“We are naïve if we think the communist party will never use that power,” NATO Military Committee Chief Lt. Adm. Rob Bauer said.
NATO Military Committee Chief Lt. Adm. Rob Bauer said Western companies doing business in or with China should be prepared for the Chinese Communist Party (CCP) to make use of that tie in the event of a conflict, given what Europe has seen from Russia.
“We are naïve if we think the communist party will never use that power. Business leaders in Europe and America need to realize that the commercial decisions they make have strategic consequences for the security of their nation,” Bauer said at an event hosted by the think tank European Policy Center in Brussels on Nov. 25, echoing a speech he gave days earlier.
“Businesses need to be prepared for a wartime scenario and adjust their production and distribution lines accordingly. Because while it may be the military who wins battles, it’s the economies that win wars.”
Bauer pointed to the case of Gazprom, an energy company that is majority-owned by the Russian government. Before Russia invaded Ukraine in 2022, Russia was Europe’s largest supplier of natural gas, which it transported through Ukraine.
Governments on both sides leveraged the business ties. Russia put a gas export ban in place, and the European Union and the United States sanctioned many Russian companies. Some, but not all, European countries stopped importing Russian gas.
Bauer warned that CCP leader Xi Jinping could unilaterally impose restrictions on industries in China that could affect the global supply chain.
For example, the world depends on China for rare earth minerals, of which 60 percent are produced and 90 percent are processed there. Critical pharmaceutical ingredients also come from China, including chemical ingredients for sedatives, antibiotics, anti-inflammatories, and low blood pressure medicines.
“We’re seeing that with the growing number of sabotage acts, and Europe has seen that with energy supply,” Bauer said.
“We thought we had a deal with Gazprom, but we actually had a deal with Mr. Putin. And the same goes for Chinese-owned infrastructure and goods. We actually have a deal with Xi.”
He stressed the national security aspect of business deals with the Chinese and Russian regimes.
“If we can make sure that all crucial services and goods can be delivered no matter what, then that is a key part of our deterrence,” Bauer said.
In the United States, businesses have increasingly stated that they see the writing on the wall and expect the need to decouple China from their supply chains.
President-elect Donald Trump has proposed tariffs of up to 60 percent across the board on Chinese imports.
Security experts in both private and public fields have warned that manufacturers rely on Chinese producers for key components in everyday goods.
Many companies have also warned investors and customers to expect price increases as they find alternative manufacturers and assemblers.
Reuters contributed to this report.