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


 
CHINA'S CENSORSHIP OF THE INTERNET AND SOCIAL MEDIA: THE HUMAN TOLL AND 
                              TRADE IMPACT 

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

                                HEARING

                               before the

              CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 17, 2011

                               __________

 Printed for the use of the Congressional-Executive Commission on China


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Washington, DC 20402-0001 



              CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

                    LEGISLATIVE BRANCH COMMISSIONERS



House                                Senate

CHRISTOPHER H. SMITH, New Jersey,    SHERROD BROWN, Ohio, Cochairman
Chairman                             MAX BAUCUS, Montana
FRANK WOLF, Virginia                 CARL LEVIN, Michigan
DONALD A. MANZULLO, Illinois         DIANNE FEINSTEIN, California
EDWARD R. ROYCE, California          JEFF MERKLEY, Oregon
TIM WALZ, Minnesota                  SUSAN COLLINS, Maine
MARCY KAPTUR, Ohio                   JAMES RISCH, Idaho
MICHAEL HONDA, California

                     EXECUTIVE BRANCH COMMISSIONERS

                  SETH D. HARRIS, Department of Labor
                    MARIA OTERO, Department of State
              FRANCISCO J. SANCHEZ, Department of Commerce
                 KURT M. CAMPBELL, Department of State
     NISHA DESAI BISWAL, U.S. Agency for International Development

                     Paul B. Protic, Staff Director

                 Lawrence T. Liu, Deputy Staff Director

                                  (ii)



                             C O N T E N T S

                              ----------                               
                                                                   Page
Opening statement of Hon. Chris Smith, a U.S. Representative from 
  New Jersey; Chairman, Congressional-Executive Commission on 
  China..........................................................     1
Brown, Hon. Sherrod, a U.S. Senator from Ohio; Cochairman, 
  Congressional-Executive Commission on China....................     3
Walz, Hon. Tim, a U.S. Representative from Minnesota; Ranking 
  Member, Congressional-Executive Commission on China............     5
Li, Alex, College Student and son of Li Yuanlong, who served two 
  years in prison for commenting on the Communist Party online...     6
Zhang, John, Christian political dissident who was imprisoned for 
  two years following the 1989 Tiananmen protests and who 
  currently assists families of Chinese political prisoners......     7
Wu, Harry, Founder, Laogai Research Foundation and Laogai Museum.    10
Xiao, Qiang, Adjunct Professor, Graduate School of Journalism, 
  University of California-Berkeley, Founder and Editor-in-Chief, 
  China Digital Times............................................    12
Kaplan, Gilbert B., Partner, King & Spalding; President, the 
  Committee to Support U.S. Trade Laws...........................    13
Black, Ed, President and CEO, Computer & Communications Industry 
  Association....................................................    16

                                Appendix

Li, Alex.........................................................    32
Zhang, John......................................................    34
Xiao, Qiang......................................................    57
Kaplan, Gilbert B................................................    60
Black, Ed........................................................    67

Smith, Hon. Chris................................................    71
Brown, Hon. Sherrod..............................................    72


CHINA'S CENSORSHIP OF THE INTERNET AND SOCIAL MEDIA: THE HUMAN TOLL AND 
                              TRADE IMPACT

                              ----------                              


                      THURSDAY, NOVEMBER 17, 2011

                            Congressional-Executive
                                       Commission on China,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10:08 
a.m., in room 2226, Rayburn House Office Building, 
Representative Chris Smith, Chairman, presiding.
    Also present: Senator Sherrod Brown; Representative Tim 
Walz.
    Also present: Harry Wu.

 OPENING STATEMENT OF HON. CHRIS SMITH, A U.S. REPRESENTATIVE 
 FROM NEW JERSEY; CHAIRMAN, CONGRESSIONAL-EXECUTIVE COMMISSION 
                            ON CHINA

    Chairman Smith. The Commission will come to order.
    I want to welcome all of our distinguished witnesses to 
this very important hearing. We really appreciate the 
attendance of all of our panelists and guests. It's a pleasure 
to welcome everyone to this important hearing on ``China's 
Censorship of the Internet and Social Media: The Human Toll and 
Trade Impact.''
    As recent events have shown, the issue of Internet 
censorship has only grown in terms of importance and magnitude, 
and I thank the Congressional-Executive Commission on China's 
staff for organizing a hearing on this pressing issue and for 
the tremendous scholarly work they have done not only in 
presenting our annual report, which is filled with facts and 
information that is actionable, but for the ongoing work that 
they do to monitor the gross abuses of human rights in China.
    As the Congressional-Executive Commission on China's report 
demonstrates, China's leadership has grown more assertive in 
its violation of rights, disregarding the very laws and 
international standards that they claim to uphold while 
tightening their grip on Chinese society.
    As Chinese citizens have increasingly called for freedoms 
and reforms, China has only strengthened its controls over the 
many areas of society, particularly over the Internet. While 
China has witnessed a boom in the popularity of social media 
and Internet sites, China's citizens that access online sites 
today remain under the watchful eye of the state. By some 
accounts, China has imprisoned more Internet activists than any 
other country in the world, and its Internet invariably ranks 
among the most restrictive globally.
    Chinese citizens are unable to voice a range of criticism 
that Americans undoubtedly take for granted each and every day. 
Chinese citizens that Tweet about local corruption may face the 
threat of abuse or harassment. Citizens that express 
dissatisfaction over tainted food supplies that injure 
children, the most vulnerable population of our society, may 
come to hear a knock at the door. And citizens that voice the 
yearning desire for democracy and right to protections we value 
so dearly may disappear into the official custody of the state, 
where they face torture and incarceration.
    For Chinese citizens, the line that can't be crossed is 
unclear. While mentions of the 1989 Tiananmen protests are 
surely prohibited, China's censorship remains at the whims of 
governmental agencies that seek to limit any of what they 
perceive to be destabilizing commentary. In China, the Internet 
provides no transparency and citizens must weigh their choices 
each time they click to send an email, or press a button, or 
post personal views.
    Who can forget Shi Tao, who for merely posting information 
about what he's not allowed to do with regard to Tiananmen 
Square, garnered a 10-year prison sentence when Yahoo! opened 
up their personally identifiable information and gave it to the 
Chinese secret police that led to his conviction. There are no 
lists of banned words, as we know. There are no registers of 
prohibited topics. It's all kept secret. In China, there is no 
transparency and there are only consequences, and dire ones at 
that.
    Today we welcome two panels that will address China's 
Internet censorship from two perspectives. The witnesses will 
not only provide personal accounts of how China's censorship 
affects individuals and families, but also detail how China's 
actions hinder the rights of U.S. businesses that seek to 
compete fairly in the People's Republic of China. These panels 
will expose China's bold disregard for its own laws and its 
international obligations, specifically in terms of its 
controls on Internet activity and expression.
    In the first panel today we will hear personal accounts of 
the consequences Chinese citizens face in seeking to express 
their fundamental right of expression. We will hear from a son 
and a pastor that have seen firsthand the actions of an 
unforgiving hand of China's Internet police. We will hear how 
the simplest calls for freedom and reforms lead to the 
separation of loved ones and the partition of families.
    In the second panel we will hear how China's Internet 
restrictions and controls not only hurts its citizens, but also 
hurts countries seeking to better China through international 
trade and cooperation. On a commercial level, China simply 
lacks the kind of transparency and fairness that we expect in 
global trading partners.
    China has not only failed to comply with its WTO 
commitments, it has exploited our expectations to create an 
unlevel playing field, hurting the competitiveness of U.S. 
businesses and workers alike. We recognize that the Internet 
and social media can and should be used to provide people with 
greater access to honest information and to open up commercial 
opportunities for businesses operating in global markets.
    We know that the promise of information technology cannot 
be achieved when it is used by repressive governments to fine, 
capture, convict, and so often torture ordinary citizens for 
voicing concerns publicly. Information technology cannot be 
advanced when it involves the systematic exclusion of 
commercial competitors in rampant disregard for transparency 
and intellectual property.
    China is one of the most repressive and restrictive 
countries when it comes to the control of the Internet and the 
impact goes far beyond the commercial losses of U.S. companies 
that want to participate in that market. There are serious 
human rights implications. We have seen the damage inflicted 
countless times through the arrest of bloggers and pro-
democracy activists who have used the Internet to communicate 
with colleagues or disseminate views and then have been 
arrested.
    What makes this situation even worse is that sometimes it 
is U.S. companies, and my colleagues will recall I held the 
first of a series of hearings where we had Microsoft, Yahoo!, 
Cisco, and Google before our committee. It was my Subcommittee 
on Human Rights. They held up their hands and promised to tell 
the whole truth and nothing but, and then said they couldn't 
tell us what they were censoring and would not tell us how they 
were being complicit.
    Harry Wu was here, and obviously has been a leader in that. 
He pointed out that Cisco has so enabled the secret police to 
track down people using Police Net, and that the use of cyber 
police is ubiquitous throughout all of China in order to 
capture the best and the bravest and the smartest in China who 
would bring that country to democracy, if only allowed to do 
so.
    So this hearing will focus on these very important issues. 
We are joined by, obviously, our Cochairman, Senator Brown, 
Sherrod Brown from Ohio, who will speak, and then Mr. Walz, who 
is the Ranking Member, and then we will go to our witnesses.
    (The prepared statement of Representative Smith appears in 
the appendix.]

  STATEMENT OF HON. SHERROD BROWN, A U.S. SENATOR FROM OHIO; 
    COCHAIRMAN, CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

    Senator Brown. Thank you, Mr. Chairman. Thank you all for 
being here. It is an honor to have you. Pastor Zhang, thank 
you. And Alex Li, who goes to one of Ohio's great universities, 
Bowling Green State University, located in a small town outside 
Toledo. Alex got here at 4 o'clock this morning after riding a 
bus all night. Thank you for your extraordinary effort to get 
here. You can do that at your age and not pay a price like the 
rest of us, riding all night. But thank you. You look great 
today. Thanks.
    Chairman Smith, thank you. Chris and I have worked together 
when I was in the House in the 1990s and into the next decade 
on China human rights issues. I am so appreciative of the work 
that he's done. And Tim Walz, who has been a stalwart on this 
Commission and on these issues, having lived in China many 
years ago for a while and taught there for a couple of years. 
Thanks for the work that you're doing.
    The business of the Internet and social media is changing 
the way the world works. Just take a look at all the smart 
phones in this room. It has changed the way we live, the way we 
do business, the way we act as a society. It's changed the 
world. It's made people closer in many ways to their 
governments. It's made these governments more accountable and 
interactive. In the case of the Arab Spring, it's helped to 
topple dictators.
    The purpose of today's hearing is to shed light on the 
darkness of China's repressive Internet and social media 
censorship. It's a policy that takes a human toll, as Chairman 
Smith said, undermining human rights freedoms and freedoms of 
expression and speech. It's a policy that's unfair to U.S. 
trade interests, especially for U.S. tech companies.
    It's well documented that Chinese officials block access to 
far too many Web sites, including this Commission's. Some sites 
are blocked because they're considered politically sensitive, 
others for reasons that we could only guess. China's Internet 
control forces private companies, including U.S. companies, to 
censor the Internet based on vague and arbitrary standards.
    Many companies are forced to operate in an opaque world 
that we know surprisingly little about. This policy benefits 
Chinese domestic companies at the expense of companies like 
Facebook, Twitter, and YouTube, who are completely blocked in 
China. Companies whose business models rely on openness and 
transparency are forced to be an arm of the Chinese Government 
or to turn their backs on 1.3 billion customers.
    But it is not just Silicon Valley companies that are 
blocked, it's also companies in my State, like GrafTech and 
Edgetech that risk having their Web sites blocked or disrupted 
as they try to sell their services and products to reach 
Chinese consumers.
    When a company goes public with complaints about these 
restrictions, as Google did last year, they risk retaliation by 
the Chinese Government for doing so. Google is a company that 
made the unfortunate controversial--and some decision that many 
of us weren't wild about--to work with the Chinese Government. 
In the end, of course, it didn't work out so well for them.
    In the absence of meaningful competition, copycat versions 
of Twitter and Facebook flourish in China and raise hundreds of 
millions of dollars, ironically, on our capital markets. For 
instance, in May of this year, Renren, China's version of 
Facebook, raised $743 million in an IPO listed on the New York 
Stock Exchange. These Chinese companies are beholden to the 
Chinese Government and Communist Party and censorship has 
increased, yet they want access to our free and open society.
    As arms of the Chinese Government, these moves should be 
closely scrutinized. China now has over half a billion Internet 
users, more of course than any country in the world. Most of 
these Internet users are young, far more aware of Chinese and 
world developments than their parents. Knowledge and openness 
are threats to totalitarian regimes. We know that. The Chinese 
Government knows that.
    In our country, knowledge and openness are pillars of our 
form of government. Take the case of outspoken dissident/artist 
Ai Weiwei. His savvy social networking skills and unabashed 
criticism of the government landed him an 81-day detention at a 
secret location earlier this year. Now the government wants him 
to pay $2.4 million in alleged unpaid taxes and penalties by 
Tuesday. Thousands of supporters in China have sent him money 
over the Internet.
    Ai continues to defy government orders by using Twitter to 
publicize his case. In recent years, the Commission has 
documented a growing number of cases of political imprisonment 
involving the Internet. Behind each case is a story and a 
family. One of those cases is Li Yuanlong. Li is a journalist 
who was imprisoned for two years for criticizing the Communist 
Party online. That's why we're so grateful that Alex, his son, 
is here to tell Li's story.
    Last month, the U.S. Trade Representative filed a request 
for information from the World Trade Organization on China's 
Internet censorship. I applaud this move as a positive first 
step. I look forward to learning what we can do to address this 
pressing issue. Too much is at stake. The human toll becomes 
insufferable. The economic threat undermines our innovation.
    China plays by its own rules because we regrettably, in 
this institution and in our government, let them. We cannot 
simply wait out the inevitable power of the Internet to move 
the hearts and minds of the Chinese people. We must do all we 
can to shine a light where free expression, thought, and 
commerce are too often kept in the dark.
    Thank you, Mr. Chairman.
    Chairman Smith. Thank you, Mr. Chairman.
    Mr. Walz?
    [The prepared statement of Senator Brown appears in the 
appendix.]

    STATEMENT OF HON. TIM WALZ, A U.S. REPRESENTATIVE FROM 
 MINNESOTA; RANKING MEMBER, CONGRESSIONAL-EXECUTIVE COMMISSION 
                            ON CHINA

    Representative Walz. Well, thank you Chairman Smith and 
Senator Brown. It's an honor to be up here with two of the most 
passionate and thoughtful members of Congress, and I appreciate 
the long work that the two of you have done to bring about 
human rights, to bring about a sense of fairness, and today is 
another example of that.
    I would also like to thank the witnesses for being here. It 
is very humbling to be on this Commission because the witnesses 
who sit in front of us are people that have paid heavy prices 
for freedoms, not just in China but worldwide, to make us 
understand those precious liberties we have. The folks in front 
of us today are no exception.
    To Alex and his father who paid a price for that, we all 
benefit from that courage. We all benefit from keeping in mind 
that human rights are above and supreme to the other issues at 
hand. But I'm also very appreciative of the second panel here, 
a group of experts to help us understand the impact of what's 
happening with social media, and also understanding how it's 
impacting markets. It is our responsibility, as Senator Brown 
said, for this institution to uphold the human rights as well 
as trade deals that were signed onto.
    Our companies are being unfairly punished by the behaviors 
of the Chinese Government and that is what this Commission was 
set up for. That was the mandate that this Commission was 
given, and I can tell you that my two colleagues sitting up 
here take that very seriously. So I look forward to the 
testimony today. Again, thanks to the witnesses. I always make 
sure I say this here. I am always incredibly impressed with the 
staff of this Commission. They are the most professional and 
best prepared of any I've seen, and I thank them.
    So, Mr. Chairman?
    Chairman Smith. Mr. Walz, thank you very much. Thank you 
for the expertise you bring to this Commission, especially 
having lived there and having gotten to know the on-the-ground 
situation in China. You are a great asset to our Commission, so 
thank you.
    We'll begin with our two witnesses on the first panel. 
We'll begin with Alex Li, who is currently an undergraduate 
student at Bowling Green State University in Bowling Green, 
Ohio. In 2006, a Chinese court sentenced Li's father, Li 
Yuanlong, to two years' imprisonment for posting comments 
online about the Communist Party. Then we'll hear from Pastor 
John Zhang, who is a rights advocate who was imprisoned for two 
years following the 1989 Tiananmen Square protest. Pastor Zhang 
currently assists families of political prisoners and serves as 
a pastor at California Bay Area Church.
    Mr. Li, if you could proceed.

 STATEMENT OF ALEX LI, COLLEGE STUDENT AND SON OF LI YUANLONG, 
WHO SERVED TWO YEARS IN PRISON FOR COMMENTING ON THE COMMUNIST 
                          PARTY ONLINE

    Mr. Li. Greetings. My name is Muzi Li. I'm from Bowling 
Green State University. In 2005, my dad had published four 
articles online and was arrested because he published four 
articles online. At that time I was 17 years old. A few weeks 
after my dad was arrested I was brought to a hotel and 
questioned by the police from the Ministry of Public Security. 
I was questioned without a parent with me. One of the questions 
was, ``What did your father do with your email address at 
[email protected]? '' Nothing. Nothing. But according 
to the verdict, my dad published four articles through my email 
address. That was wrong. Why? The police say my dad published 
the articles through my email address. That's the case.
    At that time my computer was operating a Windows XP system. 
I would just use the Windows Live to watch more news and the 
account number was totally [email protected] It's not 
an email address, it's an account number. The police tracked my 
IP address and then the account number showed up. They thought 
it was an email address, but it wasn't. So they thought my 
father published those articles through the email address, but 
my dad didn't.
    So it was all the Golden Shield. The police cannot track my 
IP address and they cannot find the account number. So 
according to the verdict, my dad used my email address, but 
that was wrong. So I think that proved that the police tracked 
my IP address through some technology and they used the Golden 
Shield to arrest those who have opposed political voices, and 
that happened to my family.
    At that time I was 17 years old, a teenager. I was choosing 
a college. I needed my father, but he was taken away. So I 
think this was totally a tragedy. Moreover, when my dad 
committed these articles for a foreign Web site, and if 
somebody wants to publish something on a foreign Web site, what 
he needs to do is copy, paste, and post. An email address is 
not necessary. However, even if my dad needed an email address, 
he has his own. Why did he use mine? It's ridiculous. So the 
police tracked my IP address through technology and my dad 
suffered two years in prison. I also suffered two years without 
my father with me. That's the story.
    Chairman Smith. Mr. Li, thank you so very much.
    Mr. Zhang? Pastor Zhang?

    STATEMENT OF JOHN ZHANG, CHRISTIAN POLITICAL DISSIDENT 
IMPRISONED FOR TWO YEARS FOLLOWING THE 1989 TIANANMEN PROTESTS 
    AND WHO CURRENTLY ASSISTS FAMILIES OF CHINESE POLITICAL 
                           PRISONERS

    Mr. Zhang. Ladies and gentlemen, thank you very much for 
holding this hearing. My name is John Zhang. I am currently a 
pastor in the Bay Area of San Francisco.
    Twenty-two years ago in 1989, I was a student at the 
Beijing Language Institute. I actively participated in the 1989 
Patriotic Democratic Movement in Beijing. After the Tiananmen 
Square incident, I organized a large memorial service to mourn 
for the Beijing residents and university students who were 
massacred at Tiananmen Square, and was arrested on June 15. I 
was arrested and sent to Qincheng prison in Beijing for two 
years.
    In 2001, I was baptized as a Christian. Soon after, I 
became a house church preacher in an underground house church. 
Every Sunday I led dozens of Christians to hold Sunday worship 
at hotels, restaurants, and at the houses of some Christian 
followers. In 2004, on the eve of the 15th anniversary of June 
4, I was arrested again. Why? Because I tried to organize an 
evangelism and invited many dissidents by phone or via email to 
attend our church's worship, but my phone was bugged and email 
was hacked by policemen, so I was once again illegally detained 
by the policemen and taken into custody for 10 days.
    In 2006, I thanked God for bringing me to America, where I 
attended theological seminary and got my master's degree after 
three years' study.
     Today, I just want to introduce a girl to everybody. This 
is Chen Qiao. Her English name is Bridgett. Her father, Liu 
Xianbin, is a famous Christian dissident in China. When she was 
only two years old, her father was taken away from her life. So 
her father disappeared from her life for nine years. When she 
was 11 years old, her father appeared in her life, but he felt 
like a stranger. She is 14 years old now. But she only lived 
with her father only less than four years. In her adolescence, 
she needed her father most. But unfortunately, her father was 
sent to jail for 10 years. This is the third time he was sent 
to jail.
     So I think the American company Cisco has played a 
disgraceful role in this sad story. According to the reports, 
Cisco helped China's Ministry of Public Security construct the 
``Golden Shield Project'' as well as provided equipment, 
technology, and training. The ``Golden Shield Project'' is a 
national surveillance network system that has a huge database 
and a sophisticated tracking network system. Policemen can 
track dissidents' IP addresses and then track, harass, and 
arrest them. I saw this in four articles published on Cisco's 
Chinese Web site, clearly showing the cooperative relationship 
between Cisco and China's Ministry of Public Security. Without 
a doubt, Cisco is responsible for the deterioration of Internet 
freedom in China. I hope that the Commission will enter these 
documents into the record.
     Today, I just want to remind everyone that freedom of 
speech is an inherent right given to man by God, which is an 
inalienable right. The United States was established on the 
values of Christianity. The United States should defend and 
adhere to these universal human values and promote ``non-evil'' 
business practices. Each Member of Congress has the 
responsibility to monitor American companies like Cisco while 
trying to maximize the business interest in China. These 
companies should not ignore the most basic morals and 
principles of business ethics. In order to regulate the 
business practices of companies that violate American law, they 
should be subject to public criticism, condemnation, economic 
penalties, and sanctions.
    Thank you for your patience.
    [The information appears in the appendix.]
    [The prepared statement of Mr. Zhang appears in the 
appendix.]
    Chairman Smith. Pastor Zhang, thank you so much for your 
testimony and for bearing witness to an extremely troubling 
truth in China, the mistreatment of house pastors, the 
mistreatment of all people of faith who are not registered and, 
to a large extent, co-opted by the government.
    I would note parenthetically that Frank Wolf and I, right 
before the Olympic Games, traveled to China with the express 
hope of meeting with a number of religious leaders, including 
underground pastors. Every one of them, except one, was 
arrested, denied, precluded the opportunity to meet with two 
visiting Members of Congress.
    Second, the one who did meet with us for dinner was 
subsequently arrested and interrogated very severely. So I 
thank you for bearing witness for fellow pastors and other men 
and women of faith in China who suffer daily, and now with the 
increased or the enhanced use of surveillance provided by the 
Internet.
    And Mr. Li, thank you as well for your testimony.
    All of us thought we might ask a question or just make a 
brief comment, and then we'll get to our second panel. If I 
could, were you in Beijing Prison Number One, by the way, 
Pastor? Which prison were you held in after Tiananmen Square?
    Pastor Zhang. Qincheng prison in Beijing.
    Chairman Smith. Okay. I would just note, right after 
Tiananmen Square, Mr. Wolf and I got into Beijing Prison Number 
One, where there were 40 activists, all with shaved heads. It 
looked like a concentration camp, because it was. They were 
making, as you know, Cochairman Brown, jelly shoes and socks 
for export to the United States. Under our very ineffective MOU 
[memorandum of understanding] with China, unless we have real-
time information about what's being made by those prisoners, 
there's no actionable direction that the U.S. Government could 
take.
    We tell them--they, the Chinese--we have suspicions and 
then they investigate. In this case Mr. Wolf and I walked out 
with the living proof of what we had gotten ourselves, and I 
was just wondering if you might have been at that prison 
because it was horrible. Thin, gaunt men, working around the 
clock, Reform Through Labor signs all over the place, and their 
only crime was asking for democracy. So again, I want to thank 
you and Mr. Li for presenting your very powerful testimony here 
today.
    Chairman Brown?
    Senator Brown. Thank you. I appreciate the discussion of 
Cisco and some of the comments from Cisco. I know Chairman 
Smith, and I know Congressman Walz and I, all are troubled by 
that and we take it seriously. The Commission is looking into 
its role in the oppression that we see.
    Alex, if I can ask you just a brief question. Tell me how 
your family is doing. Might they suffer from your testimony 
today? If you would, tell us a little bit about how your family 
is doing.
    Mr. Li. Do you mean now or----
    Senator Brown. Today. Yes, now. Yes.
    Mr. Li. I think it will because obviously American--the 
police--last year I joined a June 4th celebration in San 
Francisco and the police knew that, and they called my dad to 
threaten him to warn me not to do anything bad. So I'm pretty 
sure they know this, and called my dad to threaten.
    Senator Brown. Please let us know. The Commission will 
monitor any of this. Please let us know if there are any 
repercussions from your testimony today with your family.
    Mr. Li. Sure. Thank you.
    Senator Brown. We want to be on your side and help to 
protect them as much as we can, as much as you can, together. 
So, thank you.
    Mr. Wu, it's nice to see you again. Thank you for your 
outspokenness and courage.
    Representative Walz. Well, thank you both. Again, as I 
said, it's always humbling to sit here and see the folks who 
are on the front line of fighting for human rights.
    Mr. Li, I'm just curious if you can help me. How did your 
family connect to the Internet? Who is your Internet provider, 
and how do you do that in China? Who did you pay to have access 
to? And then your Gmail account you mentioned with your father, 
how did that work?
    Mr. Li. I think it's similar to America. The Internet 
service was provided by the China Mobile Company.
    Representative Walz. So you had an account. You can get on 
the Internet. You had a Gmail account.
    Mr. Li. Yes. And those Web sites my dad committed on--he 
was--wanted to overthrow something called Freegate. So those 
Web sites are blocked in China. That's why he got in trouble.
    Representative Walz. Okay. Well, again, I thank you very 
much. We've got a panel coming on next that's going to talk 
about how some of this is done. We're deeply troubled by your 
account, and I associate myself with Senator Brown's concern 
for your family. So, thank you for the courage of coming today, 
and thank you, Pastor Zhang.
    Chairman Smith. Thank you both. Anything you'd like to add 
before we go to panel two? We'll be inviting Harry Wu, without 
objection, to join panel two, a man who has done extraordinary 
work in exposing the exploitation of the Internet, and 
especially has brought focus on Cisco. So Harry, if you would 
just stay there for the second panel, we'd appreciate it.
    But would either of you like to add anything before we go 
to panel two, Mr. Li or Pastor Zhang?
    [No response].
    Chairman Smith. Then Harry, we'll go to you in panel two.
    Mr. Wu. Shall I go?
    Chairman Smith. Yes. Just stay put.

STATEMENT OF HARRY WU, FOUNDER, LAOGAI RESEARCH FOUNDATION AND 
                         LAOGAI MUSEUM

    Mr. Wu. I don't have any connection with any American 
company that has business with China or the Chinese Government, 
Chinese companies. I just focus on the Cisco case. There were a 
number of contracts with China's Security and Public Security 
Department since 2002 until 2007 or 2008.
    China has a national program, the so-called ``Golden 
Shield.'' Entirely, the whole cost is $5 to $6 billion. So far, 
I understand that only a few provinces have signed a contract 
with another American company. Most of them, they signed 
contracts with Cisco. So we have some quotes here. This is from 
Chinese information. They so appreciate this cooperation with 
Cisco, and Cisco has a proposal to them not to only sell the 
products, sell the equipment, but also to include training.
    Last December, I was in Oslo. I wanted to participate in 
the Nobel Peace Prize award for Chinese dissident Liu Xiaobo. 
As you know, Liu Xiaobo, since 2002 until 2009, sent 248 
articles to our Web site ``Guancha,'' and we published his 
book.
    But unfortunately we saw the Nobel Peace Prize had a menu. 
On one of the pages, John Chambers, the CEO of Cisco, was there 
because the CEO supports the Nobel Peace Prize, the financial 
support for the Nobel Peace Prize awarded to a Chinese 
dissident. So this is one face to tell the people what Cisco is 
doing. They sponsor the Nobel Peace Prize awarded to a Chinese 
dissident, but the other face, they sign a contract--many 
contracts--for Chinese security to set up the ``Golden Shield 
Program,'' to arrest Chinese dissidents, including Alex's 
father, Li Yuanlong and Chen Qiao's father, Liu Xianbin.
    You have to know, Liu Xianbin, Chen Qiao's father, was 
sentenced three times. The first time was two and a half years. 
The second was 13 years. Recently, this year, he was sentenced 
to another 10 years in a prison camp. Just because of what? 
Because he wrote an article on a Web site. How come the Chinese 
Internet can effectively control everything, control everyone?
    I don't think that without Cisco support they could have 
done it. But we heard Cisco's attorney testify twice in the 
Senate, in the House and say, we have to follow Chinese law. We 
sell the products to anyone. We don't care what they're doing.
    But they never mentioned that when they sold the product to 
Chinese security. They say, ``Well, if a car accident happens 
in a city, the patrol car has to write a report to the 
supervisor. So, the Internet helps.'' I say, okay, well, car 
accident. But if there's a dissident that posts something 
online, are the police going to report it or not? This is not a 
security problem, this is a political issue. I want to know 
that Cisco in China is now training the police.
    Let me stop here. I sent a letter to John Chambers, the 
CEO. I said, ``Remember recently IBM apologized to the Jewish 
because they sold technology to Hitler's Germany 60 years ago. 
Are you going to apologize later to Chinese dissidents? Because 
Cisco in this business is entirely working with Chinese Public 
Security.''
    Thank you.
    Chairman Smith. Thank you. And let the record note that it 
was Harry Wu, at the first hearing that I held on Internet 
exploitation in China, who brought forward the information on 
Cisco. When we had the Cisco representative, after being sworn 
in, tell us that they could not disclose what it is that they 
were doing, and like Google, Yahoo!, and Microsoft, said it was 
a matter of Chinese law that there was all of this cloak of 
secrecy.
    It was Harry Wu who told us how they had enabled, through 
Police Net, to give the secret police of China the same 
capabilities that the FBI, Scotland Yard, and other world-class 
enforcement agencies have, law enforcement agencies. But we, 
the United States, and especially through corporations like 
Cisco, had given them that capability and that capacity.
    We will be inviting Cisco back to the witness table and we 
will ask them hard questions about what it is that they're 
doing. And as you pointed out so well, Mr. Wu, having spent 
almost 20 years in the Laogai yourself, and having been 
tortured beyond belief, without this kind--you know, propaganda 
and secret police are the two mainstays of dictatorship.
    The IBM--and there is a book called IBM and the Holocaust, 
a heavily footnoted book that makes it very clear that the 
Gestapo would not have been able to find so many of the Jewish 
people who ended up at Auschwitz and Buchenwald and elsewhere 
had it not been for IBM.
    Now, fast forward to 2011. Now we have Cisco doing the same 
kind of horrific enabling of a secret police to track down 
these great pastors and family members who are behind these 
lines, going online and then being captured by the secret 
police because of corporations like Cisco. So, thank you, Mr. 
Wu, for that. Thank you, Pastor.
    Mr. Walz, anything you want to add?
    [No response].
    Mr. Wu. Thank you.
    Chairman Smith. Thank you very much, gentlemen.
    We'll now hear from Professor Xiao Qiang. Professor Xiao is 
an Adjunct Professor at the Graduate School of Journalism at 
the University of California at Berkeley, and a Visiting 
Researcher at the Counter-Power Lab at the School of 
Information at UC-Berkeley as well. Professor Xiao is also 
Founder and Editor-in-Chief of China Digital Times, a bilingual 
Chinese Web site covering China's social and political 
transition.
    We will then hear from Mr. Gil Kaplan, who is partner at 
King & Spalding, where he focuses on international trade cases 
and trade policy issues. Mr. Kaplan is also president of the 
Committee to Support U.S. Trade Laws, an organization of 
companies, trade associations, unions, and individuals 
dedicated to preserving and enhancing the trade remedy laws 
U.S. companies have access to which ensure international trade 
is conducted on a fair basis.
    Professor Xiao?

STATEMENT OF XIAO QIANG, ADJUNCT PROFESSOR, GRADUATE SCHOOL OF 
  JOURNALISM, UNIVERSITY OF CALIFORNIA-BERKELEY; FOUNDER AND 
              EDITOR-IN-CHIEF, CHINA DIGITAL TIMES

    Mr. Xiao. Thank you, Mr. Chairman. Respectful 
Representative Christopher Smith, I have been working with you 
many years in terms of human rights, promoting human rights in 
China, and I respect your consistent and tireless work.
    I have written a statement to submit to the Commission for 
the record.
    Chairman Smith. Without objection it will be a part of the 
record.
    Mr. Xiao. So what I'm going to do in the next five minutes 
will be to briefly summarize a few points to give a background 
of the Chinese state censorship and the activities on the 
Chinese Internet of political participation of Chinese netizens 
and my own analysis and observation in order for us to 
understand better why there is such censorship and control in 
the Chinese cyberspace and the consequences to American 
companies.
    First of all, I am currently, in addition to documenting, 
identifying, and indexing censorship in China, I am also 
working with some leading computer scientists at UC-Berkeley to 
test, evaluate, and incubate counter-censorship technologies 
which can be applied to expand the free flow of information 
around the world.
    The first point I'm going to make on Internet censorship, 
which is already well documented and publicized in many works, 
including my own research, is to focus on a single case which 
is the Chinese Twitter-like company, Sino-Weiboa. China blocked 
Twitter and Facebook in 2009, but this particular company, who 
is also raising money from the U.S. stock market, has expanded 
its own microblogging service in China in the last two or three 
years. Now it has over 250 million users.
    According to their own report, this company has an 
extensive and powerful censorship mechanism to back up their 
operation. The company's executive has publicly stated that 
monitoring the content is Sino-blog services' biggest headache 
and it entails intensive communication between editors and 
state managers, including emails, updating guidelines for 
monitoring content that is sent every hour. This company has 
hundreds of human hired individuals and departments just to 
monitor the content and censoring them.
    On these particular microblogging services, I have just 
published the latest directive from the Chinese state censor. 
Well, actually two of them. One is relating to the artist Ai 
Weiwei, asking them to delete old information about him 
borrowing money to return his tax action online. But the latest 
directive from the state to this company is to prevent three 
individuals, Chinese individuals, from opening an account on 
this microblogging service.
    These three are Chen Ping, a businessman who is a publisher 
of a Hong Kong-based magazine called Sunshine Affairs, and the 
second is called Chang Ping, a renowned Chinese journalist, and 
third is Wen Yunchao, an editor of that publication. That 
publication is banned in China and not allowed anywhere in 
cyberspace, and their names are being prevented from opening 
any microblogging services in China. These individuals, 
actually, their personal safety, is in danger.
    The next point I'm going to say is that despite this kind 
of censorship, that the Chinese Internet netizens have been 
increasing their criticism to the Chinese Government policies 
and systems and questioning the government accountability and 
increasing their ability to politically participate in Chinese 
society.
    Precisely because of that, the Chinese Government has 
intensified its control to a more advanced technological and 
sophisticated level. And here comes the American companies and 
technologies, because controlling individuals is not enough. 
What they are doing is preventing those technologies from 
search and file sharing, access feeds for blogging, 
microblogging. They want these Internet services totally under 
their own control so they don't give foreign companies the same 
level playing field, and they actually blocked hundreds of 
thousands, if not more, Web sites and companies and web pages 
from China, preventing such access for the Chinese netizens.
    So it has had both censorship consequences and level trade 
consequences. My own research group has documented a 
significant portion of such censorship directives over the last 
five years, and some are translated on our Web site, and those 
search-banned key words, over 800 of them, in cyberspace.
    So finally my point is, despite such censorship there is an 
emerging generation of Chinese bloggers and netizens who are 
pro-human rights, democracy, and freedom values, and actually 
they are the leading voice on the Chinese Internet. It's the 
hope of the Chinese Internet to facilitate such speaking voices 
for a different future of China, but in order to achieve that 
day, the U.S. Government should stand firmly behind the values 
of the freedom of speech and freedom of information and do 
everything we can from this country to mitigate those 
consequences and violations of human rights and Internet 
censorship, including this consequence to American companies.
    Thank you.
    Chairman Smith. Thank you so very much for your testimony.
    Mr. Kaplan?
    [The prepared statement of Mr. Xiao appears in the 
appendix.]

   STATEMENT OF GILBERT B. KAPLAN, PARTNER, KING & SPALDING; 
      PRESIDENT, THE COMMITTEE TO SUPPORT U.S. TRADE LAWS

    Mr. Kaplan. Thank you very much, Mr. Chairman and members 
of the Commission, for inviting me to testify here today. I'd 
like to just say briefly that I, too, am humbled, as some of 
you mentioned, to be speaking here with people who have risked 
their lives, their health, and their families on this issue 
which we look at perhaps more as a legal and commercial issue, 
but I understand the deep danger people are in related to this.
    Through my work with the First Amendment Coalition, we've 
been working to achieve a breakthrough on China's Internet 
restrictions since 2007. I feel that we are finally making some 
progress, in part from our work and also in part from the work 
of this commission and other voices on Capitol Hill and the 
U.S. Trade Representative [USTR].
    There is a relationship between commerce and the trade 
problems we face and American values and our ability to promote 
American values around the world, and one of those, of course, 
is free speech.
    China's censorship of the Internet and its restrictions on 
the free flow of information have a very significant impact on 
U.S. economic and trade interests. These measures have been 
ongoing for years and have had an overwhelmingly adverse effect 
on market share for U.S. companies in China, perhaps to the 
extent that such market share will never be recovered.
    China's blocking and filtering measures and the fog of 
uncertainty surrounding what China's censors will or will not 
permit violate numerous of China's international obligations, 
including provisions of the WTO General Agreement on Trade and 
Services, the GATS.
    Although there is public information identifying several 
large companies that have been blocked or restricted by the 
Great Firewall, including YouTube, Facebook, Twitter, Vimeo, 
Google, and The Huffington Post, to name a few, there are many 
other companies that have been blocked from access in China 
that I am not able to identify by name specifically because 
these companies fear retaliation. These companies come from 
various sectors, including energy, labor mediation, tourism, 
education, web hosting, and advertising, among others.
    The fact that these large, well-established companies and 
other fast-growing U.S. firms, so successful in every other 
major market in the world, are reluctant to come forward with 
specific information that would form the basis of a WTO 
complaint against the Chinese Government is powerful testament 
to: (1) the importance of the Chinese Internet market, the 
largest in the world, to these firms' continuing success; and 
(2) the risk of retaliation these firms face if they are seen 
as lending direct support to a trade complaint against China. 
Moreover, companies not yet in existence but for which China 
could represent a significant business opportunity do not even 
have a voice in this matter, and perhaps never will.
    The First Amendment Coalition was able to persuade the 
Office of the U.S. Trade Representative to take the critical 
step of requesting detailed information from China on its 
Internet restrictions under Article 3-4 of the GATS, which 
mandates transparency in a member's application of measures 
affecting services.
    GATS Article 3-4 reads as follows: ``Each member shall 
promptly respond to all requests by any other member for 
specific information on any of its measures for general 
application or international agreements within the meaning of 
Paragraph 1.''
    We feel the U.S. request to China under GATS's Article 3-4 
is highly significant not only because it is the first time any 
WTO member has utilized that provision of the GATS agreement, 
but also because it is the first time that the U.S. Government, 
or any government, has made a formal submission through the WTO 
to China to address Internet censorship.
    Some of the information requested from China by the USTR 
included the following: With respect to China's rules governing 
Web site blocking, who is responsible for determining when a 
Web site should be blocked? What are the criteria for blocking 
access? Where are the guidelines published? Who does the actual 
blocking? How can a service supplier know if their Web site has 
been blocked? Are decisions to block appealable?
    Is the process used to prevent access the same or different 
for foreign and domestic content? With respect to the 
prevention of ``illegal information,'' how is illegal 
information defined? Is a written government order required for 
a private corporation or relevant authority to block the 
transmission of illegal information?
    We hope, and to some degree expect, that the government of 
China will answer these questions fully and promptly, 
fulfilling its obligations under the WTO.
    Let me just close by making two points. I think it would be 
very useful for this Commission to undertake, directly or 
perhaps through an economic consulting firm, an economic 
analysis of the overall harm caused to U.S. companies by the 
Chinese blockage and censorship of the Internet. There isn't 
really hard economic data on that that's available, but it is a 
study which could be done. But, of course, someone has to 
commission it and pay for it. I think that would be a very 
valuable exercise.
    I have talked to economic firms and there is a methodology 
that could be used. It would be billions of dollars of losses, 
but I think having that number out there would be very helpful.
    Second, in a recent newspaper article a representative of 
ACT, the Association for Competitive Technology, noted that 
many of its member companies with joint ventures with firms in 
China have found their web links back to the United States have 
been removed or the U.S. firm's Web site has been blocked. He 
noted, ``It's always difficult for technology companies to draw 
lines in the sand and say this and no further when they are 
beholden to shareholders.'' He said, ``That's why we need the 
USTR and the administration to step up to the table.''
    I concur with this general point. I think we do need 
government involvement in this and government has to take the 
lead. Individual companies will not be able to do this without 
government leadership.
    Thank you.
    Chairman Smith. Mr. Kaplan, thank you so very much for your 
testimony and for laying all of that out for us, and for the 
work you've done to help get the USTR to take that very 
important action.
    Let me now introduce Mr. Edward Black, who has served as 
president and CEO of the Computer & Communications Industry 
Association, a nonprofit membership organization that 
represents technology companies, including Google, Yahoo!, 
Ebay, Facebook, and Microsoft. A consistent supporter of 
Internet freedom, Mr. Black serves on and has previously served 
as chairman of the State Department's Advisory Committee on 
International Communications and Information.
    Mr. Black, you may proceed.
    [The prepared statement of Mr. Kaplan appears in the 
appendix.]

   STATEMENT OF EDWARD BLACK, PRESIDENT AND CEO, COMPUTER & 
           COMMUNICATIONS INDUSTRY ASSOCIATION (CCIA)

    Mr. Black. Thank you, Chairman Smith, Chairman Brown, and 
Ranking Member Walz and members of the Commission. I appreciate 
the opportunity to testify before the Commission to discuss 
China's censorship of the Internet.
    CCIA has promoted openness, competition, and free trade for 
nearly 40 years and we commend the Commission for examining how 
restrictions on the free flow of information online pose not 
only significant human rights concerns, but economic concerns 
as well.
    I know that freedom of expression has mainly been viewed 
through the lens of human rights. We admire the courage and 
sacrifice of activists such as Mr. Li's father and Pastor 
Zhang, who seek freedom for their people and the openness of a 
free society.
    I firmly believe that the United States must continue its 
full-throated support of freedom of expression worldwide. We 
support the State Department's effort to aggressively promote 
Internet freedom and I caution our government against taking 
any actions such as misguided intellectual property enforcement 
bills before Congress that might hamstring these efforts 
abroad.
    In addition to harming human rights, restricting the free 
flow of information online has serious economic repercussions. 
American companies whose main purpose is to facilitate 
communications and information exchange are some of the biggest 
and fastest-growing companies. Google and Facebook just to 
mention a few, have estimated market value of $174 and $83 
billion respectively. They're both more highly valued than 
Goldman Sachs. Our industry is an important part of the 
American economy.
    Since China gets full access to U.S. markets in sectors 
where it has a comparative advantage, it is disconcerting that 
the U.S. Government has not done more to ensure that our 
Internet industry gets the same access in China, a market with 
more Internet users than the entire U.S. population.
    However, we are very encouraged by the USTR's recent formal 
inquiry into the specifics of Chinese censorship. As Gil 
mentioned, we also had been pushing USTR in this direction for 
a long time. Using mechanisms available under the WTO, USTR has 
put China in a position where it needs to divulge specific 
details about its notoriously vague censorship policy or face 
repercussions.
    The first step of dealing with Chinese restrictions is to 
bring them into the light of day. Focusing on the impact that 
such restrictions have on trade provides U.S. negotiators 
tangible sticks and carrots that are not available in the human 
rights area. While the WTO allows exceptions to its rules for 
matters of public morals and national security, it also 
requires all restrictions be transparent, provide due process, 
be minimally restrictive, and apply equally to foreign and 
domestic entities.
    As of today, China complies with none of these 
requirements. Compelling China to justify every blockage may 
dampen its enthusiasm to impose such measures. We would hope 
China would have to scale back and better document its 
censorship practices.
    The Chinese Government censors, blocks, and discriminates 
against foreign-based Web services and content, as discussed 
more extensively in our written testimony. This directly and 
indirectly advantages domestic Chinese firms. It has repeatedly 
blocked sites and services, including Facebook, Flickr, Google, 
Twitter, and others, singling out U.S. companies for 
censorship, even when Chinese-owned services carry the same 
banned content. This double standard strongly suggests that the 
motivation for censorship is often protectionism rather than 
morals.
    In the past, China has even manipulated the Great Firewall 
to redirect users entering the URL of U.S. search engines to 
Baidu. In addition, content filtering by China degrades the 
quality of service delivered by foreign providers who must 
compete against unfiltered domestic firms.
    Chinese Internet censorship is part of a continuing pattern 
of using trade and regulatory policies that either restrict 
access to Chinese markets or force foreign companies to 
acquiesce to Chinese Government demands as a price of access.
    This Commission's most recent annual report correctly 
identified a troubling aspect of China's censorship regime, 
where China uses vague standards of liability and places the 
burden of enforcing those standards on service providers. 
Pending IP enforcement legislation before this Congress 
unfortunately shares the same disturbing similarities with 
China's approach to Internet control, as pointed out by the 
Commission.
    The bills create vague standards for liability and ask 
private companies and Internet intermediaries to police and 
censor their users. When coupled with blanket immunity 
provisions for actions taken while attempting to comply with 
the legislation, this bill would tolerate and encourage over-
broad filtering and will remove legal, as well as illegal, 
content.
    If the United States legitimizes censorship and prior 
restraints on speech for infringement and enforces it through a 
draconian system of DNS filtering, this will allow China and 
others to point to our own actions to justify theirs and make 
the job of our diplomats very much more difficult.
    As a letter from over 100 law professors, including Larry 
Tribe, recently pointed out, the proposed Protect-IP 
legislation represents a retreat from the United States' strong 
support of freedom of expression and the free exchange of ideas 
on the Internet. We must take care not to undermine our own 
foreign policy and trade goals by setting bad precedents.
    Finally, in conclusion, China's censorship perverts what 
should be a tool for freedom and empowerment, the Internet, 
into a tool for authoritarian control. Addressing Chinese 
censorship as a trade barrier is a legitimate, multilateral, 
and potentially effective approach that needs to be pursued by 
our government at the highest levels. It may seem a little bit 
like going after Al Capone for tax evasion, but that's what we 
need to do.
    Finally, I'd just remind the Commission that I would hope 
that as the U.S. Government takes action and focuses on this 
problem, we also keep in mind we want to make sure we do no 
harm.
    Thank you very much.
    [The prepared statement of Mr. Black appears in the 
appendix.]
    Chairman Smith. Thank you very much. I want the record to 
know that Chairman Brown was called back to the Senate, so he 
conveys his thanks for your testimony and has told me he has 
read it and will have some questions that he'll pose for the 
record.
    [The questions appear in the appendix.]
    Chairman Smith. Mr. Walz, I would yield the mike.
    Representative Walz. Well, I thank the Chairman. I, myself, 
am going to be called away, so the Chairman's compassion and 
tolerance of me is also appreciated.
    So, thank you all for being here. I guess the first 
question I'm going to ask, maybe each of you--Professor Xiao, 
this might be to you. I've said this before and I watched it, 
that everyone said, and I watched with Deng Xiaoping's opening, 
once the Chinese get television that will change everything. 
Once the Chinese get land lines that will change everything. 
Once the Chinese get wireless cell phones that will change 
everything. We've had this belief that technology would be that 
overriding social change agent. Is it overly optimistic to 
believe that this new social media is going to finally be the 
silver bullet that is unstoppable in terms of their ability to 
censor?
    Mr. Xiao. I don't think anything is a silver bullet. 
Managing a country is a complicated and huge task, and building 
democracy and human rights in that society, it's going to be a 
long, historical process. But technology--and here we're 
talking about Internet and social media--has some--I'm not a 
technology deterministic person, but it has an architectural 
advantages that can--like TV, which is broadcasting an image, 
the Internet participated and has a networked topology that 
makes every node have very easy access to post something and 
information flow much easier.
    It's much more difficult for an authoritarian regime to 
control information, that is true. It's also making the 
possibility, which never happened before the Internet, for the 
individuals that can collaborate and coordinate their actions 
simultaneously or in some kind of self-organized fashion, which 
any authoritarian regime in China fears the most, is the self-
organization of the people.
    So these things are actually rapidly happening in the 
Chinese Internet, in Chinese society, and my research reveals 
such a pattern, both from language to actual online actions. 
You mentioned the artist Ai Weiwei, who is right now under the 
penalty of a $2.4 million tax. It's really political 
persecution, clearly.
    The Chinese censor issued a clear directive to all Internet 
companies to delete any information regarding the fact that he 
is using the Internet to collect such loans. Regardless of the 
censorship and all the effort and all the mechanisms, there are 
over 30,000 Chinese individuals, with their real names, sending 
in their little donations. Actually, it's so-called lending 
money to him as a statement of standing by him, not of the 
regime. Without Internet, the 30,000 people would not be able 
to do that. Despite the fact that censorship is, by and large, 
effective and pervasive.
    The Chinese Government is losing their ground to control 
how much information, particularly their ideology to supporting 
the regime legitimacy, that they need to be constantly facing 
contests from the Chinese netizens. So that's actually good 
news. Despite that, I don't expect this will automatically open 
the entire society because it has so many other factors to it, 
but it is positive.
    Representative Walz. No, that is helpful. I think for me, 
one of the concerns I have is I would anticipate, as you said, 
that that ability to participate both ways, the ability to 
self-organize, the things that we're seeing both here and 
around the world, from Arab Spring to events in the United 
States. The fear I have is, though, this accelerates further 
the desire to clamp on it harder will be very tempting.
    Mr. Xiao. It is true.
    Representative Walz. And I think we'll see an acceleration 
in human rights abuses very quickly. So I think now is our time 
to continue to push before we reach that critical point when 
they realize they've lost control.
    Mr. Xiao. I agree with you.
    Representative Walz. I appreciate that.
    I thank both you gentlemen. I appreciate the work you've 
done. I think that you're approaching this the right way. Mr. 
Black, I think your suggestion to us is very good to the 
American public. It's not that they don't care, but I'm a high 
school teacher so I always look at what motivates people. It's 
Maslow's hierarchy here. If we're trying to talk about self-
actualization on human rights, we're losing them. If you go to 
the bottom and talk about the money you'll get them, not 
because they're greedy, but because it impacts them.
    Just for an example, is this true? Would this be true in 
China? I just pulled up Professor Wu's book here, ``The Bitter 
Winds,'' his memoir, on my Kindle, on my Ipad from Kindle 
Store, and I want to buy it from Amazon. Could I do that in 
China? Could I pull up his book in China and buy it? A 
legitimate business, an American business, a legitimate person 
who owns that. We couldn't buy this, Mr. Wu?

    Mr. Wu. My simple answer is no. I don't know about 
individual books, but many, many books have been blocked.
    Mr. Black. Your point is well taken.
    Representative Walz. Amazon is losing money today.
    Mr. Black. There are a lot of things in the United States 
that would be blocked for a variety of reasons, commercial 
activity and products galore are basically not allowed.
    Representative Walz. If you're a free market capitalist 
here, this has to really appall you, doesn't it?
    Mr. Black. Absolutely.
    Representative Walz. Here's an entrepreneur that did this, 
put this on there. He and the company, Amazon, who are 
benefiting from it, the content, would be stopped from doing 
that.
    Mr. Black. There are studies that indicate that Internet 
commerce over the past year has basically amounted to $2 
trillion worth of activity. A substantial amount of that was 
not in China. You could imagine how much--when a Web site is 
blocked, all the advertisers, all the products that might flow 
through that lose that channel. So the impact is not on the Web 
site itself only, it is on a wide range of players that 
interact with that in a variety of ways.
    Representative Walz. There's a ripple effect on jobs here. 
Today there's going to be a worker not needed to box this book, 
there's going to be a worker not needed to load it on a UPS or 
FedEx truck to send it to this person who would liked to have 
ordered it and couldn't.
    Mr. Kaplan. That's correct. Even more problematic, Amazon 
does function in China but it has had to do a joint venture 
with a Chinese company and have servers set up within China. So 
one of the macro effects of the whole censorship is many U.S. 
companies have had to move to China, can't use their facilities 
in the United States, and this has a very pervasive effect on 
U.S. economic prosperity.
    Representative Walz. That's a powerful point.
    I'm sorry I'm going to have to leave, Mr. Chairman, but I 
look forward to hearing the rest of this. I do want to convey 
how much I thank you on this, and I certainly think you are 
hitting on a powerful tool here that can have multiple 
benefits, both from human rights and economic fairness. So, I 
thank you for that.
    Chairman Smith. Thank you.
    Representative Walz. Mr. Chairman, thank you for letting me 
go.
    Chairman Smith. Thank you, Mr. Walz. I want to thank our 
very distinguished witnesses for your insights and counsel.
    Just a couple of questions. Professor Xiao, has the 
capacity to censor and survey within China been developed 
primarily by U.S. IT companies and U.S. corporations, or 
Western corporations? If that is the case, is it still the 
case--or was the case--today or has the technology of the 
Chinese, Baidu and the others in the government, collaboration 
with them, caught up and now they've taken it over? They 
basically can do it on their own without----
    Mr. Xiao. At the beginning, early stage of the Internet 
development, it's clearly the case that those technologies are 
almost directly imported from the United States. In the last 10 
years, however, China has sort of emphasized to develop such 
technology capacity by its own companies or own trusted 
engineers. However, those Chinese Government-trusted domestic 
companies, many of them have close relationships with U.S. 
companies. There is a technology transfer clearly happening in 
sort of a second or third tier to the Chinese censorship 
apparatus.
    Chairman Smith. Let me ask, Mr. Kaplan, Mr. Black, has 
there been any effort made by the Department of Defense, 
Commerce, and all of the relevant agencies of the U.S. 
Government to ensure that this technology is not conveyed to 
the Chinese secret police and the military? Obviously the dual 
use for the military cannot be underscored enough. Command and 
control is essential to an effective operating military 
machine.
    When you give it to police who routinely torture people who 
go on the Net and try to promote fundamental democratic values, 
it seems to me we should be inhibiting the sale and transfer of 
that capability. Has that happened at all during either the 
Bush administration, the Clinton administration before it, or 
now the Obama administration?
    Mr. Black. Yes. Basically it's an export control issue 
which goes back for decades to the Soviet Union, et cetera. The 
rules have kind of evolved, but historically were to 
differentiate between those things where getting the product 
had a tremendous difference, and whether or not there was 
foreign availability, either domestic or from a third party, 
third country.
    Generally, although there are certain things that are 
clearly so obnoxious and repulsive that they remain on what we 
call foreign policy controls and banned, to a large extent I 
think there was a broad spectrum of agreement that when 
something is widely available in an indigenous way as well, 
that it is just futile to really have those controls.
    Again, carving out some really horrendous things, but one 
of the great examples we went through was with semiconductors. 
Semiconductors clearly were important to the creation in the 
East bloc of sophisticated computers for weapons control, but 
they were also used for transistor radio and everything else. 
So they were so widely available from so many sources, so we 
just can't control it, so we focused on the things we can 
really make a difference with. That's pretty much a prevailing 
U.S. law. So there's not a real effort because they don't think 
it would have an impact.
    The question, do you judge it by, will it make a difference 
at the end of the day? The second standard is, even if it will 
make a difference, is it so abhorrent that you don't want to be 
connected to it? Those two standards coexist and apply in 
different ways.
    Chairman Smith. Well, with respect, as far as you can tell, 
was there any instance where the government said that's not 
going to be sent over to the PRC because we know it has 
consequences for the dissidents and the religious believers who 
go online and are seeking to----
    Mr. Black. In the software world, I'm not sure. There's 
clearly a more physical product category. There are those, a 
number of things in that category, but I'm not sure I'm aware 
of any in the software.
    Mr. Kaplan. Frankly, I'm not sure. But I would like to make 
a related point. The irony about all this in terms of China, is 
we've allowed the entire manufacturing base, as it relates to 
the Internet, to be put in China. Knowing the products that you 
need to run the Internet aren't really made in the United 
States anymore, or are made to a very limited degree, it always 
was the deal that, sort of at the higher end, more intellectual 
capital would stay in the United States and we'd sell that to 
China. That's like what we're trying to sell over the Internet.
    So we've moved all the hardware to China so they obviously 
can build off that to control the Internet because all the 
hardware is made there. We don't make it, but we were supposed 
to be able to sell the higher end stuff, like Internet, R&D, 
and other things like that to China, and now they're stopping 
our Internet. So, the whole deal is, you know, our Internet 
providers, our Internet--exciting opportunities like Facebook, 
Twitter, and other organizations could be very profitable and 
bring more prosperity here. So the whole deal is askew very 
fundamentally.
    Chairman Smith. Point well taken. And that continues to 
this day?
    Mr. Kaplan. It gets worse every day.
    Chairman Smith. It gets worse.
    Mr. Xiao. It's getting worse.
    Chairman Smith. Doesn't that strike you as absurd that the 
West--I mean, even the idea of foreign availability being a 
loophole, I mean, Semens, a lot of companies, corporations that 
have tremendous capabilities, but the Chinese wanted what 
Google, what Cisco, what others could provide because it was at 
least----
    Mr. Xiao. Let me emphasize this point. The aspects of the 
Internet innovation, particularly other users and moving the 
content that will make them more easily accessible, more easy 
to organize, more easy for users to use the nature of those 
Internet innovations, but those Internet innovations directly 
run against the Chinese Government interest to control 
information from the top down. It's not those companies trying 
to run against China, this is Internet innovation. The Chinese 
companies try to do the same innovation, but they cannot do it 
in China.
    So it hurts the innovation in Chinese society as well. 
Censorship hurts both countries. But also, because the Chinese 
Government feels they cannot control such a new innovation, 
therefore, especially the empowering users aspect of those 
innovations, therefore, they block the foreign companies for 
which they think they don't have direct control and they put 
all kinds of demands and shackles on the domestic companies to 
make the domestic Internet industries also handicapped in that 
aspect.
    Mr. Black. If I could add?
    Chairman Smith. Yes, please.
    Mr. Black. No doubt that China has developed tremendous 
technological capability. That's absolutely true. The United 
States is still a leader in Internet innovations in terms of 
how to utilize in creative and imaginative ways the Internet 
because we care about empowerment. Basically what the Internet 
does in many ways is it empowers users. That empowerment allows 
those users to feed back in a social network way to help be 
part of the innovation process.
    So the U.S. society, not just our companies, is really the 
dynamic, creative component trying to relax from ever being 
able to do that because they're not letting their people have 
that empowerment. They fear the empowerment. So there's always 
going to be some lag there, and frankly, our social networks 
are--if you think in First Amendment terms, it's not just 
freedom of speech, it's freedom of association. It is a 
tremendously useful tool.
    The fact that China so fears some of those companies having 
a presence there because of the openness of our companies' 
systems, therefore they create their parallels and their 
alternatives and put much more, greater restrictions on it. So 
they recognize the power of the Internet and they are trying to 
use the benefits of it, and yet trying very hard to restrict 
aspects of it which they feel they can't control.
    Chairman Smith. In your view--all three of your views--my 
sense is that China is becoming much more xenophobic than ever, 
that the dictatorship believes that the restlessness, 
especially the thought of a Jasmine Revolution in what they 
were seeing in the Middle East, sent shivers down their spine, 
especially when there was some crackling over the Internet 
about freedom and democracy. Those things began to percolate 
again. Not that they ever went away, but they were more 
suppressed. I've held 34 hearings on human rights abuses in 
China.
    Several of those hearings have focused on the grossly 
destabilizing consequences of the one-child-per-couple policy, 
forced abortion, the missing girls. The State Department said 
10 years ago, the State Department reports there may be as many 
as 100 million missing girls in China--that was 10 years ago--
through sex-selection abortions and gendercide.
    I work on trafficking, human trafficking all the time. 
China is becoming a magnet beyond any other comparison for 
trafficking women and girls. The woman who wrote the book, Bare 
Branches recently testified and said that by 2020, 40 to 50 
million men--so the number has one up in terms of estimation--
will not be able to find wives because they have been killed 
systematically through the one-child-per-couple policy.
    The point being, the government now looks at this growing 
instability, more males than females by far, a growing 
lawlessness. It seems there's a total direct relationship 
between that and a tightening of just--the Wall Street Journal, 
on November 6, said, ``Executives from China's top Internet 
companies pledged to boost efforts to curb harmful content at a 
unusual government meeting with web firms.'' It goes on to say 
that ``Baidu, Alibaba, and Sina Corp have said that Internet 
companies must strengthen their self-management, self-
restraint, and strict self-discipline.'' We all know what those 
words mean. They're just tightening that iron fist.
    I'm wondering, the instability is going to reach a tipping 
point. I'm deeply worried about what that means for more 
torture, as you are, I'm sure, more killings in the streets, as 
we've seen. I mean, Tiananmen Square was the most visible, but 
there have been others since, as we all know. That connection, 
if you will----
    Mr. Xiao. Let me share some of my research and observations 
on this. One, is my research group has documented over 3,000 
blocked URLs by the Great Firewall. This is far from the entire 
number of them, but these are the Web sites submitted by 
Chinese netizens. So, to some degree it's they are useful for 
them directly, so you can see the pattern of where they are 
blocking not only just politically-sensitive information, but 
any sort of user-generated contents that a hosting service 
feels they cannot control.
    The second is that the directives, we have documented over 
the last five years, as I said, a significant body, a 
proportion of it. You can analyze a pattern of it. The 
increasing xenophobia is correct by how many directives goes 
after the so-called massive incidents, basically corrective 
actions at the local level protests in China is increasing. So 
the control of such information flow online has been increasing 
in the last five years, clearly.
    Also, you can look at the sensitive words that they ban or 
block, a Sino-blog or a microblog service. They ban the search 
because then the user cannot find all the related information. 
They are afraid of such an information aggregation phenomenon 
in the Chinese Internet. So we documented over 820 such words, 
which is only a portion of it, but it's already clearly showing 
what kind of fear that they have of the site. Again, there's a 
pattern and there's a trend to increasing state instability.
    Finally, regarding the family planning policy, I have a 
clear example between the Internet and that, which is, as 
you've probably heard, about a Chinese lawyer, Chen Guangcheng, 
the blind man who helped villagers in his village and 
neighborhood to defend their rights, including the one-child 
policy and abusive practices and forced abortion, et cetera.
    He's been sentenced and now he's been released. He served 
his sentence already and he's supposedly free, but he's not 
free at all. He lives in the village and is incommunicado. 
Nobody can visit so no one knows what's happened to him. So on 
the Chinese Internet, the netizens started this movement of, 
just go to visit him.
    Those villagers are being blocked, beaten, harassed, and 
tortured and sent away from the village by the local 
authorities. The central authority clearly knows what's going 
on and those activities are also banned on the Chinese 
Internet, but the Chinese netizens are privately organizing 
anyway. So it's an ongoing case at this moment, linked between 
the government's fear to some of the policies and challenges 
and the ability of mobilization on the Internet.
    Chairman Smith. Yes?
    Mr. Black. If I could, I think your question basically is, 
yes, we sense a greater assertiveness, boldness, unashamedness 
about, and really defending their approach about how to censor 
the Internet, not backing away at all. In fact, I think they 
realize that there is a global contest going on, whether or not 
an open model would prevail or a closed model, and they're 
competing, I think, to get the rest of the world to adopt their 
model, partly because I think they believe in it and partly 
because it prevents them from becoming an outlier.
    The more people they can persuade into being a censorship 
type country, the more they can say, well, we're doing what 
everybody does. I think that's a key part of what's driving 
them. I think it's important to understand the newest tactic 
that they're really using. It's not that new, but in many cases 
it's not the government doing the censorship, it is imposing 
liability on Internet intermediaries and thereby compelling 
them, forcing them, encouraging them very strongly to be their 
self-censors. That's the model.
    I think the model that they're actually going to sell 
around the world is not that the governments do it themselves, 
because most governments don't have the technological 
capability. It will be to create this model of imposed 
liability, economic liability that would put people out of 
business if they don't become effective censors.
    Mr. Kaplan. Maybe I could just add, as the United States 
loses more and more ground in the trade battles, I think with 
China, China has become much more assertive and brazen in terms 
of promoting its values within China, but within the rest of 
the world, too. I'm sure you've looked at the situation in 
Africa, Latin America, the relationship to the World Bank and 
how they're competing with them in terms of loans. If we keep 
losing economic power we're going to lose moral power over 
values.
    This relates to the question that Congressman Walz asked. I 
think China is going to be very successful in controlling the 
Internet. It will not open up Chinese society because they have 
such a pervasive ability and such a pervasive desire to do it. 
They will be able to do it. They can defeat the positive sides 
of the Internet. There's been press in totalitarian societies 
forever, but the press has not meant freedom of the press. 
There's not going to be freedom of the Internet in China, I 
don't think. But they are being successful in controlling the 
Internet, essentially, unless this commission and other people 
can do something about it.
    Mr. Xiao. If I could add one more point, which is demanding 
transparency, why it's important. Clearly it's important to 
demand transparency in how they censor the Internet because the 
business is imperative to have such a level playing field. It 
also has very positive consequences for human rights, expanding 
human rights in Chinese society, because the whole censorship 
is about controlling people's minds.
    The most effective censorship is not letting people know 
what's being censored and what's being controlled. The more 
what is being censored and what exists in the censorship itself 
is known more clearly in detail by many people, the less 
effective that censorship is and the more people will demand 
more human rights and freedom of speech in Chinese society.
    Chairman Smith. You know, Professor Xiao, last week members 
of our Commission staff and myself sought the ability to go to 
meet with Chen Guangcheng and his wife, Yuan, and were denied a 
visa. We are repeating that request to the Chinese Embassy in 
the hope that we would be able to. I believe it was his 40th 
birthday on Saturday.
    We wanted to be there with him and his wife and show 
solidarity, and hopefully to let the Chinese know that we are 
watching and the world is watching, because our great fear is 
that they will beat him, and beat him to death, which they've 
been doing since he was in prison and since he's been released. 
So, thank you for bringing that up, because that's so very 
important.
    Let me ask about--and I only have two final questions to 
this excellent panel. In 2006, I introduced the Global Online 
Freedom Act. I am going to reintroduce it very shortly. The 
idea, and we're working on text to see what might be the best 
way of accomplishing what I know we all agree to, but obviously 
means to that end are sometimes open to debate--always open to 
debate.
    But the idea would be to establish an Internet-restricting 
country designation, because obviously China is not the only 
country in the world where this is a problem. I just chaired a 
hearing on Belarus yesterday, or two days ago. Belarus, with 
President Lukashenko remains one of the worst dictatorships--is 
the last dictatorship--to do it, and they use Internet 
censoring, courtesy of the Chinese model, with great impunity 
and obviously capture a lot of dissidents and democracy 
activists.
    So they would be surely designated an Internet-restricting 
country and would require disclosure of what is being censored, 
whether it be Microsoft, Google, or any of the others. It would 
require that personally identifiable information be put out of 
reach of the Chinese or any other Internet police.
    To their credit, Yahoo! made a move when they went to 
Vietnam to put that information out of reach, and it's in 
another ASEAN [Association of Southeast Asian Nations] country, 
I'm happy to say, because there was instance after instance 
where Internet bloggers and the like were put into prison 
simply for expressing concerns about the dictatorship in that 
country. That's one approach.
    The other approach, and I would appreciate your views on 
this as well if you would, the Falun Gong practitioners and 
some of their IT experts have developed a capability that I 
have spent hours, and as I said, Frank Wolf and others, trying 
to understand because it is above my pay grade in terms of 
technological understanding, but they seem to have a means of 
piercing the Great China firewall, and to do so almost at will, 
if not at will.
    We've asked the administration repeatedly to honor the 
appropriations amount that was set aside by Mr. Wolf on the 
Appropriations Committee to take this and run with it and to 
fund it so that this firewall is not impenetrable, and they 
have shown that, and it can also be used in other Internet-
restricting countries as well. So your take on the Falun Gong's 
technology, GOFA [Global Online Freedom Act], those two things.
    Mr. Xiao. Okay. Since my research lab has done a lot of 
focus on this area, let me just say some general points. One, 
is that the Great Firewall is far from watertight. It actually 
has thousands of leaks all the time. They are doing a quite 
incredible job in terms of preventing information from reaching 
the scale of the masses, millions of certain information, but 
also they have not been doing it in their full capacity because 
I don't think they're better resources, but their sort of 
policy decision about what time, it's not a time of crisis to 
do such more intensive blocking at this moment, but it's 
cranking up all the time.
    There's probably four types of technology and practices 
that are sort of leaking the otherwise blocked information into 
the Chinese cyberspace. The one type of practice is mostly set 
up by Chinese techies themselves using the U.S. servers or 
servers outside of the Great Firewall and set up some 
circumvention tunnels. So if you know a little bit of 
technology, it's not hard to do it by yourself, to share it 
with your friends.
    Those activities are small enough that the Great Firewall 
will never find out all of them. There's just too many of them. 
Those practices have been shared, the knowledge is being 
shared, and the total number doing that actually in Chinese 
cyberspace is very significant, I would say a significant 
portion of the entire sort of information flow that way.
    The second significant portion of people doing that is by 
VPN, the commercial tunneling technology, because the company 
needs that, or many services need that. People just pay by the 
service and then you can circumvent the Great Firewall, but you 
have to pay the money for it. A lot of people for a variety of 
needs, not only political needs, business and other things, 
have to do that. The Great Firewall can block them, but because 
they are afraid of consequences and collateral damage, they're 
not doing so at this moment most of the time.
    Third, are those circumvention tools, including the Falun 
Gong group's introduced and managed tools. It has been, in a 
variety of situations, very effective for the other users, 
particularly that are user-friendly, when they are user-
friendly and simple to download or simple to use. They're not 
limited to Falun Gong tools. There's other tools out there. But 
they all have different strengths and weaknesses.
    None of them can be absolutely blocked by the Great 
Firewall at all, but there's a battle of cat-and-mouse going at 
it all the time. So this side of the research and development 
and deployment of circumvention tools does need to be supported 
and expanded and helped by the information flow. So, all of 
these activities are important.
    Mr. Kaplan. The issues that were just discussed, certainly 
that's my understanding also. There are means to get past the 
firewall, but as soon as they become generally known I think 
the Chinese will find ways to patch those holes and then other 
means will be found. But it is not airtight, by any means. 
There are people who have gotten through in any number of ways, 
so I think that can be done.
    But it's a cat-and-mouse game: You do one thing, they'll do 
another; you do another, and it slows down the ability to get 
information in China. I mean, if you talk to U.S. students or 
U.S. citizens in China, most of them have given up trying to 
use U.S. Web sites. It just takes so long and it's so 
undependable. So you don't have to stop it entirely to make it 
essentially not useful.
    Mr. Xiao. Right. I'll give you an example. The Google Gmail 
server, the Gchat, and the Chinese Government, since the 
spring, has disconnected that connection to the Gchat every 10 
minutes or every 15 minutes. So that type of thing is annoying 
enough for a lot of people to stop using those services and 
that's what they're doing. They don't completely cut it off, 
but they'll create such a burden that it forces the users to 
use other Chinese services.
    Mr. Black. I might use a metaphor to make the same point 
that has been made, which is, if you don't think of it as the 
wall, think of it as a dam and the fertilizer for freedom and 
it'll trickle out. They're never going to have a 100 percent 
sure way that nothing has penetrated. But the trouble is, it's 
really successfully blocking the valley below from being 
fertilized with the full knowledge of the Internet and that's 
sad.
    Chairman Smith. Mr. Kaplan, if I could ask you, and all of 
you if you want to answer, prior to China's ascension into the 
WTO and PNTR, I held a series of hearings in my Subcommittee on 
Human Rights about why we were so naive to think that China 
would adhere to the rules and regulations prescribed by the 
WTO, since they did not live up to virtually any of the human 
rights commitments that they had made, including the Universal 
Declaration of Human Rights.
    As we all know, they have so deigned the International 
Covenant for Civil and Political Rights, which they violate 
with impunity. For at least a half a dozen years before any 
Chinese official came to the United States, they would announce 
that they were close to signing it to try to mitigate any kind 
of criticism that official would receive here. Totally gamed 
it. After a while, you say, how many times are we going to get 
hit and say, oh, they didn't really mean it?
    Now, you have brought out, Mr. Kaplan, in great detail, and 
I join in what you helped to bring about and I thank you for 
that, but under WTO the rules have been broken. At least, we 
believe they are, and I think they are. What can the WTO--
where's the enforcement, because that's what always seems to be 
lacking? A slap on the wrist. At what point is there a genuine, 
durable penalty for violating, in this case, the trade laws?
    Mr. Kaplan. Well, I think there are two answers to that 
question. One, is I think there's an awful lot the United 
States could be doing to impose consequences on China for the 
violation of our trade rights. We could be self-initiating many 
more cases, we could take some of the emergency powers that are 
available to impose tariffs on products coming into the United 
States.
    We could start acting much more vigorously on currency. 
We're doing, I would say, a very small percentage of what we 
could do to pressure China to comply with their international 
trade obligations, putting aside the WTO, and we ought to be 
doing a lot more than we're doing in that regard.
    I hope at some point we do turn up the heat, because I 
think it will have consequences if our actions have direct 
consequences on Chinese imports to the United States of major 
high value items, I think we've got to start doing that.
    As to the WTO, if they do not answer these questions that 
USTR has asked fully and honestly we can start a WTO case. Now, 
that's litigation, it takes a while. But the WTO has shown 
itself willing to impose decisions on everybody, including the 
Chinese, if they close their market unfairly. This is a market-
closing device they're using. If they don't comply, we can 
retaliate.
    We can put duties on their computers coming into the United 
States. We can put duties on other products coming into the 
United States. It might be appropriate to pinpoint Internet-
related technologies. We are able to do that. Usually when that 
happens, foreign governments, even very big and strong ones, do 
change their conduct.
    Mr. Black. One thing I think is not fully understood is, 
again, I think there's a great way to bring pressure on China 
by focusing on the rest of the world as well. There are 
difficulties in bringing China cases, but we should bring them. 
I totally agree that's there. But there are other countries 
doing similar things. It may be much easier to establish a 
string of precedents against some countries without the 
capability, frankly, to push back both politically, 
diplomatically, and legally.
    Setting a string of WTO precedents in this area might be 
very helpful. Since, again, my focus is Internet freedom in 
general, although China has to be a big part of that 
discussion, I would step out of focus here and mention that 
right now Russia is in the process of seeking WTO admission. 
Because of the U.S. Jackson-Vanik legislation there is a unique 
lever.
    I am not aware of what confirmed enforceable commitments in 
the area of Internet freedom are being requested of Russia, but 
I would certainly think it would be within the framework of 
anybody who cares about these issues to try to make that so, 
and again that would then be a fantastic precedent to deal with 
China.
    Chairman Smith. Is there anything else any of you would 
like to add before we close?
    Mr. Black. If I could make one short----
    Chairman Smith. Mr. Black?
    Mr. Black [continuing].--sentence I didn't get to read. Our 
Nation invented the Internet. We invented a First Amendment. 
We're the global standard-bearer for both economic and 
political freedom. It's critical that we continue as a country 
to lead in holding Chinese and other governments accountable. 
Part of that is, we also do have to remember, you must lead by 
example as well as by word. Thank you.
    Chairman Smith. If I could ask--I should have ended on 
that, but would any of you like to make a comment on Cisco and 
their enabling of the Police Net and other means by which they 
enable the secret police?
    Mr. Xiao. I'm sorry. I actually would rather echo what was 
just said about, America invented the Internet and the First 
Amendment. I grew up in China, but became a U.S. citizen five 
years ago. When I swore into this country's citizenship, I was 
deeply, profoundly moved by the diversity of the people to 
unite in the same house on fundamental human rights and 
dignity. But I am always Chinese in a sense of cultural 
heritage, and for my work am deeply connected with the people 
in China. Particularly, I became an activist since the 1989 
Tiananmen massacre.
    I actually know for a fact that when the Internet was 
introduced to China in the middle 1990s, many of the 
enthusiastic people, entrepreneurs, and technologists and the 
Internet industry with the hope that they are the Tiananmen 
generation. Our dream of China's democracy has been crushed by 
tanks in 1989, but they're the same people that have hope that 
this time technology will be on our side and we will change 
China.
    There are so many Internet entrepreneurs and the business 
people and content providers that I know that share that dream. 
Even though they are working under the censorship, and some of 
them are working inside of the system, but that dream never 
died. So the freedom of the Internet is not only an American 
dream, but it's also a new Chinese dream that has not been 
flourishing. I still continue working toward that.
    Mr. Kaplan. I think that was a very moving statement. I 
would just add, I really think the United States has to be 
prepared to take action in terms of real economic consequences. 
I think if we did do that more frequently it would make an 
enormous difference and I hope we will be more willing to do 
that in the future.
    Chairman Smith. Thank you so very much for your testimony, 
for your leadership, and those very uplifting and encouraging 
notes, but also challenging notes.
    The hearing is adjourned.
    Mr. Li. I have one last comment.
    Chairman Smith. Okay. We'll reopen for a moment to hear Mr. 
Li.
    Mr. Li. This is pretty short. I am sitting here today 
because I have the hope that more people will come over in the 
future, so I wish those companies have some confessions on 
those who suffered and those victims here.
    Chairman Smith. I would agree. We had a hearing with Shi 
Tao's mother a few years back, and Jerry Yang sat right behind 
where Shi Tao was. At the time there was an ongoing lawsuit 
against Yahoo!. Frankly, Jerry Yang seemed to have been truly 
moved by the plight of Shi Tao in particular, and his mother's 
agony as she talked about her son still to this day in prison, 
but obviously then having gotten a 10-year sentence.
    I asked him if he would settle that lawsuit and help the 
individuals who were--the families, as we all know, get 
impoverished while a loved one goes off to the laogai, and 
Harry Wu has been working very closely with them and others to 
make sure that the families are helped. So there is a 
conscience, I think, in corporate America. I think it needs to 
be prodded sometimes. I do believe that Google thought at first 
that they were opening China rather than contributing to its 
further closure.
    But as Professor Xiao pointed out, almost like judo, no 
matter how hard the secret police hits you can still throw them 
if you have the skill and the technological acumen. But there 
is that sense that an apology or tangible help, and to realize 
that you can't enable a dictatorship. I would conclude my 
comments, that I believe dictatorships need two things to 
survive: The control of the message, the propaganda message, 
and secret police.
    In Cisco, they're getting both, especially the secret 
police enabling, but I think many--I mean, Google actually 
supports the Global Online Freedom Act. At first, they were 
vigorously opposed to it. Again, no legislation is panacea or a 
silver bullet ever, but it may be a useful tool if we can get 
it enacted. So, thank you for that very important note.
    Mr. Black, did you want to--you leaned forward like you 
wanted to join in.
    Mr. Black. I wanted to add, when you mentioned Falun Gong, 
the kind of circumvention tools that it uses are in fact one of 
the things that makes us concerned about this intellectual 
property protection legislation, SOPA [Stop Online Piracy Act]. 
Those kind of tools would probably be made illegal. So again, 
lead by example is a big issue. I guess I'd also maybe use this 
occasion to mention that we have just begun and have created a 
new foundation to ensure Internet freedom for an innovative 
future. It's the Foundation for Innovation and Internet 
Freedom. We believe that there needs to be another voice that 
can work globally for this, again, focusing on innovation, the 
economic component, as well as Internet freedom itself. So 
we're in this fight for a long time.
    Chairman Smith. Thank you. And thank you all for your 
testimony.
    The hearing is adjourned.
    [Whereupon, at 11:51 a.m. the hearing was concluded.]
                            A P P E N D I X

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


                          Prepared Statements

                              ----------                              


                     Prepared Statement of Alex Li

                           november 17, 2011
    My name is Muzi Li (or Alex). I am from Bijie City, Guizhou 
Province, China. My father is Yuanlong Li, a man who was sent to jail 
for two years for publishing four articles online. I came to the United 
States on December 28, 2009 and became an undergraduate student at 
Bowling Green State University. I am majoring in Economics and minoring 
in Philosophy. Due to my fear of the Chinese Government's Ministry of 
State Security, I applied for political asylum in the United States in 
December 2010. I was approved on March 8, 2011.
    My family bought a computer when I was in middle school. My father 
didn't know how to use a computer, so I taught him. He learned some 
basic skills, such as how to use the Internet. However, my father and I 
found that we could Google some websites, but we could not visit them 
because those websites' opinions differed from the Chinese 
government's. At the beginning of 2005, I got Freegate from a friend. 
Freegate is proxy software; through Freegate, I could cross the 
firewall to visit foreign websites with different ideas. Later on, my 
father published his articles overseas through Freegate's software.
    Unfortunately, those four articles became my family's nightmare. 
The nightmare lasted for two years and five days. On the morning of 
September 9, 2009, my stepmother called me and told me not to come home 
until that afternoon. In the afternoon, I went back home and saw that 
the computer was missing and my house had been searched. My stepmother 
was weeping. Then I found out my father was arrested that day at his 
working place by the agents from the Ministry of State Security without 
any notice. Meanwhile, another group of agents visited my stepmother at 
her work place. They drove her home and rummaged through my home in 
front of her. She told me not to go home in the morning because she did 
not want me to be scared.
    Later the agents found out that I taught my father how to operate 
the computer; they decided to interrogate me. I was 17 in 2005, not yet 
an adult. They took me to a hotel to interrogate me without my parents' 
permission; they did not allow my mother or my stepmother to stay with 
me during the interrogation. During the interrogation, the agents tried 
to prove that I was an accomplice of my father. They asked me some 
questions such as, ``How much do you know about your father's articles? 
'' ``Did you help your father write the articles? '' They told me that 
my father had already told them what he did. They wanted me to tell 
them what I knew. If our stories matched, my father would be safe, and 
nothing would happen to him. In that case, I told them that I taught my 
father how to use the computer, and how I got the Freegate software. 
The agents lied; they threw my father to the jail then.
    A few weeks later, the agents came to my home. They asked me a 
confusing question: ``How did your father publish those articles? Did 
he use your email address? '' I explained that everyone knows to 
publish an article on a forum website, instead of using email, all you 
need to do is copy and paste. Besides, my father had a Yahoo! email 
account, so he didn't even know my Hotmail password. How could he have 
used my email address to publish articles on a forum? Thus, I told the 
police officers it was impossible for him to have used my email 
address. The reason why the agents could see my 
[email protected] email address was because I used it to 
register for our family's Windows software. So, when the agents found 
my IP address, they found the email address for the operating system, 
and assumed it was what my father used to post the articles.
    Nevertheless, the agents heard what they wanted, and ignored the 
rest. They ignored my answer about the email address. They also adopted 
my words during the first interrogation as part of their evidence.
    The reasoning behind the sentencing was that my father published 
four articles, which were viewed 1,532 times and received responses 
from over 25 people. The court stated my father was guilty of 
``inciting subversion of state power and overthrowing the socialist 
system.'' First of all, my father posted his articles on foreign-
operated websites. Without a proxy, people in China could not visit 
them. In 2005, few people knew of and made use of proxy software. 
Secondly, I could not imagine a nation with 1.4 billion people would be 
overthrown by an article with 1,532 views and responses from 25 people. 
So, I believe the agents were just using this as an excuse to persecute 
my father.
    Moreover, I suspect China's judicial system. While my father was 
detained, the Ministry of Police and State Security, the Court and the 
Procurator spoke with one voice; they all thought my father sinned by 
publishing four articles. They threatened me saying that if I talked of 
my father's case to overseas media, the penalty for my father would be 
even more serious.
    This is the disparaging situation and terrifying government that I 
faced while in China. Finally, my father advised me to leave the 
country. He sacrificed by selling his house to pay my tuition in the 
United States. He repaid the house mortgage with the help of the Yahoo! 
Foundation, and then he sold it. In the United States, I took part in 
some activities like the memorial event for Tiananmen Square. The 
agents in China knew exactly when and where I was and what I did at 
these activities.
    I do not believe the agents could get this detailed information 
without collaborating with an information technology company of the 
likes of Cisco Systems, who has built China's Golden Shield from the 
ground up.
    This is my testimony.
                                 ______
                      
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                 
                                 ______
                                 

                    Prepared Statement of Xiao Qiang

                           november 17, 2011

   From ``Grass-Mud Horse'' to ``Citizen'': A New Generation Emerges 
                   through China's Social Media Space

    Respectful Chairman, Representative Christopher Smith, Chairman, 
Cochairman Senator Sherrod Brown, and Distinguished Commission members,
    My name is Xiao Qiang. I am the Founder and Chief Editor of 
bilingual China news website: China Digital Times, and the Principal 
Investigator of the Counter-Power Lab, at School of Information of UC 
Berkeley. My research focuses on identifying, documenting and indexing 
censorship in Chinese cyberspace and generating an online aggregator of 
censored, blocked and marginalized content. As part of this work, I 
closely follow the political conversations of Chinese netizens and 
interpret their coded discourse and terminology.
    It is a privilege to speak in front of this important commission 
alongside my distinguished fellow panelists. My talk today will focus 
on the intensified and increasingly sophisticated Chinese state control 
and censorship of the Internet; the growing resistance to such 
censorship; the expanding online discourse; and the capacity of the 
Internet to advance free speech, political participation, and social 
change in China.
                        1. government censorship
    Since the mid-1990s, numbers of Internet users have grown 
exponentially and by late 2011, there are an estimated 450 million 
Internet users in China (perhaps tens of millions more if one counts 
the people who access the web through cell phones). While most of these 
people use the Web for entertainment, social networking, and commerce, 
the numbers of netizens engaged in political criticism are steadily 
growing and are now estimated to be between 10 and 50 million.
    The government has employed a multilayered strategy to control and 
monitor online content and activities since the introduction of the 
Internet in China in 1987. Authorities at various levels use a complex 
web of regulations, surveillance, imprisonment, propaganda, and the 
blockade of hundreds of thousands of international websites at the 
national-gateway level (``the Great Firewall of China'').
    The government's primary strategy for shaping content is to hold 
Internet service providers (ISPs) and access providers responsible for 
the behavior of their customers; thus business operators have little 
choice but proactively to censor the content on their sites.
    Business owners must use a combination of their own judgment and 
direct instructions from propaganda officials to determine what content 
to ban. In an anonymous interview with me, a senior manager at one of 
China's largest Internet portals acknowledged receiving instructions 
from either State Council Information Office or other provincial-level 
propaganda officials at least three times a day. Additionally, both the 
government and numerous websites employ people to read and censor 
content manually.
    Sina Weibo is China's largest Twitter-like microblogging service 
with 250 million users, according to their own report in late 2011. It 
is also one of the most tightly controlled spaces on the Chinese 
Internet and is an example of how control works on various levels. 
According to one of the company's top executives, ``Sina has a very 
powerful content censorship and infrastructure backup,'' which includes 
the ability to automatically monitor its users 24 hours a day while 
also utilizing hundreds of human monitors.
    The same executive noted that monitoring content is Sina's 
``biggest headache,'' and entails intensive communication between 
editors and censors including emails updating the guidelines for 
monitoring content that are sent every hour. Editors are obligated to 
report on any ``malicious'' content, and repercussions for users can 
include private or public warnings, deletion of content or cancellation 
of user IDs. Users are rewarded for reporting malicious or pornographic 
content by clicking a button on the site's homepage. Individual 
keywords are also filtered on Sina Weibo search; my research group has 
uncovered over 820 filtered search terms, including ``Cultural 
Revolution,'' ``press freedom'' and ``propaganda department.''
                     2. netizens' coded resistance
    The results of government censorship efforts are mixed at best. The 
government's pervasive and intrusive censorship system has generated 
equally massive resentment among Chinese netizens. As a result, new 
forms of social resistance and demands for greater freedom of 
information and expression are often expressed in coded language and 
implicit metaphors, which allow them to avoid outright censorship. The 
Internet has became a quasi-public space where the CCP's dominance is 
being constantly exposed, ridiculed, and criticized, often in the form 
of political satire, jokes, videos, songs, popular poetry, jingles, 
fiction, Sci-Fi, code words, mockery, and euphemisms.
    In early 2009, a creature named the ``Grass Mud Horse'' appeared in 
an online video that became an immediate Internet sensation. Within 
weeks, the Grass Mud Horse--or cao ni ma, the homophone of a profane 
Chinese expression--became the de facto mascot of Chinese netizens 
fighting for free expression. It inspired poetry, videos, and clothing 
lines. As one blogger explained, the Grass Mud Horse represented 
information and ideas that could not be expressed in mainstream 
discourse.
    The Grass Mud Horse was particularly suited to the contested space 
of the Chinese Internet. The government's pervasive and intrusive 
censorship has stirred resentment among Chinese netizens, sparking new 
forms of social resistance and demands for greater freedom of 
information and expression, often conveyed via coded language and 
metaphors adopted to avoid the most obvious forms of censorship. As a 
result, the Internet has became a quasi-public space where the CCP's 
dominance is being exposed, ridiculed, and criticized, often by means 
of satire, jokes, songs, poems, and code words.
    Such coded communication, once whispered in private, is not new to 
China. Now, however, it is publicly communicated rather than murmured 
behind the backs of the authorities. For example, since censorship is 
carried out under the official slogan of ``constructing a harmonious 
society,'' netizens have begun to refer to the censoring of Internet 
content as ``being harmonized.'' Furthermore, the word ``to harmonize'' 
in Chinese (hexie) is a homonym of the word for ``river crab.'' In folk 
language, crab also refers to a bully who exerts power through 
violence. Thus the image of a crab has become a new satirical, 
politically charged icon for netizens who are fed up with government 
censorship and who now call themselves the River Crab Society. Photos 
of a malicious crab travel through the blogosphere as a silent protest 
under the virtual noses of the cyber-police. Even on the most 
vigorously self-censored Chinese search engine, Baidu.com, a search of 
the phrase ``River Crab Society'' will yield more than 5.8 million 
results.
    In recent years, Chinese netizens have shown they possess boundless 
creativity and ingenuity in finding such ways to express themselves 
despite stifling government restrictions on online speech. This 
``resistance discourse'' steadily undermines the values and ideology 
that reproduce compliance with the Chinese Communist Party's 
authoritarian regime, and, as such, force an opening for free 
expression and civil society in China. At China Digital Times, we have 
created an online ``Grass-Mud Horse Lexicon,'' or a translated glossary 
of more than 200 such terms created and spread by netizens in China. 
Without understanding this coded but widespread (thanks to the 
Internet) ``Grass-Mud Horse Discourse'' through the lens of censorship 
and resistance, one cannot fully understand the contradictions in 
Chinese society today, and the potential and the possibilities for 
tomorrow.
                         3. online mobilization
    Through online social networks and virtual communities, the Chinese 
Internet has become a substantial communications platform for 
aggregating information and coordinating collective action especially 
through the use of shared language, experiences and images.
    For example, this information aggregation process can happen when a 
local issue resonates with a broader audience and spreads beyond the 
limited jurisdiction of local officials, sometimes even making it into 
the national media. When corruption or environmental damage, for 
example, are exposed, local authorities implicated in the scandal often 
crack down on news websites hosted within their respective 
jurisdictions. But when such news finds its way to a website based 
outside the relevant local jurisdiction, the officials of that 
jurisdiction will have no means of directly suppressing it. This gap in 
control between local authorities as well as between local and central 
authorities opens a space for netizens to transmit information.
    Influential bloggers may also mobilize their fellow netizens by 
acting as spokespersons for certain issue positions, or by giving 
personal authentication to messages that resonate with the people, or 
by articulating what others could not say in the face of political 
censorship. Bestselling author, race-car driver, and blogger Han Han is 
one such figure. Han is an outspoken critic of government censorship, 
and his blog posts are often deleted by censors. Nevertheless, his main 
blog received more than 300-million hits between 2006 and 2009. In 
April 2010, Time magazine listed Han Han as a candidate for the hundred 
``most globally influential people.'' Han Han subsequently wrote a blog 
post asking the Chinese government ``to treat art, literature, and the 
news media better, not to impose too many restrictions and censorship, 
and not to use the power of the government or the name of the state to 
block or slander any artist or journalist.'' This post generated some 
25,000 comments from his readers and was viewed by more than 1.2 
million people. The article has also been widely reposted online; in 
May 2010, a Google search found more than 45,000 links reposting all or 
part of the essay. Despite official efforts to use the Great Firewall 
to block Chinese netizens from voting for Han Han on Time's website, he 
came in second in the final tally, showing the mobilizational power of 
his writing.
      4. role of social media technologies and american companies
    It is not just Han Han's words that are so influential, but the 
social media technologies - search, file-sharing, RSS, blogging, 
microblogging, image and video-sharing, social networking, etc - that 
allow them to spread freely, despite government censorship.
    On November 2, 2011, the State Council of Information Office issued 
directives to all national and local websites: ``Thoroughly delete all 
information and commentaries about Ai Weiwei's ``borrowing money to pay 
tax'' event.'' This refers to the penalty of a $2.4 million back tax 
bill levied on dissident artist Ai Weiwei, who spent three months in 
jail this spring. Through the Internet, Ai called for loans from 
supporters around the world to pay the bill. Searching on Sina Weibo, 
one will found over a dozen words and phrases relating to ``Ai Weiwei'' 
have been recently blocked, and many such posts were soon deleted; 
however Ai Weiwei's call for loans has been reposted by devoted 
readers, and circulated through emails, instant chats, closed forums 
and private messages among users on a variety of social networking 
services. Ten days after the censor's decisive directive, days, about 
30,000 people had sent in a combined total of 8.7 million yuan ($1.37 
million) to pay Ai Weiwei's penalty, despite the state censor's full 
efforts to suppress his words from spreading.
    This is what China's leaders most fear: the power of truth-telling 
among the Chinese population, which directly challenges their 
privilege, ideological control, and the legitimacy of the regime. The 
Chinese government has learned that it can't merely target Internet 
users, but must focus on information technologies, access to the 
network, and the companies that provide these tools.
    That's where American Internet companies enter the story. Because 
American Internet companies are not under the control of the government 
and therefore cannot be trusted to abide by the government's rules, 
they are most often prevented from entering the market on a level 
playing field, or simply blocked by the Great Firewall. Several top 
global websites, including Google, YouTube, Twitter, and Facebook, as 
well as thousands of other websites, are no longer easily accessible. 
China's intrusive government policies effectively mark the beginning of 
a cyberworld divided into the internet and the ``Chinternet'', with the 
Great Firewall marking the boundary.
                   5. emergent new political identity
    The Chinese government has the determination, resources and 
technology to make the Internet work in support of its ruling status 
quo. However, its dominance is constantly being contested by netizens' 
online civil disobedience and public demands for rights. The result of 
such interplay of censorship and digital resistance is an emerging 
pattern of public opinion and citizen participation that represents a 
shift of power in Chinese society. The Internet allows citizens to 
comment on certain (albeit limited) topics, and create their own shared 
discourse which is outside the bounds of government censorship and 
propaganda. In addition, an entire generation of online public agenda 
setters has emerged to become influential opinion leaders. I have 
observed a remarkable phenomenon that many of the most influential 
online opinion leaders appear to hold in common values supporting 
democracy, human rights and freedom of expression. These netizens, with 
their growing numbers, expanding social networks, political resilience, 
and increasing influence, seem to be evolving from ``voices under 
domination'' to ``universal values advocates.'' This new, emerging 
generation of ``Internet citizens'' is becoming one of the most dynamic 
forces in setting the media agenda and fostering civil engagement on 
public issues in China, despite the government's control efforts. This 
new generation--embodying alternative (liberal, democratic) political 
values and connected through the Internet--will certainly change 
China's future course.
                6. recommendations to the us government
    Increasing funding to projects which aim to expand the free flow of 
information on the Internet, such as (1) projects which monitor 
Internet censorship, identify and archive censored content and make 
such contents re-accessible for netizens (2) development and deployment 
of counter-censorship technologies in support of online civil society, 
human rights and journalism communities in China and other countries 
with a censored Internet.
    Thank you, Mr. Chairman.
                                 ______
                                 

                Prepared Statement of Gilbert B. Kaplan

                           november 17, 2011

                              Introduction

    China's censorship of the Internet and its restrictions on the free 
flow of information have a very significant impact on U.S. economic and 
trade interests. China continues to impose debilitating burdens on 
foreign Internet service providers through its censorship regime, its 
blocking of foreign websites, and its ``Great Firewall'' 
infrastructure, which inhibit or prevent all together U.S. companies' 
ability to do business in China, and their ability to compete with 
Chinese domestic companies. China's Internet service providers have 
capitalized on this discriminatory treatment of U.S. companies and have 
consequently experienced great success. Earlier this year, for example, 
RenRen (known as ``China's Facebook'') filed for a U.S. public 
offering, symbolizing its success to date and its plans for 
expansion.\1\ Meanwhile, Facebook is blocked in China. These measures 
have been ongoing for years, and have had an overwhelming adverse 
impact on market share for U.S. companies--perhaps to the extent that 
such market share can never be recovered.
---------------------------------------------------------------------------
    \1\ http://money.cnn.com/2011/04/18/technology/renren--IPO/
?section=money--latest
---------------------------------------------------------------------------
    China's blocking and filtering measures, and the fog of uncertainty 
surrounding what China's censors will and will not permit, violate 
numerous of China's international obligations, including provisions of 
the WTO General Agreement on Trade and Services (``GATS'') and China's 
WTO Protocol of Accession.
    The negative impact of these violations on America's premier 
Internet companies is profound. There are several corporate victims of 
China's exclusionary practices. Although there is public information 
identifying several large companies that have been blocked or 
restricted by the Great Firewall, including YouTube, Facebook, Twitter, 
Vimeo, Google, and the Huffington Post, to name a few, there are many 
other companies that have been blocked from access in China that I am 
not able to identify by name specifically because these companies fear 
retaliation. These companies come from various sectors, including 
energy, labor mediation, tourism, education, web hosting, and 
advertising, among others. The fact that these large, well-established 
companies and other fast-growing U.S. firms, so successful in every 
other major market in the world, are reluctant to come forward with 
specific information that would form the basis of a WTO complaint 
against the Chinese government is powerful testament to (1) the 
importance of the Chinese Internet market--the largest in the world--to 
these firms' continued success, and (2) the risk of retaliation that 
these firms face if they are seen as lending direct support to a trade 
complaint against China. Moreover, companies not yet in existence, but 
for which China could represent a significant business opportunity, do 
not even have a voice in the matter and perhaps never will.
    I represent the First Amendment Coalition, an award-winning, non-
profit public interest organization dedicated to advancing free speech 
for individuals and companies just like those denied access to China's 
Internet market. I have been working with them to address the issue of 
China's Internet restrictiveness since 2007. The issues regarding 
internet censorship and internet blockage are trade issues cognizable 
under the WTO, as well as freedom of speech issues. They are a harmful 
trade barrier to U.S. business which must be ended.
    The First Amendment Coalition was able to persuade the Office of 
the U.S. Trade Representative (``USTR'') to take the critical step of 
requesting detailed information from China on its internet restrictions 
under Article III:4 of GATS, which mandates transparency in a Member's 
application of measures affecting services. GATS Article III:4 reads as 
follows.

        Each Member shall publish promptly and, except in emergency 
        situations, at the latest by the time of their entry into 
        force, all relevant measures of general application which 
        pertain to or affect the operation of this Agreement.

    USTR's request to China follows a three year effort by the First 
Amendment Coalition to get the U.S. government to take a tough stance 
to address China internet restrictions in violation of international 
trade rules, free speech, and human rights. The U.S. request to China 
under GATS Article III:4 is highly significant not only because it is 
the very first time any WTO Member has utilized that provision of the 
GATS agreement, but also because it is the first time that the U.S. 
government, or any country, has made a formal submission through the 
WTO to China to address internet censorship.
    Contrary to GATS Article III:4, China's measures with respect to 
Internet services have not been published promptly, and in fact, the 
blocking and filtering measures have not been published at all.\2\ In 
this regard, we have been unable to document written directives or 
specific governmental instructions concerning China's measures 
constituting the ``Great Firewall,'' but this in effect lends support 
to the argument that China is not transparent in its practices related 
to controlling and censoring Internet content. Indeed, China has 
published few, if any, regulations related to Internet services. The 
Chinese government recently issued an official decision, currently 
available only in Chinese, which appears not to contain ``any new 
concrete policies but it does set the stage for future moves to rein in 
parts of the Internet at the possible expense of the commercial 
Internet companies.'' \3\
---------------------------------------------------------------------------
    \2\ A panel has previously interpreted the term ``publish'' in the 
WTO Agreements as more than ``making publicly available.'' In Chile-
Price Band System and Safeguard Measures Relating to Certain 
Agricultural Products, the panel held that the requirements to publish 
a report in the Agreement on Safeguards meant ``to make generally 
available through an appropriate medium.'' Appellate Body Report, 
Chile-Price Band System and Safeguard Measures Relating to Certain 
Agricultural Products, WT/DS207/AB/R (adopted 23 October 2002), para. 
7.128. Further, ``[t]he obligation is of an absolute character and due 
diligence obliges WTO members to publish more, rather than less, 
because of the terms `relevant' and `affecting' invite a wide 
reading.'' Mitsuo Matsushita, Thomas J. Schoenbaum, & Petros C. 
Mavroidis, The World Trade Organization, Law, Practice, and Policy 
(2003).
    \3\ See ``6th Plenum Report Suggests China Will Strengthen Internet 
Management,'' Digicha Internet and Digital Media in China, October 26, 
2011, citing from the ``Central Committee Decision Concerning the Major 
Issue of Deepening Cultural System Reforms, Promoting the Great 
Development and Prosperity of Socialist Culture'' from the 6th Plenum 
of the 17th Communist Party Congress (currently available only in 
Chinese), available at http://digicha.com/index.php/2011/10/6th-plenum-
report-suggests-china-will-strengthen-internet-management/.
---------------------------------------------------------------------------
    The historic action taken by USTR is also a significant and 
important step because, in addition to promoting transparency and free 
speech, it may result in China providing information in response to 
U.S. questions that will assist small and medium-sized U.S. businesses 
in entering the Chinese market, which they currently are unable to do 
given the lack of certain vital information involving use of the 
Internet. As USTR indicated in its press release,

        [a]n Internet website that can be accessed in China is 
        increasingly a critical element for service suppliers aiming to 
        reach Chinese consumers, and a number of U.S. businesses, 
        especially small- and medium-sized enterprises, have expressed 
        concerns regarding the adverse business impacts from periodic 
        disruptions to the availability of their websites in China.

    Small and medium-sized U.S. businesses are particularly 
disadvantaged by China's Great Firewall because, unlike bigger U.S. 
companies, they do not have the resources to physically set up shop in 
China so they are simply excluded from the Chinese market.
    Some of the information requested from China by USTR included the 
following:

          With respect to China's rules governing website 
        blocking: Who is responsible for determining when a website 
        should be blocked? What are the criteria for blocking access? 
        Where are the guidelines published? Who does the actual 
        blocking? How can a service supplier know if their website has 
        been blocked? Are decisions to block appealable? Is the process 
        used to prevent access the same or different for foreign and 
        domestic content?
          With respect to the State Internet Information Office 
        (``SIIO'') established by the State Council: What are the 
        responsibilities and authorities of SIIO? Will SIIO handle 
        licenses, approval processes, and questions on filtering and 
        other laws?
          With respect to inadvertent blocking where one site 
        is blocked when it shares an IP address with a website China 
        has deemed harmful: How does it occur? Can it be avoided? Will 
        Chinese authorities notify the owner of the web hosting service 
        so that it may ensure other sites are not inadvertently 
        blocked? How can companies resolve inadvertent blocking?
          With respect to the broad nature of the eleven 
        categories of content which Internet service providers may not 
        disseminate: \4\ Are there any criteria to determine when 
        content falls within the eleven categories? Are government 
        requests to filer specific terms communicated directly to 
        Internet information service providers? Are the same terms 
        subject to filtering made available to Internet information 
        service providers inside and outside of China?
---------------------------------------------------------------------------
    \4\ According to measures issued by China's State Council, Internet 
services providers may not disseminate information with content that: 
(1) opposes the fundamental principles determined in the Constitution; 
(2) compromises state security, divulges state secrets, subverts state 
power or damages national unity; (3) harms the dignity or interests of 
the state; (4) incites ethnic hatred or racial discrimination or 
damages inter-ethnic unity; (5) sabotages state religious policy or 
propagates heretical teachings or feudal superstitions; (6) 
disseminates rumors, disturbs social order or disrupts social 
stability; (7) propagates obscenity, pornography, gambling, violence, 
murder or fear or incites the commission of crimes; (8) insults or 
slanders a third party or infringes upon the lawful rights and 
interests of a third party; (9) disturbs the public order by 
instigating illegal gatherings, associations, parades, demonstrations, 
or assemblies; (10) organizes activities in the name of illegal civil 
organizations; contains other content prohibited by the laws and 
administrative regulations, or by the state.
---------------------------------------------------------------------------
          With respect to the prevention of ``illegal 
        information'' as that term is used in the White Paper on the 
        Internet in China: How is illegal information defined? Is a 
        written government order required for a private corporation or 
        relevant authority to block the transmission of illegal 
        information? What types of technical measures are service 
        suppliers expected to use to prevent transmission of the 
        illegal information? Are the technical measures to block 
        illegal information applied automatically to domestic and 
        foreign traffic? If not, how are they applied? Does Internet 
        content from outside of China go through a separate monitoring 
        process for illegal information than Internet content created 
        inside of China? If so, how do they differ?

    We hope and expect that the Government of China will answer these 
questions fully and promptly, fulfilling its obligations under the WTO 
to maintain an open internet and not discriminate against U.S. 
business.
    The remainder of this submission will review in greater detail the 
Internet restrictions in China, the adverse trade impact caused by 
those restrictions, and how those restrictions would appear to violate 
China's international trade obligations.
                    i. china's internet restrictions
    U.S. and foreign Internet companies have faced a long history of 
discriminatory treatment in China, to their disadvantage and to the 
advantage of their Chinese competitors. China has for many years 
maintained a policy, popularly known as the ``Great Firewall,'' under 
which it has exerted strict control over the use of the limited system 
of fiber optic cables that connects networks in China to the outside 
world. As we understand it, China has installed certain hardware, known 
as ``tappers'' or ``network sniffers,'' at each entry point so that 
when a user in China attempts to access a good or service located on a 
server outside of China, the tappers create mirror copies of the data 
packets that flow back and forth between the two servers, and the 
mirror copies are delivered to a set of computers that automatically 
review the data packets. The computers can be, and often are, pre-
progammed to block a particular domain name server (``DNS''), Internet 
Protocol (``IP'') address, or Universal Resource Locator (``URL'') 
address.\5\
---------------------------------------------------------------------------
    \5\ See e.g., ``12VPN and Other VPN Services DNS Poisoned by Great 
Firewall in China,'' June 27, 2011, available at http://
www.bestvpnservice.com/blog/12vpn-now-dns-poisoned-in-china-by-great-
firewall; ``Google+ Now DNS Blocked in China,'' July 5, 2011, available 
at http://www.isidorsfugue.com/2011/07/google-now-dns-blocked-in-
china.html; ``China Strengthens Great Firewall, While, Chinese Bypass 
It,'' March 3, 2011, available at http://www.bestvpnservice.com/blog/
china-strengthens-great-firewall-while-chinese-bypass-it; ``Ahead of 
Party Anniversary, China Poisons the Internet,'' July 1, 2011, 
available at http://uncut.indexoncensorship.org/2011/07/ahead-of-party-
anniversary-china-poisons-the-internet/.
---------------------------------------------------------------------------
    The government of China (``GOC'') also employs tens of thousands of 
individuals whose sole mission is to search the Internet for 
objectionable content. Their work often results in the blocking of 
additional DNS, IP, and URL addresses.\6\
---------------------------------------------------------------------------
    \6\ See ``You've Got Mail,'' Time Magazine, October 16, 2011, 
available at http://www.time.com/time/magazine/article/
0,9171,2096818,00.html
---------------------------------------------------------------------------
    Following USTR's Article III:4 request, China defended its Internet 
censorship as an effort to ``safeguard the public.'' \7\ Although the 
ruling Communist Party claims its monitoring and blocking is to promote 
``constructive'' websites, stop the spread of ``harmful information,'' 
and develop what it calls a healthy internet culture, it is unclear 
what content is subject to blocking and often the blocked content has 
nothing resembling ``harmful information.'' \8\ Additionally, the 
blocking appears motivated by other competitive or political agendas. 
For example, access to the Android Marketplace was blocked within China 
just after Google announced it would help the Dalai Lama to visit South 
Africa virtually.\9\
---------------------------------------------------------------------------
    \7\ ``Beijing leaps to defense of `Great Firewall of China,''' 
Reuters, October 20, 2011, available at http://www.reuters.com/article/
2011/10/20/us-china-internet-idUSTRE79J1PU20111020.
    \8\ See ``6th Plenum Report Suggests China Will Strengthen Internet 
Management,'' Digicha Internet and Digital Media in China, October 26, 
2011, citing from the ``Central Committee Decision Concerning the Major 
Issue of Deepening Cultural System Reforms, Promoting the Great 
Development and Prosperity of Socialist Culture'' from the 6th Plenum 
of the 17th Communist Party Congress (currently available only in 
Chinese), available at http://digicha.com/index.php/2011/10/6th-plenum-
report-suggests-china-will-strengthen-internet-management/.
    \9\ ``Android Marketplace blocked by Great Firewall of China,'' The 
Register, October 10, 2011, available at http://www.theregister.co.uk/
2011/10/10/china--android--blocking/.
---------------------------------------------------------------------------
                ii. harm caused by china's restrictions
    Chinese internet restrictions have disadvantaged American 
businesses, to the benefit of Chinese businesses. According to news 
reports, Facebook and Twitter, for example, have been blocked in China. 
In their absence, copycat websites based in China (with censored 
content) have been able to flourish. It seems unlikely that Facebook 
and Twitter will be able to regain the market share lost to their 
Chinese competitors even if they were unblocked at some point in the 
future. Chinese users have already developed a preference for certain 
social media sites, and it is doubtful that they would have an 
incentive to switch services.\10\ The loss of a huge potential market 
for these companies indicates the extent of the harm caused by the 
Chinese actions. In addition to the direct loss of access to Chinese 
consumers by these companies comes the loss from all of the advertisers 
that would ordinarily be offering their services on the Internet pages 
of these social media service providers.
---------------------------------------------------------------------------
    \10\ See, e.g., Lin Shujuan, Flutter over New Twitter, China Daily 
(Oct. 22, 2009) http://www.chinadaily.com.cn/cndy/2009-10/22/content--
8829406.htm (discussing the rise in popularity of Sina Weibo, a 
microblogging website with monitored content, since Twitter became 
inaccessible in China); Glen Loveland, When Will China Unblock Facebook 
and Twitter? (Sep. 28, 2009) http://www.examiner.com/x-/x-15615-Asia-
Headlines-Examinery2009m9d28-When-will-China-unblock-Facebook-and-
Twitter (``Every Chinese user who can't use the site is that much more 
likely to turn to China's domestic copycat, YouKu''); China's Twitter 
Clones, Read Write Web (Mar. 5, 2010) http://www.readwriteweb.com/
archives/china--twitter--clones.php (quoting Chinese technology writer 
Kaiser Kuo: ``Although there would be an uptake in the number of users 
on Twitter, if it was ever to be made available again, Weibo and others 
will have gained too much momentum by then'').
---------------------------------------------------------------------------
    The number of Internet users in China has exceeded 500 million, 
growing at double digit rates since 2008, roughly twice the size of the 
U.S. market, which grew only 2.5 to 4.5 percent in the same timeframe. 
China is now the largest market for Internet users \11\ and U.S. 
businesses are effectively being blocked from or only given highly 
restricted access to that market. U.S. companies excluded from the 
Chinese market are not just large tech companies but small and medium 
businesses including ``travel sites, engineering firms and consulting 
firms, which have found their sites blocked and have complained to the 
trade office.'' \12\ A 2011 report by the McKinsey Global Institute 
estimates that there is a ten percent increase in productivity for 
small and medium businesses from internet usage.\13\ This productivity 
growth is denied U.S. companies that are blocked from providing their 
services in China.
---------------------------------------------------------------------------
    \11\ ``U.S., China Clash Over Internet Great Wall,'' China-U.S. 
Trade Law, October 31, 2011, available at http://
www.chinaustradelawblog.com/2011/10/articles/trade-disputes/wto/us-
china-clash-over-internet-great-wall-acaaeaecea/.
    \12\ ``China tangles with Internet access,'' Politico, citing USTR 
official, October 30, 2011, available at http://www.politico.com/news/
stories/1011/67190.html.
    \13\ Internet Matters: The Net's Sweeping Impact On Growth, Jobs, 
and Prosperity, McKinsey Global Institute, May 2011, available at 
http://www.mckinsey.com/mgi/publications/internet--matters/pdfs/MGI--
internet--matters--full--report.pdf.
---------------------------------------------------------------------------
    U.S. companies are subject to the strict controls that completely 
disrupt their service, or at a minimum seriously delay the transmission 
of information. Users of these websites, if they actually endure the 
wait and do not move to a competitor service supplier,\14\ suffer from 
a decrease in the quality of service, causing commercial harm to U.S. 
companies.\15\
---------------------------------------------------------------------------
    \14\ ``Android Marketplace blocked by Great Firewall of China,'' 
The Register, October 10, 2011, available at http://
www.theregister.co.uk/2011/10/10/china--android--blocking/.
    \15\ See e.g., ``Can China's Economy Thrive with a Censored 
Internet?'' Time, October 26, 2011, available at http://
curiouscapitalist.blogs.time.com/2011/10/26/can-china%E2%80%99s-
economy-thrive-with-a-censored-internet/.
---------------------------------------------------------------------------
    It would be very useful for this Commission to undertake, directly 
or perhaps through an economic consulting firm, an economic analysis of 
the overall harm caused to U.S. companies by the Chinese blockage and 
censorship of the internet. I think that would be one useful follow-up 
to this hearing.
  iii. china's internet restrictions violate its international trade 
                              obligations
    The Chinese Government's actions appear to constitute various 
violations of WTO agreements to which China is a party, particularly 
the GATS Agreement. The Chinese actions in question, although often 
based on unwritten policies and practices, would still constitute 
``measures'' that can be challenged under the World Trade Organization 
Dispute Settlement procedures. In this regard, the Appellate Body and 
various WTO panels have confirmed that actionable ``measures'' subject 
to WTO dispute settlement include not only written laws and 
regulations, but other government actions as well.\16\ Panels have also 
recognized the subtleties of government pressure on private companies 
as ``measures'' that may be challenged at the WTO.\17\
---------------------------------------------------------------------------
    \16\ See, e.g., Appellate Body Report, United States - Sunset 
Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat 
Products from Japan, WT/DS244/AB/R (adopted Jan. 9, 2004), paras. 81-85 
(``In principle, any act or omission attributable to a WTO Member can 
be a measure of that Member for purposes of dispute settlement 
proceedings''.) (The Appellate Body also referred to its earlier 
opinion in Guatemala-Cement I (AB), which stated that `` . . . a 
`measure' may be any act of a Member, whether or not legally binding, 
and it can include even non-binding administrative guidance by a 
government.'').
    \17\ Panel Report, Japan - Measures Affecting Consumer Photographic 
Film and Paper, WT/DS44/R (adopted Apr. 22, 1998), para. 10.44.
---------------------------------------------------------------------------
    In addition to USTR's current GATS Article III:4 request, there are 
more aggressive steps that the United States could take to protect its 
vital economic interests. While we believe that China currently is 
preparing its official response to USTR's Article III:4 request, if 
China fails to respond or fails to respond meaningfully, the United 
States would then have a readily apparent basis to initiate formal 
dispute settlement proceedings in the WTO. Paragraph 1 of GATS Article 
XXIII says ``[i]f any Member should consider that any other Member 
fails to carry out its obligations or specific commitments under this 
Agreement, it may with a view to reaching a mutually satisfactory 
resolution of the matter have recourse to the dispute settlement 
understanding.''
    In addition to a potential violation under GATS Article III on 
transparency, there are other WTO obligations that China appears to 
violate with its Internet restrictions, including other GATS 
provisions, as is discussed below.
    Initiation of a WTO dispute settlement proceeding against Chinese 
Internet restrictions by the United States would signal to the U.S. 
business community, to consumers around the world, and to China, that 
the U.S. government will assert its rights under WTO agreements when 
China fails to fulfill its WTO obligations, even in those areas that 
may be of a more sensitive nature. Unfortunately, these sensitivities 
give rise to a number of obstacles to U.S. initiation and prosecution 
of a formal WTO dispute against China.
    As noted, it is difficult to find companies willing to come forward 
to support a potential case against China for fear of retaliation. Due 
to this fear, specific facts needed by the U.S. government to support 
many claims under the WTO are difficult to document. In addition, also 
as noted, many of the Chinese laws, regulations, policies, and 
practices regarding Internet services are not written down, although 
they are enforced de facto.\18\
---------------------------------------------------------------------------
    \18\ See US - Zeroing (EC) at paras. 192, 198.
---------------------------------------------------------------------------

    A. China's Internet Censorship Violates Other Provisions Of GATS

    China made specific commitments regarding market access and 
national treatment for services in various service sectors.\19\ China's 
Internet policies would appear to violate many of these specific 
commitments under the GATS, including in the areas of Data Processing 
Services, Photographic Services, Telecommunication Services, Mobile 
Voice and Data Services, Audiovisual Services, Tourism and Travel 
Related Services, and Transport Services. By pursuing these policies, 
China denies market access to U.S. companies and discriminates against 
the services of U.S. companies in favor of Chinese companies.
---------------------------------------------------------------------------
    \19\ These commitments appear in an addendum to the Working Party 
Report on the Accession of China and are an integral part of the GATS. 
Report of the Working Party on the Accession of China, Addendum, 
Schedule CLII--The People's Republic of China, Part II--Schedule of 
Specific Commitments on Services List, List of Article II MFN 
Exemption, WT/MIN(01)/3/Add.2 (10 Nov 2001) (``Schedule of Specific 
Commitments'').
---------------------------------------------------------------------------
    Although U.S. companies offer a wide range of services over the 
Internet, four service sectors that would appear to suffer 
disproportionately under Chinese policies are: (1) Advertising services 
(the primary revenue source for U.S. suppliers of Internet-based 
services, particularly those operating search engines, social 
networking, and data/photo sharing, is through advertising and U.S. 
services suppliers obtain revenue from the development and posting of 
targeted advertisements on their webpages and facilitating access to 
other websites by their users clicking on the advertisements); (2) Data 
processing and tabulation services (relevant U.S. services suppliers 
are providing consumers with the ability to access certain tools over 
the Internet that enable them to make, edit, and share videos or 
photos, or other data and that allow them to search for content on 
other websites and the U.S. services supplier is necessarily processing 
data for the consumer and providing a tool to access defined data bases 
or the Internet generally); (3) On-line information and database 
retrieval; and (4) Videos, including entertainment software and (CPC 
83202), distribution services (``Video/entertainment distribution 
services'').
    There follows below a brief discussion of some of the specific GATS 
claims that might be made against the Chinese measures in question and 
some of the factors that would need to be considered in prosecuting 
such claims.
1. National Treatment
    China's restrictions on U.S. Internet companies appear to violate 
the national treatment provision in Article XVII of the GATS, which 
provides that ``each Member shall accord to services and service 
suppliers of any other Member, in respect of all measures affecting the 
supply of services, treatment no less favourable than that it accords 
to its own like services and service suppliers.''
    The Chinese measures at issue would seem to fall within one or more 
of at least four services subsectors for which China has inscribed a 
specific commitment, without limitation on national treatment, in its 
WTO Services Schedule. As such, China's measures must comply with the 
obligations in Article XVII for these subsectors.\20\ Current Chinese 
treatment of U.S. Internet companies, including filtering and blocking 
through the ``Great Firewall'' and mandated disabling of certain 
service functions, modifies the conditions of competition in favor of 
Chinese suppliers such as Baidu (considered the ``Google'' of China); 
as such, these measures are inconsistent with Article XVII of the GATS.
---------------------------------------------------------------------------
    \20\ In the case of potential market access violations in relation 
to telecommunications services, the United States will need to address 
potential Chinese arguments that the measures are non-discriminatory 
and are based on China's right, under the footnote in its schedule, to 
require that such services be channeled through approved gateways. 
Moreover, in relation to national treatment for video/entertainment 
distribution services, China has not scheduled any limitation in 
relation to ``content review'' and thus discriminatory content review 
would not be justified by any reservation or limitation.
---------------------------------------------------------------------------
    If China's measures were challenged in a WTO proceeding, a Panel 
would first determine whether China's measures are indeed ``affecting'' 
the supply of these services. As noted by the Appellate Body in EC--
Bananas III:

        [T]he term of ``affecting'' reflects the intent of the drafters 
        to give a broad reach to the GATS. The ordinary meaning of the 
        word ``affecting'' implies a measure that has ``an effect on'', 
        which indicates a broad scope of application. This 
        interpretation is further reinforced by the conclusions of 
        previous panels that the term ``affecting'' in the context of 
        Article III of the GATT is wider in scope than such terms as 
        ``regulating'' or ``governing.'' \21\
---------------------------------------------------------------------------
    \21\ Appellate Body Report, European Communities--Regime for the 
Importation, Sale and Distribution of Bananas, WT/DS27/AB/R (adopted 25 
September 1997), para. 220.

    It is therefore not necessary for China's measures to be directly 
regulating or governing the business of U.S. Internet service 
providers, but merely that the measures have an effect on these 
services, and their providers' ability to do business in China. China's 
measures clearly have ``an effect on'' these services--indeed, a very 
detrimental one.\22\
---------------------------------------------------------------------------
    \22\ See ``Enabling Trade in the Era of Information Technologies: 
Breaking Down Barriers to the Free Flow of Information,'' Google paper 
released November 15, 2010, available at http://
static.googleusercontent.com/external--content/untrusted--dlcp/
www.google.com/en/us/googleblogs/pdfs/trade--free--flow--of--
information.pdf.
---------------------------------------------------------------------------
    Second, the United States would need to demonstrate that China's 
measures accord ``less favorable'' treatment to U.S. suppliers than to 
China's domestic suppliers of ``like'' services. As set forth in GATS 
Article XVII:3, the test for less favorable treatment is whether the 
measure ``modifies the conditions of competition in favor of services 
or service suppliers of'' China compared to like services or services 
suppliers of the United States.\23\ Persuading a panel in this regard 
would require the production of extensive data and specific information 
demonstrating the competitive disadvantage suffered by U.S. companies 
due to China's measures. A comparison of blockages of websites, upload 
times for content of websites, and other significant impediments to 
Internet service providers would likely reveal significant and swift 
loss of market share by U.S. providers.
---------------------------------------------------------------------------
    \23\ See, e.g., Panel Report, Canada - Certain Measures Affecting 
the Automotive Industry, WT/DS139/R, WT/DS142/R (adopted 19 June 2000), 
para. 10.80.
---------------------------------------------------------------------------
2. Market Access
    Article XVI:2 of the GATS prohibits Members from maintaining or 
adopting quantitative limitations on service operations or service 
output. China's restrictions on certain U.S. Internet companies' 
services constitutes a de facto quantitative limitation on such 
services, therefore violating this provision.
3. Domestic Regulation
    Under Article VI of the GATS, for services sectors in which 
specific commitments have been undertaken, China must administer its 
measures in a ``reasonable, objective and impartial manner'' and, for 
all services sectors, must ensure that tribunals or procedures are 
available for the prompt review and remedy of administrative decisions. 
China's restrictions on U.S. Internet companies are subjective and non-
transparent, and there are no tribunals or procedures for the review of 
these administrative decisions. The restrictions therefore violate 
China's obligations under Articles VI:1 and VI:2(a) of the GATS.
    China's ``Great Firewall'' filtering and blocking practices would 
also seem to violate the GATS Annex on Telecommunications, which states 
in paragraphs 4 and 5 that ``each Member shall ensure that relevant 
information on conditions affecting access to and use of public 
telecommunications transport networks and services is publicly 
available'' and that ``(e)ach Member shall ensure that any service 
supplier of any other Member is accorded access to and use of public 
telecommunications transport networks and services on reasonable and 
non-discriminatory terms and conditions.'' In addition, paragraph 5(c) 
imposes an obligation on China to ensure that U.S. services suppliers 
may use the public telecommunications transport networks and services 
``for the movement of information within and across borders'' and ``for 
access to information contained in data bases or otherwise stored in 
machine-readable form'' in the United States or in the territory of 
another WTO Member. China's filtering and blocking on Internet content 
clearly restricts the availability of these telecommunications networks 
in a discriminatory fashion.

                               Conclusion

    We appreciate the Commission holding this hearing and inviting me 
to testify. We also appreciate the efforts of USTR in submitting the 
GATS III:4 questions. We urge the Commission to take into account our 
views in its ongoing work on this issue. We also urge the Commission to 
monitor China's responses to these questions as well as USTR's 
continuing efforts on this very important issue. An open and accessible 
internet in China is a prerequisite to U.S. success in the Chinese 
market, and a goal that we must continue to fight for until it is 
achieved.
                                 ______
                                 

                     Prepared Statement of Ed Black

                           november 17, 2011
    Chairman Smith and Chairman Brown, I appreciate the opportunity to 
again testify before the Commission to discuss China's censorship of 
the Internet. I am President and CEO of the Computer & Communications 
Industry Association (CCIA), an organization that has promoted 
openness, competition, and free trade for over 35 years.
    I commend the Commission for examining the prescient issue of how 
restrictions on the free flow of information online pose not only 
significant human rights concerns, but economic concerns as well. CCIA 
has long been an advocate of openness online, as we ardently believe 
that freedom and openness are not only at the heart of our industry's 
rapid growth, but are also the core values underpinning our success as 
a democracy.
    I know that traditionally freedom of expression has rightly been 
viewed through the lens of human rights, and I strongly support working 
through the United Nations and NGOs to put pressure on recalcitrant 
members of the international community who defy their commitments in 
this arena. We deeply admire the courage and sacrifice of activists 
such as Mr. Li's father and Pastor Zhang who seek freedom for their 
people. As their prior testimony makes clear, the human toll of such 
measures is enormous. A commitment to freedom, particularly the freedom 
of expression, is the keystone of our nation and has premeditated our 
foreign policy since America's incipiency. It is also what has driven 
so many Tunisians, Egyptians and Syrians to sacrifice their lives in 
recent months. I firmly believe that the United States must continue 
its full-throated support of freedom of expression worldwide--both 
online and offline. In fact, some of our biggest domestic and foreign 
policy mistakes occurred when we have overlooked these principles in 
the name of diplomatic or political expediency. In this vein, I support 
our State Department's efforts to aggressively promote Internet freedom 
online and I caution our government against taking any actions, such as 
the misguided Intellectual Property enforcement bills before Congress 
as we speak, that might hamstring these efforts abroad.
    In addition to doing great injury to human rights, actions to 
restrict the free flow of information online also have serious economic 
repercussions. The Internet increasingly represents the shipping lane 
of the 21st century. Others have likened it to a digital Silk Road, 
ferrying electrons around the world and enabling trade in service 
sectors that were not too long ago considered by economists to be 
nontradable. It erases distance, eliminates delivery costs, and 
connects the smallest businesses in the most remote places with a 
worldwide market. Now a U.S. engineer, a German lawyer, a British 
banker or an Indian accountant can ply their trade anywhere in the 
world that has an Internet connection--and all without ever having to 
get on a plane and pass through a customs checkpoint. In fact, a recent 
McKinsey study found that the Internet accounted for 21 percent of GDP 
growth of mature economies over the last five years.\1\
---------------------------------------------------------------------------
    \1\ James Manyika and Charles Roxburgh, ``The great transformer: 
the impact of the Internet on economic growth and prosperty,'' MCKINSEY 
GLOBAL INSTITUTE, October 2011, http://www.mckinsey.com/mgi/
publications/great--transformer/pdfs/McKinsey--the--great--
transformer.pdf
---------------------------------------------------------------------------
                  i. the benefits of a trade approach
    The Internet industry is one sector where the United States enjoys 
a comparative advantage over the rest of the world. Despite the best 
efforts of other nations, no other country has been able to duplicate 
Silicon Valley. Besides the Internet being a major input of nearly all 
traditional businesses, American companies whose main purpose is to 
facilitate communication and make information more easily accessible 
are some of our biggest and fastest growing companies. Google, 
currently the 28th most valuable company in the world with a market 
valuation of $174 billion, and Facebook, whose estimated market value 
is $83 billion, are both more highly valued than Goldman Sachs.\2\ This 
is big business for America, and these businesses also happen to be the 
tools that empower people to communicate, assemble, and organize.
---------------------------------------------------------------------------
    \2\ Financial Times ``FT Global 500 2011'', http://www.ft.com/intl/
reports/ft-500-2011; Ari Levy, ``Facebook Valuation tops Amazon.com, 
trailing only Google on the Web'', BLOOMBERG, http://www.bloomberg.com/
news/2011-01-28/facebook-s-82-9-billion-valuation-tops-amazon-com-
update1-.html
---------------------------------------------------------------------------
    Since China gets full access to United States markets in sectors 
where it has a competitive advantage, such as low-cost manufacturing, 
it is disconcerting that the United States Government has not done more 
to ensure that America's Internet companies get the same liberalized 
access to the Chinese market, a market which now has more Internet 
users than the entire population of the United States--and the number 
of Chinese Internet users is growing briskly.\3\ This is an important 
market for our domestic Internet industry.
---------------------------------------------------------------------------
    \3\ In 2010, China was reported to have 420 million Internet Users. 
See Gao Qihui, ``China's Internet Population hits 420m'', CHINA DAILY, 
July 15, 2010, http://www.chinadaily.com.cn/china/2010-07/15/content--
10112957.htm
---------------------------------------------------------------------------
    However, we are encouraged by the USTR's recent formal inquiry into 
the specifics of Chinese censorship practices. By using mechanisms 
available to it under the WTO, the USTR has put China in a position 
where it must divulge specific details about its notoriously vague 
censorship policies or face retaliation. As the first step of dealing 
with Chinese restrictions is to bring them into the light of day, this 
move is crucial. Although it is unlikely that enforcing trade 
commitments can ``solve'' the China censorship problem as much as 
freedom of expression advocates, myself included, would like, the route 
certainly has its advantages and provides U.S. negotiators tangible 
sticks and carrots that are not available in the human rights arena. 
Prominent human rights organizations such as Human Rights Watch have 
also recognized the potential benefits of pursuing a trade approach.\4\
---------------------------------------------------------------------------
    \4\ Human Rights Watch, Race to the Bottom, August 2006, page 86.
---------------------------------------------------------------------------
    Even though the WTO allows exceptions to its rules for matters of 
public morals and national security, it also requires that all 
regulations and restrictions be transparent, provide due process to 
affected parties, be the least restrictive as possible and apply 
equally to foreign and domestic players. As of today, China complies 
with none of these requirements. Furthermore, the WTO has interpreted 
the public morals and national security exemptions reasonably narrowly 
in the past, so there is even some question as to the legitimacy of 
much of Chinese filtering at its very core under international trade 
law. Even if some filtering is found permissible under trade law, 
forcing China ``to justify each and every blockage or filtering'' may 
dampen its enthusiasm to impose such measures.\5\ At the very least, it 
is likely that China would have to scale back, and better document, its 
censorship practices.
---------------------------------------------------------------------------
    \5\ Tim Wu, ``The World Trade Law of Censorship and Filtering.'' 
CHICAGO JOURNAL OF INT'L LAW (2006-07).
---------------------------------------------------------------------------
                         ii. chinese censorship
    The Chinese government censors, blocks, and discriminates against 
foreign-based web services and content, practices which directly or 
indirectly advantage domestic firms. It has repeatedly blocked sites 
and services, including Facebook, Flickr, Foursquare, Google and 
Twitter. China blocked Foursquare, a social networking service, ahead 
of June 4, 2010, in response to a number of users who had set their 
location to Tiananmen Square as a way to honor the 1989 protests.\6\ 
Additionally, China has singled out U.S. companies for censorship even 
when Chinese-owned services carry the same, banned content.\7\
---------------------------------------------------------------------------
    \6\ Claudine Beaumont, ``Foursquare Blocked in China'', THE 
TELEGRAPH, June 4, 2010.
    \7\ Simon Elegant, ``Chinese Government Attacks Google Over 
Internet Porn'', TIME, June 22, 2009.

        Even a seemingly harmless site, like photo-sharing website 
        Flickr, has been blocked in China, while its identical clone 
        Bababian has grown steadily with foreign technology and no 
        foreign competition. Likewise, blog-hosting sites Blogger and 
        WordPress have long been blocked in China. Instead, Chinese 
        netizens use Tianya, the 13th-most popular site in China. Far 
        from being a sanitized land of boring blogs about daily 
        activities, Tianya also hosts China's largest Internet forum, a 
        vitriolic, sensationalized, and hate-filled arena that makes 
        Western gossip sites seem like the Economist.\8\
---------------------------------------------------------------------------
    \8\ Jordan Calinoff, ``Beijing's Foreign Internet Purge'', FOREIGN 
POLICY, January 15, 2010, available online at .

    This double standard strongly suggests that the motivation here is 
protectionism rather than morals.
    In addition, ``Google's decision to stop self-censoring its search 
results in mainland China and reroute traffic through its site in Hong 
Kong, where mainland China's censorship rules do not apply, has come at 
a high cost. Its share of the Chinese search market revenue plunged to 
19.6 percent in the last quarter of 2010 from 35.9 percent the year 
before, according to Analysys International. Chief competitor Baidu has 
benefited greatly from Google's fading position, increasing its share 
of search market revenue to 75.5 percent from 58.8 percent during the 
same period.'' \9\
---------------------------------------------------------------------------
    \9\ John Boudreau, ``Google Struggles to Succeed in China Market'', 
SAN JOSE MERCURY NEWS, April 24, 2011.
---------------------------------------------------------------------------
    China has also taken action against U.S.-based services in response 
to specific activities of American firms or the U.S. Government itself. 
For instance, in response to Congress awarding the Dalai Lama with the 
Congressional Gold Medal in October 2007 and the opening of a YouTube 
Taiwan domain, China manipulated its ``Great Firewall'' to redirect 
users entering the URL for U.S. search engines to Baidu, the Chinese 
search engine.\10\ This is the digital equivalent of diverting business 
to a competitor in direct contradiction to the customer's intentions.
---------------------------------------------------------------------------
    \10\ Maggie Shiels, ``China Criticised Over YouTube'', BBC, March 
25, 2009, available online at .
---------------------------------------------------------------------------
    In addition to such direct censorship, CCIA Members report that 
content filtering harms the quality of service that foreign firms are 
able to deliver, indirectly advantaging domestic Chinese services.
    For instance, China filters content and services at the 
international gateway as transmissions enter the country and become 
available to users. In filtering the services and content that enter 
their networks, China ensures that the foreign services available to 
users are degraded iterations of the service available to users in 
other markets. As a result, foreign service and content providers must 
compete with degraded products against non-filtered domestic products, 
and as such are disadvantaged in comparison to the domestically based 
competitors in those countries.
    Internet censorship is part of a continuing pattern of the Chinese 
government using trade and regulatory policies that seek to either 
restrict access to Chinese markets or force foreign companies to 
acquiesce to Chinese government demands as the price of access. China's 
behavior signifies its belief that access to its markets is a coin that 
enables them to buy their way out of playing by the global trading 
system rules. From its ``Indigenous Innovation'' policies to its export 
quotas for rare earth elements, China has consistently shown a 
willingness to flaunt international trade rules until confronted by 
multiple trading partners.
                        iii. domestic precedent
    In this Commission's most recent annual report it correctly 
identified a troubling aspect of China's censorship regime.

        Chinese Internet regulations contain vague and broad 
        prohibitions on content that, for example, ``harms the honor or 
        interests of the nation,'' ``spreads rumors,'' or ``disrupts 
        national policies on religion.'' In China, the government 
        places the burden on Internet service and content providers to 
        monitor and remove content based on these vague standards and 
        to maintain records of such activity and report it to the 
        government.\11\
---------------------------------------------------------------------------
    \11\ Congressional-Executive Commission on China Annual Report 
2011, page 58.

    Pending IP enforcement legislation before the House and Senate (S. 
968 and H.R. 3261) share some disturbing similarities with China's 
approach to centralized Internet control as pointed out by the 
Commission. The bills create vague standards for liability and ask 
private companies and Internet intermediaries to police and censor 
their users. When coupled with blanket immunity provisions for actions 
taken while attempting to comply with the legislation, this bill would 
encourage overbroad filtering that will remove both legal and illegal 
content.
    Although the purported goal of fighting intellectual property 
infringement is completely different from Chinese authoritarianism, 
legitimizing censorship and prior restraints on speech and enforcing it 
through a draconian system of DNS filtering allows China to point to 
our own actions to justify theirs and makes the job of our diplomats 
much harder. Even when attempting to achieve laudable ends, like 
preventing intellectual property infringement, we should not require 
our Internet service providers to monitor their customers' 
communications and maintain Internet blacklists. As a letter from over 
100 law professors recently pointed out, the proposed legislation goes 
even further than China on some fronts.

        The Act represents a retreat from the United States' strong 
        support of freedom of expression and the free exchange of 
        information and ideas on the Internet. At a time when many 
        foreign governments have dramatically stepped up their efforts 
        to censor Internet communications, the Act would incorporate--
        for the first time--a principle more closely associated with 
        those repressive regimes: a right to insist on the removal of 
        content from the global Internet, regardless of where it may 
        have originated or be located, in service of the exigencies of 
        domestic law. China, for example, has (justly) been criticized 
        for blocking free access to the Internet with its Great 
        Firewall. But even China doesn't demand that search engines 
        outside China refuse to index or link to other Web sites 
        outside China. The Act does just that.\12\
---------------------------------------------------------------------------
    \12\ ``Professors' Letter in Opposition to ``Preventing Real Online 
Threats to Economic Creativity and Theft of Intellectual Property Act 
of 2011,'' July 5, 2011. http://blogs.law.stanford.edu/newsfeed/files/
2011/07/PROTECT-IP-letter-final.pdf

    We must take care not to undermine our own foreign policy and trade 
goals by setting bad precedent in our domestic laws.
                       iv. multilateral approach
    We highly appreciate the Commission's interest in the issue of 
Chinese Internet censorship and its resolve to address it. CCIA has 
long stated that this issue is beyond the scope of any one company or 
industry to deal with and that it is imperative for U.S. companies to 
have the support of the U.S. Government if they are to effectively 
compete in foreign markets where their operations are being obstructed. 
These companies' problems are exacerbated by the highly competitive 
nature of Internet-based industries. The low barriers to entry and 
extreme economies of scale characteristic to the Internet services 
industry mean that companies must constantly fight off follow-on 
competitors seeking to replicate their success. It is possible to 
rapidly create (and China has indeed created) a domestic search engine, 
social networking site or blogging platform. Because they can be easily 
replaced by a domestic alternative, U.S. companies have little 
bargaining power vis-`-vis countries such as China.
    Of course, the situation in China bears little resemblance to a 
competitive market in which companies legitimately compete on the 
merits of their product. Indeed, Chinese censorship seems to have the 
added objective of clearing the competitive deck of foreign competition 
as the Chinese government actively promotes and protects its domestic 
Internet companies at their expense.

        Chinese search engine Baidu enjoys its dominant player position 
        while competitor Google struggles with Chinese government 
        regulatory bodies. Renren and Youku were able to grow fast 
        while the original Facebook and Youtube had been banned in 
        China. Thus, Chinese users didn't have options but simply chose 
        the Chinese versions of social network and video sharing 
        service when the world's largest services were blocked in their 
        country.\13\
---------------------------------------------------------------------------
    \13\ Amanda Min Chung Han, ``Will Investing in Chinese Information 
Technology Companies be Another Tulip Speculation?'', ASIA-PACIFIC 
BUSINESS AND TECHNOLOGY REPORT, August 8, 2011, available online at 
.

    Renren ultimately availed itself upon U.S. capitals markets, 
conducting a ``spectacular'' IPO on the New York Stock Exchange where 
it benefited handsomely from its access to the Chinese market, while 
its U.S. competitor was excluded.\14\ In such an environment, any 
ceding of market share by U.S. companies plays right into Chinese 
hands, leaving China with a much more malleable and compliant Internet 
sector.
---------------------------------------------------------------------------
    \14\ Clare Baldwin & Jennifer Saba, ``Renren's Big Day, a Prelude 
to Facebook IPO'', Reuters, May 4, 2011, available online at .
---------------------------------------------------------------------------
    We would also submit that the issue is beyond the scope of any 
unilateral action by the United States. Instead it requires the 
cooperation of other like-minded countries in multilateral fora. The 
potential of combating Internet censorship as a trade barrier lies in 
the fact that the rules-based international trade system is crucial to 
continued Chinese growth. Characterizing censorship in the context of a 
system whose rules China cannot afford to blatantly ignore is likely to 
achieve a political response in a way that traditional human rights 
approaches have not. Thus, CCIA strongly supports USTR's action last 
month seeking detailed information regarding China's Internet 
restrictions and their impact on U.S. trade. What success we have had 
in attaining Chinese concessions on issues such as Green Dam or 
Indigenous Innovation have come after coordinated efforts with other 
trading partners such as the European Union and Japan. This underscores 
the importance of utilizing an official multilateral forum like the 
WTO, and the need to incorporate new 21st century issues such as the 
free flow of information into the international trade system.
                             v. conclusion
    China's Internet censorship is first and foremost a deplorable 
practice that perverts what should be the greatest tool for 
communication and freedom into a tool for an authoritarian regime's 
control of information and of its citizens. However, the major economic 
distortions of this practice also demand action under the international 
trade system, one that China must at least be seen as respecting due to 
its own dependence on trade. While from a human rights perspective, it 
may seem akin to going after Al Capone for tax evasion, addressing 
Chinese censorship as a trade barrier is a legitimate, multilateral and 
potentially effective approach that needs to be pursued by our 
government at the highest levels. As the nation that invented the 
Internet, and as the global standard bearer in both economic and 
political freedom, we must continue to lead in holding the Chinese 
government accountable, and we must lead by example.
                                 ______
                                 

 Opening Statement of Hon. Chris Smith, a U.S. Representative From New 
     Jersey; Chairman, Congressional-Executive Commission on China

                           november 17, 2011
    The Commission will come to order. I want to welcome all of our 
distinguished witnesses to this very important hearing. We really 
appreciate the attendance of all of our panelists and guests. It's a 
pleasure to welcome everyone to this important hearing on ``China's 
Censorship of the Internet and Social Media: The Human Toll and Trade 
Impacts.'' As recent events have shown, the issue of Internet 
censorship has only grown in terms of importance and magnitude, and I 
thank the Congressional-Executive Commission on China staff for 
organizing a hearing on this pressing issue, and for the tremendous 
scholarly work they have done not only in presenting our annual report, 
which is filled with facts and information that is actionable, but for 
the ongoing work that they do to monitor the gross abuses of human 
rights in China.
    As the Congressional-Executive Commission on China's 2011 annual 
human rights report demonstrates, China's leadership has grown more 
assertive in its violation of rights, disregarding the very laws and 
international standards that they claim to uphold, while tightening 
their grip on Chinese society. As Chinese citizens have increasingly 
called for freedoms and reforms, China has only strengthened its 
controls over many areas of society--particularly over the Internet.
    While China has witnessed a boom in the popularity of social media 
and Internet sites, Chinese citizens that access online sites today 
remain under the watchful eye of the state. By some accounts, China has 
imprisoned more Internet activists than any other country in the world, 
and its Internet environment ranks among the most restrictive globally. 
Chinese citizens are unable to voice a range of criticism that 
Americans undoubtedly take for granted each day: Chinese citizens that 
tweet about local corruption may face the threat of abuse or 
harassment. Citizens that express dissatisfaction over tainted food 
supplies that injure children--the most vulnerable population of our 
society--may come to hear a knock at the door. And, citizens that voice 
the human desire for democracy and rights protections we value so 
dearly may disappear into the official custody of the state, where they 
face torture and incarceration.
    For Chinese citizens, the line that can't be crossed is unclear. 
While mentions of the 1989 Tiananmen protests are surely prohibited, 
China's censorship remains at the whimsy of governmental agencies that 
seek to limit what they perceive to be any destabilizing commentary. In 
China, the Internet provides no transparency--and citizens must weigh 
their choices each time they click to send an email or press a button 
or post personal views online. Who can forget Shi Tao, who for merely 
posting information about what he is not allowed to do, with regard to 
Tiananmen Square, garnered a 10-year prison sentence when Yahoo! opened 
up their personally identifiable information and gave it to the Chinese 
secret police that led to his conviction. There are no lists of banned 
words. There are no registers of prohibited topics. In China, there is 
no transparency. There are only consequences, and dire ones at that.
    Today, we welcome two panels that will address China's Internet 
censorship from two perspectives. The witnesses will not only provide 
personal accounts of how China's censorship affects individuals and 
families, but also detail how China's actions hinder the rights of U.S. 
businesses that seek to compete fairly in China. These panels will 
expose China's bold disregard for its own laws and its international 
obligations, specifically in terms of its controls on Internet activity 
and expression.
    In the first panel today, we will hear personal accounts of the 
consequences Chinese citizens face in seeking to express their 
fundamental rights of expression. We will hear from a son and a pastor 
that have seen firsthand the anxious and unforgiving hand of China's 
Internet police. We will hear how the simplest calls for freedom and 
reforms can lead to the separation of loved ones and partition of 
families.
    In the second panel, we will hear how China's Internet restrictions 
and controls not only hurt its citizens, but also hurt countries 
seeking to better China through international trade and cooperation. On 
a commercial level, China similarly lacks the kind of transparency and 
fairness that we expect in global trading partners. China has not only 
failed to comply with its WTO commitments, it has exploited our 
expectations to create an unlevel playing field, hurting the 
competitiveness of U.S. businesses and workers alike.
    We recognize that the Internet and social media can and should be 
used to provide people with greater access to honest information and to 
open up commercial opportunities for businesses operating in global 
markets. We know that the promise of information technology can not be 
achieved when it is used by repressive governments to find, capture, 
convict, and so often torture ordinary citizens for voicing concerns 
publicly. Information technology can not be advanced when it involves 
the systemic exclusion of commercial competitors and rampant disregard 
for transparency and intellectual property.
    China is one of the most repressive and restrictive countries when 
it comes to the control of the Internet and the impact goes far beyond 
the commercial losses for U.S. companies that want to participate in 
that market. There are serious human rights implications and we have 
seen the damage inflicted countless times through the arrest of 
bloggers and pro-democracy activists who have used the Internet to 
communicate with colleagues or disseminate views and then have been 
arrested. What makes this situation even worse is that sometimes it is 
U.S. companies, and my colleagues will recall I held the first of a 
series of hearings where we had Microsoft, Yahoo!, Cisco, and Google 
before our committee--it was my subcommittee on human rights--held up 
their hands and promised to tell the whole truth and nothing but, and 
then said they couldn't tell us what they were censoring and would not 
tell us how they were being complicit. Harry Wu, who is here, and has 
been a leader on this issue, pointed out that Cisco has so enabled the 
secret police to track down people using police net, and that the use 
of cyber police, ubiquitous throughout all of China, in order to 
capture the best, bravest, and smartest in China, who will bring that 
country to democracy if only allowed to do so.
    This hearing will focus on these very important issues. We are 
joined by our Cochairman Sherrod Brown from Ohio who will speak and 
then Mr. Walz who is a ranking member, and then we will go to our 
witnesses.
                                 ______
                                 

Statement of Hon. Sherrod Brown, a U.S. Senator From Ohio; Cochairman, 
              Congressional-Executive Commission on China

                           november 17, 2011
    The business of the Internet and social media is changing the way 
the world works. Just take a look at all the smartphones in this room. 
It has changed the way we live, the way we do business, and the way we 
act as a society. It has changed the world. It has made people closer 
to their governments and made those governments more accountable and 
interactive, and in the case of the ``Arab Spring,'' it has helped 
topple dictators.
    The purpose of today's hearing is to shed light on the darkness of 
China's repressive Internet and social media censorship. It is a policy 
that takes a very human toll, undermining human rights reforms and 
freedoms of expression and speech. And it is a policy that is unfair to 
U.S. trade interests, especially for U.S. tech companies.
    It's well-documented that Chinese officials block access to many 
Web sites, including this Commission's. Some sites are blocked because 
they are considered politically sensitive, and others for reasons that 
we can only guess.
    China's Internet control forces private companies--including U.S. 
companies--to censor the Internet based on vague and arbitrary 
standards. Many companies are forced to operate in an opaque world that 
we know surprisingly little about.
    This policy benefits Chinese domestic companies at the expense of 
companies like Facebook, Twitter, and Youtube who are completely 
blocked in China. Companies whose business models rely on openness and 
transparency--are forced to be an arm of the Chinese government or turn 
their backs on 1.3 billion customers.
    But it isn't just Silicon Valley companies that are blocked in 
China. It's also Ohio companies like Graftech and Edgetech that risk 
having their Web sites blocked or disrupted as they try to sell their 
products and services to reach Chinese consumers. When U.S. companies 
go public with complaints about these restrictions, as Google did last 
year, they risk retaliation by the Chinese government for doing so. 
Google is a company that made the unfortunate decision to work with the 
Chinese government. In the end it did not work out well for them.
    In the absence of meaningful competition, copycat versions of 
Twitter and Facebook flourish in China and raise hundreds of millions 
of dollars, ironically, on our capital markets. For instance, in May of 
this year, Renren, China's version of ``Facebook,'' raised $743 million 
in an IPO listed on the New York Stock Exchange. These Chinese 
companies are beholden to the Chinese government and Communist Party 
and censorship has increased--yet they want access to our free and open 
society. As arms of the Chinese government, these moves should be 
closely scrutinized.
    China now has over half a billion Internet users, more than any 
country in the world. Most of these Internet users are young, and far 
more aware of Chinese and world developments than their parents. 
Knowledge and openness are big threats to totalitarian regimes--we know 
that and the Chinese government knows that. In our country knowledge 
and openness are pillars of our form of government.
    Take the case of outspoken dissident artist Ai Weiwei. His savvy 
social networking skills and unabashed criticism of the government 
landed him an 81-day detention at a secret location earlier this year. 
Now the government wants him to pay $2.4 million in alleged unpaid 
taxes and penalties--by Tuesday. Thousands of supporters in China have 
sent him money over the Internet. And Ai continues to defy government 
orders by using Twitter to publicize his case.
    In recent years the Commission has documented a growing number of 
cases of political imprisonment involving the Internet. Behind each 
case is a story and a family.
    One of those cases is Mr. Li Yuanlong. Li is a journalist who was 
imprisoned for two years for criticizing the Communist Party online. 
That's why we're so grateful that Li's son, Alex, a fellow Ohioan and a 
student at Bowling Green State University, is here to tell Li's story.
    Last month the U.S. Trade Representative filed a request for 
information with the World Trade Organization on China's Internet 
censorship. I applaud this move as a positive first step and look 
forward to learning what we can do to address this pressing issue. Too 
much is at stake--the human toll becomes insufferable, the economic 
threat undermines American innovation.
    China plays by its own rules because we regrettably, in this 
institution and in our government, let them. We cannot simply wait out 
the inevitable power of the Internet to move the hearts and minds of 
the Chinese people. We must do all we can to shine the light where free 
expression, thought, and commerce are too often kept in the dark.
    Thank you.