Factors we accept that Economic Cost like in high value pharmaceuticals and the margins will bear out the cost of development but right now for the Industrial Products or products for the ag sector the same costs still exist today but the margins are not there for the products. So it creates an imbalance and were seeing more capital flowing towards medical products with high margins than some of these industrial applications. Dont get me wrong, the cost will come down as technologies increase but the funding cycle we are right now with the markets being like they are impact some other than others. I seem to remember and i could be corrected later but i think senators grassley and ernest had spoken out about amino acids and other Biotech Products produced in china, many of them Food Additives and i think vitamin k and others that are necessary for the strength of our livestock, our food supply. What visibility do you have in that from the commission and what are you doing, is that accurate and it seems we are putting ourselves and the potential for china to be able to relationshippize to weaponnize those products for what is a critical need here. I appreciate the question and i just described, biotech can help us creating more resilient supply chains but can be used to entrench the supply chains we have visavis the United States and china. By and large we dont have great visibility to biotech supply chains whether it be medical or agriculture and am feeling a sense of whats the word . Jealousy at my colleague talking about great detail the Battery Supply chain and different sectors and how well defined that is. But on the biotech side its not there in terms of what are the critical inputs, the Raw Materials, the reagents, the consumables, where those come from and where they exist, the visibility is not there and it becomes very difficult to make policy decisions. If youll allow me one extra detail here, the way our system classifies biotech with the way that we count biotech industry in what we call make codes does not apply to biotech because it can be used in industry and pharmaceutical we dont have ways of measuring our own economy with respect to biotech. It becomes very difficult to make policy decisions without understanding where we are and without understanding where china is. Were looking at ways to improve our own economic accounting if thats something the commission is interested were happy to chat further on that. Weve looked in the past about accounting and Data Acquisition and certainly looking at redefinition of the nix codes which is in the department of commerce and something within their jurisdiction and does does not require new Statutory Authority and something will take under advisement. Mr. Nadaner, i appreciate everything youre saying and is spot on and i wanted to go to a different component of the Battery Supply chain and not the commodities, the cobalt, etc. , but the technologies embedded in there. There was a recent report that the authorities, camp lejeune indicated to the local authorities they could not put load balancing batteries from source in china as part of the reserve power system. And there have been increasing questions about the security of these larger batteries, not that the same isnt true of an e. V. Or tesla auto. But with the drive towards green energy and load balancing batteries, whether at the Industrial Facility or on the grid itself are increasingly important and ive raised other issues today. It sounds like were allowing preplaced chinese emissions on the u. S. Homeland because these batteries are all remeetly remotely maintained, serviced, accessed. What been the technology sphere do you think we need to be doing about the battery supplies that we are not doing presently . These are remote vehicles for our destruction. Theyre embedded with electronics that be used for a variety of purposes. The battery in many ways are chemicals with wires and sensors and semi conductors included but the chemicals can be highly explosive. And that just takes a little bit of computer code to change. I think in terms of those kinds of electronics that get embedded in particularly larger, more complex batteries, thats something we can make but there still has no one is going to make it unless the batteries are also made here. It has to be something that goes in. Ok. Thank you. Commissioner cleveland . I want to thank you all for your testimony. Its extremely helpful. I have one question for dr. Rozo. You talk about the potential of withholding biofuel advancements from the u. S. Military. Can you talk more about that . Its in your written testimony. Page 9. My page 9. In talking about that there is an increasing consolidation in the ag biotech space and im curious what do you see is the threat or the risk there . Sure. I think broadly, the acquisition of singenta by kim china and the ongoing combining of assets with synokim is concerning because this supply chain and this agriculture biotech is winnowing. The number of companies which used to be much larger and represents a lot more countries is now much smaller and thats a concerning trend. We wanted to note, also, that the purchase of kim china was just to point to the differing views or view points what constitutes National Security concerns. We made recommendations around increasing the visibility of National Security at the usda as part of ongoing work related to the farm bill. In looking at the agency and the ability of individuals to participate in security conversations is not of course what it is in other National Security agencies. And how it could impact our military and our sector. But its clear that syngenta has the best information on seeds grown here in the United States and that potential information could be used against us. Its a point of taking into account not only the basic Biotech Sector but also all the economic sectors which it applies to. I want to raise with you a number of obvious objections and see how you would respond. First would be the question of the impact of this tariff that you advocate on u. S. Consumers and producers who are incorporating currently incorporating products that are made with these important components. Thats one. The second related question is the impact of stiffer tariffs and tax credits that you propose on our relations with our allies. Weve been through this with the i. R. A. And this sounds like it could be the same thing. How would you respond based on those concerns . I think as a country you cannot have passthroughs from friends. Its not a very friendly act. And they have a similar problem to us. We can solve the problem together but we certainly cant suffer the problem alone. We cant be just a great sponge. So i think, i believe if we put the tariffs in the right place and have the right diplomacy and the right diplomacy that dr. Kissinger and dr. Schultz did years ago, its very intense and laborious, but to put in place the right kinds of agreements, you could have a joint tariff. Among allies. Then we would all benefit. In terms of consumer costs, i think currently the situation right now is a very bad deal for average americans if not in the upper class. We dont have these industries anymore or middle class jobs. We have communities that are bereft of manufacturing to an unhealthy extent, so i believe that if we had a revival of industry that would be far better than getting a cheaper battery but not having a job and not having a community. Can we solve this by ourselves on our own or will this necessarily require a high level of cooperation from our allies . I believe it would be extraordinarily difficult for us to do this alone. With allies its imminently possible because as weve seen, korea, japan have extraordinary technologies and we benefit when they come here. And germany has great chemical ability and france is doing some very nice things on batteries. So to do this together will be much more easier than to do it alone. Someone has to take the first step. Right now the easy situation is for u. S. To be the great absorbent. Thank you. Can i add one point if thats ok. I did spend time looking at the chinese e. V. Industry and it seems to me that they not only are exporting to the u. S. But they also mostly exporting to europe. So a potential tariff on chinese to the United States might leave it behind in the competition sphere. Thats just one point. And also half of teslas e. V. s manufactured in china in its factory is also going to europe. That could be convoluted in the export data thats reported publicly. Thank you. Commissioner glass . I will pass. Cochair albert . No further questions. Well, im going to come back to me then it sounds like. Which is fine. Dr. Rozo, you mentioned the kim china. I was going back to the b. G. I. That was complete genomics in 2012. Do you think that the those that serve on the committee now have a better appreciation for some of the risks in this area . I think the work you did at the n. S. C. And the creation of this commission is partially a sign of that. Are you in your discussions at the commission aware of greater sensitivity . Yeah, thank for you the question. I think by and large when were looking at the government and we have a suite of work around biolit asy and how we improve the understanding of biology in the federal government, we need more individuals out of all agencies who have more familiarity with biotechnology. Being one of those individuals for some time before i stepped out of government, kid say there are great, really intelligent scientists working in the government but theres not many of them. And theyre not at high enough roles within the government. And so whether its sifius and without specific individuals in the room that understand biotech and understand the complexities with this technology, it becomes difficult to inform these discussions. So were looking at ways to improve what were calling another question is when one looks at biotechnology and we did a hearing and commissioner cleveland and i did it four years ago with your cochair and others, we talked about fermentation capacity and Building Blocks to be able to convert the ideas to industrylevel production. Whats the state of the industry, china certainly claimed our clock when they took over everything from penicillin to other fer mentation approaches. It is something i am concerned but when we look at the medical sector we have a lot more information, the facilities have to be approved by bioregulatory bodies and products have to be approved. And the majority highlight the products exist in the u. S. And e. U. , lowvalue products. On the industrial sector, the understanding is much less, but i will say and certainly in response to imbalancees that exist in industrial manufacturing capacity, the administration has just put out yesterday r. F. P. For increasing industrial biomanufacturing capacity in the United States. That is in the early stages but for industry that is a welcomed development a support in supporting biomanufacturing capacity. A its an area we dont have good analytic data. But there is support on the industrial side and they have Large Public Companies that arent using these engineering techniques but fer mentation is an old manufacturing science. And they will have an advantage over ours. Companies are facing difficult decisions between financing their own facilities or paying high fees to contract out that capacity. We had a Funding Program yesterday which we advocated for and we are in support of increasing that capacity in the United States. Question for you, on page four of your testimony, you refer to Venture Capital firms having received 224 billion. Is that within the Chinese Market or include understanding that there is the screening mechanism that is still in development but not yet fully applicable was that just domestic chinese or global . All encompassing. Any percentage of what might be global, what percentage might be u. S. . Ill be happy to check back for you. I believe that is for the companies that are receiving money from Venture Capitalists. If you could that would be helpful . Any other questions from my colleagues. If not, in closing, thank if not, in closing, thank you all, to all of our witnesses throughout the day for your excellent testimonies. The public can find those testimonies as well as a recording of the hearing on our website. I would like to note that the commissions nextgen will take place friday march 1. That hearing is titled Chinese Consumer products, safety, regulations and supply chains. With that, we are adjourned. Thank you. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] good morning and welcome to the first hearing of the u. S. China economic and Security Review Commission 2024 report cycle. I would like to thank everyone for joining us and think the witnesses for the time and effort they put into their testimonies. Thank you to thewir staff for e time the touchup prepare todays hearing, at thank you to commissioner wessel. Its an honor to cochair the sharing with you today. While this Commission Deal with a variety of issues in u. S. China relationship, todays hearing focuses on a topic that is rightfully emerge at the forefront of the policy debate in both chambers of congress in recent months. That topic is technology. While much remains uncertain about the 2020 through 2030s, recent events have made an unmistakably clear that technology will be the indispensable precondition for american prosperity, security, and National Sovereignty in the ahead. President eisenhower once observed, there is only one thing i i can tell you about r and almost one only, and it is this. No were ever shows the characteristics that were expected. It is alwaysried different. It has now been 79 years since the world last experienced a war between great powers. Thats the same amount of time that elapsed between the American Civil War and world war ii. Just think of how different the world of the American Civil War was compared to the world on the eve of world war ii. Similarly, the world today bears little resemblance to the world of 79 years ago. If a great power war broke out tomorrow we cant know exactly what shape it would take, but we do know as president eisenhower wisely suggested that it would bear little in common with the last great power war of the 1940s. It is therefore essential for the future of American Security and deterrents to fully understand the implications of recent breakthroughs in commercial and military technology. America cannot remain capable of winning great power wars beyond anyy reasonable doubt if it does not remain superior technologically and conversely, america cannot deter greaton por wars from happening if the world doubts americas capacity to win them. Since the days of david and goliath with a trojan horse of troy, the books of history are full of stories of smarter adversaries at maneuvering larger foes. The greatest risk f to americans that we underestimate the importance that intelligence will play in reconfiguring military power in the decade ahead. We can think of ai as a factor for intelligence, a system that can solve any puzzle, finding cyber export, predict the next chessmen, locate tanks and the satellite image, to space and adversaries response option, and so forth. I look forward to discussing at greater length the Critical Role of ai in the future of the u. S. China rivalry and diving deeper into chinas adoption of ai into its Global Military strategy. Second, technology will be the sine qua non for used remains the worlds preeminent economic power. In u. S. China t rivalry, the nation with the most advanced technology will also be the nation with the larger economy. Look no further than the difference between israel and nigeria today. Nigeria has more than 21 times the population of israel, and s 37 billion barrels in oil reserve. Yet come israel has a larger economy and the stronger military. The reason is technology. Contrary to popular belief, america can, in fact, stay ahead of china economically, but to do so must also stay had technologically. With four times our population, is chinan, simply manages to converge with us technologically and to get to a parity on productivity, it could have four times our gdpur and maybe four times our military, making it the dominant power. And so parity means the west is losing. Parity cannot be the byproduct of American Technology policy. Technology dominance should be our north starr and i will be y focus today. Third, technology is challenging the conceptions of National Sovereignty. As chinas cyber influence increases, the single Free Internet as a sort of american officials want to envision is giving way to ideologically opposed the fact of techno blocks. The Global Internet is already divided in two between the decentralized democratic internet the mood to americans, as a centrally controlled internet authoritarian internet built by china. The latter is spreading rapidly in the developing world where countries in South East Asia to latin america have opted to rely on chinese technologyol for 5g g networks and other critical digital infrastructure. The influence of the authoritariannf internet is also expanding into advanced democracies as company susceptible to ccp influence become more central to our online lives. It chinas efforts to export the systems abroad are left unchecked, the ccp may soon enjoy the to envelop dozens of countries behind its great firewall, and reconstitute 2