Rubio: “Capitalism Didn’t Change China—China Changed Capitalism”
Mar 2, 2023 | Press Releases
U.S. Senator Marco Rubio (R-FL) spoke on the Senate floor to discuss the challenges our nation is facing and what we can do to make things right. See below for the full transcript. Watch on YouTube and Rumble.
Mr. President, no issue dominates our attention more these days than our growing rivalry with China, and rightly so. It’s a historic challenge. It’s one that I think we waited way too long to recognize, and now we’re scrambling to make up for that.
But I think it’s important that we remember that the core and central issue here is not China per se. The core issue here is a decades-old bipartisan consensus that’s entrenched in our economics and in our politics. A consensus that said that economic globalization would deliver wealth and freedom and peace.
It was almost a religious faith in the power of the free flow of people and money and goods across borders as the answer to virtually every problem that faced the world. And that’s how we built our politics. That’s how we build our foreign policy.
And you know what? For about 50 years after World War II, it generally worked. The reason why it generally worked is that we didn’t actually have a global market. If you look at the economy that we were engaged in, even through free trade and the like during that period of time, it was primarily a market made up of democratic allies, countries that shared common values and common priorities for the future.
Even when the outcomes were not always in our benefit, when some industry left to a country in Europe, or during the time that Japan challenged us in some sectors, at least the beneficiary of that outcome was not the Soviet Union or some geopolitical competitor. The beneficiary was another democracy and an ally in our confrontation with communism.
It generally worked during that time because, by and large, the interest of the global market and the interest of our country never got out of balance too far.
And then the Cold War ended. And our leaders became intoxicated with hubris. I remember the lexicon was that it’s the end of history, and the world will now be flat, and every country is now going to naturally become a free enterprise.
Democracy and economic liberalization would always result in political freedom. You flood a country with capitalism, and that country will not just get rich, but they’re going to turn into us or some version of one of our democratic allies.
In pursuit of that gamble, which had no historic precedent, we entered into all kinds of trade deals and treaties and rules and regulations on an international scale. And we invited all kinds of countries that were not democracies, did not share our values, and did not have the same long-term goals for the world as we did. Their long term goals, in fact, were incompatible with ours.
Of all the deals that were made, none has had a greater impact than the decision that was made in the first year of this century to admit China into the World Trade Organization.
They opened up our economy to the most populous nation on earth, controlled by a communist regime. And they did it, not because anybody argued that it would be good for American workers. They made the argument that eventually it would be, but they weren’t arguing this is going to help us in the short term, this is good for our industries.
The argument behind doing this with China was we think capitalism will change them. They’re going to eat Big Macs and drink Coca-Cola, and they’re going to literally ingest democracy, and it will transform them.
They argued that capitalism was going to change China. Now we stand here 23 years later and realize capitalism didn’t change China—China changed capitalism.
They opened up their doors and said come on in. They said we have cheap labor, cheap workers. And millions of American jobs, important industries, and factories flooded into China. They did it with the promise that you can make a lot of money in this huge market very quickly, with huge rates of return, and therefore make more profits for companies.
We lost jobs, factories closed, and towns were gutted. But the leaders at that time said don’t worry, they’re only taking the bad jobs. Those bad jobs are going to be replaced by good jobs, better jobs. Americans are going to be able to have those good jobs.
And they said those Chinese workers that took your jobs are going to get richer now, and with that money they’re going to do two things. They’re going to start buying American products, and they are going to demand democracy and freedom. They’re going to change China.
Well, I don’t think I’m going to spend a lot of time today explaining that that did not work out. That is not how it played out.
China allowed our companies in, but you know what they did? They forced every one of these companies to partner with a Chinese company, a small one at the time. They forced you to partner with them, and they stole your trade secrets.
So they invited them in, they learned how to do whatever it is you did, and when they no longer needed you, they kicked you out. Their company took over. And in many cases, they put the company that taught them how to do it or that they stole the secrets from out of business.
That’s what they did. They used it to build up their own economy, their own companies. The Chinese middle class also grew at a historic rate. But ours collapsed in an almost inverse effect. The numbers are stunning. If you look at the destruction of these American working-class jobs and the rise of the middle class in China, they happen at the same time and on almost the same scale.
China did get rich. They most certainly got rich, but they didn’t use that money to buy our products. They used that money to buy the products that are made in China. And they didn’t become a democracy either. Now you have a rich Chinese Communist Party that has tightened its grip on the country.
And it’s actually started going around the world trying to export their authoritarian model.
They literally go around telling countries democracy cannot solve problems. “Our system is so much better at solving problems. We can move quicker, we don’t have to have a town hall meeting before we do everything, we can have strategic 20-year plans, and we can solve your problems.”
And for developing countries around the world, that potentially has some appeal. The fact is that we’re now confronted with the consequences of this historic and catastrophic mistake. And it’s important to understand what some of these are and they’ll be familiar to you because we see them every day. They play out not just on the floor of the Senate. They play out in our society and our politics on television.
First of all, we’re a nation that’s bitterly divided. It’s easy and lazy to say we’re Republicans, Democrats, Liberals, Conservatives. The biggest divisions are not even ideological per se. They seem to be attitudinal.
Largely, they seem to be along the lines of an affluent class of people that work in jobs and careers and in industries and live in places that have benefited from this rearrangement of the global economy. They do jobs that pay well and that work in a system like this.
They are divided against the millions of working people who were left behind by all these changes and live in places that are literally hollowed out, once-vibrant communities that have been gutted.
By the way, remember when they would say don’t worry, those people will move to somewhere else in the country for those new jobs? They didn’t move, because people don’t like to leave their community. They don’t like to leave their extended family. They don’t like to leave all the things they’ve ever known and supported them. That didn’t work that way.
We are addicted to cheap exports from China. And we are dependent on Chinese supply chains for everything from food to medicine to advanced technology. We just had a pandemic that reminded us of this. And what does that mean—these long supply chains dependent on a geopolitical competitor? It means we’re vulnerable. Vulnerable to blackmail, vulnerable to coercion.
You know what else it left us with? An economy that is highly concentrated and fragile. Our economy is primarily based today on two sectors. What’s all the news about? Turn on the financial networks. You’ll see what all the discussion is about. Primarily two sectors—finance, meaning people that take your money and invest it somewhere else—and Big Tech.
And those two industries that are now the pillar of our economy are controlled by just a small number of giant multinational corporations, the same ones that, by the way, outsourced our jobs. These multinational corporations, in many cases, have more power than the government. And they have no loyalty to our people or to our country. Their interest is not the national interest, because they’re multinationals. In fact, they’re owned by shareholders and investment funds from all over the world.
This idea that globalizing our economy would prevent great power competition between nations was always a delusion. And I think the people of Hong Kong, Taiwan and Ukraine can tell you that this idea that free trade always and automatically leads to peace isn’t true either.
You know, none of us have ever lived in a world where America was not the most powerful nation on earth. I was born into and grew up in a world where two superpowers faced off in this long and dangerous Cold War between communism and freedom, between the free world and people who lived enslaved behind the iron curtain.
And then I came of age, and suddenly I watched the Berlin Wall fall, and I saw the Soviet Union collapse. Let me tell you, if you had told me 10 years earlier that the Soviet Union is going to vanish off the face of the earth, I wouldn’t have believed it. It was a time truly historic and unprecedented.
But now, three decades later, we find ourselves once again in a rivalry with another great power, and this rivalry is far more dangerous. Our rival is far more sophisticated than the Soviet Union ever was.
The Soviet Union was never an industrial competitor. The Soviet Union was never a technological competitor. The Soviet Union was a geopolitical and a military competitor. But the near-peer rival in China that we have now? They have leverage over our economy. They have influence over our society. They have an army of unpaid lobbyists here in Washington.
These are the companies and the individuals that are benefiting from doing business in China. And they don’t care if five years from now they won’t even be able to work there anymore. They’re making so much money off their investments, their factories, and their engagement there now that they lobby here for free on China’s behalf.
This is a rival that has perfected the tactic of using our own media, our own universities, our own investment funds, our own corporations against us. They’ve used them against us every day.
But this is not the story of what China has done to us. China saw a system that we created, they took advantage of its benefits, and they didn’t live up to its obligations. You know why? Because China was trying to build their country. They were making decisions that were in China’s national interest, not in the interest of the global economy or some fantasy about how if two nations are in business, and there’s a McDonald’s in both countries, they’ll never go to war.
This is not the story of what China’s done to us. This is the story of what we’ve done to ourselves. Because we’ve allowed the system of globalization to drive our economic policies and our politics.
And it remains entrenched. Even now, people who agree that we have to do something about this will tell you, ‘We can’t do that, because it will hurt exports. They’ll put a tariff on some industry. China will kick us off.’
None of this is going to matter in 5 or 6 years. They won’t need to tariff farm goods from the United States. They’ll own the farm. They’re already buying up farmland. You don’t have to worry about the investment funds that won’t be able to make a return on their investment. In five years, they won’t need their money anymore.
The system of globalization was a disaster, and the result of the system was not global peace and global prosperity. The result was not the world without walls, in which we were all part of one big happy human family.
The reality is people live in nations, and nations have interests. And, by and large, for almost all of human history, nations have acted in their own interests. Now we see what happens when one nation does that and another does not.
The result has been the rise of China and big business, the two big winners in all of this—the consolidation of corporate power in the hands of a handful of companies in key industries, and the rapid and historic rise of China at our expense.
China is a populous country. They’re always going to be a superpower. They were always going to be one. But they did it faster because they did it at our expense. They didn’t create these jobs. They moved them. They didn’t create these industries. They took them.
We buy solar panels from China. Who invented solar panels? We did. They lead the world now in battery production for these electric vehicles. We invented it. I can go on and on. They’re building more coal-fired plants than any country on earth. Today, China has more surplus refining capacity for oil than any nation on the planet.
This era has to end now. It’s not about just taking on China. It is about changing the way we think. It’s not 2000 anymore. It’s not 1999 anymore. This is a different world.
In a series of speeches over the next few weeks, I’m going to attempt to outline a coherent alternative moving forward, in the hope that we don’t just sit around here all day trying to outdo each other about who’s going to ban this and who’s going to block that going to China.
This is about a lot more than just banning this and stopping that. It is about a coherent approach to a difficult and historic challenge. And look, it’s a complicated one, and complicated problems rarely have ever have simple solutions.
But the simplest way I can describe how I think we should move forward is we need to fundamentally realign the assumptions and the ideas behind our economic and foreign policies. We need a new system of global economics where we enter into global trade agreements, not with the goal of doing what’s good for the global economy, but with the goal of doing what’s good for us.
If a trade deal creates American jobs or strengthens a key American industry, we do that deal. If it undermines us, we don’t do the deal just because it would be good for the global economy or because in the free market lab experiment, it’s the right thing to do.
We don’t live in a lab. We’re human beings, flesh and blood, who live in the real world. In economic theory, when a factory leaves and a job is lost, it’s just a number on a spreadsheet. In real life, when a factory leaves and a job is lost, a dad loses his job. A single mom loses the ability to support her family. A community is gutted.
We’ll need to enter into global trade agreements. We’re not talking about isolationism here. But the criteria for every agreement needs to be, is it good for our industries and workers or is it bad?
It sounds pretty simplistic. I don’t know how anyone could disagree that we should not enter into trade agreements that are bad for American workers and bad for key industries.
We also, by the way, need to enter into foreign policy alliances that reward our allies and strengthen those who share our values and our principles. If we can’t make something here, then we should strengthen the ability of an ally to be the source of our supplies.
But I will tell you this at the outset—it will not be easy. Because those who have prospered and flourished under the status quo—they still have a lot of power, and they will use it to protect that status quo. But we have no choice but to change direction. Because our success or our failure is going to define the 21st century.
