Transcripts For CSPAN2 Hearing On China And U.S. Economic Po

Geostrategic challenge with the rise of china poses for the United States, not just today but in the future. The communist party led people were public of china through unfair trade practices, intellectual property theft, market manipulation and very prominently, in my view, nonreciprocal treatment, not just in the economic round but in many realms i has been a fore in the Global Economy that undercuts the resiliency and strength of the u. S. Economy. China has been one of the worlds fastestgrowing economies averaging close to 10 growth from 19792015. In 2014 china overtook the United States ass the Worlds Largest economy purchasing power parity basis according to the International Monetary fund. I believe that there is a strong eipartisan interest hopefully we will see that today in establishing a longterm economic United States strategy with our allies that focuses on reciprocity, intellectual property theft, and ultimately, from the United States perspective out competing the chinese. In may the white house issued its document called the United States strategic approach to the peoples republic of china and this document stated quote, the Chinese Communist parties expanding use of economic political and military power compels acquiescence from nationstates across the globe harms vital American Interest and undermines the sovereignty and dignity of countries and individuals around the world. This document is part of the Broader National Security strategy issued a couple of years ago by the Trump Administration and National Defense strategy issued by the garment of defense. These documents, although you dont see it in the press, in my view, have very strong bipartisan support in the congress for laying out the challenge that our nation faces with regard to china. What they lack right now is implementing documents, implementing strategies, particularly as it relates to the economic challenge that china poses so what are hearing intends to do today is to start the focus on the implementation and execution of these strategies and as i mentioned the strategies have broadbased bipartisan support but we will need to be able to bring our government, our society together for the long term, literally decades like we did in the cold where with thewe soviet union if we will execute these and away that protect American Interests, or workers, economic National Security interests. I am hopeful that is the path that we are beginning on in the Trump Administration in a series of speeches through cabinet members in the last few weeks has started to lay out this strategy and i know secretary pompeo, as we speak, is testifying in front of the Senate Foreign Relations Committee and i am hopeful with our two panel of Witnesses Today that government witnesses and experts from the private sector and think Tank Community will be able to start informing the congress on this issue which i think is one of the most important issues facing the United States. That is our goal and i am excited to have a Ranking Member markey as my Ranking Member here and i know he feels the same on a lot of these issues with regards to the challenges that china poses and with that i will turn my turn to the Ranking Member for his Opening Statement. Thank you, mr. Chairman. Thank you so much for convening this hearing and for your continued partnership on the subcommittee and i want to thank our witnesses for their willingness to participate today. As the Ranking Member of both the skunk subcommittee and east asia Foreign Relations committee i believe meeting the china challenge should be a bipartisan priority. We must compete against beijing efforts to unfairly tilt the Playing Field against American Workers and businesses. Those actions include states and companies, intellectual property theft as well as increasingly using multilateral institutions to set standards that privilege Chinese Companies and technology. China also uses its vast economic tools to threaten freedom around the world and beijing is already exploiting the size of its market to coerce american citizens and Business Leaders as well as foreign governments into selfcensorship to protect official chinese cecigovernment messaging. We know china is using exports and foreign assistance including through the belton Road Initiative to embed around the world, not only surveillance technologies but also the values and practices that activate those technologies for authoritarian repression. As we engage in this competition as systems we must remember that the Chinese Government is testing their authoritarian tools first and foremost on the people of china. I want to make clear that in todays hearing and otherwise we are focused on the threats posed by the chinese. Excuse me. We are focused on the threats posed by the chinese [inaudible] [audio difficulties] but while countries around the world look to the United States week, International Coalition to push back on chinese aggression they note the United States has retreated from our historic support of democracy and human rights. Pillar of our Foreign Policy. They note that the trauma administration has abandoned International Institutions like the World Health Organization or the Chinese Governmentn has only stuck up their influence campaign and they note this administrations unprecedentedun support for [inaudible] over allies but rather than take a leadership role in pulling together a Global Coalition to combat chinas policy objectives this administration has pursued an aggressive go it alone approach that swings between pandering to china including an apparent green light from President Trump while we hear of detention camps to the closing of the chinese consulate in houston without any reason or expiration of what we seek in return. We cannot consider china policy in a vacuum. Every policy decision for the past 3. 5 years impacts of the rest of the world views our legovernment. It is clear to meet we have failed to rise to this moment. As china stepped up its Propaganda Campaign in the midst of the coronavirus it is hard for the United States to point fingers when our own virus response has been so inadequate. The president s and explicable failure to lead a National Response to the Coronavirus Crisis is attacks against science, free speech and the media has left the United States flailing as other countries lead and responding to the pandemic. As china continues to dominate manufacturing and require companies to bring on chinese partners and share intellectual property the United States has caught relevant areas of the massive spending and has not leverage the full resources of the government to spur economic development. We should be investing in our research and development and Technology Sectors andnd putting money into education with a particular focus on stem. We should also be utilizing the defense production act to its full potential to mobilize the economy during the pandemic. As china engages in a conference of campaign to exploit International Institutions for their own purposes we havent retreated even further from the world stage. When the United States is absent on the world stage china is only too happy to fill the void. Competition with china is fundamentally about a free society versus authoritarianisma must utilize all tools at our disposal to remain competitive, resilient in this as we work with democratic countries around the worlds as a pushback in a connected way to protect the values we hold so dear and the challenges are too important the stakes are too high in the United States and play cannot afford to seed leadership. Thank you, mr. Chairman for this very important hearing and thank a who all of the witnesses are at this meeting today. This is clearly a very important segment. Thanker you, senator markey. I appreciate your partnership on this committee were we have had good hearingstt and i think a lt of overall bipartisan agreements on a number of issues that is important as it relates to china. I noticed that the chairman of the Commerce Committee, senator wicker is here and i would ask him to give an Opening Statement as well. Mr. Chairman. Thank you very much, mr. Eachairman. I appreciate your leadership on this issue and Ranking Member markey this is an ambitious two Panel Hearing this morning and should be quite valuable. The focus of course is the Chinese Communist party and their predatory economic practices and their impact on American Companies and workers both at home and abroad. Confronting these practices and protecting our economic advantages for the future will require an aggressive u. S. Government response supported by congressional action and oversight. Inmate the white house published its whole of government Response Plan and a document called the United States strategic approach to the peoples republic of china and todays hearing will focus on the economic dimensions on the overall u. S. Strategy. As the white House Strategic points out the ccp uses a variety of weapons to undermine americas economic competitiveness, including cyber attacks, intellectual property theft, force Technology Transfers and illegal subsidies to state owned enterprises. I hope our witnesses will describe the particular impact of chinas campaign with respect to industries under the Commerce Committees jurisdiction such as tillich medications, Maritime Aviation and space. Americas future Economic Prosperity is not the only thing at stakenl in a strategic competition. As the covid19 pandemic continues china is apparently using tactics from its predatory playbook against our Public Health sector. Last week the department of justice indicted two chinese hackers for a widespread cyber attack campaign supported by the chinese intelligent service. The targets allegedly included at least for u. S. Pharmaceutical and biotech working on a covid19 related testing and treatment product. Covid19 crisis has revealed unacceptable vulnerabilities housed by years of letting the ccp and gauge and destructive and economic packages. Without an effective coordinated response hopefully that is about to change. Here in the initial phase in the outbreak chinese exporters and exporters and shipping ground to a halt in the u. S. Businesses were forced to go without [inaudible] and in particular the United States pharmaceutical industry has been shown to be overly reliant on chinese suppliers. We cannot tolerate having these economic vulnerabilities and the ccp is unlikely to stop its predatory practices. Therefore the u. S. Governmentes should help our economy become more resilient against constant pressure from beijing. I would ask our witnesses from the state department and the Commerce Department to detail the measures there are taking to support [inaudible] congress can play a sufficient role in supporting the efforts of the executive branch. The Commerce Committee is doing as part to help by producing not partisan Bipartisan Legislation just as the recently secured and trusted Communications Network act known as the rip and replace and there are funds in the covid19 more proposal by the majority leader in this regard. This lot will help protect american can medications networks from threats posed by ccp suppliers such as huawei and dte, by supporting the removal of that equipment i was open to suggestions from all our witnesses on how congress can continue to bolster the administrations efforts but mr. Chairman and Ranking Member markey have been champions in this regard and i appreciate the bipartisan support and i think the witnesses for [inaudible] thank you very much. Thank you very much but i want to welcome our witnesses and i have instructions here that say if the witness does not take their seats, ask them to do so. We have no witnesses actually here in the room but i think they have taken their seats virtually so i can see them on the screen and i want to welcome mr. Michael wetzel my commissioner of the u. S. China economic and Security Review Commission and mr. Rush, director of the China Strategy Initiative at the Brookings Institution and gentlemen, you each will have five minutes to deliver an oral statement, longer written statement will be included for the record and thanks again fort being here and mr. Wetzel why dont we begin with you. Thank you for the invitation to appear before you today. The topic of todays hearing correctly affects every one of our citizens. My name is Michael Wetzel and i am appearing before you today as a commissioner on the u. S. China economic and security View Commission but as a normal washington disclaimer i am speaking for myself although my comments are informed by my service on the commission and all the work i have been involved in for many years. Todays hearing raises the critical issue of t how to respd to the china challenge. What chinas policies and actions pose the greatest threat to our competitive posture other nations are watching americans response to determine whether they should emulate chinas actions or whether america will stand tall and defend and promote its interests. Last week chinas foreign minister said that quote, the Current Situation in chinese u. S. Relations is not what china desires to see. The United States is responsible for all of this. I agree that we dont want the current relations to continue but i strongly disagree that the u. S. Is solely responsible. Years of repeated attacks on our industrial based continuous theft of our intellectual property, countless unfair trade practices, massive subsidies state owned and statesupported entities and many other predatory and protectionist policies along with chinas human rights abuses, current actions in hong kong and power of production in the South China Sea and elsewhere require that we more seriously confront china. Chinas actions led to their response. Chinas leadershipd has made clear their intentions for numerous policy pronouncements and activities. They dont pose their approach as being winwin but rather winning and dominating. The chinese common as parties policies have contribute itbu to the hollowing out of production and the dangerous reliance on uncertain and risky supply chains and a loss of resiliency. Countless jobs have been lost and in my prepared testimony i outlined many of the ccp policies and practices to form the basis from our concerns. They are well documented in the dangerous dependence on china for our medicines, medical devices and personal protective equipment has painted a stark picture from the public but that dependence exists in many other sectors, including the ccp istated goals. But ministry is right as a relates to policy failures here and the rest that must be addressed and our inaction on certain and actions on others have intuited to the current problems. [inaudible] many u. S. Businesses began to set up operations to china with the stated goal of serving the Chinese Market and despite facing the requirements forr joint Ventures Technology transfer and other policies the amount of investment by u. S. Firms in china increased as did their employment which rose by almost six