How a CCP shooting war could begin—how it can be avoided
The S.E.C. chairman must protect investors by rescinding the Obama-Biden May 2013 Memorandum of Understanding.
Committee on the Present Danger: China press release – April 27, 2025
WASHINGTON, D.C.—On April 26th, elements of the Chinese military were photographed holding a large PRC flag on Sandy Cay, an uninhabited reef in the South China Sea within a few kilometers of what is described as “the Philippines’ most important outpost in the South China Sea” on Thitu Island. The military channel on China’s CCTV network announced that “the China Coast Guard implemented maritime control and exercised sovereign jurisdiction” over the cay, which it described as “disputed territory.”
This is not the first such act of war by the Chinese Communist Party in the South China Sea’s strategic waters. In recent years, the CCP has seized and weaponized a number of such atolls, reefs, and other features, transforming some into island bastions for projecting power and controlling their surrounding 12-mile “sea territories,” airspace, as well as their undersea resources. That zone would include Thitu Island, which the Financial Times reports is now “upgrading a runway and other infrastructure on the island. The building is part of efforts to make its South China Sea reefs more habitable and push back against increasingly aggressive Chinese activity.”
Communist China ignored an impotent Law of the Sea Tribunal, which ruled that such construction violated international law. The Obama-Biden administration acquiesced.
This is, however, the first such Chinese incursion on Donald Trump’s watch. To date, his administration’s response has been limited to a statement by National Security Council spokesperson James Hewitt that reports about it would be “deeply concerning, if true. Actions like these threaten regional stability and violate international law. We are consulting closely with our own partners and remain committed to a free and open Indo-Pacific.”
If real costs are not imposed on the CCP for its seizure of Sandy Cay, it is a certitude that there will be additional and more fraught acts of Chinese aggression in the region. And, in the absence of the United States imposing such costs, the Philippines will be left with two unpalatable choices: either defending its sovereignty by taking on the Chinese military alone or actually, or at least effectively, surrendering to their mortal enemy – and ours: the Chinese Communist Party.
Fortunately, the United States can penalize the Chinese Communists profoundly without firing a shot. In keeping with President Trump’s historic “America First Investment Policy,” the Securities and Exchange Commission’s new chairman, Paul Atkins, can simply immediately rescind the May 2013 Memorandum of Understanding that granted China’s companies unique and privileged access to U.S. capital markets.
This sweetheart arrangement, which was engineered by then-Vice President Joe Biden, has been exploited by the CCP to garner from mostly unwitting American investors conservatively $2 trillion to fund its military build-up in the South China Sea and globally, and its other hostile behavior – including innumerable acts of “unrestricted warfare” against America.
The Bottom Line
Chairman Atkins has stated repeatedly, both in his confirmation hearing and on the occasion of his Oval Office swearing-in ceremony, that he regards his first responsibility to be protecting investors on our exchanges. Since the Biden MoU has enabled Chinese Communist Party-controlled companies – including Chinese military companies operating in China and even in the United States – to defraud and otherwise exploit American and other investors in U.S. capital markets, terminating it should be Job One.
Giving the required 30-day notice that the U.S. is terminating the Memorandum of Understanding between the Public Company Accounting Oversight Board and the Chinese Securities Regulatory Commission and Ministry of Finance would enable a high national purpose to be served in the implementation of a policy course-correction that needs to be taken anyway but that can, under present circumstances, impose real costs on the CCP for its aggression at the moment – and help deter still worse behavior in the future.