Piper Lounsbury, Chief Research and Development Officer at Strategy Risks, testified before the House Select Committee on the CCP and commented on the growing risks of doing business in China. During the July 13 hearing, Lounsbury suggested that China is attempting to replace US businesses with their own, and relies on US technology and data to do so.
In her testimony, Lounsbury said, “Many US executives with decades of experience trying to work in China have begun to realize that the Communist Party of China (CPC)’s evolving development goals are structured to advance Beijing’s stated objective of eventually replacing American firms and businesses while using and subjugating them in the near term. To achieve this goal, the CPC has created a set of national development strategies which rely on theft, coercion and merger-enabled access to US technologies, intellectual property, and data. Yet US shareholders and investors remain unaware - or choose not to look - at the extent to which such practices exist. Since China is now the second-largest country in the world by nominal GDP and the largest country in the world by GDP in purchasing power parity (PPP), American CEOs are increasingly concerned that risk is higher now than ever before.”
Lounsbury emphasized the vast difference between the economic and political structures of the US and China and said, “it is a fantasy to imagine we can come together in a shared and equitable partnership unless we come together under the PRC’s terms, in other words unless we get absorbed by the Communist Party of China and its converted subjects.” She used the example of the CEO of Raytheon Technologies who said that China is “too big, too important, and too necessary for the US economy.” Lounsbury went on to say that many of the biggest American corporations have invested huge amounts of money in China over the last several decades and thus have a vested interest in the US getting along with China.
Federal Newswire previously reported that Shehzad Qazi, the Chief Operating Officer of China Beige Book International, said, “If you’re aligned with (the CCP's) vision, you succeed. If you’re not, you don’t." Committee Chairman Rep. Mike Gallagher (R-WI) said during the hearing, "It’s time for American corporate executives to take off the golden blindfolds and stare with clear eyes at the growing peril of doing business in China."
During the committee hearing, Qazi expressed that the current dangerous situation can be attributed to both the federal government's lack of oversight and the greed of American executives, as previously reported by Federal Newswire. More than 1,000 American companies rely heavily on China as a crucial center for operations, a situation Qazi attributed to their excessive greed.
Lounsbury continued her testimony, commenting on the problematic relationship US businesses share with the CCP, calling it “adverse asymmetry.” She stated that China is withholding information from foreign businesses while at the same time collecting data from other nations. She suggested that Congress make more Americans aware of the threat of China and protect US data, saying that “the lucrative business model of collecting and selling personal data is a national security concern for the US.” She also urged Congress to incentivize companies to return supply chain dependency to the US.
According to Daily Hive, Microsoft has already initiated the relocation of its leading artificial intelligence center from China to Vancouver. Numerous researchers currently engaged in artificial intelligence in Beijing may be transferred, with the intention of mitigating the risk of talent being lured away by Chinese companies or facing harassment from government officials. The move has been named the "Vancouver Plan."
