[Senate Hearing 113-460]
[From the U.S. Government Publishing Office]
S. Hrg. 113-460
THE FUTURE OF U.S.-CHINA RELATIONS
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HEARING
BEFORE THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
JUNE 25, 2014
__________
Printed for the use of the Committee on Foreign Relations
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COMMITTEE ON FOREIGN RELATIONS
ROBERT MENENDEZ, New Jersey, Chairman
BARBARA BOXER, California BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland JAMES E. RISCH, Idaho
JEANNE SHAHEEN, New Hampshire MARCO RUBIO, Florida
CHRISTOPHER A. COONS, Delaware RON JOHNSON, Wisconsin
RICHARD J. DURBIN, Illinois JEFF FLAKE, Arizona
TOM UDALL, New Mexico JOHN McCAIN, Arizona
CHRISTOPHER MURPHY, Connecticut JOHN BARRASSO, Wyoming
TIM KAINE, Virginia RAND PAUL, Kentucky
EDWARD J. MARKEY, Massachusetts
Daniel E. O'Brien, Staff Director
Lester E. Munson III, Republican Staff Director
(ii)
C O N T E N T S
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Page
Corker, Hon. Bob, U.S. Senator from Tennessee, opening statement. 2
Friedberg, Dr. Aaron L., Professor of Politics and International
Affairs, Princeton University, Princeton, NJ................... 19
Prepared statement........................................... 22
Menendez, Hon. Robert, U.S. Senator from New Jersey, opening
statement...................................................... 1
Russel, Hon. Daniel R., Assistant Secretary of State for East
Asia and Pacific Affairs, U.S. Department of State, Washington,
DC............................................................. 3
Prepared statement........................................... 5
Roy, Hon. J. Stapleton, Distinguished Scholar and Founding
Director Emeritus of the Kissinger Institute on China and the
United States, Woodrow Wilson International Center for
Scholars, Washington, DC....................................... 17
(iii)
THE FUTURE OF U.S.-CHINA RELATIONS
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WEDNESDAY, JUNE 25, 2014
U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 2:15 p.m., in
room SD-419, Dirksen Senate Office Building, Hon. Robert
Menendez (chairman of the committee) presiding.
Present: Senators Menendez, Cardin, Corker, Risch, and
Rubio.
OPENING STATEMENT OF HON. ROBERT MENENDEZ,
U.S. SENATOR FROM NEW JERSEY
The Chairman. This hearing of the Senate Foreign Relations
Committee will come to order.
We appreciate Ambassador Russel being with us, and our
other panelists.
There is no question that one of our biggest foreign policy
challenges is getting the relationship between the United
States and China, and the rebalance to the Asia-Pacific, right.
Today's hearing explores the U.S.-China relationship and,
coming as it does just in advance of next month's U.S.-China
Strategic and Economic Dialogue, allows us to reflect on other
issues beyond the Middle East that will also shape the 21st
century.
China is soon to become the world's largest economy,
whether measured in purchasing price parity or raw GDP.
Consider that more concrete has been poured in China in the
past handful of years than in all of the United States during
the 20th century. Eight of the world's 12-largest container
ports are in China.
China is on the move, but the question is: On the move to
what? Will China become a trade partner committed to the
enforcement of international law, or will we see 19th-century
mercantilist behavior and the flouting of international norms?
Will China help to support peace and stability in Asia or seek
to overturn the order? Will China open space for its citizens
to express their views and ideas, or will it continue, like
Cuba, to brutally repress its own people?
In the last year alone, a crackdown has swept away more
than 150 journalists, lawyers, and activists. The bottom line
is that there are reasons for hope, but there are also reasons
for pessimism.
The fact is, U.S. exports to China have increased by almost
$40 billion in the past 4 years alone, from $67 billion to $106
billion, creating and sustaining millions of U.S. jobs in
sectors across the board: automobiles, power generation,
machinery, aircraft, and other vital industrial sectors. That
speaks to the potential of our partnership. At the same time,
U.S. firms complain of cyber-enabled theft of intellectual
property rights or just plain old-fashioned theft when trying
to do business in China.
Equally or more troubling still, we have seen an
increasingly provocative China on the seas, coercing and
intimidating neighbors in both the East China Sea and South
China Sea, and attempting to use the threat of military force
to address territorial and regional disputes. China's
provocative actions in the South China Sea threaten not just
regional stability, but longstanding U.S. interests in the free
flow of commerce, freedom of navigation, and in the peaceful
diplomatic resolution of disputes consistent with international
law. Likewise, China's continued deliberate and provocative
actions in and around Japanese territory run the risk of
sparking a broader regional crisis. There should be a clear
cost to China's actions and what we must do to offset those
actions is deepen our alliances with Korea, Japan, and the
Philippines, and reconsider the arms embargo with Vietnam, and
we must make sure we fully resource all elements of the
rebalance.
So, I look forward to our panelists' thoughts on how we
should evaluate the strategic and economic realities unfolding
with the rise of China. How do we reconceptualize the problems
we face? How do we turn them into opportunities? How do we make
sure allies and partners have the resources they need in the
context of China's rise? And how do we work with China through
such mechanisms as the SSD at the Strategic and Economic
Dialogue to assure that disagreements need not lead to
conflict?
And, with that, let me recognize the distinguished ranking
member, Senator Corker, for his remarks.
OPENING STATEMENT OF HON. BOB CORKER,
U.S. SENATOR FROM TENNESSEE
Senator Corker. Thank you, Mr. Chairman, and thank you for
calling this hearing.
I also want to thank the witnesses for being here and
sharing their wisdom with us.
It has been exactly 1 year since President Obama and
President Xi Jinping gathered at Sunnylands to chart a new
course for U.S.-China bilateral relations. Analysts were
optimistic that the summit would set a tone for greater
cooperation between the United States and China on a range of
issues, including North Korea.
However, as we convene here, a year later, the prospects
for enhanced cooperation seem fairly dim. Indeed, we are facing
a period of increasingly strained relations between Washington
and Beijing, with issues such as China's continued
aggressiveness in the East and South China Seas, as well as
serious ongoing issues with Chinese cyber theft.
Moreover, I am troubled that the Obama administration does
not appear to have a clear China policy or a strategy to
address Beijing's continued disregard for international norms,
including economic rules of the road. It is deeply
disconcerting to me that the negotiations on the Trans-Pacific
Partnership, which has the potential to be a game changer in
the Asia-Pacific by cementing free trade principles in the
region and potentially influencing Chinese behavior, continue
to drag on absent high-level political engagement from the
administration.
The United States-China bilateral relationship is one of
the most important and consequential relationships for U.S.
political, economic, and strategic interests, yet China appears
to be positioning itself increasingly as a geopolitical and
strategic rival to the United States. The pace and lack of
transparency with respect to the Chinese military
modernization, coupled with China's actions in the East and
South China Seas, has cast doubt on the idea of the peaceful
rise of China.
Despite these challenges, I still see great opportunities
to strengthen cooperation, specifically the conclusion of
successful negotiations on Bilateral Investment Treaty, which
has the potential to benefit U.S. businesses.
I look forward to hearing from Assistant Secretary Russel,
and from our second panel of experts, on whether the time has
come to rethink U.S. policy toward China and other issues I am
sure they will bring up.
And again, I want to thank you, Mr. Chairman, for calling
this hearing.
The Chairman. Thank you, Senator Corker.
Our first panelist is Daniel Russel, the Assistant
Secretary of State for East Asia and Pacific Affairs.
Ambassador, your full statement is going to be included in
the record, without objection. We would ask you to try to
summarize it in about 5 minutes or so, so we can enter into a
dialogue.
And, with that, you are recognized.
STATEMENT OF HON. DANIEL R. RUSSEL, ASSISTANT SECRETARY OF
STATE FOR EAST ASIA AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF
STATE, WASHINGTON, DC
Ambassador Russel. Thank you very much, Mr. Chairman,
Ranking Member Corker. I appreciate the opportunity to testify
today on United States-China relations. And I thank you also
for your bipartisan support of our Asia policy.
I am also honored to participate with one of America's most
accomplished diplomats, China experts, and a good friend of
mine, Ambassador Roy, and with another important contributor,
Dr. Friedberg.
This year marks the 35th anniversary of the official
diplomatic relations between the United States and China. We
have made remarkable progress during that time. There is
enormous potential, moreover, for further progress that
benefits both our countries, our neighbors, and the world.
To achieve this progress, we seek a relationship defined,
not by strategic rivalry, but by fair and healthy competition,
by practical cooperation on priority issues, and by
constructive management of differences. As President Obama has
made clear, we seek and welcome the emergence of a stable,
peaceful, and prosperous China that respects and supports
global rules and universal values. Our two economies are
intertwined, so China's growth fuels our own and promotes the
region's prosperity, a prosperity underpinned by America's
enduring security commitments and engagement. Many of our
interests coincide. So, China's expanding regional role can
complement the sustained United States strategic engagement in
the Asia-Pacific.
Mr. Chairman, we do not seek to contain China. To the
contrary, we want China to contribute to the stability and
development of the region by exercising restraint, by upholding
the basic rules on which the international system is built,
rules that China helps formulate and benefits from. So, to
advance this goal, we maintain an intense pace of high-level
bilateral engagement.
In 2 weeks, our countries will hold the U.S.-China
Strategic and Economic Dialogue, the S&ED, in Beijing. This
important annual dialogue is led by Secretaries Kerry and Lew,
with their Chinese counterparts, and covers virtually every
aspect of our relationship. The strategic track includes our
highest ranking joint civilian-military exchange with China,
will seek progress on challenges in Africa, South Asia, the
Middle East, and will discuss concerns like maritime disputes
and China's behavior in the South and East China Sea, as well
as cyber security and terrorism, and will further our important
efforts with China on the world's most pressing nuclear
proliferation challenges: North Korea and Iran.
In the economic track, we will work to strengthen global
economic recovery. China's leaders have announced plans for
economic reforms that, if realized, could go a long way in
moving China's economy toward fair market principles. Growing
Chinese direct investment in the United States contributes to
jobs here at home, and our Bilateral Investment Treaty
negotiations hold the potential for greater benefit.
We will work on climate change, energy, and environment
issues, where the United States and China share common
interests and responsibilities as the two largest energy
consumers and carbon emitters.
And we will raise our concerns about the worsening human
rights situation, as senior U.S. officials invariably do. Just
this month, for example, China harshly suppressed any
commemoration of the 25th anniversary of the violent Tiananmen
Square crackdown, with cases of harassment, detention, and
arrests of journalists, lawyers, activists.
We will also expand exchange programs that foster long-term
mutual understanding through the annual United States-China
consultation on people-to-people exchanges--235,000 Chinese
students studied in the United States last year, and we are
increasing the number of Americans who study in China. And 1.8
million Chinese visitors last year contributed nearly $10
billion to our economy.
Mr. Chairman, the United States-China relationship has made
great strides over these decades, and we are committed to
building on that progress. Together, we seek to create a ``new
model of relations'' built on practical cooperation and
constructive management of differences that strengthens the
international system to the benefit of our countries and the
world.
Thank you, and I look forward to your questions.
[The prepared statement of Ambassador Russel follows:]
Prepared Statement of Daniel R. Russel
introduction
Chairman Menendez, Ranking Member Corker, members of the committee,
thank you for the opportunity to testify today on U.S.-China relations.
It is also a great honor to be participating in today's hearing with
one of our Nation's most accomplished diplomats, Ambassador Stapleton
Roy--a friend, former colleague, and one of the foremost experts on
U.S.-China relations. Ambassador Roy's contributions to the U.S.-China
relationship have been invaluable, and I look forward to hearing his
insights.
I would also like to take this opportunity to thank you, Mr.
Chairman, for your leadership and to acknowledge this committee's
contributions to the rich bipartisan tradition of engaging China. I
have found it extremely valuable to work closely with the committee's
members, and in particular with the Asia Subcommittee, in advancing
U.S. interests vis-a-vis China and the Asia-Pacific region as a whole.
overall bilateral relations
This year marks the 35th anniversary of the establishment of
official diplomatic relations between the United States and China. We
have made remarkable progress since the era of back-channel messaging
and secret trips. The scope of today's U.S.-China relationship was
unimaginable when President Nixon made his historic visit in 1972 to
China.
Yet there is still enormous potential for progress in the U.S.-
China relationship. Progress that will yield benefits to the citizens
of both countries, our neighbors, and the world. To realize this
progress and these benefits, we seek to ensure that the relationship is
not defined by strategic rivalry, but by fair and healthy competition,
by practical cooperation on priority issues, and by constructive
management of our differences and disagreements. Where interests
overlap, we will seek to expand cooperation with China. These areas
include economic prosperity, a denuclearized Korean Peninsula, peaceful
resolution of the Iranian nuclear issue, and a reduction in the
emission of greenhouse gases. Where they diverge--and we have
significant and well-known areas of disagreement--we will work to
ensure that our differences are constructively managed.
Mr. Chairman, there are those who argue that cold-war-like rivalry
is inevitable and that the United States and China are condemned to a
zero-sum struggle for supremacy, if not conflict. I reject such
mechanistic thinking. As anyone who has served in government can tell
you, this deterministic analysis overlooks the role of leaders who have
the ability to set policy and to shape relationships. It gives short
shrift to the fact that our two economies are becoming increasingly
intertwined, which increases each side's stake in the success of the
other. It undervalues the fact that leaders in Washington and Beijing
are fully cognizant of the risk of unintended strategic rivalry between
an emerging power and an established power and have agreed to take
deliberate actions to prevent such an outcome. And it ignores the
reality of the past 35 years--that, in spite of our differences, U.S.-
China relations have steadily grown deeper and stronger--and in doing
so, we have built a very resilient relationship.
We view China's economic growth as complementary to the region's
prosperity, and China's expanded role in the region can be
complementary to the sustained U.S. strategic engagement in the Asia-
Pacific. We and our partners in the region want China's rise to
contribute to the stability and continued development of the region. As
President Obama and Secretary Kerry have made very clear, we do not
seek to contain China; to the contrary, we welcome the emergence of a
stable, peaceful, and prosperous China. We believe all countries, and
particularly emerging powers like China, should recognize the self-
benefit of upholding basic rules and norms on which the international
system is built; these are rules and norms which China has participated
in formulating and shaping, and they are rules and norms that it
continues to benefit from. In this context, we are encouraging China to
exercise restraint in dealing with its neighbors and show respect for
universal values and international law both at home and abroad.
A key element of our approach to the Asia-Pacific region, often
called the rebalance, is strengthening America's alliances and
partnerships in the region. This contributes directly to the stable
security environment that has underpinned the region's--and China's--
dramatic economic growth and development.
A second element is working to build up regional institutions in
order to uphold the international rules-based system and create
platforms for the countries and leaders to work on priority strategic,
economic, and other issues. These institutions help develop habits of
cooperation and promote respect for the interests of all parties.
A third key element has been expanding and deepening our
relationships with important emerging countries such as China,
including through regular and high-level dialogue.
In just 2 weeks, our countries will hold the sixth round of the
U.S.-China Strategic and Economic Dialogue--the ``S&ED''--in Beijing.
This annual dialogue is unique in its level and scope. It is led on the
U.S. side by Secretaries Kerry and Lew and brings a number of Cabinet-
level and other senior U.S. Government officials together with their
Chinese counterparts to work on the major issues facing us. The breadth
of the agenda in the two tracks--strategic and economic--reflects the
breadth of modern U.S.-China relations. The S&ED is an important
vehicle for making progress in the pursuit of a cooperative and
constructive relationship; for building a ``new model'' that disproves
the thesis that the United States and China are somehow destined for
strategic rivalry and confrontation.
The S&ED is an important forum for the United States and China to
take stock of and set goals for the bilateral relationship, to review
regional and international developments and explain our respective
policies, to coordinate and seek practical areas of cooperation on
important issues of mutual interest, and to constructively manage areas
of difference through candid, high-level discussions.
Let me preview of some of the topics for upcoming discussions at
this year's S&ED:
We will exchange views and explore prospects for progress on
regional challenges, including Sudan, Afghanistan, Iran, North
Korea, Ukraine, Iraq, and maritime disputes in the South and
East China Seas;
The world's two largest economies will work on strengthening
the global economic recovery;
The world's two biggest energy consumers and carbon emitters
will work on combating climate change, and expand cooperation
on clean energy;
We will discuss global challenges ranging from cyber
security to counterterrorism to wildlife trafficking, and the
United States will raise our concerns over human rights;
Secretary Kerry will cochair the annual U.S.-China High-
Level Consultation on People-to-People Exchange, which supports
exchange programs that build the foundation for mutual
understanding and trust;
And Deputy Secretary of State Bill Burns and his Chinese
counterpart will hold the U.S.-China Strategic Security
Dialogue (SSD), our highest-ranking joint civilian-military
exchange with China, where we will conduct frank discussions on
some of the most sensitive strategic issues in the
relationship.
The S&ED and our numerous other dialogues and official exchanges
with the Chinese each year reflect the importance we attach to managing
this relationship. This level and pace of engagement show the
commitment of both sides to producing tangible benefits for our two
peoples, the Asia-Pacific region, and the global community.
The United States and China have a vital stake in each other's
success. That is why we maintain an intensive schedule of engagement;
President Obama and President Xi met in Sunnylands, CA, a year ago and
have met twice more since then. The President plans to visit Beijing in
November when China hosts APEC. Secretary Kerry, as well as numerous
Cabinet and sub-Cabinet officials, have visited China already in 2014
and have met with Chinese counterparts in the United States or at
international fora.
We work with China in virtually all important international arenas,
including the U.N., the G20, the East Asia Summit, and APEC where we
are cooperating closely on regulatory transparency, supply chain
efficiencies, promoting clean and renewable energy, cross-border
education, and combating corruption and bribery. Our relationship
touches on nearly every regional and global issue, and, as such,
requires sustained, high-level attention. Moreover, few of these issues
can be effectively addressed if China and the United States do not
cooperate.
economic relations
Economic issues play a central role in the U.S.-China relationship.
China's economic success has added to our growth and increased the
purchasing power of consumers in the United States. Our two-way trade
has almost quadrupled since China joined the WTO in late 2001. While
the long-standing imbalance in that trade remains troubling, China is
now one of the fastest growing U.S. export markets. In fact, U.S.
exports to China grew by more than 90 percent between 2007 and 2013. In
our bilateral engagements, we are encouraging economic reforms within
China to ensure not only that its economic behavior is sustainable on
its own terms, but that it contributes to strong, sustainable and
balanced growth of the global economy. This includes reorienting its
economy away from a development model reliant on exports and credit-
fueled investment in real estate and infrastructure to one that
increases consumer spending and contributes to global demand. Central
to this goal has been urging China to move toward a market-determined
exchange rate. We are also addressing sources of friction in our
bilateral relationship by pressing China to change a range of
discriminatory policies and practices that harm U.S. companies and
workers and that undermine incentives to innovate. These include
subsidies that tilt the competitive playing field in favor of Chinese
national champions, policies that pressure companies to hand over
intellectual property as a condition for access to the Chinese market,
and export credits that unfairly advantage Chinese companies in third
markets. U.S. businesses have investments totaling over $50 billion.
And from 2012 to 2013, Chinese direct investment flows into the United
States more than doubled, according to private sector figures, and now
contribute to thousands of jobs here. Our ongoing bilateral investment
treaty negotiations hold the potential for even more mutually
beneficial economic ties.
Even as we increase trade and investment, we will continue
insisting on tangible progress in other economic areas that matter to
the United States. These include:
China continuing to move toward a market-determined exchange
rate;
Negotiating a Bilateral Investment Treaty;
Increasing access to Chinese markets for U.S. businesses;
Developing a more transparent regulatory regime;
Ending industrial policies that favor state-owned
enterprises and national champions and seek to disadvantage
foreign companies and their products;
Ending forced technology transfer; and
Addressing U.S. concerns over the theft of intellectual
property and trade secrets, including government-sponsored,
cyber-enabled theft for the purpose of giving Chinese companies
a competitive advantage.
We will also continue to encourage greater Chinese integration into
the rules-based international economic and trading system, in order to
create a level playing field for domestic and foreign companies
operating in its and other markets. Over the last few months, China's
leaders have announced plans for sweeping reforms that, if realized,
could go a long way in moving China's economy toward market principles.
We are encouraged that these announced reforms would potentially give
the market a greater role in the economy, and we are keenly interested
to see such reforms put into practice. I believe we can do much to work
with China as it transitions to a consumption-driven, market-oriented
growth model that would benefit both our economies.
military-to-military relations
On the military side of the U.S.-China relationship, we are
committed to building a sustained and substantive military-to-military
relationship that focuses on identifying concrete, practical areas of
cooperation and reducing risk. This includes not only deepening the use
of institutionalized dialogue mechanisms, including senior defense
participation at the SSD and S&ED, but also inviting the Chinese to
join regional cooperative exercises and expanding talks with the
Chinese military about operational safety in the region. For the first
time this year, China will participate in RIMPAC June 26-August 1 in
Hawaii.
We also aim to continue high-level exchanges between our
militaries. Recent exchanges have included visits to China by Secretary
Hagel in April and General Odierno in February, and a visit to the
United States by Chief of the General Staff, General Fang Fenghui, in
May.
At the same time, we will continue to carefully monitor China's
military developments and encourage China to exhibit greater
transparency with respect to its military spending and modernization.
This will help countries better understand the motivations of the
People's Liberation Army. We continue to encourage China to use its
military capabilities in a manner conducive to the maintenance of peace
and stability in the Asia-Pacific region.
global and regional issues
As the largest energy consumers, greenhouse gas emitters, and
renewable energy producers, the United States and China share common
interests, challenges, and responsibilities. These are issues that
relate directly to our economic and national security. Cooperation on
climate change, energy, and environmental protection is more critical
than ever and is an important area of focus in the U.S.-China bilateral
relationship.
Through broad dialogues such as the Ten-Year Framework for Energy
and Environment Cooperation and the S&ED, over the last year we have
been able to produce new and expanded commitments to cooperation on
climate change, energy, and the environment. During Secretary Kerry's
February trip to Beijing, he announced implementation plans for each of
the five initiatives under the Climate Change Working Group as well as
a new enhanced policy dialogue on domestic and international policies
to address climate change that will be held on the margins of the
upcoming S&ED.
China is a vital partner on some of the world's most pressing
proliferation challenges, including the DPRK and Iran. The United
States and China agree on the importance and urgency of achieving a
denuclearized, stable, and prosperous Korean Peninsula. While
differences remain between us on some of the tactics, we coordinate
closely and consult intensively on how to advance these shared goals.
The result has been a tightened web of sanctions targeting North
Korea's nuclear, ballistic missile, and proliferation efforts. China
has also strengthened its own sanctions enforcement, which we welcome,
though it could do more to prevent North Korea from engaging in
proliferation activities. Indeed, North Korea remains in flagrant
violation of the U.N. Security Council resolutions that the United
States and China approved and support. So we are urging China to make
greater use of its unique leverage with the DPRK to produce concrete
signs that the DPRK leader has come to the realization that his only
viable path forward is denuclearization.
On Iran, the United States and China share the goal of preventing
Iran from acquiring a nuclear weapon and are working together within
the P5+1 negotiations with Iran toward that goal. Through our frequent
and high-level engagement, we will continue to press China to honor its
commitments, in particular those related to its imports of Iranian oil
and enforcement of U.N. sanctions, in furtherance of reaching a
comprehensive and long-term solution to the Iran nuclear issue.
managing differences
In the Asia-Pacific region, Beijing's neighbors are understandably
alarmed by China's increasingly coercive efforts to assert and enforce
its claims in the South China and East China Seas. A pattern of
unilateral Chinese actions in sensitive and disputed areas is raising
tensions and damaging China's international standing. Moreover, some of
China's actions are directed at U.S. treaty allies. The United States
has important interests at stake in these seas: freedom of navigation
and overflight, unimpeded lawful commerce, respect for international
law, and the peaceful management of disputes. We apply the same
principles to the behavior of all claimants involved, not only to
China. China--as a strong and rising power--should hold itself to a
high standard of behavior; to willfully disregard diplomatic and other
peaceful ways of dealing with disagreements and disputes in favor of
economic or physical coercion is destabilizing and dangerous.
The United States does not take sides on the sovereignty questions
underlying the territorial disputes in the South and East China Seas,
but we have an interest in the behavior of states in their management
or resolution of these disputes. We want countries, including China, to
manage or settle claims through peaceful, diplomatic means. For
example, the Philippines and Indonesia have just done so in connection
with their EEZ boundary. Disputes can also be addressed through third-
party dispute resolution processes. Where parties' rights under
treaties may be affected, some treaties provide for third-party dispute
settlement, as is the case of the Law of the Sea Convention, an avenue
pursued by the Philippines in an arbitration with China currently being
considered by an Arbitral Tribunal constituted under that treaty. The
United States and the international community oppose the use or the
threat of force to try to advance a claim, and view such actions as
having no effect in strengthening the legitimacy of China's claims.
These issues should be decided on the basis of the merits of China's
and other claimants' legal claims and adherence to international law
and norms, not the strength of their militaries and law enforcement
ships or the size of their economies.
Another area where we believe China's actions run counter to
important universal principles is the worsening human rights situation
in China. Just this month, China conducted a harsh crackdown on
commemorations of the 25th anniversary of Tiananmen Square. China's
actions included the detention, harassment and arrests of journalists,
lawyers, and activists. Top U.S. officials raise our concerns with
Chinese leaders on a regular basis, and, as we have in every previous
round, Secretary Kerry plans to raise human rights at this year's S&ED.
We express concern about the Chinese Government's censorship of the
media and Internet. We push for the release of all political prisoners,
including but not limited to prominent figures like Liu Xiaobo. We urge
China to address the policies in Tibetan areas that threaten the
distinct religious, cultural, and linguistic identity of the Tibetan
people. Instability and violence are on the increase in the Xinjiang
Uighur Autonomous Region. As we unequivocally condemn the acts of
terrorism and violence, we also urge China to take steps to reduce
tensions and reform counterproductive policies that stoke discontent
and restrict peaceful expression and religious freedom.
conclusion
Clearly, a wide-ranging and complex relationship such as ours with
China comes with challenges. Some degree of friction is inevitable. But
an essential tool for managing and resolving differences is open and
extensive communications between our two countries--at senior and
working levels of government, military to military, through local
governments and organizations, between our business communities, and at
the grassroots level.
We are now reflecting on the considerable progress attained in 35
years of bilateral relations. One key lesson is that to ensure that our
relationship grows and matures, we need to build up the links among our
two peoples. People-to-people exchanges are essential to enhancing
mutual understanding and furthering U.S. strategic and economic goals.
To that end, the United States in 2013 received 1.8 million Chinese
visitors who collectively spent $9.8 billion on goods and services in
our economy. Our State Department personnel work hard to facilitate
growing Chinese demand for international travel by maintaining average
visa wait-times under 5 days over the past 2 years.
Education also plays an important role fostering mutual
understanding. In 2013, we had 235,000 students from China studying in
the United States, more than from any other country, and the United
States aspires to increase the number of American students studying in
China and learning Mandarin through the 100,000 Strong Initiative. In
March, PRC First Lady Peng Liyuan welcomed First Lady Michelle Obama to
China where together they met with U.S. and Chinese students and
faculty and promoted the value of study abroad and educational
exchange.
We are also working with groups like the Sister Cities
International and the U.S.- China Governors Forum. These programs help
by encouraging and supporting cities and states to deepen their
cultural or commercial ties with Chinese counterparts. In the last year
alone, we have supported numerous visits of governors and state
delegations and helped them to find opportunities to deepen their
involvement and links to China.
The Department works closely with the United States Chamber of
Commerce, AmCham China, the U.S.-China Business Council, and other
business groups to support key priorities for U.S. companies doing
business in China and to promote greater Chinese investment in the
United States. In partnership and consultation with those
organizations, we have encouraged the Chinese Government to eliminate
investment restrictions, strengthen IPR protection, increase regulatory
transparency, and establish a level playing field for all companies in
China.
In conclusion, let me paraphrase what President Obama said earlier
this year when he met with Chinese President Xi at the Nuclear Security
Summit in The Hague. The U.S.-China relationship has made great strides
over these past several decades, and both sides are committed to
building a new model of relations between our countries defined by
expanded cooperation and constructive management of differences.
Mr. Chairman, I thank you for the opportunity to appear before you
today to discuss U.S.-China relations. I look forward to answering any
questions you and others from the committee may have.
The Chairman. Well, thank you. It sounds like a rather rosy
picture. Let me delve into it a little bit.
So, when China speaks of a new type of great power
relationship, what is it that the administration interprets in
that phrase? Is that China just laying down a marker for
gaining greater say in its own backyard? And what is our
response to that?
Ambassador Russel. The new model concept is something that
was discussed indepth in the Sunnylands meeting, a year ago,
that Senator Corker referred to. There are those in China who
seek to define a new model as if it were the creation of a
sphere of influence by China in the Asia-Pacific region, and
the ``respect'' by the United States and the international
community for certain ``core interests,'' as if it was not
legitimate for the United States and others to hold positions
on certain issues.
We see the prospect of a so-called ``new model'' very
differently. To the President and to the administration, to the
United States, the goal is a model that is defined by practical
cooperation on issues of genuine significance to the United
States, China, and to the world--real issues, not boutique
issues--along with the ability and the wherewithal to address
and manage our serious and genuine differences, and to do so in
a way that is strengthening, not deleterious, to the rules of
the international system that have allowed China to achieve so
much progress in its development. We seek a model of a
relationship that is marked not by strategic rivalry, but by
healthy competition.
The Chairman. So--and that is what we see. What does China
see when it says that it seeks a relationship that is based on
a new great power paradigm?
Ambassador Russel. When the Chinese officials talk about
the ``new model,'' typically they talk about win-win outcomes,
and they talk about respect for core interests. We are all for
win-win outcomes, but we are not for slogans.
What we care about and what we seek to achieve is
meaningful cooperation. So, at the upcoming S&ED, for example,
on the security--on the strategic track, which, as I mentioned,
brings together high-level civilian as well as military
officers in the strategic security dialogue under it, we engage
on issues like the conduct of China in the South China Sea and
the East China Sea. We engage directly on issues of human
rights, including the repressive practices in Xinjiang and
Tibet. We do not consider so-called ``core interests'' to be
out of bounds for substantive discussion, and we hold China to
account for its behavior.
The Chairman. Well, when we talk about hoping that China
will be part of an international order that will observe
international rules, and you talk about the South China Sea, is
our carefully calibrated balance between cooperation and
competition still the right approach? Should we be putting a
little more on the competition side and demonstrating, in more
robust terms, our enduring national interest in freedom of
navigation, the free flow of commerce, and the peaceful
resolution of disputes, consistent with international law?
Ambassador Russel. Mr. Chairman, we believe that
competition and cooperation coexist in the United States-China
relationship. We seek healthy competition on the basis of a set
of accepted global norms. We welcome the right and the ability
of China to participate in shaping and updating rules, but on
the condition that China accepts that rules are binding on it,
as well as on others. Rules apply not only to small countries,
but to large ones.
We are strengthening our diplomatic engagement throughout
the region. We have significantly strengthened our military
alliances and our security relationships. Our presence in the
life and in the security of the Asia-Pacific is robust.
The Prime Minister of Singapore is in Washington today. I
think he had the opportunity to call on you and other members
of the committee. Singapore, for example, is not only an
important security partner of the United States, not only an
important conegotiator in the effort to achieve a uniquely
high-standard, comprehensive trade agreement, the TPP.
Singapore is also a charter member in ASEAN, a regional
grouping that the Obama administration has invested a great
deal of diplomatic effort in supporting.
The Chairman. I appreciate that. But, you know, this
committee has expressed itself, as has the Senate, about its
concerns about the way China is acting in the South China Sea.
And, while there may be--maybe those are legitimate disputes on
territories--but the manner in which, so far, it seems to be
addressed is more of a muscular China versus a China driven by
the international order which seeks to solve its disputes
through the international order. And that is a concern.
Let me turn to another concern. We talk about competition.
I was in China last August, and throughout the region, and I
always try to meet with the American Chamber of Commerce in
different countries to get a perspective of the realities on
the ground about the challenges of doing business for American
companies in a given country. And a 2013 American Chamber of
Commerce China survey found that 72 percent of respondents,
which reflected a lot of what I heard when I was there, said
that China's IPR enforcement was either ineffective or totally
ineffective. The U.S. International Trade Commission estimated
that United States intellectual-property-intensive firms that
conducted business in China lost $48 billion in sales,
royalties, and license fees in 2009 because of IPR violations
there. In certain sectors, such as wind power, where American
Superconductor has been severely harmed by IP theft by its
Chinese partner, Sinovel, the damage to U.S. businesses have
been particularly acute. It is estimated that an effective IPR
enforcement regime in China that would be comparable to United
States levels could increase employment by IP-intensive firms
here in the United States by 923,000 jobs.
So, where does intellectual property rights in our
competition and discussion with China rank on the list of
priorities among the wide range of issues that we have with
China?
Ambassador Russel. Mr. Chairman, the protection of
intellectual property rights is a top priority for the
administration, and I can personally attest to the fact that
President Obama, Vice President Biden, Secretary Kerry, and
other Cabinet Secretaries have raised our concerns very
directly with Chinese leaders, including, and particularly, the
Premier, Li Keqiang, who has responsibility for the economy.
This is on the agenda as a priority issue for the upcoming
S&ED.
The Chairman. But, we have had this on the agenda. Now,
this is not new to the agenda, right? So, what----
Ambassador Russel. Right.
The Chairman [continuing]. Is the progress we have made? I
mean, where has the dialogue taken us on making advancements?
So far, I do not see it.
Ambassador Russel. Well, there are points of measurable
progress with respect to motion pictures, with respect to
pharmaceuticals. But, I fully agree with your point that China
still has a long way to go to meet acceptable international
standards in protecting IPR.
One thing that is different is the fact that the Chinese
themselves now realize that they increasingly have more to lose
as Chinese companies develop products and as Chinese consumers
suffer from the poison or the other deleterious effects of fake
pharmaceuticals and counterfeit products.
We use our regular working group on IPR to delve down on
very specific issues. We have made a strong push to educate
Chinese consumers and manufacturers to the fact that they lose
in the race for innovation, they lose in the race for
entrepreneurship, when they flagrantly violate the rule of law
and they rely on the theft or the forced transfer of U.S. or
other technology and products as the driver of their
industries.
A related problem, Mr. Chairman, is the use of cyber-
enabled theft of United States companies' intellectual property
and proprietary information, theft that we have identified as
enabled, in some cases, by Chinese Government or Chinese
military officials. This is an issue that we raise forcefully,
and it is an area where we will continue to push for Chinese to
take action.
The Chairman. I have many other questions.
Let me turn to Senator Corker, recognizing that there is a
vote that is ongoing.
Senator Cardin, have you voted in the last vote?
Senator Cardin. I have.
The Chairman. So, I will let Senator Cardin chair. I will
leave, come back, and we will try to keep the hearing going, in
respect to everybody's time.
Senator Corker.
Senator Corker. Thank you. Thank you.
Again, thank you for being here.
I cannot help but notice that Secretary Kerry's bigger
issues, timewise, seem to lie in the Middle East. Secretary
Sherman is spending 100 percent of her time on Iran
negotiations--we had a good meeting this morning--and Secretary
Burns is leaving. Who is responsible at the State Department
for our China policy?
Ambassador Russel. Secretary Kerry, personally, is
responsible, and is engaged directly in overseeing our China
policy. I met with Secretary Kerry at some length last week to
discuss it. I have accompanied Secretary Kerry to China. I will
again next week, when he makes his sixth visit to Asia. He is
on the phone with his Chinese counterparts, he is in regular
receipt of the reports that our Ambassador, Ambassador Baucus,
submit or that I send up. I have found, and I can attest,
Senator, to the fact, that Secretary Kerry and Deputy Secretary
Burns and all of our Under Secretaries are focused and engaged
on the Asia-Pacific broadly, but particularly on the United
States-China relationship.
Senator Corker. And what is their constructive policy to
persuade China to not have the antagonistic relations that it
has with its neighbors?
Ambassador Russel. Well, we have outlined clearly the
principles that we believe should guide China and all the
countries in the region with respect to maritime security,
which includes, obviously, the respect for freedom of
navigation and overflight, unimpeded lawful commerce, and
insist that only peaceful resolution of disputes is in
consistency with international law as the acceptable vehicle
for responding.
There is, however, as you have pointed out, Senator, a
pattern of behavior on the part of the Chinese that is
straining China's relations with its neighbors and raising
questions about China's intention. We talk candidly, directly,
and openly to the Chinese leadership through our diplomatic
context. We talk extensively with not only the other four
claimants, which are ASEAN countries, but also the relevant
neighbors who have a stake in the peaceful and open region in
Southeast Asia.
We have put forward--and you will hear more about this from
Secretary Kerry--a proposal that the claimants themselves,
including China--China is not alone in overreaching--can, on a
voluntary basis, forgo some of the provocative actions that are
destabilizing, such as the reclamation of islands and the
construction of bases, such as the building up of outposts, and
so on.
So, we use public messaging, we use diplomacy. We also
engage in building the capacity of the countries in Southeast
Asia to ensure that they are able to adequately police their
own territorial waters and that they can maintain the domain
awareness that ensures that they know what is going on in their
contiguous waters or in the open seas.
Our strategy, Senator, includes the support for a unified
and influential ASEAN, and we believe that the call from the
ASEAN countries to China to work with them, not to bully them,
has a long-term salutary effect.
Lastly, the fact of the matter is that the robust military
presence, the strong security commitments, and the healthy
alliances that the United States maintains with many countries
in the region similarly serves to maintain stability and keep
the peace, going forward, as it has for the last six decades.
Senator Corker. I appreciate that comprehensive answer. We
just had a gentleman in from the region who is very much a part
of China, if you will, and I asked him why this was taking
place. If you want to synthesize his answer down to just a
phrase, it was, ``China's doing this because they can.''
Ambassador Russel. That is----
Senator Corker. So, for years, they could not. They were
not strong enough. Now they are a rising nation, and they can
do what they are doing because they can.
I listen to you, and, I am not in any way trying to be
critical of you as an individual, but I hear all those things,
and it does not appear to me that it is having the desired
outcome. Now, maybe over the next 20 years, as you build these
capacities, maybe that is the case. But, I am concerned that,
over the next 20 months, something happens that ends up
creating a conflict or things get out of hand. I am just
wondering what are some of the other things the administration
might consider to ensure that something really catastrophic
does not occur?
Ambassador Russel. Well, thank you, Senator.
We believe strongly that diplomacy is the right vehicle for
addressing this set of problems. We also think that one
critically important step will be for all of the claimants, not
only China, but particularly China, to define its claims
clearly in ways that are consistent with international law.
Because the risk of an incident and confrontation that you
allude to is driven by ambiguity over who is claiming what, and
on what basis. And so, we have, therefore, urged China to set
aside the legally ambiguous construct of a nine-dash line and,
instead, make its claim--and we do not take a position; its
claims may be valid--but, make a claim in terms that are
consistent with international law.
Number two, to pursue diplomatic or legal means to address
it. We are also, as I mentioned, strengthening the capacity of
the partners on an ongoing basis. I do not think this is a 20-
year proposition, but it is not an overnight proposition,
either.
China's--by its own assertion, China's interests lie in a
stable and peaceful periphery. China has said--China's leaders
have said that they want quiet in their environment in order to
concentrate on development and social and economic growth. They
have not achieved stability or quiet. To the contrary, they
have generated real strains in their relationships. And so, the
watchword that we advocate, in the first instance, is
restraint, and big countries have a big responsibility to
exercise it. Secondly, there are a range of very practical
crisis-prevention and crisis-management initiatives that are in
play in the region. And Secretary Kerry, who will be in the
region for a seventh time to attend the ASEAN Regional Forum in
August, is a strong advocate for, and has held in-depth
discussions, as he will again in August, on some of these very
practical confidence-building measures and crisis-prevention
measures that include hotlines and that include agreements on
handling unplanned incidents at sea.
Senator Corker. Well, thank you for being here.
I am going to turn it over to Chairman Cardin and go vote
so folks back home will have confidence in me. Okay?
[Laughter.]
Thank you.
Senator Cardin [presiding]. Secretary Russel, let me thank
you for not just your leadership on the bilateral relations
between the United States and China, but your work in East Asia
and the Pacific and the manner in which you have worked with
this committee and with the United States Senate. I do
appreciate the close relationship and the sharing of
information as we do the rebalance to Asia. I think it is been
in the best interests of the United States.
And, as you point out, the bilateral relationship between
the United States and China is multifaceted. There are areas
where we have common interests, and we can, hopefully, find a
path forward. One of those, quite frankly, is a peaceful
resolution of the conflicts within the China Sea. It is not in
China's interest to see military flareups or have this become
expanded, because they depend upon commerce on the China Sea,
as we do, as the region does. So, in my conversations with
Chinese leaders, I think that they truly do not want to see a
military flareup on the China Seas, and they want to keep the
lanes open. But, it will take real leadership to have the rule
of law prevail rather than the force of one country in
determining the territorial disputes.
We have a common interest on the environment. And it seems
to me we can work together on that. We have some common
interests in trade. The United States market is very important
to China, and commerce between China and the United States is
very important to America's economy. So, we have a lot of
common interests. And, as you point out, we have some
significant challenges.
The Chinese progress on basic human rights is still very
troublesome. The ability to express views contrary to the
government in a safe and peaceful manner is certainly very much
in question. The freedom of religion is a major issue and the
protection of intellectual property. It is clear there are a
lot of issues that need to be managed between the United States
and China.
I found one thing you said about U.S. intentions which I
could not agree with you more on. Our intention is for China to
continue to grow and be a constructive player in the region. We
are fully prepared to compete with any country in the world,
including China, as long as it is on a level playing field. But
we also need markets for our products. And as China's middle
class grows, it provides consumers to buy American goods. So,
our intentions are clearly for China to continue its economic
growth, and do it in a way consistent with the respect for its
neighbors, and to be a constructive player in the region.
But, I must tell you, in my conversations with Chinese
leaders, I do not think they believe that. Seems to me they
believe that we are interested in holding China back and that
the rebalance is more about keeping China isolated than it is
about every country in the region growing.
So, can you just share with us your view, if you agree with
me--if you disagree with me, please let me know--as to how we
deal with creating better trust between the United States and
China, and do it in a way that does not compromise our
positions on issues and our values, that we are pretty clear
about what we expect in that relationship.
Ambassador Russel. Well, Senator Cardin, first of all,
thanks for your kind words, and thank you particularly for your
leadership, especially on the Asia Subcommittee.
I very much agree with the points that you made in your
statement. And I am very focused on the question of building
strategic trust, both between the United States and China, but
also between China and its neighbors, because the uncertainty
and the concerns that China's neighbors and many Americans feel
about China's long-term intentions, which, among other things,
is fueled both by its problematic behavior with regard to
territorial disputes, but also the opacity of its military
modernization, represent an impediment to real progress, both
in the bilateral relationship, but also in regional growth.
I believe that one of the essential ingredients to
developing real trust, as opposed to papering over differences,
is direct, high-level dialogue. China is a one-party state, and
the ability to speak directly to Chinese leaders is uniquely
important. Since taking office, President Obama has met with
the Chinese President or the Chinese Premier, I think,
something on the order of 19 times, which is extraordinary.
But, Secretary Kerry, along with other senior officials,
similarly have maintained a very robust rhythm of high-level
meetings interspersed, as I mentioned, by telephone calls and
so on. And the S&ED, which is 2 weeks out, represents another
important vehicle, both for the high-level direct dialogue, but
also for the important stakeholders in our respective
departments of government and agencies who are working on
projects or wrestling with disagreements through the course of
the year, to meet in person and to take stock of what they have
done, and to chart a program of work ahead for the coming year.
A second area that is essential in building trust, I
believe, is promoting people-to-people connections. And through
our comprehensive high-level people-to-people dialogue, through
our various educational exchanges, through our outreach
programs to Chinese citizens and NGOs, and, frankly, through
Chinese language training programs for Americans, we are
ensuring that the next generation gets a firsthand
understanding of what the other culture and the other system is
all about.
Thirdly, the economic relationship, as you mentioned, is
hugely important. And, as China increasingly develops its own
intellectual capital and acquires something worth protecting,
we are confident that our messages about the need to protect
intellectual property will start to ring true, because the
Chinese are suffering both from counterfeit materials, but also
from a lack of innovation.
And then, lastly, as I alluded to, greater clarity in
China's military modernization will be an important element of
creating trust between China and the United States and its
neighbors. We have a strong military-to-military dialogue that
involves high-level exchanges. The Secretary of Defense has
recently been to China. We have got other visits in the works.
And we are working hard to remove the uncertainties and the
ambiguities in connection with our military-to-military
relationship, including by going so far as to include China in
some of our multilateral exercises.
Senator Cardin. Well, thank you very much. I think that
gives us an agenda to work on this. It is not easy. I think
people-to-people exchanges have been extremely helpful. When I
was in China, one of my most enjoyable meetings was with
students. It is a country that guards itself pretty carefully
when it comes to expression of views. So, I have found students
to be very refreshing in that regard. And I think we do have a
real challenge on our hands to develop that trust, consistent
with our positions on issues, so it is very clear that, for our
strategic partnerships to grow, there are areas that need to be
understood, and that that comes from the framework that we have
two different governments. We understand that. And our goal is
to improve that relationship and to make the progress that is
important for U.S. interests.
We are going to take--we are going to go to the second
panel. Senator Menendez is going to be back in about a moment,
so we are going to take a very short recess, and then Senator
Menendez will reconvene the committee for the purposes of
introducing the second panel.
Ambassador Russel. Thank you very much, Mr. Chairman.
[Recess.]
The Chairman [presiding]. This hearing will come to order
again.
Let me apologize to our witnesses. We have one more vote
going on, but I thought that we have probably enough time to
listen to both of your testimonies and maybe begin some
questioning before we will have to take one more vote and
another short recess.
But, we are pleased to be joined by two incredibly
important witnesses--J. Stapleton Roy, distinguished scholar
and founding director emeritus of the Kissinger Institute on
China and the U.S. at the Woodrow Wilson International Center
for Scholars, here in Washington; and Dr. Aaron Friedberg,
professor of politics and international affairs, at Princeton,
which is a university that is in service to the country, but
located in the great State of New Jersey. So, we welcome you
here.
As I said to our State Department witness, your entire
statements will be included in the record. I would ask you to
summarize them in about 5 minutes or so, so we could enter into
a dialogue.
And we will start with you, Ambassador Roy.
STATEMENT OF HON. J. STAPLETON ROY, DISTINGUISHED SCHOLAR AND
FOUNDING DIRECTOR EMERITUS OF THE KISSINGER INSTITUTE ON CHINA
AND THE UNITED STATES, WOODROW WILSON INTERNATIONAL CENTER FOR
SCHOLARS, WASHINGTON, DC
Ambassador Roy. Thank you, Mr. Chairman, particularly for
holding this hearing on an issue which is of vital importance
to the United States and to the peace of the world.
The United States, in my judgment, has a sensible and
constructive policy framework for dealing with a rising China,
but successful implementation of this policy will require
patience and perseverance.
East Asian countries worry about U.S. staying power in the
region. The United States rebalancing strategy is, in essence,
an effort to demonstrate to our friends and allies in East
Asia, and to China, that the United States has both the will
and the resources to remain actively engaged in East Asia,
politically, economically, and militarily, as we regain our
economic health.
Fortunately, top leaders in both China and the United
States have concluded that unchecked strategic rivalry between
the two countries is not in the interests of either.
They have set the strategic goal of striking a stable and
sustainable balance between competition and cooperation in the
U.S.-China relationship. Accomplishing this will not be easy. A
major driver of the growing strategic mistrust between China
and the United States is the understandable desire of each side
to have a military balance that favors its own interests. This
is a natural preference, but it will not contribute to
containing strategic rivalry between China and the United
States. This is the heart of the strategic problem between the
United States and China. We do not know whether a solution can
be found, but finding a solution is worth the effort.
In pursuing the goal, both China and the United States are
confronted with serious contradictions in our position in the
western Pacific. If we do not manage these contradictions
properly, the strategic goal of constraining our strategic
rivalry will be a vain hope.
In China's case, it must deal with the fundamental
contradiction between its commitment to peaceful development
and its equally strong commitment to defending China's
sovereignty and territorial integrity. If China strays from the
path of peaceful development, its hope of achieving the China
dream of the great rejuvenation of the Chinese nation will be
hopeless.
Adhering to the path of peaceful development is easier said
than done, because China is embroiled in territorial disputes
with six of its neighbors. An additional aspect of this issue
is that domestic influences on China's foreign policy are
becoming stronger, limiting China's diplomatic flexibility.
This has long been a problem in handling China's relations with
Japan, in large measure because domestic attitudes in China
toward Japan, and historical memories are so strong, that
Chinese leaders must take care not to let the spearhead of
nationalism turn against themselves. Historical revisionism in
Japan is also a major contributing factor to the current
tensions affecting Japan's relations with China and South
Korea.
In the case of the South China Sea, domestic influences on
China's handling of the issue have become more intense over the
last decade, and China's skillful diplomacy in Southeast Asia
of a dozen years ago has largely been undone by China's more
assertive approach to territorial issues in the South China
Sea. China's leaders recognize the problem, and they are giving
high-level attention to trying to strengthen China's diplomacy
with its neighbors. They had a special conference, in October
last year, chaired by Xi Jinping, to address this question.
But, China has still not found a satisfactory method of
managing this contradiction, and this is contributing to the
rise in regional tensions.
In the case of the United States, let me just cite two
contradictions in our approach. The first is, the relations
between our two allies in Northeast Asia--South Korea and
Japan--are not good. They are marked by significant tensions. A
second contradiction for the United States is that two of our
allies--Japan and the Philippines--are locked in territorial
disputes with China over uninhabited islands that are of no
interest or importance to the United States. There is no
question in my mind that the United States will stand by our
allies if they are subjected to aggression, but we do not wish
to be dragged into an avoidable conflict with China over small
issues, from our standpoint.
For all these reasons, we cannot be complacent in looking
to the future, although I think there are grounds for optimism
that we can actually handle these problems and steer them in
the right direction.
There are troublesome negative aspects in our bilateral
relations with China that, if not handled correctly, could
increase regional tensions and damage the interests of both
countries. We have not yet been able to stabilize the balance
between cooperation and competition in the relationship.
In the United States, the sharp increases in China's
defense spending, beginning in the mid-1990s, are feeding
concerns that China poses a potential threat to the United
States position in the Asia-Pacific. In my view, conventional
diplomacy will not be sufficient to limit and hopefully reverse
our strategic rivalry with China.
It is the normal responses of human nature that have led to
confrontations throughout history, and we can see this pattern
unfolding in the crisis in Europe over Ukraine and in the
rising tensions between China and Japan. This is normal
behavior. You do something I do not like; I respond with
actions that you do not like. And you have this back-and-forth.
This is the reason why rising powers have more often than not
gotten into confrontation with established powers.
It was unconventional behavior on the part of China and the
United States 42 years ago that achieved the breakthrough in
our relations that led to the establishment of U.S.-PRC
diplomatic relations. Similarly, it took a leader of Deng
Xiaoping's courage and foresight to state, 35 years ago, that
territorial problems between China and Japan are too
complicated for the current generation to resolve, and should
be left for future generations to resolve. By taking that
unconventional position, Deng greatly facilitated the positive
development of Sino-Japanese relations over the next quarter
century. We need to be equally daring in our approach to
stabilizing our relations with China.
In conclusion, let me stress that China's economic rise has
benefited China's neighbors and the region as a whole. All of
China's neighbors have an interest in continuing economic
cooperation with China and do not support a containment
strategy that would divide the region. Their interest is in
responsible Chinese behavior as a major emerging power, not in
constraining China's growth. When China, in their eyes, behaves
irresponsibly or seems ready to act coercively, they want the
assurance provided by the reliable presence of a militarily
strong country, such as the United States, that can offset
Chinese growing power.
At the same time, no regional country wants to be forced to
choose between China and the United States. If the United
States, in regional eyes, seems to be mishandling its relations
with China in ways that make China a more nationalistic or
dangerous neighbor, confidence in the United States regional
role decreases.
In short, our skill in dealing with China is directly
linked to how successful we will be in retaining the confidence
of our friends and allies in East Asia. This is a healthy
dynamic. It rewards responsible behavior on the part of both
China and the United States, and it creates disincentives for
irresponsible behavior. This is important, because the central
purpose of U.S. policy in East Asia is to have a positive and
constructive relationship with China.
Thank you.
The Chairman. Thank you very much.
Dr. Friedberg.
STATEMENT OF DR. AARON L. FRIEDBERG, PROFESSOR OF POLITICS AND
INTERNATIONAL AFFAIRS, PRINCETON UNIVERSITY, PRINCETON, NJ
Dr. Friedberg. Thank you very much, Senators. It is an
honor for me to have this opportunity to express my views.
The relationship between the United States and China is
clearly mixed. It contains elements of cooperation as well as
competition. In my view, the areas of cooperation are less
impressive and less substantial than is sometimes claimed,
while the sources of competition are deeper and more profound
than many prefer to believe.
I think that the current and emerging competition between
the United States and China is not the result of misperception
or misunderstanding. And, unfortunately, I do not believe that
it will be alleviated by dialogue or high-level meetings, as
important as these may be.
The competitive aspects of the relationship, in my view,
spring instead from two deep sources. First are the classic
dynamics of great-power politics. China is a rising power.
Rising powers, historically, have wanted to assert themselves
to reshape the rules, the institutions, and sometimes the
territorial boundaries that were put into place when they were
relatively weak.
A second factor, which, in my view, is important, but does
not always get the attention it deserves, is ideology. We often
hear it said that China is no longer a Communist country, and
therefore, there is no basis for ideological friction or
mistrust between China and the United States. While it may be
true that China's leaders are no longer Marxists, they are
still Leninists, by which I mean they continue to be committed
to one-party rule, and they regard the United States and other
democratic countries as posing an existential threat to their
regime. It is in part for this reason that they want to push
back American's presence and influence in Asia.
As regards the future of United States-China relations, in
my view, if China's power continues to grow, but if it
continues to be ruled by a one-party authoritarian regime, the
competitive aspects of the relationship are going to grow,
while the areas of cooperation are going to dwindle. I should
say I do not think this means that conflict between the two
countries is inevitable. I do not believe that is the case.
But, I am afraid that the risks of conflict will grow. And
indeed, this is precisely what appears to be happening today.
In the past 5 years, China has used stronger, more strident
language and more assertive and, at times, forceful actions to
assert its claims to control the waters and airspace off its
eastern seaboard. Chinese spokesmen and some Western analysts
have sought to deny that any shift has taken place or to
explain those changes that have occurred as mere reactions to
the behavior of others, or as the byproduct of competition
among bureaucracies, or the unauthorized actions of a handful
of rogue PLA officers, or a reflexive response to popular
nationalist pressures.
With the passage of time, it seems to me that these claims
have become increasingly difficult to sustain. Beijing's recent
behavior appears to be deliberate, purposeful, and coordinated,
but it suggests an adjustment in tactics and time lines rather
than a fundamental shift in strategy. China appears to be
pushing harder to achieve its long-standing goals of expanding
its own regional power and influence while constricting the
power, influence, and position of the United States. In the
long run, Beijing evidently hopes to displace the United States
and to restore China to what it regards as its rightful place
as the preponderant power in the Asia-Pacific region.
In addition to advancing its claims to control most of the
water and resources off its coasts, Beijing is using calibrated
threats in an attempt to intimidate its neighbors, to
demonstrate the inadequacy of U.S. security guarantees, and, if
possible, to drive wedges between the United States and some of
its regional friends and allies.
China's increased assertiveness, I think, reflects a mix of
arrogance and insecurity. Since the onset of the global
financial crisis in 2008-2009, many Chinese analysts and
policymakers have concluded that the United States has entered
into a period of unexpectedly rapid decline in its power and
influence. Chinese planners appear to have concluded that, at
least for the next several years, the United States will
continue to be strategically preoccupied and financially
constrained, and that, if they play their cards right during
this period, they may be able to create facts and consolidate
their position.
But, this near-term confidence, I think, is mixed with
longer term concern. Among other factors, slower economic
growth and continuing revelations about the extent and depth of
official corruption could threaten internal stability and
regime survival. A more assertive stance may enable Beijing to
achieve victories that contribute to its proclaimed goal of
``national rejuvenation'' and enhance the CCP's legitimacy by
casting it as the defender of China's honor and greatness.
Regardless of the results, however, the regime appears to
believe that an atmosphere of increased tension and friction
with foreign rivals can help it to rally support and deflect
possible public resentment from its own inadequacies and
failings.
China's recent actions are deliberately dangerous. Its
leaders are manipulating risk, or playing chicken. They are
knowingly creating hazardous situations, in the hopes that
others will back down. I think there is an element of bluff,
here. I do not think China's leaders seek armed conflict. They
certainly do not seek it with the United States. And, as a
result, I think that, if faced with a firm response, they are
likely to adopt a more cautious stance. Nevertheless, even if
it is not intended to do so, the kind of behavior in which they
are presently engaged could all too easily lead to
confrontation and escalation.
In the long run, China's assertiveness may turn out to be
counterproductive and even self-defeating. If its Asian
neighbors respond by increasing their own capabilities and
working more closely with one another and with the United
States, they may be able to block Beijing's initiatives and
balance its power. But, such an outcome is not automatic or
inevitable. In the absence of an effective American response,
China may yet be able to successfully pursue a divide-and-
conquer strategy, intimidating some of its neighbors into
acquiescence while isolating and demoralizing others. Indeed,
this appears to be what Beijing is attempting to do: reaching
out to Washington, proclaiming its desire for a new type great-
power relationship with the United States, while at the same
time ratcheting up pressure on some key targets, especially
United States allies--Japan and the Philippines, as well
Vietnam.
Just very briefly on the question of an American response.
For most of the last two decades, the United States has pursued
a mixed strategy toward China, seeking to engage it through
trade, diplomacy, people-to-people contact, and so on, while at
the same time taking steps to preserve a favorable balance of
power in East Asia, even as China grows stronger. In my view,
it is neither feasible nor, at this point, necessary to abandon
this mixed strategy in favor of something radically different.
What is required instead is a readjustment of the blending of
the two elements; and, in particular, an increased emphasis on
the balancing portion of America's strategic portfolio.
The current administration began to move in this direction
in 2011, with its announcement of a pivot toward Asia. But, its
efforts to date have been, and I think are widely perceived in
the region to be, inadequate. There is growing concern on the
part of friends and allies that, despite the rhetoric of its
leaders, the United States may lack the resources, the focus,
and perhaps the resolve necessary to withstand Chinese pressure
and sustain a position of leadership.
A variety of measures, I think, are necessary in order to
counteract this. I would just emphasize two themes. On the one
hand, I think it is necessary for the United States and its
allies to take steps that impose some costs on China for its
more assertive behavior. And, on the other, it is essential for
us to increase the capacity of our allies, as well as our own,
to deter and, if necessary, to defeat attempts at coercion.
Among the various steps that are needed, I think one in
particular stands out, and it is a long-term problem. The
United States has to develop, articulate, and fund, together
with its allies, a military strategy that will enable it to
continue to project power into the western Pacific under any
circumstances and despite the ongoing deployment by China of
so-called antiaccess area denial capabilities.
Our position in Asia is built on our alliances, and those,
in turn, rest on assurances that we will come to the aid of our
allies if they are threatened or attacked. Without an effective
and timely response, Beijing's ongoing military buildup will
begin to call the credibility of our assurances into question,
and this could weaken our alliances, increase the risk of
aggression, and potentially endanger the peace and stability of
the entire Asia-Pacific region.
Thank you.
[The prepared statement of Dr. Friedberg follows:]
Prepared Statement of Aaron L. Friedberg
introduction
In the past 5 years China has used stronger, more strident language
and more assertive, and at times, forceful actions to assert its claims
to control the waters and air space off its eastern seaboard. Chinese
spokesmen (and some Western analysts) have sought to deny that any
shift has taken place, or to explain those changes that have occurred
as mere reactions to the behavior of others. With the passage of time
such claims have become increasingly difficult to sustain.
Examples of China's growing assertiveness continue to multiply. The
most recent include Beijing's unilateral declaration of an Air Defense
Identification Zone that covers Japanese-controlled islands in the East
China Sea in November of last year, the deliberate near-collision of a
PLAN vessel with the U.S. Navy cruiser Cowpens in December and, in the
past 2 months, the deployment of oil rigs and a small armada of naval
and maritime patrol vessels into waters claimed by Vietnam.
These developments raise three questions:
--What explains Beijing's increased assertiveness?
--What are the likely implications of this behavior for China's
relations with its neighbors and with the United States?
--And how should the U.S. respond?
Explaining increased Chinese assertiveness
With the end of the cold war, China began to pursue a consistent
and generally cautious strategy for dealing with its neighbors and with
the United States. This strategy reflected the wisdom of former party
chief Deng Xiaoping who, in the wake of the Tiananmen Square massacre,
the fall of the Berlin Wall and the U.S. defeat of Iraq in the first
Persian Gulf war advised his colleagues that China should ``hide its
capabilities and bide its time.''
At least until recently Chinese strategy has evidently been
governed by three axioms:
--``Avoid confrontation'' (especially with the United States, but
also with China's wealthy and powerful neighbors).
--``Build `comprehensive national power' '' (a concept Chinese
analysts use to refer to all of the various dimensions and
instruments of national capability).
--``Advance incrementally.''
Regarding this last point: Chinese policymakers assessed that they
were in a relatively weak position and needed time to build their
strength, but they did not believe that they could or should remain
passive. To the contrary, over the last two decades they have sought
opportunities to enhance their country's influence and strengthen its
position, while simultaneously attempting to erode and constrict those
of the United States. The ultimate aims of Chinese strategy appear to
be two-fold:
--To preserve the Chinese Communist Party's monopoly on domestic
political power.
--To displace the United States and restore China to its rightful
place as the preponderant power in East Asia.
Beijing's recent behavior suggests an adjustment in tactics and
timelines rather than a fundamental shift in strategy. China is pushing
harder to achieve its long-standing goals. In addition to advancing its
claims to control most of the water and resources off its coasts, it is
using calibrated threats in an attempt to intimidate its neighbors,
demonstrate the inadequacy of U.S. security guarantees, and, if
possible, to drive wedges between the United States and some of its
regional friends and allies.
China's increased assertiveness reflects a mix of arrogance and
insecurity. Following the onset of the global financial crisis, many
Chinese analysts and policymakers concluded that the United States had
entered into a period of unexpectedly rapid decline in its relative
power and influence. With their country's fortunes seemingly on the
rise, some argued that the time had come for China, if not to abandon
``hiding and biding,'' then at least to adopt a more forward-leaning
posture in its dealings with the rest of the world. Chinese planners
appear to have concluded that, at least for the next several years, the
United States will continue to be strategically preoccupied and
fiscally constrained. If it plays its cards right during this period,
China can ``create facts'' and consolidate its position.
Near term confidence is mixed with longer term concern. Among other
factors, slower economic growth and continuing revelations about the
extent and depth of official corruption could threaten internal
stability and regime survival. A more assertive stance may enable
Beijing to achieve victories that contribute to ``national
rejuvenation'' and enhance the CCP's legitimacy by casting it as the
defender of China's honor and greatness. Regardless of the results,
however, the regime appears to believe that an atmosphere of increased
tension and friction with foreign rivals can help it to rally support
and deflect possible public resentment from its own inadequacies and
failings.
Implications for regional peace and stability
China's recent actions are deliberately dangerous. Its leaders are
manipulating risk or playing ``chicken''; they are knowingly creating
hazardous situations in the hope that others will back down. Even if it
is not intended to do so, such behavior could easily lead to
confrontation and escalation.
In the long run, China's assertiveness could also turn out to be
counterproductive and even self-defeating. If its Asian nations respond
by increasing their own capabilities and working more closely with one
another and with the United States they may be able to block Beijing's
initiatives and balance its power. But such an outcome is not automatic
or inevitable. In the absence of an effective American response, China
may yet be able to successfully pursue a divide and conquer strategy:
intimidating some of its neighbors into acquiescence while isolating
and demoralizing others. Indeed, this appears to be precisely what
Beijing is now trying to do: reaching out to Washington and proclaiming
its desire to form a ``new type great power relationship'' with the
United States, while at the same time ratcheting up pressure on key
targets, especially U.S. allies Japan and the Philippines, as well as
Vietnam.
How should the U.S. respond?
For most of the last two decades the United States, like China, has
been pursuing an essentially constant strategy. Despite occasional
shifts in emphasis, successive administrations have sought to engage
China, primarily through trade and diplomacy, while at the same time
taking steps to preserve a favorable balance of power in East Asia. In
addition to maintaining and selectively strengthening its own military
capabilities, Washington has sought to bolster relations with its
traditional treaty allies and to build quasi-alliance relationships
with other countries (including Singapore and India) that share its
concerns about the possible implications of China's growing strength.
The objectives of U.S. strategy have been, first, to ``tame'' China
by giving it a stake in the preservation of the existing international
order and second, in the long run, to transform it, encouraging the
evolution of its domestic political system away from authoritarianism
and toward something more closely resembling liberal democracy.
It is neither feasible nor, at this point, necessary to abandon
this mixed strategy in favor of something different. What is required,
instead, is a readjustment of the blending of the two elements and, in
particular, an increased emphasis on the balancing portion of America's
strategic portfolio. The current administration began to move in this
direction in 2011 with its announcement of a ``pivot'' toward Asia
(later renamed the ``rebalance''), but its efforts to date have been,
and are widely perceived in the region to be, inadequate. There is
growing concern on the part of friends and allies that, despite the
rhetoric of its leaders, the United States may lack the resources, the
focus, and perhaps the resolve necessary to sustain a position of
leadership.
Among the measures that will be needed to alleviate these fears,
one in particular stands out. The United States must develop,
articulate fund and (together with its allies) implement a military
strategy that will enable it to continue to project power into the
Western Pacific, under any circumstances, and despite the ongoing
deployment by China of so-called antiaccess/area denial capabilities.
America's position in Asia is built on its alliances and those, in
turn, rest on assurances that it will come to the aid of its allies if
they are threatened or attacked. Without an effective and timely
response, Beijing's ongoing military buildup will begin to call the
credibility of those assurances into question, weakening U.S.
alliances, increasing the risk of aggression, and potentially
endangering the peace and stability of the entire Asia-Pacific region.
The Chairman. Well, thank you both.
I have let you both go over time because you had a lot of
good things to say, insights, which will mean that we are going
to have to take a brief recess. We have one final vote. I think
we will--Senator Corker and I both know how we are voting. We
will come right back, and we will get into a line of
questioning, because you have raised many issues beyond the
questions I originally had.
So, this committee will stand in recess, subject to the
call of the Chair.
[Recess.]
The Chairman. This hearing will come back to order.
Thank you both for your forbearance.
You have both raised some very interesting points. So, let
me ask you both. China: strategic competitor? Strategic rival?
Strategic problem? Ever, potentially, a strategic ally?
Ambassador Roy. All of the above.
The Chairman. I was afraid that was going to be your
answer.
Ambassador Roy. No, seriously. I was, for 45 years, a U.S.
Foreign Service officer, and spent 9 years working on the
Soviet Union, and even longer than that dealing with China
during periods when it was a hostile country and during periods
when it was a friendly country and we were expanding our
relations rapidly. Elements of cooperation and of competition
are inherently part of relations between major powers. And
certainly China is a major power. I do not think that getting
rid of strategic rivalry between the United States and China is
a realistic approach to the relationship.
But, calibrating the balance between cooperation on common
interests and the rivalry elements that are part of major-power
relations is what diplomacy is all about. And it does not, and
should not, drive us in the direction of conflict if we can
stabilize the strategic rivalry. The reason why we talk about
trying to create this new type of bilateral relationship is
because, if you do not constrain the strategic rivalry, it can
drive you in the wrong direction and result in hostile rivalry,
which returns you to a negative cold war type of relationship,
which we are far away from in our relationship with China.
The Chairman. Dr. Friedberg, I would like to hear from you,
too. And one of the things that you said in your testimony,
that I noted, was that this mixed strategy that we have--that
maybe what we need is an adjustment, I think you said, of the
blending. And can you speak to the overarching question I just
asked Ambassador Roy, as well as--well, what is the blend--what
should the blending look like?
Dr. Friedberg. As far as whether China's a competitor, a
rival, a problem, and so on, I think it is all of those things.
I think we have to acknowledge the extent to which, in fact,
there is this competitive or rivalrous component to the
relationship. And I do not think we have always been as candid
as we need to be in acknowledging that fact. For reasons that I
indicated, I think the competitive aspects of the relationship
are growing in intensity. I agree with Ambassador Roy that part
of our objective should be to contain that and prevent that
from spilling over and contaminating and coloring the entire
relationship.
I do not think it is inevitable that China and the United
States need to be in a zero-sum relationship, enemies in the
ways that the United States and the Soviet Union were during
the cold war. But I also do not see much prospect for anything
resembling an alliance or a genuine deep partnership between
the United States and China for the foreseeable future.
As far as the mixing of elements, in our strategy, with all
of the debates about our policy, since the end of the cold war
at least, in fact, both Republican and Democratic
administrations have pursued a broadly similar strategy for
dealing with China, and it has had these two components:
engagement--obviously, the diplomatic part of the engagement
goes all the way back to the late 1960s and early 1970s; the
economic piece has become much more important, clearly, since
the early 1990s.
But, at the same time, I would say, from the mid-1990s
onward, successive administrations have also sought
deliberately to strengthen our position in the region to
maintain a balance of power that is favorable to us and to our
friends. And we have done that in three ways. One is by
maintaining and strengthening our own military capabilities in
the region. So, the pivot, in that sense, is not new; it really
goes back to the Clinton administration. We have also tried to
strengthen and build on our traditional alliance relationships,
particularly with Japan, Korea, and Australia. And we have also
developed what I would call quasi-alliance relationships with
other countries in the region to whom we do not extend security
guarantees, but who share with us, to some degree, a concern
about the growth of Chinese power, including a small country
like Singapore, and a very large one like India.
What has happened over time is that we have modulated that
blend, or changed that mix of elements. When the current
administration first came into office during its first couple
of years, it sought to play up engagement with China, as with
Russia, and to downplay the balancing part of the formula.
Since 2011, I think, in response to increased Chinese
assertiveness, the Obama administration has sought to increase
the balancing piece of the portfolio. I think they were correct
to do that. My concern is that they have had difficulty in
following through.
The Chairman. Let me ask you--so, Ambassador Roy, you
talked about patience, that it will require patience. And I
often hear this when I travel in the region, when I speak to
regional leaders who come here. I often hear about this element
of patience. And I understand that. Except--or maybe you can
help me and the committee understand how--as we exhibit
patience, how do we also deal with issues like the intellectual
property rights issue, the counterfeit issue, the cyber theft
issue, currency manipulation? Those are all economic elements
of this competition, even though those elements are not,
obviously, legitimate--in international norms, legitimate
competition.
And so, how do we press those issues? How do we press
issues about right of freedom of passage, navigation in the
South China Sea? How do we press our--I hope, our human rights
issues, even though I think we have increasingly been reluctant
to do that? We do it, but it seems to me it is--the tier is all
the way down there, in terms of pursuing human rights issues,
whether it be in China or the way they treat Tibet.
For both of you, give me a sense of how, as we engage, do
we at the same time robustly pursue the very essence of this
competition that we hope to be in in a more legitimate
international way, when there are hundreds of thousands of jobs
being lost in the United States, billions of dollars being
lost. Patience has, obviously, its limitations.
Ambassador Roy. It is a very good question. And it is one
of the frustrating----
The Chairman. We only ask good questions here at the
committee. [Laughter.]
Ambassador Roy. Well----
The Chairman. No, it is not--that is not--I would like to
think that is true, but it is humorous, if nothing else. But--
--
Ambassador Roy. When you would like to see changes in other
countries, where you have only a very limited ability to
actually force them to make the changes you would like to see,
you need to have patience, and you need to understand the
processes that would be most effective in accomplishing this.
And, frankly, one of the reasons why I was comfortable
representing a country that takes a high profile on human
rights issues is because our high profile on human rights
issues is a function of the fact that, from the beginning of
our republic, we had built-in violations of human rights that
were fundamental. We had slavery embedded in our Constitution.
For 70 years, we tried to solve it through a political process.
We failed. We fought a bloody civil war, and then we
reinstituted Jim Crow laws that persisted for nearly 100 more
years.
When I was Ambassador in China, we created a linkage
between human rights in China and most-favored-nations
treatment and wanted fundamental improvements in seven areas of
human rights in 1 year. Well, if the United States takes
centuries to deal with fundamental human rights problems, why
do we expect that other countries can deal with them overnight?
So, that is why I say we need patience.
Now, I have also reflected on this. If other countries had
set the goal during the 19th century of forcing the United
States to give up slavery, would it have been helpful? What
actions would they have taken? Well, in fact, I think there
were some factors that influenced us. For example, Britain
eliminated slavery. So, in other words, some countries were
setting a behavior pattern which actually influenced thinking
in the United States. I have found that the power of example is
much more useful in dealing with other countries on human
rights issues, or on intellectual property protection issues
than simply haranguing them about it.
Now, on the intellectual property issue, the reality is,
the countries that produce intellectual property are the ones
most devoted to protecting it. And countries that do not
produce intellectual property tend to think that theft of
intellectual property is in their national interest.
When I was a diplomat in the Republic of China on Taiwan,
back in the 1960s, they were defiant on piracy issues. For
example, they said, ``Your textbooks are too expensive for us.
We are a developing country; therefore we are going to steal
them, and too bad.'' And that is the way they behaved. And it
took us decades to force a friendly government to begin to
respect our intellectual property interests. So, that was an
example of a country that was determined simply to act in its
own interest, because, at the time, it was not producing
intellectual property.
Now, one of the reasons why I am optimistic, in the long
term, about China's moving toward greater respect for
protection of intellectual property is because, unlike some of
the countries I have served in, China has big ambitions about
becoming a creator of intellectual property. And if you create
intellectual property, you cannot do so effectively if you do
not protect it.
I have had meals with Chinese movie producers who described
the types of movies they could produce and the ones they could
not produce. And the ones they could not produce were the ones
that could be easily ripped off inside China. They could not
make any money, and therefore they simply did not produce those
types of movies. But, in other areas, there were better
protections, and therefore they could move ahead.
So, I have discovered, in dealing at the highest levels of
the Chinese Government, there is an intellectual understanding
of the importance of protecting intellectual property, but it
is a country that, historically, in modern history, has not
produced much intellectual property, and therefore, there is a
habit of ripping off intellectual property from others.
I recall 10 years ago, when we began to clamp down on
downloading free music from the Internet, that our college
students were all busy ripping off intellectual property. And
we began to tighten the screws on them, and I think it is been
substantially improved. But, in the process, our young people
continued to think they had some----
The Chairman. Yes. But----
Ambassador Roy [continuing]. Right to----
The Chairman [continuing]. We did something about it.
Ambassador Roy. We did something about it.
The Chairman. And that is a--one of the fundamental----
Ambassador Roy. Well, I think we are actually making
progress in this area. And if you talk to Microsoft and some of
the other countries that have--companies that have been working
on this, long term, it is not that there has not been progress;
it is simply there has not been enough. And therefore, they are
continuing to push ahead, and I think that the U.S. Government
has to support those efforts.
The Chairman. Let me turn to my colleagues.
Senator Corker.
Senator Corker. Thank you, Mr. Chairman.
Ambassador, Doctor, thank you both for being here.
We had a group of Chinese businessmen here a couple of
years ago, and I made some comments to them and used the word
``competition'' among other kinds of things, and then realized,
in talking with them, that they do not view us that way at all.
Now, these were businessmen.
If we were having this same kind of hearing in China, and
they had two witnesses that were talking about the United
States, how do they view us? How does the citizenry generally
view us? I know that is very diverse, with that many people.
And how does the government actually view the United States? We
look at them as competition, we look at them as a growing
threat. Those are some of the words that you all have used. How
do they view us?
Dr. Friedberg. Well, of course, as you indicate, it is a
country of 1.3 billion people----
Senator Corker. Yes.
Dr. Friedberg [continuing]. So there are a lot of----
Senator Corker. Yes.
Dr. Friedberg [continuing]. Different opinions, although
they do not all have the opportunity to be expressed because--
--
Senator Corker. Yes.
Dr. Friedberg [continuing]. Of the character of the Chinese
political regime. I think the Chinese strategic elites, so the
people who worry about China's strategy and about the United
States in particular, do see the United States as a strategic
competitor, as a threat to China's interests. As I indicated,
they believe that, for ideological reasons, the United States
is fundamentally opposed to their current regime, seeks to
encircle them, to block them from achieving their rightful
place in the world, potentially to destabilize them from
within, and so on.
So, I think there is a deep-seated suspicion of the United
States. And, in part, I believe that is one of the reasons that
Chinese leaders and strategists want to extend their influence
in the region and would like to see the influence and presence
of the United States diminish, because they see us as
threatening.
Throughout this broader swath of Chinese society, I think
there is a much wider range of views. People in business see
many opportunities, of course, in dealing with the United
States. I see many Chinese students coming to the United States
and studying. And, in many cases, they are very enthusiastic
about American culture and society and so on.
Senator Corker. But, the people who make the decisions and,
therefore, set the policy, see us the same way we see them.
Dr. Friedberg. Well, I think it is even darker. I think
they really--as I said, I think they really believe that we
want to----
Senator Corker. Yes.
Dr. Friedberg [continuing]. Contain and bring them down.
Senator Corker. Yes.
And you agree with that, Ambassador?
Ambassador Roy. I think that represents one aspect of it.
But, there is a very strong different aspect to it. China's big
goal, the China dream, is to modernize China. Chinese leaders
at the very top recognize that they will greatly slow the
process of modernization of China if they do not have good
relations with modern countries. So that, going way back to the
1980s, when we established diplomatic relations, China has
attached high importance to improving and sustaining relations
with the modern countries of the world. These are the countries
to whom they sent the students that they needed to get educated
to bring back the skills that were part of the modernization
process. And I still encounter an understanding of the
importance of that factor. It is a stabilizing factor in a
highly competitive relationship between the United States and
China. China still wants good relations with the United States,
because, otherwise, the Chinese dream is a fading chimera that
they will never get closer to unless they are able to maintain
the close relations with modern countries.
But, modern countries have modern ideas. And what is
significant, for somebody like me--who served in China as a
U.S. Government official from 1978 to 1981, and then was there
as Ambassador, and now I visit it--is the whole nature of
thinking in China about political change, about government
structures, has changed over the last 30-40 years, because all
of a sudden, at every level of Chinese society--in the
government, in the educational institutions, in the business
community--you have people who have been educated in the West.
They do not see our system as something that can be
transplanted to China, but they understand that, in dealing
with corruption, a free press can be helpful. Can China really
address corruption within the Communist Party if it has a
judicial system that is controlled by the Communist Party? So,
already you are beginning to see different language coming in.
If you look at the language of the Third Plenum Communique
that came out in November of last year, all of a sudden they
are talking about rule by law, because the corruption is when
officials do not abide by the laws that are on the books, but
simply arbitrarily exercise their power. And they are talking
about having checks and balances on the exercise of power.
Well, this is something that we addressed back in the
Federalist papers in the 18th century. And yet, that type of
discourse about exercising power in the sunlight, having the
people serve as a check on the exercise of power, putting power
in a cage so that it cannot be arbitrarily used, all of this is
language taken from that Third Plenum document that emerged
last November. You did not find these concepts part of the
discourse in China before.
So, this is how countries change. They have exposure to
different societies. The modern ones are the ones that
influence them most. And then they begin to borrow from those
societies, and gradually you find that they are talking about
issues in a different way.
Again, I emphasize one other point. China's the only
authoritarian country in the world which has age limits on
their senior leaders. China's top leaders are expected to step
down around the age of 70. We have had Presidential candidates
who were near the age of 70. In China, you cannot have that.
And they have put a two-term limit in effect, which means that
the top leaders can only serve 10 years. And the replacements
have to be 10 years younger or they will be over the age limits
at the end of the period.
So, one of the advantages of a democratic system of
government is that we can change leaders, and changing leaders
is often the only way that you can change bad policies. But,
now China has generational shifts that are also built into a
regular process of changing leaders, so that when we get the
next change of leadership in China, in 2022, the people will be
under 60 years old who take the top positions. They will have
no memories of the cultural revolution. They will have spent
their entire lives, adult lives, under conditions of reform and
openness, with ready access to the outside world.
Do we really expect that those leaders are going to use the
same types of governance concepts inside China that the old
generation, that was not university-educated, or, if they were
educated, it was in Russia, or the Soviet Union, back in the
1950s? No. That is not the way humans behave. People reflect
the experiences they have as part of their maturing process.
And the experiences that the last 30 years of Chinese have had
are radically different from the experiences they had before
China opened itself up to the outside world.
But, we are talking about change over a period of decades,
and that is why I talk about the need for patience and
perseverance in dealing with China.
Senator Corker. If I can ask just one more question.
The age issue you mentioned certainly would wreck the
United States Senate. [Laughter.]
The Chairman. Present company excluded.
Senator Corker. That is right. [Laughter.]
So, it is understandable to see why you would undertake,
from their perspective, cyber theft. It is enriching them. They
can move ahead decades quickly by ripping us off. You can
understand that counterfeiting and all of those things. Again,
it is not proper, but, it is in their interests to rip us and
other countries off to pursue a more rapid growth there. And it
is unfortunate that they condone that. And I realize, over
time, as you mentioned, that may well change as they develop
their own.
If they view us as a threat, and they view us as
competition, what is in their national interest, relative to
the silly disputes that are taking place in the South and East
China Sea, which immediately, as you all mentioned in your
earlier testimony, provokes a response, ``They do something; we
do something''? How is that, again, in their overall strategic
interest to cause us to want to engage more fully in that way
because of their breaking of international norms?
Dr. Friedberg. Well, if I could start by just saying
something on the previous issue, because I think it is related,
I will give you the glass-half-empty view. It seems to me that
the Chinese regime, although it has evolved and changed, and
Chinese society has changed in many ways, maintains its
commitment to the preservation of one-party rule. Its interest
in reform is not rooted in principle so much as in practicality
and a desire to maintain its control. And it has proven to be
quite smart, sophisticated, but also ruthless in suppressing
dissent and maintaining the dominance of the CCP. I think there
is an anxiety on the part of the leadership about the future,
for reasons that I suggested. And the ways in which the regime
has sought to bolster its legitimacy, particularly since the
decline of the appeal, such as it was, of Marxist-Leninist
ideology, has been to emphasize economic growth and
improvements in welfare, but also, increasingly, nationalism
and this idea of a Chinese rejuvenation, the great Chinese
dream, and so on.
So, these disputes, although they appear to be over
insignificant pieces of rock, actually are potentially
extremely important, and I think, from the point of view of the
regime, may be useful, or they may see them as being useful, as
a way of rallying and mobilizing popular support behind the
government and deflecting frustration and resentments outward
against historic rivals, like Japan, and, to some degree, the
United States.
These disputes are about resources and about who is going
to be the dominant power in the region. China is seeking to
establish itself in that position, in part by forcing others to
give way in the face of its pressure. But, I do think that
these disputes have an internal function, and it is related to
the regime's concern about maintaining domestic control.
So, yes, in the long run, I hope that Ambassador Roy is
right and that we have this peaceful evolution, but, in the
shorter term, I am concerned that the regime, in its efforts to
maintain its control, may be undertaking dangerous and
aggressive external policies.
The Chairman. Senator Rubio.
Senator Rubio. Thank you.
I wanted to return to this notion of--Secretary Russel,
about--you used this term, ``the China dream,'' which I have
heard used to describe the situation in China, their ambitions
for their country. As it is been described to me in my visits
to--in my visit to Asia, and by others since--and there might
be some dispute about it--but, they view the China dream--they
describe it as follows: that China views itself, from a
historical perspective, as the world's great power, that they
view the last 150 years as an aberration in world history, and
they are simply now reemerging into their rightful place. And
``their rightful place'' means not simply displacing the U.S.
as a dominant power in the region, but, in fact, in some--in
many respects, behaving like the dominant power, vis-a-vis
their neighbors and the way they act toward their neighbors. I
think that is further compounded by what is no doubt over the
last 10 years not just a massive expansion in their military
capabilities, but by increasing assertiveness, for example, in
their claims in the areas within the nine-dash line, their
territorial claims, and potentially their claims on navigation
rights, which is something that we should care about deeply.
You described it as simply a desire to modernize the
country, but others have described it as much more--much deeper
than simply that, that, in fact--and perhaps you discussed this
earlier, but that the China dream, in fact, is about
establishing themselves as the world's dominant power in a
zero-sum game with the United States and the established
institutions under the post-World War II world. What is the
right way to view their mindset and--so that we can understand
better some of the policy decisions they are making?
Ambassador Roy. It needs to be viewed in its historical
context in order to have some idea of what they are talking
about. The two words that have generally characterized the
goals of China's reformers, going back to the Qing Dynasty in
the late 19th century, have been wealth and power. This was
what they wanted China to recapture. China used to be a country
that had wealth and power, and then it lost it during its
period of decline and exploitation by more powerful countries.
And so, right up through the 20th century, the goal has
been restoring China's wealth and power. That is not a bad
goal. All countries, in a sense, aspire to it. But, there are
aspects of it which are dangerous. And one aspect of it that I
find particularly disturbing is in the documents coming out of
the 18th Party Congress, which was 2 years ago, in talking
about why China needed powerful armed forces. They did not
simply relate them to the defense needs of the country and to
the economic development needs of the country, protecting their
economic development. They said they needed powerful armed
forces commensurate with the country's international standing.
That is a very dangerous concept. It means that China is now
saying, ``We need powerful armed forces because we are emerging
as a great power.''
And this represents a type of great-power chauvinism which
I think is inherently dangerous. I cannot get anybody else to
pay attention to what I see as a very dangerous phraseology
emerging in that document. When I discuss it with my China
colleagues, you know, they do not pay much attention to that
phrase. But, to me, it is very disturbing. What does it mean
for China to have powerful armed forces commensurate with its
international standing? When its economy overtakes that of the
United States, which might occur in the near future, does that
mean they need armed forces that are bigger than those of the
United States?
So, in other words, I see two sides of this. I see a China
which has legitimate aspirations to restore its wealth and
power, and I see a China which also may have the typical
ambitions of somebody who is getting strong enough to be the
big bully in the block.
Senator Rubio. I guess, from their actions, though, you can
deduce the following. I think this is a safe statement, and you
are certainly an expert on this, so I am glad we have the
opportunity to talk to you about it. Since the end of World War
II especially, we have had an established international order
that involves resolving disputes through mediation and other
methods----
Ambassador Roy. Right.
Senator Rubio [continuing]. And so forth. There is been an
economic order, as well, involving all sorts of things, from
trade to currencies. And what I take from the actions I have
seen recently is, the Chinese attitude toward this is, ``We did
not write these rules, we did not participate in their
creation. They were written in a way to benefit the West or
others, and we do not necessarily feel like we need to comply
with them. In fact, we would like to reorder or rewrite, to
some extent, by changing facts on the ground, in some
instances, how all of this operates, moving forward. And as a
rising power, we intend to do so.'' And that includes, by the
way, increasing, not just their military capacity, but their
willingness to use that capacity, at least now, to various
different means to assert their territorial claims. So, in
fact, they are not just--this is not just a rhetorical----
Ambassador Roy. Right.
Senator Rubio [continuing]. Challenge that they pose. We
are beginning to see this reflected in the actions that they
are taking.
Ambassador Roy. This gets into the question of whether
China's a status-quo power or whether it is trying to overthrow
the status quo and establish a new one. I actually find that
the truth, as I see it, is that China is somewhere in between
that. And common sense tells you that when a new power emerges
into an existing system, the existing system has to make
certain accommodations. And if the system will not make the
accommodations, then the rising power will want to change the
system.
But, in fact, the existing system is accommodating China to
a significant degree, but not to a 100-percent degree. So, for
example, China sees the World Bank and the Asian Development
Bank as largely controlled by Western countries and, in the
case of the Asian Development Bank, by Japan. And so, they are
talking about setting up an Asia Infrastructure Investment
Bank, which will be largely funded by billions of dollars from
China and which will engage in reconstructing a new Silk Road.
In other words, they will engage in infrastructure projects
leading into Central Asia and the Middle East. So, they are
thinking big in these terms.
But, this is not the same, to me, as being anti-status-quo.
It simply means that China wants more accommodation for its
interests, and the question of whether we can maintain the
stability of the international system is partly the degree to
which China will accommodate itself to the existing
institutions and the degree to which the existing institutions
will accommodate themselves to the fact that China has growing
stature in the world, has growing financial resources, it
swings more weight in the world. It is now a giant factor in
international trade, which is one of the reasons why our
Transpacific Partnership has the door open for China to
participate. Because what would be the sense of having a
transpacific partnership in which the country that has the
largest trade relationships with the countries that are members
of the partnership is not within it?
Senator Rubio. I guess that my final question is, Is it
fair to say that, among leading policymakers within the
Communist Party in China, they view international relations as
a zero-sum game, that, in order for them to increase, someone
else has to decrease? Is that----
Ambassador Roy. No. In fact, who am I to say what their
secret thoughts are? But, I have not encountered that view in
any of the senior-level conversations that I have been
privileged to be part of.
Senator Rubio. So, what about this, then? Is it fair to say
that there are commentators or others within--and others close
to the decisionmaking process--that view the United States as a
declining power and China as a rising power?
Ambassador Roy. I would say that is almost a universal
perception in China, at the moment.
Senator Rubio. Universal, meaning----
Ambassador Roy. But, it is not just----
Senator Rubio [continuing]. Among their political
leadership?
Ambassador Roy. I encounter that perception in Korea, in
Japan, in Southeast Asia, and in Europe. In other words, I
think there is a very dangerous perception out that the United
States is a declining power because of the fact that we have
not recovered in a robust fashion from the global financial
crisis of 2008, and they see us as having a frozen political
system that is unable to address our problems effectively. And,
frankly, that perception is out there widely in the world. And
I think it is wrong, because I think it leads to a
misestimation of the latent capabilities of this country. But,
frankly, we are feeding those misperceptions by not addressing
our domestic problems more effectively, in my judgment. I mean,
this is what I bring back when I travel abroad.
And there is a second point that I will make, in terms of
whether we are a declining country or not. I was in the Foreign
Service and in the government a long time. During the first 30
years of my government career, every time I returned to the
United States, it was better. We had an interstate highway
system. We switched to jet aircraft. Things worked better. And,
for the last 20 years, every time I return to the United
States, I am ashamed to see that our infrastructure works less
well, is less modern than you see in other countries. If you
have been to China and ridden on their high-speed rail system,
it makes you ashamed to take an Amtrak train to New York. You
can barely stand up on it. And in China, the trains go at twice
the speed and are smooth as silk.
So, this disturbs me, as an American, because--I hate
walking up escalators that do not work. [Laughter.]
And in Washington, that is an everyday experience. And we
are talking about technology that was developed at the end of
the 19th century, and somehow we cannot even keep our
escalators working. Dammit, I wish that Congress would----
[Laughter.]
Ambassador Roy. [continuing]. Address these types of
issues.
Senator Rubio. We have a bill on escalators this week, do
we not? [Laughter.]
The Chairman. Well, I am glad, Ambassador, we have given
you a forum to express those----
[Laughter]
The Chairman. As one of the members here trying to get a
highway mass transit bill done----
[Laughter.]
The Chairman [continuing]. We are all in favor of that.
Let me thank you both. I do have two quick questions. I
want to take advantage of your expertise, here. And I leave
this open to either--the first one, open to either one of you,
and then the second one is for Dr. Friedberg.
The way I see it--I also sit on the Senate Finance
Committee, and the way I see it, China adopting a market-
determined exchange rate would not only help rebalance their
economy domestically, but certainly would go a long way toward
correcting some of the imbalances that exist in our bilateral
trade relationship. How quickly do you think that China will
move toward a market-determined exchange rate? And what, if
anything, can we do to encourage or support that within China?
Any of you have--either one of you have any views on that?
Ambassador Roy. It is going to take time. I think it may
happen faster than we think. China is not comfortable holding
trillions of dollars of foreign exchange reserves, much of
which is in dollar-denominated treasury instruments. And
therefore, it is actively seeking to increase trade that is
settled in renminbi. And it is reaching agreements with
bilateral trading partners to settle the accounts using China's
currency.
But, China still does not have open capital accounts. And
until it moves to open capital accounts, it cannot become a
reserve currency for other countries, effectively. So, they are
not there yet, and they are not ready for that step yet, but
they are definitely setting that as a goal. And I think we
would be blinding ourselves if we think that we can simply
assume the dollar will remain the principal international
trading currency, given the current trends we see in patterns
of international trade.
They have already made quite rapid progress, in terms of
the percentages in which their trade accounts are settled in
nondollar currencies. So, it is something, I think, that we
need to pay very close attention to.
We are financing ourselves 50 percent through foreign
borrowing. You know, in World War II, we financed it entirely
by domestic savings. But, now we are financing it by foreign
borrowing. If we ever reach the point where we have to borrow
in foreign currencies, then we lose control over the terms of
repayment. And that is what bankrupted Asia during the Asian
financial crisis. Because the short-term dollar rates were
lower than borrowing in local currencies, and because the
currencies seemed stable, they were borrowing in short-term
dollar terms, and all of a sudden the financial crisis caused
the exchange rates to go gaga, and all of a sudden, Indonesia
was bankrupt overnight because of that. We do not want to move
in that direction, and that is one reason why we need to get
our financial system functioning well.
The Chairman. Let me turn to Dr. Friedberg.
So, with reference to our rebalancing to Asia and your
comments about, while you think it is right, you think it lacks
the robustness that is necessary, you mentioned the capacity--
helping the capacity of our allies to be a deterrent toward the
type of actions that we might be concerned with by China. If
you were to say--if you were sitting in the administration and
you would say, ``Here are the three, four top things that I
think we should do,'' what would they be? I did not
particularly care for rebalancing or pivoting, because I do not
think we have ever left. The only question is, What is the
degree of our engagement?
Dr. Friedberg. Well, the first one is very easy to say,
but, I realize, very, very difficult to accomplish. I think we
are going to have to increase defense spending, in the long
run, and, in particular, we are going to have to increase the
resources that are devoted to the kinds of capabilities we need
to counter this emerging Chinese antiaccess area denial
network. I do not think that is going to happen anytime soon. I
think we are trying to make do with what we have. But, I think,
in the long run, that is not going to be adequate.
Related to that, I think we are going to have to develop
and articulate a coherent and credible strategy for enabling
ourselves to project power into the region under any
circumstances in order to maintain our security commitments.
One thing about the so-called rebalance or pivot, or whatever
one wants to call it, that I think was not particularly well
handled, was the premature discussion of the so-called air-sea
battle concept, which attempts to begin to answer this
question, but was not ready for prime time and has caused a lot
of problems and confusion. Nevertheless, I think there is a gap
there that needs to be filled. We have to have a credible story
that we can tell ourselves about how we would use our forces if
we needed to do so, and also to tell our allies. And we do not,
at the moment.
I think, as far as assisting our friends and allies, there
are a number of things--and again, some of these things are
currently being done, and perhaps they could be done more--the
kinds of military exercises that we have engaged in, we are
about to engage in with the Philippines, also with Japan, which
demonstrate to any observers that we are prepared to use force,
if necessary, to help our allies defend themselves in
contingencies that might involve intrusion in their territorial
waters, and so on, I think send a powerful deterrent signal.
There are kinds of capabilities that our friends and allies
would like to buy, some of which we sell, some of which other
countries, like Japan, may be willing to sell, which increase
their situational awareness, enable them to better patrol and
control their territorial waters and airspace. I think those
things make sense.
We ought to be encouraging, even where we are not directly
involved, the kinds of connections that are growing up among
countries in the region that are intended to enhance their
defense capabilities. Japan and Australia are talking about co-
developing a new submarine for Australia. That makes sense, I
think. Japan and India are engaged in naval conversations and
maneuvers. Those things make sense. Even when we are not
directly involved, we should be encouraging others to do things
to help to maintain a balance.
The Chairman. Well, thank you both for your very valuable
insights. This obviously will be a continuing source of the
committee's attention. We look forward to engaging you along
the way as we have different issues to pursue.
This hearing's record will remain open until the close of
business tomorrow.
And, with the thanks of the committee, this hearing is
adjourned.
[Whereupon, at 4:20 p.m., the hearing was adjourned.]