[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
 FEEDING THE DRAGON: REEVALUATING U.S. DEVELOPMENT ASSISTANCE TO CHINA 

=======================================================================


                                HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 15, 2011

                               __________

                           Serial No. 112-78

                               __________

        Printed for the use of the Committee on Foreign Affairs


 Available via the World Wide Web: http://www.foreignaffairs.house.gov/

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                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey     HOWARD L. BERMAN, California
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California          BRAD SHERMAN, California
STEVE CHABOT, Ohio                   ELIOT L. ENGEL, New York
RON PAUL, Texas                      GREGORY W. MEEKS, New York
MIKE PENCE, Indiana                  RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina           ALBIO SIRES, New Jersey
CONNIE MACK, Florida                 GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas             DENNIS CARDOZA, California
TED POE, Texas                       BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida            BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio                   CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida                FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania             KAREN BASS, California
TIM GRIFFIN, Arkansas                WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
ROBERT TURNER, New YorkAs 
    of October 5, 2011 deg.
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director
                                 ------                                

                  Subcommittee on Asia and the Pacific

                 DONALD A. MANZULLO, Illinois, Chairman
RON PAUL, Texas                      ENI F.H. FALEOMAVAEGA, American 
BILL JOHNSON, Ohio                       Samoa
DAN BURTON, Indiana                  FREDERICA WILSON, Florida
EDWARD R. ROYCE, California          GARY L. ACKERMAN, New York
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
MIKE KELLY, Pennsylvania             GREGORY W. MEEKS, New York
JEFF DUNCAN, South Carolina          DENNIS CARDOZA, California































                            C O N T E N T S

                              ----------                              
                                                                   Page

                                WITNESS

The Honorable Nisha Desai Biswal, Assistant Administrator for 
  Asia, United States Agency for International Development.......    10

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Donald A. Manzullo, a Representative in Congress 
  from the State of Illinois, and chairman, Subcommittee on Asia 
  and the Pacific: Prepared statement............................     4
The Honorable Nisha Desai Biswal: Prepared statement.............    13

                                APPENDIX

Hearing notice...................................................    34
Hearing minutes..................................................    35
The Honorable Donald A. Manzullo: Material submitted for the 
  record.........................................................    36


 FEEDING THE DRAGON: REEVALUATING U.S. DEVELOPMENT ASSISTANCE TO CHINA

                              ----------                              


                       TUESDAY, NOVEMBER 15, 2011

                  House of Representatives,
              Subcommittee on Asia and the Pacific,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 11:30 a.m., in 
room 2172 Rayburn House Office Building, Hon. Donald A. 
Manzullo (chairman of the subcommittee) presiding.
    Mr. Manzullo. The Subcommittee on Asia and the Pacific will 
now come to order.
    On September 15th, 2011, the United States Agency for 
International Development notified Congress of its intent to 
obligate $3.95 million in Development Assistance funds to 
``engage China as a partner in addressing climate change.''
    This particular notification, while small in the grand 
scheme of things, is emblematic of the dysfunction in America's 
foreign aid spending priorities. What is being proposed here, 
essentially, is that we borrow money from China to give back to 
China to help it fix its own domestic problems, many of which 
were created in the breakneck rush to develop.
    At the same time, these programs help boost the 
competitiveness of Chinese manufacturers at the expense of U.S. 
manufacturers and U.S. jobs. In my opinion, this is a fool's 
errand, and the U.S. Government needs to clean up its own 
fiscal trail before helping China clean up its environmental 
mess.
    We have enough challenges at home without having to worry 
about U.S. taxpayer monies funding a Chinese Government regime 
notorious for disregarding international norms of trade, human 
rights, and the environment.
    China's poor record speaks for itself. None of the 
organizations, universities, and entities that USAID funds in 
China are completely independent of Chinese Government control. 
Each year the United States spends over $39 billion in taxpayer 
funds to support America's foreign policy objectives abroad.
    In the Asia region alone, the President's request for 
Fiscal Year 2012 amounts to more than $800 million. It is up to 
all of us to ensure that not a penny of taxpayer money is 
wasted on these programs.
    China's behavior on multiple levels, demonstrates a 
concerted effort to advance economic growth, regardless of the 
consequences. Indeed, Chinese leaders count on economic growth 
to offset the lack of political and religious freedoms in that 
country.
    As a result, American manufacturers face unprecedented 
challenges from illegal Chinese Government subsidies, an 
artificially low exchange rate, and rampant systematic theft of 
intellectual property. None of this is new information, and the 
American people are sick and tired of China's unfair trade 
practices.
    To drive home this point, the U.S. intelligence community 
released a report just last month detailing the depth and 
breadth of China's organized industrial espionage efforts. The 
findings are truly scary.
    No amount of U.S. Government assistance will change China's 
intentions to steal our secrets, take our manufacturing jobs, 
and advance its own agenda. Our generosity as a nation in 
helping others is without question what makes us great. In 
fact, the Organization for Economic Cooperation and 
Development, OECD, noted that the U.S. is the largest provider 
of government and civil society programming among major 
bilateral foreign aid donors in terms of real funding.
    We need to make sure that these funds are effectively being 
used to the benefit of the American people. Providing training, 
technical assistance, and capacity building for China's 
manufacturing and commercial real estate sectors is 
unjustifiable in a time when China continues to steal our 
intellectual property and drive U.S. competitors out of 
business.
    I am amazed that it takes 22 contractors in China to 
implement just one part of the environmental program contained 
in USAID's notification.
    Furthermore, the fact that USAID conducts oversight of this 
program from its regional headquarters in Bangkok, Thailand is 
even more surprising.
    To make matters worse, the U.S. Trade Representative 
Office, at the urging of the United Steelworkers of America, 
has launched a Section 301 investigation into alleged dumping 
of solar panels and wind energy goods into the United States.
    The USTR also filed a formal complaint against China at the 
World Trade Organization over the country's failure to declare 
over 200 government subsidy programs in the clean tech sector. 
In many cases, these subsidy programs are the same programs, 
initiatives, and incentives that climate activists and the 
administration claim as tremendous breakthroughs and efforts 
China is making to combat climate change. This view could not 
be more optimistic from our end and more misguided from theirs.
    Given the state of the U.S. economy and with government 
debt approaching a record $15 trillion, it is absurd to think 
that any U.S. Government entity would spend a single dollar 
trying to encourage China to do the right thing.
    China is America's strategic competitor in many areas, and 
I have seen no evidence to show that American foreign 
assistance--that is American taxpayers' dollars--to China is 
paying dividends in the relationship. In fact, it is arguable 
that China has enough resources to spend on its own, and U.S. 
assistance to China should not be at any cost to the taxpayer.
    China's economy has been growing far faster than the U.S. 
and other Pacific powers. China's complete disregard for 
intellectual property rights, abysmal human rights record, and 
lack of religious tolerance run counter to American values. 
China's poor record on accountability and its unwillingness to 
share accurate environmental and human rights data with its own 
citizens and with the U.S., creates uncertainty over the 
effective utilization of American taxpayer monies. If the PRC 
lacks the political will to clean up its own backyard, no 
amount of U.S. funds will change that reality.
    The 16th Congressional District of Illinois, which I have 
the honor of representing, depends heavily on manufacturing for 
its livelihood. Manufacturing accounts for approximately 25 
percent of the local economy or double the national average. We 
need to be supporting U.S. manufacturers in Illinois and 
nationwide to compete with China, not throwing money away to 
help China compete with us. The American people deserve more 
from their tax dollars at work beyond spending it on programs 
aimed to fuel a clean energy revolution in China at the expense 
of job growth back home.
    [The prepared statement of Mr. Manzullo follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                              ----------                              

    Mr. Manzullo. Ranking Member Faleomavaega is on his way 
back from American Samoa. Mr. Sherman, do you have an opening 
statement?
    Mr. Sherman. I sure do.
    Mr. Manzullo. You are recognized.
    Mr. Sherman. I want to welcome the witness back to this 
room, in which she spends such a long time. You are here 
testifying about a giant mistake of theory, a giant mistake of 
thinking at USAID.
    The idea that we would give foreign aid to China is an 
insult to the American taxpayer and shows an incredible lack of 
understanding of the new world by anyone who would suggest it.
    Now, there are only two exceptions to that. One would be 
money that we give to democracy organizations designed to 
undercut or at least change the Government of China. And the 
second would be co-equal contributions to projects that are 
equally beneficial. That is not what is at stake her.
    Now, I want to stress that an atom of carbon that goes into 
our atmosphere is equally important to the entire world. We 
don't have enough money in this country to reduce our carbon 
emissions to the degree that the world expects of us. For us to 
then go spend money on the theory that we are reducing carbon 
emissions in China makes no sense. And there is no way that the 
world will give America credit for a reduction of Chinese 
carbon emissions.
    We are borrowing money from China to give it to China to do 
stuff that the Chinese don't think is important enough to pay 
for. And, if anything, they have got more money. So if it was a 
good project in their eyes, they could easily afford to fund 
it.
    I realize that the amounts of money involved are relatively 
small. A particular notice was sent to Congress, talking about 
$3.95 million.
    I don't worry so much about the $3.95 million. I worry 
about a mindset in our foreign policy establishment that thinks 
us mailing checks to Beijing is a good idea.
    I should bring to the attention of this committee that 
outside of our jurisdiction, the Department of Energy is 
spending from the reports I have seen far more than USAID also 
to give foreign aid to China.
    I would invite anyone at USAID to come to a town hall and 
stand in front of American taxpayers and say, ``Giving foreign 
aid to China is a good idea.'' There is a tremendous disconnect 
between a foreign policy establishment that runs our foreign 
policy and the American people who pay for it.
    I will be circulating a letter addressed to the 
Administrator of USAID, Dr. Shah or Mr. Shah, urging that he 
not provide foreign aid to China.
    Now, I should point out that in this very room, we had to 
discuss the idea of providing foreign aid to Libya. This was 
money to be given to entities under the control of Gaddafi's 
kids. This was about 4 years ago. There is just a disconnect 
between those who are in the Executive Branch who make our 
Executive Branch decisions on foreign aid and common sense.
    And I realize that USAID deals with a lot larger amounts 
than $3.95 million, but this is an example of what Congress 
needs to stop.
    I thank the chairman for holding these hearings. I hope 
that the witness is treated well by the State Department for 
the--do you get--well, I will find out in your opening 
statement whether you get hazard pay for today. But you deserve 
it.
    And I yield back.
    Mr. Manzullo. Congressman Johnson, do you have an opening 
statement?
    I can assure you that as the chairman of this subcommittee, 
you will get all the respect possible under every 
circumstances. The members here realize that you are doing your 
job, and we appreciate that. We appreciate your ability to come 
here and your willingness to do so.
    Mr. Johnson?
    Mr. Johnson. Thank you, Mr. Chairman.
    I appreciated my colleague's comments about the fact that 
USAID deals in much larger issues. You are exactly right. Over 
the last 10 years, we have given China some $275 million. The 
3.9 that we are talking about this year is a drop in the bucket 
compared to what we have already given to our world's largest 
competitor. So I commend you for those comments.
    I find the topic of today's hearing particularly troubling 
in light of our country's current fiscal situation. Nationwide 
unemployment stands at 9 percent. And many parts of my district 
in eastern and southeastern Ohio consistently have seen double 
digit unemployment for far too long.
    Even more troubling, our national debt is dangerously high 
at over $14.9 trillion, threatening our nation's ability to 
recover from its economic woes, turn our economy around, get 
people back to work, and continue to fulfill our role as a 
worldwide advocate of freedom and democracy.
    So the news that we are giving aid to China for certain 
unnecessary programs and projects hits home especially hard, 
particularly for Americans struggling to get back on their 
feet.
    Why can't China, a nation with the world's second largest 
economy and the fastest growing economy after our own, use its 
own funds to implement green energy programs to address climate 
change? Surely China can find the funds somewhere within its 
$10 trillion economy.
    USAID tries to legitimize this aid by arguing that China is 
behind on environmental governance and that strategically 
working with China to address environmental threats will change 
their way of thinking and ensure that the two nations are on 
the same page. Apparently this aid is also seen as a way to 
level the playing field for U.S. industries that must comply 
with environmental responsibility standards. This is just 
absolutely misguided thinking.
    First, China is in no way behind when it comes to 
environmental knowledge or technology. The U.S.-China Economic 
and Security Review Commission's 2010 report to Congress noted 
that China's continued economic growth and stability is 
dependent on its energy supply and, therefore, is looking to 
improve domestic energy production and energy efficiency. 
Chinese leaders have even pointed specifically to green energy 
as a means of strengthening energy security.
    In September 2009, Chinese President Hu Jintao gave a 
speech to the U.N. General Assembly which focused on China's 
adoption and implementation of a national climate change 
program. And China's 12th 5-year plan mentions climate change 
at the top of its environmental section. The plan also includes 
new policies to promote greater industrial efficiency and a 
major push to also increase the efficiency of new and existing 
buildings. It seems to me like China is perfectly aware of the 
global climate issue.
    Let's face the facts here. It makes no difference whether 
or not China is abiding by priorities it has outlined in 
speeches and plans. No amount of U.S. assistance will convince 
China to implement policies that harm its bottom line.
    China's position at the top of the world's production and 
manufacturing is its focus and will remain so, no matter how 
hard anyone tries to convince it otherwise.
    And let's discuss leveling the playing field for a moment. 
Abiding by the same environmental standards will not put U.S. 
and Chinese manufacturers on par. China's artificially low 
currency, illegal subsidies for industry, and disrespect for 
intellectual property rights will continue to put American 
businesses at a disadvantage. It is ridiculous to think that 
the value of this funding is worth the return.
    At the same time, another arm of the U.S. Government, the 
U.S. Trade Representative, has brought a case against China at 
the World Trade Organization regarding illegal green technology 
subsidies. So we are borrowing money from China to give to 
China for a sector of their economy that is already well-
developed and now enjoying illegal subsidies. Someone please 
explain how this makes sense because I don't get it.
    My home State of Ohio is a leader in many forms of energy 
production: From coal to natural gas and now even alternative 
energy. With a manufacturing sector that has suffered greatly 
due to jobs moving overseas, Ohio is looking to alternative 
energy production as a way to revitalize this important sector. 
China is already creating conditions for its green technology 
companies to flourish at home and abroad.
    I have got some more of my opening statement, but I am 
running out of time, Mr. Chairman. It is my strong opinion that 
the committee's hold on this funding should remain in place. 
There are better uses of taxpayer dollars, particularly at this 
time in our nation's economic history. I am looking forward to 
hearing the justification for these projects, but it is going 
to take some convincing for me to understand the logic here.
    I yield back.
    Mr. Manzullo. Congressman Chabot, you are recognized for an 
opening statement.
    Mr. Chabot. Thank you, Mr. Chairman.
    And so we can get to our witness, I will be relatively 
brief here. I want to thank my friend the chairman from 
Illinois for arranging this hearing.
    It is no secret that I have long been a critic of U.S.-
China policy on many levels. And my criticism is not limited to 
this administration. I have been just as critical of Republican 
administrations, particularly on human rights issues and 
specially on U.S.-Taiwan policy.
    While our current Federal budget deficit is over $1.3 
trillion, our national debt approaching $15 trillion with China 
holding much of that debt and with every American taxpayer 
responsible for about $133,000 of that debt, we are discussing 
today an administration proposal to obligate an additional $4 
million in American tax dollars to engage the People's Republic 
of China on climate change.
    I will be interested to hear the testimony this morning 
that will hopefully shed a little light on how we think this 
commitment of tax dollars will benefit us, the United States of 
America. Aside from the obvious questions about why the United 
States should be providing what is essentially foreign aid to 
China, the chairman has raised some serious questions about 
oversight. And I look forward to hearing what can be done about 
this waste of U.S. tax dollars, particularly in light of the 
PRC's dismal record on environmental issues and the blatant 
lack of transparency in their government.
    I again want to commend the chairman for calling this 
hearing. You know, it is no wonder the confidence by the 
American people in this administration is so low and the 
confidence in the United States Congress is even more dismal 
when you see things like this, U.S. foreign aid to China, when 
we owe them almost $1 trillion for money that we have already 
borrowed from them. It is just almost unthinkable, but here we 
are.
    I yield back, Mr. Chairman.
    Mr. Manzullo. Thank you.
    It is a pleasure to welcome Nisha Desai Biswal back to the 
Committee on Foreign Affairs, where she once served as a member 
of the staff. Good to see you again.
    Ms. Biswal. Thank you, Mr. Chairman.
    Mr. Manzullo. Ms. Biswal was sworn in as USAID's Assistant 
Administrator for Asia on September 20th of 2010. Prior to her 
appointment, she served as the majority clerk for the State 
Department and Foreign Operations Subcommittee on the Committee 
on Appropriations under Chairman David Obey and Representative 
Nita Lowey.
    Ms. Biswal previously served as the Director of Policy and 
Advocacy at InterAction, the largest alliance of U.S.-based 
international humanitarian and development nongovernmental 
organizations. I thank you for appearing before the 
subcommittee. Your written statement will be entered into the 
record.
    We are going to leave the record open for at least 14 days 
to accommodate any statement that Mr. Faleomavaega wants to 
insert into the record.
    Ms. Biswal. Thank you very much, Mr. Chairman. And thank 
you, Mr. Johnson and Mr. Chabot and Mr. Sherman, for your 
remarks as well.

   STATEMENT OF THE HONORABLE NISHA DESAI BISWAL, ASSISTANT 
ADMINISTRATOR FOR ASIA, UNITED STATES AGENCY FOR INTERNATIONAL 
                          DEVELOPMENT

    Ms. Biswal. It is an honor for me to appear before this 
committee today and be here to discuss with you the important 
topic of our bilateral assistance programs in China. I 
appreciate that as we face a difficult economic and budgetary 
environment, and it is more important for us to analyze the 
impact of our programs and to ensure that taxpayer dollars are 
being wisely and effectively spent.
    Mr. Chairman, USAID's bilateral programs in China focus in 
four areas: Assisting Tibetan communities, addressing the 
threat of HIV/AIDS and other pandemic diseases, advancing the 
rule of law and human rights, and supporting environmental 
protection/climate change mitigation efforts.
    These programs have been and continue to be congressionally 
directed programs. I believe, however, that they advance the 
values and the interests of the United States. They address 
critical development challenges that have regional and trans-
boundary reverberations. And let me assure you that none of the 
funds that USAID manages in China go to the Government of 
China.
    Congress began appropriating funds for assistance to 
Tibetan communities as early as Fiscal Year 2000. In Fiscal 
Year 2006, that program was expanded to address governance, 
environment, and rule of law through U.S. educational and 
nongovernmental institutions as directed by Congress. For FY 
2010, Mr. Chairman, USAID's assistance in China was $23.4 
million, including $4 million for health and HIV/AIDS, $7.4 
million for Tibetan communities, and $12 million to support 
environment and rule of law activities. In 2011, our total 
country allocation for China for USAID is projected to be $12 
million, a 48-percent decrease from the prior fiscal year. With 
that backdrop, let me spend just a couple of minutes on the 
specific area that you have highlighted, which is the 
environment programs.
    Mr. Chairman. 16 of the 20 most polluted cities in the 
world are in China. And the pollution from Chinese factories 
and plants has a substantial negative impact directly on the 
United States. Almost one-third of the particulate pollution in 
California and 30 percent of the mercury found in North 
American lakes comes from Chinese coal-fired power plants.
    USAID programs work to reduce these harmful emissions, 
which are having an impact on our own shores. We have proposed, 
as you noted, a $3.95 million program budget to continue 
environment programs in China. These programs focus on three 
major areas. The U.S.-China partnership for environmental law 
strengthens the application of environmental laws and 
regulations through partnerships between the United States and 
Chinese universities, government agencies, and NGOs to provide 
training in environmental regulation and law to lawyers and 
lawmakers.
    The U.S.-China partnership for climate action is a public-
private partnership with GE, Honeywell, Walmart, S.C. Johnson 
and Company, and the Citi Foundation to promote reduction in 
energy use through bringing together leading U.S. and Chinese 
practitioners, energy conservation, greenhouse gas management, 
and environmental innovation. This program is expanding market 
opportunities for U.S. businesses and technologies by featuring 
them prominently in our training and workshops.
    And, finally, the third component is a regional program to 
combat trafficking in endangered species to address the illegal 
wildlife trade across the Asian continent, seeking to improve 
law enforcement, reduce consumer demand, and strengthen cross-
border regional networks.
    Mr. Chairman, let me just conclude to say that USAID's work 
in China is important to our national and our economic 
interests and that it addresses critical global development 
challenges.
    I appreciate the opportunity to testify today before you, 
and I welcome the opportunity to answer any questions that you 
may have.
    [The prepared statement of Ms. Biswal follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
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    Mr. Manzullo. Thank you.
    Let me do this. Do either of you gentlemen have another 
hearing that you have to go to? You are right on time.
    Mr. Chabot, then we will take you first.
    Mr. Chabot. I have a couple of questions. I appreciate 
that.
    First of all, thank you for your testimony here this 
morning.
    We are broke. The United States is broke. We spend more 
money than we take in. We have got almost a $15 trillion 
national debt hanging over our heads, $1.3 trillion this year 
alone. Unfortunately, it is heading in the wrong direction.
    We don't know what the so-called Super Committee is going 
to do, what they are going to recommend. There is some 
speculation that, God forbid, they are going to suggest that we 
raise taxes and, therefore, burden the American people even 
more. We don't know if that is going to happen or not, but we 
are all trying to figure out what kind of proposals are going 
to be made and whether they are going to be able to come to 
some agreement. And if they can't, we know that sequestration 
of funds was built into the bill, which means automatic cuts, 
$600 billion in cuts from defense, which concerns everybody. 
Probably Republicans are a little more concerned about it, $600 
billion in domestic cuts, which most people would argue maybe 
the Democrats care a little bit more about that. That is what 
you hear. I don't know if that is accurate or not, but you do 
hear that. But it is a lot of money. And we are talking about 
cutting that.
    Now, I know $4 million in Washington to some people may not 
sound like much. I can guarantee you for the hardworking, 
taxpaying folks back in my district, that is a lot of money, 
more money than most see in an entire lifetime of work. And so 
I think we ought to take this amount very seriously.
    My point is that we are spending far more money than we 
take in, which means that any additional expenditures that are 
made--and this is an additional expenditure that is being 
proposed here, correct?
    Ms. Biswal. That is correct.
    Mr. Chabot. Yes. It is new money that we are spending. If 
we are not in balance--and we are not--and we are spending new 
money, then that means--and you assume, as the President has 
said, he doesn't want to run up more debt. And I think Congress 
doesn't want to run up more debt. Then it means you are going 
to have to cut from somewhere else to come up with this $4 
million.
    Where does the administration propose cutting? What program 
is less important than us giving this what many of us would 
call foreign aid to China? What is less important than giving 
foreign aid to China?
    Ms. Biswal. Thank you for that question. Mr. Chabot----
    Mr. Chabot. You are welcome.
    Ms. Biswal [continuing]. Let me reassure you, first of all, 
that we are focusing and prioritizing our foreign assistance 
programs. As I mentioned in my brief oral statement, we have 
seen our China program's overall size go down by 48 percent 
from the prior year in what we are spending in Fiscal Year 
2011.
    The amount of assistance that we program in China, none of 
which goes to the Government of China but is administered 
through nongovernmental institutions and American educational 
institutions, the programs that we administer in China leverage 
significant contributions from the American private sector and 
from Chinese institutions.
    Mr. Chabot. That is all well and good. And I only have 
another minute. I don't mean to cut you off, but I will at this 
point just to ask you this. So you are saying, in essence, what 
you said is that we have other programs and other things in 
China and other places around the world where we spend money, 
but we are going to spend less on something else for this 
money. Isn't that correct?
    Ms. Biswal. Mr. Chabot----
    Mr. Chabot. The money has got to come from somewhere unless 
we are going to add to the deficit. The President has said he 
doesn't want to do that. Congress doesn't want to do that.
    Ms. Biswal. Certainly it is a difficult environment. And 
tough choices are being made across government and certainly 
within USAID in terms of what we will be able to fund and where 
our priorities are.
    Mr. Chabot. Okay. Let me ask you this. We have a trade 
deficit with China right now. Is that correct? In other words, 
we are importing a whole lot more from them. All you have got 
to do is go to Walmart. An awful high percentage of what is 
labeled there if you pick it up and look under it is going to 
say ``Made in China,'' a lot less than we export to them.
    Now, we have GE aircraft engines and other things that go 
on planes that we sell to them. So it is not that we don't sell 
them anything, but a lot more Chinese products come into the 
United States than U.S. products that go there. Isn't that 
accurate?
    Ms. Biswal. You are correct. It is also our largest export 
growth market.
    Mr. Chabot. And we have a huge surplus to the extent that 
we are borrowing from them, correct? It is not like they are 
borrowing from us. And it is to the tune of almost $1 trillion 
at this point that we owe them. Is that correct?
    Ms. Biswal. I have no reason to doubt that. I am not the 
expert on the amount.
    Mr. Chabot. And there are an awful lot--and I am almost out 
of time, but there is an argument that they are manipulating 
the value of their money in order to continue this huge 
continuing U.S. importing Chinese products. And that is costing 
American jobs a lot of people would argue. Isn't that correct?
    Ms. Biswal. That is correct.
    Mr. Chabot. Well, all that being given, it just seems to me 
you are going to have a hard sell explaining to the American 
people why we ought to be using U.S. tax dollars to fund 
something like this. Why can't China use their own money?
    And I will yield back, Mr. Chairman.
    Ms. Biswal. May I respond briefly?
    Mr. Manzullo. Yes.
    Ms. Biswal. Mr. Chabot, my only response to the points that 
you raised, which I agree are all important points for 
consideration, is that our programs, particularly our 
environmental programs in China, are fundamentally advancing 
our interests. And those interests are associated with the 
amount of pollution in the United States that is traced back to 
Chinese sources. And the fact that if we do not engage in 
addressing that pollution in light of the explosive growth that 
China is experiencing, the harmful effects here in the United 
States are going to become increasingly costly, both in terms 
of the health impacts and the economic impacts.
    Mr. Manzullo. Mr. Johnson?
    Mr. Johnson. Thank you, Mr. Chairman. And thank you, Ms. 
Biswal, for your testimony.
    So let me get this straight. We are borrowing money from 
China to give back to China to improve industrial energy 
efficiency, which will then drive down production costs to 
Chinese firms, making it harder for U.S. firms to compete. Why 
are we paying to modernize China? Please enlighten me as to 
USAID's thinking that this is an effective use of hardworking 
Americans' tax dollars, which should really stay in the pockets 
of small businesses right here at home to help create jobs for 
unemployed Americans. Can you enlighten me? Why are we paying 
to modernize China?
    Ms. Biswal. Mr. Johnson, I would simply respond by saying 
that this program leverages significant resources from American 
companies, like GE, which has put in $2.8 million in matching 
contributions toward the training programs that we have to 
improve environmental health and safety standards in China by 
improving----
    Mr. Johnson. Wait a minute. Hold on. Hold on. Did I 
understand that right? In addition to the $4 million that we 
are giving for these programs free of charge, no interest 
payment, to the Chinese, we have also got American companies 
that are giving additional and above that?
    Ms. Biswal. So if I may finish----
    Mr. Johnson. Is that yes?
    Ms. Biswal. So we have leveraged significant resources from 
the American private sector because they see the value of, one, 
greening their supply chain; two, having the same compliance 
requirements of Chinese companies on environment, health, and 
safety standards, to which they are subjected. That does 
actually have the effect of increasing perhaps the cost of 
manufacturing in China and improving the environmental impact 
of----
    Mr. Johnson. And is USAID going to hold China accountable 
for enforcing these standards that we train them on?
    Ms. Biswal. Our programs work to improve the domestic 
demand in China for environmental compliance through supporting 
advocacy organizations----
    Mr. Johnson. I have got a number of questions. So like Mr. 
Chabot, I----
    Ms. Biswal. Sorry. I was simply trying to respond.
    Mr. Johnson [continuing]. I apologize. So let's assume that 
we can solve the pollution problem in China. How does that 
create jobs here in America? Draw the line back for me.
    Ms. Biswal. First of all, many of the energy efficiency 
technologies, products, and services which we are bringing to 
the attention of Chinese officials in industry----
    Mr. Johnson. That we are giving to them.
    Ms. Biswal. We are not providing any technology or service. 
We are helping to make them aware of, but then Chinese 
companies individually contact and contract with American 
companies for those products and services. We do not provide a 
technology transfer, and we do not----
    Mr. Johnson. We don't have to provide technology transfer. 
The Chinese takes the technology. Now, that is another part of 
the problem. In your description of USAID's rule of law 
programs, you state that the goal, one of the goals, is to 
level the playing field for U.S. corporations to operate within 
China's legal framework. You stated that this includes training 
Chinese Supreme Court justices on how intellectual property 
cases are prosecuted within the U.S.
    I don't know if you are aware or not or have read the 
Office of the National Counterintelligence Executive Report on 
Foreign Economic Collection and Industrial Espionage, but China 
is one of the most aggressive collectors of U.S. economic 
information and technology. China's intelligence services 
frequently seek to exploit Chinese citizens or persons with 
family ties in China to use their insider access to corporate 
networks to steal trade secrets.
    So I don't buy that we are giving them anything. They are 
taking whatever they want. That is one of their predispositions 
in doing business in China.
    How does USAID know whether these judges and officials that 
you are training are using your valuable training opportunities 
to take back to their lawyers and then find the loopholes and 
the strategies to compete against American companies?
    Ms. Biswal. I do agree that intellectual property rights is 
an area of significant deficiency in terms of China's 
compliance. China has adhered to the same international 
standards. However, they have been extraordinarily weak in 
compliance.
    Our programs seek to improve the record of compliance. It 
is a difficult task. Providing technical tools through 
American-based organizations, like the Asia Foundation, to 
develop the knowledge and the capacity in the court system, in 
the law schools, in the legal profession in China to improve 
compliance is one way to address that.
    Mr. Johnson. Ma'am, my time is up, and I apologize. It 
seems to me that giving the Chinese Government American aid at 
the expense of the American taxpayer to try and force 
compliance is an ill-advised strategy, given the fact that over 
the last 10 years, we have given the Chinese nearly $275 
million, around $275-300 million, and we are not seeing any 
progress on compliance. And so I would say that the program is 
failing.
    And I stand by, Mr. Chairman, my assertion that I hope we 
keep these funds on hold.
    Mr. Manzullo. Thank you.
    Ms. Biswal, is there money in the budget to give to the 
U.S.-China Partnership for Environmental Law?
    Ms. Biswal. The President's budget request did not contain 
funding for these programs.
    Mr. Manzullo. For all the programs?
    Ms. Biswal. Was that your question, sir?
    Mr. Manzullo. No. Of the $12 million that is in the budget, 
was any money there allocated for the U.S.-China Partnership 
for Environmental Law?
    Ms. Biswal. In the $3.95 million congressional notification 
that was sent to the committee, about $1 million of that is to 
continue the U.S.-China Partnership for Environmental Law.
    Mr. Manzullo. On page 2 of your testimony at the bottom, 
you state that that program ``is now fully self-sustaining and 
no longer requires additional USAID funds.''
    Ms. Biswal. Sorry. The reference is to another component 
program. That was not for the environmental partnership law 
program; it was not my intent to mischaracterize how I joined 
those two together, that was part of the Guangdong 
Environmental Partnership Program, which has become fully 
sustaining and does not receive----
    Mr. Manzullo. Wait a second.
    Ms. Biswal [continuing]. Any additional funds.
    Mr. Manzullo. So there is a program within the program?
    Ms. Biswal. I think in referencing that program, I was also 
connecting to other programs that supported those outcomes, 
which have become fully self-sustaining. And I apologize if 
that was confusing.
    Mr. Manzullo. Ms. Biswal, it is not self-sustaining when 
you are asking the taxpayers to pony up $1 million. I mean, 
General Electric, Honeywell, Walmart, Alcoa, and Pfizer have 
contributed how much money? Do you have any idea? You said GE 
contributed $2.8 million.
    Ms. Biswal. Right. So I believe for the Institute for 
Sustainable Communities programs in China, which include the 
Climate Action Partnership and the Guangdong Environmental 
Partnership, which we are no longer funding, those two programs 
leveraged over----
    Mr. Manzullo. I am not saying leveraged, but these 
companies can put up all the money. They certainly make a lot 
of money in China and don't need taxpayers' dollars for 
``leverage.'' Would you agree?
    Ms. Biswal. I think that the intent behind a public-private 
partnership is to create that initial platform for private 
sector investment around a policy objective. We are trying to 
move toward graduating these programs.
    Mr. Manzullo. You don't have to graduate Honeywell, 
Walmart, Aloca, Pfizer, and General Electric. They make 
tremendous profits. Wouldn't you agree?
    Ms. Biswal. I believe they are making progress.
    Mr. Manzullo. Okay. They are making a lot of profits. Yet, 
still you are asking the taxpayers to put more money into a 
program that already has generous support by the private 
sector. That doesn't make sense. How can you defend that?
    Ms. Biswal. I would only posit, sir, that the President's 
budget request did not request funding for these programs, but 
because Congress appropriate funds for these specific 
environmental and rule of law activities, being a good 
congressional staffer in my past life, we do strive to make 
sure that we follow congressional intent in how we maintain our 
programs.
    Mr. Manzullo. Let me see if I can get this straight. The 
President's budget did not request any money for the U.S.-China 
Partnership for Environmental Law?
    Ms. Biswal. No, sir.
    Mr. Manzullo. Is that correct?
    Ms. Biswal. That is correct.
    Mr. Manzullo. Then what programs are targeted for funding 
under the President's request, in his budget request?
    Ms. Biswal. The President's budget request included funding 
for programs in Tibet, which was $5 million in the----
    Mr. Manzullo. Let me back up. Could you go to your 
testimony on pages 2, 3 and 4 and point, in particular, to 
where the programs are that the President wanted funded? Start 
with the U.S.-China Partnership for Environmental Law. You are 
saying the President requested zero funding for that.
    Ms. Biswal. That is correct.
    Mr. Manzullo. For anything involved in that program or 
subprograms or programs within the program?
    Ms. Biswal. That is correct.
    Mr. Manzullo. And the Guangdong Environmental Partnership 
Program, that was included in that program?
    Ms. Biswal. There was zero funding requested for 
environmental and rule of law programs in the President's 
budget request.
    Mr. Manzullo. Okay. The U.S.-China Partnership for Climate 
Action, did the President request any funding for that?
    Ms. Biswal. He did not, sir.
    Mr. Manzullo. Okay. So I have zero, zero. The Asia Regional 
Response to Endangered Species Trafficking, did he request any 
money for that?
    Ms. Biswal. No, not for the China programs.
    Mr. Manzullo. The USAID Rule of Law Program in China, did 
the President request any money for that?
    Ms. Biswal. He did not.
    Mr. Manzullo. Well, then, why have you given us four 
programs for which he has requested no money? I thought that 
you would have at least the programs that are getting the 
money. What other programs are there besides these? Am I 
missing something?
    Ms. Biswal. So the President's budget request asked for $5 
million to continue assistance to Tibetan communities----
    Mr. Manzullo. Okay. Go ahead.
    Ms. Biswal [continuing]. And I believe $7 million for HIV/
AIDS assistance through the PEPFAR program, through CDC and 
USAID combined.
    Mr. Manzullo. Okay.
    Ms. Biswal. That was a total of $12 million that was 
requested in the President's budget request.
    Mr. Manzullo. All right. So these four programs here were 
the ones that ended up being funded by the time the continuing 
resolution was signed. Would that be correct?
    Ms. Biswal. So dating back to 2006, Congress has included 
funding and directives to maintain rule of law and environment 
programs in China. And we have complied, sir.
    Mr. Manzullo. I am just trying to figure out who is on 
first here. I think I am understanding that the four programs 
here that you have listed in this testimony were not at the 
President's request. Is that correct?
    Ms. Biswal. That is correct.
    Mr. Manzullo. And the programs ended up getting funded 
because Congress decided to throw that money in for these 
programs?
    Ms. Biswal. That is correct.
    Mr. Manzullo. And that the----
    Ms. Biswal. For these sectors. The programs were 
competitively awarded, but the sectors of environment and rule 
of law were determined and directed by Congress in the 
appropriations bill.
    Mr. Manzullo. Okay. The President's request is for $12 
million. That is for Tibet and for HIV/AIDS. Is that correct?
    Ms. Biswal. That is correct.
    Mr. Manzullo. All right. But, notwithstanding the fact that 
Congress directed USAID to spend this money, then you 
anticipated my next question. How did Vermont end up with 
getting this award?
    Ms. Biswal. A number of different U.S. institutions have 
partnered with USAID over the years in carrying out both the 
environment and rule of law programs. USAID would put forward a 
request for proposals. Different institutions would then submit 
proposals. And then they would be competitively awarded by a 
technical selection committee based on a variety of criteria, 
including technical expertise, country experience, cost-
effectiveness of programs.
    Mr. Manzullo. Do those people sit under your purview or 
your jurisdiction?
    Ms. Biswal. I do not have any direct lens into the awarding 
of these grants or contracts. And for the programs that we are 
discussing today, most of them had been awarded under either 
the previous administration or before I went to USAID. But they 
have continued certainly since I have been there.
    Mr. Manzullo. Then this question I will not anticipate you 
to answer, but if you know the answer, I appreciate it. Do you 
have any idea how many colleges or universities actually were 
in the application process for some of these programs?
    Ms. Biswal. I do not. I can take that question for the 
record.
    Mr. Manzullo. Okay. Mr. Johnson, do you have some more 
questions?
    Mr. Johnson. Ms. Biswal, explain how USAID is going to 
effectively expand the market potential for clean energy 
technologies and services from American companies in China when 
China has hundreds of subsidies policies and practices in place 
affecting trade and investment in green technology, of which 
USTR just filed an investigative report to the World Trade 
Organization about. How are you going to get Chinese companies 
to buy U.S.-manufactured products over its own heavily 
subsidized domestic goods?
    You earlier testified--when I asked you about creating 
American jobs, you said companies here would be creating 
products that would then be sold to the Chinese in those green 
energy initiatives, but they are heavily subsidized in China. 
How are you going to get past all of that?
    Ms. Biswal. What our programs seek to do, sir, is to create 
a platform for U.S. technologies, U.S. companies that provide 
services that we think are relevant to improving the energy 
efficiency, reducing the greenhouse gas emissions. We provide a 
platform for those products and services to----
    Mr. Johnson. Cap and trade by regulation. I got that part. 
Go ahead.
    Ms. Biswal [continuing]. To introduce American products and 
services into the Chinese market. So American companies 
participate in these training workshops. USTR and the Foreign 
Commercial service of the Department of Commerce actually 
advertise our programs as a good way for American companies who 
are seeking entry into the Chinese market to be able to 
introduce----
    Mr. Johnson. How are you going to get the Chinese to buy 
them when the Chinese are subsidizing the prices of those 
products domestically? How are you going to compete? How are 
American companies going to compete in that market?
    Ms. Biswal. I would leave it to others to answer that 
more----
    Mr. Johnson. You don't know.
    Ms. Biswal [continuing]. Effectively than myself, but I 
would say that many of our partners, GE, Honeywell, have 
reported increases in their sales in China. I don't know what 
the correlation is to their participation in our programs, but 
I----
    Mr. Johnson. That is the problem that we have, Ms. Biswal, 
with so much of our job-killing policies coming out of this 
administration--that they don't know. You don't know what the 
implications are to American companies until after you have 
implemented these policies. And then the American businesses, 
small businesses, here in America wind up paying the price for 
that.
    China has also shown an increasing tendency to use 
international language to defend its poor environmental record 
and falsely tout its achievements. Of course, the Chinese 
Government welcomes increased U.S. Government funding to help 
them build capacity, train their people, and take greater 
market share and jobs away from America.
    Why aren't we using the money that we are giving to China 
to help spur the U.S. economy and job growth at home, rather 
than investing it in China, which has the technology, the 
budget, the resources, and the manpower to do all of this on 
their own? We are borrowing money from them. And, yet, we are 
giving them money to do, like someone I heard earlier say, what 
they don't think is important enough to spend their money on. 
Why are we doing that?
    Ms. Biswal. So, as I noted earlier, while these programs 
are maintained not at the behest of the administration but in 
compliance with congressional directives, that we do believe 
that these programs are advancing our American economic 
interests and do serve as a platform for American companies and 
American institutions to be able to gain entry into the Chinese 
market.
    Mr. Johnson. Well, I appreciate your retort about it is 
congressional direction, not the administration. First of all, 
I disagree with that, but I can assure you I am new. This is my 
first term. But if that is true, then I am going to work hard 
to change the direction because we are spending American 
taxpayer dollars irresponsibly on this program.
    Mr. Chairman, I yield back.
    Mr. Manzullo. Mr. Royce?
    Mr. Royce. Thank you, Mr. Chairman.
    Hello, Nisha. How are you?
    Ms. Biswal. It is a pleasure to see you, Mr. Royce.
    Mr. Royce. Nice to see you.
    I have some of the same concerns. Basically I think we are 
borrowing about 37 cents on every dollar right now in the U.S. 
And we are borrowing a lot of that from China. So from the 
standpoint of people here, we are spending money we don't have. 
And I think we can do better than borrowing money from China 
only to gift it back to them. And from the standpoint of many 
of us here, that looks like what we are doing.
    China already has a competitive advantage over the United 
States. Right now with this Keystone project, this weekend the 
Chinese head of state is up meeting with Prime Minister Harper 
trying to convince him to send that oil to China, rather than 
allow it to come into the market in the United States. And so I 
just ask--you know, we get down to the technology transfer 
issue here as well.
    Section C--it is description of the U.S.-China Clean Energy 
and Climate Partnership--says that USAID does not ``necessarily 
intend'' to promote technology transfer or technology 
deployment-focused activities. The phrase ``does not 
necessarily intend'' is somewhat troubling because from 
hearings I have held on, China's indigenous innovation 
policies, basically story after story is told about how U.S. 
companies are forced to hand over sensitive technology in order 
to obtain market share there.
    So not necessarily intending to do this when you are a 
competitor, when China is fully intent on doing exactly this 
leads me to worry that these same pay-to-play policies will be 
implemented by China in our efforts to promote clean energy 
there. And I wonder if you could clarify what USAID means with 
this language ``does not intend.''
    Ms. Biswal. So, Mr. Royce, the programs that USAID is 
managing in China on environment don't actually involve a 
transfer of technologies. They basically provide information on 
best practices, on energy efficiency that are commonly adopted 
in the United States.
    However, they do seek to engage American companies as 
service providers, as experts on addressing some of these 
challenges that, in the process, allow opportunities for those 
companies to pursue any commercial opportunities that may 
result.
    Mr. Royce. I understand, Nisha, that argument. But if that 
were the case, then why wouldn't the language read, ``There 
will be no technology transfer,'' rather than the language I 
see here, which implies that----
    Ms. Biswal. Yes. You know, as I look through the language 
of the RFAs involved in these programs, I will say that they 
were written a number of years ago. And I think our policies 
have evolved since then, particularly because the operating 
climate has also evolved. And we are not providing through 
these programs any transfer of any cutting edge innovative 
technologies or any patent-protected technologies. We are 
basically looking at best practices.
    Mr. Royce. I understand. I understand. But I think there is 
a certain naivete here. And, looking at USAID, the way they 
state this on China's rule of law program assistance, for 
example, part of this, USAID says, ``China is making efforts to 
develop more robust administrative procedures and laws--
judicial review, notification and comment, transparent 
administrative procedures, and gaining redress are all seen as 
possible outcomes.''
    Going to the issue of naivete of us working with China in 
this relationship, when China--first of all, I don't think they 
are too concerned at all about green energy other than the 
bottom line for them, but in terms of practicing it themselves, 
they seem quite indifferent to it, unfortunately.
    Second, in terms of our experience, I probably hear this 
more because I am a Californian and hear people who have 
invested in China more than most of the members, but there is 
no understanding, there is no respect of the rule of law. And 
U.S. businesses enter at their own risk. And, yet, the 
verbiage, the language, whether it is Commerce Department or 
USAID, gives our companies the sense that there is some 
progress being made; whereas, in fact, in working with the 
embassy on a number of these questions, constituents are having 
their entire businesses seized and this is ignored by the 
Chinese legal system.
    And I just ask if giving rosy descriptions of this program, 
if implying that China is cooperating on this, I just ask if 
USAID understands the level of impunity that still exists in 
the Chinese legal system and in their resistance to any of 
these things that you and I worry about.
    Ms. Biswal. I think that that is a very fair point, Mr. 
Royce. And I think oftentimes in our description of programs, 
perhaps the aspirational language of what we are trying to 
achieve might appear overly optimistic and, as you said, paint 
a rosy scenario. So I take your point.
    Mr. Royce. Yes. My final point is I don't think China 
intends to buy into this system, either rule of law or on the 
environmental front. They will take money from us. They will 
take things that they think they can use for technology 
transfer and so forth and try to compete with us on the world 
market, but in terms of domestic concern about these issues, I 
just haven't seen it in my trips there or discussions there.
    Thank you very much for your testimony here, Nisha.
    Ms. Biswal. Appreciate your questions.
    Mr. Manzullo. Mr. Biswal, on page 5 of your testimony, you 
talk about the Asia Regional Response to Endangered Species 
Trafficking Program,----
    Ms. Biswal. Yes.
    Mr. Manzullo [continuing]. The ARREST Program.
    Ms. Biswal. Yes.
    Mr. Manzullo. Now, prior to this year, did the President 
seek funding for that program?
    Ms. Biswal. So overall funding for addressing----
    Mr. Manzullo. No. I know it went down, but prior to this 
year, did the President seek funding for that particular 
program?
    Ms. Biswal. This particular program is a new regional 
program that has not yet commenced. It builds upon prior 
regional programs in the ASEAN region that did not----
    Mr. Manzullo. Okay.
    Ms. Biswal [continuing]. That did not address----
    Mr. Manzullo. It is a new program?
    Ms. Biswal. It is a new program.
    Mr. Manzullo. Now, I have in front of me a letter from 
USAID dated April 1st of 2011 signed by Thomas Stephens, 
Regional Agreement Officer, giving $7,995,000 to the FREELAND 
Foundation. Are you aware of that?
    Ms. Biswal. Yes.
    Mr. Manzullo. In their application approved by USAID for 
the programs appearing on page 13 under that particular 
program, it says 1.3A, ``Sex, Drugs, Rock and Roll, and 
Wildlife''----
    Ms. Biswal. I am sorry. What----
    Mr. Manzullo [continuing]. ``Targeted officials and youth. 
FREELAND's multimedia campaigns motivate all sectors of 
society, including border officials, to help stop illegal 
wildlife trade. The wildlife trafficking stops here.''
    I mean, come on. Can you justify $8 million going to an 
organization to have a media campaign entitled ``Sex, Drugs, 
Rock and Roll''?
    Ms. Biswal. I perhaps would not have titled it that way. I 
do believe what they are trying to do in this program----
    Mr. Manzullo. Just a second. Just a second. If USAID had an 
objection to the title of that, they could have corrected that 
title before they give the money. Isn't that correct?
    Ms. Biswal. That is correct.
    Mr. Manzullo. All right. But, yet, notwithstanding, USAID 
agreed to have a program, spending U.S. taxpayers' dollars on a 
program entitled ``Sex, Drugs, Rock and Roll, and Wildlife.'' 
Can't you see why Congress is angry over the way you are 
spending money? Do you think that these members are justified 
in asking these questions?
    Ms. Biswal. I think Congress is always justified in asking 
the questions and conducting the oversight that you are 
conducting. I truly appreciate the hearing that you are having.
    Mr. Manzullo. Well, I understand that. You don't need us to 
tell you that spending taxpayers' money on programs called 
``Sex, Drugs, Rock and Roll, and Wildlife'' is outrageous.
    Ms. Biswal. So that ill-named approach is----
    Mr. Manzullo. Ill-named? These are the programs. These 
people are getting $8 million in government funds and with the 
permission and consent and authority of USAID. They allowed 
taxpayers' money to be spent on a program called ``Sex, Drugs, 
Rock and Roll, and Wildlife.'' That has got to come to an end. 
Would you agree?
    Ms. Biswal. I would not agree, Mr. Chairman.
    Mr. Manzullo. You can defend that program?
    Ms. Biswal. I can defend a program that seeks to stop the 
trafficking of endangered species, the trade in----
    Mr. Manzullo. Well, what has sex got to do with that?
    Ms. Biswal. So that media campaign that----
    Mr. Manzullo. Well, wait a second. What has sex got to do 
with stopping the illegal trafficking of animals, of endangered 
species?
    Ms. Biswal. Well, to be specific, I would say that there is 
a correlation between human trafficking, narcotics trafficking, 
and trafficking in endangered species that is occurring 
throughout Asia----
    Mr. Manzullo. Oh, do me a----
    Ms. Biswal [continuing]. And the criminal network.
    Mr. Manzullo. Right. I mean, that is----
    Ms. Biswal. It is a fact. So I agree with you, sir, that 
perhaps the title was glib and ill-advised, but I believe what 
they were seeking to do was make the correlation.
    Mr. Manzullo. Well, then that is the whole point. 
Taxpayers' money supports USAID programs. Is that correct?
    Ms. Biswal. That is correct.
    Mr. Manzullo. Taxpayers' dollars are used to employ people 
to go over applications. Isn't that correct?
    Ms. Biswal. That is correct.
    Mr. Manzullo. Would you agree also that the people who make 
these awards, including apparently Thomas Stephens, Regional 
Agreement Officer in Bangkok, Thailand, that apparently he 
agreed with this application? Isn't that correct?
    Ms. Biswal. I believe he agreed with the intent of what the 
program was going to do.
    Mr. Manzullo. Just a second. We are not talking about the 
intent. I am talking about the literal rewards in this 
application.
    Ms. Biswal. Yes. I am sure that it did pass through his 
approval.
    Mr. Manzullo. If he had had a problem with the name of this 
program, he could have said, ``Don't use that name.'' Isn't 
that correct?
    Ms. Biswal. I believe that is true.
    Mr. Manzullo. Then, additionally, as part of the Sex, 
Drugs, Rock and Roll and Wildlife Program, it says it is 
targeting officials and youth. It says, ``Flexible and modular, 
the campaigns will be upgraded based on impact surveys and 
rolled out in Vietnam, Laos, Thailand, Malaysia, and 
Indonesia.'' Are you going to take a survey on people who were 
involved in illegal trafficking of endangered species and see 
whether or not these particular ads are impacting their 
behavior?
    Ms. Biswal. The idea is to reduce consumer demand for 
endangered species that are often found on menus in restaurants 
throughout Asia and to increase awareness in the general 
population of the impact of trafficking in these endangered 
species. So yes, we would want to do surveys of that population 
to see if our programs to reduce demand were----
    Mr. Manzullo. Here is the survey. You are involved in 
illegal trafficking of endangered species. Yes or no? Are you 
impacted by these TV or radio ads or posters with money spent 
by the U.S. taxpayer to determine whether or not this impacts 
your behavior? Are you really going to get some kind of a valid 
response on that?
    Ms. Biswal. Mr. Chairman, for illegal trafficking in 
wildlife to be sustained, there needs to be a popular consumer 
demand that is being met through this illegal trafficking and--
--
    Mr. Manzullo. Then why is the U.S. taxpayer paying for 
this?
    Ms. Biswal. The U.S. taxpayer pays for this because these 
programs address our core interests. The trafficking in 
endangered species and the illegal trafficking of wildlife, 
one, has correlations to human and narcotics trafficking as 
well as some links to terrorist financing;----
    Mr. Manzullo. I just----
    Ms. Biswal [continuing]. Two, that it has adverse health 
impacts and economic impacts in the United States, including 
through the introduction of invasive species into the United 
States. So we believe that this is an appropriate use of U.S. 
tax funds because we are advancing core U.S. interests.
    Mr. Manzullo. That is probably the best reason to end it.
    Mr. Rohrabacher?
    Mr. Rohrabacher. Thank you very much, Mr. Chairman.
    Let me just note I don't believe that spending by the 
United States Government, especially when the money is going to 
a non-democratic country, a country that is controlled by an 
oppressive government, that we can make up through our spending 
what comes about because of bad policy on the part of that 
government or lack of spending on that government to achieve 
the same end. For us to be pouring money into the goals that 
you just suggested is pouring U.S. taxpayer dollars down the 
toilet because it will accomplish nothing.
    If you have a group of gangsters, who could care less 
about--you know, these are people who take their own women and 
put them into forced abortions, and these are the same people 
who murder the Falun Gong and other religious followers. We 
expect that we are going to help them save endangered species 
by putting our taxpayer dollars at work in China? Talk about 
naive.
    We also have a program here that I read as $4 million that 
is provided through AID and part of the AID program, the RDMA, 
$4 million to help them decrease their carbon footprint in 
China.
    Now, you tell me that at a time when we are spending our 
$1.5 trillion and we have to borrow that money from China in 
the first place that giving them $4 million is a good deal for 
the people of the United States.
    Ms. Biswal. Thank you, Mr. Rohrabacher. It is a pleasure to 
see you.
    Mr. Rohrabacher. Thank you.
    Ms. Biswal. Let me answer your question in two ways. First 
of all, the environment programs that USAID is managing in 
China, none of the funds go to the Chinese Government or 
Chinese institutions. Second of all, as I had noted earlier, 30 
percent of the particulate pollution in California and 30 
percent of the mercury pollution in North American lakes 
emanates from Chinese coal-fired power plants.
    Mr. Rohrabacher. So they should be giving us money for 
that, not us giving them money.
    Ms. Biswal. So our programs----
    Mr. Rohrabacher. If, indeed, you are right that they are 
having policies that affect our people's health, we shouldn't 
be giving them money and saying, ``We are going to pay for 
it.'' They are the ones who should be paying for it.
    Ms. Biswal. And we don't give them money, sir. Our programs 
through American----
    Mr. Rohrabacher. I have got $3,950,000 given as part of the 
RDMA program. Now, does that go through foreign aid or doesn't 
it? Does it go through the State Department or doesn't it?
    Ms. Biswal. That money is programmed by USAID----
    Mr. Rohrabacher. Right.
    Ms. Biswal [continuing]. Through American institutions.
    Mr. Rohrabacher. So it is an American taxpayer dollar 
program by our AID program. And you think it is a good thing?
    Ms. Biswal. I do believe that it is addressing core U.S. 
interests.
    Mr. Rohrabacher. One of the reasons why I believe that our 
country and many Americans believe our country is in such 
economic straits is we have been treating China as if it were a 
democratic country. We have been willing to turn our head at 
violations of human rights but also violations the rights of 
our own people to have at least an equal treatment of Americans 
in their marketplace as they have in our marketplace.
    We hare basically provided this--and turned our heads to 
the massive flow of technology that has been stolen from 
American businesses. Yet, we continue to have programs that 
give them $5 million here, $4 million here, $7 million to sex, 
drugs, and rock and roll.
    The American people have serious reason to believe that our 
basic policy is insane, is insane. It is incomprehensible that 
we would permit the massive transfer of wealth that has taken 
place between the United States of America and China over the 
last 20 years after Tiananmen Square, the leadership of that 
government that controls China made sure that the world knew 
that they were going to rule their country with an iron fist 
and there was going to be no democracy.
    To continue treating them the way we are and agreeing to 
programs like this, trying to explain them away, no wonder they 
think we are a bunch of fools because we are acting like fools.
    Thank you very much, Mr. Chairman.
    Mr. Manzullo. Mr. Johnson?
    Mr. Johnson. Thanks again, Mr. Chairman.
    I want to go back to how we think we can effectively 
convince the Chinese to reduce their harmful emissions. I want 
you to remind me again. How do your programs work to reduce 
harmful emissions when at the national level, the Chinese 
Government is only paying lip service to environmental 
compliance?
    Ms. Biswal. So China has reduced in the past 4 years the 
energy intensity of its economy by 19 percent. The overall 
amount of emissions has continued to increase as there have 
been, I believe, a 40-percent growth in its manufacturing 
sector. So certainly we are not keeping pace with the overall 
growth to have a net reduction in emissions, but I would say 
that the percentage trend has been positive. And if you want to 
see how we are----
    Mr. Johnson. Well, I thank my colleague for asking. Where 
do you get those figures from?
    Ms. Biswal. I would be happy to provide after the fact the 
source of the data. The 19.1 percent reduction in energy 
intensity is through international nongovernmental 
organizations that monitor compliance against greenhouse----
    Mr. Johnson. Were they produced by the Chinese Government?
    Ms. Biswal. No, they are not.
    Mr. Johnson. No, they are not? Okay. All right. Well, let 
me go to something else here. The Chinese Government does not 
encourage public participation or civil society participation 
in climate change policy processes. Aren't we being naive in 
thinking that NGOs who will have to work with local or central 
government authorities can somehow create this change needed to 
really clean up China's environmental mess? Your staff has 
stated that results have been incremental. You just 
acknowledged that.
    So how many years do we plan on funding climate change in 
China until we see real results or until China wakes up and 
takes these initiatives on their own? I mean, what is the end 
game here?
    Ms. Biswal. Well, sir, as I noted, these funds were not 
requested in the President's budget request. USAID will 
continue to run programs for environmental protection and 
climate change mitigation in China as long as Congress directs 
us to do so.
    Mr. Johnson. Wow. We can fix that. Okay. Good. Yes. We can 
fix that. Thank you very much.
    China has a poor record of accountability. We talked about 
only making progress incrementally. What mechanisms are in 
place to monitor the use of USAID funds? Are there metrics? 
And, if so, how are we monitoring the funds and the 
effectiveness of such rule of law and climate change programs?
    Ms. Biswal. We have monitoring and evaluation built into 
every grant proposal that we fund. We also do external audits 
of programs when they are completed. And certainly our staff 
who are based out of Bangkok travel periodically to the program 
sites to ensure that they are going as proposed.
    Mr. Johnson. Yes. Just for the record, I was just reminded 
that the funds requested for this program last Congress came 
from the Senate, not from the House. So I want to make that 
assertion.
    I think, with that, Mr. Chairman, that is my----
    Mr. Manzullo. Mr. Rohrabacher?
    Mr. Rohrabacher. Just one note on the statistics that you 
offer us.
    Ms. Biswal. Sir?
    Mr. Rohrabacher. I don't know. Let me just put it this way. 
I am not doubting your integrity, but I would doubt the 
integrity of those figures. And I would suggest that in a 
vicious dictatorship, as China has, that they do not permit 
these NGOs that you are talking about the freedom that is 
necessary to come up with those statistics.
    There is no freedom of press in China. There is no freedom 
to complain. There is no freedom to criticize. And there is no 
freedom to gather honest statistics. That is what happens under 
these type of dictators because you can imagine the local 
people in one of their provinces just allowing people to 
understand that things are actually getting worse than getting 
better or that the money that is being spent by the Americans 
here, supposedly to bring down the carbon footprint, is 
actually going to the home of one of the Communist Party 
bosses. No, no. That would never be known to you.
    And, as you start getting it, ``Well, they have increased 
it by this much and that,'' that may be good when we are 
working with a democratic government that has a free press to 
check those figures. It is totally unreliable for us to base 
policy on that type of information. So it is like the Cold War, 
us going to the Soviet Government and expecting them to be 
honest about their environmental or industrial problems, which, 
of course, they weren't.
    So thank you, Mr. Chairman, for giving me--by the way, 
would you like to comment on that?
    Ms. Biswal. Well, only, sir, that I would be happy to try 
to provide for the record with the sourcing of where the 
statistics came from and how the information was collected.
    Mr. Rohrabacher. Well, realizing that the basics, the 
source, whoever that person or group is, faces the same 
restrictions as anybody else who tries to do business in China, 
that should give us pause not to just give them the benefit of 
the doubt when we hear some good statistic.
    So, Mr. Chairman, I think that gives us--makes our job a 
lot more difficult and your job a lot more difficult to 
determine just what is real about this monstrous dictatorship. 
Thank you.
    Ms. Biswal. Yes, sir.
    Mr. Manzullo. Well, this has been interesting, hasn't it?
    Ms. Biswal. Indeed.
    Mr. Manzullo. What I would like to do is to send you a 
letter because we are trying to track down where everything is 
going. But, if you know, this program, the ARREST Program,----
    Ms. Biswal. Yes, sir.
    Mr. Manzullo [continuing]. The information that we have--
and maybe I don't have all of it--does not show China as being 
a player in this. Would that be incorrect?
    Ms. Biswal. You know, the China component of this program 
is very tiny. It is about $250,000 for trying to engage China 
in the broader ASEAN compliance network. And so of the overall 
program scope, it is, one, new and, two, very small.
    Mr. Manzullo. When an award is made by USAID for one of 
these programs, how does USAID check out the NGO? I mean, do 
they look at the salaries of the officers to see if they are 
disproportionate? Do they look to see if there have been any 
problems going on with the organization fiscally or 
politically?
    Ms. Biswal. We do have a fairly extensive system of 
analyzing all of the data relevant to the bidders. I don't want 
to speak out of turn because I am not familiar with all of the 
contractual steps that----
    Mr. Manzullo. I understand.
    Ms. Biswal. But I would be happy to get that process for 
you for the record.
    Mr. Manzullo. Okay. Well, we appreciate your coming here 
and taking the time to share with us this intriguing item 
called foreign aid, which most Americans have a very difficult 
time, especially in my district, understanding because in the 
largest city, the unemployment is still way over 14 percent. I 
appreciate you taking the time. Thank you for being our guest 
today.
    Ms. Biswal. Thank you, sir.
    Mr. Manzullo. The hearing is adjourned.
    [Whereupon, at 12:51 p.m., the committee was adjourned.]
                                     

                                     

















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