It is by now well known that the so-called Trade War between the United States and the People's Republic of China was merely a nice way of packaging for popular consumption (and narrative management) of a large group of objectives, impulses and trajectories that followed from decisions taken by both American and Chinese elites (lamentable in the opinion of some) since around 2012 (in China) and 2016 (in the US). That trajectory is grounded on the fundamental premise (justified by core premises of liberal democracy and Marxist-Leninism in their own ways) that it is necessary (and inevitable) that the core leaders of the Marxist-Leninist and liberal democratic communities decouple their economies--and move forward from the great program of coupling that was at the heart of the great post 1945 project of multilateral globalization. COVID-19 has only intensified an initiative already well established by December 2019 when the coronavirus epidemic first intruded on the narrative of ideological statecraft marked by America First and Belt and Road Initiatives.
This post considers the increasing intensity of that strategic de-coupling and the reconstruction of global production chains within the orbits of the great apex organizers of ideologically distinct market communities--one liberal democratic, and the other Marxist Leninist. To that end it considers the contemporary project of the Congressional-Executive Commission on China (CECC), "Global Supply Chains, Forced Labor, and the Xinjiang Uyghur Autonomous Region", a program to be held 11 March 2020 in Washington, D.C. and its connection to the challenges to global trade across the US-China divide that the COVID-19 more clearly exposed. The CECC Concept Note and Program information also follow below.
The Congressional-Executive Commission on China was created by the U.S. Congress in 2000 "with the legislative mandate to monitor human rights and the development of the rule of law in China, and to submit an annual report
to the President and the Congress. The Commission consists of nine
Senators, nine Members of the House of Representatives, and five senior
Administration officials appointed by the President." (CECC About). The CECC FAQs provide useful information about the CECC. See CECC Frequently Asked Questions. They have developed positions on a number of issues (e.g., here).
CECC tends to serve as an excellent barometer of the thinking of political and academic elites in the United States about issues touching on China and the official American line developed in connection with those issues. CECC becomes an even more important barometer of coherence and fracture in policy approaches as the discipline of activities between the political parties and the President and Legislature fractures in new and dynamic ways. As such it is an important source of information about the way official and academic sectors think about China. As one can imagine many of the positions of the CECC are critical of current Chinese policies and institutions (see, e.g., (here, here, here, here, here, here, here, here, here, here, here, here, here; and here).
The CECC has made its position clear with respect to the situation in Xinjiang and has been an important force in influencing opinion in the US. For a listing of its engagements see HERE. On 10 October 2019 CECC distributed a "Xinjiang: Chairs’ Statement on State and Commerce Department Actions." Also in October CECC held hearings on "Forced Labor, Mass Internment, and Social Control in Xinjiang."(Congressional-Executive Committee on China (CECC) Hearings: Forced Labor, Mass Internment, and Social Control in Xinjiang 17 October 2019).
CECC tends to serve as an excellent barometer of the thinking of political and academic elites in the United States about issues touching on China and the official American line developed in connection with those issues. CECC becomes an even more important barometer of coherence and fracture in policy approaches as the discipline of activities between the political parties and the President and Legislature fractures in new and dynamic ways. As such it is an important source of information about the way official and academic sectors think about China. As one can imagine many of the positions of the CECC are critical of current Chinese policies and institutions (see, e.g., (here, here, here, here, here, here, here, here, here, here, here, here, here; and here).
The CECC has made its position clear with respect to the situation in Xinjiang and has been an important force in influencing opinion in the US. For a listing of its engagements see HERE. On 10 October 2019 CECC distributed a "Xinjiang: Chairs’ Statement on State and Commerce Department Actions." Also in October CECC held hearings on "Forced Labor, Mass Internment, and Social Control in Xinjiang."(Congressional-Executive Committee on China (CECC) Hearings: Forced Labor, Mass Internment, and Social Control in Xinjiang 17 October 2019).
Now CECC continues to push its Xinjiang initiative, refining its focus on labor issues (rather than those of religion and human rights more generally understood. The object is quite clear--to add to the risk calculus of businesses as they make determinations about the way in which they organize and locate their supply chains. The importance of this strategic line cannot be overestimated for Western enterprises increasingly subject to the legal and business risk of the human rights effects of their economic activity (e.g.,Human
Rights Without Chinese Characteristics and Global Production Chains
Within China: Xinjiang and Badger Sportswear as a Harbinger of
Dissonance in Human Rights Risk Management). This is a point underlined in the CECC's Concept Note for its Program: "The gross human rights abuses, including forced labor, being committed in the XUAR deserve a robust, concerted response from the U.S. Government and the international community. U.S. companies should not be complicit in the forced labor of Uyghurs, Kazakhs, Kyrgyz, Hui, and other Muslim minorities." (Concept Note; Concept Note and Program information follow below).
Note here the multiple objectives of the CECC's program. The obvious one, strategically and ideologically important, center on religious rights, human rights, and dignity as those are interpreted to be applied to evaluate Chinese policies in Xinjiang. These are clearly important especially with respect to the US's relations with the ummah ( أمة ), its own Christian majority communities, and liberal democratic elite human rights sensibilities). But that is the sort of thing that sells well among the US's friends and an influential segment of the liberal democratic professorate (who as the blue collar workers in the Academy continue toiling to produce the sort of academic writing (and high end journalism that is increasingly indistinguishable from conventional advocacy pieces in the US academy) that might be useful to the political classes and force the hand of economic leaders). Yet that may not resonate as well with the driving engines of social stability--the economic leaders and their legions of compliance sensitive risk mitigating administrative organs. For that, a business case for action is required, one that aligns with a public policy that sees value in an economic decoupling that de-centers China from its position as the middling nexus point for US global supply chains.
But where does this decoupling strategy come from? Certainly officially both the US and China vehemently deny any effort toward decoupling and reconstitution of global trade. Each rather takes the inverse position--that each represents the leading forces of globalization. And yet, in both cases, while their actions suggest a continued strong adherence to the general principle of globalization, the manifestation of that adherence begins to take strongly centralizing aspects. That, in turn, suggests that globalization fior each is understood as fractured globalization--that is that the global most be understood in terms of activity flows, and that activity flows must be organized along two increasingly distinct approaches manifested by post-Obama liberal democracy or post Hu Jintao Marxist Leninism.
China's New Era political-economic model necessarily involves a decoupling from the major streams of global thought from which China drew extensively during the generative period of Reform and Opening Up. As an ideological matter, it became increasing necessary to legitimate the success of the Chinese Marxist-Leninist Model, not merely by its success as an economic project, but as an ideological project as well. That legitimization also required a strong decoupling of the ideological basis of societal, economic, and political foundations from global systems understood as essential regressive. That decoupling served as the basis fro New Era thought, now understood as a striong progressive movement toward the ideological autonomy of the China success phenomenon. But ideological decoupling was not enough. The true test for ideological autonomy required a refleciton of this ideological trajectory in the development of Chinese society. and also in the forward progression of the economic model which was the ultimate expression of ideology as applied. So, even as China entered into the generative period of ideological decoupling with New Era Thought, so it sought to express that decoupling ion practical terms through the Belt and Road Initiative. It was no longer enough for China's economy to be dependent on supply chains ion which it was only a middle level player; it was now necessary to produce an autonomous global economic system that mirrored its emerging ideological system. Both, together, then, could serve as the basis for the re-alignment of China's place in the world and offer to its partners an alternative road to prosperity and social order. The New Era order was not meant to avoid foreign connection, but to reorder their significance and operation within China, and as a part of China's new global economic networks.
At almost the same time, the United States also radically changed course. Though that change remains highly contentious as American elites engage in a brutal civil war for dominance of control over the narrative and levers of public power to direct the Republic in a way more to their liking (and manage societal acquiescence by control of legitimating narrative). The American changer of course was theatrically performed with the rejection of the Trans-Pacific Partnership, the last and greatest expression of the post-1945 world order sensibilities. Of course by the time it was ready for approval, an important element of the American left and right harbored reservations. These were couched in the parochial language of American politics. But such opposition likely signaled a deeper rejection--not just of the form or content of TPP, but of its animating principles and philosophy. That is, by 2016, factions of the American elites across the political spectrum were already poised to reject the American post-1945 dream of a unified global system of production in which deep inter meshing would itself produce stability at the cost of sovereign control of macro-economics. Thus, even after 2016 among the Trump hating elites who criticized what would become the emergence of America First, there was little love lost for the TPP which served as a useful sacrifice. Like the Chinese Belt and Road, the principles emerging after 2016 were centered around the idea that global production was valuable, but that it must be understood as a series of spokes the utility of which could only be realized by a strong connection to a single hub. For the left that usually meant developing global economic activity as spokes made intelligible by and directed through the "hub" of global human rights. For the right that usually meany economic activity the actors of which would be protected by markets the integrity of which would be the central activity of a "hub" or apex state.
For both China and the US, then, by 2017, the state of their trade relations represented a potent ideological challenge. The Chinese could no longer tolerate a global trade order in which they relinquished substantial managerial authority to production chains, many of which lead away from Beijing. The US could no longer afford what they viewed as the subsidy of middle tier participants in the global production order in which they effectively transferred technology, and value added, without acquiring anything of value in return. For both, then, a change was due. But change did not mean the segregation of trade relations. Indeed the opposite weas true--and thus the multi year negotiations (though those were extended for all sorts of reasons, including internal US and Chinese factional dialogue and the instability in US leadership while the elite civil war erupted into the Impeachment of the President in 2019-2020). For the Chinese, realignment and decoupling would mean a greater control of production within their territory and the power to direct it for national ends; for the Americans it meant the need to take advantage of Chinese markets and locational advantages, while cultivating a much more aggressive program of diversification of supply chain location. For the Americans, then, it made sense to advance high principles in the Xinjiang situation because it would also advance America First aspirations and strategic objectives. For business the writing on the wall was clear--Chinese operations were to be cultivated, but they were to be increasingly understood as centered on the Chinese market; that required the long term development of multiple supply chains, many of which would then strategically align with America First.
For both China and the US, then, by 2017, the state of their trade relations represented a potent ideological challenge. The Chinese could no longer tolerate a global trade order in which they relinquished substantial managerial authority to production chains, many of which lead away from Beijing. The US could no longer afford what they viewed as the subsidy of middle tier participants in the global production order in which they effectively transferred technology, and value added, without acquiring anything of value in return. For both, then, a change was due. But change did not mean the segregation of trade relations. Indeed the opposite weas true--and thus the multi year negotiations (though those were extended for all sorts of reasons, including internal US and Chinese factional dialogue and the instability in US leadership while the elite civil war erupted into the Impeachment of the President in 2019-2020). For the Chinese, realignment and decoupling would mean a greater control of production within their territory and the power to direct it for national ends; for the Americans it meant the need to take advantage of Chinese markets and locational advantages, while cultivating a much more aggressive program of diversification of supply chain location. For the Americans, then, it made sense to advance high principles in the Xinjiang situation because it would also advance America First aspirations and strategic objectives. For business the writing on the wall was clear--Chinese operations were to be cultivated, but they were to be increasingly understood as centered on the Chinese market; that required the long term development of multiple supply chains, many of which would then strategically align with America First.
The CECC program nicely aligns with these fundamental trajectories. And one can expect more along these lines. In this case the CECC Program is heavily tilted to the non-governmental and "watchdog" sector, as well as the sector of NGOs advocating for religious rights as understood in liberal democratic states. But these participants were chosen to drive home the further point--that the business risk, as well as the potential legal risk, of investment in China makes its own business case for decoupling. Decoupling would minimize and cauterize business and legal risk with respect to Chinese operations, while it would diversify production to ensure that during the course of human rights and other ideological disputes especially by Western stakeholders, production continues substantially undisturbed.
And it is here that one can (at last) make the connection with the COVID-19 epidemic and its aftermath. Like the Xinjiang situation, COVID-19 presents an instance that underlines a case for decoupling and diversification for foreign business. Where the situation in Xinjiang is used to make the case for diversification based in the increased business or legal risk of sourcing from China, the COVID-19 epidemic, and Chinese public responses, it is now suggested, make an equally compelling case for diversifying supply chains out of China.
And it is here that one can (at last) make the connection with the COVID-19 epidemic and its aftermath. Like the Xinjiang situation, COVID-19 presents an instance that underlines a case for decoupling and diversification for foreign business. Where the situation in Xinjiang is used to make the case for diversification based in the increased business or legal risk of sourcing from China, the COVID-19 epidemic, and Chinese public responses, it is now suggested, make an equally compelling case for diversifying supply chains out of China.
With the outbreak of the Coronavirus COVID-19, it has become clear that a diversified sourcing base is critical to success. The virus has caused major, if temporary, disruption that will affect the supply chain out of China for months to come. * * * Now, with the disruptions caused by the Coronavirus, the fragility of the single-source strategy has been exposed, and brands are paying for their dependency on China. It will be impossible to replace the current system overnight, but it’s necessary, and the risk of not diversifying is greater than the pain of doing so. Changing infrastructure and supply lines will take years of steadfast discipline and purpose. In the short term, it will likely mean thinner margins for all who attempt it, but as the Coronavirus outbreak has shown, not diversifying your sourcing could prove fatal to your business. (COVID-19 means you need to diversify your supply chain, even if it’s painful).
PwC has been more blunt: "The COVID-19 outbreak is likely to result in longer-lasting reconfigurations of supply chains to build resilience, and this is already under way as some US companies diversify Asia operating models in response to shifting trade policies. " (COVID-19: Operations and supply chain disruption).
But again, one does not speak here to segregation, but rather to de-coupling- The difference is important. Segregation suggests a wall between the global production of the US (and its production chains), and those of China (and its chains). Instead, de-coupling suggests a dual track strategy where each of the apex states will encourage mutual investment and access to production, but that those will be more specifically targeted to profitable ventures in which value added is increasingly local. The object, then, is not to pull production, but to re-organize it along dual lines, one within the spoke and wheel of the US or China, and the other for still quite profitable economic activity across production chains.
What CECC adds is a reality that such reconfigurations are not merely market responses, but also reflect quite real trajectories that are being driven not just by the Americans, but by China's own national aspirations in a remodeled and decoupled multi-global reorganization of production.
And ironically, for the rest of the world the great lesson of COVID-19 will be the value of greater coupling, even as the US and China find it is their mutual best interests to de-couple.
But again, one does not speak here to segregation, but rather to de-coupling- The difference is important. Segregation suggests a wall between the global production of the US (and its production chains), and those of China (and its chains). Instead, de-coupling suggests a dual track strategy where each of the apex states will encourage mutual investment and access to production, but that those will be more specifically targeted to profitable ventures in which value added is increasingly local. The object, then, is not to pull production, but to re-organize it along dual lines, one within the spoke and wheel of the US or China, and the other for still quite profitable economic activity across production chains.
"At the end of January, when COVID-19’s destruction in China was becoming apparent, U.S. Commerce Secretary Wilbur Ross told Fox Business that “I think it will help to accelerate the return of jobs to North America.” Coming at a moment when some 8,100 Chinese had been infected with the virus, it was an extraordinarily callous comment, but the line was consistent with the so-called decoupling from China the administration of U.S. President Donald Trump advocates." (Blindsided on the Supply Side).
And ironically, for the rest of the world the great lesson of COVID-19 will be the value of greater coupling, even as the US and China find it is their mutual best interests to de-couple.
Assistant Under-Secretary for Agriculture and Fisheries Affairs at the Ministry of Municipality and Environment (MME), Sheikh Dr. Faleh bin Nasser Al Thani, has said that under National Food Security Strategy adequate measures are in place to ensure food security in the country which will help mitigate the impact of COVID-19.
He said that the strategy which was launched in 2017 after blockade helped in the diversification of sources of import and increasing of the storage capacity of basic food items and in raising self-sufficiency rate of food production in Qatar.
“In 2017 (before blockade), as per the national food security strategy, we were dependent on one or two countries for importing foods. After blockade, we opened imports from all over the world. Now importers and traders have more options to import products from abroad,” said Sheikh Dr. Faleh bin Nasser Al Thani while talking to The Peninsula. (Measures in place to counter possible COVID-19 effect on food supply chain)
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Global Supply Chains, Forced Labor, and the XinjiangUyghur Autonomous RegionRayburn 2255Wednesday, March 11, 20209:30amThe Chinese government has created a far-reaching system of forced labor in the Xinjiang Uyghur Autonomous Region (XUAR) requiring current and former internment camp detainees to work in food and textile production and other manufacturing, including in factories outside the XUAR. Goods produced with forced labor have entered the U.S. and European markets and the risk of complicity in forced labor is high for any company importing goods directly from the XUAR or those partnering with Chinese companies that operate in the region. The gross human rights abuses, including forced labor, being committed in the XUAR deserve a robust, concerted response from the U.S. Government and the international community. U.S. companies should not be complicit in the forced labor of Uyghurs, Kazakhs, Kyrgyz, Hui, and other Muslim minorities.The Commission will hold a roundtable to further examine the impact of Chinese government-sponsored forced labor in and from the XUAR on global supply chains as well as U.S. and international consumers. Panelists will discuss how forced labor is part of the Chinese government’s human rights abuses in the XUAR, examine how this forced labor has been used to produce goods that have entered global supply chains, and evaluate the effectiveness of audits and other due diligence mechanisms in ensuring that supply chains involving the region and the XUAR government are in compliance with U.S. laws prohibiting products made with forced labor.The roundtable will be livestreamed on the CECC’s YouTube channel.At the event, the Commission will release a new report entitled “Global Supply Chains, Forced Labor, and the Xinjiang Uyghur Autonomous Region.” The CECC Chairs will also discuss new bipartisan and bicameral legislation to address the importation of goods made from forced labor in the XUAR into the United States.Introductory RemarksRepresentative James P. McGovern, Chair of the Congressional-Executive Commission on ChinaSenator Marco Rubio, Cochair of the Congressional-Executive Commission on ChinaPanelistsScott Nova: Executive Director of the Worker Rights ConsortiumShelly Han: Chief of Staff and Director of Engagement at the Fair Labor AssociationJeffrey Vogt: Rule of Law Director at the Solidarity CenterRushan Abbas: Director, Campaign for UyghursMedia Contact: Scott Flipse(202) 308-6062
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