China and the U.S. remain at odds in a trade war that has imposed tariffs on a host of raw materials and consumer products dating back to 2018. As many know, this largely was in response to China’s unfair trade practices, notably the stealing of intellectual property, not to mention huge trade deficits impacting the exports of U.S. goods, products and services.

These and other issues will continue to be the focus of the recently formed Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, formed last month by the House of Representatives.

From what I’ve read, the group, led by Michael Gallagher (R-WI), and created with a bipartisan vote of 365-65, will be looking at four major areas:

United States investment in China: For some time now, Gallagher has voiced his concern about United States investment in China and noted that he will consider creating “a system for monitoring and blocking U.S. investments in China.”

Gallagher’s concerns are by no means new. In November 2020, he introduced legislation that aims to ban Americans from investing in Chinese companies and individuals listed on the Commerce Department’s so-called Entity List of firms facing U.S. restrictions.

Investigate our reliance on supply chains and products from China: In commenting on the focus of the select committee, House Speaker Kevin McCarthy (R-Calif) said, “One of the greatest worries about the future is that we fall behind Communist China. The fact of the matter is the danger posed by our dependence is dire.

“We spent decades passing policies that welcomed China into the global system and in return, China has exported oppression aggression and anti-Americanism. It didn’t start under this administration. But the current administration has made it worse. The policies have weakened our economy and made us more vulnerable to the threats of the CCP. But here is the good news — there is bipartisan consensus that the era of trusting Communist China is over.”

McCarthy has already commented on how the Covid-19 pandemic led to “not knowing whether we could have our medical supplies” that were produced in China and went on to promise that the select committee would also work to stop the theft of intellectual properties and “bring supply chains back home to America.”

China’s threats to cybersecurity, privacy and intellectual property: Gallagher has a long history of working to curtail China’s ongoing attempts to infiltrate these areas and as a result, expect a stepped-up attempt to protect domestic data and intellectual properties.

China’s influence in American education: The select committee has stated that it “will investigate the CCP’s attempts at infiltrating our academic institutions and the rise and proliferation of Confucius Institutes in the United States as organs of the CCP.” Universities and educational organizations should be prepared to respond to questions from the select committee.

As far as a timetable, the select committee is operational as I write this. However, for the record, according to the wording of House Resolution 11, “The select committee shall not have legislative jurisdiction and shall have no authority to take legislative action on any bill or resolution. The sole authority of the select committee shall be to investigate and submit policy recommendations on the status of the Chinese Communist Party’s economic, technological and security progress and its competition with the United States.”

And while the committee cannot take legislative action, worth noting is that under H.R. 11, it will have the authority to issue subpoenas and take depositions from witnesses, a strong indication that this committee may have teeth.

So, what happens next?

Is this a case of China (and note how all recent comments now refer to China as Communist China) going too far with the balloon fiasco, or is the select committee an acknowledgment that we’ve become too reliant on China’s exports, or is this a case of patriotism versus profits?

Possibly some of each?

According to this chart from Statista https://www.statista.com/statistics/277428/value-of-us-imports-from-china/, China is deep into our pockets as far as what we import from them.

Closer to home — as in home furnishings — while we may have relocated lots of furniture production from China to other Asian countries, we still rely heavily on China for everything from foam, glass, metal, hardware and loads of other materials we need for the furniture that we sell. And of course China still remains a major producer of finished furniture exported to the U.S.

I think the balloon incident was just the trailer for what could be quite a movie.

Stay tuned.

One thought on “What’s next for U.S., China relations?

  1. Finally someone with common sense speaks out on the China balloon incident! Ray Allegrezza is not afraid to say it like it is and how it can have a major effect on our furniture industry. This is a very big deal and America needs to realize that this is a major wake-up call.

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