Senate Intelligence Committee and a member of the banking and finance committees. [applause] senator warner thank you for that kind introduction. The first time i have spoken to the council since i was a governor. And in in that, apologize while most of the action is going on in the house today, we are actually plowing through a , and im goings to be a little limited. Limit my presentation and not go through the question and answers, and i would have almost flipped out because i think the questioning is a must more significant. But i appreciate this opportunity to speak to the council on competitiveness. Continueul we will this dialogue because i think this conversation and issue is the issue of our time. I am going to talk about u. S. China relations, and maintaining the United States competitive edge. There is a widespread understanding today that rising china is the great Foreign Policy challenge of our time. This could not be a more important time or more important conversation. Ouran and must retain leadership and Global Competitive advantage, by embracing those defining characteristics that have made america the leader of the free world, our belief in the rule of law, checks and balances, open markets, justice, diversity, human rights, and ultimately the rights of an individual. Especially when those rights come in conflict with the government. Foundation, are the we dont focus on this enough, but those basic American Values have been the foundation of our international success, and in most ways, the foundation of our strongest alliances. But today china is offering a ,ifferent model to the world which i will acknowledge it has achieved meteor cries, but it meteoricso achieved rise, but it has done so by rejecting those values the west consider strong. My beef is with president xi jinping and the communist party means thenot by any great contributions of Chinese Americans or the chinese people. It is terribly important at this moment in time that we, whether in business wherein politics, stand with the people of hong kong as they struggle for their freedoms. I fear that the Chinese Communist partys intent on reshaping the norms and values that have underwritten the decades of global stability, security and prosperity. Recently, when you say i was part of that conventional wisdom, conventional wisdom told us the u. S. And china would rise together, two nations intertwined in partnerships in trade, business and education. And like many, i remember leading a trade delegation to china as governor, and i hoped chinas greater global integration would lead to a more open, prosperous and potentially more democratic china. And that a rising china would be good for the world. Today i believe it is clear that and the of president xi Chinese Communist party do not align with that vision. The party is making a play for dominance in all the advanced, 21st Century Technology arenas, 5g, ai, quantum, robotics, areas where they are already the worlds leader, but they are doing this not on a traditional marketbased, fair playing field. The Party Instead is exploiting all elements of state power to strengthen chinas position globally, using Cyber Attacks to steal economic and military secrets, modernizing and expanding its own military presence, and waging influence campaigns, some open but many covert, to shape perceptions of china while undermining human rights, dignity and free speech. It acts in an interventional list and unilateral way, continuing more so in the last two years to reject Core Principles around transparency, reciprocity, rule of law and the free market. Andccp, i believe, exploits , depending on where it provisions itself, sometimes says china is a marketbased system and exploits the opportunities of an open market, while at the same time increasing barriers to Foreign Companies coming into china, and massively subsidizing its own chinese champions on the international market. And what it cant outinnovate, the ccp has no reservations about stealing, cyber theft and espionage. Foreign competitors have often unwittingly, although more so with certain of their actions maybe not so unwittingly, assisted beijing in these efforts. And it has become extremely common for the ccp to force Foreign Companies into joint ventures with Chinese Companies, who require them to share source codes and other ip, in order just to get into the chinese , sacrifices that companies would not make to gain access to any other marketplace in the world. Ise that ip and source code in china, that is often taken, stolen, and then used by the Chinese State to modernize Chinese Military under a statedirected policy they call civilmilitary fusion. The government there continues to view western universities and government labs as a fertile background for the transfer of Sensitive Research back to china, and for spreading false narratives favorable to the chinese coming is to party. What is particularly alarming, and we have seen enormous evidence of this recently, is that it is these chinese expatriates, especially students and academics, as essential asset in the staterun efforts. Let me be clear, 363,000 Chinese Students at american unities at american universities, most of them great, great students. My concern is not with the vast majority of these students, who come here with the opportunity ourearn and also benefit country and the world at large. But my concern is, what has changed in the last five years with these students, america is not by any means as open and immigrant friendly as it used to be, there are obviously, china is a much more attractive place to go back to for students, but the third and most damaging and potentially devastating is that the chinese spy services are increasingly threatening families of students who are doing advanced research, threatening their families if the sons and daughters, after they complete their studies, dont come home and bring a thumb drive full of ip. These behaviors are not just a challenge to the United States, but to all nations committed to democracy, transparency and rule of law. So what do we do . A comprehensive, global strategy focusing on competing with china in the 21st century. I am not here to advocate that we go back to some kind of bilateral, cold war approach, where we try to break the world into two halves. Given chinas size, its integration into the economic order and the world order, two thirds of all the nations in the world, their top trading , anders already china Global Threats we face, from Climate Change to regional threats like north korea, there are going to have to be areas where we continue to cooperate. And we should that with our eyes wide open. So what do we do . Should quickly take actions to protect ourselves. The u. S. Government must increase efforts to protect our critical supply chains. Increased export controls are critical, with dual use technologies, to limit chinese investments incentive and investments in sensitive and critical technologies, and to ensure that chinese bad actors dont hide those investments in anonymous shall companies. Shell companies. We know china is using, on a regular basis, dark money to buy influence, in australia, taiwan, increasingly other nations in have so making sure we financial transparency in this country around Beneficial Ownership is critical. But the federal government cant to tackle this challenge alone. For example, over the last year and a half, i got so frustrated with the intel briefings, that theged my views throughout Obama Administration ended to the trump administration, nothing partisan about this, that laid out in a unanimous way the threatened challenge china poses on a host of fronts, with the Intel Community saying, simply terrorizing the 15 members of the Intelligence Committee is not sufficient if we cant get this immigration get this information into the academic world, the business world, and other parts of our society. As a former business guy, i have been basically doing roadshows over the last year and a half, always with a republican colleague and always with either the director of National Intelligence or his deputy, fbi, dhs, others, where we give those outside government, in a classified setting, an inside view of what we see in terms of these challenges. We have done a dozen plus and have more to do of these socalled roadshows. It ends where we both walk out with shared awareness, and i hope for the folks who come from academia, telecom, we have hit many sectors with the exception of private equity, who has been unwilling to hear this story so far, we have walked out of those sessions with a shared awareness, and increased sense of urgency that companies and universities need to fortify their own systems against Cyber Threats and insider threats. We need to do a better job protecting our research and development, especially the critical work at United States universities and research labs. Universities must double down on security and compliance. For example, requirements that exist but have been ignored for too many years on faculty members disclosing additional sources of income, or affiliations with Foreign Military and intelligence to better address potential conflicts of interest. We have seen continually and number of faculty members who say, i wondered why xyz professors were always offered these expensepay trips to china to lecture for a while. If that is not a flashing red cant limit faculty members travel, but at least have conversations about what they are getting into, then we are not doing our job. Again, these measures must be enforced pragmatically and transparently, so they dont discriminate against the people they seek to protect. The goal is not only to protect our research, but to help students and researchers, chinese and otherwise, avoid being prayed upon by the communist party being preyed upon by the communist party. Party. Im disturbed that u. S. Businesses and academic communities have deepened partnerships with china shortterm gain while failing to take into account longterm costs. If i hear one more business leader, fortune 500 Business Leaders say, i get this problem but we cant miss the chinese markets, and i only say, at what cost . We see american investors pouring money into statebacked Chinese Companies that advanced Chinese Military capabilities. We have seen u. S. Companies, some of our most prominent, developed technologies that directly enable the Chinese Communist partys censorship, surveillance and social control efforts in a system that is the most orwellian in nature. And what is worse is that this ability for china to develop these surveillance technologies, which are currently focused mostly on their own people, but they have taken this as another tool that they can export to other authoritarian regimes, to only their version of a topdown market system, but also saying, if you want to control your dissidents, we can offer you a marketbased solution that will rock your socks. One example is the ccps Inhumane Treatment of the uighur and i recently joined with senator cornyn on the uighur protection act that would place expert export control and technologies that provide the ability of the communist party to monitor uighurs in western china or protesters in hong kong. So we have a so we have looked that additional restrictions around Technology Including facial recognition software, currently being used to increase mass surveillance efforts. A career in telecom before i got into politics, we need to get very serious, very quickly, because we are behind in securing our Telecommunications Networks when it comes to 5g. For those who are not telecom inds, 5g is the equivalent the old days of moving from radio to television. It will have that much of a transformative effect on our economy, as virtually all of the internet of things or devices arrive on a 5g network. So far the u. S. Has failed to find that consensus with our International Allies on how we ,eal with a company like huawei that is beholden to the commonest party of china rather than shareholders or management. For too long we have tried to point out, our friendly nations around the world say, show me the back door, that is not the issue. The issue is, if you become competitora chinese that offers a fullstack thation in 5g, in a system is going to be software driven, at any point in the future, the communist party in china can make sure that malware that comes into your system can have devastating effects in terms of your people being spied upon. And there is not an Intelligence Agency around the western world that doesnt acknowledge that. This 5gve to have strategy. Im joined by a number of colleagues to press the administration, and they are getting their act together to appoint a 5g topdown person so we can build this coalition of companies around the world. Huawei is already going to get close to half the market, no matter what we do, starting this far behind. This is the First Time Since sputnik we are behind on a leadingedge technology. Defensive measures only go so far. We need to outinnovate china on an ongoing basis. Back to 5g, we can simply say we out ofng to keep huawei u. S. Networks, but it is not going to be kept out of other networks. I want to make sure i get these and this is an important point. I will try to speed this up. We havey in the past, always thought, even if not invented in america, we, by the size of our market and an open and competitive marketplace, if we can outinnovate, we win the longterm battle. We are seeing in the case of 5g the first example of what may be the new model of the 21st century, where china basically has good technology, whether they acquired it, stole litter stole it or, developed it, back a National Champion and then go into the marketplace, and if we expect a marketbased solution against a Company Sponsored by china, the 5g market, about 75 billion in equipment to be purchased, china has put up a 100 billion fund to back huawei. So the notion that any company and we dont even have an american competitor in this space can go against an International Competitor on offer 140 huawei can financing, that is a challenge we can solve on our own. We need to look at how we think about International Technology alliances. Starting point, but there will be needs for government involvement unlike anything in modern times. This country is going to have to start thinking about industrial policy in ways we have not thought about in the last 50 years. Is good news, there broadbased consensus across the american political spectrum that this may be the time indicia that brings us together. There is also growing recognition amongst a lot of this was driven by japan, korea, australia, as they saw these chinese influences across the west that were going to have to have some International Cooperation to take on this challenge. Where wewe do in 5g are behind, we have to be careful because we will face the same level of competition in artificial intelligence, quantum computing, biotech, opposing a level of threat and need for solution sets that we have not seen before. I recently suggested, if we issue some new spectrum, we ought to take the lead in making sure we push toward what would 5g,he next iteration beyond open radio access network, where the west could be more competitive because we will be moving towards a softwarebased solution. An example of a problem, but also hopefully a solution set. And we proposed that if there is additional spectrum being auctioned off, that we need to make sure we put aside some funds, public funds, to promote oran, and if we have to take out some huawei equipment on some of our smaller domestic areas, which, if you ever look at a map of where huawei sold equipment and where our icbms are located, you will see a complete overlap. If we have to change out that equipment, we need to build toward a next generation solution. So this notion of a Tech Alliance or alliance of the willing may be a new framework that we thought about in a military sense, thought about in an economic sense and increasingly we will have to think about in a technology sense. That goes across r and d, supply chain issues, goes across how we the technology of the 21st century that will drive the economy is based in the values that built our country in the first place and allowed our country to prosper in the postworld war ii environment. Recognize ouro public level of investment, if we are going to make this happen, is going to have to go dramatically up. At the end of world war ii, the u. S. Funded 16 and percent of all the r and d in the world. Today we fund 28 . Only 7 of that is nondefense related. Is not a Business Plan for success against a country in the sense of china, that is laid out in their china 2020 five plan, technologies they believe they if they are able to carry that out. It is extraordinarily important we get this right. I have a lot of other important nongs to say, but since, of afor the weary in terms voting schedule, i will leave it at that. I hope i get invited back, hopefully i have provoked you a little and you say, i agree with this, i dont agree with that senator, lets get at it. This is the issue of our time. In a strange way, when we see my so job right now, seeming divided in our country, i want to leave you with what may be a good news piece. I have found from the business signed academic communities over the past two years and from the political world, i can tell you this is a world where there is a growing, huge consensus. What we have not had is that plan on how we get it right. You,e going to need policymakers, academia to put our heads together, not just on an americanbased opportunity, but with democracies around the world. I hope i can be part of that solution set and we need you in that struggle as well. Thank you. [applause] cook and imadam the 2018 cspan student cam winner and im here to encourage to wrap up this competition as the deadline is getting close but youll have time. This was the time i started filming my documentary the first year i entered. Im in the d. C. Office is right now and cspan two came with an Incredible Opportunity for me to express my thoughts, my views about the Political Climate in the current day and connect with local and state leaders and political office. Im excited you are interested and pursuing this because it is a onceinalifetime opportunity. Still time for you to enter the cspan student cam video competition. You have until january 20 to create a five to six minute documentary that explores an issue you want a candidate to address during campaign 2020. We are giving away a total of 100,000 in cash prizes with a grand prize of 5,000. For more information, go to our website, studentcam. Org. The Washington Post columnist David Ignatius hosted a discussion on iran, its future, and impact on the middle east. This is an hour and a half. Ladies and gentlemen, let me
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