By Xiao Qiang and Wang Yi
The US President Trump signed the National Defense Authorization Act (NDAA) for Fiscal Year 2019 into public law on August 13. The NDAA contains some negative clauses related to China such as calling for the Trump administration to direct a whole-of-government strategy on China, submitting assessments and plans for strengthening Taiwan’s force readiness and foreign investment risk review. China's Ministry of Foreign Affairs, Ministry of National Defense and Ministry of Commerce all expressed their strong dissatisfaction on August 14.
The Wall Street Journal reported on August 14 that the NDAA includes measures to curb China's expansion and support the US military servicemen. The Act reflects a growing consensus between the Democrats and the Republicans: the world has entered a new era of great power competition, and the US must take action to compete with China and Russia. “Some lawmakers say the defense-policy act is tougher on China than any in history."
There are many contents related to China and the US-China relationship in the act. Voice of America (VOA) reported on August 14 that the act called on the Trump administration to formulate a whole-of-government strategy including the industrial policy, political influence, regional and global military capabilities to counter China's activities and to protect the US interests.
The act requires the US Secretary of Defense to report to the Congress on a regular basis regarding China's military operations and "coercive activities" in the Indo-Pacific region, and to make the report available to the US allies and partners in Asia thereafter. The act also requires the report to include content such as China’s military operations and infrastructure development in the South China Sea.
Regarding Taiwan, the act requires the US Department of Defense (DoD) to strengthen its defense relationship with Taiwan and help Taiwan to improve its self-defense capabilities. It requires the US to conduct a comprehensive assessment of Taiwan's military strength, formulate an assessment report within one year, and support Taiwan's purchase of defensive weapons.
The act also proposes in "the sense of the US Congress" that the US Secretary of Defense should promote exchanges with the Taiwan military and enhance the security of Taiwan, including creating practical training and military exercises with Taiwan, and push forward exchanges between senior defense officials and general officers according to the Taiwan Travel Act.
Spokesperson for China’s Defense Ministry Senior Colonel Wu Qian expressed in a statement on August 14 that the NDAA is filled with Cold War mentality, stoking China-US conflicts and interfering with China's internal affairs. The act also violates the one-China principle and the three China-US joint communiqués. It disrupts the relationship development and undermines mutual trust and cooperation between the two countries. This is firmly opposed by the Chinese military.
According to Wu Qian's statement, Taiwan is a part of China. The Taiwan issue concerns China's sovereignty and territorial integrity and is the most important and sensitive issue at the core of the China-US relationship. China firmly opposes any form of official exchanges and military ties between Taiwan and other countries. This position is firm and clear. China will never allow anyone to split Taiwan from China at any time and in any form.
China’s Foreign Ministry Spokesperson Lu Kang also expressed on August 14 that China is strongly dissatisfied with the US, who adopted and signed the National Defense Authorization Act for Fiscal Year 2019 containing negative China-related contents in disregard of China's opposition.
We urge the US to abandon the Cold War mentality and the zero-sum game concept, correctly treat China and China-US relationship, abide by the one-China principle and the three China-US joint communiqués, and not to implement clauses that will harm China’s interests, so as to avoid harming the China-US relationship and the bilateral cooperation in important areas, Lu Kang said.
Apart from the Taiwan part, the most noticeable item in the NDAA is the Foreign Investment Risk Review Modernization Act of 2018. The act requires the Committee on Foreign Investment in the United States (CFIUS) to conduct a more rigorous review of foreign acquisitions of the US companies and to provide national security assessment reports for the US companies with foreign investment.
The British Broadcasting Corporation (BBC) reported on August 14 that the act was the result of the US growing concern about Chinese companies’ acquisition of the US technology through investment, mergers and acquisitions. The concern is exactly why the Trump administration imposes heavier tariff on exports from China. Though NDAA does not directly point to China, China’s interest in the US investment has decreased and reached a new low in the first half of 2018 even without the act.
In response to the Foreign Investment Risk Review Modernization Act of 2018, a spokesperson of China’s Ministry of Commerce said on August 14 that China will conduct an overall assessment on the act and will closely follow the impact on Chinese companies.
Cross-border investment is thriving with the development of economic globalization. Chinese and American companies have strong will and great potential in deepening investment cooperation. In this context, the two governments should respond to the companies and provide a favorable environment and stable expectations. The US should treat Chinese investors objectively and fairly, and not make national security censorship an obstacle to investment cooperation between Chinese and American firms, said the spokesperson of China’s Ministry of Commerce.
On the same day, the Financial Times also commented that concerns about China's rise have promoted the birth of Foreign Investment Risk Review Modernization Act of 2018, which may mark the end of an era: "National security has become the key factor governing foreign investment in the US."
The article wrote, "Fears over losing an economic and cultural war (and possibly a real one at some point) with China is a worry that is shared broadly in the US." According to the article, the latest NDAA has empowered the US DoD and its intelligence department with more authority to decide on who will have the eligibility and permission to invest in the US. The act has also tightened the investment of the US companies to China, making everything more difficult.
Disclaimer: The authors are Xiao Qiang and Wang Yi, reporters with the Global Times. The article is translated from Chinese into English and reedited by the China Military online. The information, ideas or opinions appearing in this article are those of the author from the Global Times and do not reflect the views of eng.chinamil.com.cn. Chinamil.com.cn does not assume any responsibility or liability for the same. If the article carries photographs or images, we do not vouch for their authenticity.