China continues to infiltrate the U.S. economy in negative ways, whether through currency manipulation or direct manipulation of the our markets with cheap products. But their latest move may allow the Chinese Communist Party (CCP) direct access into American companies. A new law that took effect this summer in China requires any multinational corporation with at least 300 China-based employees to have at least one "employee director" on the board to represent the workers. This employee director can then report back to the CCP for spying and influence on America's largest corporations.
Critics are issuing a stark warning to U.S. companies about this new law and its implications. Congressman John Moolenaar (R-MI), who chairs the House Select Committee on the CCP, recently told Fox Business "there's no such thing as a private company" in China, adding the CCP will "settle for nothing less than complete control at your expense."
Jonathan D.T. Ward, author and founder of the Atlas Organization, has been warning American companies about China even before this new law. "I think the party is ending for American corporates in China," he told Fox Business. "They've been there for a long time, and they've built supply chains there that I think are fundamentally at risk because of geopolitics, and also because the profitability of these corporations is relatively limited (there)."
With China's economy struggling and American products no longer in demand there like they once were, Ward believes there is little upside for U.S. companies to stay there. "What I've told my corporate clients over the years is when you're in China, you're not really selling your product, you're selling your intellectual property," he continues. "They steal everything...every chief security officer I know in the Fortune 500 has told me this repeatedly."
"Boards and CEOs need to understand you want to be looking for the exit now, so that you don't lose a limb as the U.S.-China decoupling gets underway."
Photo: Visual China Group