Theyll have five days to submit into the record. Its called examining operation in Foreign Investment in the United States. I recognize myself for five minutes for an opening statement. The free flow of capital is a bed rock tenant of a United States economy. Insuring that free throw world wide has always been a bipartisan goal and to that end, im proud to serve in the caucus along with our call eelgs mr. Holding, hiems and meeks. It promotes Global Investment and help hads educate members about the importance of Foreign Direct Investment. Its the recipient of the greatest amount of Foreign Investment. That capital has provided a good deal of if aerj that kept our economy vibrant. To provide the fuel of u. S. Businesses and jobs. Today almost 5 are related to Foreign Investment. Most of these jobs pay handsomely, far better on average than other u. S. Jobs. But if Foreign Investment is to be a force for good, it must not be welcomed more unthinkingly than one might leave a house unopen around the clock. We must guard against it. That investment might come for purely economic reasons but especially in this era of international turmoil, conflict and economic uncertainty, it can come from individual or nation states who can can weaken our economy or spirit away technology or know how that could gain an advantage over ours. To maintain an a vigilant watch on Foreign Investment, sifius reviews many inbound investments to determine if they pose a threat to National Security. This involves rigorous scrutiny of all departments or agencies, including a scrub by the Intelligence Agency and the president has it power to order divestment if such concerns cannot be mitigated by a change in the original proposal. Today we face new threats on a number of fronts, not just of a hallowed out industrial sector but from terrorism and major nations that are economic competitors. Im referring of course mainly to china. Concerns have risen about using that countrys vast reserves to achieve Key Technology with aen eye towards taking a lead to the markets of the future. Theyve set aside 250 billion to be used in dominating the vital semiconductor market. This is not a new phenomenon but a new challenger. President ford set up out of concern it could weaken our economy. 1988 among concerns japan was seeking to buy critical technology, Congress Gave president ragen the ability to actually blocked deals. Interestingly the first use came when president george h. W. Bush blocked a sale of a component to a Chinese Company and President Trump already has blocked a proposed purchase of semiconductors of a Chinese Company. Approving a deal only when divestment of divisions with sensitive technologies or activities have occurred. But the statute as not been updated in a decade and clearly we should think about modernizing it. For were about 30 more reviews and a full fold expansion just since 2013. To that end senator corner have spent more than a year studying the process and considering possible reforms. I commend their work. This hearing is the beginning of the committees study of sievious. The committee will seek to insure that sifius has the tools to examine Foreign Investment. It is our duty to advance the National Security of the United States. At it same time we must aspire to the greatest extent possible a welcoming Investment Climate so u. S. Companies have the capital needed to grow. We need to be mindful the investment for clients overseas is not unnecessarily comp rusmized. Theyve have a panel of witnesses to discuss challenges that sifius faces. Its intended to inform members on wise decisions on this topic. This should be the begin oofg strong and thoughtful review. I would recognize a member of the democratic side, the gentleman from washington, mr. Heck for five minutes for an opening statement. And mr. Chairman, to begin with i would ask unanimous consent to enter into the record a letter i sent december 8th, requesting a witness from the department of treasury be witness at this hearing. I believe frankly theres no substitute for hearing from the people actually administering. Ive given treasury a very hard time in this committee. About this issue in past hearings. I want to make clear that they have begun to engage in what i characterize as a expressive manner. And my hope that committee could benefit in a future hearing. I would be happy to yield to chairman bar. I appreciate it gentleman yielding and just to clarify this is a first of a series of hearings. We most certainly will be extending an invitation to treasury officials who have a large role in the process to testify and you will have that opportunity. I yield back. Thank you very much, mr. Chairman. Im glad to hear that and i thank you again for convening this hearing. I believe it works well for motivated actions but in the 10 years since Congress Last pass legislation related to this issue, to pursue a comprehensive strategy or dominate strategically important industries. They were not designed and are not sufficient to deal with that kind of challenge. And although as many of our witnesses will note this is a problem every part of the u. S. Government have to Work Together to address. I believe there are some aspects that can only be addressed to close gaps at authority. With i asked about this in july, he agreed this was a pressing issue and that we could not aafford do nothing. I hope we can all bring that sense of urgency to how this committee approaches its work on reform. The kind of urgency and unity i know this congress can still bring to bear on issues related to our National Security. There are certainly things we need keep in mind as we move forward. Im fwlad many of todays issues have raised issues, will raise issues like the need to improve information sharing and cooperation with our allies and partners, many of whom are also in the process of reevaluating their own equivalents monopoly im glad many witnesses will raise it need to provide more resources which i agree are urgently needed to keep pace with it times, the demand and the need. And im proud that the United States is in fact a place that welcomes Foreign Investment. But the broader legitimacy and acceptance of that principal of openness, which i believe in and the ability of the United States to stand up for a free and open Global Economy is in fact dependent on our National Security monopoly as secretary mumuch toen said doing nothing is not an option. But im confident we can find a bipartisan path forward and strike that balance between continuing to allow robust Foreign Investment which i think does serve our economic prospects while at it same time balancing it against very legitimate security concerns, which are growing in number and velocity and in complexity. It needs to be reformed. It starts here with this committee and this hearing today, mr. Chairman. So finally, thank you again very much for convening it. The gentleman yields back and the honorable Senior International counsel at william hail. And served as deputy secretary of the u. S. Treasury where he had sniff kwnt a revamp of sifius. He also served as National Security kuns kounsal from 1983 to 1985. During 1987 he was a member of the National Defense panel. And to 2005 it director of Central IntelligenceNational Security advisory panel. He served in combat in vietnam with the 173rd airborne brigade, retired in the Major General in the army reserve and served as u. S. Ambassador to germany. A National Security strategy and logistics activity at dwight consulting who served for 36 years at the department of defense. To january 2017, mr. Estevez he represented the department of defense while Chinese Investment accelerated rapidly. Previously held several key positions including material evidence and undersecretary of defense for supply chain integration. Honorable mr. Wolf is a partner and from to 2017 was secretary of commerce for export administration. He was primarily responsible for the u. S. Dual use export control system and as a result, he helped lead part of the defense trade system. Also mr. Wolf was the primary Commerce Department secretary to sifius. And the litman chair in National Security and director of the digital and cyber space policy program that kounsel of foreign relations. An expert on chinese domestic and oo foreign policy. Before coming to cfr was an arms control analyst at the union of concerned scientists. He as been a visiting scholar of the hoover institute, the Massachusetts Institute of technology for international studies, the Shanghai Academy of social sciences and in beijing. President and ceo of the organization for international inhad vestment, representing the unique interests in subsidiaries. Her efforts feeks on the role subsidiaries play in the u. S. Economy and make u. S. A more competitive location. Prior, she was Senior Vice President where she focussed on Strategic Communications and advocacy. Each of oyou will be recognize said to give an oral presentation of your testimony. And each of urstatements will be made part of the record. You are now recognized for five minutes. Thank you, mr. Chairman, members of the subcommittee. Thank you afor your information on Foreign Investment in the u. S. This is one of those rare instances where advancing three decades of service has some benefits. My experience began in 1985 under president regan and secretary vaguer. As you noted it was then governed by an executive order signed in 1975 by president ford because of concern about saudi petro dollars being recycled to buy american assets. By 1988 concern had had shifted to japanese purchases, which led to passage of the exxon florio amendment and then concern about state owned Companies Buying technologies led to passage of the verd amendment. In 2005, after deals involving a Chinese National overseas oil company in dubai ports were blocked by congressional concerns, Congress Passed the National Security act of 2007. Today growing concern about Chinese Investment, especially in the Technology Sector has led to legislation proposed by congressman pit chger and Bipartisan Co sponsors. Earlier this year this committee helped legislate it secretary of the treasury as a statutory member of the National Security counsel, demonstrating its tightly linked to our overall security and foreign direct if vestment as beth you and mr. Heck have noted makes an important contribution to the u. S. Economy. Over 7 million americans will receive their paychecks this months. Close to 40 of those workers are in manufacturing jobs and fdi jobs pay about 20 more than the economy average. A more open if vestment policy is integral to u. S. Economic success and i urge President Trump to issue the traditional u. S. Open Investment Policy Statement at the earliest opportunity. But in issuing that statement, its important to insure Foreign Investment does not harm u. S. National security interests. Chinese investment has an appropriately high priority for scrutiny. Because china seeks to participate strategically in multiple spheres, military, diplomatic and economic using all elements of the state, including Stateowned Enterprises in that competition. Current legislation provides significant authority to block chinese acquisitions. The first unwound by a president was under george h. W. Bush in 1990. And President Trump recently blocked the acquisition of semiconductor by a Chinese Investment group. I would be sure to address actual gaps in authority. There is particular concern Chinese Companies may be using creative legal structures short of owner sp and control that could nonetheless crippal u. S. National security. I believe this is a vauld area for stricter scrutiny in the United States. I would caution about occurring outside the United States. Its intended to give the president exceptional authority to protect the United States, without superseding authorities in other statutes. For exampleful a joint venture abroad, the export Administration Regulations should be the first line of defense. Although additional ledgislativ authority is warranted, a lack of resources. As cases filed before sifius climbed to 250 this jeer and with the prospect that led by treasury could be involved next year in a major regulatory and implementation exercise, the work load may begin to delay jobs producing investments that do not raise National Security concerns. I urge matching requirements continue to be oo Central Point in your deliberations. Todays hearing and your future actions are being watched closely overseas. A particular concern the European Commission in brussels is establishing a if vestment review mechanism, even though ethe commissions has no authority on matters. So it may become a political screening process that could create a new barrier into that important market of over 300 million consumers. In conclusion im more concerned about growing protectionism than trade protectionism. If we want to grow well paying jobs in the United States we must send a clear message that the United States is open to investment, except in those instances where a process focussed squarely on National Security determined an investment mustby blocked. Thank you. The honorable estevez. Thank you for the opportunity to appear before you today to discuss the committee on Foreign Investment in the United States. I do want to be clear today that my views are my own views not that of my firm. I think its important to say from the dod perspective. There are many reasons as the finest military in the world. However, another reason is technological superiority of that military force we have over our adversaries. Its one of the tools that epihads us retain our technologicaled a vajt. The interagency process not only worked but worked well in protecting National Security in the United States for those cases that sifius had jurisdiction on. Nor did i sign off or ask it secretary of defense to sign off. The dod always achieved the mitigation terms. When i assessed the National Security risk involved in each transaction, i use the construct which i call the three cs plus one. They represent company, country and commodity. It plus one was colocation, when a Foreign Company was buying your Company Located near a sensitive military installation. Framework like this. For country we assess of the home country was a potential adversary of the United States or the country it was lax in its protection. In assessing companies we were determined if the company was a stateowned enterprise or had been created for that specific deal or if the it comp own or its ownership was reliable and stable. To assess commodities or technology, we would review the technology to dod Weapons Systems both current and future, how Cutting Edge Technology was squl it was already globally available. In co location cases we would assess what was taking place at given location and whether had the purchasing party would be able to impact those activities. If we had had had concerns with two or more with those cs my concern is cases are heading to mitigation at a minimum or potentially block. I recognize there are currently reviews by congress. My views arent based on that legislation. While the vast majority of joint ventures dont put