Gaffney testifies before U.S.-China board: Chinese penetration of the global capital markets: Are American investors unwittingly buying the rope to be used for their ‘hanging’?

In testimony today before the U.S.-China Economic and Security Review Commission (USCC), Center for Security President Frank J. Gaffney, Jr., explained how Communist China’s access to, and use of, American and other foreign capital is facilitating its plan to "displace the United States as the world’s preeminent economic power and, if necessary, to defeat us militarily."

By bringing its dubious state-owned enterprises to the world’s capital markets, Gaffney observed, Beijing is effectively hoping foreign investors will, to paraphrase Lenin’s famous quip, "buy the rope with which China ultimately will hang them." The capital raised in this endeavor, he continued, could be used to aid the PRC’s rapidly accelerating and increasingly offensively-oriented military modernization effort, and allow it to conduct influence operations in pivotal regions of the world. As USCC Vice-Chairman Roger Robinson suggested in today’s Financial Times, greater scrutiny of Chinese financial and economic practices – and their objectives – is in order.

Gaffney’s appearance before the USCC comes on the heels of testimony he delivered last month before the House Armed Services Committee that helped dissuade the PRC from pressing forward with its bid to purchase oil-and-gas giant Unocal. Despite that decided victory for American interests, Gaffney reemphasized before the USCC that the Nation must begin thinking strategically about the nature and implications of the threat posed by Beijing’s economic warfare campaign against the United States, and about the steps available to this country to counter and neutralize that threat.