Shane Leary joins Miles Yu to discuss the surge in Chinese nationals entering the United States illegally, what's driving this phenomenon, and how policymakers ought to respond. They then turn to the upcoming "two sessions" in which the Chinese People’s Political Consultative Conference and the National People’s Congress will convene, and what makes this year's rubber stamping sessions so peculiar. Finally, they discuss the US Department of Commerce's recent probe into the importation of Chinese electric vehicles, and its national security implications.
China Insider is a weekly podcast project from Hudson Institute's China Center, hosted by Miles Yu, who provides weekly news that mainstream American outlets often miss, as well as in-depth commentary and analysis on the China challenge and the free world’s future.
Episode Transcript
This transcription is automatically generated and edited lightly for accuracy. Please excuse any errors.
Miles Yu:
Welcome to China Insider, a podcast from Hudson Institute's China Center.
It's Tuesday and we have three topics this week. The first is Miles’ reflection on the surge of Chinese migrants entering the United States illegally, why it's happening and what our response should be. Second, we discussed the upcoming two sessions in Beijing and why this year's rubber stamp sessions are so peculiar. And third, we discussed the White House's recent scrutiny of Chinese electric vehicles and how the Commerce Department's response doesn't go far enough.
Shane Leary:
Miles, how are you?
Miles Yu:
Very good, Shane. Glad to be with you again.
Shane Leary:
Me as well. Well, so our first topic pertains to the surge in illegal border crossings into the United States. In 2023, more than 24,000 Chinese migrants were apprehended at the border, which is more in 1 year than the 10 prior years. What do you think is driving this and could you speak a bit to how these migrants are actually getting here and into the country?
Miles Yu:
First of all, US has always been the number one destination for Chinese immigrants, especially political refugees. Each year, America accepted tens of thousands, sometimes hundreds of thousands, depends on different administrations, political refugees from China. In 2022, for example, worldwide, there are about 120,000 Chinese political asylum seekers. Over 95,000 of them, or close to 80% of them applying to the United States. America has been very, very generous to immigrant applications. There are many legal ways to enter the United States economically, immigrants, mostly family, political asylum, investment, especially in the Chinese case, education. We have over 300,000 Chinese students studying in this country as though we speak. Now, most of them are having something we call F1 visas. This kind of student visas would allow you the opportunity to apply upon your graduation for a job in this country. And you get what we call the EB-1 visa that is employment-based visas, and you become legal citizen in the United States years down the road.
Or if you have a special talent, you can get a visa called the H-1B visa. So, there are many, many legal ways in the United States. So, the question then is why illegal border crossings are surged from China? Well, there are different ways of illegal stay in this country. One is overstay of visa terms, but most importantly right now, as you indicated, that is illegal border crossing. The number and scale is just scary. It poses a threat to the US legal system and the national security. The reason why there's such an illegal border crossing over 24,000 of them last year, I can list four of them. One is basically political repression at home in China. Xi Jinping has quadrupled the number of Chinese fleeing China and the number of political refugees applying come to the United States since he came to power in 2013. And of course there's also economic tsunami that's going on in China.
Xi Jinping’s terrible economic policies that caused a high unemployment rate there also caused huge capital and talent flights. And number three, obviously I think this is also very important, that is why there is an illegal border crossing by the Chinese nationals in the last couple of years, is because CCP’s encouragement. Number one, this is a good opportunity for Chinese state actors, particularly its security and intelligence organizations to infiltrate American society. Once you get this illegal border crossers into the United States, it's very hard to track them. So, if you come here legally, you have a lot of papers and we know where you are, what you're doing, right? Number two, the Chinese government wrote in this surge, it is also they intentionally let them lose in many cases because PRC has probably the world’s most draconian exit policy. In other words, anybody who wants to get out of China, unless the government let you go, it's very difficult to do that.
So, and this case, you got tens of thousands of illegal border crossers getting out of China. I mean, that means China does not really want to enforce its border exit laws and regulations. I think another factor is very important. It's highly likely because this is a huge number of Chinese illegals, it's hard to make this long journey from China and then go to Central America and all the way to come to Mexico and across border to Arizona, Texas, and California without facilitating these illegals in running this huge criminal enterprise. And also, China must have used its diplomatic and financial muscles to lubricate various countries involved to give these illegals passes through their territories. But also most tellingly, it is very interesting because China is the only country in the world that has steadfast refused to take back any illegals deported by the United States. So, I'll give you one example.
In 2023, there were about 24,000, more than 24,000 illegals entered the United States. The US government wants to deport a huge number of them back to China. China has refused to take any of them except about 288 of them as the number I've seen recently. Those people were some medical conditions or some kind of very rare cases. So that's considerably less than 1% of the illegals that cross the border from US [inaudible] deporting back. So, you can see the Chinese government in government there too. But I will also say that despite all this push factors that are listed, there is also another interesting thing that is, it's a US border policies’ idiocy and criminal neglect and policy paralysis on our part because political parties, particularly those parties in power, care so much about who should take be given the credit for good immigration policies. And also, sometimes when crisis occurred, some administration basically is so confrontationally averse, they just do not recognize this is a problem. This is a crisis. So, due to all those reasons and factors that I just mentioned, and we have this perfect storm of illegal border crossing from China. By the way, China has surpassed Mexico as the dubious winner of number of illegals crossing the border into the United States.
Shane Leary:
That's striking. I want to expand a little bit on the national security threats. I mean, is it simply state actors entering the country or are there ways in which the CCP might try to influence or hold leverage over other migrants that they're allowing to flee and things like that? And maybe if you could talk a little bit more about, I mean obviously the border policy right now is just sort of crazy, but what we should be doing to combat this problem?
Miles Yu:
Well, national security definitely is a risk. Not only that, it's America’s political system. It's the most fundamental [inaudible] of the American government. It is the rule of law. If you have an open border, there's no rule of law. If the government of China tried to organize the huge group of people, take advantage of this loophole, this porous border in the United States, they could basically get in a lot of people here [inaudible] without our ability to track them efficiently. And that’s basically a security risk. The most important thing is we don't know who these people are. I mean, if the government cannot really keep a tab on who comes in into your homeland, we're in big trouble. We do know this already, that there are some bad actors from this group of illegals, and they were very active in Chinese diaspora, Chinese diaspora communities and spreading disinformation, basically trying to demonize the American society and American system, and using TikTok and Twitter and other means to broadcast those messages back to China.
Shane Leary:
And just one last note, I mean, I want to ask what the journey is actually like where they go through and if you could expand on that.
Miles Yu:
Overwhelming majority of them, if not all of them, came through Ecuador and landed Ecuador and made a long journey through Columbia, Panama, Costa Rica, Nicaragua, Honduras, Guatemala, Mexico, and then to the US border. So that's a long journey. Then the question is why Ecuador? It has something to do with a very interesting factor about the Chinese passport. Chinese passport is probably among the passports in the world that is not really worth that much because you do not have any visa free countries or visa arrival countries. There are several countries in Latin America that do give China, Chinese visitor visa-free [entry], you don't need a visit to go there, but most of them are the island countries. They're surrounded by water, you cannot walk away from these countries: the Bahamas, Barbados, Jamaica, Dominican Republic, et cetera, et cetera, except three land countries in Latin America: Suriname, Bolivia, and Ecuador.
Now Suriname is surrounded by insurmountable primitive Amazonian jungles in Guyana and Brazil, so you cannot recross them easily. Bolivia is just since simply way too far; you have to go through the mountains and Ecuador is the only one that really is practical. So, you have a lot of people landed in China. Last year alone, there are more than 50,000 Chinese tourists landed in Quito, visa free, and almost all of them had one purpose on their mind, that is to leave Ecuador and to walk to the American southern border. So, this is a pretty amazing development in my view. How to fix the problem? We have the end or border policy paralysis. Number two, we have to really reform our visa and passport to loopholes. And number three, I think most importantly, we have to really recognize our abysmal diplomatic failure in Central America. Those countries I listed earlier; they all didn't want to face the reality giving some pass to this illegal border process by the thousands through their territories. We have to really revitalize our diplomatic efforts to work with those countries: Columbia, Panama, Costa Rica, Nicaragua, Honduras, Guatemala, and Mexico. Many of them are allies. We have to really persuade them, cajole them, coerce them, and eventually even threaten them because they were harming the American national interest. It's a failure in governance in my view.
Shane Leary:
It's an excellent point for our next topic. The annual two sessions in Beijing is fast approaching. For those who don't know, the two sessions refer to two annual legislative sessions where in the Chinese People's Political Consultative Conference and the Nationals People's Congress both convene. This'll take place next week. Miles, could you tell us a little bit about what these are and their importance in Chinese politics?
Miles Yu:
The NPC, the National People's Congress as well as the C-P-P-C-C-C-P-C-C, whatever they call it, the Chinese Political Consultative Conference, those were the most shameful rubber stamps in China. So basically, what it is, is they meet for a couple of weeks each March, and they basically rubber stamp whatever the Chinese Communist Party has already decided and they accept it. This year is very weird and peculiar, that is, there's no paper to rubber stamp on because the Chinese Communist Party is in big trouble. That's why this year's two sessions are very, very weird. Normally this is a big fanfare for the Chinese Communist Party to put out propaganda, to showcase what they call the whole process democracy as if China really is a democracy. The reason why it's kind of a low key and kind of very quiet about the two sessions, because China, what the party normally would decide before the two sessions are two things. One is to decide on major economic policies, number two, to decide on major personnel appointments and changes.
So, on economic policy right now, as I say, China is in the midst of the economic tsunami, and they really don't know what to do with the economy except Xi Jinping trying to centralize the role of the Chinese Communist Party. Party control will be enhanced and is being enhanced as if that solves the problem. As you see, Chinese people have lost their confidence in Chinese Communist Party's ability to handle the economic crisis like this. So, nothing's working. The stock market is tanking, and the real estate upon which most of the Chinese governance is based is collapsing en masse. So that's why the party run out of ideas. So, they really could not really come up is with the reasonably presentable economic decisions for the rubber stamps to pass. Secondly, on personnel, Xi Jinping has faced serious [inaudible] on the governance crisis in the last year or two. He sacked his defense minister, he sacked his foreign minister, and he replaced the finance minister. And then he immediately, actually for a long while, he already appointed the replacement of his defense minister and his foreign minister. So, the decisions are already being made. So that's why this charade of rubber stamping is not really necessary because the two sessions are supposed to agree to pass as if they're appointing all those new personal changes. This year's two sessions were kind of, I use the word weird, I think is a little bit surreal to me.
Shane Leary:
For our third topic, concern has arisen over Chinese electric vehicles entering US markets. The Commerce Department has opened a probe which could lead to restrictions on imports, citing concern that the vehicles pose a national security risk due to connected car technology. Miles, could you tell us a little bit about this and whether concerns from the White House are grounded?
Miles Yu:
It is grounded and I think the Chinese have demonstrated its insatiable appetite for hacking big data for American consumers and from American data centers, government or private. The car, EV cars, particularly BYD, they were well connected with the Chinese satellite system with a Chinese sort of a great firewall, and there were surveillance systems as well. So that's why there's an interconnectedness of the electrical vehicles, if Americans buy them by the millions, a huge chunk of American consumers personal data will be lost to the Chinese government. And as well, the ongoing activities will also be monitored. And so, this is a really, really serious problem. I think the White House is doing the right thing, but they try to say that ‘we're investigating,’ you don't really need much investigating at all because the sort of cyber ecosystem in China itself is already posting a serious national security risk to Americans.
But I don't think this investigation alone has done enough. It is not just the national security problem. It really has not addressed the root cause of Chinese EV challenges, particularly by BYD. It is really a phenomenon of China's non-market nature of its economy because BYD is becoming BYD other than its own engineering progress. It sells really well because it's really cheap. Why it's so cheap, below cost? Because Chinese government subsidize it hugely. You can buy BYD in many markets in Europe, for example, for half of a price of its cost. And no private company, no market economy-based company can really afford that except in China. So fundamentally, this is the problem we're dealing with the Chinese non-market economy. Unless you solve that problem, I don't think any investigation will do any good. And another thing is basically we have to really understand the issue of overcapacity. China, because of its government financing, government policy protection, and it's a total protectionist approach to the new market like EV, China can threaten the United States and in any particular categories at scale. And that’s something that no Tesla’s, no Apple’s could successfully deal with unless the United States government as a sovereign nation gets involved and deal with the policy, deal with the issue of China's non-market economy compliance.
Shane Leary:
I want to go in, I mean, I'm glad you brought up Tesla and some of the American manufacturers who are selling in China. Devil's advocate, what would you say to someone who is concerned about potential backlash on US auto manufacturers and the way this could affect American business in China?
Miles Yu:
I think that the American automobile industry has suffered from this shortsightedness. We’re the victim of our own success, America’s automobile industry has been leading the world for a number of years. And the Japanese came along, and Germans came along, so they beat us in certain categories, but in some other categories, American automobile industry is still leading, particularly trucks, pickup trucks, for example. Nobody can beat us, but both the Japanese and Germans and Americans have failed to recognize the incredibly lucrative and the great future of the electric vehicle market. So, where Japanese has been famously slowing, and Toyota for example, has refused to invest in that. They believe in their hybrid brand as the champion in the new market, but that grid is not working. So, China basically took advantage of this neglect by the West, and they basically marched into the EV market. So, we're playing catch up. And I think right now, if we focus our effort on certain industrial policy, and particularly EV and I think we will prevail, but it's going to be very, very hard because we are now at the disadvantage. China has grabbed a lot of supply chain for the EV markets, the minerals, some of the parts. I think right now we are basically racing against the Chinese domination of EV market globally.
Shane Leary:
Well, Miles, I think that's all the time we have for this week. Thanks so much for joining me and I look forward to doing again.
Miles Yu:
Okay, see you next week.
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