The Real Cost of China's Communist Economy | Mary Kissel | IEA Interview

In this Institute of Economic Affairs interview, our Managing Editor Daniel Freeman interviews Mary Kissel, Executive Vice President at investment bank Stephens and former Senior Advisor to US Secretary of State Mike Pompeo. The conversation examines the current state of US-China relations, China's economic challenges under Xi Jinping, and the national security threats posed by Chinese infiltration of Western infrastructure. They discuss how the Trump administration's 2017-2018 national security strategy marked a shift from viewing China as a competitor to recognising it as an adversary, particularly following China's handling of Covid-19 and ongoing cyberattacks like the Salt Typhoon hack.

Kissel argues that economic interdependence has failed to liberalise China politically, describing Xi Jinping as a pure expression of Communist Party control rather than an aberration. She explains how US companies are increasingly divesting from China following the lessons learned from Russia's invasion of Ukraine, though Fortune 500 companies with significant investments remain committed. The discussion covers China's military buildup, including its million-man army and 600 nuclear weapons, alongside domestic repression including the treatment of Uyghurs and the use of 1.5 million police to monitor Chinese citizens.

The interview concludes with an examination of Hong Kong's transformation and the case of imprisoned newspaper proprietor Jimmy Lai, whom Kissel describes as a friend facing life imprisonment for peaceful protests and press freedom. She criticises Britain's response to Lai's detention as inadequate and argues that Hong Kong now serves as a preview of what a China-led world order would look like. Kissel emphasises that Western democracies must move beyond "strategic narcissism" to understand China's true intentions and take coordinated action to protect critical infrastructure and democratic values.

Get full access to Institute of Economic Affairs | Insider at insider.iea.org.uk/subscribe