The Pentagon has now added BYD, Alibaba, Baidu, and dozens of other Chinese firms to its list of companies allegedly linked to China’s military establishment. Washington wants the public to believe this is about national security. China’s greatest crime is not that it has a military. Every major power has a military. China’s greatest crime is that it competed too well.
China is building electric vehicles that are taking market share from Western automakers. Suddenly it becomes a national security concern. China develops world-class battery technology. National security concern. China advances artificial intelligence. National security concern. China dominates solar manufacturing. National security concern. China expands semiconductor capabilities. National security concern. At some point people need to ask whether the issue is military activity or economic competition.
The United States spent decades shipping factories, manufacturing, technology, and investment capital to China. Wall Street and consumers rejoiced after receiving cheaper products. The assumption was always that China would remain a low-cost manufacturing platform while the West retained financial and technological dominance. That has never been what our computer indicated, and although it may not have made sense decades ago, every indicator shows China on the rise.
China took the capital, the technology, the expertise, and the industrial capacity and built an economic machine that now challenges the West across nearly every major strategic industry. BYD now sells more electric vehicles than many Western competitors. China produces the overwhelming majority of the world’s battery components. Chinese companies have become major players in artificial intelligence, robotics, telecommunications, and advanced manufacturing. The problem is not that China failed. The problem is that China succeeded.
What would happen if BYD were headquartered in California? Politicians would celebrate it as proof of American innovation. If Baidu were based in Silicon Valley, every financial network would praise its technological achievements. If China’s battery industry belonged to the United States, politicians would be holding press conferences celebrating industrial leadership.
Instead, these companies are Chinese. Yes, there have been instances of technology theft as both nations play dirty to compete. Every success achieved by the rival nation is portrayed as a threat. Governments begin redefining ordinary commerce as strategic warfare.
Washington is finally admitting what China understood from the beginning. Beijing never separated economics from national strategy. China viewed industrial development as national power. The West viewed industry as something to offshore in pursuit of quarterly profits. Now policymakers are discovering that surrendering industrial capacity has consequences.
We are rapidly approaching a world where every Chinese company is viewed as a military company and every American company operating abroad is viewed as an instrument of Washington. Once governments start treating commercial competition as military competition, the distinction between economic warfare and actual warfare begins disappearing.
The public should understand what is taking place. This is not merely about BYD, Alibaba, or Baidu. This is another step in the escalation between the world’s two largest economies. The war cycle is advancing precisely as expected. The rhetoric becomes more hostile as restrictions become more aggressive. The economic walls will grow higher.
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