Ripon Forum - February 2022 by The Ripon Society

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Rodney Davis discusses his first job & the lesson he learned from it.

February 2022 Volume 56, No. 1

“ENTERPRISE CHINA” BEIJING’S COMPETITIVE STRATEGY AND BATTLE PLAN, AND THE IMPLICATIONS FOR U.S. POLICYMAKERS & BUSINESS LEADERS IN THE YEARS AHEAD. by J. Stewart Black & Allen J. Morrison

Plus: Darin LaHood & Rick Larsen discuss the importance of speaking with one voice when it comes to China.

And: Young Kim explains why America cannot turn a blind eye to the plight of the Uyghurs.

President Xi Jinping is seen on a large screen during the 100th anniversary celebration of the founding of the Chinese Communist Party at the Bird’s Nest National Stadium in Beijing on June 28, 2021.

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“Ideas that matter, since 1965.“ Volume 56, Number 1

Politics and Perspective

Cover Story (cont’d)

Taming Inflation: What Policymakers Can – and Should – Do By Douglas Holtz-Eakin

Ocean Shipping Carriers: It’s Time to Realign the Interests of Shippers and Ocean Carriers By Dusty Johnson

How the U.S. Can Deter Chinese Aggression into the Next Decade By Barry Pavel & Christian Trotti There is an ongoing revolution in military affairs, and if China is the first to redefine the way that great powers fight and deter wars, there could be perilous geopolitical implications.

Affordable Housing—Wisconsin’s Secret to the Labor Shortage By Jim Steineke

Preventing the Next Ukraine By Michael A. Hunzeker The unfolding crisis in Ukraine should serve as a wake-up call that we are running out of time to deter aggression against an even more vulnerable partner: Taiwan.

China’s Looming Challenges By Carl Minzner From hosting the Olympics to containing the pandemic, it might seem that China is on top of the world. But beneath the surface, the country faces serious problems.

Cover Story 10

“Enterprise China” By J. Stewart Black & Allen J. Morrison The size, scale, and level of coordination between Chinese companies and the Chinese State is not only unprecedented, but is something business leaders and policymakers can no longer ignore.

Speaking with One Voice on China By Darin LaHood & Rick Larsen We must approach U.S. policy towards China in a bipartisan way, remaining focused on the country’s manipulation of global free markets, threats against its neighbors, and ongoing human rights abuses.

America Cannot Turn a Blind Eye to the Plight of the Uyghurs By Young Kim We must wake up and realize that the Chinese Communist Party has fully committed to leveraging oppression, torture, and genocide to further its geopolitical ambitions and economic prospects.

Publisher The Ripon Society Jim Conzelman, President Editor Lou Zickar Deputy Editor Kyle Chance Advertising Coordinator Autumn Reed

Editorial Board Thomas Tauke Michael Castle Erik Paulsen Billy Pitts Pamela Sederholm Jim Murtha John Feehery

Special Report: Advice to the CDC 26

A Better Prepared Public Needs Clear Communication By Cynthia Baur

Messaging Failures of the Pandemic By Eric D. Hargan

Dear CDC ... About that Latest Announcement By Glen Nowak

Sections 3 30 32

In this Edition News & Events Ripon Profile - U.S. Rep. Rodney Davis

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RIPON FORUM February 2022

THE RIPON SOCIETY HONORARY CONGRESSIONAL ADVISORY BOARD U.S. Senators: Shelley Moore Capito - Senate Co-Chair Todd Young – Senate Co-Chair Marsha Blackburn Roy Blunt Richard Burr Bill Cassidy, M.D. Susan M. Collins Steve Daines Joni Ernst Deb Fischer John Hoeven Jerry Moran Mike Rounds Thom Tillis Roger Wicker U.S. Representatives: Rodney Davis - House Co-Chair Jackie Walorski - House Co-Chair Darin LaHood - Vice Chair, Midwest Mike Kelly - Vice Chair, Northeast Dan Newhouse - Vice Chair, West Frank Lucas - Vice Chair, Southwest Ann Wagner - Vice Chair, South Mark Amodei Kelly Armstrong Don Bacon Troy Balderson Andy Barr Stephanie Bice Mike Bost Vern Buchanan Larry Bucshon, M.D. Michael C. Burgess, M.D. Ken Calvert Buddy Carter Tom Cole John Curtis Tom Emmer Ron Estes Brian Fitzpatrick Andrew Garbarino Anthony Gonzalez Kay Granger Garret Graves Sam Graves Jaime Herrera Beutler French Hill Trey Hollingsworth Bill Huizenga Bill Johnson Dusty Johnson Dave Joyce John Joyce, M.D. John Katko Young Kim Adam Kinzinger Bob Latta Billy Long Nancy Mace Brian Mast Kevin McCarthy Michael McCaul Peter Meijer Carol Miller John Moolenaar Blake Moore Guy Reschenthaler Tom Rice Cathy McMorris Rodgers Steve Scalise Lloyd Smucker Pete Stauber Bryan Steil Glenn “GT” Thompson Mike Turner Fred Upton David Valadao Brad Wenstrup Steve Womack

In this Edition

Fifty years after President Richard Nixon made his historic trip to Beijing to normalize relations with China, the latest edition of The Ripon Forum examines the global ambitions of the Chinese State and the challenges facing America in that regard in the coming years. Leading the Forum’s coverage are Professors J. Stewart Black and Allen J. Morrison, who, in an essay entitled “Enterprise China,” argue that the size, scale, and level of coordination between Chinese companies and the Chinese State is not only unprecedented, but is something that U.S. business leaders and policymakers can no longer ignore. “There are roughly 150,000 State-Owned Enterprises (SOEs) in China,” Black & Morrison write, “and collectively they account for at least 30% of the economy, or $4.5 trillion in revenue. That share alone is greater than the total GDP of any other nation except the United States and Japan … The level of ownership, control, and support of China’s SOEs is also without precedent. In terms of control, the top executives of these SOEs are appointed by and serve at the pleasure of their state owners.” Black & Morrison argue that the effective “CEO” of Enterprise China is none other than President Xi Jinping himself, and the goal is nothing short of world domination. “Enterprise China’s competitive strategy is not just about protecting itself from foreign invaders,” the pair write. “It is more fully about ‘going out’ and influencing the world. Only in shaping the world can it control its own destiny. Therefore, the implication to both executives and policymakers is simple: Enterprise China is in it to win it, so expect to play hardball.” To effectively meet this challenge, U.S. Reps. Darin LaHood (IL-18) and Rick Larsen (WA-2) believe it is critical that Republican and Democratic policymakers speak with one voice on Capitol Hill. The pair serve as the Co-Chairs of the U.S.-China Working Group in Congress. In an essay for this latest edition, they discuss the effort they are leading to achieve that goal, and point to specific areas where common ground between the parties can be found. “Now, more than ever,” LaHood & Larsen write, “we must approach U.S. policy towards China in a bipartisan way … we will ensure Congressional attention continues to focus on China’s manipulation of the global free market, threats against its neighbors, and ongoing human rights abuses.” U.S. Rep. Young Kim (CA-39) examines one of these abuses in an essay focusing on the plight of the Uyghurs and their mistreatment by the Chinese Communist regime. Kim, who has authored a number of bills aimed at ending this mistreatment, writes that: “While Congress has made strides to support Uyghurs, nations and private interests around the world have remained largely silent as the People’s Republic of China continues to ramp up its genocidal campaign. In fact, many U.S. companies have continued to ignore basic corporate responsibility and morality in favor of profit and have not done nearly enough to respond to concerns over the PRC’s human rights violations.” In other essays focusing on U.S. policy toward China, analysts Barry Pavel & Christian Trotti of the Atlantic Council assess the increasing strength of the Chinese military and its implications for U.S. national security, while Professor Michael Hunzeker examines Taiwan’s ability to defend itself against a possible Chinese attack, and the steps U.S. policymakers should take to make sure such an attack does not occur. With all signs pointing to China becoming a global economic and military superpower in the 21st century, Carl Minzner of the Council on Foreign Relations examines some of the most pressing challenges that President Xi Jinping faces at home that may stand in the way of achieving this goal. In addition to focusing on the rise of China, the latest edition of the Forum also examines some of the other challenges facing the United States this year. Douglas Holtz-Eakin of the American Action Forum writes about the rising rate of inflation and what policymakers can do to reverse this trend. U.S. Rep. Dusty Johnson (SD-AL) writes about the impact of the supply chain crisis on the economy and the bill he has authored to provide some relief. And Wisconsin State Assembly Majority Leader Jim Steineke writes about the impact of labor shortages on the economy of his home state and the effort he is leading to address these shortages through affordable housing. With the Centers for Disease Control coming under increased scrutiny for how it has been communicating with the public about the pandemic, three health care experts share their advice for how the agency could make their communications more clear. And in the latest Ripon Profile U.S. Rep. Rodney Davis (IL-13) discusses, among other things, a lesson he learned from his first job and how it continues to shape his service in Congress today. As always, we hope you find this latest edition of The Ripon Forum interesting and informative, and we welcome any comments or questions you might have. RIPON FORUM February 2022

Lou Zickar -- Editor of The Ripon Forum 3

Politics & Perspective

Taming Inflation:

What Policymakers Can – and Should – Do by DOUGLAS HOLTZ-EAKIN The shocking acceleration of inflation is the economic percentage point each quarter and ended 2021 at 4 percent. signature of 2021. In January, year-over-year Consumer Part of the U.S. experience is driven by supply chain issues, Price Index (CPI) inflation was 1.4 percent; by December it as well. had shot to 7.0 percent. Even more striking, prices for food, But the U.S. government added fuel to the fire, passing energy, and shelter – which constitutes over 50 percent of the $1.9 trillion, deficit-financed American Rescue Plan the typical family budget – had stimulus in March 2021. At the skyrocketed by 8.2 percent. time of its signing, the U.S. The 5.7 percentage point economy was growing at a red-hot 12-month jump in CPI inflation 6.5 percent; additional stimulus has been exceeded only twice in was neither needed nor desirable. the postwar era: In 1951, it jumped Inflation responded immediately as much as 10.6 percentage to the policy error, jumping from points, and in 1974, it rose 6.1 1.9 percent in the first quarter to percentage points. Both episodes 4.8 percent in the second quarter – are instructive. nearly three times the increase of The 1951 episode is Europe’s supply-driven inflation. a cautionary tale about The fiscal stimulus was reinforced overstimulating the economy. In by an aggressively accommodative this case, year-over-year growth monetary policy that featured zeroin gross domestic product entered percent interest rates and large, the year in double-digit territory continuous monetary infusions. and Korean War-related defense Inflation continued to rise as the production layered on yearyear went on. over-year growth in government Inflation is clearly a problem Douglas Holtz-Eakin spending that peaked at 49 percent in the present. Will it continue? in the third quarter. Lesson: To be durable, price inflation must Perhaps the best we can Excessive government spending be accompanied by wage inflation in a hot economy can quickly fuel hope from policymakers is and higher inflation expectations. inflation. that they stop adding to the Wage inflation has already arrived, In contrast, the 1974 episode as average hourly earnings rose 5 problem with massive new percent from December 2020 to demonstrates the exact opposite of demand stimulus. Instead, it December 2021. To compound spending bills, such as the features a huge supply cost shock matters, consumers’ expectations Build Back Better Act. – the quadrupling of oil prices due for inflation over the next year rose to the OPEC oil embargo. Lesson: from 3 percent to 6 percent during Cost increases borne by supply 2021. This raises the specter of problems can quickly be passed along to consumers, even if workers bargaining for higher wages as a hedge against the economy is moving toward recession. expected inflation. When those labor cost increases get The inflation of 2021 reflects a combination of these passed on to consumers, the expected inflation becomes a forces. The COVID-19 pandemic has wreaked havoc on self-fulfilling prophecy. labor markets worldwide, and the resulting disruptions What should policymakers do? in supply chains and goods production have been wellTo diagnose the roots of this inflation is to identify documented. These supply constraints increased costs the appropriate policy response. Ultimately, the supply and generated higher inflation across the globe. European chain issues boil down to the impact of the coronavirus. consumer price inflation, for example, increased about one This is best offset with a more effective public health 4

RIPON FORUM February 2022

policy. Both administrations have botched the response to such as the Build Back Better Act. COVID-19 with reliance on vaccines as a silver bullet. It Most of the focus is thus on the Federal Reserve, is not surprising that, as The New York Times reported, six which must take its foot off the monetary accelerator and former Biden transition advisers called on the president “to begin tapping the brakes with higher interest rates and adopt an entirely new domestic pandemic strategy geared withdrawals of the massive monetary infusion undertaken to the ‘new normal’ of living during the pandemic. If it with the virus indefinitely, not taps too lightly, inflation will to wiping it out.” persist and become more The Federal Reserve … must Such a strategy would be entrenched. If it becomes too take its foot off the monetary accomposed of a greater range aggressive—as has habitually of responses to the pandemic, been the case in its postwar celerator and begin tapping the with more emphasis on testing to sharp rises in brakes with higher interest rates response and therapeutics, and less inflation—growth will stall, and withdrawals of the massive on mandates for lockdowns, and a recession could ensue. vaccines, and masks. Inflation is the top monetary infusion undertaken There are, of course, economic issue this year during the pandemic. traditional tools of economic but is largely attributable to policy available to slow Washington’s policy errors in the excess stimulus that is the past year. Policymakers contributing to inflation. It is highly unlikely, however, will have to raise their game in 2022 to tame inflation that policymakers will soon embark on structural deficit without damaging the recovery. RF reduction via higher taxes and lower spending. Perhaps the best we can hope from policymakers is that they stop Douglas Holtz-Eakin is the President of the American adding to the problem with massive new spending bills, Action Forum.

RIPON FORUM February 2022

Ocean Shipping Carriers:

It’s Time to Realign the Interests of Shippers and Ocean Carriers by D U S T Y J O H N S O N When the global pandemic hit our shores in 2020, peak of the pandemic when the backlog of ships at like a cog in a machine, America’s supply chain quickly the port stretched miles long. For context, the 2014 came to a halt. Outbreaks at processing plants stymied port congestion record was 48 total vessels, while production, dairy farmers were forced to dump milk, the 2021 backup record was 154 vessels. Import cattle producers slowed growth rates, and pork producers shipping rates from China to the U.S. for forty-foot had to cull production. containers have always been priced higher than These were just the shortcontainers being exported term effects. from the U.S. to China, but COVID-19 relief packages now it’s become financially bolstered social safety net advantageous for ocean programs – expanding welfare shippers to directly cancel program eligibility for millions export obligations. Spot of Americans. Stimulus checks rates remain near historic coupled with lockdowns highs for container shipping; allowed Americans to save more the boom shows no sign of money compared to historical ending. norms, leading to what we’re This unprecedented seeing today: increased backlog shifted the way spending on goods instead of foreign flagged ocean dining, entertainment, and other carriers do business. Instead services. of reloading at American Cue the long-term effects. ports to bring U.S. exports Port backups. Empty shelves. across the Pacific – ocean Delayed orders. Workforce carriers began turning shortages. Covid outbreaks. around with their empty Record-breaking ocean carrier containers, leaving U.S. profits. Inflation. exports stranded. Supply chain delays and Supply chain delays and While the largest ocean port backlogs impact all of us. It carriers saw profits more port backlogs impact all of does not matter whether you’re than triple in 2021, in just six us. It does not matter whether months, the U.S. dairy sector a business owner, consumer, or agriculture producer – we’ve all incurred nearly $1.3 billion you’re a business owner, felt the strain. in losses due to container consumer, or agriculture There’s been a lot of talk and availability issues. Valley producer – we’ve all felt concern about goods coming in, Queen Cheese, a South but this supply chain crisis is a Dakota dairy exporter, had the strain. two-front battle, with the second more than 2 million pounds being the delays and financial of sold and ready-to-ship losses American exporters are facing. lactose stuck in its warehouse because they couldn’t While COVID-19 has exacerbated issues with our get an empty container to take it overseas. Just this supply chain, a lot of these issues existed beforehand and week, dry pea and lentil processors are having 30have been worsened by outdated policy that encourages 50% of their bookings canceled without reason. bad behavior by ocean carriers. According to a survey by the Ag Transportation This bad behavior was brought to the forefront at the Coalition, agriculture exporters report that 22% of 6

RIPON FORUM February 2022

their export sales are lost because it is not possible to want to do business with American ports, you need to deliver to foreign customers affordably and dependably play by our basic rules. due to supply chain delays. Ag shippers are considering OSRA protects American consumers and producers expensive air freight at massive losses just to maintain from price gouging by foreign carriers and establishes customer relationships built up over decades in markets minimum service standards to ensure best practices. It we fought hard to access. Delays threaten producers’ would also prohibit ocean carriers from unreasonably bottom-line, and even worse, their reputation as a declining shipments of U.S. exports and from slapping reliable trading partner. undeserved fees on our American consumers exporters. having difficulty accessing More than 360 national, items like toilet paper and China and the foreign flagged state, and local groups, and dishwashers is a problem; businesses support OSRA. ocean carriers aren’t playing American businesses and We were proud to see OSRA fair, and accountability is agriculture producers not pass the House (364-60) in being able to ship millions December and be included long overdue. of dollars in produce, grain, as an amendment to the and meat overseas is a major COMPETES Act with an even financial crisis in the making. stronger vote. This emergency That’s why Congressman John Garamendi (D-CA) and isn’t going away anytime soon – that’s why it’s urgent I teamed up to introduce the Ocean Shipping Reform the Senate passes OSRA expediently. We cannot continue Act (OSRA) early last year. Our bipartisan bill is the to allow foreign entities to crush American profits and first major update of federal global shipping regulations enable lengthy delays any longer. RF since 1998. China and the foreign flagged ocean carriers aren’t Dusty Johnson represents South Dakota’s at-large playing fair, and accountability is long overdue. If you District in the U.S. House of Representatives.

pepsico.com RIPON FORUM February 2022

Affordable Housing:

Wisconsin’s Secret to the Labor Shortage by J I M S T E I N E K E As the American labor shortage persists, states need to get creative if they hope to fill their open positions. While many have opted to invest in retraining programs, enhance employee benefits, or raise the minimum wage, Wisconsin Republicans have taken an entirely different approach. We are pursuing an agenda that encourages the construction, restoration, and renovation of affordable housing units for job seekers and their families. If successful, this model could serve as a roadmap for other states and the nation as a whole.

past, new retirees are expected to live in their homes for decades to come. This creates a housing shortage for new arrivals seeking open positions. An affordable workforce housing agenda ensures the resources are there to support these individuals, creating a win-win for both states and job seekers alike.

Wisconsin in Focus Wisconsin has been battling a workforce housing shortage for years. According to a 2019 report titled Falling Behind: Addressing Wisconsin’s Workforce Housing Shortage, since 2012, the state has created 75% fewer lots and Understanding the Worker 55% fewer new homes than preShortage recession averages. This scarcity What most people get wrong has been further compounded about the worker shortage is the by a series of other factors: the exit population. The vast majority National Association of Home of people who left the workforce Builders estimates that excessive during the pandemic were and outdated regulations add an above the age of 55 and retired average of $93,870 to the final early. By retiring, they have price of a home – or one-fifth signaled they are not actively its entire value – and rents and seeking employment anymore Jim Steineke construction costs are rising faster and are unlikely to return to than incomes. full-time employment in the We are pursuing an These trends have left the future. Thus, states focusing on Badger State facing some stark enticing these individuals back agenda that encourages the realities. The median age for firstinto the workforce are likely construction, restoration, time home buyers in Wisconsin to be unsuccessful because the has risen to 33. The state is also and renovation of affordworkforce, as a whole, has shrunk running a migration deficit with indefinitely with no foreseeable able housing units for individuals aged 20-24 and has expansion for years to come. job seekers and their a lower homeownership rate for States need to adapt to this households ages 25-34 and 35-44 new reality. While they should families. than all neighboring states except still encourage people on the Illinois. Plain and simple: the sidelines to rejoin the labor pool – and I have voted for legislation that does that here in state needs to do more if it is to be seen as an attractive Wisconsin – states also need to refocus their efforts on destination for job seekers going forward. competing with one another for the workers that remain. America is now a beauty contest, and the states need to do Simple Solutions to Complex Problems Republicans recognize the danger Wisconsin is in everything they can to be seen as an attractive destination and have moved to make it more competitive. We recently for job seekers. The key to success for states lies in a strong introduced a number of proposals to create safer, more infrastructure. Unlike the major population shifts of the affordable housing options throughout the state. Many 8

RIPON FORUM February 2022

of the bills take innovative approaches to traditional program. The site permit identifies locations as having conservative policies – reworking many of these proven the necessary paperwork filed to streamline the approval ideas to set the state up for success in the future. process. This move is anticipated to save months of One such example is the coupling of tax credits to construction time and thousands of dollars by avoiding incentivize developers to build certain housing models. cumbersome red tape. The rehabilitation loan program Back in 2018, Wisconsin created a low-income housing would help families update hazardous properties and tax credit for the construction make them livable again. This is of units at 60% the area-median great for older neighborhoods in income (AMI) and below. the Rust Belt that need updating America is now a beauty This was a huge success. This and have expensive repairs. contest, and the states need session we replicated that with to do everything they can a middle-income housing tax Conclusion: credit to target the next income While these ideas are still to be seen as an attractive segment up, or those earning working their way through the destination for job seekers. between 60-100% AMI. This state Senate, their potential group has historically been makes them a model for other referred to as the “missing states. Wisconsin is not only middle” because its trademark style – multi-unit buildings a more attractive destination for job seekers because of located in spacious neighborhoods between the crowded these reforms, but they will also provide the necessary high-rises of downtown and the dispersed single-family infrastructure to support workers as well. As a result, homes of suburbia – largely fell out of favor after World the Badger State is now poised to be more competitive War II but has recently seen renewed interest. This style nationally and attract out-of-state workers to fill its labor BLEED: 7.625" W is efficient, effective, and perfect for states like Wisconsin shortage. Other states may want to follow suit. RF TRIM: 7.375” W currently experiencing a housing crunch. SAFETY: 6.875” W Other major initiatives include the creation of a Jim Steineke is the Majority Leader of the Wisconsin State “shovel ready” site permit and a rehabilitation loan Assembly.

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Cover Story

“ENTERPRISE CHINA” BEIJING’S COMPETITIVE STRATEGY AND BATTLE PLAN, AND THE IMPLICATIONS FOR U.S. POLICYMAKERS AND BUSINESS LEADERS IN THE YEARS AHEAD. by J. Stewart Black & Allen J. Morrison

In 1995, when Fortune first published its Global 500 ranking, China had only three firms on the entire list. In 2021, it not only had three firms just in the top 10, but had more total firms than any other country, including 11 more than the United States. Back in 1995, when we would ask U.S. executives to name key Chinese competitors, most could not. Today most can, even if they can’t pronounce their names and simply refer to them by their initials such as SAIC (Shanghai Automotive Industrial Company), ICBC (Industrial and Commercial Bank of China), or CNOOC (China National Offshore Oil 10

Company). Similarly, in 1995, many, if not most, American policymakers and politicians believed, or at least hoped, that greater commercial engagement by and with China would lead to greater liberalization within the country. Few, if any, believe that today. Over the past two-and-a-half decades, China’s economy and commercial enterprises have grown in size and scale such that no one can overlook them. However, our research and work with top executives globally suggest that many nonetheless retain two critical misperceptions. First, where many see scores of independent, multibillion-dollar enterprises, there

RIPON FORUM February 2022

actually lies a multi-trillion dollar monolith. Second, where most see individual competitive tactics and actions, there is an overarching, comprehensive competitive strategy and battle plan. From our perspective, unless and until these misperceptions are corrected, both executives and policymakers risk miscalibrating China’s threats and opportunities and miscalculating their own responses.

However, even this expanded view of Enterprise China is not complete. The scale and scope of Enterprise China is not limited to just SOEs. The State has nurtured and exerts significant control over most large, private firms as well. We refer to these as State-Influenced Firms (SIEs). Evidence abounds of the State’s ability and willingness to exert influence, if not control, over these firms. Consider just two recent cases — Ant Financial and Didi. Ant Financial was set for an IPO in 2020, which was expected to bring in $35 billion. It would Chinese Enterprises vs. Enterprise China have been the largest IPO in history and would have valued The size of the 135 individual Chinese companies on Ant at about $315 billion out of the gate. At that level, Ant the Global 500 list, and thousands more beyond that list, would have been worth more than Société Générale, Deutsche deserves careful assessment and analysis. However, looking Bank, Credit Suisse, Barclays, ING, Santander, and Goldman at them individually can easily obscure the collective Sachs combined. As most readers likely recall, the Chinese monolith that includes not just these firms but also an entity government stopped the IPO, sanctioned parent Alibaba to the not on the list. That entity is the number one employer (386 tune of $2.8 billion, and put Alibaba’s founder and leader, Jack million) and the second Ma, on ice and out of public largest revenue generator view for months. Similarly, ($1.3 trillion) on the planet not long after listing on the There are roughly 150,000 today. We’re talking about New York Stock Exchange, the Chinese State, which State-Owned Enterprises in China, Didi, the largest ride sharing includes national, regional company in the world (with and collectively they account for at and municipal governments. three times as many drivers least 30% of the economy, or $4.5 It is this commercial totality and twice the revenue as that we should assess Uber), was forced to delist trillion in revenue. That share alone and analyze. We label it from the New York Stock is greater than the total GDP of “Enterprise China.” Our first Exchange by the Chinese key point is that competing any other nation except the government. The message against Chinese enterprises was not lost on any Chinese United States and Japan. is not the same as competing enterprises: The State calls against Enterprise China. the shots in the end. Some executives and policymakers might be inclined to quickly dismiss the notion Enterprise China’s Competitive of Enterprise China as just the latest incarnation of industrial Vision and Strategy policy efforts, such as “Japan Inc.,” designed to benefit But even if one were to accept the scale and scope of their indigenous firms—efforts that over time did not live Enterprise China as gigantic and unprecedented, the impact of up to alarmist’s predictions. However, the size and scope of this monolith could only be as large as the coordinated actions Enterprise China both in absolute and relative terms are unlike of all the component pieces. For that, there would need to be a any we have seen before. There are roughly 150,000 State- grand competitive strategy and battle plan. There is, and it has Owned Enterprises (SOEs) in China, and collectively they been hiding in plain sight. account for at least 30% of the economy, or $4.5 trillion in As professors of strategy, we observe and teach that revenue. That share alone is greater than the total GDP of any strategy serves vision; therefore, to understand an entity’s other nation except the United States and Japan. strategy, you first need to understand its vision. Enterprise The level of ownership, control, and support of China’s China’s “CEO,” President Xi Jinping, provided a succinct SOEs is also without precedent. In terms of control, the top vision for the country to the 19th Party Congress in October executives of these SOEs are appointed by and serve at the 2017 when he stated that China would “become a global leader pleasure of their state owners. Most of the executives heading in terms of composite national strength and international these entities come from the political ranks of the CCP (Chinese influence.” As with any vision, this tells you where China Communist Party). As an example of the unprecedented level intends to go. of support the State provides to these SOEs, consider that even A strategy tells you how an entity plans to compete and though SOEs only account for 30% of the Chinese economy, win along the way. In China’s case, we do not have to speculate their debt levels exceed 90% of China’s total GDP. Privately- about its strategy; we do not need to break into government Owned Enterprises (POEs), which account for more than offices in Beijing and photograph secret documents. The key double that share of the economy, have debt levels that are less elements of the strategy are laid out in three public documents: than one-third of that held by SOEs. National Medium- and Long-Term Science and Technology RIPON FORUM February 2022

Development Plan (MLP spanning 2005-2015), Made in China 2025 (MIC 2025 spanning 2015 to 2025), and China Standards 2035 (Standards 2035 spanning 2020-2035). At its essence, this overall competitive strategy consists of three pillars: reduce dependency, dominate domestically, and win globally. The vision and strategy are captured in Figure 1. Strategic Pillar #1: Reduce Dependency The first pillar of Enterprise China’s competitive strategy is to reduce its external dependency in key sectors. These sectors were laid out in the MLP and modified in MIC 2025. MLP primarily sought to reduce dependency in the targeted sectors by establishing local content goals of roughly 30% by 2020. The MIC upped those goals to 40% by 2020 and extended those goals out to 2025 with a target of 70% local content. Enterprise China seeks to achieve these local content objectives and the resulting import substitution through three tactics: borrow, buy, and build, of which the greatest emphasis thus far has been placed on borrow and buy.

market, its external dependency risk would not just move from offshore to onshore, it would diminish overall. There is an additional reason for dominating domestically—profit sanctuaries. By dominating domestically in targeted sectors, Enterprise China can create profit sanctuaries that better enable it to fund both Strategic Pillar #1, as well as Strategic Pillar #3, which we will discuss next.

Strategic Pillar #3: Win Globally If Enterprise China were to limit its competitive strategy to just these first two pillars, it might soon find itself isolated and alone. In a globally connected world, ensuring prosperity at home requires winning abroad. In pursuit of this strategic pillar, Enterprise China employs three core tactics: acquiring international companies, leveraging domestic standards globally, and piggybacking on its own foreign policy initiatives such as the Belt & Road Initiative. Of these, leveraging technological standards deserves special note. In today’s connected world, much of the global utility of innovations and their financial returns come from interoperability. Consequently, Enterprise China believes the words of Werner von Siemens, the 19th-century German founder of the Siemens conglomerate: “He who owns the standards, owns the market.” This is the core of Standards 2035 and why Enterprise China seeks to establish standards Figure 1: Enterprise China’s Vision in areas such as 5G at home and Competitive Strategy and leverage them abroad.

Strategic Pillar #2: Dominate Domestically The second pillar of Enterprise China’s competitive strategy is to ensure that indigenous Chinese firms dominate domestically. This part of the strategy is articulated primarily in MIC 2025. The key metric of this pillar is market share. In the targeted sectors, the desired market share for domestic entities ranges between 70% and 85%. The rationale for this strategic pillar is simple. If Enterprise China simply focuses only on local content requirements, it risks shifting its external dependency from offshore to onshore. For example, suppose because of local content requirements, Qualcomm switches from selling telecom chips that it made outside of China to chips that it makes in China. China could still be unacceptably dependent on Qualcomm—a foreign company based in a foreign country. However, if in addition to high local content objectives, Enterprise China takes steps to ensure indigenous firms control 70% to 85% of the domestic telecom chip 12

Implications Given the unprecedented size and scope of Enterprise China and its overarching competitive strategy, what are the implications for both executives and policymakers? The implications are broad and deep, but here we highlight just three. 1) Take the Wide View: Don’t Mistake What is in Front for What Is - If indeed Enterprise China is not just a collection of Chinese enterprises, and if common actions are not just coincidental but the result of an overarching national vision and competitive strategy, then both executives and policymakers

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would be wise to view Enterprise China through a wide lens. extent it is to reduce its dependency on the United States and To executives, we are not encouraging them to ignore other countries. However, those moves today will not well individual companies or abandon tried and true tools of predict the extent or the nature of Enterprise China’s moves competitor analysis. We are only saying that those tools are tomorrow. In the context of all three of Enterprise China’s necessary but insufficient. For example, U.S. mobile payment competitive strategy pillars, any wish or prediction that China companies or firms with those services cannot simply look at will largely and permanently decouple and go back to its Alipay or WeChat Pay and get an accurate lay of the land. Even isolated ways of the 500 years prior to the 20th century is folly. expanding their field of view to the parent companies, Alibaba To set global standards, win, and influence globally, Enterprise and Tencent, is not sufficient. Executives need to widen China must engage and lead, not withdraw. their lens to look at the larger ecosystem and the country’s 3) Play Hardball: Don’t Discount Rhetoric for Resolve — overarching national strategy. They need to see that Enterprise Finally, our research and observations over the last two decades China seeks to reduce (if not eliminate) its external mobile lead us to conclude that Enterprise China’s determination to payment technology, products, and services dependency, seeks pursue and its resolve to execute its competitive strategy are to ensure indigenous firms dominate domestically, and aspires high and should not be underestimated. As fiery as his rhetoric to win globally. Only by taking a wide lens view can executives was in the summer of 2021, President Xi’s warning that any properly calibrate their opportunities and challenges, as well as nation that tries to “bully, oppress, or subjugate [China]… calculate their actions. will find [itself] on a collision course with a steel wall forged The implication is similar for policymakers. The moves by 1.4 billion people” is only half the picture. Enterprise in 5G by Huawei cannot be China’s competitive strategy is viewed in isolation. Even if not just about protecting itself there were no backdoor security from foreign invaders; it is more Enterprise China’s “CEO,” risks in utilizing Huawei’s fully about “going out” and President Xi Jinping, provided a influencing the world. Only in 5G technology, policymakers could only accurately assess the shaping the world can it control succinct vision for the country risks and take wise action by its own destiny. Therefore, the to the 19th Party Congress in looking at the larger ecosystem implication to both executives of telecom in China and then and policymakers is simple: October 2017 when he stated placing that in context of Enterprise China is “in it to win that China would “become a Enterprise China’s strategy it,” so expect to play hardball. global leader in terms of of reducing its dependency on external 5G technology, Conclusion composite national strength ensuring its indigenous firms The size and power of the and international influence.” dominate domestically, and Enterprise China train coming leverage domestic standards to down the track is unquestioned. win globally. Where the country wants to go 2) Take the Long View: Don’t Mistake Today for Tomorrow in the future is clear. In looking forward, some predict that — Although we can point back 15 or more years to the origins China will come to rule the world, while others forecast the of Enterprise China’s current competitive strategy, we are not country’s coming collapse. We are pragmatists. The scale and implying that it was all worked out from the beginning. It has scope of Enterprise China and the comprehensiveness of its evolved over time. Nevertheless, core elements have remained competitive strategy should be well understood and assessed. intact across nearly two decades, and new elements have At the same time, Enterprise China’s design does not guarantee leveraged that foundation to address the future. its destiny. In 2021, in a Harvard Business Review article, we Consequently, to executives we would say take care laid out the factors that could derail Enterprise China’s grand to not let the opportunities of the moment obscure the risks plans. In the end, executives and policymakers alike should of the future. And the risks are significant. Take the case of take a wholistic view of Enterprise China and its competitive Bombardier. It entered into a joint venture (JV) in China with strategy and monitor the potential derailers carefully. That is China Railway Rolling Stock Corporation (CRRC) in 2014. the most practical way to ensure taking wise actions both today After a promising start, it later discovered that not only was it and tomorrow. RF being pushed out of China, but it was facing direct competition abroad from its former partner. To Bombardier’s dismay, J. Stewart Black is a professor of global leadership and CRRC was using technology that looked quite familiar in an strategy at INSEAD. Allen J. Morrison is a professor of global open tender for subway cars in Boston, where CRRC underbid management at Arizona State University’s Thunderbird School Bombardier by nearly 40%. of Global Management. They are coauthors of Competing The implication to policymakers is similar. For example, in and with China: Implications and Strategies for Western today it may seem as though China is decoupling, and to some Business Executives (Thinkers50). RIPON FORUM February 2022

Speaking with One Voice on China by DARIN LAHOOD & RICK LARSEN

Addressing the unique challenges presented by China can China also poses a challenge to national security. As the and should be a bipartisan issue. As co-chairs of the bipartisan People’s Liberation Army (PLA) modernizes and grows more U.S.-China Working Group, we have worked together over capable, China has ramped up its pressure and assertiveness several terms in Congress to elevate dialogue among Members towards its neighbors, particularly India and Taiwan. China has and staff around the U.S.-China relationship. We have also also invested in shipbuilding, space operations, nuclear weapons both recently published detailed outlines of policies to compete and delivery systems, and emerging technology. Further, with China and support American workers: the GOP Task China’s Civil-Military fusion strategy and organization of a Force Report and Rep. Larsen’s China White Paper. Though Strategic Support Force shows the PLA correctly understands our proposals have similarities and differences, we agree that the centrality of technology and information operations in any Congress must work in a bipartisan fashion to address the future military conflict with the United States. This challenge challenges presented by China. will require Congress to make prudent choices about posture, There are investments, and several lenses through oversight. And, as which to view U.S.with the economic China policy and challenge, the United how Congress can States will be better craft a pragmatic and positioned when proactive approach coordinating and to ensure the United cooperating with States has a leadership like-minded partners. voice in the IndoMembers will Pacific. From an be better able to economic and national develop and evaluate security standpoint, policies to respond China is a strategic to these challenges competitor of the with a common LaHood and Larsen spoke to a meeting of The Ripon Society in United States. For understanding of January 2020. far too long, China the history of the has sought to skirt bilateral relationship. As co-chairs of the bipartisan U.S.-China international rules and As co-chairs of the standards to gain a U.S.-China Working Working Group, we will ensure competitive advantage Group, we provide a Congressional attention continues to focus over the United States forum for Members and our like-minded of Congress and on China’s manipulation of the global partners in the global staff to learn about free market, threats against its neighbors economy. this history and have and ongoing human rights abuses. For example, frank discussions China is now the about U.S. policy world’s second-largest with outside economy, but it maintains “developing country” status with the experts and each other. Over the years, we have led bipartisan World Trade Organization to retain preferential trade benefits delegation trips to China — meeting with Chinese leaders and intended to lift countries out of poverty. In addition, China discussing issues on the economy, trade, intellectual property, continues to restrict market access, steal intellectual property, military, energy, and the environment. We’ve also traveled to mandate joint ventures, and provide distortionary support to Hong Kong to meet with American businesses, government state-owned enterprises. Because these policies harm American officials, and protest leaders to discuss the importance of this workers and workers in other nations that compete with China, unique relationship — particularly as China continues to further it is critical that U.S. policymakers develop responses that are undermine freedom of speech, judicial independence, rule of targeted and coordinated with our world partners. law, and human rights. 14

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and firm engagement on China’s growing defense posture and As the pandemic recovery continues, many challenges abuse of global economic standards. While we may not be persist in the relationship between the United States and China, able to expect unanimity on all issues, enhancing American including China’s lack of transparency around the origins of competitiveness will require consensus in Congress and an COVID-19. Americans, our government, and our like-minded open dialogue on charting a path forward. partners must also not turn a blind eye to forced labor and other As co-chairs of the bipartisan U.S.-China Working Group, human rights abuses being committed against the Uyghur we will ensure Congressional attention continues to focus on population, a mostly Muslim ethnic group in the northwestern China’s manipulation of region of Xinjiang. The the global free market, Chinese government’s Now, more than ever, we must threats against its crackdown in Hong Kong, neighbors and ongoing through Beijing’s “national approach U.S. policy towards human rights abuses. We security law,” also raises China in a bipartisan way. are committed to working concerns about the erosion of as Members of Congress autonomy and the right to free to keep an ongoing dialogue and forum for Members to learn expression. Beijing’s refusal to align with global human rights and engage in policy that maintains U.S. leadership abroad, standards and export of technology that enables oppressive supports national security, and creates a level economic surveillance should be central to Congress’ approach to China. playing field based upon global rules and standards. Now, There is no singular solution to the challenges that remain more than ever, we must approach U.S. policy towards China in the U.S.-China relationship. The challenges will require in a bipartisan way. RF diligent and consistent bipartisan work to strengthen American competitiveness vis-à-vis China and globally and promote Darin LaHood, a Republican, represents the 18th District of our values around the world. For example, compare our two Illinois in the U.S. House. Rick Larsen, a Democrat, represents reports – though there are real differences, we both support the 2nd District of Washington. They serve as co-chairs of the strengthening U.S. trade relationships, additional investments in bipartisan U.S.-China Working Group. funding for scientific research and developing language skills,

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America Cannot Turn a Blind Eye to the Plight of the Uyghurs

to silence Uyghur advocacy. Specifically, the bill would create a Special Coordinator for Uyghur Issues, allocate funding for human rights advocates to speak up, prepare our Foreign Service Officers to communicate with the Uyghur community, and call on our government to develop a multilateral strategy with other likeminded countries to call for the PRC to immediately cease its policies in Xinjiang. House Foreign Affairs Subcommittee on Asia, the Pacific, Central Asia, and Nonproliferation Chair Ami Bera (CA-07) joined me in introducing this bill, and we have 50 bipartisan cosponsors. It passed out of the House Foreign Affairs Committee by YOUNG KIM in September 2021, and I hope House leadership brings it to the No one should live in fear because of their ethnicity or faith. floor soon. While Congress has made strides to support Uyghurs, Unfortunately, this happens daily in China in the province of nations and private interests around the world have remained Xinjiang. In the Xinjiang Uyghur Autonomous Region (XUAR) largely silent as the PRC continues to of the People’s Republic of China (PRC), ramp up its genocidal campaign. In fact, over 1.8 million Uyghurs and other ethnic many U.S. companies have continued minority groups have been imprisoned, to ignore basic corporate responsibility tortured, and brainwashed in so-called and morality in favor of profit and have ‘political reeducation’ centers by PRC not done nearly enough to respond to officials because of their ethnicity and concerns over the PRC’s human rights religious beliefs. Since 2017, the PRC violations. government has systematically carried Instead of speaking out and out state sponsored genocide in Xinjiang withdrawing financial support for a with the goal of wiping out Uyghurs and regime that is torturing and exploiting other ethnic minorities living in China. its own people based on their ethnicity Even Uyghurs living abroad are and religious beliefs, many companies in danger, as the PRC has weaponized have leaned further into China’s its embassies and consulates around market. Their financial investment and the world to invalidate passports and technology—including intellectual strongarm countries into deporting We must wake up and property that will likely be stolen—will vulnerable ethnic minorities back to allow the PRC to further legitimize its China where they disappear into the realize that the CCP regime and strengthen its grip on its detention camp system. has fully committed to people. The personal testimonies from Some companies have even gone survivors and instructors of the camps leveraging oppression, as far as to remain corporate sponsors of are heart wrenching and horrific, yet torture, and genocide to the 2022 Winter Olympics in Beijing, tragically, not unique. Too often we have further its geopolitical which the PRC is also using to silence heard verified accounts of forced labor, dissent globally. These companies have systematic rape, forced sterilization, ambitions. chosen to turn a blind eye and continue inhumane conditions in detention camps, funding a regime that actively silences, brainwashing, and torture. enslaves, and tortures its own people—and the American people Congress in recent years has found bipartisan support in will not forget. responding to crimes against humanity in Xinjiang. Last year, We must wake up and realize that the CCP has fully Congress passed the Uyghur Forced Labor Prevention Act, which committed to leveraging oppression, torture, and genocide to would prevent products produced in Xinjiang and suspected of further its geopolitical ambitions and economic prospects. We utilizing forced labor from being imported into the U.S. This, cannot continue to be complicit and must deal with the PRC among other provisions, represent strong action taken by Congress government we have, not the one we want. I will continue to do all to respond to the genocide in Xinjiang. While I’m glad Congress I can to support Uyghurs and I hope my colleagues as well as U.S. got this bill across the finish line and President Biden signed it companies and the international community joins me so we can into law, there is more to be done to support Uyghurs and hold the hold the CCP accountable. RF PRC officials responsible for their repeated torture accountable. I introduced the Uyghur Policy Act, which would create a multilateral diplomatic strategy to counter the Chinese Communist Young Kim represents California’s 39th District in the U.S. House Party’s genocide in Xinjiang and push back on the PRC’s efforts of Representatives. 16

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How the U.S. Can Deter Chinese Aggression into the Next Decade by B A R R Y PAV E L & C H R I S T I A N T R O T T I Last October, the Financial Times reported wars, there could be perilous geopolitical implications. that the Chinese military tested a nuclear-capable To better compete with Chinese military modernization, hypersonic glide vehicle in August 2021. While this the United States must structurally adapt its approach missile may have missed its target by up to two-dozen to investing in the right capabilities, acquiring defensemiles, it successfully traversed low-Earth orbit before relevant technologies, and leveraging diplomacy in descending through the atmosphere, confirming fears creative ways. that the United States has Hypersonic weapons fallen behind China in must be understood the hypersonic arms within this broader race and potentially in technological context. other facets of military These new missiles modernization. In are certainly groundparticular, Beijing’s breaking, since they willingness to test its combine the speed of weapons even when the intercontinental ballistic probability of success missiles (ICBMs) with is lower, compared to the maneuverability and Washington’s more low flight profile of cruise risk-averse approach to missiles to significantly testing weapons only complicate (and when it is much more potentially circumvent) confident in success, is early warning systems A 2019 military parade in Beijing featured DF-17 Dongyielding results. General and current missile feng medium-range ballistic missiles equipped with a Mark Milley, chairman defense capabilities. By DF-ZF hypersonic glide vehicle. of the U.S. Joint Chiefs themselves, however, of Staff, even declared they do not meaningfully this test “very close” affect the nuclear balance to a Sputnik moment of power between China There is an ongoing revolution in in the broader strategic and the United States. military affairs, and if China is the and technological If deployed en masse, competition with China. traditional Chinese first to redefine the way that great While this (and Russian) ICBMs powers fight and deter wars, there development is have long been capable could be perilous geopolitical concerning, Chinese of overwhelming U.S. advances in hypersonic missile defenses, and implications. weapons — as well as this capability is only other emerging military growing as China and dual-use technologies — do not constitute a Sputnik continues to expand the size of its nuclear arsenal moment by themselves. Rather, the combination of through the construction of missile silo fields. The threat these technologies, and the speed with which China is of mutual assured destruction is still the predominant harnessing them to modernize its forces and capabilities nuclear deterrence paradigm and is not disrupted by in new and unanticipated ways, pose the greatest hypersonic weapons alone. threat to U.S. and allied security. There is an ongoing However, Chinese hypersonic weapons become revolution in military affairs, and if China is the first far more concerning if they are integrated with other to redefine the way that great powers fight and deter emerging capabilities. Like the United States and Russia, 18

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China is seeking to leverage an ongoing revolution in this has meant a focus on speed and mass. Regarding strategic forces that threatens to undermine the long- speed, conventionally-armed hypersonic weapons and standing, traditional models of nuclear deterrence, a wide range of other uncrewed systems will allow and the classic U.S. nuclear triad may be put at risk China to more quickly overwhelm U.S. bases, aircraft in the future. In particular, Chinese quantum radars carriers, and other means of power projection, while and advanced air defense systems may be increasingly China’s investments in artificial intelligence, cloud capable of detecting and targeting the United States’ computing, and data analytics will enable faster and stealthy and non-stealthy nuclear-armed bombers; more agile command and control in accordance with China is actively working to improve its anti-submarine its vision of “Intelligentized” warfare. Regarding mass, warfare capabilities, which may threaten the long-term China can better leverage firepower within the region survival of U.S. nuclear-armed submarines, which through its ambitious shipbuilding program, a variety were long thought to be invulnerable; and advances in of anti-ship missiles and munitions, and advances in Chinese missile defense systems such as the HQ-19, autonomous systems and drone swarms. S-300, and S-400 will enable the interception of short-, When combined, these strategic and operational medium-, and intercontinental-range ballistic missiles. capabilities spell trouble for U.S. forces, particularly At the same time, hypersonic weapons can target missile in light of competing global commitments. These sites and delivery mechanisms before they are launched, capabilities threaten to undermine the very sources thereby threatening to undermine the survivability of of U.S. military power, including the United States’ U.S. ICBMs, submarine-launched ballistic missiles nuclear triad, ability to project large-scale conventional (SLBMs), and the Long capabilities, and global Range Stand Off Weapon defense posture including a (LRSO). Together — if vast network of bases hosted To better compete with Chinese deployed alongside China’s by allies and partners. As growing and increasingly military modernization, the numerous wargames have sophisticated nuclear pointed out, if geopolitical United States must structurally arsenal and its cyber, tensions were to escalate adapt its approach to investing counterspace, electronic over a crisis — such warfare, and directed as ramped-up Chinese in the right capabilities, acquirenergy capabilities which coercion of Taiwan or ing defense-relevant technolothreaten the United States’ another flashpoint in the early warning system and gies, and leveraging diplomacy Indo-Pacific — and cause nuclear command, control, a U.S.-Chinese war, the in creative ways. and communications United States could very (NC3) architecture — these well lose due to modernized emerging technologies may Chinese forces. Careful eventually enable a devastating first-strike capability consideration is necessary to confront these challenges, against the U.S. homeland. Fortunately, the United and the following three recommendations embody highStates maintains a capable and ready nuclear arsenal priority initial steps for U.S. defense policymakers. and has made comparable gains in strategic forces, First, policymakers need to articulate the right especially in missile defense, but the global strategic priorities for modernizing U.S. defense technology. If forces balance no longer so clearly favors the United the future of warfare will be increasingly “networked, States. Moreover, because of rapidly changing data-driven, faster, and contested from longer ranges technologies being incorporated into forces on both and across all domains,” as argued by the Atlantic sides, that balance is highly dynamic and could even Council’s report on Seizing the Advantage: A Vision become fragile if sufficient uncertainties emerge for the Next U.S. National Defense Strategy, the United attendant to nuclear and crisis stability. States needs enhanced intelligence, surveillance, Beyond strategic forces, Chinese military and reconnaissance (ISR) capabilities and data modernization may reshape the operational conduct aggregation tools to understand that environment; a of warfare on the future battlefield. Chinese planners Joint All-Domain Command and Control (JADC2) have studied the classic American way of war, as system to share information and issue orders; and an demonstrated by victories like the 1990-1991 Gulf War, increasingly diverse range of kinetic and non-kinetic and have accordingly oriented their modernization fires like hypersonic weapons to strike adversaries in programs toward preventing the United States from different ways regardless of the environment. It will projecting and amassing combat power and from also need to modernize its nuclear arsenal and adopt deploying it via sophisticated platforms. In particular, new technologies into strategic forces in a way that RIPON FORUM February 2022

stays ahead of and hedges against adversaries’ potential technological threats. These priorities will allow the United States to compete with Chinese strategic forces and operational speed and mass, thereby fielding a more effective nuclear and conventional deterrent. Second, Pentagon planners need to adapt their weapons acquisition mindset. The United States maintains a world-leading innovation and industrial base that is capable of efficaciously and efficiently producing new technologies, but policymakers are often oriented on the wrong capabilities. Rather than “compete by differentiation” — and continue the longstanding focus on expensive and sophisticated platforms —the United States should “compete by cost” instead. This means developing advanced networkdriven capabilities, investing in more numerous, cheaper, and attritable systems like drone swarms, and partnering in new ways with the innovative firms that are producing them. The more rapid acquisition of cheaper, networked capabilities will enable much more effective competition with China’s Military-Civil Fusion strategy. Lastly, while arms control with China in the near

term appears unlikely, diplomacy will be a key tool for mitigating tensions and providing a new, stable platform for the strategic forces balance of the 2030s. There will be opportunities for articulating clear redlines, pursuing offramps during escalated tensions, and even curtailing certain weapon development programs if they are mutually expensive or unattractive. Diplomats must be vigilant for such opportunities as they arise. No single Chinese technology will be a game changer; rather, Chinese military modernization should be evaluated holistically for the key capabilities being produced. If the United States is to compete effectively, it needs to better understand the way that China is integrating its emerging capabilities to seek to change future combat outcomes and deterrence, while modernizing its own forces and adjusting its diplomatic approaches to prepare for that future. RF Barry Pavel is senior vice president and director of the Scowcroft Center for Strategy and Security at the Atlantic Council. Christian Trotti is assistant director of the Forward Defense practice at the Atlantic Council’s Scowcroft Center for Strategy and Security.

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RIPON FORUM February 2022

Preventing the Next Ukraine by MICHAEL A. HUNZEKER A war in Ukraine seems more likely with each passing problem.” Even if Xi prefers to use diplomatic and economic day. Washington should not breathe a sigh of relief. Far from pressure to bring Taipei under Beijing’s control, he may worry a one-off episode, the storm brewing over Eastern Europe that his window of opportunity is closing. As a result, Xi could serves as yet another stark reminder that our rivals believe feel compelled to use force sooner rather than later. they can act like it is the 19th century all over again. For example, far from gravitating toward China, evolving If anything, the unfolding crisis in Ukraine should serve Taiwanese identity and ham-fisted Chinese bellicosity are as wake-up call that we are running out of time to deter pushing the island further away. Xi also faces a number aggression against an even of looming domestic more vulnerable partner: challenges. Meanwhile, Taiwan. Washington should despite pouring billions act with urgency. into military modernization, The threat is real. The the prospects for a swift Chinese Communist Party Chinese victory could has never equivocated actually grow dimmer about the fact that it sees with time. Support for the Taiwan as a sacred issue island is solidifying among over which it seeks to American voters and elites assert political control. Nor alike. The U.S. Department should we downplay the of Defense considers China risk of war by convincing its pacing threat. Successive ourselves that Beijing presidential administrations prefers to win without have sought to improve fighting. No rational actor Taiwan’s defenses by Taiwanese sailors salute the island’s flag on the deck of prefers otherwise. In any authorizing billions in arms the Panshih supply ship after taking part in annual drills, case, this stereotype about sales ($32 billion since 2009 at the Tsoying naval base in Kaohsiung iin 2018. Chinese strategic culture is to be exact). And the Biden dangerously misguided. Administration is cajoling China has a long and regional allies to take a distinguished history of clearer stance on the need The unfolding crisis in Ukraine using violence as a foreign for cross-Strait stability. should serve as wake-up call that policy tool. Moreover, Fearing Taiwan’s Chinese rhetoric, laws, and inexorable drift could we are running out of time to deter actions make clear that therefore lead Xi to “roll aggression against an even more when it comes to Taiwan, the dice” on war. Such a force is very much still on gamble becomes especially vulnerable partner: Taiwan. the table. Most ominous of tempting to the degree that all, the decision to go to war Xi thinks he can seize the increasingly rests solely in the hands of a single “paramount island before the United States can intervene. leader” who has proven that he is perfectly willing to use brute Deterring an attack on Taiwan therefore requires force at home and abroad. convincing Xi that a rapid victory is unlikely, which means Worse yet, time is not on our side. The current and former preparing Taiwan to hold out for as long as possible. officials in the region with whom I have spoken agree that Herein lies the problem. Taiwan’s military is not ready the next six years are especially perilous. Their reasoning is to absorb a first strike and defend the island long enough for straightforward: Xi Jinping is pursuing an unprecedented third outside forces to intercede in decisive numbers. Ironically, term, justified in large part by a promise to solve the “Taiwan Taiwan’s Ministry of National Defense is one of the biggest RIPON FORUM February 2022

impediments. Security experts and defense officials have long interests in East Asia will be considerable. Allies will question called on the ministry to stop wasting its finite defense budget American credibility and seek alternative ways to provide for on small numbers of outdated, but expensive, manned fighter their own security. Nuclear proliferation is therefore likely. Nor jets, large surface ships, and main battle tanks. The problem should we expect China to stop at Taiwan. Even if winning with these “prestige” platforms is that Taiwan cannot possibly without a fight does not embolden Beijing, Taiwan’s loss will afford enough of them to go toe-to-toe with the Chinese almost certainly trigger a spiraling security situation between military for very long. The recommendation is to instead buy China and its neighbors. large numbers of cheap, mobile, and lethal capabilities — Working with the Tsai Administration to shore up crossthings like drones, coastal defense missiles, air defenses, tiny Strait deterrence is therefore an unquestionably better way missile boats, and naval mines — in order to wage a prolonged forward. But the stakes and timelines are such that Washington campaign of denial. should be ready to apply more pressure than it is accustomed to Cross-Strait deterrence will remain on a fragile using on allies and partners. foundation until Taiwan’s military embraces and implements In particular, Washington should insist on conditional these changes. Unfortunately, powerful elements within the arms sales. Congress and the Biden Administration should Ministry of National Defense continue to resist these urgently work together to pass and enact any of the three bills recently needed, and long overdue, reforms. introduced by Senator James Risch (R-ID), Senator Josh If Taiwan is unwilling to do everything it can to provide for Hawley (R-MO), and Congressman Mike Gallagher (WIits own defense, should the United States consider abandoning 8). All three bills condition future arms sales upon Taiwan’s it entirely? willingness to undertake the painful, but overdue, changes Setting aside the moral necessary to make the island problems with leaving a more defensible. thriving liberal democracy with Congressional leaders and Deterring an attack on Taiwan which the United States has a the Biden Administration should deep and enduring relationship also be careful to ensure that our requires convincing Xi that a to its fate, abandonment is a rhetoric does not outpace our rapid victory is unlikely, which real military capability. Although cure that will almost certainly prove worse than the disease. there are compelling reasons to means preparing Taiwan to After all, getting the hold out for as long as possible. consider embracing strategic Ministry of National Defense clarity on Taiwan, Washington to embrace change is far from should avoid moving in this an insurmountable problem. direction until it believes Taiwan Taiwan’s military is certainly not the first in history to resist can hold out against a worst-case scenario invasion. Deterrence change. Washington also has an important ally in President suffers to the degree that symbolic gestures paint Beijing into Tsai Ing-wen. Her administration takes the invasion threat a corner that American and Taiwanese military power is not seriously, has overseen a dramatic increase in defense ready to back up. spending, and is pushing for other important defense Finally, Washington should find ways to prioritize the reforms. The trick is to find ways to help President Tsai fulfillment of existing foreign military sales contracts. Currently, impose change on her otherwise reluctant senior officers. when Washington authorizes multiple arms sales, companies Abandoning Taiwan instead of finding better ways to work like Boeing and Lockheed Martin get to decide which country’s with and through President Tsai is akin to committing suicide weapons to build first. Profit and efficiency motives — not for fear of death. national interests or strategic priorities — therefore mean Taiwan Nor should Washington delude itself into thinking it can might get its weapons after the UAE or Saudi Arabia. This way abandon Taiwan “on the cheap.” Assuming it is even possible of doing business is no longer justifiable given the speed at (let alone morally defensible) to use Taiwan as a bargaining which cross-Strait tensions are rising. chip in the pursuit of a “grand bargain” with China, nothing These are controversial recommendations. Acting upon can stop Beijing from turning around and asking for more them will require a willingness to bear significant political down the road. Nor will America’s East Asian allies stand idly and diplomatic costs. But as the unfolding tragedy in Ukraine by as Washington negotiates a long-term partner away. Japan, suggests, the price tag for failing to act could prove much in particular, increasingly sees Taiwan’s security as intertwined higher. RF with its own. Abandoning Taiwan in the midst of a crisis could prove Michael A. Hunzeker (@MichaelHunzeker) is an assistant even more costly. My ongoing research suggests that failing professor at George Mason University’s Schar School of Policy to defend Taiwan from attack will come as a profound shock and Government, where he is also associate director of the in Canberra, Seoul, and Tokyo. No matter how Washington Center for Security Policy Studies. He served in the Marine tries to justify such a move, the cost in terms of American Corps from 2000 to 2006. 22

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China’s Looming Challenges by CARL MINZNER From hosting the Winter Olympics to containing a unequal societies on earth. And their economy has become pandemic that has crippled other nations around the globe, it severely distorted by Beijing’s addiction to state-owned might seem that China is on top of the world. Indeed, this is enterprises as a tool to control growth, and infrastructure precisely the image Xi Jinping seeks to project – both at home development as the fuel to drive it. and abroad. Demographically, China is entering an era of rapid But beneath the surface, China faces serious problems. aging. Just like its East Asian neighbors, China’s birth rates Politically, China is atrophying. The reform era is over. are plunging to among the lowest in the world. China’s Key elements that underlay working age population peaked China’s post-1978 boom – a in 2011. It has steadily declined more relaxed grip by Party since. The same will soon be authorities, space for technocratic true for the population at large, governance, openness towards perhaps as early as next year. private enterprise – are giving The percentage of the population way. Under Xi, China is sliding over 65 years old will surge, from back towards single-man rule, roughly 12% now to around a stifling ideological orthodoxy, third by mid-century. Hard and with Maoist controls over state painful choices lie ahead – raising and society alike. retirement ages, cutting pensions, This is not a recipe for addressing labor shortages, success. The last time China and providing effective care to downed this particular cocktail, hundreds of millions of elderly in the 1950s and 1960s, it resulted citizens, many of whom are in decades of instability and locked in rural poverty. erratic policymaking. Space for None of these have easy meaningful discussion vanished. solutions. All will hobble China’s Channels of information to 21st century rise. Carl Minzner the top shriveled. Yes-men Naturally, Beijing’s proliferated. Potential successors leaders aren’t dumb. They rose, fell … and were beaten openly recognize the latter two Economically, China’s go-go to death (Liu Shaoqi), or died challenges. And China does years are over. Annual 10% in mysterious plane crashes not lack for impressively titled (Lin Biao). Grandiose visions policies and proposals to address GDP growth rates are a thing embraced by an aging great leader them. Back in 2013, observers of the past. And Beijing faces and enthusiastically pushed by swooned as Party declared that the urgent need to address a sycophantic underlings spun out the market would play a “decisive into catastrophic economic failure role” in future reform efforts. host of problems that have (as with the Great Leap Forward) In 2021, markets trembled accumulated during the or horrific political strife (such as — and the private tutoring the Cultural Revolution). industry imploded — as Beijing boom era. Economically, China’s golaunched a blitz to implement go years are over. Annual 10% Xi’s “common prosperity” drive GDP growth rates are a thing of the past. Ahead lies an era aimed at tackling social inequalities and barriers discouraging of much slower growth. And Beijing faces the urgent need to parents from having children. address a host of problems that have accumulated during the But China’s own political realities increasingly undermine boom era. A yawning gap exists between haves and have-nots such efforts. Beijing’s reflexive desire for central control has that puts China alongside the United States as one of the most systematically stymied meaningful economic reform over RIPON FORUM February 2022

the past decade. And the new focus by Party leaders on the ethnonationalism as an electoral tool to rile populist anger. demographics of an aging China shows early signs of veering Indeed, from the perspective of Beijing’s autocratic rulers into a misguided pro-natalist strategy akin to that pursued – as well as those in Moscow and Tehran - that result is actually by Ceausescu in Romania (and amounting to a 180-degree desirable. That weakens America at home, strengthens Xi’s reversal of China’s former anti-natalist one-child policy), with hand in China, and divides us from our allies. similarly disastrous social Abandoning our own results. historic commitment to liberal What does all this mean democracy – whether on the Demographically, China is for America? right, the left, or both – in favor The 21st century is often entering an era of rapid aging. of an increasingly narrowly framed as a kind of decadesThe percentage of the population defined concept of “America” long Olympic contest between founded on blood, soil, and over 65 years old will surge, from ethnic identity – that is how America and China for influence on the world stage. the United States “loses” not roughly 12% now to around a But a far more important only the 21st century, but its third by mid-century. competition is playing out own soul. within each country, where China is on track to lose both China and America are its own contest, against its in a qualifying match against their own respective domestic own domestic demons, with tragic results. demons – historical, political, and social. Will America as well? RF And in the long-term, the most threatening thing for Beijing’s autocratic rulers is not the prospect of some freakishly Carl Minzner is a Senior Fellow for China Studies at the cartoon-like version of Uncle Sam emerging victorious Council on Foreign Relations, and a Professor of Law at from America’s semi-finals – muttering vapid slogans about Fordham Law School. He is the author of End of an Era: How America first, undermining our own democratic institutions, China’s Authoritarian Revival is Undermining Its Rise (Oxford tacking towards isolationism, and fanning the flames of University Press, 2018; paperback, 2019)

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Special Report: Advice to the CDC

A Better Prepared Public Needs Clear Communication by CYNTHIA BAUR Throughout the COVID-19 pandemic, experts, politicians, conditions, flatten the curve, mRNA technology, to name a few. For example, plain language explanations weren’t easy to commentators, and the public have criticized government agencies, oftentimes the U.S. Centers for Disease Control and find about what clinical trials are and why they are the best way Prevention (CDC), for their communications substance and to know the vaccines worked as intended and are safe enough style. They called out the agencies for confusing information for millions of people. Instead, the official messages were “Vaccines are safe. We know because we tested them in clinical and recommendations. My observation is that COVID messages come from trials.” As many have noted, people excluded or abused by prior many sources, not only CDC, and even those sources medical research especially needed plain language information providing accurate information often didn’t communicate about the science behind the vaccines and why they could trust both the scientists and the clearly about COVID risks. science. From the beginning, scientists Technically, “risk” is a labeled the virus a “novel” numerical probability, but threat with many unknowns for practically, risk is our personal, human health. This means we shifting sense of how dangerous all began with little knowledge something is. Explaining and understanding about what risks in plain language builds was to come. Practical plain people’s understanding and language explanations of risks confidence. For example, along the way could have recent testing messages show better prepared the public for the confusion that happens the long haul. when people can’t figure out Plain language puts what’s risky or not. Testing audiences’ information needs Cynthia Baur demand confirms many people at the center of the process, and want to do the right thing and COVID communications have know if they’re infected, but prioritized some audiences Practical plain language they couldn’t make sense of over others. Epidemiological explanations of risks along the being told to test before seeing data have driven COVID way could have better prepared friends and family during the messaging rather than the holidays but that testing wasn’t public’s need to understand the public for the long haul. necessary to leave isolation. If and respond to the virus’ the risks were different in these threat. From the beginning, the numbers of cases, hospitalizations, and deaths have been situations, then the public needed a clear statement about why. As we reflect on this pandemic and anticipate the next, we the lead, not just from CDC but in many media reports, must consider if we want to replicate COVID communication commentary, and policymakers’ statements. If I’m a policymaker, hospital administrator, or even missteps for future outbreaks. Despite misinformation, we frontline clinician, then illness, hospitalization, and death data know enough about clear communication to do better. The are relevant for planning, resource allocation, and service question is, how much effort are we willing to spend to have a delivery. Members of the public trying to gauge their personal public with an accurate understanding of the health risks they risk, however, need simple, actionable information that aligns may face? RF with how they live their lives. For example, the UMD Horowitz Center for Health Literacy made an animated video for college Cynthia Baur, PhD, is the Director of the Horowitz Center for students to show them more and less risky realistic situations. Health Literacy, University of Maryland School of Public Health. Research shows people don’t trust what they don’t Prior to joining the Center in 2017, Dr. Baur spent ten years understand, and a lot about COVID has been hard to understand. working in CDC health communication roles, participating in The specialized language or jargon has been overwhelming: pandemic influenza communication planning, and leading the airborne versus droplets, herd immunity, underlying health agency’s health literacy and plain language work. 26

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Messaging Failures of the Pandemic

because the public has access to the same information. Therefore, public health experts must not exaggerate or over promise, but rather tell the truth and be transparent; admit mistakes and move forward. Operate like this—such as communicating how and why science evolves— so the American people will forgive mistakes and accept changes in policies and protocols. Simply, trust the American people and by ERIC D. HARGAN they will trust you back. Calls by individuals for censorship or the demonization As we grapple with the continuing problems stemming from COVID-19 and the lockdowns, we must also face a of scientific or political opponents do not reflect confidence wider issue: the failures of communication that have plagued in their positions. We must recognize that democratization of information has led to widespread divergences of attitudes, the response. Americans have lost trust in our public health officials – beliefs, policies, and even factual predicates regarding the with the Centers for Disease Control and Prevention (CDC) pandemic. It’s understandable that such divergence has taking the brunt of the nation’s anger. It’s understandable why produced anxiety among authorities. Daniel Patrick Moynihan Americans feel angry – the public health community at large has put it best, “You are entitled to your opinion. But you are offered the public constantly changing information and advice not entitled to your own facts.” And the authorities believe they are acting on facts, and on topics vital to Americans’ in everyone’s best interests. lives: getting back to normal, However, often what the experts masking, boosters, quarantines, thought was ‘the science’ just and social distancing. It’s been 6 months earlier has shifted. such an avalanche of confusion These changes in scientific that the phrase ‘the CDC understanding happen all the recommends’ has become an time, but these changes in the internet meme – a joke. facts and consensus should pull This mockery bodes everyone toward humility. The ill for America’s ability to best course of action is to rely best promote the future of on empathy and evidence over medical progress, not just to partisanship and intimidation. react to health emergencies or The CDC and the public pandemics, but also to advance Eric D. Hargan health community generally innovations like telehealth and will recover their reputation artificial intelligence and help and trust over time by lead to new modalities of care. Public health experts must not returning to their true roles as America’s health care exaggerate or over promise, scientists and doctors, and by future depends on robust publicbut rather tell the truth and be exiting the political theater private sector partnerships, that they were pushed into by like Operation Warp Speed, transparent; admit mistakes an unprecedented pandemic. where government works and move forward. Those who have entered into with our nation’s innovators politics should drop it, leave to find new cures and medical the politics to the politicians breakthroughs. A trusted public health community, and especially the CDC, is a prerequisite and get back to even-handed, principled medicine and science. to such a future. However, the enduring lack of normalcy and And as we enter into the process of learning (and in many cases the endless state of emergency continue to erode the American re-learning) the lessons of the pandemic, we must understand people’s trust in the public health community’s competence to that an information-savvy public will be watching and judging. This is not a bad thing, and it should elevate and inspire the get us through COVID or, indeed, do anything in the future. The public health community can rebuild its reputation public health community. If it does, it will recover trust and and gain back the trust of the American people, but it must regain the useful and, indeed, necessary role it has occupied in RF recognize that its communication problems stem, partly, from Americans’ lives. the inherent democratization of information and knowledgesharing. People can do their own research now, and they Eric D. Hargan served as the Deputy Secretary of the evaluate the data and recommendations in a far different way Department of Health and Human Services (HHS) from 2017 than they used to. The information revolution has transformed to 2021, as well as Acting Secretary in 2017-2018. He is the how Americans receive, understand, and trust the experts Founder and CEO of The Hargan Group. RIPON FORUM February 2022

Dear CDC ... about that Latest Announcement

would require acknowledging that it currently is not possible to prevent most infections and mild illness. It is hard to communicate well when people do not know what you are trying to achieve. • Be careful with the word “science” and how you use it. Yes, understanding the virus, developing vaccines and treatments, and developing public health recommendations use and involve by GLEN NOWAK science (e.g., rigorously designed studies). Public health It is a widely held belief that “good communication is recommendations and actions, however, involve much more essential in a pandemic,” but as the Center for Disease Control and than science; they also require judgements regarding whether and Prevention’s (CDC) recent recommendations on how long people how to use findings from a scientific study. It is also the case that infected with COVID should isolate from others demonstrated, often decisions and recommendations have had to be made in that is easier said than done. Thus, as the COVID pandemic the absence of science. Thus, messaging should avoid extolling continues into its third year, public health recommendations seem “We need to follow the science” or “Our policies are based on more likely to trigger calls for “improved COVID messaging” science” because it has rarely been that simple with COVID and most people know that. and “better CDC communications” than adoption of the advice. • Announcements and Having served as the CDC’s messages need to be clear and director of media relations for six well-stated, but keep in mind, years, including during the 2009doing so does not mean criticism 10 influenza pandemic, I know and disagreement won’t arise. how difficult it is to communicate Often, it is the public health public health science, advice, recommendation or policy, and and recommendations. I also not the wording and messaging, know the communication that is the actual source of demands and challenges are criticism. Communicating far greater in the COVID-19 their presence does not ensure pandemic thanks to a virus that high or universal agreement is continually changing, far more Glen Nowak or compliance with a public news and social media outlets, health recommendation. People, and a society where people Effective or successful including experts and especially can easily express diverse and “communication” involves politicians, will disagree with divergent views. And as if that the interpretation, value, and listening, learning, and weren’t challenging enough, meaning of the data used as the recent surveys report significant understanding those you basis for a recommendation declines in public trust in the are seeking to inform. as well as whether action is CDC as well as a majority needed or worthwhile. Differing of American’s saying they feel “worn out” by how COVID has impacted their daily lives perspectives, values, beliefs, and demographic characteristics matter. (Monmouth University Poll, December 2021). Effective or successful “communication” encompasses more CDC Director Rochelle Walensky has pledged to improving the agency’s COVID communications, including the clarity of its than what you say and how you say it. It involves listening, learning, messages, and highlighting the continued likelihood of rapid and and understanding those you are seeking to inform, educate, unpredictable changes in recommendations. Both are important influence, or motivate. It involves engaging with diverse individuals steps, but if the CDC hopes to build trust, address frustrations, and groups, including those who have different views, to better and improve acceptance of public health recommendations and understand their needs, concerns, values, and priorities. This is often difficult, and not always successful, but as we transition from advice, it needs to do much more. At the top of my list are: • Make clear the major public health outcomes that the CDC a COVID pandemic to COVID being endemic (i.e., a part of our is trying to achieve with its recommendations and actions. At this lives), it is the only way to identify public health recommendations RF stage of the pandemic, it is unclear what the end goals are with that will achieve the greatest and broadest acceptance. respect to COVID. For instance, are the recommendations and actions intended to prevent all or most COVID infections? Or are Glen Nowak is a professor in the College of Journalism and Mass they mostly about reducing and preventing severe COVID illness, Communication at the University of Georgia and co-director of especially hospitalizations and deaths? The former is much more the College’s Center for Health and Risk Communication. He difficult to achieve and seemingly not well aligned with what spent 14 years at CDC, including six years as the agency’s director current vaccines are designed to do (i.e., prevent severe illness, of media relations and 6 years as director of communications for hospitalizations, and deaths). The latter is more attainable but its National Immunization Program. 28

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News & Events

Asa Hutchinson Talks About his Solutions-Oriented Approach to Governing his Home State WASHINGTON, DC – Arkansas credit. To graduate now from Arkansas having been reelected in 2018 with 65% Governor Asa Hutchinson appeared schools, you have to have computer of the vote, receiving more votes than before a luncheon meeting of The science. any other candidate for governor in the Ripon Society on February 9th, “This is an extraordinary step state’s history. He became Chairman of delivering remarks about his role as forward, recognizing that teaching the National Governors Association last Chairman of the National Governors our young people the opportunities July, and leads the organization with Association, and his bipartisan, in software development and cyber Democratic Governor Phil Murphy of solutions-oriented approach to security allows us to bring technology New Jersey serving as his Vice Chair. governing his home Hutchinson state. noted that he and “We had the Murphy took part in NGA meeting less a panel discussion at than 10 days ago,” the recent meeting Hutchinson stated, of all the Governors, referring to the annual a discussion that gathering of Governors was moderated that was recently by philanthropist held in Washington. David Rubinstein “It’s sort of the last and focused in part bastion of potential on the meaning of bipartisanship. It’s neat bipartisanship and to see the Governors why it is important talking about problems for Republicans and that we have in common Democrats to work and how we can together to get things address them together. done. And we share ideas, “ D a v i d “To solve problems, you’ve got to reach whether Democrat or Rubenstein is really across the aisle.” Republican.” a great interviewer,” Gov. Asa Hutchinson One of those ideas H u t c h i n s o n related to computer recounted. “The first Remarks to The Ripon Society science education, question he asked me February 9, 2022 which, Hutchinson was, ‘Well, Governor said, he has not only Hutchinson, what’s made a national initiative in his role companies to Arkansas. It allows us to so bad about partisanship?’ Great as NGA Chairman, but a priority in feed the incredible entrepreneurial spirit way to start out the conversation on his role as Chief Executive of the in technology that we already have — bipartisanship — to ask me about Razorback State. from Walmart, which is a technology partisanship. And it is a great question. “Arkansas was the first state to company, to U.S. Steel, which is a “I look back at my own history, mandate that all schools offer computer technology company that happens to and I was as partisan as anyone. I was science,” he stated. “We went from make steel. We have to produce that Chairman of the Republican Party of 1,100 students taking computer science talent, and we’re doing that. And I took Arkansas when we were in the minority, when I became Governor, to over that issue nationally, asking governors and I helped build the Republican Party 12,500 taking computer science today. to form a compact to help promote that to where it’s a red state today. So, I’m And we took it a step further in this in all the different states.” partisan in elections. But I also believe last legislative session. We were the Hutchinson is serving his second that once the election is over, you’ve third state to mandate it as a graduation term as the 46th Governor of Arkansas, got to solve problems. And to solve 30

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problems, you’ve got to reach across building a party, but it is looking at the have the equivalent of 20% of our state the aisle. And that to me is a pattern that past. I believe that genuinely. And I budget in a reserve account, now $1.2 leadership needs to follow today.” think it’s going to be more challenging billion.” Hutchinson then proceeded to cite for our party looking into the future to “Lowering taxes. Setting up that a number of areas where he thought win in 2022. reserve account. Creating the surplus. America’s leaders needed to work “We have to be able to articulate Creating jobs in the state. Leading in together and focus on policy, not our vision for the future. But we also computer science education. Managing politics. have to be able to stand for the rule of the pandemic and keeping our economy “We’ve got to have improved law. And we have to make sure that going, while also respecting both the border security,” he stated. “We got to we do not diminish that by the type public health needs and individual address the issue of inflation. When you of resolution that diminishes what freedom needs of our citizens. I think look at trade policy, I came up in the era happened on January 6th. We’re going we’ve done a good job in Arkansas.” of Ronald Reagan when the hallmark to have to continue to address that as a Hutchinson was introduced at principle of the Republican Party was party and as leaders.” Wednesday’s discussion by his fellow to open markets, not close markets. I Hutchinson concluded his Arkansan, Congressman French still happen to believe that is a good remarks by returning to his efforts as Hill, who represents the 2nd District philosophy, but we’ve of the Razorback drifted away from that. State in the U.S. When you look at the House. Following challenges in Europe, Hutchinson’s the challenges in remarks, Hill asked China, we have these the Governor to problems to address, expand on his and leadership makes comments relating a difference in how to the pandemic, and you approach those. more specifically, his And that’s where you push from the start of set aside partisanship the pandemic to keep and you work together things open. to get that done. “I recognized in Obviously, you don’t the two-month period abandon principles — we went virtual that you stick with your this cannot happen principles. But you again,” Hutchinson find common ground. Hutchinson was introduced at The Ripon Society lunch discussion recalled, looking by his fellow Arkansan, Congressman French Hill (AR-2). And to me, thoughtful, back to that period in conservative early 2020 when the leadership is important country as a whole today in America.” Governor of Arkansas and some of more or less shut down. “And so that Hutchinson also offered his the key initiatives he has been able to spring I said, ‘Next year, we’re going to thoughts on the recent decision by the accomplish in office over the past seven be open with in-classroom instruction, Republican National Committee to years. and it’s going to be statewide.’ And that censure Congresswoman Liz Cheney “When I became Governor,” he message worked. Even through the and Congressman Adam Kinzinger for noted, “we had a 7% individual income fall, when we got hit hard again and their service on the Select Committee tax rate in Arkansas. We lowered that there was pressure from the unions and to Investigate the January 6th Attack on tax from 7% to 5.9%, and we’re going others saying, ‘Close it down, close it the United States Capitol. to be lowering it in the next two years down’ — we never did. “I’ve been a former party chairman, to 4.9%.” “We kept things open. And that and that’s not the job of the party first of “For 100 years of Democrat was a good decision, because as Johns all,” he stated. “And secondly, we have leadership, they forecasted what the Hopkins and others are articulating to be about the future. We have to be revenue was going to be for the next now, the harsh difficulty in terms of about addressing these problems and year and then they would spend every the mental health of our students and not the past. And so I was one of the dime. When I became Governor, I athletes when you’re closed down — few governors that spoke out on that. I said, ‘Why can’t we create savings?’ it’s hard to make that gap up. And so said that this was wrong. It is not about We started that practice, and we now I’m glad we kept things open.” RF RIPON FORUM February 2022

Name: Rodney Davis

Occupation: Representative for Illinois’ 13th Congressional District First job & lesson learned from it: I worked at McDonald’s, and I learned a couple of things. First off, if you got time to lean, you got time to clean. I was constantly trying to figure out how to multitask and perform my job the best I could. Another lesson I learned that helps me today as a member of Congress is that customer service matters. Book(s) you’re recommending to friends: I always recommend the book Back in the Game by my good friend, Steve Scalise, because it is a miracle that Steve was able to survive the shooting that morning we were on the field. All of us were able to witness his miraculous recovery, and to see Steve running around the Capitol today is just an amazing reminder about the importance of faith and perseverance. Proudest achievement since coming to Congress: Throughout my career as a staffer, and throughout my career as a member of Congress, we’ve always talked about reforming our tax code. The last time we reformed our tax code in Washington was in 1986. I was 16 years old, I had a great mullet haircut, and I was probably cruising around our local square listening to new music from the rock band Poison. When I got to Congress, I talked about making our tax code flatter, fairer, and simpler. Working with the Trump Administration and President Trump, we were able to do that. I helped craft some very good provisions in that bill that I think led to historic economic growth and historic employment prior to the pandemic. Our tax code changes put American companies on par with the rest of the global marketplace. America was growing in all sectors until COVID hit. And I think we can get back to that if we focus on keeping our taxes low and we focus on investing in America rather than losing our competitive edge to other countries. Challenge facing your District that you’re working hard to address: My current district includes four public universities, four private universities, and up to eight community colleges around my region. Student debt is a major issue that my constituents are facing, and it’s frankly an issue that the country’s facing right now. We have more student debt in this country than we have auto and credit card debt combined – it’s a total of $1.7 trillion. To address the student debt problem, I passed language in the CARES Act to allow employers to help pay down student debt and be incentivized to do so. It’s a great retention tool and it is a publicprivate conservative solution that’s already law right now. Finish this sentence: “If I could change one thing about American politics, it would be…” The polarization. 32

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Ripon Forum - February 2022

Articles inside

Ripon Profile of Rodney Davis

Messaging Failures of the Pandemic

Asa Hutchinson Talks About his Solutions-Oriented Approach to Governing his Home State

Dear CDC ... about that Latest Announcement

China's Looming Challenges

A Better Prepared Public Needs Clear Communication

How the U.S. Can Deter Chinese Aggression into the Next Decade

Preventing the Next Ukraine

Speaking with One Voice on China

America Cannot Turn a Blind Eye to the Plight of the Uyghurs

Affordable Housing—Wisconsin’s Secret to the Labor Shortage

ENTERPRISE CHINA

Taming Inflation: What Policymakers Can – and Should – Do

Ocean Shipping Carriers: It’s Time to Realign the Interests of Shippers and Ocean Carriers

In this Edition