The House Panel Giving Washington A Reality-Check On China

Authored by Terri Wu and Eva Fu via The Epoch Times (emphasis ours),

Through the back door of a New York City building, some of the most potent American business leaders were smuggled in for a tabletop exercise simulating a Chinese invasion of Taiwan.

The secrecy made it look like they were “in a witness protection program because they were so concerned about retaliation from the CCP [Chinese Communist Party],” said Rep. Mike Gallagher (R-Wis.), who hosted the exercise in September 2023.

“If this retaliation is how the CCP will treat business partners in peacetime, think about how it would act in war—and the ramifications to our economy, especially our critical supply chains, including pharmaceuticals and semiconductors, in a Taiwan invasion scenario,” Mr. Gallagher told The Epoch Times.

The idea of the tabletop simulation stemmed from his exchanges with financial executives.

One told him there is “zero” chance that the CCP will invade Taiwan. Another said the United States will never sanction China, even if it invaded the self-governed island.

“It’s clear that, in many cases, Washington and Wall Street are living in two different worlds. One is the real world, the other a fantasy land,” said Mr. Gallagher.

The New York City simulation didn’t focus on military conflicts but on areas of economic warfare such as shipping routes, supply chains, and money transfers.

“We saw that if China were to invade Taiwan, the losses across our financial system would dwarf the write-downs taken at the outset of the Russia–Ukraine war. The entire U.S. economy and banking system would be imperiled,” Mr. Gallagher said.

“Equity markets would drop precipitously as global shipping lanes closed, shipping insurance premiums skyrocketed, supply chains broke down, and the specter of global conflict grew. Americans would see their pensions shrink and their bank accounts hemorrhage cash.”

The wargame participants—financial, pharmaceutical, and mining executives—walked away from the simulation with a different understanding: The United States must immediately prepare an economic contingency plan to reduce critical supply chain dependence on China and curb Beijing’s access to U.S. funds to support its aggressions.

In addition, the United States can’t afford to rely on economic means alone to deter China from taking Taiwan by force; credible military deterrence is a must-have.

“I think the executives who took part left aware of the danger, but many remain afraid to speak out,” Mr. Gallagher said.

Restricting U.S. outbound investment to China is a top priority of the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party, also known as the Select Committee on the CCP.

When such investments help Chinese companies develop technology that the regime then uses to advance its military capabilities, the panel views it as the United States funding its own destruction.

With bipartisan support, the Senate has passed language addressing this issue, initially as an amendment to the 2024 annual defense act. A similar bill passed the House Foreign Affairs Committee.

House Speaker Mike Johnson (R-La.) left the language out of the yearly defense act that was passed in December 2023; an updated version for a House floor vote is expected this year.

In addition to addressing China-related economic security issues, several of the select committee’s Taiwan policy recommendations were included in the 2024 annual defense act, including a new program of military cybersecurity cooperation with Taiwan and increased congressional oversight of weapons sales to the island to reduce backlog.

Bipartisan Product

Since its launch last January, the Select Committee on the CCP has demonstrated a rare bipartisan culture on the Hill.

Chairman Gallagher and the committee’s ranking member, Rep. Raja Krishnamoorthi (D-Ill.), have spoken in lockstep during hearings and often held press conferences together.

Rep. Dusty Johnson (R-S.D.), a committee member, said the two leaders have been accommodating to different views.

The group’s economic policy recommendations released in December had the endorsement of all but one member.

“Our product is a consensus work product,” Mr. Johnson told The Epoch Times.

Rep. Ashley Hinson (R-Iowa), another select committee member, also credits Mr. Gallagher and Mr. Krishnamoorthi for leading “the most substantive, bipartisan work in Congress.”

In an email to The Epoch Times, she highlighted a roundtable event the panel held in her home state of Iowa regarding the CCP’s agricultural theft as an example of how the panel used “firsthand knowledge” and “real experiences” to “craft the policy blueprint to ensure the U.S. is competing with China rather than enabling their malign and destructive behavior.”

The committee’s work hasn’t gone unnoticed by its subject of focus: the CCP.

Chinese propaganda articles label the committee an “anti-China pioneer” and often report its action as another “restless move.”

A September 2023 paper published by China’s Tsinghua University’s Center for International Security and Strategy warned that the committee might transform into a “center coordinating China policies for all parts of the U.S. Congress.”

The article warned that the panel could raise the American public’s awareness of the China threat, which it labeled “misinformation.”

To some committee staff members, criticism from the CCP is an endorsement of their work. A sign in their office says: “Have we worked harder than our CCP counterparts today?”

A Deal Contingent on Taiwan

Since the inception of the Select Committee on the CCP, Mr. Gallagher has repeatedly warned that the current timeframe is the “window of maximum danger” related to Taiwan.

However, some analysts don’t view military conflict over Taiwan as inevitable.

If regime leader Xi Jinping sees hope in a “peaceful unification” of Taiwan, he may be incentivized to hold off an invasion, said Bonnie Glaser, a managing director for the German Marshall Fund think tank.

Shi Shan, a China expert with decades of journalist experience both in the mainland and in Hong Kong, said that view was “correct in theory.” He uses an alias to avoid reprisals from the CCP.

Mr. Shi has learned from CCP insiders that Xi has to deliver Taiwan to his Party within a certain timeframe in exchange for his lifetime CCP leadership—a prize, that if achieved, would elevate him to the level of Mao Zedong, who established communist China in 1949 and drove his political enemies to Taiwan.

Xi began his third term last year after removing the two-term or 10-year limit in China’s Constitution. The constitutional amendment was passed in March 2018. At the 19th Party Congress a year ago, Xi persuaded CCP senior leaders to extend his reign by promising them Taiwan, Mr. Shi said.

In his 2024 New Year address, the 70-year-old communist leader reiterated that the unification of China is a “historical inevitability.”

Mr. Gallagher and Rep. Michael McCaul (R-Texas), the House Foreign Affairs Committee chairman, said that when authoritarian dictators warn the world about their plans, we should heed them.

Mr. Shi told The Epoch Times more about Xi’s inflexible internal situation.

“Xi is preparing China for a war with Taiwan. Because of that, the Party needed a leader beyond the previous term limit. If he gives up on the goal, the disagreeing forces within the Party will hold him accountable because he has made himself an exception and made the economy suffer. He has so much on the line that he cannot change his course.”

Xi has been working toward the goal for a while.

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