Dr. Yang Jianli’s Speech at the 2022 Conservative Action Political Conference in Mexico

Nov. 18, 2022

Thank you, Senator René Bolio, for your invitation. I’m sorry that I’m unable to travel to Mexico to be with everyone in person.

I feel particularly honored and privileged to address an urgently important question facing the entire democratic world: How can we resist dictatorship?

The question is huge, but time won’t allow me to adequately elaborate. All I can do here is to make a few major points to initiate a dialogue, with the hope of getting the ball rolling.

The past two decades have seen a serious democratic recession. Not only have existing democracies faced difficulties in the functioning of democracy at home and serious challenges internationally, but democracy is also losing its appeal to developing authoritarian and semi-authoritarian states. According to Freedom House, every year for the past 16 years, significantly more countries have seen declines in political rights and civil liberties than have seen gains. Since 2015, this already ominous trend has gotten even worse: 2015 to 2019 was the first five-year period since 1974 in which more countries abandoned democracy (twelve) than transitioned to it (seven).

One of the main causes of the global democratic decline is China. Over the past three decades, China has achieved rapid economic development under a largely stable one-party Communist regime, becoming the world’s second largest economy, rapidly closing the gap with the United States in the fields of technology and defense. It has significantly grown its influence on the international stage, offering the world’s authoritarian states a real alternative to the previous belief that the only path to modernity is liberal democracy. The dominant international order of the post-World War II era has been challenged as never before. In recent years, China has not only influenced and controlled less developed countries and regions (especially in Africa) through projects such as the “Belt and Road,” but has also penetrated democracies—negatively affecting the democratic way of life and engaging in increasingly blatant manipulation of international organizations such as the United Nations.

Most importantly, China has become increasingly well-versed in leveraging its economic power to coerce democracies on values-related issues–human rights, Taiwan, etc.

I assume that we all want to find ways to address this dire situation if we can. But the question is: How much money is an individual, a business, or a country willing to or able to spend in order to stand up to China’s totalitarian regime? We must admit that it’s probably too much to ask Norwegian fisherman, Canadian farmers, or blue-collar workers in Europe and the United States, to individually sacrifice their livelihoods on the altar of human rights. There’s a limit. We must be idealistic, but also pragmatic. So, what should we do? Conventional wisdom tells us that “divided, we fall.” But the Chinese government excels at the “divide and conquer” strategy. The world’s democracies must respond collectively.

The biggest problem for the democratic world is the overdependence of each country’s economy on China. The 2020 figures show that China is the largest, second-largest or third-largest trading partner of the United States and the vast majority of its democratic allies, including Germany, Japan, India, South Korea, Australia, New Zealand, Argentina, Brazil, the United Kingdom, Canada, South Korea, Taiwan, Mexico, and Chile, just to name a few. And smaller, more fragile democracies are still largely left to fend for themselves. Security alliances exist, but they were built to address military threats, not economic coercion arising from values-related conflicts. To address this issue, I propose a values-based economic “NATO” for the world’s democracies.

During the post-WWII race between the U.S. and USSR as the two superpowers, NATO was established, bringing together allies across western Europe and North America with a pledge to defend one another militarily in the event of a Soviet attack. That alliance has endured but evolved, from the original 12 member-states to 30 today, but still with the principle of collective security, which means an attack on one is deemed an attack on all. The importance of NATO and its special functions has become even more evident since Putin launched the war against Ukraine.

The time has come to consider the establishment of a nonmilitary equivalent to NATO for the world’s democracies, especially in the face of growing threats from China, Russia, Iran, North Korea, Cuba, Venezuela, and other autocracies.

The values-based economic treaty organization of democracies that I’m proposing should aim to engage in both collective defense and collective offensive on values-related issues. If we apply the NATO principle of mutual military defense to the economic sphere, then whenever China uses economic coercion to bully a member-state on human rights issues, for example, others should automatically and immediately respond by increasing trade with the bullied member. This will help break the collective-action dilemma all the democracies—especially smaller ones—have faced so far. Under the treaty organization I’m proposing, if an undemocratic country retaliates economically against a member-state for standing up for democratic principles, all other treaty members must proactively come to her defense to help ease the resulting economic pain.

Collective offense would comprise the following three elements:

First, each signatory country should pass a Human Rights Act linking human rights to all fields of diplomatic ties with dictatorships—regular assessments and executive reports to Parliament or Congress, etc.

Second, signatory states should collectively confront human rights violating countries for human rights issues on various world platforms.

Third, signatories should formulate united measures of punishment for individual cases of human rights violations—economic sanctions, boycotting of cultural events (exchanges, Games, etc.), and so on.

In response to values-related conflicts in recent years, mutual assistance between Japan, Taiwan, Australia, the Czech Republic, Lithuania and other countries has emerged to confront China’s economic coercion. In particular, in April of this year, the European Union approved 130 million euros (140 million US dollars) in financial aid to Lithuanian companies after China initiated discriminatory trade restrictions against Lithuania after Taiwan was allowed to open a Representative Office in the Lithuanian capital of Vilnius.

But the big potential question is: How long can such beneficial and effective acts of mutual assistance last? In particular, will these democracies (including the EU) be able to maintain their strong values and mutual support when the geopolitical landscape changes (such as when China adopts a strong divisive strategy) and interest structures evolve? The United States itself has a long history of loudly advocating for democracy in principle yet compromising on democracy in practice. In the long run, that habit will undermine, rather than advance, the future of democracy.

So, the world’s democracies must set a standard for shared-values mutual assistance based on rules, rather than relying on the one-time discretion of individual states. In 2004, macroeconomists Edward Prescott and Finn Kydland won the Nobel Prize in Economics for their work on the concept of “time inconsistency,” in which they introduced an important conclusion: Rules are better than discretion, because parties are committed to not changing their policies even when doing so may benefit themselves. If each party has the discretion to change its policy, a time inconsistency problem arises, and credibility and commitment become difficult to establish.

It’s undeniable that the world has entered a new Cold War. Indeed, both U.S. President Joe Biden and Chinese General Secretary Xi Jinping have acknowledged this fact, although both have avoided the term “Cold War.” Increasing geopolitical divisions in the wake of Russia’s deadly invasion of Ukraine have brought the new Cold War into sharper focus. It’s a Cold War because the conflict of values has become the root of enduring military, economic, and diplomatic conflicts. Without a conflict of fundamental values, all other conflicts would be easy to resolve in an international order based on freedom and rule of law. For the democratic world, the question is not whether to acknowledge this new Cold War (or what to call it), but rather how to fight and reign victorious. The values-based economic “NATO” that I propose is the most fundamental and effective structural response to the grave challenge that China and other world’s dictatorships pose to world democracy.

Thank you.