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Rep. Mike Gallagher (R-Wis.), chairman of the Select Committee on the Chinese Communist Party (CCP), has urged American business leaders and policymakers to plan for a potential Chinese invasion of Taiwan and consider the impact of U.S. supply chain dependence on China if such an invasion were to occur. In an opinion piece for the New York Post, Gallagher shared that he and other committee members conducted a war game with Wall Street executives last month, revealing varying views on China and Taiwan within the business community.
"Though a CCP invasion of Taiwan may still seem unfathomable to the financial community, the American people see the growing risks of CCP economic coercion and military aggression," Gallagher said.
Gallagher emphasized the need for imagination and foresight when it comes to the CCP's actions. He stressed the importance of preventing a crisis and protecting America's economic sovereignty through the collaboration of leaders in Washington and Wall Street.
During the war game, committee members and business leaders explored a hypothetical scenario in 2028 where Chinese President Xi Jinping amassed military power near Taiwan and U.S. intelligence indicated an imminent invasion. Gallagher warned that if the U.S. continues on its current path, it will lack economic and financial tools to deter China from proceeding with the invasion. He further cautioned that critical supply chain dependencies on China, such as active pharmaceutical ingredients and rare earth minerals, would undermine the U.S. military deterrent position.
To prevent this scenario from becoming a reality, Gallagher proposed policy changes including the decoupling of key supply chains from China through incentives, regulatory reform, and trade policy. He urged the strengthening of America's economic sovereignty and increased trade with allies, while also restricting investments in China that ultimately benefit the Chinese military.
Gallagher highlighted the divergent perspectives among Wall Street leaders regarding the CCP. While some view the CCP as an adversary, others see it as a friend or business partner. He expressed concern that many executives were disregarding the threat of a Chinese invasion of Taiwan, with one major asset management firm executive claiming the odds of an invasion within the next five years were "zero."
The risks posed by the CCP extend beyond Taiwan, according to Gallagher. He warned that U.S. pensions, retirement savings, and endowments are at risk. Gallagher pointed to a recent deal between the CCP and the U.S. Public Company Accounting Oversight Board, whereby U.S. regulators will be required to accept inadequate Chinese audits of Chinese firms listed on U.S. stock exchanges.
