The Economic Security Threat To The West And Its Allies Posed By The Chinese Communist Party (CCP)

China has made no secret of its ambition to displace the Unites States as the world's predominant superpower and change the world order according to Chinese Communist Party (CCP) values. Yet, unlike responsible nations, who pursue their ambitions in peace, China has done so at the expense of others using its toolkit of economic security threats. China targets nations it wishes to undermine and/or nations it can use to gain strategic advantages.

Economic security threats are designed to disrupt the stability, growth, and well-being of a targeted nation. It impairs its ability to manufacture, trade, and compete on a level playing field. These are the many ways in which Chinese economic security threats are carried out:

(Source: X)

Advanced Technology Theft

The Five Eyes, a joint intelligence partnership between the U.S., Canada, United Kingdom, Australia, and New Zealand, uncovered China's operations for advanced technology theft. These include technologies relating to artificial intelligence, aerospace, energy, and defense.

One of the many ways in which China steals technological secrets is through an army of spies strategically installed in private companies. The operations are widespread, spanning America, Asia, and Europe. Under the Biden administration, in 2024, there was a rare prisoner swap between the United States and China, which NBC News said included Xu Yanjun, a Chinese intelligence officer sentenced to 20 years in prison for attempting "to steal aviation trade secrets from GE Aviation."[1] The Justice Department further stated: "Xu targeted American aviation companies, recruited employees to travel to China, and solicited their proprietary information, all on behalf of China... Xu attempted to steal technology related to GE Aviation's exclusive composite aircraft engine fan module – which no other company in the world has been able to duplicate – to benefit the Chinese state."[2]

Telecommunication Sabotage And Surveillance

Huawei accounts for over 30 percent of the global telecom equipment market.[3] It has installed 5G infrastructure in franchised areas around the world. Having proprietary telecom infrastructure gives China the capability to conduct surveillance operations and/or disable telecommunication services if it has to.

In 2024, it was reported that a Chinese tech security firm was able "to breach foreign government systems, infiltrate social media accounts and hack into personal computers." According to cyber-security firms SentinelLabs and Malwarebytes, "the trove of documents from I-Soon, a private company that competed for Chinese government contracts, showed that its hackers compromised more than a dozen governments."[4]

Furthermore, The U.S. Department of Justice asserts that Tiktok is a network means by which China conducts surveillance operations. It is also how it obtains the personal data of persons of intertest. "TikTok Inc.'s ultimate parent company is ByteDance Ltd., a privately held company that has operations in China. ByteDance Ltd. owns TikTok's proprietary algorithm, which is developed and maintained in China. The company is also responsible for developing portions of the source code that runs the TikTok platform. ByteDance Ltd. is subject to Chinese laws that require it to 'assist or cooperate' with the Chinese Government's 'intelligence work' and to ensure that the Chinese Government has 'the power to access and control private data' the company holds," stated the Supreme Court of the United States.[5]

Controlling Critical Infrastructure Through Debt Traps

China has gained control over critical infrastructure in strategic areas through its Belt and Road Initiative. These includes seaports, airports, and military bases. Sri Lanka[6] and several African countries[7] were forced to cede control of valuable infrastructure to the Chinese for debts they could not pay.

Economic Coercion

Beijing uses its enormous buying power to impose its will over certain countries or punish them for calling out its bad behavior. We recall how China imposed export restrictions on Australian coal, timber, wine, beef, and barley following Canberra's demand for an investigation on the origins of the Wuhan virus.

In the Philippines, Beijing used restrictions on banana imports to punish Manila for its resistance against China's incursion on its sovereign territories in the West Philippine Sea.

In 2021, in response to China's ban on imports of Taiwan-grown pineapples, Taiwanese businesses and citizens made up for the potential shortfall in sales by buying an entire year's worth of the tropical fruit in just four days. On February 26, 2022, Beijing announced it would ban all imports of Taiwanese pineapples, alleging that "harmful organisms" had been found in the fruit. Taiwan's Council of Agriculture (COA) Ministry chastised China for its "unilateral decision," which it called "unacceptable."

According to the COA, 97 percent of exported pineapples went to China in 2020. The move prompted the Taiwanese Foreign Ministry to launch a "Freedom Pineapple" campaign on Twitter. That same day, then-President Tsai Ing-wen also took to Twitter, calling on the public to buy Taiwanese pineapples and writing that as with Australian wine, "China's unfair trade practices" were targeting Taiwan's pineapples, despite the fact that 99.79 percent of imported batches had passed inspection.

On March 2, 2021, it was announced that Taiwanese farmers had received pre-orders for 41,687 tons of pineapples from companies, e-commerce platforms, and consumers, already exceeding the annual quantity of exports to China.[8]

Investment And Acquisition Of Strategic Assets

Chinese state-owned enterprises invest heavily in strategic sectors abroad, such as energy, telecommunications and transport infrastructure. These investments give China control over critical industries with national security implications.

Supply Chain Disruption

There are 17 rare earth materials critical to manufacturing sophisticated defense equipment such as precision-guided munitions, unmanned aerial vehicles, and autonomous underwater vehicles. They are also used to manufacture computers and smartphones.

As it happens, China is the source country for sixty percent of the world's rare earth supply with the greatest capacity to process them to a form suitable for use. This has given China a virtual monopoly on this valuable commodity.

It is worth noting that, in December 2024, it was reported that China had banned the export to the United States of rare earth minerals, which are used, among other things, in the manufacture of semiconductors.[9]

(Source: The Visual Capitalist)

Disinformation

China spends billions to push its narratives to a worldwide audience via traditional and social media. In certain countries of interest, an elaborate disinformation network has been put in place comprising politicians, journalists, opinion makers, and influencers peddling Chinese propaganda.

Recently, former Philippine Presidential Communications Secretary Trixie Cruz-Angeles admitted to the Philippine Congress that about a dozen Filipino social media influencers attended a state-sponsored seminar in China in May 2023. The CCP covered all expenses including airfare, accommodations, and other related costs. The CCP has also been accused of funding disinformation campaigns in the Philippines and other countries of interest.[10]

Former Philippine Presidential Communications Office (PCO) secretary Trixie Cruz-Angeles admitted during the House tri-committee (tri-comm) hearing on fake news and disinformation Friday, March 21 that China sponsors seminars abroad for pro-Duterte vloggers from the Philippines.

Influence In International Organizations

China has sought to increase its influence in international organizations like the World Trade Organization and the International Telecommunication Union. By shaping international rules and standards to its advantage, China tilts the playing field in favor of its own economic and strategic interests.

Nations can protect themselves from Chinse economic security threats in the following ways:

First, building supply chain resilience. Nations will do well to minimize dependence on China for critical commodities.

Second, achieving the highest possible degree of strategic autonomy. Nations must build manufacturing capacities for critical goods like food, medicines, steel, cement, and petrochemicals.

Third, diversify export markets outside of China.

Fourth, mitigate Chinese control over strategic industries in the homeland such as in telecommunications, water, power, highways, and railways.

Fifth, protect against cyber threats and security breaches through stronger legislation and strengthening controls on cybercrime.

Sixth, strictly enforce laws relating to treason to discourage locals from cooperating with the CCP.

Seventh, in various international fora, targeted nations must call out the economic and security threats waged against them.

Economic security threats have become the preferred tool of the CCP to force nations to bend to its will. Resistance, resilience, and preparation are key to minimizing vulnerabilities.

*Andrew J. Masigan is the MEMRI China Media Studies Project Special Advisor. He is a Manila-based economist, businessman, and political columnist for The Philippine Star. Masigan's articles in MEMRI are also published in The Philippine Star.