Ceding or overturning the loss could mark an inflection point for financing the totalitarian regime. For U.S. agencies, such as the DOD, to win, they must produce the evidence that overcomes a common yet critical misperception: U.S. courts, barring contradictory evidence, view companies formed under the laws of the CPC as mirror images of companies formed under U.S. laws.

While mimicking U.S. company forms, CPC-organized companies camouflage a gravely distinct intent. U.S. laws bind corporate officials with a duty of loyalty to company owners. CPC laws, in grim contrast, through a variety of mechanisms, subordinate all companies’ officers’ loyalties (and assets) to sustaining the CPC itself. Rephrased for emphasis, U.S. based companies serve their owners; CPC formed companies serve the CPC. (On one day in August 2015, the CPC abruptly, unilaterally and simultaneously rotated executive officers at China Mobile, China Unicom and China Telecom.)

The CPC uses investment from the United States, among other purposes, to rip apart and militarize reefs in the South China Sea, augment the lethality of its military, invade Hong Kong and incarcerate Uyghurs. Yet, data compiled by the CPC’s foreign currency administrator, “SAFE,” shows that the CPC continues to enjoy access to about $300 billion per year of U.S. financing resources. CPC-controlled Xiaomi sued in U.S. District Court to keep its pathways to U.S. capital open.

Bipartisan efforts exposed Xiaomi’s capability and intent. First, in September 2019, Senators Cotton and Schumer and Representatives Gallagher and Gallego asked the Defense Department (DOD) to identify companies operating in the United States with ties to the CPC’s People’s Liberation Army. The congressmen made the request in accordance with Section 1237 of the 1999 National Defense Authorization Act (NDAA). Complying, DOD investigations produced and updated a Section 1237 list. Next, building on the DOD’s list, Executive Order 13959 prohibited Americans from investing in Xiaomi, and other Section 1237 companies, because it made equipment designed to harm Americans or interfere with U.S. operations. Section 1260H of the 2021 NDAA renews DOD’s listing requirements.

Strategically, the CPC concentrates its actions on keeping its conduits to American investment open. As the totalitarian regime attempts to simultaneously expand its international influence and meet rising burdens of its aging population with a declining number of workers, it needs more foreign currency. Fearing attenuated access to foreign capital, the CPC turns to designing its own laws or manipulating others’ laws to undermine the regulations, processes and agreements that establish and maintain the international, open, infrastructure that sustains capital flows.

(At least 9 laws, promulgated by the CPC from 2014 to 2019, command Chinese citizens, enterprises, and organizations to gather information relevant to CPC security, cyberspace ambitions, and law enforcement. Elsewhere, the CPC ignores multilateral organization requirements to disclose terms of debt extended to other countries. In one U.S. case, the CPC contravenes U.S. price fixing laws to set vitamin C prices. In another, it sequesters assets that would compensate U.S. victims of poisonous drywall behind CPC borders.)

Pervasive CPC coercion – extending into breaching agreements, stealing intellectual property, and buying political access – upends global monetary, trade and behavior standards that have promoted world peace for almost 80 years. That system preserves reliable financial mechanisms that allow nations to price and acquire resources, like coal and metals, for economic prosperity. Before this capital-based approach, nations simply occupied lands to secure resources. The CPC, in contrast, occupies other regions (Hong Kong, Tibet, Xinjiang, the South China Sea and intentions for Taiwan) for their natural, financial, human and manufacturing resources; it also abuses capital and trade systems to accomplish occupation without military invasion. (Sri Lanka ceded its Hambantota port to CPC occupation to escape onerous debts the CPC imposed for its construction.)

In its basic capital access, capital denial context, the Xiaomi case frames the strategic tension within the United States between our fundamental inclination to promote capital access, in general, against our need to strategically deny capital to specific aggressors.

U.S. citizens deserve and need unity, or concentration, of strategy to combat Communist Party aggression. Our jobs, our livelihoods, our grandchildren’s freedoms to express themselves and pursue their dreams depend on attenuating the CPC’s abilities to export totalitarianism. Lacking a better alternative, now, we have only this strategy of attenuation – of exploiting the Party’s overreach everywhere, eroding its ability to wreak fear, injustice and oppression anywhere.

President Biden’s most recent EO, issued Thursday, recognizes that the Communist Party of China has turned companies’ balance sheets into battlefields. Our laws provide tools that protect us. Our Justice and Defense Departments must learn to use them.

Patrick Jenevein serves as CEO of Pointe Bello, which developed and implemented the legal strategy to defeat the Aviation Industry Corporation of China in U.S. courts.