- The Washington Times - Tuesday, August 9, 2005

Virginia Republican Rep. Frank Wolf sent a strongly worded letter to Akin Gump Strauss Hauer and Feld, questioning the firm “being on the payroll of the Chinese government” and lobbying on behalf of state-owned China National Offshore Oil Corp. (CNOOC).

Unocal’s directors now favor Chevron’s offer. CNOOC has thus withdrawn its bid, but is reportedly looking to acquire other American oil companies. Mr. Wolf, who chairs the powerful Science-State-Justice-Commerce Appropriations subcommittee, cited a Pentagon report warning that China’s need for oil, gas and other energy resources “appears to be driving the country toward becoming an expansionist power.” Mr. Wolf asked in his letter, “Is there no bright line to separate who the lobbyists in Washington will or will not represent?” Beijing thinks it knows the answer, and it’s not the one Mr. Wolf wants to hear.

The public would be shocked at the work done in Washington by American firms on behalf of overseas interests trying to influence U.S. policy. James Sasser, ambassador to Beijing during the Clinton administration, once said, “The Chinese really don’t do any lobbying. The heavy lifting is done by the American business community.” This may be changing. In the July 23 National Journal, Bara Vaida reports that Beijing is now hiring a number of “politically connected lobbying and public relations firms to help press its message.” Still, its most effective support comes from its business partners.

An example appeared the day after Mr. Wolf sent his letter. The House considered a bill offered by International Relations Committee chairman Rep. Henry Hyde to levy sanctions against European companies that sell arms to China. The bill won a majority, 215-203, but as the Associated Press reported, “Earlier during the roll call, more than 330 members had registered yes votes, but several lawmakers said people started changing votes after learning of opposition from the business community.” Opposed was the Electronic Industries Association, whose members are heavily engaged in China. Its president, former Democratic Rep. David McCurdy, called the bill “reactionary”and argued “we should nurture better ties with China.”

This is not the first time in history that bankers and business interests have become enthralled with a regime whose ambitions pose a threat to their own country. In the third volume of his history of the financial City of London, David Kynaston details the optimistic views that bankers and the business press held towards Europe’s rising fascist rulers during the interwar period. When Hitler marched into the Rhineland in 1936, the Financial Times declared his action “may well emerge in the end a clearer prospect of European peace than has existed for a generation past.” When the League of Nations failed to act against Mussolini’s aggression with sanctions “and accompanying notions of collective security had lost almost all credibility — few in the City lamented the fact,” noted Mr. Kynaston.

After the Munich crisis The Financial Times praised Chamberlain’s “efforts to preserve the peace as having assumed heroic proportions.” And Sir Montagu Norman, governor of the Bank of England mentioned “the helpful attitude of your Fuhrer” in a letter to Hjalmar Schacht, president of the Reichsbank. Bankers were even known to lecture newspaper owners against running columnists hostile to the policy of appeasement.

David Wells, a senior correspondent for The Financial Times, has continued his paper’s tradition by defending American bankers who see China as a client rather than a geopolitical rival. In like form, a Wall Street Journal editorial on Beijing’s new exchange rate policy praised the undervaluation of the yuan because it “gave foreign investors the confidence to build factories in China fueling the country’s export-led boom.”

In an earlier editorial supporting CNOOC’s bid for Unocal, the Wall Street Journal even used the tired line that “free trade also helps build a Chinese middle class that will eventually demand more political freedom.” Winston Churchill knew this was a false hope when he faced a middle-class, capitalist Germany under Hitler’s control. He warned of Germany’s growing economic capabilities “with her factories equipped to the very latest point of science by British and American money.”

Beijing’s leaders focus on who is in charge. They may have abandoned communism, but not Marxist political analysis. The U.S.-style state “is essentially a capitalist machine, the state of the capitalists” according to Friedrich Engels. Combined with Karl Marx’s observation that “big industry created a class… with which nationality is already dead” and Beijing believes it knows how to control America by manipulating a detached, self-absorbed elite. Thus when Chinese Premier Wen Jiabao visited the U.S. in 2003, he went to the New York Stock Exchange, the American Bankers Association and the Chamber of Commerce before he went to the White House. Marxist theory has told them where the real power resides in America, and it has nothing to do with democracy.

Will U.S. policy be determined on the grounds of national interests or by special interests with foreign leanings? Are the Marxists right about the nature of American politics, that money rules and nothing else matters? Congress and the White House need to make clear who they truly represent.

William Hawkins is senior fellow for national security studies at the U.S. Business and Industry Council in Washington, D.C.

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