[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
CHINA'S RISE: THE STRATEGIC IMPACT OF ITS ECONOMIC AND MILITARY GROWTH
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ASIA AND THE PACIFIC
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
JUNE 17, 2015
__________
Serial No. 114-72
__________
Printed for the use of the Committee on Foreign Affairs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.foreignaffairs.house.gov/
or
http://www.gpo.gov/fdsys/
______
U.S. GOVERNMENT PUBLISHING OFFICE
95-128PDF WASHINGTON : 2015
_________________________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Publishing Office,
Internet:bookstore.gpo.gov. Phone:toll free (866)512-1800;DC area (202)512-1800
Fax:(202) 512-2104 Mail:Stop IDCC,Washington,DC 20402-001
COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida BRAD SHERMAN, California
DANA ROHRABACHER, California GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio ALBIO SIRES, New Jersey
JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas THEODORE E. DEUTCH, Florida
TED POE, Texas BRIAN HIGGINS, New York
MATT SALMON, Arizona KAREN BASS, California
DARRELL E. ISSA, California WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina ALAN GRAYSON, Florida
MO BROOKS, Alabama AMI BERA, California
PAUL COOK, California ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas GRACE MENG, New York
SCOTT PERRY, Pennsylvania LOIS FRANKEL, Florida
RON DeSANTIS, Florida TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina JOAQUIN CASTRO, Texas
TED S. YOHO, Florida ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
DANIEL DONOVAN, New York
Amy Porter, Chief of Staff Thomas Sheehy, Staff Director
Jason Steinbaum, Democratic Staff Director
------
Subcommittee on Asia and the Pacific
MATT SALMON, Arizona Chairman
DANA ROHRABACHER, California BRAD SHERMAN, California
STEVE CHABOT, Ohio AMI BERA, California
TOM MARINO, Pennsylvania TULSI GABBARD, Hawaii
JEFF DUNCAN, South Carolina ALAN S. LOWENTHAL, California
MO BROOKS, Alabama GERALD E. CONNOLLY, Virginia
SCOTT PERRY, Pennsylvania GRACE MENG, New York
SCOTT DesJARLAIS, Tennessee
C O N T E N T S
----------
Page
WITNESSES
Derek M. Scissors, Ph.D., resident scholar, American Enterprise
Institute...................................................... 6
Mr. Han Dongfang, founder and director, China Labour Bulletin.... 22
Mr. Jerome A. Cohen, professor and co-director, U.S.-Asia Law
Institute, New York University School of Law................... 33
Adam Hersh, Ph.D., senior economist, Roosevelt Institute......... 40
Alison Kaufman, Ph.D., senior research scientist, China Studies
Division, CNA Corporation...................................... 49
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Derek M. Scissors, Ph.D.: Prepared statement..................... 9
Mr. Han Dongfang: Prepared statement............................. 24
Mr. Jerome A. Cohen: Prepared statement.......................... 36
Adam Hersh, Ph.D.: Prepared statement............................ 43
Alison Kaufman, Ph.D.: Prepared statement........................ 52
APPENDIX
Hearing notice................................................... 76
Hearing minutes.................................................. 77
CHINA'S RISE: THE STRATEGIC IMPACT OF ITS ECONOMIC AND MILITARY GROWTH
----------
WEDNESDAY, JUNE 17, 2015
House of Representatives,
Subcommittee on Asia and the Pacific,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 1:06 a.m., in
room 2255, Rayburn House Office Building, Hon. Matt Salmon
(chairman of the subcommittee) presiding.
Mr. Salmon. The subcommittee will come to order. Let me
start by recognizing myself and the ranking member to present
our opening statements. Without objection, the members of the
subcommittee can present brief remarks if they choose to or
they can submit them for the record.
And now I am going to yield myself as much time as I may
consume to present my opening remarks.
We can hardly discuss any major foreign policy issue
without China coming up. Indeed, questions about China are on
the top of everyone's minds. How stable is the Communist Party
regime? How does China's land reclamation in the South China
Sea affect prospects for peace or conflict? How can we deter
China from hacking into our networks and stealing vital
national security and economic information? Does China's
activity reflect its growing global ambition or is it driven by
domestic concerns for stability and security? What are the
consequences of a slowdown of the Chinese economic machine on
the U.S. economy?
China is at a crossroads. Its quest for development and
global influence has come at a high cost of alienating partners
and allies alike. There are cracks in the foundation, and
imbalances remain politically, economically, and militarily.
China cannot forsake and undermine the same international order
that has helped incubate its rise to prominence. It cannot
forget the agreements that it should honor or the spirit in
which they were made.
I look forward to discussing these issues as I welcome our
distinguished witnesses who traveled from as far as New York
and Hong Kong to be here today.
China has become a global economic powerhouse since it
opened up in 1978. China's military operation and expenditures,
vast manufacturing, as well as regional investment and global
infrastructure projects reflect this well. But the IMF projects
China's annual GDP growth to slow down to about 5.9 percent
over the next 6 years. Experts attribute the slowdown to
factors such as demographic changes, the coddling of state-
owned enterprises, a weak banking system, government
corruption, and inadequate adherence to the rule of law.
Major demographic challenges are forcing changes to China's
long-term economic planning, including the legacy of its one-
child policy and increasing wealth gaps. The working class is
simultaneously shrinking and demanding higher wages. Large debt
loads throughout municipalities and provinces across the
country mean that reckless infrastructure buildup is no longer
viable for boosting GDP growth. The instruments that China used
to finance its rise are no longer a reliable option for
maintaining its position as a great economic power.
Innovation and access to information are major contributors
to economic growth, but these drivers have been stifled because
of China's desire to control information to protect domestic
stability, leaving China in a development dilemma. These issues
cannot be addressed when people cannot express ideas freely and
benefit from their hard work. China can only throw so much
money to try to foster intangible skills that contribute to an
innovation society.
Instead, China resorts to stealing other nations'
intellectual property, blatantly disregarding international
norms, while stubbornly denying any malicious activity in
cyberspace. Domestic drivers are protecting the governing power
of the Chinese Communist Party. Continued economic growth and
military modernization override its desire to curtail or halt
such activity.
China's cyber activity cannot persist without
repercussions. Yet, the high payoff for this behavior, and
frankly, our inability to devise proper responses, exacerbate
the issue.
Over the past 25 years, China has made great strides in
military modernization, including a sustained 9.5 percent
annual increase in military spending over the past decade.
While it lacks combat experience and power projection
capabilities, the People's Liberation Army attempts to address
these shortcomings by conducting more noncombat operation
overseas, participating in more international exercises,
notably with Russia, and enhancing its ability to dominate
territory in or around its waters. China's island-building
activities contradict decades of international agreements in
this arena and raise concerns and questions over its supposed
peaceful rise.
Under Xi Jinping's leadership, punishment and detention for
the exercise of free speech and assembly has been increasing.
The government not only strictly controls the Internet and
limits people's political and social rights, it also pursues
efforts to forcibly assimilate ethnic and religious minorities,
such as the Uighurs in Xinjiang. Legislation such as the
Foreign NGOs Administration Law also put at risk our NGOs'
ability to operate in China.
Promotion of human rights and protection of personal
freedoms should continue to be an important aspect of our China
policy. Under Xi Jinping's leadership, the world has seen a
China that is both more internally restrictive and more
internationally assertive. His predecessor, Deng Xiaoping,
encouraged a low profile for China on the world stage, saying,
``tao guang yang hui.'' Under Xi Jinping, however, China has
embraced a higher international profile, changing its foreign
affairs slogan to ``striving for achievements'' or ``fen fa you
wei.''
I have had the privilege to travel to China more than 40
times, and I have had the honor to get to know many thoughtful,
inspiring, innovative, and successful Chinese people. If I have
learned anything from my years of engagement with China, it is
that there is no one way to characterize a country that is so
full of wonder and full of contradictions, full of frustration,
yet full of potential.
As the United States prepares for Xi Jinping's visit on
September 1, I urge our Government to welcome China's active
role in the world, but we must also temper China's impatience
and assertiveness with expectations of reciprocity and
responsibility.
I now recognize the ranking member, Brad Sherman, for his
remarks.
Mr. Sherman. Thank you, Mr. Chairman. We are, of course,
holding these hearings an hour early. I got about 1\1/2\ hours'
notice of that. So let the record show that I was not 2 minutes
late to these hearings. I was 58 minutes early.
Mr. Salmon. Right.
Mr. Sherman. And I would hope that members who wish to give
short opening statements be allowed to do so whenever they are
able to arrive.
We have two great issues with China, economic and
geopolitical. It is my observation that in our country,
whenever we are making a decision, we tend to make it in lines
with the institutional needs of the most powerful institution
that cares about that policy. So in the area of military
affairs, we tend to make decisions meeting the institutional
needs of the Pentagon. In the area of economics, we tend to
make decisions based upon the institutional needs of Wall
Street and the corporate sector.
And with regard to China, this has led to a bizarre
schizophrenia where we are about to fight China for islets that
are useless and not ours and make every possible concession on
trade, while never talking about using trade to tell China they
better not take islands if we care about the islands, which I
am not sure we should. Islets, I might add.
Look at the Pentagon as an institution. Every time since
1898 when we have faced a uniformed nation-state as an
adversary it has been a glorious outcome for our military
forces, none more glorious than the defeat of the Soviet Union,
which basically took place by facing them down rather than
engaging in kinetic warfare. Every time since 1898 that we have
faced an asymmetrical opponent, every time we have faced a
nonuniformed adversary, it has been very painful for our
Pentagon and military forces. We have not always lost, but
since the Philippine insurrection, it has always been painful.
So the Pentagon, if it is going to meet its institutional
needs, needs to find a worthy adversary. There is only one, and
that is China. And that is why every decision at the Pentagon
is how can we ignore the Middle East and reconfigure our forces
to pivot toward a confrontation with the People's Republic of
China. Every decision as to what research to do, every decision
as to how to procure, force configuration, it is all about how
can we fight the war--or the face-off, hopefully, not a kinetic
war--that will meet our institutional needs.
China does not have to be the enemy, but it is the only
enemy that meets the Pentagon's institutional needs. Keep in
mind when it comes to these islets, there is no oil, they are
worthless. If they are standing astride trade routes, those are
trade routes in and out of Chinese ports. If China controls
them, they will have the geopolitical, strategic capacity to
blockade their own ports, but they do not stand in a position
to interfere with U.S. trade with Japan, the Philippines, et
cetera.
And there is no oil. If there was any oil, it wouldn't be
our oil. And Japan, for example, spends almost nothing of its
GDP to defend the islets that don't have any oil, but if it was
oil, it would be Japanese oil.
And China is part of this. They are meeting their
institutional needs by whipping up nationalism over useless
islets.
When it comes to trade, the trade deal that is before
Congress now is the most incredible gift to China and the most
incredible gift to Wall Street. China is not a party, so they
have no cost, no commitments. They don't have to pay a penny
for this deal. But what do they get?
First, a declaration by the world that the trade agreements
of the 21st century will allow, even encourage currency
manipulation, which of course is their number one way of taking
American jobs.
Second, the rules of origin provision. Goods can be made,
admittedly, 60 percent made in China, but that really means 80
percent made in China in reality, finished in Japan, finished
in Vietnam, and get fast tracked into the American market. So
it is 80 percent of all the benefits of signing a free trade
agreement with the United States and zero percent of the cost.
I would point out that while we run a $300 billion trade
deficit with China, Germany has a balanced trade relationship
with China. If we had a balanced trade relationship with China
there would be a labor shortage in this country. Companies
would be desperate to hire more people, they would be raising
wages, they would be hiring the barely unqualified and then
training them. A higher percentage of GDP would be going to
labor. Wall Street does not want that. And this agreement
ensures that we will continue to have the wage stagnation, or
from the other side, labor cost nonincrease that Wall Street
would like to see.
Finally, we have one tactic that we could be using against
China and probably should, and that is, gather the
information--they are hacking us all the time--gather the
information that proves that their top 1,000 cadres are corrupt
and expose that information, as is appropriate, whether it be
those who are the insiders like or those who are on the outs,
whether it be those who are popular locally, those who are not
popular locally, whether it be that we demand concessions,
otherwise we will expose, or whether we actually expose in
order to undermine the regime's image that it is fighting for
the Chinese people.
Of course, we are reluctant to do that, just as we are
reluctant to have any of the hundreds of tax cheats in our own
country who are exposed in multimillion-dollar revelations from
banks subject to our criminal law, but we need to have dossiers
on the economic corruption of the top 1,000 Chinese officials.
And I yield back.
Mr. Salmon. Thank you.
Let me just make a comment on the timing of the hearing.
There really wasn't anything sinister afloat. They changed the
votes to 3 o'clock today, which would have given us time for a
15-minute hearing, which didn't do justice when we have got
somebody that came all the way from Hong Kong to meet with us.
So we apologize for the changes to the people testifying
today and to members of the committee. We did the best we could
today with a very difficult situation.
I recognize Mr. Duncan.
Mr. Duncan. I thank the chairman and apologize. I will have
to leave, due to the schedule change, at 1:30.
I think it is prudent that we remind ourselves of Proverbs
22:7, which says the borrower is servant to the lender. China's
actions in the Spratlys and the South China Sea are
inexcusable, and what should the U.S. do about it, given that
China is such a strong economic power? And what should the U.S.
do about that? Definitely not unilaterally, but also possibly
working with the Philippines that are dramatically affected
with the incursion in the Spratlys that we see.
China's posturing is alarming. China is attempting to
reshape international economics as well as geopolitics. And one
thing that concerns me that I hope this committee will delve
into is China's, for lack of any word, gobbling up mineral
rights around the globe, especially when it comes to rare earth
minerals, which they understand and we fail to recognize enough
that they are vital to the technical systems of today, such as
your iPhone, your iPad, and all the technology that really
drives our economy.
So these are some things that I hope we delve into, and I
appreciate the chairman for having this hearing. And I yield
back.
Mr. Salmon. Thank you.
Mr. DesJarlais, did you have any opening comments?
Mr. Perry.
Mr. Perry. Sure. Thank you, Mr. Chairman.
The U.S.-China relationship is entering a new phase.
Beijing has become more confident, global, and assertive. In a
relationship that has unique cooperative and competitive
elements, no one, none will stress a relationship more than
those concerning the South China Sea. American efforts to
protect our interests against this newly aggressive China have
been, in my opinion, ineffective. In official public
statements, the Obama administration takes no position on the
disputed formal territorial claims and then calls for peaceful
resolution of disputes.
American objectives for the South China Sea must be a part
of a larger strategy toward China that welcomes a greater
Chinese economic and diplomatic role. It can't just be rhetoric
and talk about a pivot without any action. We must set clear
boundaries on Chinese expansion of its territory by coercion or
conquest, and on its ability to deny the United States full
freedom of action in the Western Pacific.
And with that, Mr. Chairman, I yield back.
Mr. Salmon. Thank you.
Now we get to the panel. Pursuant to Committee Rule 7, the
members of the subcommittee will be permitted to submit written
statements to be included in the official hearing record.
Without objection, the hearing record will remain open for 7
days to allow statements, questions, and extraneous materials
for the record subject to length limitation in the rules.
Okay. We are honored today to have the distinguished panel
before the subcommittee. Dr. Derek Scissors is a resident
scholar at the American Enterprise Institute where he focuses
on Asian economic issues. One of Dr. Scissors' areas of
specialty is the economy of China and Chinese-U.S. economic
relations.
Dr. Alison Kaufman is a senior research scientist at the
CNA Corporation's China Strategic Issues Group. One of her
areas of expertise is U.S. security cooperation in the region.
Thank you for being here.
Jerome Cohen is currently a professor of law at New York
University School of Law as well as the co-director of the
U.S.-Asia Law Institute. Mr. Cohen has practiced law and lived
in China for decades, since before the country opened up to the
world.
Mr. Dongfang Han is currently the executive director of the
China Labour Bulletin. Mr. Han helped to form China's first
independent trade union in 1989, and in the aftermath of the
crackdown following the Tiananmen Square protests, he was
arrested and detained for nearly 2 years. He has led a long
career as a voice for reform and rights in China.
I really enjoyed my meeting in Hong Kong with you, and I am
so excited about you being here today.
Adam Hersh is a senior economist at the Roosevelt Institute
and a visiting fellow at Columbia University's Institute for
Policy Dialogue. Previously he was a senior economist at the
Center for American Progress.
And without objection, the record will remain open for 5
business days during which members may submit materials for the
permanent record.
And you all understand the lighting system. You have 5
minutes to speak. I don't do a heavy gavel. If you have a few
seconds over, no problem. But the light turns amber when you
have got about a minute left. Just be cognizant of that. When
it turns red, it is like my wife tells me when I am speaking,
it is time for this.
So I appreciate you being here today. We are extremely
happy to have you here. I am going to start on the left side of
the dais with--my left, your right--Dr. Scissors.
STATEMENT OF DEREK M. SCISSORS, PH.D., RESIDENT SCHOLAR,
AMERICAN ENTERPRISE INSTITUTE
Mr. Scissors. Thank you, Mr. Chairman, and thank you to the
committee for inviting me here.
I am going to start by saying that the chairman's remarks
about the great variety in China apply to U.S. studies of China
as well. There are other research communities represented here
who have very different perspectives for very good reasons.
From my perspective--and I title my written testimony not
``China's Rise'' but ``China's Stall''--so the econperspective
on China is quite different than perhaps the national security
or the human rights perspective.
To summarize it, the China stall is not unavoidable, but
the problem is more than a decade old at this point. The
government is going to report whatever it wants, the Chinese
Government can report whatever economic statistics it likes,
but by the end of this decade it will be unmistakable that
China is no longer growing economically, unless significant
market reforms are resumed.
That is the theme of my presentation. It has a lot of
implications, which hopefully we will get to in the rest of the
hearing.
Let me give some qualifiers. I am not saying China is about
to collapse. That is a different argument. I think it is
unjustified. China's economic situation of high debt and aging
population--and you see a picture up on the board--inadequate
local innovation, that is not a collapse situation. That is a
stagnation situation. So people talking about collapse are
saying different things than I am saying here.
I do think, rather, that China can avoid this, can have
another generation of rapid growth, which would be very
impressive on the top of the one it has already had, but it has
to go back to what got it there in the first place, which is--
should I yield my time to Congressman Rohrabacher?
Mr. Salmon. Go ahead.
Mr. Scissors. Okay. It has to go back to what got it there
in the first place, which is individual property rights and
competitive markets.
And my third caveat would be is I don't really care about
GDP. I certainly don't care about Chinese GDP. The Chinese
Government doesn't tell the truth about their GDP growth. I
don't think GDP is a very good measure. What matters,
especially in mixed command-market economies, is how well you
are delivering the goods to households. So what I care about
when I am saying China is stagnating, I am not talking about
what they are going to report in 2020. I am talking about
household and personal income growth.
Okay. So how am I saying this? The problems go back to
2003. In that year the then new government under Hu Jintao
pushes aside market reform in favor of public investment,
directed and financed by the state, largely routed through
state-owned enterprises. 2003 to 2008, China's economy is
getting bigger and it is getting less healthy. The equivalent
of my wife's comment is: At 190 pounds, you were fine, you
didn't get stronger when you added the extra 20 pounds. She
says that, I don't know, once in a while, this morning,
yesterday, you name it. That is what was going on in China 2003
to 2008.
You didn't see that when the numbers were soaring, but when
the financial crisis hit, China's vulnerability was much
higher. They were much more vulnerable to a drop in excess
demand, they were much more leveraged. They actually got
structurally weaker in those 5 years even though they got
bigger.
Then they had a horrible crisis response, which is to order
their banks, because they control the banks, to lend to
everyone, without discrimination, when no one could make money.
So you would think that the United States would be the champion
of debt problems. The financial crisis starts here. We had
private sector debt problems. We brought a lot of the private
sector debt into the public sector. China's debt problems since
2008 are much worse than ours, not even close. And I could give
you some numbers, but I want to get to my implications of this.
So what is the forecast for China's growth? When you have
high debt and you have overspent, you don't have a return on
capital. You have already wasted a ton of money, you have to
use a lot of your money to pay back debt, that is not going to
drive growth. Aging, public health problems, labor, which has
been a big contributor to Chinese growth, is not going to drive
growth. Environmental destruction, which means the land, which
was the original driver of Chinese growth in the late 1970s and
early 1980s, not going to drive growth.
Innovation, which both the chairman and the ranking member,
several members have talked about, it is a very rough
transition to go from copying and stealing other people's
technology to developing your own, and what China needs to push
growth higher is to develop its own technology, but that can't
be ordered the way espionage programs can be ordered. So that
is not a clear source of growth either. In fact, I think it is
much more likely we are going to be dealing with China stealing
U.S. technology and information than we are China driving
innovation.
Sources of growth are pretty easy. China is going to
stagnate. And the way to get away from that is reform, which
they have talked about, but it requires fewer restrictions on
labor mobility so people can go where the jobs are. That makes
the Ministry of Public Security very uncomfortable. My
colleague may discuss this. I don't mean to put any words in
his mouth.
They need a competitive financial system instead of one run
by the state. They need a smaller state sector so that the
private sector can actually compete in more industries. They
need private rural land rights. The state owns all rural land.
Individuals can't own rural land.
So this is a very tall order, and they have a long, long
way to go. And I have to be cynical here. I don't believe
governments do things until they actually do them. IOUs don't
cut it. So right now China is on a path to stagnation, not a
path to reform.
I don't really have time for implications. There are a lot.
I will say that the economic impact on the U.S. is not very
large. We can talk more about that. I think there are some
important strategic issues. I am not qualified to talk about
some of them. One of them I am. Ranking Member Sherman said
correctly: We should be spending more resources gathering
information. I wrote a paper about this a couple of years ago.
We can have differences over what information we want to
gather. But we have a China that could stall. We were caught
off guard when the Soviet Union's economy didn't work. We
shouldn't have that happen again.
Thank you.
[The prepared statement of Mr. Scissors follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
----------
Mr. Salmon. Thank you.
Mr. Han.
STATEMENT OF MR. HAN DONGFANG, FOUNDER AND DIRECTOR, CHINA
LABOUR BULLETIN
Mr. Han. Thank you, Mr. Chair. Likewise, I enjoyed our
conversation in Hong Kong. I am here as a democracy activist
based in Hong Kong for more than 20 years and fighting for
better labor rights protection and democracy in China.
I want to share with you what is behind the South China Sea
conflict. What is changing, what is possible in China's
society. Ten years ago, the China Labour Bulletin decided to go
for a collective bargaining system in workplaces, and we fight
for that instead of political freedom of association to take
what the Chinese Government doesn't want to give.
So during the 10 years, the first 5 years we did seminars
and writing articles to promote this idea, but in the last 5
years we got involved into 70 strike cases, we are able to make
each of the 70 cases into a certain level of collective
bargaining. And that proves something, that when we made that
decision people were doubting, without freedom of association,
whether you can do collective bargaining under a communist
regime. We did so.
So 10 years after, I have to say very proudly collective
bargaining in workplaces in China is being accepted by
different people in this country, including the government and
official trade union and labor NGOs, and most importantly, the
workers who are on strike. From wildcat strike without a clear
agenda, without a clear strategy, they turn into very a clear
strategy on their collective bargaining. So that makes labor
relations much less confrontational than before.
So that means if collective bargaining can happen under a
communist regime, and the labor issue and labor movement even
can be operated at some level in China, that was the most
sensitive issue in the communist regime, if that can happen, I
think there are many other things that can happen. If the
government can allow these things to happen, many other things
can happen. So I just want to share with you about that, and
there are possibilities.
And the second point I want to share is that China is a
highly interest-oriented country. So you have a military, you
have a Public Security Bureau, you have the state security, and
you have workers, you have employers. And this country is
highly operated with a market economy. So how can we deal with
a highly self-interested society and politics as well? And that
is one of the reasons, I have to say, why the labor movement
became possible under the communist regime.
And the other point I want to make is social media with the
new technology. This is no longer as a tool. Social media is no
longer as a tool. It is a way of living for hundreds of
millions of Chinese people. That means controlling information
for anyone, including the government and security, it is not
possible. And hundreds of millions of Chinese people are
receiving and sending out information, sharing information,
sharing their desperation, their experiences with others over
the Internet either with people they know or they don't know.
So the new reality, the social media, really, really
provided a huge opportunity and space for civil society to
grow, and that is what I believe the future democracy and
China's change will be based on. So therefore I would like to
recommend to people who are working on the China-U.S.
relationship, I would like to see as a democracy activist, I
would like to see the U.S.-China relation have less hostility
and more trust, and I really would like to see to build a
strategic partnership, even in the South China Sea. Why not? It
is possible.
And second, I would like to see the U.S. devote more
resources to help China develop the civil society movement,
which is already growing, for example, the labor movement
development. It will benefit both the U.S. workers and Chinese
workers to have both sides higher income.
So therefore I want to emphasize that the CCP, Chinese
Government, is already changing into a new reality, and I
believe China doesn't need to repeat what happened in Eastern
Europe countries and the former Soviet Union. It can change the
country for the better. So I would like to say that the civil
society movement, it is very vulnerable and fragile, if
anything happens between the U.S. and China military-wise, and
that will be a disaster for the civil society to develop.
Thank you, Mr. Chair.
[The prepared statement of Mr. Han follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
----------
Mr. Salmon. Thank you.
Mr. Cohen.
STATEMENT OF MR. JEROME A. COHEN, PROFESSOR AND CO-DIRECTOR,
U.S.-ASIA LAW INSTITUTE, NEW YORK UNIVERSITY SCHOOL OF LAW
Mr. Cohen. I want to congratulate the chairman and members
of the committee for opening statements that were eloquent,
comprehensive, and stimulating, and I think I have learned a
lot just from listening to my two colleagues.
My own remarks will focus first on the domestic scene, and
secondly on China's foreign policy, which is our most immediate
problem.
On the domestic scene, I think between the chairman's
statement and what we have heard here, I don't have to recite a
whole chain of challenges, but it helps to remember them
because I am neither on the side of the collapsists who think
China is on the verge of demise or those who think China is
going to dominate the world. I think actually, because its
vulnerabilities are accumulating and beginning to outweigh its
assets, that China may have peaked in terms of the world's fear
of China and respect for it.
It doesn't mean, however, that this government is going to
disappear. When we remember the example of North Korea, even
they are able to hang on indefinitely. So we shouldn't
underestimate the viability of this government, but we have to
think about what it is likely to do.
The sad thing from the point of view of China's leaders is
these people represent a Communist Party that after 65 years of
ups and downs really has to be credited with making huge
economic and social progress. On the other hand, the speed of
that progress has led to many of their problems. They are
victims of their own success, and they have not devised a
system that is adequate for dealing with these questions,
whether you call it democratic or democratic dictatorship or
whatever. And these leaders are afraid. They are like cats on a
hot tin roof. Despite their many accomplishments, they fear
overthrow. And June 4, 1989, in which Mr. Han took part, was a
too vivid reminder for them.
So they engage in repression, and the repression has gotten
worse in the last 3 years under Mr. Xi Jinping. He will appear
here in September, a very attractive character, able person.
But the fact is we have to understand the repressive policies
in which he is engaged. I have many friends in prison in China.
I have many who are exiles who cannot go back to China. These
are often the cream of Chinese society. They are the best
future of China.
Repression cannot go on forever. If we look at the example
of Taiwan, when I first went to Taiwan in 1961, Chiang Kai-
shek's son was head of the secret police. He was a killer. By
the mid-1980s, when he was in charge of the government he had
inherited from his father, he was beginning to be a modernizer.
He saw you can't go on using repression. You have to begin to
develop social, economic, political, and legal institutions
that can process the grievances that accumulate inevitably with
progress. And he started off what now has become the vibrant
democracy in Taiwan.
And that is something I wish Mr. Xi Jinping and his
colleagues could expend more energy on. But their natural turn
is repression. And we are going to see this perhaps for 8 more
years if he can remain in office, despite his anticorruption
campaign's implications, et cetera. I think somebody has to
assert the time has come for domestic reform of a serious
nature.
But let me talk about the international situation. You
know, it is easy to exaggerate, with the current concern over
China's policy toward the South China Sea, how terrible their
foreign policy may be, et cetera, but we really need to keep an
overview. And I think China and the U.S. are ready to continue
cooperation on many subjects, particularly environment, climate
problems, et cetera. I think with the coming Strategic and
Economic Dialogue we will see continuing efforts to compromise
on many of the controversial issues that plague us.
China has entered the WTO in largely a constructive way,
and although it hasn't completed complying with all its
obligations, I think that is a good example of China as a full
participant in the world process. On the other hand, as was
mentioned, the so-called foreign NGO law that is being prepared
is going to wreak havoc with China's foreign relations. It is
going to cover much more than NGOs. Every university is
covered. Their definition of NGO is very, very broad.
And the institution in China that is going to administer
this is the Ministry of Public Security, the police, not the
Ministry of Civil Affairs that used to be responsible for these
problems exclusively. And that may be the best hope for seeing
revisions of the law before it is passed, because other Chinese
institutions are very jealous of the authority of the police
organizations in China. And we should note, the budget for the
police organizations in China exceeds, every year now, the
budget for the national military. That is a pretty sobering
reflection of the repression that is going on.
But the most important questions are serious ones that
plague us today. It used to be the East China Sea with Japan,
but it is noteworthy we don't hear much about that now, and
there is a lesson in that, because we could see the same result
if we play our cards right with the South China Sea.
It seems to me the South China Sea issue has to lead to
what to me as a international law professor and lawyer is very
obvious. Different countries have different views about the
rights and wrongs of the international law issues involved
about the specs of Earth and the Spratlys and Paracels, et
cetera. The obvious answer, as it is in the East China Sea
between Japan and China, is turn to international law. Turn not
only to assertions that we are right and there is no dispute we
are right because we are right, that is just nonsense.
International law also presents institutions for resolving
these questions.
We don't have that when we look at cyber attacks, we have
no rules yet for that, and we have no institutions for applying
those rules. But we do have that with the Law of the Sea. That
is what UNCLOS is. And I hope that you will try to use your
influence with the Senate to make a final successful effort for
the U.S. finally to accede to UNCLOS, because right now we are
denied the opportunity to do what the Philippines has done.
I admire enormously what the Philippines has done. They had
the guts to bring China to an arbitration under the Law of the
Sea institutions, and China is legally committed to take part
and certainly to observe whatever decision comes out of these
impartial experts who are arbitrating the Philippine dispute
with China.
Early next year we will at least have a decision whether
this tribunal has jurisdiction over the case, and I think it
will probably find it does have and it will go on to answer
some of the questions that currently plague us. Do you want to
know what an island is compared to a reef, compared to a rock?
These questions may well be answered through the Philippine
arbitration. Is the nine-dash line a bunch of hooey, as many of
us think it is? Well, we can look to the Philippine arbitration
perhaps to answer that. This is just an example of what
international law institutions can do if they are invoked.
The sad thing is the Philippines stands by itself right
now. Japan may be saying: We will hold your coat and we hope
you win. That is certainly Vietnam's view. And we have others.
Taiwan, of course, is excluded from formal participation, but
they too should be taking initiative. This is the time for
using international institutions and imagination.
There are so many ways available, in the light of
international law precedents, for solving these problems. You
can decide to do an inventory of all these features and decide
which are reefs, which are rocks, which are islands entitled to
a full panoply of Law of the Sea benefits, Continental Shelf,
exclusive economic zone, and all that. We can have diplomats
decide we will divide up, we will share jurisdiction, we will
share resources in some ways.
But the diplomats are in a stalemate. We have heard the use
of stalemate to describe the domestic situation in China,
stalling. Well, we have a stalled political situation
internationally, and the United States and Japan and Taiwan, as
well as the Philippines, and even Vietnam, which behind the
scenes sides with the Philippines, have to use the existing
institutions, and I hope that your committee will use its
influence to make more of the opportunities that exist.
So that is the burden of what I have to say.
[The prepared statement of Mr. Cohen follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
----------
Mr. Salmon. Thank you very much.
Dr. Hersh.
STATEMENT OF ADAM HERSH, PH.D., SENIOR ECONOMIST, ROOSEVELT
INSTITUTE
Mr. Hersh. Thank you, Chairman Salmon, Ranking Member
Sherman, thank you for inviting me to testify today.
China's rising geoeconomic and geopolitical significance
and what it means for the United States could not be a more
timely or important topic, particularly as our Nation considers
how to proceed with the Trans-Pacific Partnership trade
agreement.
Let me begin with a point of agreement on this issue. The
rules for how our economy works, who gets to write those rules,
this is of fundamental importance to the United States'
economic future. The divisions we saw in last week's historic
TPA/TAA vote here in the House reveal how much the rules matter
to people. Some point to this outcome as a sign of a broken
Congress, but I submit this was Congress doing its work.
Rather, what is broken is the relationship between Congress
and the executive branch, particularly the USTR, and how
divided constitutional authorities to make international
agreements work in practice in our Government. When the rules
matter this much, we should take the time to get them right,
rather than trying to bulldoze through Congress whatever rules
USTR and the corporate lobbyists that negotiate these
agreements with them, supposedly on our behalf.
What we know about this agreement is that it has less to do
with freeing trade, creating jobs, raising wages, or
rebalancing geopolitics than it does with rewriting the global
economic rules to favor corporations, CEOs, and shareholders at
the expense of almost everybody else. Unless Congress acts to
change this balance of power with the executive, we should
expect more of the same confrontational politics and
uncertainty over policy when what we really need is to reach
agreements that meet our national imperatives through
cooperation and inclusion.
I will make two points today. My first point is that the
most fundamental thing for national security is a strong
national economy, and TPP would weaken our economic base, leave
us more unequal overall, and reinforce the global race to the
bottom in social and environmental standards, commercial
standards, and taxation. My second point is that TPP fails the
geostrategic rationale for checking China's rise on many
fronts.
On my first point, estimates of TPP's economic impact say
it would raise U.S. GDP by $88 billion by the year 2025. This
amount is less than the statistical rounding error when we
calculate GDP for the United States. If each of you chose a pet
infrastructure project in your district and decided to fund
that, it would have a bigger economic impact over the next year
than TPP will have 10 years from now.
TPP's big changes are not to lower traditional barriers
between countries, but to change how the economic rules work
within countries. I detail this in more detail in my written
testimony, but I will highlight the investor-state dispute
settlement as one of the major issues of the agreement.
Here I will note that progressives like Senator Elizabeth
Warren and my boss, Nobel Prize-winning economist Joseph
Stiglitz, are aligned with scholars from the Cato Institute and
editors from The Economist magazine in agreeing that ISDS goes
too far in empowering global corporations against the
sovereignty of the public to regulate in its interest. What
ISDS does is provide an implicit subsidy for foreign investors
to move their investments offshore and makes it more difficult
for our partners to raise the standards that we say we care
much about.
My second major point is that TPP fails the geostrategic
rationale for keeping China in check. This is a 20th century
cold war containment strategy aimed at a 21st century problem
where the United States is no longer the center of the world
economy. For this to work, it would need to do two things. It
would need to truly set high standards and it would need to
largely exclude China from the benefits of this trade bloc.
This would let TPP countries get a bigger share of the
supposedly higher standard trade and investment happening in
the region and entice China to raise itself toward TPP
standards, but it does neither of these.
On the first test, TPP makes no meaningful advances over
the status quo of recent trade agreements. It leaves in place
the same woefully toothless mechanism to enforce standards on
labor rights, environmental protections, and accountability for
state-owned enterprises. And TPP foregoes the opportunity to
discipline currency manipulation for trade advantage, which is
a pervasive practice, not just in China but across the Asia
region.
On the second test, TPP cannot feasibly exclude China from
the benefits of the agreement. China is already more integrated
with TPP countries than the United States. Its total trade with
non-NAFTA TPP members is nearly double that what the United
States has with the same group of countries. What this means is
that either by investing directly in or trading Chinese-
produced content through TPP countries, deeper and growing
integration with China will mean that Chinese producers can
enjoy access to TPP's market access without reciprocating the
same market opening to U.S. businesses and workers. In fact,
the Chinese officials I talk to are about as enthusiastic for
TPP as any business lobbyist here in Washington.
China's transformation under authoritarian capitalism, its
ongoing nonmarket economic structure, its expanding
geopolitical influence, these all pose real challenges for the
United States and for the future of open societies around the
world. But TPP does not provide answers to these challenges.
Finally, our own unforced errors in foreign economic
relations are much for damaging the U.S. reputation in the
region than your vote on TPA and slowing down the process for
negotiating TPP. Here, I am looking at things like Congress'
failure to enact internationally negotiated IMF reforms and to
this administration's diplomatic debacle in trying to strong-
arm our allies into boycotting China's Asian Infrastructure
Investment Bank. When this is how we treat our friends, it is
no wonder the United States has a reputation problem in the
world.
This strategic choice cost us an opportunity to write the
economic rules with China. Instead, it left us isolated from
the international community and left China to write the rules
on its own.
These problems do not end with TPP. A multitude of other
agreements are underway with the same basic template, from a
mega regional agreement with the European Union, to the trade
in services agreement, to bilateral investment treaties with
China itself. These will determine whether we grow with broadly
shared prosperity or continue down our economic path that
produces high and rising inequality and low economic
opportunity.
Strengthening international relations is essential for
ongoing U.S. leadership in the world. So is getting these rules
right. No American should relish a failure to build deeper and
more open relations with our partners, nor should we retreat
from trying. But getting to a deal that serves more than the
narrow interests of powerful multinational corporations
requires that Americans be willing to walk away from the TPP
agreement that we have on the table now.
Thank you.
[The prepared statement of Mr. Hersh follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
----------
Mr. Salmon. Thank you.
Dr. Kaufman.
STATEMENT OF ALISON KAUFMAN, PH.D., SENIOR RESEARCH SCIENTIST,
CHINA STUDIES DIVISION, CNA CORPORATION
Ms. Kaufman. Thank you very much for having me here today.
I am going to give the usual caveat that the views I express
are my own, not those necessarily of CNA, the United States
Navy, the Department of Defense, or in fact anyone but myself.
So I state that for the record.
In my testimony today I have been asked to talk about
Chinese security affairs, and the first point I want to make is
that actually, in the Chinese view, everything we are talking
about today is part of security affairs. Xi Jinping has been
very clear about that, but it is actually quite a longstanding
trend in Chinese views, that internal security, external
security, economics, diplomacy, law, military, all of it is
part of what they consider to be their security problem.
And so when Chinese decisionmakers think about securing
their nation, they are also thinking about how to balance all
of those things with one another. So I would assume that when
Chinese decisionmakers sit down they actually say: Here are all
these problems we have, how are we going to make these work
together to strengthen China and make it more powerful?
That said, I have been asked today to talk more on the
military side of things and more traditional view of security.
So today I am going to raise three questions. First, what are
some of the security issues that Chinese leaders appear to be
worrying about the most right now? Second, what are they doing
about them? And third, what does this mean for the United
States?
So first, what are Chinese leaders worried about? They draw
their worries from the past, the present, and the future. All
countries do this. The Chinese are especially concerned with
the past in many ways for shaping their view of what the future
may hold. Based on the past, they worry that China's
sovereignty, its territory, its international stature and
reputation, its self-determination, and its internal stability
are always, constantly, under threat. It is a very deep
existential anxiety. There is also a longstanding view that
Western powers, in particular the United States, have vested
interests in China maintaining a degree of insecurity. So this
is a starting point, I think, for many aspects of U.S.-China
relations.
Based on the present, they look around them, and they worry
that China's global interests are now expanding faster than
their own ability to secure those interests. China's economic
growth, especially, increasingly depends on the ability to
protect overseas investments and workers--we heard a little bit
about that today--to secure sea lanes that carry its energy and
trade, and to manage transnational crisis and national
disaster.
Then, looking to the future--and here we are lucky that
China's Government and affiliated organizations have very
recently published fairly authoritative texts outlining what
sorts of problems they think the future holds, not just for
them but for the world--they see a world in which crisis that
could escalate to conflict or war lurks everywhere, in which
security issues are very, very complex and transnational and
will often require cooperation and coordination, both within
the Chinese establishment and also with foreign countries, and
in which their ability to win at information-based warfare is
going to require advanced capabilities in the maritime, cyber,
and space domains.
So what are they doing about these security concerns in the
military domain? Obviously, you are very familiar, I think,
with the military modernization program that has been going on
for many years. The annual DOD report to Congress, I think,
summarizes that very, very well.
In addition to that, the Chinese People's Liberation Army,
the PLA, has a very, very long task list. Again, they published
it recently. I would not want to have that long a task list. Of
course they are supposed to be very good at warfighting and, of
course, solidify any reunification with Taiwan. They are also
supposed to take on crisis management, international security
corporation, internal security, humanitarian assistance,
disaster relief, rights and interest protection, which is both
a new and an old language, support for national economic
development, and a whole host of other things.
This is a very long list that they have to undertake, and
Xi Jinping clearly does not think the PLA is ready to take this
on. So in addition to the longstanding military modernization
program, Xi also has announced dozens of areas of institutional
reform within the Chinese military. Among others, it is a very
long list, but among others this includes improving joint
operations doctrine and capabilities, rebalancing the force
structure more toward maritime, air force, and second
artillery--their strategic nuclear force--building up defense
R&D, improving their human capital, which has been a
longstanding concern, and also improving the PLA's internal
discipline and reaffirming its party loyalty.
These are all tasks that Xi has set before them in 2013,
and in the intervening couple of years, and I think going
forward for the next several, we are going to see a lot of
changes coming out of the institutional aspects of the Chinese
military.
We have also, obviously, seen the reorganization of China's
civilian maritime law enforcement organizations--we have been
hearing a lot about that--their white hulls, using nonmilitary
vessels to conduct law enforcement operations, and also the
establishment of a top-level national security commission or
committee with Xi Jinping at the head whose exact mandate is
still rather unclear to us.
China has also been undertaking these moves to secure what
it calls its maritime rights and interests, particularly in the
South China Sea. I am not going to belabor that because I think
everyone is very familiar with those points. But one point to
make there is that those moves, of course, make neighboring
countries very unhappy. And partly in response, they are also
investing now in their white hull capabilities, their civilian
coast guards, things like that, and in some cases their
military capabilities, and they are also enhancing their
military partnerships across the region and beyond, including
with the U.S.
So what does this mean for the United States? Well, I think
a key challenge for the U.S., for the United States Government,
for policymakers is figuring out how to manage these
insecurities within the U.S.-China relationship. That doesn't
necessarily mean conceding to or accommodating these
insecurities, but it means encouraging China's productive
cooperation and a greater sense of security in areas where
those concerns are convergent with U.S. interests, and
dissuading China from feeling more secure in areas where these
concerns and interests may diverge from those of the United
States.
Obviously, in areas such as counterpiracy, peacekeeping,
noncombatant evacuations, avoiding accidental crises, all of
these problems that go along with China's expanding global
economic footprint, there are a lot of areas in which it may
make sense to support a more secure China. A China that is more
invested in burden sharing on things like counterpiracy,
peacekeeping, and so on, may be more aware of the cost of
losing those opportunities. A China that feels included in
international efforts, including international legal
institutions, as some of the other people here have been
talking about, may be less suspicious of international
partners, more willing to speak with them within those venues,
and also less likely to strike out on its own.
That said, obviously, the way that China is currently going
about dealing with many of its other security concerns is not
compatible with U.S. policy and interests, and China's
leadership has framed a lot of those issues in terms that would
make it very hard now for them to easily walk back. This
language of rights and interests is very powerful in China. It
is hard for them to step back from it now that they have
employed it.
Here, I think the U.S. path needs to be to show China that,
in fact, China's own security interests, all the interests we
talked about here at the table, are actually at cross-purposes,
that China can't secure some of those interests through its
current approach without seriously compromising some of the
others. So China can't simultaneously maintain stable economic
relations with its neighbors or with other countries in the
world while aggressively pursuing its territorial claims.
China can't expect international law to work for it
sometimes and not accept its jurisdiction at other times. And
China can't expect other countries to simply accept that PLA
modernization is not a threat without engaging in much greater
and more credible transparency about the PLA's capabilities and
intentions.
The costs of these self-contradicting behaviors should be
high, and they should be a focal point, in my opinion, for U.S.
discussions with China and U.S. cooperation with other
countries in the region. I believe that the U.S. should be
prepared to use all instruments of national power in tandem,
economic, diplomatic, military, other instruments, to persuade
China of what these costs might be.
Thank you.
[The prepared statement of Ms. Kaufman follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
----------
Mr. Salmon. Thank you.
Given the fact that one of the reasons we moved the hearing
today was because they called a 2 o'clock mandatory conference
for Republicans, and with my colleagues on the Republican side,
I want to give them an opportunity to ask questions before they
have to leave, so I am going to start with them.
Mr. DesJarlais, you were here first, so go ahead.
Mr. DesJarlais. Thank you, Mr. Chairman.
And I thank the panel for your insightful testimony. It was
very helpful and very informative.
Dr. Kaufman, you were kind of wrapping up your testimony
regarding the Spratlys and the concerns of Malaysia, Vietnam,
Taiwan, Philippines, and others with what they may see as
aggression. What would be the consequences for the United
States and the region if China were to establish de facto
control over the South China Sea?
Ms. Kaufman. You always start with the hard questions.
I think the challenge for the U.S. is that other countries
in the region are watching to see, of course, what the U.S.
will do, regardless of the nature of the U.S.' formal
commitment. I mean, in the case of the Philippines, the U.S.
has a treaty alliance. I am not an expert on the terms of
those, but there is not necessarily an expectation that the
U.S. would be involved in an actual conflict. But I think that
everyone is waiting to see if the U.S. will back up what it has
said is unacceptable in terms of international law and in terms
of U.S. policy and partnerships.
And so I tend to think that if the U.S. did nothing, I
mean, if China establishes these long-term plans and the U.S.
continues to pursue relationships in all of these other
domains, that countries in the region will say: Well, you must
not really mean it.
I think that everyone understands the very, very difficult
military position that the U.S. is in, and people I have talked
to in the region are, I think, clear about the fact that this
is a very difficult dilemma. I don't think anyone thinks that
the U.S. is dying to come in and take care of this problem. So
I think they recognize that. But I think that a failure to
react on other fronts to instill any kind of pain for doing
these things that we said are unacceptable would be a problem
for us.
Mr. DesJarlais. Thank you.
And I was going to ask a few more questions along that
line, but, Dr. Hersh, I heard your comments on TPP. I wanted to
get maybe a different perspective.
Dr. Scissors, do you have an opinion in regards to the
Trans-Pacific Partnership trade deal that is currently being
negotiated, whether it has potential to considerably increase
U.S. economic engagement in the region? And would you
specifically view this potential deal as an opportunity to
promote democratic values in the region?
And, Mr. Han, I will switch to you to answer that after Dr.
Scissors' comments.
Mr. Scissors. Well, I seem to be constrained more than my
fellow panelists because I haven't seen the document, so I
don't know what is in it and I don't whether I like it. A lot
of the critics of TPP apparently don't care what is in it.
I would love TPP to be a strong free trade agreement. I am
an absolute free trader. That is what I want. I don't know what
is in it. It is very hard to talk about gains. The studies that
are done on TPP make very anodyne, weak, I don't mean weak like
wrong, I mean just they have to be very cautious in their
assumptions is not very helpful.
I think that if TPP is a strong agreement, which is
uncertain, it is a very powerful template for U.S. economic
expansion going forward because it will be used as a basis for
the TTIP and other agreements. So just looking at the gains
from TPP as just the start for the U.S. economy, again, this is
if it is a good agreement, I think what we can say as a
secondary matter, because I am interested in the economics more
than I am in U.S. leadership, is that if we don't move forward
with TPP we are reduced to the status of mercenaries in Asia.
What East Asia cares about is economic development. This is
the major initiative on the table. We have a number of Asian
countries who are already parties. There are others who want to
join. If it is no good, we have also blown our economic
leadership. If we don't pass it, we have blown our economic
leadership. And that leaves us as the people you call when
there is a firefight, not the people who come to bring
prosperity.
So I can't endorse TPP because I am not allowed to read it
yet, but I can endorse the fact that we need a major economic
initiative in the region very badly, and I am very hopeful that
TPP is that initiative.
Mr. DesJarlais. Thank you.
Mr. Han, you can take the reminder of the time.
Mr. Han. The TPP depends on what is that aiming to. If it
is pure economical, I don't have much opinion on that. But if
it is about excluding China, there may be another impact or
another intention, that will make me doubt whether, one, you
can make China as a better international player, economically
and politically; second, the Chinese workers and Chinese people
will get benefit from this TPP, which my colleague mentioned
that it may make Chinese workers' rights better.
And that reminds me of CSR, corporate social
responsibility, which has been around for many years. That is
much closer to enterprises, and that enterprise is self-
policing, but it becomes something else. It never really
benefits Chinese workers.
Now, as I said earlier, that workers in China are already
taking their fate in their own hands, and Chinese civil society
development also is very fast developing. And Chinese people
are trying to take everything into our hands and that Chinese
Government has to listen to more and more. If TPP is for the
purpose of isolating or targetting China, excluding China, then
I don't see much benefit Chinese people will have.
Thank you.
Mr. DesJarlais. Thank you. Yield back.
Mr. Salmon. Thank you.
Mr. Sherman.
Mr. Sherman. Thank you. I do want to chime in on the
economic analysis of TPP and TPA.
First, I mean, economists have kind of blinders on. First
they look at how TPP will change the status quo. What they
don't look at is its number one affect, which is to lock in
those portions of the status quo that it locks in.
So if TPP said nothing but there is no change and the
United States is locked into the trade policy that has governed
us over the last 30 or 40 disastrous years, that would be a
huge agreement. If it said nothing but from now on America will
never effectively complain about currency manipulation, that is
huge.
Now, we have never done it. I mean, we talk about it a
little bit or chatter. So the biggest effect of TPP is to lock
in a rejection of worrying about focusing and responding to
currency manipulation or going the Warren Buffett route of
saying, if you want to export to the United States, well,
whenever there is an export from the United States, we give the
exporter a chit, and if you want to bring something in, you
need to buy one of those chits.
So if the agreement did nothing more than lock us into all
the bad decisions we have made, it would be bad enough. The
other thing the economists don't look at is the rules of origin
because, as Dr. Scissors points out, he is not allowed to read
the agreement. If you go to the basement, you will see, and I
can't reveal exactly what the numbers are here, that goods that
are 60 percent made in China, admittedly, which means actually
70, 80, 85 percent made in China, get into the country duty
free.
So all the economic analysis is based on what is going to
be produced in Japan, what is going to be produced in Vietnam.
There is no analysis of what is going to be produced in China
and finished in Japan or Vietnam, or slap a ``Made in Vietnam''
sticker on it. So I would be very surprised if it increased our
GDP at all.
The next point I want to make is what the Chinese
Government lacks is any ideological support for its existence,
any source of a mandate from heaven. We survived the Great
Depression, as did every other traditional democracy, because
even with bad results, we had a system people agreed to.
Now, the divine right of kings works pretty well. People
believe it. Democracy has stood the test of time where it has
got its root in. Islamic theocracy seems to be able to survive
U.S. sanctions more or less. And the Communist religion, when
you are truly the vanguard of the proletariat, was sufficient
to allow Stalin and Lenin to survive even when there were very
bad times for the people of the Soviet Union.
In contrast, this government is not the vanguard of the
proletariat. It may be many things, but they are not that. So
as long as they deliver tremendous economic growth, what is not
to like? But if they face anything like we faced in the 1930s,
they have got to retreat to what they are already retreating
to, which is nationalism, xenophobia, and you better support
us, otherwise China will lose the islets. And there is oil
under those islets. And you better believe that because you
better believe that you ought to keep us in power.
Mr. Cohen, you mentioned the Philippines is taking China to
the international tribunal, and the Chinese are more or less
accepting that process?
Mr. Cohen. They are thumbing their nose at it.
Mr. Sherman. Okay. I am glad I asked the question.
Also, Mr. Cohen, describe for me how corrupt are the top
2,000 people in the Chinese Government, and when they are
corrupt, what do they put their money into? Is it Swiss
chateaus, is it Rolex watches? Because if you want to undermine
any government anywhere in the world, it is not enough to say
they are corrupt. People love the details. The Kardashians,
every detail. But at least they are not corrupt. At least they
are not governmental. So lifestyles of the rich, famous, and
corrupt, what would we see if we could make the TV show?
Mr. Cohen. Well, shall I answer that question, Mr.
Chairman?
Mr. Salmon. Yes. In fact, it is your opportunity to answer.
You answer however you feel.
Mr. Cohen. I want to first comment on the first point you
made, Mr. Sherman, of course, as you know so well, this concern
about the TPP and economic relations generally with China
involves politics every bit of the way. I have three quick
observations on that.
One is we have to recognize our failure to open the IMF,
the World Bank, the Asian Development Bank to greater Chinese
participation to reflect the new Chinese achievement.
Second, on the TPP, process is as important as substance,
and as far as I know, this is a nontransparent process. And I
am a citizen, I believe in human rights, and I really am
concerned about my inability to know what the TPP really
contains. And I realize there are problems in negotiating with
11 other countries if you don't keep things secret, but how do
you expect public support for any agreement where the public is
being uninformed?
And this is a bad precedent for other governments. Taiwan
is in a stalemate now in its cross-strait relations with the
mainland because of the fact the people in Taiwan have risen up
in the Sunflower Movement, as it was called, against the
failure----
Mr. Sherman. Mr. Cohen, we do have limited time. If you
could focus on the question I asked about corruption.
Mr. Cohen. Well, that was not the only one.
Mr. Sherman. It is the only one I asked you to answer, but
go ahead.
Mr. Cohen. In any event, on corruption, what we now know
after almost 3 years of an intense campaign by the leadership
of Mr. Xi Jinping is that there is far more corruption in China
than the outer world had realized. And this represents a crisis
for them because if he continues to pursue the so-called
tigers, like Mr. Zhou Yongkang, who was just dispatched to life
imprisonment, and he goes beyond his own enemies like Zhou
Yongkang to, in an objective fashion, pursue other leaders in
China, this can lead to the destruction of the party.
On the other hand, if he doesn't pursue these people, it is
going to lose public support. And leaders before him, and he
also has agreed, failure to pursue corruption is a life-or-
death question for the party. They may get through the next 8
years of his term, but it is not going to go far beyond that.
So I think you put your finger on a critical issue, and the
problem is for us what to do. Right now China is asking us to
find and return to China people the Government of China is
pursuing as being corrupt elements. And the U.S., not having an
extradition treaty with China because we can't send people back
to a legal system we don't trust, doesn't know what to do. We
were going to have the head of the Chinese anticorruption
campaign visit Washington at this time, but because of
inability to make an agreement on how we are going to handle
their demands to send back as many as 150 leading people, he is
not coming.
The other problem is, what is corruption? Much of what
passes for corruption in the eyes of the Chinese people may not
be direct bribery, but it is the use of Guanxi, relationships.
If I am the son of a leading member of the Communist Party,
everybody knows that when I try to make a deal, and it offers
so many opportunities. And they have gone into every kind of
business. It isn't just they spend the money on luxury things.
They are making hundreds of millions of dollars.
And one problem is what can you do about family networks--
Xi Jinping himself has this problem in his own family. He has
got people who have made lots of money by using their access to
the top. So this is a huge problem for China. It may be a life-
or-death struggle.
Mr. Sherman. Thank you.
We are debating whether to withdraw from the Middle East
all military force right now on the floor, so I am going to
have to go to the floor. I yield back.
Mr. Salmon. Thank you, Mr. Chairman.
I am going to yield to Mr. Perry.
Mr. Perry. Thank you, Mr. Chairman.
And as my good friend from Sherman Oaks is leaving the
room, I must say that I found it curious that the statement
that China, as being the vanguard of the proletariat, would be
concerned in times of peril in keeping their power and they
would say to their citizens, ``Well, you must be with us
because there is oil under those islands,'' it seems to me, in
my lifetime, they said, ``You must be with us or you end up in
jail.'' And that is what works, and that is what will work in
the future if there are times of peril.
But that having been said, I came here thinking that we
would talk about aircraft carriers and increased economic
activity such that the West and the United States in particular
would find it problematic and itself behind.
But looking at some of the statistics here, you look at
GDP, and, Dr. Scissors, with all due respect, at least some of
these numbers, from 10.4 in 2010 to 7.4 in 2014, and looking at
in the next 6 years down to 5.9, looking at birthrates from 5.8
per woman in 1964 to 1.6 in 2012, and then looking at the labor
force shrinking by one-fifth over the next 50 years, I thought
maybe we would discuss like we believe in--well, a lot of us,
there are a lot that don't--but there are a lot of us that
believe in capitalism in the United States and that this is
free democracy and free trade and capitalism has done well for
the West and our system is the best and it has lasted and
endured the longest of the longest of modern governments
because of that, and we have always kind of eschewed Communism
as a moribund program that simply can't work over the long
haul.
And with those statistics and with the concern in America
today of a rising China and so on and so forth, I would
actually like to ask you, Dr. Scissors and Mr. Cohen, in
particular, what you think, like how long do we have to wait?
If we believe that what we have is right and what they have is
wrong and cannot endure, are we close to the end? Is the end 50
years away? Ten years? When will it collapse under its own
weight? When will it pull the Soviet Union and unexpectedly, as
you said, we won't be ready? Is there something on the horizon
that some people see and some people don't?
Mr. Scissors. As I said in my opening remarks, I know the
timing of the hearing messed a few things up, I am a stagnation
guy, not a collapse guy. The mixed economy that China has
doesn't lend itself to acute economic crises. Some of my
colleagues are experts on politics. I am not. But some of the
statistics you cited, for people who believe in GDP, first of
all, I think the party is exaggerating their GDP growth, but
even then, it is on a straight line down, the growth. Aging,
debt, all of it says stagnation.
And we have seen that countries can stay stuck for a long
time without instability. None of them are middle-income
countries run by the Communist Party. North Korea is just poor.
It is kind of more remarkable that they have had not very much
instability there.
But I think in terms of the challenge to the United States,
the challenge to competitive market capitalism when we practice
it properly, that challenge is already going away. The Chinese
model is already fading. I was sitting in front of the Congress
in 2009 when people were panicked that China was going to take
over the world, and I think that panic has receded considerably
and it is going to continue to recede.
So I don't know enough about Chinese politics to say,
``Hey, I think the economic stagnation is going to breed a
collapse.'' It is possible. Ranking Member Sherman just said,
my colleagues have said, the party has survived on delivering
the goods economically and they are not going to be able to
unless they change course.
But what I can say is, to echo Professor Cohen, I think
China has peaked economically. And the economic challenge to
the United States is not going to go away, China is not
suddenly going to become small, but the fear that we have had
of China overtaking us, eclipsing the way we do things, that in
my view is already gone, and if it isn't already gone, it will
be gone for almost everyone in a few years.
Mr. Perry. Dr. Cohen, quickly.
And if I get time, Dr. Hersh, I would like to hear your
comments as well.
Mr. Hersh. We began engaging China post-1989 Tiananmen
massacre with the idea that commerce would lead to political
changes of a more evolutionary basis, and that happened here in
Washington. We had our own version of the Long March to get
China permanent normal trade relations and then to get China
into the WTO. China has certainly integrated itself into the
global trade and investment system over this time, but I don't
think we have seen the political changes that we thought would
flow from these economic changes and more integration with the
ideas and technologies of the outside world.
Has this created pressures for political change? Maybe, but
not necessarily in the ways that we had expected. Those who are
successful in the new China, in China, Inc. are greatly
supportive of the way that the government has prosecuted its
policymaking and secured its position and power. But this
growth and transformation has also unleashed the most rapid
increase in inequality almost that the world has ever
experienced, and this is creating real risk for social and
political instability that I don't think we have good forecasts
for how those might disrupt China's political system.
There is clearly quite a bit of economic gain to be had
from economic integration with China, as well as other partners
in the region, but who benefits from that, how the gains are to
be distributed depends entirely on the kinds of rules that we
set in these international agreements.
Mr. Cohen. I could answer just a little bit.
Mr. Salmon. Time from the gentleman has expired. We
probably need to get to the next questioner, Mr. Rohrabacher.
Mr. Rohrabacher. Yes, thank you.
Well, I have sat through these sessions where people are
predicting that if we do certain things economically for China
that that would result in the type of political reform then and
reform toward making a country less antagonistic and more
benevolent than they would be otherwise.
We have now had about 20 years to see if that theory works,
and I think that it has been a resounding failure, all the
things that were promised us if we just bolster the economic
situation of China by permitting a trade agreement, which
obviously has enriched and empowered that China. Do they have
free labor unions now? No. Do they have opposition parties? No.
Does China today have fewer territorial claims and is less
provocative toward their neighbors? No. I just heard all of
these predictions, and they turned out to be not true.
Now, I know that Mr. Cohen has suggested that you have to
give the Chinese Communist Party credit, at least look at what
they have done. No. No. The fact is that the Chinese people
could well have been living better today had we not had a
Communist Chinese dictatorship over them and bolstered it a
number of years ago. I think they didn't have the same kind of
dictatorship in other countries that had Chinese-type of
backgrounds, and those people prospered and yet have freedom at
the same time, or at least a greater degree of freedom than you
have in the mainland of China.
So let me suggest that when we are talking about the TPP,
we hear some of the same rhetoric about the TPP, how it is
going to bring this prosperity and better trained jobs, and I
think that all the farmers in America thought that we would be
feeding China, and now China is a massive food exporter to the
United States and putting some of our people out of work.
And by the way, when you talk about the TPP, at least with
most-favored-nation status, we pretty well knew what exactly
that meant. People keep using phrases like ``free trade'' with
the TPP. How do we know it is free trade? We don't even know if
it is free trade at all. Even with MFN or WTO it wasn't free
trade with China. With China, we ended up with, of course,
letting them in most-favored-nation status and into the WTO.
We basically have a clique that is able to manipulate the
trade now and has enriched the clique. But as Mr. Han was
suggesting, there are a lot of people left out of the clique
and they don't have any economic rights at all.
So I would just like to leave it with this. And maybe, we
have got about 1\1/2\ minutes now, if you have to bet on which
change, what is going to happen? This fellow over here is a
stagnation guy instead of a collapse guy. What about the rest
of you? Are you collapse guys or stagnation guys? And I would
just like to hear that simple answer from all of you here, Mr.
Han first, then Mr. Cohen, and right on down. Are you a
collapse guy or a stagnation guy? Are they going to collapse
and then the democrats are going to take over and have a
democratic free society or is it going to stagnate?
Mr. Han. I would like to say it is a process. It is not a
flip of the hand thing. It is a process. As I said earlier in
my talk, workers without freedom of association, we are getting
rights to collective bargaining. And now collective bargaining,
this idea, is being accepted more and more.
Mr. Rohrabacher. I agree with you that it is a process, and
that means that a process, as we determine what will happen and
what the process will be, we will determine whether or not a
Communist, strong Communist Party that threatens the rest of
the world still continues in power. We will determine it,
because it is a process, that we will impact as we impacted it
with MFN and WTO in a way that strengthened the hand of the
despots.
Mr. Cohen, are you a stagnation guy or a collapse guy?
Mr. Cohen. Right now I think the Chinese Government is
threatened with Brezhnev kind of administration of the economy
that ultimately led to collapse in the Soviet Union, but we
shouldn't underestimate the imagination and dynamism of the
Chinese leaders in meeting some of these international economic
problems. The AIIB and related institutions are an example of
their giving an imaginative response that put the U.S.
Government back on its heels with surprise.
So I think I agree with Mr. Han that the current situation
is a struggle, it is up for grabs. And I think I agree with
you, Mr. Rohrabacher, about what we do can have a profound
influence.
But I do want to point out, apropos of what you said
earlier, that the Chiang Kai-shek regime in Taiwan was as harsh
a military dictatorship as we see now on the mainland. The Park
Chung-hee administration in South Korea was similar. I opposed
both of them very actively. But the fact is, as an objective
observer, I have to say that for a certain period, as a
government gets going, dictatorship seems to enable economic
progress, but that very economic progress leads to the kind of
ferment that we are beginning to witness in China. And what the
outcome of that ferment will be is really in part up to us,
mostly up to the Chinese people.
Mr. Rohrabacher. And the difference, of course, is those
two dictatorships did not pose an ever-enlarging threat to
their neighbors and to the peace of the world. Chiang Kai-shek
didn't threaten, I don't think, he didn't threaten anybody, and
after he got to Taiwan--well, we could go into that--and
neither did South Korea.
China poses a huge threat. The building of these islands
and then making greater declarations of ownership of
territorial rights, if there is anything that is a threat to
the peace of the world, and our administration hasn't said
anything about that. By the way, Putin occupies a given small,
tiny area of Ukraine because it is made up of pro-Russian
people and he has gone there protecting those pro-Russian
people. Shouldn't have done it, but you hear this is a
monstrous invasion. China makes claims of 100 times more
territory than that, that would cut Japan and Korea off from
their trading routes, and you don't hear anybody complaining
about that.
Better go on to the last time. Collapse or are we going to
stagnation?
Mr. Hersh. I don't know if I would go to stagnation, but
definitely a slowdown. The organic forces in China's economy
that have led to such rapid growth to this point, those are not
going to continue, although China will continue to grow at a
healthy pace. Where China's economy is already coequal in size
to the United States, that means it is going to continue to
pull away from----
Mr. Rohrabacher. Unless, of course, we are so stupid that
we keep bolstering this same dictatorial government that
threatens the word.
Dr. Kaufman.
Ms. Kaufman. I think that historically we have not seen
very many successful democratic transitions that haven't taken
place either as a result of leadership decisions or war. I
think that many people in China were paying a lot of attention
to what happened in 2011, and I don't think that they find the
outcome of the Arab Spring very appealing. I think that a lot
of people are pretty unhappy with certain aspects of the CCP,
but I don't think that many people see very many viable
alternatives.
Mr. Rohrabacher. Okay. One last thought, Mr. Chairman. That
is, we had a turning point in the history of the world, and
there were two of them in close proximity. One was the collapse
of the Soviet Union. I am proud to have been part of Ronald
Reagan's team in the White House for 7\1/2\ years with him,
served as special assistant, and did everything we could to
bring down the Soviet Union. And it came down in a peaceful way
without having direct fights between Soviet troops and American
troops. What a great accomplishment that was.
We could have had the same type of accomplishment in China,
but Reagan was no longer President. Herbert Walker Bush was
President. And at Tiananmen Square, it is my belief, Mr.
Chairman, had Ronald Reagan been President, he would have
picked up the phone, as his intelligence officer said, they are
about to unleash the army on Tiananmen Square, and Reagan would
have said: If you want unleash the army on Tiananmen Square, no
more open markets, no more investment, no more credits, all the
deals are off. And they wouldn't have put the army in and we
would have a democratic China today that wasn't threatening the
peace of the world.
Yes, it is a process, and we need to play our part.
Thank you very much.
Mr. Salmon. Thank you.
Save myself for last.
I, as a young man, did a mission for the Mormon Church in
Taiwan and spent 2 years there, during the time when Chiang
Ching-kuo, Chiang Kai-shek's son, was the President, and there
was no freedom of speech, there was no right to assemble, and
there was really no freedom of the press per se. And so I lived
that up close and personal. I was there in 1979 when Jimmy
Carter severed diplomatic ties with Taiwan, normalized
relations with China. And at that time we clearly advocated a
one-China policy, and we have done that ever since.
Things have changed now. Taiwan is not anymore an
autocratic, authoritarian regime. It is now a thriving
democracy. And a lot of the policies that we have toward Taiwan
right now seem to be kind of outdated.
And I am just wondering, I know, Mr. Cohen, you have been a
strong advocate, as I have in the past, on the one-China
policy, but we have seen how the one-China policy really works
with Hong Kong, where they said it was going to be one China,
two systems, and that is a joke. It is a real joke, because
they don't even have the ability to choose their own Chief
Executive. That is delivered to them from Beijing. You get to
pick, but you get to pick from the candidates that we choose.
There is no universal suffrage, not really, not in Hong Kong.
And the people on Taiwan, they have watched that. And as
they think about a peaceful reunification one day and they see
how Hong Kong is treated, they are thinking, ``Not on your
life, we don't want to go under those kind of circumstances, we
have a thriving democracy that works.''
And then I see how Taiwan tries to do a magnanimous gesture
during the Ebola outbreak and they offer their support to the
World Health Organization, and what happens? Politics, lousy,
stupid politics.
Same thing with their ability to be able to join the all-
hands-on-deck call for fighting terrorism globally. They can't
participate in Interpol. In fact, I dropped a bill just
recently and it was marked up in the full committee on Foreign
Affairs that says that they should have observer status in
Interpol. Why not? I mean, it is ludicrous.
Some of the walking on egg shells that we do to try to
appease China on this one-China policy thing seems to be really
unsustainable, and I am wondering, is it time for us to look at
maybe tweaking that a little bit.
Mr. Cohen, what are your thoughts?
Mr. Cohen. The time is coming, because next year, as you
know, President Ma steps down. No matter who replaces him, and
it is likely to be the DPP candidate, this is going to create a
new kind of difficulty in cross-strait relations. We have had a
pretty good ride the last 7 years because Ma has made so many
agreements without prejudicing the security of Taiwan. But he
has reached the limit, and the people of Taiwan, as you know,
are expressing they want to have more say in Taiwan's future.
Mr. Salmon. Tired of it.
Mr. Cohen. China may be getting more nationalistic and less
patient. So I am afraid you are going to have to give this more
attention over the next few years, because there is going to be
a return of tension over Taiwan that may make the South China
Sea look like less of a threat in comparison.
Mr. Salmon. Well, Mr. Cohen, I remember vividly when Lee
Teng-hui was being sworn in as the first freely elected
President of Taiwan, Beijing responded by lobbing missiles into
the Taiwan Strait. Now, while we had a policy of strategic
ambiguity, which was the policy we have kind of articulated for
decades, President Clinton kind of erased some of that
ambiguity by sending the Nimitz down the Taiwan Strait to give
a little bit of clarity. And what happened was we deescalated
the tensions in the region.
But I am just not sure right now that this administration
is even up to that, of giving any kind of clarity on what
exactly we are going to do to uphold the Taiwan Relations Act.
Dr. Scissors, do you have a comment?
Mr. Scissors. This is a very quick, and it is intentionally
cheeky, but it is also real. If you finish the TPP and you let
Taiwan join before China, you have done something to change
your recognition of the two countries.
Mr. Salmon. Right. And honestly, Dr. Scissors, there is a
lot of dialogue. We did a delegation over to China, Taiwan,
Japan just a couple of years ago, and then we did another
meeting about 3 months ago with Ed Royce, and the topic of
Taiwan coming in the second round of TPP came up. There was
support across the board, from both Republicans and Democrats.
I think if you polled Members across the board in the Congress,
you would find far more support for Taiwan coming into the TPP
ahead of mainland China. I think you would find that support
very robust.
Mr. Scissors. Right.
Mr. Salmon. Some of these international bodies, I think,
really need to have the input that Taiwan has, and we could
probably do that without jeopardizing our sacred one-China
policy. But is there a way for us to maybe tweak that a little
bit?
Mr. Cohen. I have been urging Taiwan to do more on its own.
For example, Taiwan, as you know, occupies the biggest island
in the Spratlys. I think, since President Ma is an expert in
public international law and is about to retire from office, he
ought to lead an effort to come up with imaginative proposals
beyond the general language he has already given us on May 25
that would encourage a settlement of these issues. We need
imagination.
Taiwan should make its way back by becoming a host to the
other contending nations and turning Itu Aba of a conference
center, a negotiation, a workshop dialogue center that will
promote, I think, the kinds of solutions that people aren't
putting forth now. People are just talking about strengthening
their militaries. And while that is useful and necessary, we
have got to do a lot more. We have to have more imaginative
solutions.
And here is a way for Taiwan to help, just the way they
managed to make a fisheries agreement with Japan in the East
China See. Imaginative, vigorous diplomacy on Taiwan's part, in
addition to our support, I think would be very important.
Mr. Salmon. Thank you, Mr. Cohen.
Mr. Han, we had a great meeting with several of the
business leaders, as well as some of the, I think, Hong Kong
greats. We met with Martin Lee, we met with Anson Chan when I
was there. And it was coincidental because I was there for the
1997 handover ceremony and I met with Martin Lee back then, so
it kind of felt like deja vu a little bit, or as a great
baseball player once said, deja vu all over again.
But do you think that the opportunity for suffrage,
universal suffrage in Hong Kong, will come to fruition in your
lifetime?
Mr. Han. Not only Hong Kong, but China as well, I believe
so. But the real opportunity and the hope is the changing of
mainland China. Hong Kong cannot get full democracy without
China becoming democracy. That is not possible. So I count on
China.
And I agree with Mr. Rohrabacher, who said China did not
answer to the international community for nearly anything. And
China, to my understanding about this government, they will not
answer positively to military responses. But one thing I am
sure I already see that myself experiencing this: Chinese
Government is already answering to its own people, although it
is not full. For example, they arrest lawyers, they arrest
journalists, but they are answering to hundreds of millions of
workers' demands to the right to collective bargaining, and the
next one will be naturally, slowly develop into freedom of
association, a union, maybe not purely freedom of association,
but with a solely collective bargaining-oriented trade union.
So if Chinese Government can answer and will answer to 100
million of Chinese workers, I do believe, even if they don't
answer to the U.S. military, but they will have to become more
and more democratic.
Mr. Salmon. Well, I thank you. This has been a very
invigorating conversation. I appreciate all the patience on the
part of the witnesses today for the time changes. I apologize
for doing that to you, but we just thought it was so important
to get this done, especially because Mr. Han is not here all
the time. So we wanted to make sure that we got it done today,
so it necessitated us moving the time. So thank you very much
and thank you so much for your patience.
This committee is adjourned.
[Whereupon, at 2:47 p.m., the subcommittee was adjourned.]
A P P E N D I X
----------
Material Submitted for the RecordNotice deg.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
\\ts \
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]