Relations, this runs just over an hour. We are delighted and honored to have this as the First Program of the school year to so to speak. The council prides itself on being nonpartisan. What better way to demonstrate nonpartisanship than having this fully Bipartisan Commission here working out of the council for a couple of days, and the chair man and Ranking Member of the commission here with us . Congressman Mike Gallagher from wisconsin and congressman Raja Krishnamoorthi from illinois, thank you for agreeing to do this program today. We would love to get your perspective on, first and foremost, chinas role in the global economy. China has traditionally driven about one third of global growth. We benefit from that, in terms of being able to export there. Trading Partners Benefit from it. Germany slows down because china slows down, europe slows down, japan slows down. It affects us back here. When you look at the china challenges the commission is working on, do you want china to slow down . Do you want chinas gross to growth to slow down . Do you feel there is a role for china to continue to play role . First of all, thank you for your hospitality. For those who dont know, we have about 10 members of our committee here. We started the day off by going to the 9 11 ceremony at ground zero, which is very powerful. We will have a series of engagements today with people from your world, the financial and economic leaders, a lot of wall street leaders. And we will do a tabletop exercise, all with the goal of trying to better inform us and the members of our committee as we attempt to fulfill the mandate we have been given by the speaker of the house as well as the minority leader, which as i interpret it is to identify the Bipartisan Center of gravity, identify a set of policy and legislative proposals that can put us on a better path to competing effectively with china and things that can pass even in divided government. In that endeavor ive been very lucky to be partnered with Raja Krishnamoorthi. He hails from some state to the south of mine. Just an absolute pleasure to work with, and has set the tone for bipartisanship, seriousness. Its been great to work with him. One thing that makes me nervous, i see people i went to college with in the audience. A lot of blackmail sitting in the audience on me. Im lucky that facebook didnt exist until i was a junior in college. I was least likely to be a member of congress in princeton and joey can tell all the dirt on me. I would like the chinese, and Chinese Communist party to stop what i perceived to be its totalitarian ambitions. It wants to be a regional hegemon, which means cutting of our alliance and partnership structure. It necessarily entails taking over taiwan at some point. I think that is xi jinpings lifelong ambition, and i dont think his ambitions stop there. If chinese Economic Growth is a means toward that end, or just a way to fill the partys coffers the largest sustained peace time buildup since the second world war, and if you think about the numbers, they are daunting, they are overwhelming. We have been twiddling our thumbs thinking about how to grow the size of the american navy. China has the biggest navy in the world. Bigger than our navy. For those who say it is not a big deal, our ships are more capable, quantity has a quality all of its own. When you add in the other fact that china has the three biggest navies in the world. To say nothing about what is most problematic for our navy, which is their antinavy, designing a force exclusively over the last 20 or so as to push us out of region. That to me is a problem. What they are doing in xinjiang is a problem. The fact that they are leveraging economic power to coerce american companies, foreign companies, thats a problem. It is the behavior they are trying to stop. I would love to see a world in which china and the Chinese People continue to benefit from exposure to the global economy. But if the Chinese CommunistParty Continues on its current course, we will not have an option but to selectively decouple and the risk and diversify in certain areas. I have not yet met a member of Congress Wants to suppress the legitimate aspirations of any chineseorigin person or anyone living in the prc. I think what we are very much concerned about is Economic Growth that comes from, in part, economic aggression. What are we talking about . We are talking about theft of intellectual property. We are talking about dumping products to put industries in a out of business. We are talking about cyber hacking. We are talking about all the types of unfortunate moves that the Chinese Communist party has undertaken to basically get a leg up on other countries economically and industries outside the country. We were in wisconsin. Bears fans need a diplomatic visa to visit that part of america. But the serious point here is that the trailers were on the verge of bankruptcy because chinese competitors had dumped so much product on the market that they couldnt survive. But certain countermeasures were put in place to enable them to stand up their operations again and be able to survive and thrive. Unfortunately, that is kind of the competitive posture that we are in with them. They take moves, we are going to have to counter them, and work with our partners, allies, and friends and multilaterally put pressure on the ccp to cease further economic aggression. Rep. Gallagher can i make one followup point . The president made a comment that as chinas economy slows, it is less likely they can make a move on taiwan. I dont know if that is true. Dont mean that you criticize the administration. I just think it is equally plausible that xi jinping could be more riskacceptant and less predictable and do something stupid. It is the nature of these regimes that because there are not robust feedback mechanisms, they are insulated from certain types of information. That is one of the questions we will be digging into, what is the systemic risk. What is the risk to the Global Financial system if xi jinping invaded taiwan or did a blockade or some lowerend scenario . That is a question we must approach with humility. I dont pretend i have answered. Of the question. Michael building on that, what do you view as the goal here . What is the new equilibrium we should be seeking in the u. S. China relationship . Yesterday President Biden in vietnam said we do not seek to contain china. Is the new equilibrium a new cold war . Is it containment . Is it detente . Is it peaceful coexistence . Is it something that has no analogue to the u. S. Soviet relationship . What do you think we are heading towards . Rep. Gallagher the near goal is obvious, preventing war. A conflict with china over taiwan would be catastrophically destructive. The scale one Aircraft Carrier gets sunk, that equals the losses of 20 years of war in iraq and afghanistan. It is crazy to wrap your head around that. Making a determined strategy work, preventing world war iii, is the nearterm objective that needs to animate what we do washington, d. C. The midterm objective, i think it is in our interest to have allies controlling Critical Technology. We can argue about what falls that definition, but some things are obvious, Quantum Nuclear technology. The longterm goal, i would argue, is maybe this is where we disagree i think we should maintain our primacy internationally. A world in which americas dominant superpower is a more peaceful and just world. That is not america alone. Part of the reason we are in such a position, or were, is we have this fantastic network of allies and partners. Quickly on new cold war i think we have a different view on this i find the analogy helpful. I call it a new cold war as far as the differences and similarities, and the differences are obvious. Weve never had to contemplate selective decoupling from the soviet union because our economies didnt interact. Whereas with china, we are conjoined twins in so many areas. It makes it so difficult to untangle. Rep. Krishnamoorthi i think it has got to be a situation where we have kind of a rulesbased International Order in the indo pacific region, where as President Biden mentioned yesterday, they are playing by the rules. There are some rules of the road that neither side or no one in the region is violating. What does that mean . First of all, it means from a security and military perspective, we dont resolve our differences anywhere except at the negotiating table. There cannot be coercion or military means of resolving these differences. And unfortunately, our ccp competitors, you could say, dont necessarily abide by that fundamental principle. You see that in the South China Sea, where they basically lay claim to the entirety of the South China Sea and im not just talking about the barbie movie depiction of the ninedash line, but throwing their elbows in the himalayas. This has got to be off the table. Previous generations of ccp diplomats and american diplomats and taiwanese folks decided were going to leave that question for the future. Maybe future generations will be able to resolve that. We cant do so at this moment. I think thats in fact what henry kissinger, along with his counterparts in the 1970s decided. If we dont get to that point, we need to get a some point where military aggression is off the table for that purpose. Secondly, there have to be economic rules of the road we can all agree to. What we are seeing right now are practices which my constituents, mikes constituents, i think the majority of the American People will not tolerate. Those will continue to destabilize this relationship. I think that is what it feels so fragile right now, because of Something Like 80 of americans view china not as a friend, not as a competitor, but sometimes as an adversary. And when you see that, you kind of are on a road to a bad place. And so we have to change that fundamentally. Michael how do you go about doing that . That was the theory they begin to abide by the International Rules and norms and it is a disappointment along that path. Do you think we can compel them through economic sanctions . Or is it through some overwhelming change in the military balance of power . Rep. Krishnamoorthi on the military side, mike and i are in agreement. We have not done enough. We have not done enough in deterring military force. Unfortunately, we kind of know what needs to be done, but it is not being done fast enough. Although there are those who want to move faster, but it has not moved yet. We could getting that is one issue that i think we are in alignment on. The second is a tougher issue. How do you get xi jinping who is a rather ideological person, to change his worldview and began begin to comply with the rules of the road . I do not know. Im not sure if it is possible. But we have to hedge. On the one hand, if it is not possible, then we are going to have to protect our values, protect commerce and industry and we will have to work with allies, partners in bilateral trade agreements that enable our friends who are collaborating with us to share in the gains of being part of that partnership. Secondly, i think that on the other hand, it is possible that these multilateral alliances and partnerships could potentially pressure those ccp to adjust. That is one thing that they fear more than anything else, which is us getting together with our friends and allies to put in place certain principles or guardrails that would prevent the ccp from playing them against each other. We have done wonderfully regarding ukraine. That is something that we should probably implement with regards to taiwan as well. Rep. Gallagher i agree with him in regards to allies and partners. It does not need to be a formal treaty alliance. Indonesia is an area where there is a dearth of focus. What we see against us is increasingly looking like an axis of authoritarian powers. China began the dominant partner. Being the dominant partner. The obvious thing is that we need to build a Stronger Team to counter that axis. I think the more obvious point, we have to go back to that strategy. I think it will continue to fail. My view and this might be part of my inexperience, but i believe the hard power component is the most important part of the strategy. The best chance of deterrence is robust and smart power. Ukraine proves the point that soft power disconnected from hard power deters. Youre not going to deter the vague threat of sanctions. If your adversary does not believe you have a credible military deterrent. In the things that weve seen, it is so important to modern warfare. Longrange precision fires. Autonomous systems. The things that can be numerous, less expensive as opposed to massive platforms that take years to build. The final point i would make, i do believe that we have to selectively and strategically decouple. I know there is a debate about the correct terminology. But a few things are obvious. I do not think we should be financing our destruction. People in this room probably disagree but i think at the lowest level, we should not be allowing americans and Pension Funds to invest in Chinese Companies that build fighter jets and artillery shells. That is an obvious step, going forward. How do you incentivize . The on shoring of tea key manufacturing. Where do you draw that line . I do not think americans have a problem with buying cheap textiles as long as there is no slave labor. Figuring out that line will be difficult. It implies a bunch of things that we need to do to get our house in order to function. But we are going to solve all of that. [laughter] mike f lets dig into that a little further, if we can. The Biden Administration has proposed some ideas about restricting investment in various sectors. You said it does not go far enough. You want to look at passive investment, index funds, any purchase from Chinese Companies. That seems to me a decoupling of the Global Capital markets. Any pros or cons for that . How do you think about is the goal to deny china the money or the expertise and technology to be used against us in a military way . Rep. Gallagher it is both. But first let me Say Something nice. They kind of conceded the principle that there should be some restrictions on outbound capital flow. I do not think it went far enough. By putting them in the lead with off ramps, given the treasurys past behavior, i think under the Trump Administration, it was the same way. It had a more dovish position. It depends on who we are talking about. I would expect that there would will not be a robust, further set of restrictions. Even though it was sector specific, it makes sense. We have all these government list. There are like four other lists. The lists are not routinely updated in a way that makes. Make sense. They do not account for a lot of companies that change names, subcomponent companies, stuff like that. I do not think based on my experience it is a workable strategy going forward. It seems that there is less of a sector specific approach. We are talking about ai, quantum and microelectronics. Most importantly, if we are just talking about private investment, that is at most 17 of the profit. Problem. What do we do about the rest of the money flowing to china . We heard some constructive pushback and feedback this morning in our meetings, initially. We are doing this to interrogate the issue because regardless of where you fall on the issue, whether you think the idea was too weak or too strong, i think Congress Needs to step up and legislate the issues. The biggest thing i think i have heard so far is that even those in the financial community, what they want above all other things is predictability and clarity. If we legislate it thoughtfully that is what we can provide. Rep. Krishnamoorthi i think some people think, well, we are advocating for taking all money out of all chinese investments. But there are certain areas that are problematic for us. I think they specified some of them. Quantum computing, artificial intelligence. Why those areas and not others . In part because some of those areas have been used for generating Surveillance Systems and the persecution of uighurs. Many of you are aware of this, that there is a genocide happening in northwest china today. There are 23 million uighurs in the province. 2 million, upwards of 2 million of them are in concentration camps, as we speak. 80,000 women have been forcibly sterilized. 600,000 children have been removed from their families. This is unspeakable evil that is happening today. We should not participate in any type of endeavors that further that genocide. It is that simple. That is the first thing. The second is, we should not be funding the buildup of the pla. We have index funds today in the federal thrift savings plan. Im sure you remember that. There are index funds. They build the fighter jet that would be used in the invasion of taiwan. There are so many military companies being funded by us. The third issue is there are a number of Surveillance Companies that we could not possibly by because it provides backdoors, but we have funding through our investments. It makes no sense. So, i think that we want to be in the situation where we are able to invest, just as they invest in our country, but we do not want to be investing in problematic sectors. I think that is where we are focused. Mike f last week, we heard news that huawei came out with a new phone. The chinese are claiming it shows the lack of utility. Of our export controls. How do you assess that product . How do you assess the export control regim