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Hi, China Watchers. Today we look at Beijing's pursuit of fired U.S. government scientists, examine China's pushback against the latest Trump tariffs and profile a book on how U.S. small businesses navigate trade with China.
Let's get to it. — Phelim.
'Join us in Shenzhen' – Chinese recruiters lure DOGE-fired scientists
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A recruiter for Chinese tech firms based in the southern coastal city of Shenzhen sees opportunity in the rising numbers of U.S. scientists left jobless by Trump administration leaves and layoffs.
An ad that began circulating on multiple social media platforms last month welcomes “global talents to pursue career development and entrepreneurship in #Shenzhen, #China.” The ad pitches the city — located across the border from Hong Kong— as "one of China's most concentrated cities for technological development."
The timing of that pitch — coinciding with the layoffs of more than 4,000 of scientists from research facilities including the Centers for Disease Control, the National Institutes of Health, the National Oceanic and Atmospheric Administration and the National Institute of Standards and Technology — has sparked concern on Capitol Hill.
"My staff have come across these ads on social media, and as far as we are aware, these are legitimate offers and are extremely concerning," said Rep. Zoe Lofgren (D-Calif.), ranking member of the House Science, Space and Technology Committee.
Lofgren argues such recruiting efforts risk a "brain drain" from the U.S. that will benefit a strategic competitor. She co-wrote a letter to Commerce Secretary Howard Lutnick last month with two other Democrats warning that the mass layoffs at NIST "jeopardize our ability to compete with the People's Republic of China."
Some scientists who held senior positions in previous administrations say that fear is justified.
"Economic competitors would be more than happy to hire the talent that we have so carefully cultivated here," said Nate Hultman, former senior adviser to President Joe Biden's climate envoy John Kerry. Russia is also looking to employ laid off U.S. researchers, CNN reported last week, citing U.S. intelligence sources.
The U.S. ability to compete in such an environment is far from guaranteed, said John Holdren, who served as Barack Obama's director of the Office of Science and Technology Policy.
"When we diminish our capabilities in science and technology while China is building theirs, our standing in the world is diminished by that, and our ability to compete in those domains where we compete with China is diminished," said Holdren, who's now a professor of environmental policy at Harvard University.
Neither the Chinese nor the Russian embassies responded to requests for comment.
The Max Planck Institutes, which house Germany's top research facilities in areas including biomedicine, astrophysics and environmental science, views those laid-off U.S. scientists as "a new talent pool," the Institutes' president Patrick Cramer told Der Spiegel newspaper last month.
Beijing has made no secret of its intent to extract as much scientific research expertise from the U.S. as possible. The FBI has accused the Chinese government of using less scrupulous methods to advance its scientific research efforts through so-called "talent programs." Those initiatives have legitimate research sides but "usually involve undisclosed and illegal transfers of information, technology, or intellectual property that are one-way and detrimental to U.S. institutions," the FBI warns on its website.
Lofgren wants GOP lawmakers to protest President Donald Trump's cutting of the U.S. federal science workforce before it inflicts irreversible damage on the country's competitiveness. "When we lose to China, that will be 100 percent the fault of Donald Trump, Elon Musk, and every MAGA Republican in Congress that didn't put a stop to this insanity," Lofgren said.
So far, GOP lawmakers have been relatively quiet on the issue. Neither Ted Cruz (R-Texas), chair of the Senate Commerce, Science and Transportation Committee nor Brian Babin (R-Texas), chair of the House Science, Space and Technology Committee responded to requests for comment.
BEIJING CRIES VICTIM IN ANTI-TARIFF CAMPAIGN
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Beijing has launched a PR campaign to push back against the Trump administration's imposition Tuesday of an additional 10 percent tariff on Chinese imports.
The goal is to debunk Trump's argument that those tariffs are an essential incentive to prod Beijing to do more to cut China's exports of precursor chemicals that Mexican cartels process into fentanyl.
Within hours of announcing retaliatory levies of 10 percent and 15 percent on a selection of U.S. agricultural exports (bad news for pork and beef exporters in Iowa and Nebraska!), Beijing published a 6,600 word “White Paper” titled "Controlling Fentanyl-Related Substances – China's Contribution."
China's Foreign Ministry said the goal of the document is to demonstrate that the U.S. "is spreading all kinds of false information on the fentanyl issue, smearing and scapegoating China, and hiking tariffs on Chinese imports over fentanyl."
The Chinese government's report includes seven chapters with titles ranging from "Striking Hard Against Fentanyl-Related Crimes in Accordance with the Law" to "Promoting Global Governance of Fentanyl-Related Substances."
Trump has argued that Beijing "simply is unwilling" to take decisive action to stem the flow of precursor chemicals to Mexico. While China is incensed about the U.S. tariffs, it also appears to be leaving the door open for negotiations to reduce trade frictions (as your host reported for U.S. Pros!)
While China has taken some actions to stem the export of precursor chemicals (such as shutting down websites that market the compounds and cracking down on money laundering operations), there is more Beijing can do, according to Vanda Felbab-Brown, senior fellow at the Brookings Institution and an expert on China's role in the U.S. fentanyl crisis.
"China could undertake aggressive inspections of factories and not just pull down suspicious websites, but arrest the individuals behind them —those are the kind of big actions that the Trump administration presumably wants to see," Felbab-Brown said.
TRANSLATING WASHINGTON
JUSTICE DEPARTMENT TARGETS CHINESE HACKERS: The Department of Justice announced a series of charges and sanctions Wednesday against a dozen Chinese nationals — including two tied to the Chinese government — for hacking critical U.S. government systems.
These steps were taken on a day when two House committees held hearings about ongoing Chinese intrusions into U.S. networks — a major concern in the wake of several massive Chinese-linked breaches into U.S. critical infrastructure, including the recent Salt Typhoon infiltration into U.S. telecommunication networks and a separate hack of the Treasury Department. POLITICO's Maggie Miller has the full story here (for U.S. Pros!).
Separately, the State Department's Bureau of International Narcotics and Law Enforcement Affairs announced bounties for up to $2 million Wednesday for tips leading to the arrest or conviction of Chinese "malicious cyber actors Yin KeCheng and Zhou Shuai." Those accusations sparked anger at the Chinese embassy. "We firmly oppose the abuse of illegal unilateral sanctions and 'long-arm jurisdiction' against Chinese entities and individuals," said embassy spokesperson Liu Pengyu.
— BLACKROCK BUYS PANAMA CANAL PORTS: The U.S. investment firm BlackRock Inc. announced Tuesday that it had sealed a deal to purchase a controlling stake in a Hong Kong firm that operates port facilities in the Panama Canal. BlackRock paid $23 billion to CK Hutchinson Holding for control of those facilities and 43 others in 23 countries, the firm said in a statement. Secretary of State Marco Rubio said last month that the Hong Kong firm's control of those facilities was an "unacceptable" security risk. The sale was "wholly unrelated to recent political news reports concerning the Panama Ports," the statement said.
— COLBY URGES HIGHER TAIWAN DEFENSE SPENDING: Trump's nominee for Under Secretary of Defense for Policy, Elbridge Colby, took Taiwan to task Tuesday for what he called inadequate defense spending. Colby said during his Senate confirmation hearing that he was "profoundly disturbed" by Taiwan's failure to increase its defense budget to meet a growing threat from Beijing. Taiwan's legislature — controlled by the opposition KMT party — voted last month to cut defense spending. Taiwan currently spends around three percent of annual gross domestic product on defense. "I agree with President Trump that they should spend more like 10 percent or at least something in that ballpark," Colby said. Taiwan's diplomatic outpost in Washington declined to comment on Colby's spending target but said the island "will continue to strengthen its self-defense capabilities" in a statement Wednesday.
TRANSLATING EUROPE
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Gabrielius Landsbergis stepped down after four years as Lithuania's foreign minister in November after the defeat of his Homeland Union party in national elections. Landsbergis made support for Taiwan in defying China's efforts to diplomatically isolate the island a cornerstone issue of his tenure as Lithuania's top diplomat. He spoke with China Watcher about the merits of that diplomacy and Taiwan's challenges under the Trump administration.
Responses have been edited for length and clarity.
The Trump administration's move to freeze military support for Ukraine has raised concerns in Taiwan that Trump may someday reverse security guarantees for the island. Are those fears justified?
Taiwan should be worried. There’s clearly a lesson here when it comes to Ukraine. There's very little doubt that China feels emboldened, and clearly is recalculating its moves.
Secretary of State [Marco] Rubio admitted that the administration is considering a "reverse Kissinger" moment, where the U.S. would try to split Russia and China. But the partnership between the two countries is really going great. It's not like in the '70s between the Soviet Union and China, when Kissinger saw a moment and opportunity, and managed to drive the wedge between the two. Now, there’s nothing like that.
But China is getting more interested in driving a wedge between Europe and the U.S. This creates a lot of anxiety for Taiwan, because one of the reasons why China would like to split the EU and U.S. is to have the EU silent if it changes the status quo in the Taiwan Strait.
How confident are you that Lithuania's current government will maintain your policy of close ties to Taiwan?
Currently I don’t see any change in policy. And my hope is that they will continue, because there is a lot of value in our current position.
We’ve gained a lot of voices supporting Taiwan and the democracies of the Indo-Pacific region. And if we continue to do that, our credibility will only grow. If we change our position we wouldn’t get more from China. And we would risk economic and political dependence on the non-democratic PRC, and lose credibility in the eyes of the friends we’ve gained.
What about the economic costs of Beijing's economic sanctions against Lithuania in reprisal for its closer ties to Taiwan?
China tried to inflict pain on Lithuania by stopping all trade. But our economic exposure to China hadn’t reached the levels that would really impact the economy if stopped. And we’ve diversified our trade throughout the Indo-Pacific region in the last three years with countries including Japan, Vietnam, Philippines, Malaysia and Indonesia. Our trade has also been growing with the United States, because when we were hit [by China sanctions], certain limitations on our exports were removed.
So in losing one trade partner we gained a bunch. So it’s way more difficult now to pressure us, in case China wants to return to its tactics of the past.
HOT FROM THE CHINA WATCHERSPHERE
Donald Trump and Xi Jinping.| Jim Watson and Peter Klaunzer/AFP via Getty Images |
— SURVEY: TRUMP MORE DANGEROUS THAN XI: Australians view Trump as a worse threat to world peace than either Chinese leader Xi Jinping or Russian President Vladimir Putin, according to survey results released Tuesday. The Canberra-based think tank The Australian Institute asked more than 2000 Australians which of those three leaders constitute the greatest danger to world peace. "31 percent rated Trump the greatest threat" while Xi and Putin were each considered the worst threat by 27 percent of respondents, the results said. A total of 49 percent of those polled "said they felt less secure since the election of President Trump."
— NEW YORK RETURNS ARTIFACTS TO BEIJING: The Manhattan District Attorney’s Office has turned over to China's New York Consulate a collection of 41 Chinese cultural relics that had been illegally exported to the U.S., Chinese state media reported Tuesday.
The return of the relics — which included bronzes, porcelain and jade artifacts — was the latest example of efforts by the Antiquities Trafficking Unit at the Manhattan District Attorney’s Office, the report said. U.S.-China cooperation in identifying and seizing illegally exported cultural relics had resulted in the return to China of 594 such items since 2009, the report added.
HEADLINES
Semafor: China won't 'replace' USAID in Africa
fDi Intelligence: Trump's FDI agenda: "His prism suggests he is living in 1825"
Taipei Times: Taiwan's erased words and silenced tongues
The U.S. vs. China Face Off: Hollywood and China
ONE BOOK, THREE QUESTIONS
Smart Rabbits|K Book Publishing |
Responses have been edited for length and clarity.
The Book: Smart Rabbits: American small businesspeople, trade wars and the future of U.S.-China relations.
The Author: Douglas Barry is an international trade consultant and a former vice president for communications and publications at the U.S.-China Business Council.
Responses have been edited for length and clarity.
You call those owners of small and medium-sized businesses doing good business with China "smart rabbits." Explain.
It comes from a phrase in Mandarin. A smart rabbit is a clever individual who, like rabbits in real life, keeps three homes. If things get really bad and they can no longer stay in the first house, then they go to the second. And if things get bad in the second, they go to the third. So they’re always thinking about the future. They realize that life is difficult to plan, and they’re ready for any contingencies with the understanding that for them, things will probably go wrong at some point, and they need to have a Plan B or a Plan C.
You profile dozens of U.S. businesspeople ranging from an importer of human hair for wig production and a guy who purchases custom containers for beer brewing, to a pig semen salesman. What do they have in common?
Pragmatism. Some of them are Democrats, some of them are Republicans. They certainly are completely aware of things that many people in the United States, including in the White House, have problems when it comes to China. But they don’t see the Chinese as the enemy. And they see they can carve out a niche in China for themselves and continue to do business where it makes practical sense.
They also see themselves as bridge builders. They have close relationships, many of which go back decades, with real people in China. They all know what’s going on, but they like each other and they want to continue to have this relationship [with those people].
How fragile are the business models of these "smart rabbits" in this era of U.S.-China tariff wars?
In some cases, this extra 10 percent tariff will push them over the edge. They won’t be able to compete and they won’t be able to stay in business. They will run out of houses to occupy. The three houses will be gone, and so will they.
Thanks to: Heidi Vogt, Maggie Miller, and digital producers Emma Cordover and Dean Southwell.
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