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China has a record of human rights' abuses, and U.S. businesses make billions there

SCOTT SIMON, HOST:

The Women's Tennis Association says it will pull its tournaments out of China out of concern for the safety of Peng Shuai, the tennis star who accused a former Chinese political leader of sexual assault. What moral responsibilities do U.S. corporations have, including sports marketers who make billions in China? Robert Daly is director of the Kissinger Institute on China and the United States at the Wilson Center and joins us now. Mr. Daly, thanks so much for being with us.

ROBERT DALY: Good to be with you.

SIMON: As I don't have to tell you, sir, the concerns mount. It's just not the whereabouts of this great tennis star, but repression of all dissidents, censorship, the internment of Muslim Uyghurs and other religious and ethnic minorities, forced sterilizations - all of which the U.S. Holocaust Memorial Museum has called crimes against humanity. Do U.S. companies have an obligation to not do business in China?

DALY: Well, if they cannot do business in China, the difficulty is, many of them will no longer be the leading companies in their industries around the world. That's the nature of the dilemma. Many Americans don't want to do business with a regime that they see as increasingly odious. But the companies that are there are actually instrumental to American global influence and power, which we lose if we pull out altogether. So it's a big policy decision.

SIMON: I have to point out - and I'm sure this has gone through your mind - the Kissinger Center is named for a statesman whose family had to flee for their lives...

DALY: That is true.

SIMON: ...Because of religious persecution at a time when most of the world turned away and said, well, you know, that's not our business.

DALY: Yes. And I agree strongly with Human Rights Watch and a number of other American organizations that have called on American companies to reconsider, for example, their sponsorship of the upcoming Beijing Winter Olympics. However, we're in a long-term competition with China that is strategic and economic, and it's normative and ideological. And we need to bring our power to bear to do well in that competition. Part of that is the power of our corporations, yet we weaken them if they can't deal with China. If they do deal with China, they strengthen a regime that wants to spread its influence at our expense.

SIMON: Let me ask you about the words that have been quoted much this week of Ray Dalio, founder of Bridgewater Associates. He said on CNBC, I invest all over the world. I can't be an expert on these things. Then he said of China, as a top-down country, what they're doing, it's kind of like a strict parent. That is their approach. We have our approach.

DALY: Well, the question is whether it's like a strict parent or an abusive parent. If a parent is merely strict, then it tends to be their business. The question is, if you hear children being beaten, at what point do you call social services? Which is to say, at which point do you call China out before the global community?

But if we are to disengage with China entirely, decouple entirely, the economic costs to Americans are going to be huge. And it's not just the corporations. Lower-income Americans will have to pay more money to get basic necessities, things that they need. American pensioners who can't invest in China, if we go that route, will get less return on their savings. So the concerns are real, but the costs are also going to be high. And I'm not sure that we've yet done the kind of deep thinking we need to do. We might feel better. We'd be a little poorer. But the Chinese regime would not likely change its behavior.

SIMON: Well, you anticipate one of my questions, which is, does the Chinese government and do Chinese businesses care? Would they be just as happy without any kind of American involvement?

DALY: China does care. It needs integration. It needs foreign markets, ideas and tech. It needs to import food and energy and natural resources. But it wants to be integrated globally without obstacle and without objection.

SIMON: Do American companies have any cards?

DALY: They have fewer and fewer cards. As China moves up the value chain, as it is able to supply its own capital and expertise and technology, it will have less need for American companies. American companies' workers as well as their shareholders want companies to do good in the world. And it's tough to do that in China when China is moving from authoritarianism toward a kind of techno-totalitarianism. But China is still very profitable for most of the American companies that are there. So is this going to be about our principles or about our profit, or as usual - as always - some mix of the two with which we're never quite comfortable?

SIMON: Robert Daly is director of the Kissinger Institute on China and the United States. Thanks so much for being with us.

DALY: Thank you. Transcript provided by NPR, Copyright NPR.