Congressman Lucas Discusses Ways To Counter China Economically

Rep. Lucas on China

Rep. Frank Lucas (R-OK-3) sat down with the Hudson Institute on Monday for a one hour event on how to counter China economically and the biggest takeaway was the obvious: it won’t be easy, and everyone has a different opinion on it.

In the opening question, Lucas tells Hudson Senior Fellow Thomas Duesterberg that academic institutions and their research departments have a tough balancing act when it comes to partnering with the Chinese. 

“I think we have been getting their (American universities) attention on this. If you are the leader of one of these institutions you have a balancing act of interested parties you have to tend with – your grant providers, your government, your academics working on the research. There has been too many instances where tech breakthroughs here have led to dramatic economic gains in other places around the world,” he said. “That is not how it is going to continue to work if we in the Science Committee have any say over this,” he said. Lucas is Chairman of that Committee.

Although Lucas was mum on what he meant by “other places”, and Duesterberg did not press him on it, it seemed clear he was talking about U.S.-China academics working on advanced technologies and materials that eventually get copied in China. This was theme of the event, afterall. Lucas seemed to stand against that relationship.  In 2022, he was one of the Republicans who took the blame for removing guardrails for academic research institutions receiving funding from the $52.7 billion CHIPS and Sciences Act. Rumor has it that it may have been Senate Majority leader Chuck Schumer who made sure there were no restrictions on research institutions partnering with China.

Lucas has been weak on China in the past. Usually the excuse is simple: it disrupts the free flow of private commerce. In 2017, he signed a letter to USTR Robert Lighthizer opposing the solar safeguard tariffs.  

When asked whether the U.S. should jumpstart the Trans Pacific Partnership, killed by Trump in year one of his presidency, Lucas said trade talks were needed to “keep the U.S. in the game.” He said if the U.S. is not going to wheel and deal on the trade front, China would fill the void. (Though this may be to the detriment of those who sign such agreements, a comment Lucas did not make, and an outcome that is rarely considered by those who think the U.S. should do giant trade deals again just because China is. Australia says there is ‘no chance’ China joins their version of the TPP, known by the acronym CPTPP, any time soon.)

 “I am from an export region, so of course I want to sell my surpluses to world markets,” Congressman Lucas told the Hudson Institute on Monday. He was speaking about Oklahoma fossil fuels and agricultural commodities. “I believe international trade is in the best interest of everyone, but the devil is in the details. It’s not about it being free trade, it’s about it being fair trade. We should be negotiating with everyone who shares our perspectives on the world…we should be negotiating trade agreements, but those agreements have to be equitable.”

Duesterberg brought up China’s nefarious habit of overproduction.

“China overproduced and exported its way to prosperity,” Lucas said. “That, plus putting limits on foreign access to its home market worked to their advantage.” 

Here, he mentioned things he hears from his ag constituents. 

“China overproduces cotton. They are a major buyer of our cotton, but they overproduce at home and store a lot of it in warehouses and that controls the price. They do a really good job at that,” he said.

Duesterberg asked if the U.S. textile industry should push back against China overproduction of cotton. Much of China’s growing areas are in Xinjiang, the far West province that is off limits to U.S. buyers of cotton goods due to Withhold Release Orders by Customs and Border Protection.  The U.S. alleges to have evidence that China’s biggest cotton companies use forced labor and prison labor. The Uyghur Forced Labor Prevention law also bans these companies from doing business with U.S. textile importers. The textile industry today, however, has another problem and that is the de minimis provision which allows for duty free imports on goods priced under $800. Textile producers here may very well be competing with forced labor, and imports made by companies banned from doing business with the U.S.  A lot of it comes into the country duty free.

If you want access to market economies like ours, there are certain standards you have to meet.

Congressman Lucas Doubts New Capital Market Controls on China

Duesterberg asked about Congress discussing bans to China’s access to American investors. Both President Trump and President Biden did this with dozens of military industrial complex players whose Shanghai and Shenzhen listed stocks were owned by many Wall Street investment firms, especially the big ones like BlackRock and Vanguard. 

While there are a few pieces of legislation targeting investment, Duesterberg only mentioned restrictions to venture capital and private equity money in China’s advanced technology startups. 

Lucas doubted any action on that for the moment.

He also said he had “certain hesitations on that issue. This goes back to the founding of the country on how to raise revenues. Capital is a product. When you are moving it out of the country, you are exporting capital. I believe we should use the international institutions to encourage modification of behavior. But also, I think that sometimes if you are foolish enough to invest your money in a risky endeavor, then you should be able to do it and pay the price,” he said. This may be the silent majority view on restricting China investments.

“This is a hot topic,” Lucas said. “I doubt you will see legislation with a divided congress in an election year.”


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