Article on "Why the China Doves Are Wrong" - Wall Street Journal

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https://www.wsj.com/opinion/jensen-huan ... s=3&page=1


Why the China Doves Are Wrong
American business leaders cozying up to Beijing refuse to see that the Communist Party wants us to fail.

Article by Shyam Sankar - Chief Technology Officer of Palantir Technologies and author of “Mobilize: How to Reboot the American Industrial Base and Stop WWIII,” forthcoming in March.

Oct. 17, 2025


China’s Commerce Ministry last week announced far-reaching export controls on lithium batteries, products that use Chinese rare-earth materials, and related technologies. The export controls, which President Trump characterized as “a rather sinister and hostile move,” are the latest reminder that the U.S. is funding its own destruction through economic dependence on a communist adversary.

Many American business elites persist in denying this reality. Nvidia CEO Jensen Huang said in a recent interview that while some Americans wear the label “China hawk” as a badge of honor, it is really “a badge of shame.” The future, Mr. Huang says, “doesn’t have to be all us or them. It could be us and them.”

A nice sentiment, but Chinese Communist Party leaders don’t believe it. They often speak soothingly of their country’s “peaceful rise.” But the party’s history and actions tell a different story. Influenced by the Chinese Civil War and the much-earlier Warring States period, the party believes that stability comes from control. This belief explains its ruthless efforts to consolidate power. The Communist Party believes China and the U.S. are locked in a “great struggle” for mastery. In this worldview, it isn’t enough for China to rise—the U.S. must fall.

China is already waging war against us in many ways. These include withholding rare-earth minerals, attempting to smuggle crop diseases into the U.S. to harm our food supply, pre-positioning electronic devices to cripple American telecommunications and emergency-response systems, and subsidizing the production and export of chemicals used to manufacture fentanyl. Beijing’s goal is to weaken us while mobilizing for a future showdown we would lose. China’s military aims aren’t secret: The People’s Liberation Army does target practice on mock-ups of U.S. aircraft carriers.

Beijing’s economic strategy complements this goal. China spends roughly 5% of gross domestic product on industrial subsidies. This is conquest economics, meant to drive competitors out of business and make them dependent on China. Beijing’s standard playbook is to accept Western businesses until it has developed a credible challenger, then to exclude Western companies from the Chinese market and flood overseas markets with Chinese goods. Business leaders who play along with Beijing call to mind author Upton Sinclair’s observation that “it is difficult to get a man to understand something, when his salary depends upon his not understanding it.”

The U.S. is partially to blame for turning China into a juggernaut. American companies have invested vast sums over decades to build China’s industrial base. Financial journalist Patrick McGee estimates that Apple alone invested $275 billion over five years in China—an amount, in real terms, twice that of the Marshall Plan.

Even more galling: Chinese military contractors securitize weapons contracts in global capital markets, meaning that American pension funds and 401(k) investors have financed missiles aimed at U.S. ships.

The result of all this is that Beijing has grown into a champion of heavy industry and a formidable opponent in technology. China accounts for roughly 30% of global manufacturing by value, while America’s share has slid to around half of that. The Chinese shipbuilding industry is by far the world’s largest, while America’s has shrunk to irrelevancy.

This dramatic reversal of fortunes could have serious consequences. Mass manufacturing backstopped American primacy in the 20th century; the U.S. outbuilt and outinnovated its totalitarian foes. Now our enemy has the upper hand.

America must mobilize to meet this crisis, rebuild our industrial base and win the new cold war against communist China. Total decoupling isn’t necessary—the U.S. and Soviet Union had limited trade during the Cold War. Sovereignty, however, is necessary. We need to create alternatives so that our security and prosperity aren’t at the mercy of officials in Beijing. Some businesses and political leaders already have an appetite for change: JPMorgan Chase just committed $10 billion for investments in critical national-security projects. Australia, the Netherlands and other allies are taking steps to regain their sovereignty from the Communist Party’s predation. The U.S. must seize this moment of opportunity.

As it did with Operation Warp Speed during the pandemic, the federal government could coordinate with industry and allies to accelerate the production of critical goods that China has virtually monopolized, including rare-earth materials and pharmaceuticals. The U.S. government could remove regulatory roadblocks that slow energy production and industrial projects. It could underwrite the demand side, acting as a guaranteed buyer of critical products at sustainable prices, so that the private sector can invest and innovate without fear of being crushed by swings in global commodity prices or Chinese mercantilism. And the government could keep or even raise tariffs on Chinese goods, both to fund rebuilding at home and to offset the artificial price advantage of China’s heavily subsidized goods.

Washington could also restrict U.S. investment in China, including by limiting American companies from building factories on Chinese soil. As they did during the Cold War, U.S. companies will have to pick sides. They should build at home and in our closest allies’ countries.

None of this will be easy or cost-free. Beijing has leverage over America, from supplies of critical minerals and pharmaceuticals to its stockpile of U.S. Treasury bonds. But using that leverage is also costly for China, threatening massive economic losses and public discontent, which Beijing’s control-obsessed officials fear. Ultimately, the Chinese Communist Party has more to gain from continued economic integration with the U.S. than we do. We should prepare for a long and painful road, while recognizing that the problem will get worse if we delay, rewarding China with more investment and trade to use against us.

The first step to ending our dependence on China is admitting we have a problem. We can continue as useful idiots, decrying “China hawks” who point out that we’re funding our own demise. Or we can wake up to the reality that we’re already in an economic war in which every purchase and investment will help determine which system survives.