[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
  AMERICA'S FUTURE IN ASIA: FROM REBALANCING TO MANAGING SOVEREIGNTY 
                                DISPUTES

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


                                HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBRUARY 5, 2014

                               __________

                           Serial No. 113-123

                               __________

        Printed for the use of the Committee on Foreign Affairs


Available via the World Wide Web: http://www.foreignaffairs.house.gov/ 
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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
JOE WILSON, South Carolina           GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas             ALBIO SIRES, New Jersey
TED POE, Texas                       GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona                 THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania             BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina          KAREN BASS, California
ADAM KINZINGER, Illinois             WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama                   DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas                 ALAN GRAYSON, Florida
PAUL COOK, California                JUAN VARGAS, California
GEORGE HOLDING, North Carolina       BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas            JOSEPH P. KENNEDY III, 
SCOTT PERRY, Pennsylvania                Massachusetts
STEVE STOCKMAN, Texas                AMI BERA, California
RON DeSANTIS, Florida       ALAN S. LOWENTHAL, California
TREY RADEL, Florida--resigned 1/27/  GRACE MENG, New York
    14 deg.                          LOIS FRANKEL, Florida
DOUG COLLINS, Georgia                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida
LUKE MESSER, Indiana

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 ------                                

                  Subcommittee on Asia and the Pacific

                      STEVE CHABOT, Ohio, Chairman
DANA ROHRABACHER, California         ENI F.H. FALEOMAVAEGA, American 
MATT SALMON, Arizona                     Samoa
MO BROOKS, Alabama                   AMI BERA, California
GEORGE HOLDING, North Carolina       TULSI GABBARD, Hawaii
SCOTT PERRY, Pennsylvania            BRAD SHERMAN, California
DOUG COLLINS, Georgia                GERALD E. CONNOLLY, Virginia
LUKE MESSER, Indiana                 WILLIAM KEATING, Massachusetts


                            C O N T E N T S

                              ----------                              
                                                                   Page

                                WITNESS

The Honorable Daniel R. Russel, Assistant Secretary, Bureau of 
  East Asian and Pacific Affairs, Department of State............     6

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Daniel R. Russel: Prepared statement...............     9

                                APPENDIX

Hearing notice...................................................    34
Hearing minutes..................................................    35
The Honorable George Holding, a Representative in Congress from 
  the State of North Carolina: Prepared statement................    36
Written responses from the Honorable Daniel R. Russel to 
  questions submitted for the record by:
  The Honorable Steve Chabot, a Representative in Congress from 
    the State of Ohio, and chairman, Subcommittee on Asia and the 
    Pacific......................................................    37
  The Honorable Mo Brooks, a Representative in Congress from the 
    State of Alabama.............................................    46
  The Honorable Luke Messer, a Representative in Congress from 
    the State of Indiana.........................................    48


                     AMERICA'S FUTURE IN ASIA: FROM
                        REBALANCING TO MANAGING
                          SOVEREIGNTY DISPUTES

                              ----------                              


                      WEDNESDAY, FEBRUARY 5, 2014

                       House of Representatives,

                 Subcommittee on Asia and the Pacific,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 2 o'clock p.m., 
in room 2175 Rayburn House Office Building, Hon. Steve Chabot 
(chairman of the subcommittee) presiding.
    Mr. Chabot. Committee will come to order.
    Good afternoon. I would like to welcome everyone to this 
afternoon's subcommittee hearing. I, first, want to apologize a 
bit for the late start but we had a series of votes. So we were 
called to the floor to vote and I hope you will take that into 
consideration. Hopefully, we won't have any other 
interruptions, and I want to thank Ms. Gabbard from the great 
state of Hawaii for being the ranking member here today. Eni 
Faleomavaega from American Samoa is unable to make it, and we 
know that she will do an excellent job for the other side. So, 
thank you very much.
    The United States' presence in the Asia-Pacific is built on 
promoting regional stability, fostering respect for 
international law, advancing respect for human rights, and 
maintaining freedom of navigation and unhindered lawful 
commerce in the maritime regions. These objectives are 
fundamentally hinged on the United States' alliances with 
Japan, South Korea, Australia, Thailand and the Philippines; 
our resilient relationships with Taiwan and Singapore; and our 
evolving relationships with Vietnam and Indonesia.
    As the title of today's hearing implies: What is America's 
future in Asia? One thing is certain--the United States will 
never leave Asia, because as a Pacific nation, we recognize 
that the nexus of global commerce and strategy has transitioned 
to the Western Pacific, and the strong bonds formed with our 
friends and allies cannot be broken; however, America's 
presence in the region is being challenged.
    The recent flare-up of confrontations between China and its 
neighbors over sovereignty claims in the East and South China 
Seas is the latest example of how decades-old conflicts could 
easily pivot from fishermen skirmishes into all-out military 
battles. China is attempting to seize its primacy over the 
Asia-Pacific region, at the expense of its neighbors. These 
moves may well be aimed at undermining the interests of the 
U.S. and its allies, challenging the administration's strategic 
rebalance efforts, and altering the myth that China seeks a 
``peaceful rise.''
    Take, for example, the increasing frequency of clashes 
between Chinese maritime law enforcement authorities and 
Vietnamese, Philippine and Japanese fishing vessels; or the 
confrontations between the U.S. Navy and Chinese naval vessels, 
including the time the USNS Impeccable was harassed by Chinese 
vessels in 2009, and the recent USS Cowpens incident. Let us 
also not forget the 2001 Hainan Island incident when a U.S. EP-
3 electronic surveillance aircraft and a People's Liberation 
Army Navy fighter jet collided mid-air. Any misstep in these 
situations--an overzealous pilot or fisherman--could have 
unnecessarily escalated tensions to the breaking point.
    From my perspective, the administration appears to be 
struggling to find a way to better direct America's resources 
toward the Asia-Pacific and find a way to manage the growth of 
maritime territorial disputes--surely the greatest threat, at 
this point, to the strategic rebalance policy. Without a 
coherent and cohesive direction, these disputes could 
significantly impact America's ability to promote regional 
peace and stability, enhance economic prosperity, and preserve 
U.S. interests.
    Finding a way to mitigate these growing tensions and 
decrease the chances of miscalculation will not be easy. I 
think Japan's decision to create a National Security Council is 
a significantly positive step because not only will it more 
efficiently direct Japanese foreign and defense policies 
regarding national security, but it will also allow for 
stronger collaboration with the United States--something that 
is critically needed. I support efforts to revise the U.S.-
Japan bilateral defense guidelines, as well as the 
consideration to locate rotational U.S. troops in the 
Philippines, as we've done in Australia. At the same time, I 
urge our regional allies to be measured in their actions and 
rhetoric because even a slightly provocative remark could 
further and unnecessarily inflame tensions.
    I also believe the administration needs to do a better job 
at clearly conveying U.S. commitment to working with and 
supporting our regional allies. China's unilateral action to 
impose an Air Defense Identification Zone over the East China 
Sea presented the administration with an opportunity to do 
this, but instead of rising to the occasion, it sent mixed 
signals of its willingness to stand up to China's acts of 
provocation. While I do not believe it is in the United States' 
best interests to ``contain'' China, I do think balancing its 
rise by maintaining a strong regional presence that is focused, 
engaged, and forceful is imperative.
    Unfortunately, that is not where we are today and since the 
hearing this subcommittee held a year ago with then-Assistant 
Secretary Robert Blake and Acting Assistant Secretary Joseph 
Yun, efforts to strategically rebalance the U.S. toward Asia 
still lack a long-term sustainable focus. They are still hinged 
on ambitious rhetoric that have not reassured our allies or 
partners in the region, or anyone else, for that matter. As a 
result, China sees the Obama administration as weak and 
indecisive, and will continue its attempts to fill a perceived 
power vacuum in the region unless we find a way to enhance our 
presence across the board.
    In the meantime, as China continues to flex its muscles, 
countries around the region are recalculating and hedging on 
whether they can count on the U.S. Consequently, I think it is 
in the interest of this country and in the interest of our 
regional allies, notably Japan, South Korea, Taiwan, and the 
Philippines, for the U.S. to once and for all articulate a 
coherent strategy that is fundamentally built on actions. It's 
time for the administration to move beyond speeches and find a 
way to reassure the region that the United States is there to 
stay and that America's future in Asia is strong, committed, 
and absolute.
    I'd now like to yield to the gentlelady from Hawaii for the 
purpose of making an opening statement.
    Ms. Gabbard. Thank you very much, Mr. Chairman.
    I appreciate your bringing attention to this critical issue 
for us to discuss and have this necessary conversation that 
answers the question of what is the United States role in the 
Asia-Pacific region and being able to bring about a better 
understanding of the current situation so that we can best 
address what that role should be both with the challenges that 
we are presented with today but also so that we can project 
long-term into the future.
    As was previously mentioned, China's expansion in the East 
China Sea and its claim over the Senkaku Islands is something 
that has escalated tensions with both Japan and South Korea.
    Last month, China, expanding its maritime law enforcement 
presence, enforcing its fisheries law in South China Seas 
contested waters, has done the same.
    We need to seek cooperation in order to achieve the 
maritime and air safety within the region that I think is a 
common objective for all interested parties and continue to be 
proactive in the Asia-Pacific region to mitigate as much as 
possible the risk of an accidental military clash.
    I think the United States needs to remain engaged with 
China in a proactive, sustained and strategic manner, using 
diplomatic peaceful means to try to address these disputes. 
Abiding by international airspace and maritime rules will 
decrease the threat to peace and stability in the region.
    Obviously, there are several sensitivities that the United 
States will need to navigate through and balance in order to 
have an effective strategy in strengthening relations, both 
with China as well as our allies--long-time allies within the 
region.
    As I mentioned, it's in the best interests of all parties 
to maintain freedom of navigation both in international waters 
and international airspace.
    It's time to be proactive now before we end up in a 
situation where there is a trigger, there is an escalation and 
we are dealing with a crisis that is highly elevated and one 
that will involve many of the countries in the region.
    Given the increasing trade among nations on the Pacific 
Rim, the urgency of setting clear norms, of having a deeper 
understanding and acceptable territorial borders is paramount.
    I look forward to reviewing our positions and policies in 
the Asia-Pacific region as we assess our future role in the 
region, as we also address the immediate air and maritime 
safety concerns.
    Mr. Chairman, thank you again for bringing us together to 
really look at this important issue and look forward to hearing 
from our witness today. Thank you.
    Mr. Chabot. Thank you very much.
    The gentleman from Arizona, Mr. Salmon, is recognized for 1 
minute.
    Mr. Salmon. Thank you.
    I'd like to thank the chairman, Steve Chabot, for holding 
this important hearing. Secretary Russel, thank you for coming 
to testify before this subcommittee.
    Since the administration announced their pivot toward the 
Asia-Pacific region in 2011, we've seen the tensions in the 
region escalate. They have risen. The hope was that if there 
was U.S. influence in the region a significant influence would 
help balance China's growing aggressiveness with their 
neighbors.
    Unfortunately, I fear the pivot has been in name only, and 
the administration's strategy in Asia remains overpowered by 
other regions around the globe. Over the last several years, we 
have seen increased aggressions in the disputed waters of the 
South China Sea and, more recently, in the East China Sea.
    As China sought to expand their control in the region, our 
allies are struggling to ensure their sovereignty is maintained 
and navigational rights to the South and East China Seas are 
protected.
    Military and commercial access to the navigable waters of 
the South and East China Seas are critical to the security and 
economic viability of every country in the region. Strong U.S. 
allies including Japan, Taiwan, Philippines, Vietnam, and South 
Korea have come under increasing pressure from China to cede or 
temper these inalienable sovereign rights to Chinese will.
    There must be a peaceful pass forward that protects U.S. 
regional allies, ensures U.S. national security interests and 
avoids unnecessary conflict and aggressions.
    One of my heroes of the region, President Ma of Taiwan, has 
proposed the East China Sea peace initiative as a means to 
resolving disputes peacefully by exercising restraint, 
refraining from taking antagonistic actions and following 
international law and continuing the dialogue.
    I hope the Chinese and other regional powers will embrace 
this as a solution going forward. It's the most proactive 
positive solution, I think, that is on the table yet.
    They have indicated--they, China, have indicated that they 
have a desire to settle disputes peacefully, but they have been 
unwilling to open dialogue and negotiate in a multilateral way 
and this is extremely disappointing, and I would hope that as 
we go forward we will all come to some recommendations or 
conclusions that will help strengthen our allies in the region.
    And like you, Mr. Chairman, I don't believe any of us want 
to do anything to contain China. I have been one of the most 
vigorous proponents of free trade with China, I believe, in 
this entire body.
    But we cannot neglect our allies in the region and there 
has to be constructive dialogue. President Ma has put a 
reasonable proposal on the table. I would like to see us run 
with that. Thank you.
    Mr. Chabot. Thank you very much.
    The gentleman from California, Mr. Sherman, is recognized 
for making an opening statement.
    Mr. Sherman. We all agree we should be engaged in the 
region. We ought to provide diplomatic support for our allies. 
But I fear that we have already begun to go overboard.
    Within the thing called the Pentagon budget, well over $600 
billion, there are shifts and we could say that we are now 
spending tens if not hundreds of billions of dollars a year 
allocable to this effort to fight over a few islands, most of 
which are so tiny that no one in history has ever chosen to 
live there.
    Already I see us shifting our research, our training, our 
force configuration to facing down China in the South China 
Sea. Compare that to Japan, which consistently spends only 1 
percent of its GDP on its military and is ready to see us 
allocate tens of billions if not hundreds of billions of 
dollars to fighting for a few islands that they will wish to 
exploit for economic purposes.
    Keep in mind that neither Vietnam nor Japan sent any forces 
to fight in the U.N. action in Afghanistan, the place from 
which America was attacked for the first time in the lifetime 
of, I think, just about everybody on this panel.
    So likewise these islands do sit astride trade routes, but 
for the most part they sit astride this trade route between the 
United States and China, and you can say, well, hundreds of 
billions of dollars of trade goes through that area, yes--trade 
between the United States and China, trade between China and 
other nations.
    We--it meets the institutional needs of the Pentagon for us 
to begin a new cold war with China. It gives them the kind of 
adversary that we have prevailed upon in glorious actions.
    Uniformed, technological, the great victories of our 
military were in World War II and the Cold War, and it is 
understandable that we will be told by the Pentagon that we now 
have another great opportunity to confront a large, militarily 
sophisticated, uniformed and conventional foe.
    But keep in mind, we are talking about islands no one has 
chosen to live on. We are talking about countries that have 
always supported us or often supported us diplomatically but 
not militarily and that they themselves, especially in the case 
of Japan, limit their own military commitment while asking us 
for a much more open-ended commitment.
    These are uninhabited islands. Let's stay calm. I yield 
back.
    Mr. Chabot. Thank you. The gentleman's time has expired.
    The gentleman from North Carolina, Mr. Holding, is 
recognized for 1 minute.
    Mr. Holding. Mr. Chairman, I will submit a statement for 
the record.
    Mr. Chabot. Okay. Thank you very much.
    The gentleman from Pennsylvania, Mr. Scott, is recognized.
    Mr. Scott. Mr. Chairman, I will also submit a statement.
    Mr. Chabot. Okay.
    The gentleman from Indiana, Mr. Messer, is recognized.
    Mr. Messer. Thank you, Mr. Chairman. Very much appreciate 
the opportunity to be here at this hearing, looking forward to 
the opportunity to travel to the region with many of you just 
in the coming couple of weeks.
    Would just sort of hope for Mr. Russel and emphasize the 
importance of talking today about the--President Ma's from 
Taiwan's East China Sea peace initiative and the importance of 
as we work through the challenges in that region that we apply 
common sense and listen to our allies. Thank you.
    Mr. Chabot. Thank you very much.
    I will go ahead and introduce our distinguished panelist 
here this afternoon. Mr. Daniel Russel is the Assistant 
Secretary of State for East Asian and Pacific Affairs and is a 
career member of the Senior Foreign Service. Prior to his 
appointment as Assistant Secretary, Mr. Russel served at the 
White House as Special Assistant to the President and national 
security staff. During his tenure there, he helped formulate 
President Obama's strategic rebalance to Asia. Before joining 
the national security staff, he served as director of the 
Office of Japanese Affairs and had other various assignments in 
Japan, South Korea, the Netherlands, and Cyprus. He has also 
served as chief of staff to Ambassador Thomas R. Pickering and 
assistant to the Ambassador to Japan, former Senate Majority 
Leader Mike Mansfield. Mr. Russel was awarded the State 
Department's Una Chapman Cox Fellowship sabbatical and authored 
the book, ``America's Place in the World.'' Before joining the 
Foreign Service, he was manager for an international firm in 
New York City. Mr. Russel was educated at Sarah Lawrence 
College and University College, University of London, U.K.
    We welcome you here this afternoon, Mr. Russel, and since 
we have only one panelist we will be extending your time for a 
statement from 5 minutes to 7 minutes before we will ask 
questions.
    So you are recognized for 7 minutes. Thank you.

    STATEMENT OF THE HONORABLE DANIEL R. RUSSEL, ASSISTANT 
SECRETARY, BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, DEPARTMENT 
                            OF STATE

    Mr. Russel. Thank you very much. You're very kind, Mr. 
Chairman.
    Thanks to Ms. Gabbard and the other members of the 
subcommittee for the opportunity to testify today on these 
important issues.
    Before I begin, I would respectfully request that you 
accept my written testimony for the record. I would also like 
to take the opportunity to thank the chairman for his 
leadership on the issue and his work to enhance our engagement 
with the Asia-Pacific region.
    The members of this subcommittee know full well the 
importance of our interests in the Asia-Pacific region. As 
Secretary Kerry has made very, very clear, at the core of our 
strategic rebalancing is a determination to ensure that the 
Asia-Pacific region remains open, inclusive and prosperous, and 
that it is guided by accepted rules and standards and respect 
for international law.
    Through our alliances, through our partnerships, the U.S. 
has been instrumental in sustaining a maritime regime based on 
international law that has allowed the countries in the region 
to prosper, and as a maritime nation with global trading 
networks the U.S. has a national interest in the maintenance of 
peace and stability, respect for international law, unimpeded 
lawful commerce and freedom of navigation and overflight, 
including and especially in the East China Sea and the South 
China Sea areas.
    For these reasons, the behavior and the tensions between 
the claimants are of deep concern to us and to our allies. An 
incident in these waters could touch off an escalatory cycle, 
which would have very serious adverse effects on our economic 
and our security interests.
    That is why the Obama administration has consistently 
emphasized the importance of exercising restraint, of 
maintaining open channels of dialogue, of lowering rhetoric, of 
behaving safely and responsibly both in the sky and the sea and 
peacefully resolving territorial and maritime disputes and 
keeping with international law.
    We oppose and we have sought to prevent unilateral actions 
that disrupt the status quo or jeopardize that peace and 
security. In the South China Sea we have supported efforts by 
ASEAN and China to reach agreement on an effective code of 
conduct, which is long overdue, in order to promote a rules-
based framework for managing and regulating the behavior of the 
countries.
    And in the East China Sea, we remain concerned about the 
serious downturn in Sino-Japanese relations. It is important to 
lower tensions, to turn down the rhetoric and to exercise 
caution and restraint in this sensitive area.
    However, China's announcement of an Air Defense 
Identification Zone, an ADIZ in the East China Sea in late 
November, was a step in the wrong direction. We neither 
recognize nor accept China's declared ADIZ.
    The United States has no intention of changing how we 
conduct our operations in the region and we have made clear to 
China that it should not attempt to implement that ADIZ and 
should refrain from taking similar actions elsewhere in the 
region.
    Mr. Chairman, as I mentioned out the outset, the U.S. has a 
deep and long-standing stake in the maintenance of prosperity 
and stability in the Asia-Pacific and an equally deep and 
abiding long-term interest in the continued freedom of the seas 
based on the rule of law--a rule that guarantees, among other 
things, freedom of navigation, freedom of overflight and the 
other internationally lawful uses of the sea.
    International law also makes clear the legal basis on which 
states can legitimately assert their rights in the maritime 
domain or can exploit maritime resources. So the United States 
takes the strong position that maritime claims must accord with 
customary international law.
    Even though the United States isn't a claimant and even 
though the United States takes no position on the competing 
claims to sovereignty over disputed land features in the East 
China Sea or the South China Sea, we believe strongly, as I 
said, that the claims must accord with international law.
    We also care deeply that all countries deal with the 
territorial and their maritime disputes peacefully, 
diplomatically and in accordance with international law. This 
means ensuring that claimants manage their differences without 
intimidation, coercion or the use of force.
    We are candid with claimants, all the claimants, when we 
have concerns regarding their claims or the behavior in the way 
that they pursue them. Deputy Secretary Bill Burns and I were 
in Beijing last month and held extensive discussions with 
Chinese officials, for example.
    In these discussions, we directly raised our concerns about 
what we see as a growing incremental pattern of efforts by 
China to assert control over the area contained in the so-
called nine-dash line in the South China Sea.
    Among other steps, this includes continued restrictions on 
access to the Scarborough Reef, pressure on the long-standing 
Philippine presence at the Second Thomas Shoal and the recent 
updating of fishing regulations covering disputed areas in the 
South China Sea.
    Our view is that these actions have raised tensions in the 
region and have exacerbated concerns about China's long-term 
strategic objectives. China's lack of clarity with regard to 
its South China Sea claims have created uncertainty in the 
region and limit the prospect for achieving mutually agreeable 
resolution or equitable joint development arrangements.
    At the risk of repeating myself, I want to reinforce the 
point, Mr. Chairman, that under international law, maritime 
claims in the South China Sea must be derived from land 
features and any Chinese claim to maritime rights not based on 
claimed land features would be inconsistent with international 
law.
    China could highlight its respect for international law by 
clarifying or adjusting its claim to bring it into accordance 
with international law of the sea. Along with that, we strongly 
support serious and sustained bilateral as well as multilateral 
dialogue among claimants to address and manage overlapping 
claims in a peaceful and noncoercive way.
    We support the rights of the claimants themselves to avail 
themselves of peaceful dispute mechanisms. The Philippines 
itself chose to exercise such a right last year with the filing 
of an arbitration case under the Law of the Sea.
    Now, these legal and diplomatic processes will take time 
but the relevant parties in the near term can take steps to 
lower tension and avoid escalation. That includes practical 
mechanisms to prevent incidents or manage them when they occur. 
Another would be for the claimants to agree not to undertake 
new unilateral steps to change the status quo.
    In the meantime, the U.S. is committed to promoting 
regional stability through continued strong diplomatic and 
military presence. This includes our efforts to promote best 
practices and good cooperation on all aspects of maritime 
security and to bolster maritime domain awareness including 
through our capacity-building program throughout Southeast 
Asia.
    It includes strengthening institutions like ASEAN and the 
East Asia Summit as regional venues where countries can engage 
in dialogue with all involved both about the principles but 
also about practical measures to avoid conflict.
    This is an issue of immense importance to the United 
States, to the Asia-Pacific and to the world, and I want to 
reaffirm here today that the United States will continue to 
play the central role in underwriting security and stability in 
the Asia-Pacific that has guaranteed peace and facilitated 
prosperity for the last six-plus decades.
    Mr. Chairman, I thank you very much for the opportunity to 
appear here today and I look forward to hearing further views 
from the members of the committee and to answering any 
questions that you have.
    Thank you.
    [The prepared statement of Mr. Russel follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Chabot. Thank you very much for your testimony, and 
before I begin the questioning here, I'd be remiss if I didn't 
recognize an old hand, somebody that served our institution for 
probably 20 years or so, was chairman of the Intelligence 
Committee and served his district in Michigan very well, and 
that's Congressman Pete Hoekstra.
    Pete, why don't you stand up there? You deserve to be 
recognized.
    (Applause)
    Thank you for your service, and I'll begin with myself. I 
recognize myself for 5 minutes.
    Mr. Russel, since the administration announced its policy 
to strategically rebalance toward the Asia-Pacific back in 
2011, many said this strategic pivot was implemented as a way 
to contain China's rise. China surely believes this to be the 
case and some believe this policy is the root cause of China's 
sense of paranoia, which instigated the intensification of its 
provocative and aggressive actions in the maritime regions in 
that part of the world.
    At the end of the day, do you think the United States' 
forward presence in the region is more escalatory than not? 
Have our efforts to increase our presence correlated with the 
increase in regional tensions? If not, then what other 
explanations do you give for the rise in tensions over the last 
few years? I think, as Congressman Salmon and I both indicated 
in our opening statements, we're not interested in containing 
China. We do think that they need to act as a civilized nation, 
as a leader if they want to be treated as one and, 
unfortunately, their actions have been quite provocative. But 
what do you say about the rebalance or the pivot, whichever 
terminology one prefers?
    Mr. Russel. Thank you very much for the thoughtful 
question, Mr. Chairman.
    I'd begin, if I may, by saying that when I was first 
secunded to the White House, to the National Security Council 
in January 2009 I heard and saw from the President and from the 
senior administration officials a commitment to strategic 
rebalance to the Asia-Pacific region based on U.S. interests.
    So the rebalance, certainly, dates back to 2009 to the very 
beginning of the administration and has, I would say, and has 
always had six basic lines of effort. First, to strengthen our 
alliances; second, to participate and to build up regional 
institutions; thirdly, to engage emerging powers including and 
especially China; fourth, to promote economic development that 
benefits the U.S. and the countries in the region; fifth, to 
champion the values that America cherishes, the values of 
democracy and to strengthen civil society in the region; and 
sixth, to diversify our engagement. In other words, use our 
soft power in addition to our strong military alliances and 
presence.
    That having been said, I am convinced that a diminution or 
a withdrawal of U.S. engagement and presence, to answer your 
question in the inverse, would be a major destabilizing factor 
in the region and it would----
    Mr. Chabot. Not to cut you off there--and I agree with you 
that it would be and we shouldn't do that--but my question is 
the way China interprets this and it seems that they interpret 
it very differently than we intended and that's really what I'm 
getting at.
    Do you think their actions in any way are a reflection of 
what we are doing--rebalancing allegedly from the Middle East 
to Asia?
    Mr. Russel. I do not, Mr. Chairman.
    Mr. Chabot. Okay.
    Mr. Russel. I recognize that there are many in China who 
either believe or find it convenient to argue that the U.S. 
strategy of engagement in the Asia-Pacific region is in some 
fashion at odds with China's own interests or, arguably, part 
of a containment strategy. It is not. Moreover----
    Mr. Chabot. Okay. Let me stop you there, if I can, because 
I've only got 2 minutes and I want to get one more question at 
least.
    The budget for the East Asia and Pacific Bureau is the 
second smallest of the bureaus at the State Department. Vying 
for funds with the Middle East is surely no easy task because 
despite troop withdrawals across that region much of the 
administration's focus is centered on crises occurring in the 
Middle East and that part of the world.
    That being said, the Asia-Pacific region is the future. 
It's the driver of the global economy and will make or break 
our geopolitical role in the world, I believe. Balancing the 
need to increase our level of engagement in the Asia-Pacific 
with budget constraints here in Washington, how do you propose 
that we best increase our presence while restraining the cost 
of that engagement?
    Mr. Russel. Well, thank you, Mr. Chairman.
    Needless to say, you're preaching to the choir. Secretary 
Kerry and, of course, I and my colleagues have been vigorous 
advocates for not only the State Department budget but for 
fully resourcing the strategic rebalance in the Asia-Pacific 
region, and against the backdrop of fiscal constraint as you 
alluded to we have seen important increases in other areas 
where our budget have been protected, certainly, relative to 
that of other agencies.
    The lines of effort that we're pursuing in the State 
Department and as a government include activist diplomacy, 
include the clear and outspoken statements--a public assertion 
of our policy which it has an important effect and is 
influential in providing confidence to our partners and allies 
in the region; a robust military presence which must continue 
and that is enhanced greatly by our unique system of alliances 
and security partnerships; an aggressive effort to partner--to 
develop partner capacity including by strengthening maritime 
domain awareness and other forums that allow our partners to 
act and to operate; and importantly, Mr. Chairman, our active 
engagement in the multilateral institutions that serve to help 
rule setting.
    These are projects that our men and women in our Embassies 
and in our militaries are actively engaged in every day.
    Mr. Chabot. Thank you very much.
    My time is expired. The ranking member, the gentlelady from 
Hawaii, Ms. Gabbard, is recognized for 5 minutes. Thank you.
    Ms. Gabbard. Thank you very much, Mr. Chabot.
    I'm going to pick up where he just left off. You know, 
obviously, coming from a state--Hawaii--that someone just told 
me this morning--I thought it was a great terminology--where we 
are the strategic point of the spear for our country's focus on 
the Asia-Pacific region geographically so keep a very close eye 
and are very keenly aware of things that are happening on an 
ongoing basis but also aware of the opportunity that exists in 
the region, and it is a question that often arises both, you 
know, here at home but also from some of our allies in the 
region is are we really serious about this focus on the Asia-
Pacific when numbers come out as they are--the chairman pointed 
out your department's budget being the second smallest in 
Department of State.
    In Hawaii, we have the East-West Center, which I think 
you're keenly aware of, also has seen a reduction in funding 
this year.
    When is this priority going to start taking place or 
showing through in very real and practical ways?
    Mr. Russel. Well, thank you for that question, Ms. Gabbard.
    We are committed and Secretary Kerry is committed not only 
to the Asia-Pacific region but to an active and effective 
presence, active and effective forms of engagement throughout 
the Asia-Pacific region.
    The East-West Center is an extremely important venue for 
us. President Obama, of course, has a personal connection 
there. I know the head of the East-West Center is in Washington 
and I'm scheduled to meet with him soon.
    The programs that we engage in not only in Hawaii but in 
the region are aimed at reaching out to governments, to civil 
society and to ensure that our connections with the countries 
in the region are more than simply professions of bilateral 
ties--that these are grass roots and people-to-people 
connections.
    So what Secretary Kerry, in terms of resource and in terms 
of direction, has focused on includes economic engagement, 
educational exchange, cooperative programs that pertain to 
energy, climate and other transnational issues and threats of 
common concern, economic development--everything from the 
Trans-Pacific Partnership to a range of commercial and other 
sorts of programs.
    Ms. Gabbard. No, I appreciate your talking about that and 
one of the assets that the East-West Center provides is at that 
grass roots level where you're having that exposure and that 
engagement with people who go back to their countries who 
become leaders within their countries and takes a very 
proactive approach.
    I'd like to talk a little bit about--let's see, I've got a 
lot of questions here. You talked about the effective code of 
conduct agreed to by the ASEAN nations and China.
    Could you just touch quickly on the progress of that and 
what the guidelines--kind of the framework is for that?
    Mr. Russel. Well, in 2002, ASEAN and China reached 
agreement on a declaration of conduct that established certain 
principles and that also committed them to negotiate a code of 
conduct that would oversee the behavior of the parties in the 
region.
    The two elements to a code of conduct, which we see great 
value to, are, first, reaching consensus between ASEAN and 
China about acceptable forms of behavior among claimants and 
relevant parties in the South China Sea based on the principles 
of peaceful resolution, respect for international law, no 
unilateral changes to the status quo and so on.
    A second dimension of the code of conduct that we believe 
can be expedited--should be expedited is the development of 
practical mechanisms to prevent incidents that could trigger an 
escalatory cycle or to manage those incidents should they 
occur.
    The United States has abundant experience with procedures 
to prevent incidents at sea. We have put our experience and our 
expertise at the disposal of the ASEANs. We're actively engaged 
in partnerships through a number of the ASEAN-related forum for 
maritime cooperation and maritime security.
    We think that there is no reason why a code of conduct 
can't be negotiated quickly or that practical steps can't be 
taken in the interim.
    Ms. Gabbard. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Chabot. Thank you. The gentlelady's time has expired.
    The gentleman from Arizona, Mr. Salmon, is recognized, who 
is also the chairman of the Western Hemisphere Subcommittee of 
the Foreign Affairs Committee.
    Mr. Salmon. Thank you, Mr. Chairman.
    When I served in Congress back in the 90s, our Secretary of 
State delineated a policy with China that was very confusing. 
It was called strategic ambiguity, and it sounds like an 
oxymoron.
    I think that since that time as a country we've tried 
desperately to seek strategic clarity in dealing with China and 
we've expanded our trade relations with China. We've advocated 
for permanent normal trade relations, their ascension to the 
WTO, and we've, I think, acted every bit as a good partner 
should.
    But given the fact that in the last couple of years 
especially they've increased their antagonistic ways in the 
South and East China Seas, what more can we do? I mentioned in 
my opening statement that President Ma of Taiwan has 
recommended this East China Sea peace initiative.
    Mr. Russel, do you have any thoughts on that as far as--is 
that something we could pick up and run with? It doesn't call 
for military action and it certainly opens the door for 
meaningful dialogue.
    But it has to happen with all interested parties and what 
role can the United States take in establishing that kind of a 
peace initiative?
    Mr. Russel. Well, thank you very much, Mr. Salmon.
    In diplomacy, as in other aspects of life, timing is 
everything and I think it is unfortunate that President Ma's 
peace initiative when it was announced did not fall on fertile 
soil or water, so to speak.
    There are a number of very important elements to that 
initiative. Others have made proposals including President 
Aquino, who similarly proposed a zone of peace and cooperation.
    When you break apart these initiatives and look at the key 
elements thereof, you find the principles that are at the heart 
of the U.S. strategy and the U.S. effort, namely, respect for 
international law and peaceful resolution of disputes.
    Our activist diplomacy, both bilateral and multilateral, at 
the Presidential level, at the Secretary's level and at my 
level is aimed at seeking consensus, not just lip service but 
practical operational consensus around these principles 
including the principles of respect for international law.
    All of the claimants need to define their claims clearly in 
ways that are consistent with international law. This 
particularly applies to China. The ambiguity of China's claim 
and the behavior of Chinese assets in asserting these claims is 
a destabilizing factor.
    We have made that point directly to the Chinese. I was 
recently, as I mentioned, in Beijing. This is something that 
Secretary Kerry has taken up directly, something that we have 
included in our clear public statement.
    Mr. Salmon. You know, I was one of the strongest advocates 
for passage of permanent normal trade relations because I 
believe that our further engaging with China in trade and 
opening up more and more doors for China to do business with 
the United States was a really, really good thing.
    I remember having to speak to a lot of my colleagues who 
were real reticent about it because of some of the horrendous 
human rights abuses in China and on and on and on.
    I mean, several issues--aggression toward Taiwan, and I 
advocated that that passage of the permanent normal trade 
relations would ultimately lead to better relations in the 
region and maybe an improvement in human rights. I've been 
really disappointed.
    I mean, I've been incredibly disappointed that China hasn't 
taken the ball and run with it and it seems to me that they're 
just playing a game of dare.
    You know, we're going to see what we can get away with and 
if the U.S. has the guts, the cojones, to challenge us, and 
given the fact that, you know, this pivot that was supposed to 
happen but I don't believe it really has happened has maybe 
kind of emboldened them, I'd just like to encourage us to maybe 
practice a little bit of tough love with them and let them know 
that we're just not going to stand for or tolerate those kind 
of aggressive actions because some of those aggressive actions 
have actually materialized into violence and that's just not 
tolerable.
    Mr. Russel. Well, Congressman, let me make absolutely clear 
that the United States is committed to and is working to 
achieve a stable, constructive, cooperative relationship with 
China. The President, the Secretary, the members of the Cabinet 
have vigorously pursued that effort.
    But by the same token, we are also committed to a 
relationship that allows us to speak clearly and candidly to 
respond directly on areas of significant difference.
    We want and the region needs a China that embraces the rule 
of law. We need a China that is a net contributor to the 
stability and the security of the region. To achieve that, we 
have a deliberate and, I would say, sophisticated strategy that 
combines the search for practical cooperation on areas of 
genuine importance to both of our citizens and to the world as 
everything from climate change to North Korea.
    But it also enables us to address directly areas of 
difference, areas of concern and problem behavior even when, to 
the chagrin of the Chinese, that requires us to publicly call 
them out or impose reputational costs.
    The key to our China strategy, Congressman, is the strength 
of our partnerships and our security alliances in the Asia-
Pacific. That is the underpinning that has allowed China to 
prosper, as you alluded to. That is the framework with which we 
will continue to work constructively with China.
    Mr. Chabot. The gentleman's time has expired.
    The gentleman from California who is also----
    Mr. Sherman. The gentleman from Virginia first.
    Mr. Chabot. Okay. The gentleman from Virginia, Mr. 
Connolly, is recognized for 5 minutes.
    Mr. Connolly. I thank my colleague and I thank you, Mr. 
Chairman.
    Mr. Russel, of course, I'm listening to my colleague and I 
certainly consider what he's saying but to assert something is 
not tolerable with respect to Chinese behavior in the South 
China Sea is fascinating, you know, to hear. I'm not quite sure 
what it translates into in terms of policy.
    What are we prepared to do to curb Chinese excesses as we 
perceive them in that region?
    Mr. Russel. Well, thank you, Congressman. I'll tell you a 
bit about what we are doing as a practical matter to address 
this.
    First and foremost, as I said, we are strengthening our 
alliances and our security posture. We are present and 
accounted for in our defense capacity in a significant and in a 
sustained and credible way.
    Secondly, we are working with a range of partner countries 
to help build local capacity, to develop their ability to 
monitor their own airspace, their own territorial waters and to 
acquire the wherewithal to defend themselves and their 
interests in a responsible way.
    This is something that the United States does bilaterally 
but it is something that we do also with our partners and 
through international fora.
    Thirdly, we engage with China directly as well as with the 
ASEANs and with neighbors including India, including Australia 
in the multilateral fora that we are attempting to strengthen.
    The regional architecture in the Asia-Pacific region is 
under developed and the decision in 2010 by President Obama to 
sign the treaty with ASEAN and to begin participating on an 
annual basis both U.S. ASEAN leaders meetings and in the East 
Asia Summit was a major milestone in terms of commitment to a 
U.S. presence that had a palpable impact on China's calculus 
and China's behavior.
    Mr. Connolly. Thank you.
    One of the concerns I have in this whole situation talked 
about in a previous hearing is the space for miscalculation. 
One looks at what China is doing and one is concerned.
    It looks from a distance like it's picking a fight with 
Vietnam, with the Philippines, with Japan, among others and one 
may not intend by declaring, you know, a Air Defense 
Identification Zone--one may not intend to do something overtly 
provocative but the result might be just that.
    And the probability of an accidental military incursion or 
worse starts to rise, frankly, especially when you pick fights 
with more actors in the region and encompassing more of the 
region.
    What is the United States position on that? I mean, do we--
is that a concern of ours and have we relayed that concern to 
the Chinese Government and what's our reading of the Chinese 
Government?
    Have they thought that through, do you think, in a 
satisfactory way? I mean, is that of concern to them as well?
    Mr. Russel. Well, thank you, Congressman.
    We are very mindful of the risk of unintended conflict or 
of accidents. No analyst that I know or respect believes that 
China or, frankly, other major players in the Asia-Pacific 
region have any desire for or intention to engage in conflict 
deliberately. But as Vice President Biden is fond of saying, 
there's something worse than an intended conflict and that's an 
unintended conflict.
    To that end, to avoid that two major lines of effort by the 
United States include the direct engagement with the Chinese 
and with the People's Liberation Army on upgrade of mil-mil 
relations between the U.S. and China, which has enabled us to 
improve our ability to communicate.
    That doesn't obviate occasions in which the U.S. and 
Chinese assets are at odds, as witnessed the case of the--
recent case of the USS Cowpens. But it does allow for a level 
of communication that permits U.S. and Chinese officers to 
resolve issues peaceably, which was also the case with the 
Cowpens.
    The second line of effort is more broadly with our allies 
and with our partners whether it's Japan, whether it's the 
Philippines or whether it's others. We are actively promoting 
regional mechanisms to prevent incidents and to manage them 
when they occur, everything from hot lines to rules of 
engagement.
    This is one important reason why the U.S. strongly supports 
the call by Japan for better communications and incident 
avoidance procedures in the East China Sea with China.
    Mr. Chabot. The gentleman's time has expired.
    Mr. Connolly. I thank you. Thank you, Mr. Chairman, and I 
thank my colleague, Mr. Sherman, for his courtesy.
    Mr. Chabot. Thank you very much.
    The gentleman from North Carolina, Mr. Holding, is 
recognized for 5 minutes.
    Mr. Holding. Thank you, Mr. Chairman.
    You know, how the United States deals--decides to engage 
with the maritime conflicts or the air disputes in the East and 
South China Seas, you know, not only sends important messages 
to our allies as to how we take care of them but it says to 
other countries around the world that might not necessarily be 
an ally but someone that we have a strategic relationship with, 
and one nation that I know who's been very, very close 
attention to how we handle these is India, and, you know, they 
watch any engagement we have with China and they watch it 
closely.
    So what would you say any potential action or inaction in 
the East and South China Seas that we undertake--you know, what 
do you think that means for our strategic relationship with 
India?
    Mr. Russel. Well, thank you very much, Congressman.
    With the caveat that my personal area of responsibility in 
the State Department does not extend as far as India, I would 
say that India, including as an active member of the East Asia 
Summit, India, by virtue of its ``look East'' policy, India, as 
the world's largest democracy and given its strategic place in 
the Indo-Pacific geography has an important role to play, an 
important contribution to make.
    We have a consultation with India, which I'm looking 
forward to undertaking as Assistant Secretary on the Asia-
Pacific region, and I have been in touch on the margins of 
multilateral meetings with my Indian counterparts.
    Others of our Asian allies including and especially Japan 
have intense consultations as well. The Prime Minister of Japan 
was recently there. Fundamentally, the rules of the South China 
Sea and the East China Sea apply in the Indian Ocean and apply 
globally.
    The absolute requirement and a requirement that is 
incumbent on China to embrace to respect rules of the road, to 
accept that international law applies equally to big countries 
and small, to strong and weak, is a principle--a set of 
principles that I believe is essential to India, and that the 
efforts by the United States including in the multilateral 
forum to champion these principles have a significant impact 
and, I believe, the support of the Indian democracy.
    Mr. Holding. Well, you know, it's hard to see how we can 
have a pivot to India without--a pivot to Asia without really 
thinking about India because India is a country where we have a 
very special strategic relationship with.
    We are bound by, as you pointed out, it's the world's 
largest democracy. We're the world's oldest democracy and, you 
know, the business relationships that we have between the 
United States and India are deep and far reaching and, you 
know, I think that India, you know, is a balance to China 
there.
    I mean, obviously those two, you know, look at each other 
all the time. And so do you think there are ways where we can 
better incorporate India into our pivot to Asia and perhaps use 
it as a foil of China--a balance to China?
    Mr. Russel. Well, thank you, Congressman.
    You know, our strategy, as I said earlier, is not to 
contain China. Our goal is not to disadvantage China's 
legitimate interests and we don't--our policies are not aimed 
at any one country and we don't use our relationships including 
our relationship with India as a lever or a bludgeon against 
China.
    However, the issues at stake are global issues. As 
democracies and as seafaring nations, India and the United 
States share a common interest in respect for international 
law, in protection of freedom of navigation and overflight and 
in the vigorous defense of unimpeded lawful commerce.
    India has--is a neighbor not only to China but also to 
Burma, Myanmar, and has an important East-West corridor of 
trade, a corridor that is important to India's economic future 
because of the huge opportunities for economic growth in that 
very dynamic region of Southeast Asia.
    India is dependent on the sea lanes as so many of its 
neighbors and therefore the safety and the security of the 
seas, a safety and security that's predicated not on coastal 
navies but on the respect for international law.
    Mr. Holding. Thank you.
    Mr. Chabot. The gentleman's time has expired. I thank the 
gentleman.
    The gentleman from California, Mr. Sherman, is recognized, 
who is also the ranking member of the Terrorism, 
Nonproliferation, and Trade Subcommittee of the Foreign Affairs 
Committee.
    Mr. Sherman. Thank you.
    China has land border disputes as well with India, perhaps 
Pakistan, Vietnam, perhaps Burma, Russia. Has China ever agreed 
to or suggested international arbitration or international 
litigation of any of its land or maritime border disputes?
    Mr. Russel. Well, thank you, Congressman.
    As you pointed out, China has not only something like two 
dozen neighbors but something like two dozen border disputes.
    Now, China has at various times made progress in resolving 
and reconciling some of these disputes but does so----
    Mr. Sherman. I know China has engaged in bilateral 
negotiations. Have they urged or agreed to the submission of 
any of these disputes to any international panel?
    Mr. Russel. The Chinese position, particularly with regard 
to its territorial disputes in the--in Southeast Asia and in 
the East China Sea insists that the only satisfactory approach 
is bilateral negotiations.
    We do not agree and, moreover, in addition to bilateral and 
multilateral fora we respect and defend the right of all 
claimant states to avail themselves of legitimate international 
legal mechanisms.
    Mr. Sherman. Thank you.
    Mr. Russel. The case in point is the Philippines.
    Mr. Sherman. I understand. Let me go on.
    The Senkaku Islands, as Japan calls them----
    Mr. Russel. Yes.
    Mr. Sherman [continuing]. They've got a claim and they--as 
I understand it, they have had an air notification system with 
regard to those islands in place for quite some time. Is that 
correct?
    Mr. Russel. Correct. These islands----
    Mr. Sherman. So when China--so when China announced that it 
wanted air notification they were simply putting themselves at 
the same position and claim that Japan had insisted upon for 
many years?
    Mr. Russel. I would put it very differently, Congressman.
    In 1972 when Okinawa reverted from the U.S. to Japan, the 
administrative control of these islands, what the Japanese call 
the Senkakus, also reverted to Japan.
    Now, we don't take a position on the ultimate sovereignty 
but the administrative control is there. With that 
administrative control came the Air Defense Identification Zone 
that the U.S. had created.
    To create or to claim, as China did, an Air Defense 
Identification Zone over an area that is administered by 
another country over an area that is so highly sensitive is 
not, in my view, putting itself on par with Japan.
    Mr. Sherman. But they did--they did just do what Japan was 
doing, albeit it's the U.S. position that Japan is the proper 
administrator of these islands at the present time. I don't 
think China necessarily accepts that but I want to go on to 
another question.
    I'm an old CPA. We have something in my field called cost 
accounting where you look at an enterprise, say, spending $600 
billion or $700 billion and allocate the expenditures to the 
various objectives and goals of the organization. It's not an 
easy thing to do.
    I would allocate, for example, zero cents to defending 
Montana from Canadian invasion, though that is one of the 
responsibilities of our Pentagon. What portion of our overall 
military expenditures would you guess or what range would you 
apply to what portion is confronting China in maritime areas?
    Mr. Russel. Well, Congressman----
    Mr. Sherman. Because, I mean, if we weren't doing--trying 
to achieve that goal we could save a lot of money but would 
that be a tenth? A quarter? What?
    Mr. Russel. I'd be happy to consult with my colleagues in 
the Pentagon to try to get an answer for you. But I would take 
issue with the formula that we are devoting our defense--a 
portion of our defense budget to confront China. Our----
    Mr. Sherman. Confront, deal with--in your response you'll 
pick the right verb for whatever role we're playing in the 
oceans off of China. I just want to get a feel.
    Now, Japan spends only 1 percent of its GDP on its 
military. It now has a confrontation with China over these 
islands. Is there any effort in Japan to spend anything close 
to 4.4 percent of its GDP on defense now that it believes its 
territory is being infringed upon?
    Mr. Russel. The Japanese defense budget is below 1 percent 
and has been in that general area since, certainly, I served 
for, speaking of Montana, Ambassador Mansfield in the 1980s.
    Under the government of Prime Minister Abe and as a result 
of 5 years of sustained effort in the U.S.-Japan alliance, not 
only have the Japanese--has the Japanese Government increased 
albeit marginally its actual defense spending but Japan has 
upped its strategic cooperation with the United States as an 
ally in ways that are hugely valuable to the U.S.
    The issue and the goal is not to contest territory with 
China. It's not to confront China. Our common objective is an 
ally--as an alliance is to bolster the security and the 
stability in the entire region.
    Mr. Sherman. If I can just reclaim. I mean, I've met with 
Pentagon people who do research and they've said every research 
project is going to be focused on confronting China. We're not 
interested in all the--doing the research that will help us 
develop weapons to do anything else, and that's what they tell 
me privately.
    Mr. Russel. With all due respect, Congressman, a very 
significant part of the Japanese defense budget and defense 
cooperation----
    Mr. Sherman. Well, I'm saying about----
    Mr. Russel [continuing]. Is aimed at defense against North 
Korea. A very significant amount of that is engaged in 
developing the capacity of Pacific Island and Southeast Asian 
partners.
    Mr. Chabot. The gentleman's time has expired.
    We are going to go in a second round after Mr. Perry here, 
so if you want to, we can take that up or something else, for 
that matter.
    The gentleman from Pennsylvania, Mr. Perry, is recognized 
for 5 minutes.
    Mr. Perry. Thank you, Mr. Chairman, and Mr. Russel, thank 
you for your testimony and being here today.
    Just a couple things. It seems like, at least from my 
standpoint, we have an agreement on what should happen here but 
maybe I might disagree with how we're going about it.
    I mean, I certainly understand toning down the rhetoric 
from our standpoint and trying to have a responsible 
conversation. The instruments of power that the United States 
is using and foremost in this regard is diplomatic and I would 
agree with that.
    My concern is is that while we are talking it seems to me 
like China is doing, and while we're trying to bring down the 
tone and the rhetoric they continue to do and over a period of 
time certain things that have occurred will become the 
commonplace, the new standard, and that's where we'll be and 
maybe they'll push it and maybe they won't but they'll have 
moved the ball.
    So when we talk about the ADIZ or the incident with the 
Cowpens, you know, these are unilateral actions and while we're 
talking is there any measurable--is there anything tangible the 
United States is doing to move the needle in the other 
direction?
    Mr. Russel. Well, thank you, Congressman.
    To your point, I am convinced that ultimately our most 
effective instrument with China is diplomatic and political. 
There is a significant backlash.
    There is a measurable reaction in the Asia-Pacific region 
to the perception of Chinese assertiveness to the incremental 
steps that you allude to to make assertions and create facts on 
the ground or on the water, and that translates into an 
intensified demand signal for U.S. military diplomatic economic 
engagement that many Chinese consider to be adverse to their 
interests. Our goal----
    Mr. Perry. So we're hoping that our actions will have the 
desired effect from within China. That is our--that's what I'm 
hearing.
    Mr. Russel. We are using all the instruments of U.S. 
influence and particularly the diplomatic instruments to affect 
and shape China's choices in the direction of responsible 
behavior in support of a stable region.
    Mr. Perry. And I can appreciate that. I wonder if we know 
how far is too far. Have we established that? And I'm not 
asking you to tell me what that would be but have we 
established how far is too far in regard to China's incursions?
    Mr. Russel. Well, in this unclassified setting, 
Congressman, what I would say without getting into trip wires 
or milestones is that we have in no uncertain terms 
communicated through action as well as through high-level 
diplomacy to the Chinese our firm commitment both to honor our 
security commitments alliances, to defend our interests, to 
remain engaged and made clear in a number of ways that the 
behavior that the Chinese manifest with regard to their 
neighborhood has a direct impact on the prospects for U.S.-
China relations.
    Mr. Perry. Okay. I mean, I get all that. But so you tell me 
if I get a classified briefing I'm going to find out that there 
is a point where the United States will say that's enough, 
enough is enough and we're going to move to the next level. 
You're telling me is--in a classified setting is there that 
point established right now?
    Mr. Russel. The way that I would put it, Congressman, is 
that we are committed and determined to shape China's choices 
and influence China's behavior through all means of national 
and collective power.
    Mr. Perry. I mean, listen, I get it. It sounds like 
diplomatic mumbo jumbo to me and it's just--you know, I almost 
fall asleep. No disrespect intended but I can't get to an 
answer here that suits me as to we have a definitive line.
    Is there a classified strategy that I can see? Do we have 
one? Just yes or no. That you won't mention here but is there a 
classified strategy that I might find elsewhere?
    Mr. Russel. There is, Congressman, an abundance of 
classified strategy with respect to both China and to the South 
China Sea and there's no time to----
    Mr. Perry. Okay. Let me ask you this. The treaty 
requirements and alliances we had were post-World War II or 
borne out of World War II at the end of World War II with our 
allies in the region and with maybe some of the other partners, 
China and otherwise.
    But that's essentially the genesis of what we're talking 
about regarding these incursions and unilateral actions whether 
it's an ADIZ or what have you. That's what we're basing our 
foundation and our strategy on and our agreements. Am I right 
or wrong? I just want--I'm looking for clarification.
    Mr. Russel. Our bilateral security commitments and 
alliances are one of the essential elements of our strategy, as 
I mentioned.
    Mr. Perry. Okay. Thank you, Mr. Chairman. I yield back.
    Mr. Chabot. Thank you. The gentleman's time has expired.
    We'll go into a second round now for anybody that might 
have any final questions. I'll recognize myself for 5 minutes.
    Mr. Secretary, as you know, this year marks the 35th 
anniversary of the signing of the Taiwan Relations Act which 
has withstood the test of time and has proved to be one of the, 
I think, most significant policy instruments in the Asia-
Pacific region over time. Last week, Taiwan received news that 
the U.S. Air Force plans to defund the Combat Avionics Program 
Extension Suite, or the CAPES program, which has huge 
implications for Taiwan. If continued, that program would 
upgrade 300 U.S. F-16s and 146 Taiwanese F-16s with top line 
avionics. If unfunded, then Taiwan will likely either turn to 
South Korea or face the detrimental possibility of no upgrades 
and an aging fleet of ABs. The other option is for the U.S. to 
release new F-16 CD fighters, or F-35s, but despite consistent 
support for many of us here in Congress, this has not happened 
yet. Since the administration continues to deny Taiwan's 
request to buy F-16 CD fighters and is now cutting the CAPES 
program, what options does Taiwan have?
    What solution, a solution that's affordable to Taiwan, does 
the administration intend to offer? If the U.S. is going to 
follow through on its rebalance objectives, ensuring the 
security of our allies and friends is critical.
    This is an important issue and I hope the administration 
takes finding a solution seriously. Could you comment on that?
    Mr. Russel. Yes. Well, thank you very much for raising the 
issue, Mr. Chairman.
    We take our unofficial relations with Taiwan and we take 
our obligations under the Taiwan Relations Act very seriously. 
The Obama administration in less than 5 years notified 
something on the order of $10 billion or $11 billion worth of 
arms sales to Taiwan, which is quite formidable.
    In addition, we have a sustained and a robust dialogue on 
security and defense issues. Our policy is that arms sales and 
our contribution to Taiwan's security contributes to cross 
strait stability and we are committed to helping to meet 
Taiwan's legitimate security needs.
    Now, this all occurs in the context of a one-China policy 
consistent with three U.S.-China communiques as well as the 
Taiwan Relations Act that have been consistent over eight U.S. 
administrations. What is different now, I would assert, Mr. 
Chairman, are two things.
    One is that the continued military build-up on the mainland 
side of the straits is unabated and, as in the past, that 
contributes to a sense of insecurity that in turn inspires the 
Taiwanese to seek additional arms and security assistance.
    But the other thing that has changed since President Obama 
took office is the quality and the intensity of the cross 
strait dialogue themselves. There has been a stabilizing 
dynamic in the relationship between Taiwan and the mainland, 
something that we very much support and encourage and we hope 
to see continued progress toward reconciliation across the 
straits.
    Mr. Chabot. Thank you very much.
    I've got two more questions and I've only got a minute so 
I'm going to boil them down pretty quickly and if you could 
answer relatively briefly on both.
    One of the main things I think we've talked about here this 
afternoon is China for lack of a better term, kind of throwing 
its weight around with its being provocative and aggressive 
with a lot of its neighbors and what should we do with our 
allies.
    And let me just touch on the Philippines. For quite some 
time, the most powerful nation that the world has ever known 
had a pretty significant military base there, specifically at 
Subic Bay, and the Philippine Government then decided that they 
no longer wanted that to be there and, of course, the 
Philippine people voiced their opinion relative to that. But 
could you comment on what the relationship is between the 
Philippines vulnerability to Chinese aggression and the absence 
of that base today? That's the first question.
    The other question is when you go to Asia everybody talks 
about TPP. You know, that's at the top. You don't hear quite as 
much about it here in this country, unfortunately; but there 
it's really big, very important, and I too think it's important 
and we ought to talk about it more here. Obviously, in order to 
pass TPP, TPA is going to have to come first. How much of an 
effort is the President going to make to accomplish that? 
Because he's going to need both Democratic support and 
Republican support if we're going to do TPA and TPP.
    Mr. Russel. Well, thank you. I'll try to be brief, Mr. 
Chairman.
    On the topic of the Philippines, the U.S. is and remains 
fully committed to our mutual defense treaty and to the 
security of the Philippines.
    We are not looking for bases in the Philippines or 
elsewhere but what we are doing is working together to develop 
a framework agreement that will increase the U.S. access, will 
increase joint operations and this will contribute very 
directly to the security of the Philippines.
    Mr. Chabot. Right. But that really wasn't my question--
what's the relationship between the lack of that base and their 
vulnerability? Do those two sort of--those two things kind of 
go hand in glove, logically?
    Mr. Russel. Again, I would tread carefully, not being a 
military person.
    Mr. Chabot. Undiplomatic?
    Mr. Russel. But--no, no. I don't--I'm not representing the 
Pentagon. But the U.S. presence in the Asia-Pacific region is 
strong and formidable. We were able to deploy virtually 
instantly to the Philippines in response to the super typhoon 
Haiyan using our existing bases in Okinawa and elsewhere.
    Even without Clark and Subic we have, as the U.S., the 
capability. Clark and Subic were not going to make the 
Philippines a military superpower even if they had remained 
fully operational as joint bases to the this day.
    Mr. Chabot. Okay.
    Mr. Russel. If I might on the----
    Mr. Chabot. Well, I'll answer my own question. I think 
their vulnerability is significantly related to the lack of 
that base there and I think that was a strategic mistake on 
their part and there wasn't much we could do about it because 
they said get out. We got out. But on the TPP and TPA?
    Mr. Russel. The President on down, the administration is 
absolutely committed to seeing through TPP. Negotiators have 
been hard at work and I think are expected to meet shortly, 
perhaps in the region at ministerial level, and the President I 
know has warmly welcomed the introduction of a bipartisan bill 
on TPA.
    Neither the U.S. nor any of the 11 members negotiating 
entered into this process with any intent other than to succeed 
in creating a high standard comprehensive agreement that is 
going to create jobs and open markets. The President is 
determined to get there.
    Mr. Chabot. Excellent. Thank you.
    It's going to take a real effort--joint effort both by the 
President, the administration and the Congress as well to get 
this done.
    Ranking member, the gentlelady from Hawaii, is recognized.
    Ms. Gabbard. Thank you, again, Mr. Chairman. I have two 
questions I hope to be able to get addressed briefly.
    Recognizing you're not speaking at all for the DoD but also 
understanding that the overall strategy that the President is 
looking forward to in the Asia-Pacific region has a very strong 
integration of both military-to-military engagements as well as 
the diplomatic and economic engagements as well, this year--
later this year it'll be the first time that China was invited 
and has agreed to participate in the U.S.-led RIMPAC maritime 
exercise.
    I understand there have been arguments made by people who 
think that this kind of military-to-military engagement will 
benefit--will benefit our--what the President is trying to 
accomplish in the Asia-Pacific region and others say that 
providing this exposure to China could strengthen their war 
fighting capabilities.
    I'd like you to speak to that as to why this is the 
direction the President has decided to take.
    Mr. Russel. Mm-hmm. Thank you.
    The participation of the Chinese in RIMPAC is, in the view 
of the administration, very much in the best interests of the 
United States and U.S. security as well as those of our 
regional partners.
    We have a--we have an interest and a stake in a 
professional Chinese military as compared to an unprofessional 
Chinese military. Moreover, China's ability to engage 
constructively and as an active participant in multilateral 
exercises directly relates to the goal of China contributing as 
a net security provider, a net security contributor to the 
region, whether it is in connection with anti-piracy, 
patrolling sea lanes or securing international waters for the 
common good.
    The growth of and the intensity of mil-mil relations 
between the U.S. and China over the last 5 years but 
particularly in the last year is, in our view, a major 
contributor to long-term stability. The high level engagement 
helps the Chinese People's Liberation Army understand what the 
U.S. is and isn't all about.
    That is fundamentally a good thing in part because it is 
critical to debunk the mythology and the stereotypes widely 
held in the PLA----
    Ms. Gabbard. Sure.
    Mr. Russel [continuing]. That drive bad behavior.
    Ms. Gabbard. I hope to be able to be in Hawaii for those 
exercises later this year. Last month, you were quoted in a 
newspaper calling for a mechanism for crisis prevention or 
crisis management in the event that incidents could trigger an 
escalatory cycle.
    I'm wondering if you'd talk about, you know, what that 
trigger could be as well and what point the United States would 
really seek to implement this kind of crisis prevention or 
crisis management.
    Mr. Russel. Well, the region has seen over the last few 
years but certainly recently as well a number of incidents--the 
tragic shooting of Taiwan fishermen by Philippines, the 
intersection of a Chinese fishing vessel with the Philippine 
naval vessel, cable cutting incidents between the Chinese coast 
guard and Vietnamese survey ships.
    The opportunities for some kind of incident for some sort 
of miscalculation are legion. In every case, it has been the 
ability to communicate that has been central to defusing 
incidents.
    Now, governments in these cases have ultimately 
communicated capital to capital. We also believe that ships 
themselves should be able to communicate bridge to bridge, and 
rather than making up on the spot solutions to problems, rather 
than delegating the decisions to junior officers in the heat of 
the moment to develop consistent rules to reach agreement on 
mechanisms, whether they are hot lines or whether they are 
standard operating procedures is going to play an important 
role in defusing----
    Ms. Gabbard. So you're kind of talking what in a combat 
setting we would talk about rules of engagement or something 
along those lines that would be standard within the area?
    Mr. Russel. Right. Standardizing rules of engagement would 
be one element to a set of mechanisms that would help prevent 
or manage incidents should they occur.
    Ms. Gabbard. Thank you.
    Mr. Chabot. Thank you. The gentlelady's time has expired.
    The gentleman from California, Mr. Sherman, will wrap up 
for us here today.
    Mr. Sherman. Mr. Assistant Secretary, we've--at the end we 
were kind of talking over each other. I was making the point 
that the Pentagon was devoting more and more of its resources, 
particularly at the research level and the force--and designing 
its future force configuration, allocating--focusing on 
confronting China, particularly off the Chinese coast.
    You made the point, and I think it's a good one, that Japan 
faces quite a number of national security concerns--North 
Korea, its need to provide regional assistance to its partners 
in its neighborhood and, of course, they've got territory that 
they have a dispute over and they see the Chinese taking almost 
military action.
    And yet Japan is able to deal with all of those national 
security concerns spending less than 1 percent of its GDP and 
relies in significant part for its defense on getting the 
American taxpayer to pick up a big chunk of that.
    I didn't think this hearing was about trade. I'm delighted 
that it came up. The lion's share of our worldwide trade 
deficit is in the East Asia region, which is your bureau. I've 
talked to foreign ministry--Foreign Ministers and Ambassadors 
from other countries and they say--I say, what's your number 
one goal. It's promoting exports.
    Mr. Russel. Yes.
    Mr. Sherman. What--your bureau, again, the biggest trade--
the lion's share of the largest trade deficit in the history of 
the world is the U.S. trade deficit in your region. What's the 
most successful and tangible and definitive success your bureau 
has had in promoting U.S. exports or reducing U.S. imports?
    Mr. Russel. Well, the most recent and tangible success is 
the conclusion of the U.S.-Korea free trade agreement, which--
--
    Mr. Sherman. I'll reclaim my time and point out that our 
trade deficit with South Korea has accelerated substantially as 
a result of and shortly after the effective date of that 
agreement.
    There's a tendency to say exports create jobs without ever 
mentioning that imports cost us jobs. Both are true, and in 
fact our imports to South Korea--from South Korea grew as a 
result of that agreement. Our exports eventually should go up, 
although in the first year they've declined.
    But, clearly, the trade deficit with South Korea has grown 
and grown substantially after that agreement. We have a huge 
trade deficit with Japan. Japan is asking us to defend them, as 
we have for over 60 years.
    Has Japan offered to make any concessions as to how much 
U.S. food they import or anything else in an effort to get us 
engaged in this island dispute they have or do they feel that 
their claim on the U.S. taxpayer is sacrosanct and doesn't need 
to be encouraged through trade concessions?
    Mr. Russel. Well, Congressman, as, of course, you know 
well, U.S. security assistance and commitment is not for sale. 
This is not something that we trade. The fact is that we're 
engaged in negotiations with Japan right now in the context of 
the TPP in which the Japanese have made very significant 
concessions.
    Mr. Sherman. Only if we give them our auto market. But I'll 
point out--okay. The deal with South Korea increased our trade 
deficit. What assurance do we have that the negotiations you're 
referring to will not also increase our net trade deficit?
    Mr. Russel. I was recently in Korea. I met with the 
American Chamber of Commerce and the representatives of a wide 
range of U.S. businesses including auto--U.S. auto 
manufacturers who are----
    Mr. Sherman. Looking to offshore our jobs and close down 
U.S. factories to increase profits. How did you help them do 
that? That was--sorry for the facetious question. Go on.
    Mr. Russel. U.S. businesses are reporting unprecedented 
access to the Korean market and significantly enhanced 
opportunities for exports, and we believe that the successful 
conclusion of the Trans-Pacific Partnership by lowering 
barriers and by bringing high standards to countries like 
Japan, like----
    Mr. Sherman. Mr. Secretary, I'll reclaim my time and say 
the definition of insanity is to keep doing the same thing and 
expect another result. Our agreement--numbers don't lie. I'm an 
old CPA.
    I look at the numbers, and our trade deficit with South 
Korea has grown very substantially after that agreement and if 
we do it again on a bigger scale we should expect the same 
results, only bigger. I yield back.
    Mr. Chabot. Thank you. The gentleman's time has expired so 
we'll finish up the hearing with the definition of insanity 
here this afternoon. We greatly appreciate your testimony here 
this afternoon, Mr. Secretary.
    Members will have 5 legislative days to submit questions or 
revise their statements, and if there's no further business to 
come before the committee, we're adjourned.
    Thank you.
    Mr. Russel. Thank you very much, Mr. Chairman.
    [Whereupon, at 4:28 p.m., the committee was adjourned.]
                                     

                                     

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