Patriotism is the last refuge of a scoundrel - Samuel JohnsonIs it just me or is the United States fast becoming a nation of scoundrels? I've long pointed out the hypocrisy of bankrupt America continually posing as the world's free trade champion when, in reality, it has been distinctly protectionist when it comes to its funders wishing to purchase assets that yield better returns than lousy Treasuries. The case of the Chinese firm Huawei is very well-known as it has been discouraged from buying the tangential defence contractor 3Com. Ditto for 3Leaf. It has also been discouraged from bidding on US government contracts with "security" related concerns. Before that you had CNOOC being similarly discouraged from purchasing Unocal over even more dubious grounds. And these examples are just the tip of the iceberg.
So, it continues to boggle me what lengths Americans will go to in order to prevent the Chinese from taking their due. After all, if you continually run up such a monstrous tab, you would expect those footing your bill to have some input in governance matters, right? Well no. In yet another affront to the idea of free trade, American lawmakers have just decided to effectively freeze out Chinese firms with Communist Party affiliations from bidding on US defence contracts. Given the increasing sophistication of PRC hardware, this restriction comes as quite a blow:
The US House of Representatives has broadened the type of Chinese entities barred from receiving Pentagon contracts amid growing unease in Washington over China's expanding military might. Under the amendment, passed by voice vote Wednesday, all entities owned by or affiliated with the Chinese government are prohibited from providing defense articles to the United States and the US secretary of defense must report to Congress 15 days before any planned waiver of the ban.Yes, protectionism it is, red in tooth and claw. There's also this tendency to conflate increasing Chinese technological prowess with goals of militarily dominating other countries--like its prospective customers. As I've pointed out before, this crude realism so favoured by certain Americans doesn't really follow Chinese history since even at the height of their technological advantage over the West, China did not go around the world colonizing and enslaving other people--unlike certain Westerners. But here they go again:
"With China making significant progress in the defense and aerospace industries it is critical that we ensure US national security is protected and that the highly skilled jobs and associated technologies in these industries are not outsourced overseas," Representative Rosa DeLauro said in a statement. The Connecticut Democrat said the measure "will help guard American interests, not only for our national security, but also the innovation, job creation and long-term economic growth in Connecticut and across the country that will allow the United States to remain competitive globally."
Chinese state-controlled firm China Aviation Industry Corp, or AVIC, is said to be weighing a bid for the contract to produce the next US presidential helicopter, prompting concerns in Washington about the possibility that Beijing may obtain US military secrets.
DeLauro's measure, also sponsored by Republican Representative Frank Wolf, was among dozens of proposed amendments to a $690 billion defense budget bill the House passed on Thursday. The amendment allows the defense secretary to waive the procurement restrictions if a good or service is both critical to the Defense Department and not otherwise available.
Companies affected by the amendment include any commercial firm "owned or controlled by, directed by or from, operating with delegated authority from, or affiliated with, the People's Liberation Army or the government of the People's Republic of China or that is owned or controlled by an entity affiliated with the defense industrial base of the People's Republic of China."
"Over the last several years, so-called 'commercial' Chinese companies have sought to compete for DoD contracts. In fact, these Chinese 'companies' are very much arms of Beijing and the People's Liberation Army," said Wolf. "That is why we believe Congress must act quickly to make clear that it will not support any contract that involves a Chinese state-controlled company for the highly sensitive presidential helicopter program or any other defense system."
As mentioned above, an immediate precursor of this move was Chinese firm AVIC considering a bid to replace ageing US presidential helicopters with a more advanced design despite utilizing American (Pratt & Whitney) engines. Worse, AVIC is also being frozen out from bidding on replacing America's ageing jet trainers in a far larger contract. From an earlier article:Could the US president's helicopter be made in China in the future? It's a possibility, as China Aviation Industry Corp (AVIC) is aiming to win US aviation contracts. The Wall Street Journal has reported that AVIC, the maker of China's new J-20 stealth fighter, has teamed up with a tiny California company, US Aerospace Inc (USAE), to try to launch bids for US defense contracts, possibly including one to supply Chinese helicopters to replace the aging Marine One fleet used by the president, people involved in the partnership were quoted as saying. Two AVIC officials previously confirmed that the company signed a strategic cooperation agreement with US Aerospace in September last year,Like a lot of Yankee blather, I think it's utter rubbish to single out Chinese defence contractors thusly. First, it would not be difficult for the US to discern if the Chinese are deliberately providing substandard equipment not living up to specifications. That would be grounds for contract termination, period. Second, why are we to assume that the Chinese would riddle their equipment with spying software and hardware--bugs, cameras, the works? It would again be very easy to spot these devices and, in the process, terminally hurt China's prospects of exporting similar wares to other countries.
The AVIC's AC-313 [helicopter], which demonstrated its first flight last year, is powered by three engines made by Pratt & Whitney and can seat up to 27 passengers and two crew members. The model is capable of replacing the aging Marine One. Insiders expect the contract to be awarded in the next two to three years.
AVIC and US Aerospace have also held talks over the suitability of AVIC's new L-15 trainer jet [see picture above] as a candidate to replace the US Air Force's fleet of Northrop T-38s which have been in use for 50 years and on which American fighter pilots learn skills such as flying at supersonic speeds. That contract is expected to be one of the most lucrative [American] military aviation contracts this decade. The United States is likely to buy about 400 aircraft and other allied countries about 600 more as the jet will become the standard model for training pilots to fly the US F-22 and F-35 stealth fighters.
Truly, patriotism is the last refuge of a scoundrel--and a rather dumb one at that. Free trade means selling off chunks of American equity, not just debt. It also means opening up bidding processes to all comers. But when you instead treat others so shabbily, is it any wonder why paeans to "free trade" fall upon deaf ears?
