Dear Friends and Colleagues,
After working with some of America’s leading companies since founding Atlas Organization in 2017, I have come to realize that the answer to the China challenge rests in the power of the US corporation. The sheer competitive power of the American “multinational corporation” makes it perhaps the single most effective battle unit for competition with China. As I have written before here and here, America and its companies need each other for both success and survival.
The US-China competition is, at its foundation, a battle for the world economy. China’s grand strategy, as I explain in China’s Vision of Victory, is to achieve long-term dominance of the global economy through mastery of global trade, strategic industries, and the technologies that will define the 21st century. By various estimates, Covid-19 has increased the pace of China’s relative ascendancy, creating an even more urgent problem. The grand strategy of the Chinese Communist Party does not end with economic power – the Communist Party aims also to convert economic power into military capability, and in doing so, to form a 21st century economic empire backed by overwhelming military force.
How does one win such a competition? The United States must harness the power of its major corporations.
In my view, the United States government will struggle to overcome China’s global grand strategy until it recognizes that America’s major companies are vital allies in this struggle. And American companies must understand that their future in the China market will be far less promising than they expect, given the goals of the Chinese Communist Party. America’s companies – especially those in strategic industries – will have to choose sides in the contest between America and China.
The US Fortune 500 – the largest 500 companies in America by revenue – is a collection of companies covering every major industry, every emerging technology, and every geographical region of the Earth. Measured in terms of revenue, the Fortune 500 represents two-thirds of the US economy. In short, this is the American economic fleet. And its executives and leaders are, in essence, the officer corps of the US economy. For all of their success to date, many of these companies have yet to realize their full potential. America’s companies are world-leading centers of research and development and they have perfected complex operations in many of the world’s most challenging regions. But they will ultimately have to confront state-backed Chinese corporate competitors which aim to best our companies in every corner of the globe.
America’s companies will have to do what they do best: innovate, adapt, gain global market share, and reinforce the foundations of American economic power and potential. However, they will have to do this in the midst of a new, unprecedented contest: a policy fight between two economic superpowers, a contest that includes economic sanctions, diplomatic deterioration, and potential military confrontation. And they will have to do this in the context of new challenges from China’s own state-owned and state-backed corporations. The fundamental units of China’s own strategy for economic dominance, Chinese companies are beneficiaries of government-sponsored, grand-scale industrial theft and espionage and massive state financing in a quest to dominate the strategic industries and emerging technologies of the future.
America’s companies will have to reduce dependencies on the China market while recognizing that free world markets – those of America, Europe, and Asian democracies including India, Japan, and Indonesia, will ultimately be larger and more dynamic than the Chinese market. Our companies will have to make a fundamental decision in the years to come: they must understand that China is a false promise for American business – the end goal of the Chinese Communist Party is to replace American companies with home-grown competitors which can then go abroad to win in global markets, beginning with China’s “Belt and Road.” The future of America and our Allies will require our companies to understand the nature of this contest and to choose sides.
US companies cannot escape the US-China global contest nor can they ignore their Communist Party backed Chinese corporate competitors. Our companies must prepare to fight an emerging global competition, as the last best hope of America and the free world.
Sincerely,
Jonathan Ward Founder, Atlas Organization Author, China’s Vision of Victory