    [Senate Hearing 114-]
    [From the U.S. Government Publishing Office]

                             [H.A.S.C. No. 114-131]

                       SOUTH CHINA SEA MARITIME DISPUTES

                                   __________

                                 JOINT HEARING

                                   before the

                 SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES

                                     of the

                          COMMITTEE ON ARMED SERVICES

                              meeting jointly with

                      SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                     of the

                          COMMITTEE ON FOREIGN AFFAIRS

                              [Serial No. 114-242]

                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  HEARING HELD

                                  JULY 7, 2016

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                       ______

                             U.S. GOVERNMENT PUBLISHING OFFICE

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                          COMMITTEE ON ARMED SERVICES
                 SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES

                      J. RANDY FORBES, Virginia, Chairman

    K. MICHAEL CONAWAY, Texas            JOE COURTNEY, Connecticut
    BRADLEY BYRNE, Alabama               JAMES R. LANGEVIN, Rhode Island
    ROBERT J. WITTMAN, Virginia          RICK LARSEN, Washington
    DUNCAN HUNTER, California, Vice      MADELEINE Z. BORDALLO, Guam
        Chair                            HENRY C. ``HANK'' JOHNSON, Jr.,
    VICKY HARTZLER, Missouri                 Georgia
    PAUL COOK, California                SCOTT H. PETERS, California
    JIM BRIDENSTINE, Oklahoma            TULSI GABBARD, Hawaii
    JACKIE WALORSKI, Indiana             GWEN GRAHAM, Florida
    RYAN K. ZINKE, Montana               SETH MOULTON, Massachusetts
    STEPHEN KNIGHT, California
    STEVE RUSSELL, Oklahoma
                    Dave Sienicki, Professional Staff Member
                  Phil MacNaughton, Professional Staff Member
                              Jodi Brignola, Clerk

                                     ------

                          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

                  STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

    Courtney, Hon. Joe, a Representative from Connecticut, Ranking
      Member, Subcommittee on Seapower and Projection Forces,
      Committee on Armed Services....................................     2
    Forbes, Hon. J. Randy, a Representative from Virginia, Chairman,
      Subcommittee on Seapower and Projection Forces, Committee on
      Armed Services.................................................     1
    Salmon, Hon. Matt, a Representative from Arizona, Chairman,
      Subcommittee on Asia and the Pacific, Committee on Foreign
      Affairs........................................................     3
    Sherman, Hon. Brad, a Representative from California, Ranking
      Member, Subcommittee on Asia and the Pacific, Committee on
      Foreign Affairs................................................     5

                                   WITNESSES

    Denmark, Abraham M., Deputy Assistant Secretary of Defense for
      East Asia, U.S. Department of Defense..........................     8
    Willett, Colin, Deputy Assistant Secretary of State, Bureau for
      East Asia and Pacific Affairs, U.S. Department of State........     6

                                    APPENDIX

    Prepared Statements:

        Courtney, Hon. Joe...........................................    35
        Denmark, Abraham M...........................................    44
        Forbes, Hon. J. Randy........................................    33
        Willett, Colin...............................................    37

    Documents Submitted for the Record:

        [There were no Documents submitted.]

    Witness Responses to Questions Asked During the Hearing:

        Mr. Sherman..................................................    57

    Questions Submitted by Members Post Hearing:

        Mr. Forbes...................................................    61
        Mr. Larsen...................................................    62
        Mr. Lowenthal................................................    65
        Mr. Salmon...................................................    63

                       SOUTH CHINA SEA MARITIME DISPUTES

                                  ----------

            House of Representatives, Committee on Armed
                Services, Subcommittee on Seapower and
                Projection Forces, Meeting Jointly with the
                Committee on Foreign Affairs, Subcommittee on
                Asia and the Pacific, Washington, DC, Thursday,
                July 7, 2016.

        The subcommittees met, pursuant to call, at 3:30 p.m., in
    room 2118, Rayburn House Office Building, Hon. J. Randy Forbes
    (chairman of the Seapower and Projection Forces Subcommittee)
    presiding.

      OPENING STATEMENT OF HON. J. RANDY FORBES, A REPRESENTATIVE
         FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON SEAPOWER AND
             PROJECTION FORCES, COMMITTEE ON ARMED SERVICES

        Mr. Forbes. I want to welcome the members of the House
    Armed Services Seapower and Projection Forces Subcommittee and
    the House Foreign Affairs Asia-Pacific Subcommittee to a
    special joint hearing on the topic of maritime disputes in the
    South China Sea.
        I also want to extend a warm welcome to our two witnesses,
    Ms. Colin Willett, Deputy Assistant Secretary [DAS] for
    Strategy and Multilateral Affairs in the State Department's
    Bureau of East Asian and Pacific Affairs, and Mr. Abraham
    Denmark, Deputy Assistant Secretary of Defense for East Asia. I
    thank you both for being here to testify at this special joint
    hearing.
        Our topic today is a timely and critically important one.
    Early next week, the Permanent Court of Arbitration is expected
    to rule on the legitimacy of China's expansive territorial
    claims in the South China Sea.
        In the aftermath of that ruling, the world will be watching
    two things. First, to see whether China behaves like a
    responsible stakeholder in the international system, and if
    not, to see how America responds. For decades, the United
    States has sought to facilitate China's integration into the
    global economy and the rules-based international order that has
    benefitted Asia so well. China's reaction to next week's ruling
    will provide a clear indicator of how that is going and whether
    Beijing's quest for regional dominance can be curbed by
    international law and world opinion.
        America's response will also send a powerful signal. While
    the United States does not take sides in territorial disputes,
    we can and should stand up for those parties that pursue their
    peaceful resolution. The Philippines is one such party but not
    the only one. And what we do or don't do to support our allies
    in the rules-based international system in the weeks ahead will
    have echoes across the region and in other corners of the
    globe.
        With so much at stake in the South China Sea, it is
    critically important that the United States has a clear policy
    toward the region and a strategy to sustain peace, prosperity,
    and the rule of law in Asia. Diplomacy will play a crucial role
    in avoiding and resolving conflict, and I am pleased to have
    Ms. Willett and members of the House Foreign Affairs Committee
    [HFAC] with us here today to discuss that critical aspect of
    any interagency approach to the region.
        If China continues to flaunt international law and world
    opinion, however, I firmly believe that the surest way of
    averting another devastating conflict in the Asia-Pacific
    region will be for the United States to remain present,
    engaged, and capable of projecting decisive military power in
    the region. Might does not make right, but it can be used to
    deter threats to peace, prosperity, and the rule of law.
        That is why I have been pleased to see an increase in U.S.
    naval and military presence in the region and an increase in
    the frequency of our freedom of navigation operations. I look
    forward to hearing from Mr. Denmark about what the Department
    of Defense is doing to deter Chinese aggression, reassure our
    allies and partners, and maintain a favorable military balance
    in the Asia-Pacific region going forward.
        I now turn to my good friend and colleague, Mr. Courtney,
    the ranking member of the Subcommittee on Seapower and
    Projection Forces, for any comments that he may have.
        Mr. Courtney.
        [The prepared statement of Mr. Forbes can be found in the
    Appendix on page 33.]

         STATEMENT OF HON. JOE COURTNEY, A REPRESENTATIVE FROM
       CONNECTICUT, RANKING MEMBER, SUBCOMMITTEE ON SEAPOWER AND
             PROJECTION FORCES, COMMITTEE ON ARMED SERVICES

        Mr. Courtney. Thank you, Mr. Chairman, and thank you to
    yourself and to Mr. Salmon for organizing today's hearing,
    which again, as you stated, could not be more timely, given the
    fact that a proceeding that the eyes of the world have been
    watching for over a year or so is about to come to a climax
    with the decision by the U.N. [United Nations] Hague Convention
    in terms of resolving this question about maritime claims in
    the South China Sea.
        Again, the stakes are huge. Trillions of dollars of
    commercial sea traffic and products pass through the South
    China Sea every single year. There are numerous stakeholders in
    terms of different nations, maritime nations that are adjacent
    to it, and obviously, the U.S. Navy and the U.S. as a nation
    has huge interests at stake in terms of making sure that
    international norms are followed that have been followed for
    the last 70 years in the wake of World War II and that
    hopefully we are going to continue to see that rule of law
    continue after The Hague's decision.
        I think a nice--I have a written statement, which I am
    going to ask to be submitted, and I am just going to briefly
    end by saying that one way to sort of frame this question is
    that in September of 2015, five Chinese naval ships entered
    U.S. territorial waters off the coast of Alaska. In
    acknowledging the transit of these vessels, the United States
    made clear we viewed this action as well within the rights of
    China and any other nation to conduct innocent passage through
    legitimately established territorial seas and nonthreatening
    military activities within exclusive economic zone of another
    country.
        The question is whether or not that same standard, which we
    scrupulously followed, is going to be adhered to in the South
    China Sea. And again, the Navy, as we have heard on the Armed
    Services Committee, has been conducting these freedom of
    navigation operations over the last 6 months, 12 months or so,
    again, well within our rights under UNCLOS [United Nations
    Convention on the Law of the Sea], and really, that is what I
    think our policy should be, which is to just basically have a
    single standard across the board, whether it is up in the
    Alaskan waters or in the South China Sea.
        And you know, obviously, you know, we have a huge amount at
    stake, as I said earlier, but we are also, I think, the nation
    that really a lot of our allies in the region are looking
    towards in terms of leadership, and really, again, following
    through on what I think is really the only path forward in
    terms of assuring that international maritime activity is going
    to continue peacefully and productively for all the
    stakeholders that are affected.
        So again, I have a written statement which I would ask to
    be entered into the record, and with that, I would yield back.
        [The prepared statement of Mr. Courtney can be found in the
    Appendix on page 35.]
        Mr. Forbes. Without objection, all the written statements
    will be entered as part of the record. And now it is my
    privilege to recognize another good friend and colleague, the
    chairman of the Subcommittee on Asia and the Pacific, Mr. Matt
    Salmon of Arizona, for any remarks he may have.

     OPENING STATEMENT OF HON. MATT SALMON, A REPRESENTATIVE FROM
       ARIZONA, CHAIRMAN, SUBCOMMITTEE ON ASIA AND THE PACIFIC,
                      COMMITTEE ON FOREIGN AFFAIRS

        Mr. Salmon. Thank you very much, Chairman Forbes. I
    appreciate you giving me the opportunity to join you in
    convening this important and timely joint hearing.
        The territorial disputes in the South China Sea may
    represent the most significant long-term security challenge in
    our shared jurisdiction. Our conversations about this topic are
    often complicated by the minutia of territorial sea's baselines
    and high tide elevations, but it is important for us to
    remember today what the South China Sea dispute boils down to.
    One nation turning away from the peaceful mechanisms of
    international law and peaceful coexistence and instead
    embracing belligerence.
        Congress, the administration, and other counterparts across
    the world, recognize the severity of the threat posed by
    China's aggressive coercive actions in the South China Sea that
    undermine international norms. Our Secretary of Defense and the
    President himself regularly list the South China Sea among the
    world's most concerning international friction points and raise
    it at the highest levels with their Chinese interlocutors,
    including Chinese President Xi Jinping.
        Analysts around the world pour over the disputes, and the
    United States has undertaken a series of highly publicized
    freedom of navigation operations to contest China's outrageous
    claims. Alarmingly, all of this attention seems to have had
    little effect. Tensions in the sea continue to mount, and China
    has established effective control of many areas by building
    capable military facilities on top of disputed features.
        In light of these trends, today's hearing could not come at
    a better time. In the coming days, weeks, and months, the South
    China Sea territorial disputes will present a series of
    especially important challenges. Our response to these
    challenges has the potential to reverse the trend of escalating
    tensions or to cause further injury to the peaceful rules-based
    international order. I would like to touch briefly on a few of
    these challenges.
        First, the arbitral tribunal deciding the Philippines'
    legal case against China recently announced it will conclude
    its decision on July 12. Although China is legally bound, and I
    repeat, they are legally bound to its result, it has refused to
    participate and has clearly said it will not comply. I am
    concerned that many seem to have written off China's
    noncompliance as a foregone conclusion.
        You must remember that this case is the most significant
    substantial approach to settling disputes in the South China
    Sea through a peaceful, equitable process. China should be held
    accountable to the tribunal's ruling. The Scarborough Shoal
    represents another critical test. China and the Philippines
    have come to the physical confrontation over this site before,
    and recent rumors hint that China may soon extend its island
    building campaign to the Shoal.
        Despite how near Scarborough is to Philippine shores, its
    disputed status makes it unclear whether it is covered by the
    U.S.-Philippines Mutual Defense Treaty. This uncertainty means
    that if aggression around Scarborough Shoal is not handled
    properly, the very credibility of such treaties could be
    damaged. These treaties are anchors of hub-and-spoke alliance
    system in the Pacific and damage to them could have dire
    consequences on American influence and security in the region.
        Finally, I want to mention the continuing threat posed by
    China's ability to declare an Air Defense Identification Zone
    [ADIZ] over the South China Sea. I am concerned we have few
    direct options to counter this type of escalation if China
    chooses to pursue it. China's network of airstrips, radars,
    missile batteries constructed across the South China Sea while
    the rest of the world watched, may prove a capacity--excuse
    me--may provide a capacity to enforce such an ADIZ.
        While the United States military would never recognize such
    a zone, commercial carriers will likely comply with China's
    notification requirement as they have under China's ADIZ in the
    East China Sea. China will once again unilaterally have changed
    the status quo. These countless other challenges posed by the
    South China Sea territorial disputes will continue to test the
    United States and our allies.
        Though the answers are sometimes not easy to find, I am
    really glad we came together today to hold this joint hearing
    and working towards solutions, and keeping the issue at the
    forefront of foreign policy and national security agendas is
    critical, and I appreciate the opportunity. I yield back.
        Mr. Forbes. Mr. Chairman, thank you. And with that, I would
    like to yield to the ranking member of the Subcommittee on Asia
    and the Pacific, Mr. Sherman, for any comments he might have.

         STATEMENT OF HON. BRAD SHERMAN, A REPRESENTATIVE FROM
       CALIFORNIA, RANKING MEMBER, SUBCOMMITTEE ON ASIA AND THE
                 PACIFIC, COMMITTEE ON FOREIGN AFFAIRS

        Mr. Sherman. Thank you. Mr. Chairman, I will be a little
    bit of a contrarian, but if I just agreed with everybody who
    had just spoken, it would be so boring.
        It is my view that the power in making decisions in any
    important area of our policy is often under the control of the
    domestic organization that has power and cares about that
    policy.
        So when it comes to the Trans-Pacific Partnership [TPP],
    Wall Street wants it, Wall Street will probably get it. When
    you look at the Pentagon and its needs, we see that for 150
    years every time our military forces have confronted a worthy
    symmetrical uniformed adversary, it has ended with glory for
    our Armed Forces, from the Spanish-American War through the
    victory over the Soviet Union without a major conflagration.
    And every time we have faced a non-uniformed asymmetrical
    opponent, it has been a terrible experience for our military
    from the Philippine insurrection right up until the operations
    in Iraq and Afghanistan, not that we are always unsuccessful,
    but it has never been gloriously easy.
        And so it is not surprising that the Pentagon is looking
    for a worthy adversary, and there is only one available in the
    world, and that is China. And so we are told that we should
    spend hundreds of billions of dollars focused on developing new
    technologies and procuring new weapons systems for the purpose
    of confronting China in the South China and East China Sea.
        Not only are we subject to this, but China is subject to it
    as well. In China, there is one institution at the center of
    making decisions, that is the Communist Party, and that
    Communist Party suffers a great crisis of legitimacy. People
    all over China are asking, ``Why are these guys running
    things?'' Their old answer was they are running things because
    they are the vanguard of the proletarian. Not so much. Then
    they said: ``Shut up. We are giving you 10 percent economic
    growth.'' I would be inclined to switch political parties if I
    could achieve 10 percent annual economic growth, but the
    Communist Party can no longer do that. So the Communist Party
    of China is retreating into the last refuge of scoundrels and
    illegitimate governments, and that is exaggerated nationalism,
    and the best way for them to do that is to focus on these
    islands.
        The amount of cost that we are incurring as we build toward
    this confrontation, again, is hundreds of billions of dollars.
    We don't have a good cost accounting system for our military to
    tell us what weapons systems relate to what international
    threats and what foreign policy objectives, but every time I
    talk to the Pentagon about research and procurement, they say:
    ``Sherman, we are not interested in doing research on anything
    unless it shoots down Chinese planes over the South China
    Sea.'' There are other things that we confront, particularly a
    war on terrorism where research is called for.
        Now, we are told that these islands are of such great
    importance. They have remained uninhabited, even though they
    are off the shore of the most teeming and populated continent,
    they have been uninhabited for millennia. We are told that
    trillions of dollars of trade goes through these islands. That
    is all trade going in and out of Chinese ports, which means if
    China were able to militarize these islands, they would be able
    to blockade their own ports.
        We are told that there is economic value in minerals, and
    none of which have happened, but we are sure of one thing, and
    that is, if there is any oil, it doesn't belong to us. It
    belongs to Japan, the Philippines, China, whoever owns these
    islands. And keep in mind, all of our allies want us to spend
    hundreds of billions of dollars defending their islands which
    may or may not have any economic value at all, but they are
    never willing to spend more than 1, maybe 2 percent of their
    GDP [gross domestic product] to defend their islands or their
    countries.
        So I am not saying we should surrender to China, but we
    should not surrender to the urge to exaggerate. We should be
    careful, and we should relax. I am not pro-China. I am pro-
    Ambien, America's leading sleep product.
        There are many situations in the world where countries make
    outlandish claims that can be quietly resisted without turning
    the Pentagon on its head, spending hundreds of billions of
    dollars developing new lethal technologies and reorienting our
    foreign policy and our military policy toward dealing with one
    particular outlandish claim.
        So we need to resist calmly China's claims in the South
    China Sea. I yield back.
        Mr. Forbes. The gentleman yields back.
        Ms. Willett, we are glad to have you with us today, and Mr.
    Denmark. And before I turn to your testimony, I want to make
    one procedural motion.
        I ask unanimous consent that non-subcommittee members be
    allowed to participate in today's hearing after all
    subcommittee members have had an opportunity to ask questions.
    Is there an objection?
        Hearing none, non-subcommittee members will be recognized
    at the appropriate time for 5 minutes.
        And with that, Ms. Willett, we want you to take all the
    time you want as long as you can get it within that 5-minute
    allotment that we have given there to give us your thoughts and
    your comments, and again, your written testimony will be made
    part of the record, so thank you for being with us, and we turn
    the floor over to you.

       STATEMENT OF COLIN WILLETT, DEPUTY ASSISTANT SECRETARY OF
         STATE, BUREAU FOR EAST ASIA AND PACIFIC AFFAIRS, U.S.
                          DEPARTMENT OF STATE

        Ms. Willett. Well, thank you very much, Chairman Forbes and
    Chairman Salmon. It is a great opportunity to appear before
    this----
        Mr. Forbes. Ms. Willett, I am going ask you to do what they
    asked me to do. Can you get a little closer to that mic.
    Sometimes they just aren't very sensitive and don't pick up.
    Thank you.
        Ms. Willett. Sure. So thank you, Chairman Forbes and
    Chairman Salmon for the opportunity to appear before this joint
    subcommittee hearing today. It is a very timely issue. It is a
    very important issue. The importance of the South China Sea to
    global commerce and to regional stability, I think is well
    known. Its economic and strategic significance means the United
    States has a vested interest in ensuring that territorial and
    maritime issues are managed peacefully.
        Next week will present an important milestone in the South
    China Sea dispute. On July 12, the arbitral tribunal convened
    under the Law of the Sea Convention is set to issue a decision
    on the Philippine submissions relating to the application of
    the convention to the South China Sea.
        The Philippines has asked the tribunal to rule on a number
    of issues, particularly on the validity of China's nine-dash
    line and on the maritime entitlements generated by various land
    features in the South China Sea. Such a ruling has the
    potential to narrow the areas which can legitimately be
    considered subject to dispute based on maritime zones generated
    from contested land features as well as the undisputed mainland
    coast of Southeast Asian claimants.
        While the tribunal will not address the underlying
    sovereignty claims to land features, the decision does have the
    potential to crack the door open to a new modus vivendi among
    the parties that would help manage tensions in those disputed
    spaces.
        It is possible to envision a diplomatic process among the
    claimants that would explore different ideas for managing
    marine resources in areas that all relevant parties agree are
    subject to competing claims.
        Such a path towards cooperation is achievable if claimants
    have the political will, flexibility, and creativity to find
    reasonable and practical arrangements that could serve as
    starting points for addressing these longstanding tensions.
    Conversely, an adverse reaction to the tribunal ruling could
    become a source of increased tension.
        The Law of the Sea Convention makes clear that the absence
    of a party or failure of a party to defend its case shall not
    constitute a bar to the proceedings, and that a decision by the
    tribunal shall be complied with by the parties to the dispute;
    in this case, China and the Philippines.
        The world will be watching to see whether China chooses a
    path of diplomacy and cooperation or continues to walk along
    one of confrontation with its neighbors. The U.S. approach to
    the dispute aims to reduce the risk of conflict and preserve
    space for diplomatic solutions, including by pressing all
    claimants to exercise restraint, maintain open channels of
    dialogue, lower their rhetoric, and behave responsibly in the
    sea and in the air, and acknowledge that the same rules and
    standards must apply to all.
        The international community has an interest in maintaining
    a peaceful and stable South China Sea and preserving a rules-
    based regional system. As such, we will keep the South China
    Sea and maritime cooperation at the top of the agenda in the
    region's multilateral forum while also working bilaterally with
    the relevant countries. We will continue to ensure that
    problematic behavior is exposed and censured. We are engaging
    closely with all of the claimants at all levels of government,
    as President Obama did in his recent trip to Vietnam, and
    Secretary Kerry did at the strategic and economic dialogue in
    Beijing last month.
        We are working with Southeast Asian coastal states to
    improve their maritime domain awareness, maintain effective
    presence in their claimed waters, and enable them to increase
    communication and collaboration amongst themselves. A common
    operating picture can help prevent unintended escalations and
    improve levels of cooperation. For these countries, having a
    steady and consistent presence is an important demonstration
    that they have no intention of relinquishing their legitimate
    maritime rights.
        These diplomatic and capacity building efforts rest on top
    of our robust and durable U.S. military presence in the region,
    which my colleague will discuss in greater detail. But let me
    underscore that the United States will not hesitate to defend
    our national security interest and to honor our security
    commitments to our allies and partners.
        The United States has been an important partner in
    protecting the security and stability of the Asia-Pacific
    region for decades, and we will continue to protect our rights
    and the rights of all nations to fly, sail, and operate
    wherever international law allows.
        I thank you for the opportunity to appear before you today
    and look forward to discussing.
        [The prepared statement of Ms. Willett can be found in the
    Appendix on page 37.]
        Mr. Forbes. Ms. Willett, thank you.
        Mr. Denmark, we look forward to your comments.

    STATEMENT OF ABRAHAM M. DENMARK, DEPUTY ASSISTANT SECRETARY OF
           DEFENSE FOR EAST ASIA, U.S. DEPARTMENT OF DEFENSE

        Mr. Denmark. Thank you, Chairman Forbes, Chairman Salmon,
    ranking members, distinguished members of the committee. Thank
    you for----
        Mr. Forbes. Mr. Denmark, could you do the same thing, could
    you get a little closer?
        Mr. Denmark. Thank you for inviting me and Deputy Assistant
    Secretary Willett to testify before you today on this important
    issue.
        I would like to thank both of the committees for your
    leadership in supporting our Nation's robust engagement across
    the Asia-Pacific. South China Sea is an area of immense
    economic and strategic importance. For decades, it has been a
    critical operational area for our military and is central to
    our strategy of strengthening a principled rules-based order
    that enables regional stability and prosperity.
        This afternoon I will describe a region at a crossroads
    with the upcoming U.N. arbitral tribunal and what actions the
    Department of Defense is taking to preserve regional stability
    for decades to come.
        At the center of the South China Sea disputes are a series
    of competing claims among Brunei, China, Malaysia, the
    Philippines, Taiwan, and Vietnam. While the U.S. takes no
    position on competing territorial sovereignty claims, we do
    take a strong position on protecting and in upholding the
    rights, freedoms, and lawful uses of the sea and airspace
    guaranteed to all, and we seek to uphold key principles at the
    heart of a rules-based international order, including customary
    international law, unimpeded lawful commerce, freedom of
    navigation and overflight, and the peaceful resolution of
    disputes.
        We do have concerns about the actions by any claimant that
    may have an effect of eroding these principles. China in
    particular has undertaken a series of initiatives that set it
    apart from other claimants, reclaiming 3,200 acres in the
    Spratly Islands, building harbors, logistical facilities, and
    military-grade airfields as it deploys military assets to these
    features, and using low-intensity coercion to enhance its
    presence and ability to control the South China Sea.
        At the same time as China has been building outposts,
    another process has also been playing out. In just 5 days, on
    July 12, a United Nations Permanent Court of Arbitration
    tribunal will issue a ruling on these disputed features. The
    ruling will mark an important crossroads for the region. It
    will present an opportunity for those in the region to
    determine whether the Asia-Pacific's future will be defined by
    adherence to international laws and norms that have enabled it
    to prosper, or whether the region's future will be determined
    by raw calculations of power.
        In light of this key inflection point, I would like to
    briefly describe what we are doing in the region to preserve
    regional stability. The United States has undertaken a whole-
    of-government approach in the South China Sea with the
    Department of Defense [DOD] working in lockstep with the State
    Department and others to support our diplomacy with a robust
    military capability.
        I would like to outline the four broad DOD efforts that
    have supported the broader USG [U.S. Government] strategy.
    First, the Department of Defense has been providing a credible
    capability in the South China Sea and the region to deter
    conflict and to create space for our diplomatic efforts to
    succeed. We have increased our military presence, and we are
    ensuring our presence is geographically distributed,
    operationally resilient, and politically sustainable.
        Second, we have enhanced our tempo of military operations.
    From exercises, to freedom of navigation operations and
    presence operations, DOD continues to fly, sail, and operate
    wherever international law allows so that others can do the
    same.
        Third, we are enhancing our regional security network
    through building partner capacity, training, and exercises,
    particularly through our engagement with ASEAN [Association of
    Southeast Asian Nations].
        And finally, we are engaging China directly to reduce risk.
    We consistently encourage China to take actions that uphold the
    shared principles that serve so many in the Asia-Pacific so
    well. We seek to keep lines of communication with Beijing open
    to improve our cooperation in areas of mutual interest and to
    speak candidly and constructively, manage differences when we
    disagree.
        These efforts have set the stage for engagements following
    the upcoming decision from the U.N. arbitral tribunal. DOD will
    provide critical support to our diplomacy by providing a
    credible deterrent against the use of force and in favor of the
    peaceful resolution of these disputes. We will continue to
    defend ourselves, our allies and partners, our interests, and
    our principles.
        Mr. Chairman, ranking members, distinguished members of the
    committees, the upcoming U.N. arbitral tribunal ruling provides
    an opportunity for the region to stand firm in our enduring
    commitments to a principled order in the Asia-Pacific and the
    rest of the world. And it is an opportunity for us to reconfirm
    our commitment to work with the region to ensure a principled
    future, one in which all people have the opportunity to live in
    peace and prosperity.
        I thank you very much, and I look forward to our questions.
        [The prepared statement of Mr. Denmark can be found in the
    Appendix on page 44.]
        Mr. Forbes. Ms. Willett, Mr. Denmark, thank you both for
    being here.
        Let me ask you this, Mr. Denmark. Is there any military
    significance to Scarborough Shoal to the United States?
        Mr. Denmark. Thank you, Mr. Chairman. The military value of
    Scarborough is not intrinsic to the feature itself. It is
    highly variable, dependent on if a country--if a claimant were
    to place military capabilities on Scarborough, it will be
    highly valuable, depending on the specific capabilities that
    have been in place.
        So to my mind, the value of Scarborough is one of strategic
    importance in that it would increase a claimant's ability, de
    facto ability to control the South China Sea and would, I
    think, marginalize a principled international order in which
    countries refrain from occupying, and constructing, and
    deploying military assets to previously unoccupied features.
        Mr. Forbes. Ms. Willett said that we will do everything
    necessary to defend the national security interest of the
    United States and allied defense rights. If you did have a
    militarization of the Scarborough Shoal, would that have any
    impact on our national interest or our allied defense rights?
        Mr. Denmark. Well, Mr. Chairman, it is very difficult for
    me to comment to any degree of specificity on potential future
    hypotheticals.
        Mr. Forbes. Well, we need to--don't we need to know? I
    mean, don't we need a strategy to be able to answer those kinds
    of questions, or--I mean, are we saying we don't have a
    position based on the Department of Defense right now as to
    whether or not there is any military significance there and if
    it does have military significance as to whether or not it
    would impact our national security interests?
        Mr. Denmark. Well, Mr. Chairman, as I said, the military
    significance of Scarborough is not intrinsic to the feature
    itself but rather what would be in place upon it. So it is
    difficult for me to react, to guess as how I would react
    because there is such a wide degree of variability.
        Mr. Forbes. Is there anything you could tell us as to what
    would constitute the militarization of Scarborough Shoal?
        Mr. Denmark. Militarization is not a term that we have
    used. The term was introduced, as you know, sir, during
    diplomatic exchanges with the Chinese. We look to resolve these
    issues through diplomacy.
        Mr. Forbes. I understand. We want everybody to take a
    breath and be calm, but at some point in time, they don't
    always do that. And so if we were to have a situation, they say
    they are not going to militarize those islands. If they were to
    militarize those islands, would that be contrary to the
    national security interest of the United States?
        Mr. Denmark. Again, sir, I think it is too--the variability
    in what could be placed on various----
        Mr. Forbes. So the Department of Defense or you can't give
    us an opinion as to whether or not you think the militarization
    of the Scarborough Shoal would be against the national security
    interest of the United States?
        Mr. Denmark. Well, in terms of--you asked me, sir, what I
    can comment upon is the military implications of this.
        Mr. Forbes. Okay.
        Mr. Denmark. And in terms of military implications, as I
    said, the variability, based on what could be in place on any
    of these features, is extremely broad, and so therefore it is
    difficult for me to hypothesize about how we may react or
    respond to what may be put on any one of these features.
        Mr. Forbes. Okay. Let me ask you this then. The 1951 Mutual
    Defense Treaty finds the United States and the Philippines were
    bound to respond to attacks on the armed forces, public
    vessels, or aircraft of the other party as well as island
    territories under its jurisdiction.
        Has the United States or--either through the Department of
    Defense or the State Department even made an analysis of
    whether or not it thinks the Scarborough Shoal is an island
    territory under the jurisdiction of the Philippines?
        Mr. Denmark. Sir, treaties tend to be--the specific meaning
    of treaties tend to be handled by the State Department, so let
    me--before I turn things over----
        Mr. Forbes. Okay.
        Mr. Denmark [continuing]. To my colleague, let me just say,
    as I have said in my written testimony, as DAS Willett
    mentioned in her statement, that we are--we retain an ironclad
    commitment to the defense of our allies, and that is something
    that we will not hesitate to follow through with.
        Mr. Forbes. Ms. Willett.
        Ms. Willett. Absolutely. Mr. Chairman, the United States
    does not take a position on disputes over land features, and
    the Scarborough Shoal is disputed.
        Mr. Forbes. How would you interpret your treaty
    responsibilities if it says ``island territories under the
    Philippine jurisdiction,'' how would you make the determination
    as to whether that was or was not under the jurisdiction of the
    Philippines?
        Ms. Willett. Scarborough Reef is a disputed feature, and we
    don't take a position on whose claim is more legitimate.
        Mr. Forbes. So if there was a dispute with China over
    whether or not one of their vessels belonged to them or to the
    Philippines, the United States wouldn't make a decision over
    that?
        Ms. Willett. I think the language in the Mutual Defense
    Treaty is clear in terms of its applicability to persons and
    vessels from the----
        Mr. Forbes. Is it not clear about island territories under
    its jurisdiction?
        Ms. Willett. Scarborough Reef is a disputed feature that we
    don't recognize any country's sovereignty over. That said, our
    treaty commitment to the Philippines is absolutely ironclad.
    This is something that we would take very seriously, and any
    move to occupy a currently unoccupied feature, or further
    militarize a currently occupied feature, is very dangerous and
    it is very destabilizing and I think something that would
    concern not just us but the other countries in the region.
        Mr. Forbes. And I am going to try one more bite at this,
    and then I am going to give it to Mr. Courtney. I understand it
    would be very destabilizing. Military actions always are. What
    my concern is, we have a treaty, and at some point in time, we
    have to make an analysis or determination what is in that
    treaty and what is not in that treaty. We specifically state in
    here armed forces, public vessels, aircraft, and we talk about
    island territories under its jurisdiction.
        At some point in time, the United States has to make its
    own legal determination as to whether or not they think those
    vessels belong to the Philippines or the aircraft belong to the
    Philippines. Are you saying that anytime somebody just puts
    that in dispute that the United States is going to step back
    and not defend that?
        Ms. Willett. No. I mean, I think the language in the treaty
    is clear. In the specific case of Scarborough Reef, the land
    feature itself is disputed.
        Mr. Forbes. Okay.
        Mr. Courtney.
        Mr. Courtney. Thank you, Mr. Chairman.
        Ms. Willett, I would just like to drill down with you a
    little bit about UNCLOS and its history and just sort of the
    structure of how that treaty operates.
        Again, in terms of how past cases have played out, I think
    your testimony mentioned India and Bangladesh had a dispute
    which went through the arbitration process, and it ended up
    with a peaceful resolution. Is that correct?
        Ms. Willett. Yes, that is correct.
        Mr. Courtney. And it had been a longstanding claim over
    many years that led up to that decision. But again, the sort of
    moral and global force of the UNCLOS kind of prevailed at the
    end of the day to have a positive outcome?
        Ms. Willett. Yes. I think that is correct. I mean, I think
    there are actually numerous examples within the region where
    countries have effectively used legal dispute resolution
    mechanisms to settle territorial, including maritime territory,
    disputes amongst themselves. And so it can be a very effective
    tool for upholding that rules-based system.
        Mr. Courtney. But there is no sort of, you know, UNCLOS
    SWAT [special weapons and tactics] team that is out there, so
    that, again, in terms of enforcing a ruling. I mean, it is
    really something that sort of uses, as I said, sort of the
    international, you know, standing as a way of trying to get
    people to work within the rule-based system that it created. Is
    that correct?
        Ms. Willett. Yes, it is. UNCLOS protects the rights of all
    nations, whether they have maritime entitlements themselves or
    not, to a specific standard for use of the seas. So it protects
    globally everyone's right to legally use international waters
    around the world. And so I think the pressure comes from an
    understanding that we all benefit from having an international
    system for regulating how seas can be used that benefits all of
    us.
        Mr. Courtney. All right. So over, you know, the last year
    or so, though, I mean, it appears that China has been trying to
    sort of step outside that structure and sort of negotiate sort
    of on a bilateral basis with countries in the region there to
    sort of, again, establish their own agreements regarding, you
    know, the issues that are really under the jurisdiction of
    UNCLOS.
        Is that sort of the pattern that you have seen, the salami
    slicing, as they call it?
        Ms. Willett. Yes, Congressman. I think you hit on it
    exactly that the fundamental issue at stake in the South China
    Sea is it is not about the rocks. It is about the rules. Is
    China, as it becomes a global sort of player and as its
    interests expand, is it going to play by the same rules as the
    rest of the globe does, whether that is in terms of the Law of
    the Sea or trade law or what have you? The question that is
    posed right now, is China going to play inside that rules-based
    system that has benefitted all of us so much over the last 70
    years?
        Mr. Courtney. All right. So and during the course of this
    proceeding--I mean, it is my understanding that the U.S.
    actually tried to obtain observer status in the, you know, the
    litigation that took place there, and we actually were denied
    that opportunity because the U.S. Senate has never ratified
    UNCLOS. Is that your understanding, or is that your testimony?
        Ms. Willett. Yes. The Obama administration, like all
    previous administrations, believes very firmly that our
    interests would be served by ratifying the Convention on the
    Law of the Sea. We did request observer status at the hearings
    under--held by the arbitral tribunal, but because we are not a
    party to the Convention, we are not able to participate, and it
    does harm us that we have not yet ratified the Convention. It
    is a common criticism when we speak out about the importance of
    these rules when we, ourselves, have not----
        Mr. Courtney. Right.
        Ms. Willett [continuing]. Signed up.
        Mr. Courtney. And that is, frankly, an observation that has
    been made by our military leadership as well. I mean, Admiral
    Richardson, you know, has testified to that effect. General
    Dunford has testified to that effect, and Admiral Harris, who
    is out there in the middle of all this with the 7th Fleet in
    PACOM [U.S. Pacific Command] has said that, really, it is time
    for this country to move forward and ratify UNCLOS.
        And again, as we get closer to the decision, frankly, I
    think hopefully our friends in the upper chamber will
    understand that, you know, this is not just some sort of parlor
    game in Washington. I mean, it has real life effects in terms
    of trying to, again, maintain, you know, what I think has been
    a rules-based system of maritime law and that we benefit from
    it in many respects even more so than other countries.
        Mr. Connolly. Would my friend yield?
        Mr. Courtney. Sure.
        Mr. Connolly. My understanding is that by not being a
    member, and the Chinese being a member, they actually can
    influence all the committees and subcommittees and we can't.
    And so in terms of doing the actual work of the law of the
    seas, we are day to day at a disadvantage and they are day to
    day at an advantage. I don't know if Ms. Willett wants to
    confirm that, but I thank my friend for yielding.
        Mr. Courtney. Well, all I would just point out is there is
    a House Resolution 631 urging the Senate to ratify, and
    hopefully today some Members will take a look at that and maybe
    have them sign onto it because, as I said, next week, the eyes
    of the world are going to be on this treaty and its benefits.
        And certainly, I mean, I think what we have heard without
    specifics this morning or this afternoon is really that, you
    know, we are going to be part of whatever that sort of
    international, you know, force to make sure that the decision
    is really adhered to. And again, we have that single standard
    that really, I think, is so important and that UNCLOS, you
    know, is really focused on creating. We all benefit from that.
    With that, I yield back, Mr. Chairman.
        Mr. Forbes. Chairman Salmon.
        Mr. Salmon. Thank you.
        When I first started serving on the Foreign Affairs
    Committee, it was 1995, Warren Christopher was the Secretary of
    State, and I remember asking the question in a hearing like
    this, what was our State Department policy toward China, and
    the answer kind of astounded me, yet it has been a policy of
    many administrations. He called it strategic ambiguity. I
    thought that was the oddest policy I had ever heard.
        And having been to China myself probably close to 50 times
    and speaking the language, living in Taiwan for a couple of
    years, being around them a lot of time, I think this is a
    country we need to have some real strategic clarity with, and I
    think one of reasons that things are getting so out of control
    in the South China Sea is that everybody is kind of dancing
    around, you know, the 800-pound gorilla in the room. China has
    stated pretty openly that with this arbitral tribunal decision
    that is expected in a couple of weeks that they don't intend to
    adhere to it.
        So then what? I guess that is my question. What are our
    options then? A lot of our allies in the region are extremely
    concerned about China's land grabbing. And as the chairman of
    the HAS [House Armed Services] Committee said that, you know,
    not only island grabbing but putting military installations on
    those islands, and so virtually all of our allies in the region
    have expressed grave concerns about what China is doing, and
    they are waiting on us to do something.
        What is that something? If they flout the decision by the
    tribunal, what is our next move? Because I think all eyes are
    going to be watching us, and though we don't specifically have
    any land disputes ourselves but our allies do, the other
    concern I have is that I think that the South China Sea is a
    real tinderbox. Whenever President Obama or Secretary Kerry
    talks about, or Ash Carter talks about the South China Sea, it
    is always one of the top national security concerns that we
    have. It is always delineated as such.
        And so what I am wondering, you know, with a lot of the
    close encounters with the ships and the planes, you know, just
    one wrong move at any given time could escalate into a major
    conflict, a major problem. What is our recourse if they just
    flout that decision?
        Ms. Willett. So to your point about China, Mr. Chairman, it
    is a big and obviously very strategically important
    relationship to the United States. It is one that has grown
    dramatically over the last several years, but one that contains
    disagreements but also contains a great deal of areas where we
    have common interests and can cooperate fairly effectively.
        And I would say that that dialogue, that cooperation has
    grown quite a bit over the last several years. It is true that
    we still have areas of disagreement, but part of that is our
    continued dialogue and our continued cooperation has allowed us
    to be able to deal with those areas pretty frankly.
        Now, there are areas, and the South China Sea is a clear
    example, where we continue to have a very significant
    difference of opinion and a great deal of friction. Our
    strategy overall, from day one, has been multifaceted. It
    includes diplomatic, military, capacity building, and economic
    tools aimed at shaping the strategic environment such that
    flouting the rules-based order and not playing by the same
    rules as others, the incentives aren't there, and ensuring that
    the effects of coercion, or you know, lawbreaking aren't
    positive.
        The net effect of what we are seeing is a situation where,
    you know, no claimant can expect to flout the law, flout the
    ruling in a way that doesn't draw international approbation and
    interest and a great deal of scrutiny, and in fact, has
    resulted in a situation where we are seeing a much greater
    demand for U.S. security presence, U.S. security cooperation,
    U.S. engagement, and we have seen much greater interest in
    economic diversification, including interest in TPP, expanded
    security ties to other regional players such as India and
    Japan, such that flouting international law, pushing back,
    behaving in a way that is not consistent with the rules-based
    order isn't paying the dividends that it might otherwise. And I
    believe that our intensive diplomatic, economic, and military
    engagement has played an important role in creating an
    environment where the payoff just isn't worth it.
        I think it is clear that Southeast Asian claimants continue
    to stand up for their rights and push back against efforts to
    coerce and bully them. We have seen a great deal of growth in
    multilateral cooperation on these big strategic issues, and I
    would expect that to continue.
        Mr. Salmon. What can we do to encourage ASEAN to step up to
    the plate in a bigger way, because heretofore--I know that most
    of the ASEAN members, because I have met with them, they are
    all very concerned about what is going on in the South China
    Sea and Chinese belligerence, but ASEAN as a group has yet to
    be incredibly effective as one strong voice to deal maybe some
    reputational harm to China. What can we do to help maybe make
    that stronger, that response from them?
        Ms. Willett. Well, thank you. ASEAN has actually been a
    consistent voice for international law and an international
    rules-based system for the nearly 50 years that they have
    existed. But you are correct, Mr. Chairman, that their
    institution has some limitations. There have been some
    instances and some limitations to their ability to speak out,
    but on this issue, they have actually spoken out fairly clearly
    fairly recently both in their joint statement with the
    President at the Sunnylands Summit in February where they made
    a clear statement in support of the Convention on the Law of
    the Sea and the right of countries to pursue dispute resolution
    through all peaceful processes, including legal and diplomatic
    processes.
        They have made their own standalone statements through
    their foreign ministers at their foreign ministerial in April,
    and we expect them to continue to take that principled line on
    the importance of the rule of law and international conventions
    such as the Law of the Sea.
        Mr. Salmon. Finally, is imposing reputational harm the
    absolute best that we can do? Other than upgrading the maritime
    security capabilities of our partners in the region, do we have
    any other tools for inducing behavioral change in the South
    China Sea?
        Ms. Willett. Thank you, Mr. Chairman. As I said, our
    strategy is multifaceted. It is diplomatic, it is military, it
    is about capacity building with the other claimants, it is
    about economic tools, but it is a cumulative long-term strategy
    aimed at making clear that the strategic environment is such
    that it is not in any claimant's or any nation's interest to
    violate international law.
        Mr. Salmon. Thank you, Mr. Chairman.
        Mr. Forbes. Mr. Sherman.
        Mr. Sherman. Thank you. There is only one significantly
    inhabited island in dispute in the South and East China Sea
    called Taiwan, a lot more people than all the--and one way to
    defend Taiwan would be to spend a few hundred billion dollars
    on more naval assets; but there is something else that would be
    just as effective, probably more effective, and that is with a
    clear law that would immediately eliminate China's ``most
    favored nation'' [MFN] status if they blockade or invade
    Taiwan.
        Under those circumstances, the missiles that China could
    use on any day to just threaten Taiwan and close its ports
    would, I think, become inoperative. Ms. Willett, would you
    oppose or would the State Department oppose an effort by
    Congress to just say if you invade or blockade Taiwan, at that
    moment you automatically lose MFN?
        Ms. Willett. Thank you, Congressman. I am happy to take
    your question and consult with my colleagues who cover Taiwan
    policy and come back to you with an answer.
        Mr. Sherman. Can I count on a clear unambiguous answer for
    the record?
        Ms. Willett. I have to take your question back to my
    colleagues who cover Taiwan.
        [The information referred to can be found in the Appendix
    on page 57.]
        Mr. Sherman. I think it was my--the chairman of our
    subcommittee that talked about ambiguity. It might be good to
    be ambiguous toward China but maybe not ambiguous toward
    Congress on this issue. I hope to get a clear answer.
        Mr. Denmark, there has been a massive increase in the
    world's attention to disputes between Japan and China over
    islands. Has Japan massively increased its defense budget over
    the last 4 years? And don't they spend well less than a quarter
    of what we spend as a percentage of GDP?
        Mr. Denmark. Thank you, sir. I don't have the specific
    numbers in front of me. I do believe it is a percentage of how
    much----
        Mr. Sherman. It is about 1 percent of their GDP.
        Mr. Denmark. In terms----
        Mr. Sherman. They keep claiming they are going to increase
    it, they never actually increase it, and they want us to spend
    hundreds of billions of dollars to develop and deploy naval
    assets to defend islands that don't have any oil, but if they
    do have oil, it is Japan oil or Chinese oil, it is not American
    oil.
        Mr. Denmark. To answer your question, sir, in terms of
    absolute numbers, I do believe that Japan's defense budget has
    increased in recent years, although not dramatically, as you
    said, sir. But we have seen, I think, very important
    developments in our alliance with Japan in the last few years
    with our agreement on new defense guidelines, the passage of
    new legislation that enables their----
        Mr. Sherman. They are not willing to put their money where
    they want us to put our money. They are not willing to put
    their lives where they want us to put our lives, and it is nice
    that they will issue joint communiques, but joint communiques
    don't cost anything.
        Ms. Willett, I want to return to the UNCLOS. I agree with
    you. It is not about the rocks. It is about the rules. China
    seems to have it the best of both worlds. They join UNCLOS,
    serve on the subcommittees, as the gentleman from Virginia
    pointed out, and yet they are not going to follow the outcome
    of this arbitration provision. Should we join--I mean, there
    are various arguments about us not joining UNCLOS, but it seems
    like China has demonstrated that you can join, participate, and
    if you disagree with anything they do, well, you just say they
    don't have jurisdiction.
        Is there any mineral rights or fishing rights or anything
    of value that the United States claims that someone is
    objecting to in a way that we could lose in UNCLOS, and if so,
    would we have to recognize the binding power of its decision?
        Ms. Willett. On the China question, Congressman, it is true
    that China has indicated that it does not accept the
    jurisdiction of the tribunal.
        Mr. Sherman. You can be sure they will accept it if they
    happen to win.
        Ms. Willett. Our focus is on their behavior following the
    tribunal decision. Actions matter in this case.
        Mr. Sherman. This question more is about why shouldn't we
    join UNCLOS? It seems China is demonstrating that you can
    participate, you can influence, and you don't really have to
    follow their rulings, so what is--can you think of any
    disadvantage to joining UNCLOS? Is there anything we could
    lose?
        Ms. Willett. Disadvantage to joining UNCLOS?
        Mr. Sherman. Yes.
        Ms. Willett. No. Our position is that it materially
    benefits us to be a part of the Convention of the Law of the
    Sea.
        Mr. Sherman. So we get the benefits, you can't think of
    anything we could lose, but even if we lost in an arbitration
    on UNCLOS about some arctic resource, China is demonstrating
    that you don't have to follow the ruling. It sounds like a
    great organization to join.
        Ms. Willett. China has not yet demonstrated that you don't
    have to follow the ruling. There hasn't been a ruling.
        Mr. Sherman. They have demonstrated that if the ruling goes
    against them, they will not feel it binding on them.
        Ms. Willett. I am concerned with their actions after we
    have an actual decision from the tribunal.
        Mr. Sherman. I mean, they may scale back what they do
    voluntarily for a host of reasons, but it is clear that they
    have laid the legal foundation to win if they win at UNCLOS and
    not to feel bound by it if they lose.
        Ms. Willett. They have presented an argument asserting that
    they are not bound by the tribunal if--when it rules. That is
    not----
        Mr. Sherman. And it is an incredibly weak argument.
        Ms. Willett. That is correct.
        Mr. Sherman. If we ever needed to present an argument, we
    could certainly present one that strong. Their argument is that
    some other government that they don't recognize once drew a
    line claiming something. That is like a Confederate general
    claiming Cuba, and so we claim all of Cuba. It is--so again,
    there are the advantages that the gentleman from Virginia
    pointed out.
        What could we possibly lose by joining UNCLOS? I don't know
    if Mr. Denmark has a comment. I will see if you have a comment,
    and then I believe my time has more than expired.
        Ms. Willett. The Convention on the Law of the Sea protects
    our maritime interests around the world. It is an important
    legal framework that ensures all countries are able to make use
    of the seas based on a rules-based system. We firmly believe
    that it is in the United States' interests to ratify, and we
    expect all parties to the Convention to fulfill their
    obligations under it.
        Mr. Sherman. I will just yield to the gentleman from
    Connecticut to remind us of the H.R. resolution that allows us
    to register our belief. That would be 631, and you are allowed
    to cosponsor that, right? Good to find out. Thank you.
        Mr. Forbes. The gentleman yields back his time.
        The distinguished gentleman from Alabama, Mr. Byrne, is
    recognized for 5 minutes.
        Mr. Byrne. Thank you. Several of us on these two panels
    were in China together a couple months ago, and we had the
    opportunity to have a number of briefings and actually got to
    hear the Chinese position. And the Chinese position is that we
    are a weakening power in the Pacific. Now, I don't know that we
    necessarily have to agree with their assessment, but I think it
    is important we understand that is their assessment. They got
    me to thinking about what Teddy Roosevelt always said, which
    is, ``Walk softly but carry a big stick.'' A lot of what we
    have heard today has been about using discretion and the use of
    power, which is certainly appropriate in any environment,
    particularly in a sensitive environment like the South China
    Sea. But I guess the question I have is, do we have a big
    enough stick over there? Do we have the right military assets
    in place in the right place to do what we need to do to fulfill
    the objectives of the United States, both militarily and
    otherwise? We keep having these incidents. The Chinese are
    clearly pushing very hard. You are from the Department of
    Defense. Do you have the assets that you need to carry out your
    mission?
        Mr. Denmark. Yes, Congressman, I believe we do. It is
    interesting, you mentioned, you referenced President Roosevelt
    in that, several months ago, I had the opportunity to accompany
    Secretary of Defense Carter to the USS Teddy Roosevelt
    operating in the region, which the ship calls itself
    ``America's Big Stick,'' which I think is a nice example----
        Mr. Byrne. I have also been on that vessel. It has a motto
    stenciled all throughout it saying ``putting warheads on
    foreheads.'' I love that. It is a good motto.
        Mr. Denmark. As I mentioned in my testimony, Congressman,
    we have increased our presence in the region over the last
    several years, and this is responding to a fairly ubiquitous
    and loud demand signal that we have been hearing from across
    the region from our allies and our partners stating that they
    are concerned about activities and actions happening in the
    South China Sea and asking us to work with them. And we have
    answered that call. We are working with them to enhance their
    capabilities. We are conducting exercises. We are conducting
    training. We are building our own capabilities in the region.
    Our operations tempo has increased, and we see that all these
    actions are providing for the common good. They are increasing
    maritime domain awareness and maritime security in the region,
    supporting our allies and our partners as well as our own
    national interests. And all of our missions are done
    meticulously to ensure that everything that we do is done in a
    way that is compatible and supports international law and
    maintains safety.
        Mr. Byrne. Well, a number of us are going with Mr. Courtney
    to the RIMPAC [Rim of the Pacific] exercise in a couple weeks.
        I want to go back to that Chinese perception. If we believe
    we have the appropriate number of assets, how do we cure that
    problem? Because a misperception is as dangerous to us as
    anything else. How do we cure that misperception with the
    Chinese? Do exercises like RIMPAC help with that, or does there
    need to be more direct communication between us and them? What
    is the source of their misunderstanding, and what can we do
    about it?
        Mr. Denmark. Well, Congressman, I do think that RIMPAC is a
    very good demonstration of American leadership and American
    power in that no other country is able to bring together so
    many countries to work together in pursuit of a common
    objective. So I think RIMPAC is a terrific example of that. In
    terms of our interactions with China, we have pursued for
    several years very consistently a robust military-to-military
    relationship with them, which includes military diplomacy in
    which our senior leaders, their senior leaders from our two
    militaries, interact with each other, both in person and over
    communications. We visit each other's countries. We visit each
    other's militaries. And from the U.S. perspective, we try to
    enhance that sort of transparency as a way to ensure, to reduce
    the potential for misunderstanding and miscalculation.
        We have also recently agreed to several confidence-building
    measures on rules of behavior in airspace and on the high seas,
    which we see as a very important aspect of our efforts to
    reduce risk. As our militaries operate in closer proximity to
    one another to a greater degree of regularity, we see that
    efforts of risk reduction are very important.
        In terms of managing Chinese perceptions, as somebody who
    has studied China for a long time, I find that task to be very
    complicated and very difficult. What we can be responsible for
    is to make sure that we are doing the right things, to make
    sure that we have the capabilities in the places that we need
    to make sure that we are building the capabilities of our
    allies and partners and make sure that we are able to defend
    ourselves, defend our allies, and defend our interests. And I
    believe we are.
        Mr. Byrne. Thank you.
        I yield back.
        Mr. Forbes. The gentleman yields back.
        The gentleman from California, Mr. Bera, is recognized for
    5 minutes.
        Mr. Bera. Thank you, Mr. Chairman.
        Throughout the opening statements and certainly throughout
    the witnesses' opening statements, there is a theme of the
    importance of recognizing global rules and norms and
    understanding the mechanisms by which to resolve disputes. So I
    think many of us in Congress have been concerned when we look
    at China's unilateral moves, whether in the East China Sea or
    in the South China Sea, which really go against international
    norms, unilateral moves, whether it is Scarborough Shoals, or,
    you know, declaring an ADIZ over the East China Sea, which
    really go outside the norms--so if we just think about the next
    steps and what is in our toolbox as the United States to help
    deescalate tensions, I think it is reasonable to go ahead and--
    we should certainly--I do wish we were a part of UNCLOS. We are
    not. But we are going through the process of recognizing
    international norms and international mechanisms by which to
    resolve disputes, so a ruling will come out shortly.
        I think it behooves us to make sure, as an international
    community, when we see that ruling, we do everything we can to
    enforce that ruling. Now, what I would say is, you know, let's
    say that ruling is not the one China is looking for, and they
    choose to ignore that ruling. We look at, I think Ms. Willett,
    you talked about the tools that we have. We are already engaged
    diplomatically in the sense that we have gone to UNCLOS. I
    would consider that a diplomatic tool by which to resolve this
    dispute. We can continue to engage them diplomatically, but we
    have already used that tool. None of us is interested in a
    military or kinetic engagement. We certainly are posturing by
    having some of our assets in the region. And the importance of
    the South China Sea, the reason why these small reclaimed
    islands are so important is that is one of the most important
    trade routes in the world right now. It is of incredible
    economic importance to not only the United States but to our
    allies in the region. And the number of goods that move through
    that region are very important, so they are very strategic.
        We can try to use economic tools to get China back to the
    table, but the worry here is, you know, China increasingly is
    moving assets to that island, and the more assets they have,
    the harder it will be to move them off of those islands. And it
    is much easier for us to deal with this today than it will be a
    decade from now.
        So, Mr. Denmark, outside of that, what are our options?
        Mr. Denmark. Well, thank you, Congressman.
        I think you can understand why I would be reluctant to
    discuss military options to any degree of specificity in an
    open hearing. What I do feel comfortable saying in an open
    setting is that we remain very committed to continue to defend
    our allies, to defend critical principles that we see as
    necessary to the continued peace and stability of the region,
    and to continue to defend our national interests. In terms of
    what happens after a decision, I would refer you to the
    statement that I submitted in that we see the military role in
    this as being essential to deter conflict and ensure that
    diplomacy has space to succeed, and we are going to continue to
    play that role.
        Mr. Bera. And certainly there is no desire for a military
    option here. I mean, we want diplomacy, and we certainly want
    China to understand that it is in China's economic benefit to
    have open seaways and the free movement of goods and services.
    They obviously see that as well. So, from our perspective,
    let's hope adhering to international norms and international
    mechanisms by which to resolve dispute, that China will take
    that mechanism as a member of UNCLOS and adhere to whatever
    ruling we do see next week. Otherwise, I think we ought to come
    back into a joint committee here and really, you know, send a
    strong message that we have got to adhere to these
    international norms.
        With that, I yield back.
        Mr. Forbes. The gentleman yields back.
        The gentleman from Alabama, Mr. Brooks, is recognized for 5
    minutes.
        Mr. Brooks. Thank you, Mr. Chairman.
        Looking at the South China Sea, there appear to be a number
    of nations that have significant economic and, perhaps,
    security interests. How would you rank those in terms of
    importance? Let's talk about it in terms of economics. Which
    countries use the South China Sea the most perhaps for fishing,
    food, commerce, oil, things of that nature?
        Ms. Willett. Thank you, Congressman.
        It is a big, complicated question. There are a number of
    claimants. They all have different, or not all, but they have
    varying claims. They have varying ways that they assess the
    values of those claims. I think----
        Mr. Brooks. I am not asking about claims. I am talking
    about who uses them.
        Ms. Willett. No, I understand. But the geographic scope of
    individual claims impacts how they assess the value of the
    resources and the importance of those spaces, which is all to
    say it is a complicated answer.
        Mr. Brooks. What is your judgment?
        Ms. Willett. From a U.S. perspective, what is most
    important and what is driving these disputes vary much from
    country to country; from our perspective, what is most
    important is whether or not they are going to pursue those
    claims in a way----
        Mr. Brooks. Mr. Denmark, I am not getting an answer.
    Perhaps you can share with me your insight on which countries
    have the greatest amount of economic interest in the South
    China Sea. It might be oil being shipped through the South
    China Sea that they are dependent on. It might be unfinished or
    finished products. It might be food in the form of fishing. Do
    you have a judgment as to which countries have the greatest
    economic interest in the South China Sea?
        Mr. Denmark. Well, Congressman, it is a very interesting
    question. I don't believe I have seen an academic analysis that
    tries to rank these. What I have seen, though, is that the
    complexities of international trade in this region means that
    it is not just the claimants that are affected, although
    obviously they have a critical interest in it, but countries
    outside of even the immediate area of the South China Sea, like
    Japan, like South Korea, like the United States, also have a
    critical interest----
        Mr. Brooks. Let's talk about it for a moment. South Korea,
    what is their interest in the South China Sea?
        Mr. Denmark. Well, obviously, I can't speak for them.
        Mr. Brooks. I understand you cannot speak for them. Do you
    have no judgment?
        Mr. Denmark. What I would say is my sense is that all
    countries in the region--I wouldn't want to identify one
    specifically. I would say all countries in the region----
        Mr. Brooks. I thought this was an easy question. South
    Korea, do they rely on their oil shipments from the Persian
    Gulf and from other areas to go through the South China Sea?
        Mr. Denmark. So what I was going to say is that South
    Korea, Japan, most of the countries of the region rely
    tremendously on international trade, much of which flows
    through the South China Sea.
        Mr. Brooks. Okay. Let's try to get to some specifics, and I
    have already lost about 70 percent of my time. South Korea, oil
    shipments through the South China Sea, do they have other
    commerce that is shipped to or from South Korea through the
    South China Sea?
        Mr. Denmark. Congressman, I am not trying to not answer
    your questions. As a representative of----
        Mr. Brooks. The answer is yes or no or you don't know.
        Mr. Denmark. What I will say, as a representative of the
    Department of Defense, I don't have those figures with me here.
        Mr. Brooks. Well, I am not asking for specific figures.
        Ms. Willett, are you familiar with whether or not South
    Korea ships or receives products through the South China Sea,
    other than oil? We have already established oil.
        Ms. Willett. All countries in East Asia receive and ship
    goods and services--oil, liquid and natural gas--through the
    South China Sea.
        Mr. Brooks. Is it fair to say that South Korea has a
    significant interest, then, in the South China Sea?
        Ms. Willett. Yes. I believe about 30 percent of the liquid
    natural gas that gets shipped to South Korea and Japan goes
    through the South China Sea. About 25 percent of the world's
    goods----
        Mr. Brooks. And Japan also has a significant economic
    interest?
        Ms. Willett. Yes, Congressman.
        Mr. Brooks. And the Philippines has a significant economic
    interest?
        Ms. Willett. Yes, sir.
        Mr. Brooks. Vietnam has a significant economic interest?
        Ms. Willett. Yes.
        Mr. Brooks. Taiwan has a significant economic interest?
        Ms. Willett. Yes, all countries in East Asia have a
    significant economic interest.
        Mr. Brooks. And would it be fair to say that their economic
    interest on a percentage of GDP is greater than that of the
    United States of America, economic interest?
        Ms. Willett. I would have to go back and look at the
    specifics because a great deal of this trade is also bound for
    the United States.
        Mr. Brooks. What can the United States of America do to
    encourage these other countries that have a greater reliance on
    shipping through the South China Sea to step up to the plate
    and absorb more of the defense costs associated with those
    shipping lanes?
        Ms. Willett. We work very closely with all of these
    countries on diplomatic, military, economic approaches to
    ensuring that the rules are followed in the South China Sea.
        Mr. Brooks. But they aren't stepping up to the plate like
    the United States of America is. My question is, what can we
    get them to do to step up to the plate to measures that are
    commensurate with their economic interests?
        Ms. Willett. We continue to engage with all of our partners
    in the region to ensure that we are all playing a part in
    ensuring that a rules-based order is protected in the South
    China Sea.
        Mr. Brooks. If the United States of America were to
    withdraw its military assets in the South China Sea, would that
    encourage these other countries to step up to the plate?
        Ms. Willett. I think that is a question for those other
    countries. I am sorry, sir.
        Mr. Brooks. All right. Thank you.
        Mr. Forbes. The gentleman's time is expired.
        The gentlelady from Guam is recognized for 5 minutes.
        Ms. Bordallo. Thank you very much, Mr. Chairman, Chairmen
    Forbes and Salmon, for holding this important and timely
    hearing.
        Two weeks ago, I had the pleasure of meeting with the Prime
    Minister of Timor-Leste to discuss a variety of bilateral
    issues. In particular, Secretary Willett, I would like to
    briefly note my concern regarding the outstanding maritime
    dispute between Australia and Timor-Leste. I believe the United
    States should use our diplomatic power and influence to bring
    about a swift resolution to this matter, and the lack of an
    agreement on this maritime dispute undermines our credibility
    when discussing the issue of the China-South China Sea maritime
    issues with the Chinese. I do know the Chinese raise this very
    often, so I hope that we can use some of our influence to
    encourage a swift resolution to the matter, and I think the
    political will exists in the region if we just need--of if we
    can just nudge this along. So I know Mr. Courtney has
    introduced a resolution to this matter, and I will also add my
    name to the chorus of people who believe the Senate should
    ratify UNCLOS.
        Now my first question is for, I guess, Secretary Denmark. I
    believe that an asymmetric advantage we have in countering
    Chinese influence in the South China Sea is the partnerships
    that we have in the region, and we should continue to cultivate
    them. Are programs such as the Maritime Security Initiative
    [MSI] a helpful tool for building partner capacity, and what
    areas can be improved? I am particularly concerned that we can
    find over $3 billion for the European Reassurance Initiative
    program, but we struggle to find $100 million for the Maritime
    Security Initiative. Now, you briefly touched on MSI in your
    testimony, Secretary Denmark, but I think this disparity sends
    the wrong message about our rebalance strategy, especially
    given your commentary on the need for building partner
    capacity. Do you agree? If you could just give it a brief
    answer. I have very little time.
        Mr. Denmark. We believe that MSI is very important. It is
    something that we have been working very actively to help train
    and equip our allies and partners. I agree with you that our
    allies and partners are a critical advantage to us in the
    region. And we are just in the beginning of this effort, and we
    are looking to continue to advance it.
        Ms. Bordallo. So you do agree then. Secretary Denmark, my
    final question is for you. On Guam, we are particularly
    concerned with the PLA [People's Liberation Army] Navy's
    increased presence in the South China Sea and the high number
    of unsafe aerial and maritime intercepts they are conducting.
    Could you elaborate on the steps that the Department is taking
    to, one, A, reduce Chinese intercepts and, B, create a roadmap
    for deescalating potential conflicts resulting from a botched
    Chinese reaction?
        Mr. Denmark. Sure. Yes, of course. As I have mentioned
    before, we have recently concluded several confidence-building
    measures with the Chinese, which are designed to reduce risk in
    terms of setting rules of behavior for interactions between our
    aircraft and our surface vessels based on existing
    international laws and norms. And we have seen an increase in
    the number of interactions between our forces in recent years,
    primarily because both sides are more active in the region
    militarily, but at the same time, we have seen a decrease in
    unsafe intercepts between our two sides, which I think
    demonstrates the effectiveness of these efforts.
        So we are going to continue to work with China to continue
    to advance these efforts to reduce risk, to enhance our ability
    to communicate with one another.
        Ms. Bordallo. Thank you very much.
        And I yield back, Mr. Chairman.
        Mr. Forbes. The gentlelady from Missouri, Ms. Hartzler, is
    recognized for 5 minutes.
        Mrs. Hartzler. Thank you, Mr. Chairman. Thank you.
        I was just wondering, has China adopted the U.N. Convention
    on the Law of the Sea?
        Ms. Willett. Yes, Congresswoman. They were integral in the
    drafting of the Convention on the Law of the Sea and have
    ratified it.
        Mrs. Hartzler. Ratified it. Okay. So they should abide by
    that, no question, obviously. Has the International Tribunal
    for the Law of the Sea ever ruled for a shared claim between
    countries? Could that be something potentially they would do
    next week?
        Ms. Willett. The tribunal in this instance won't rule on
    the underlying question of sovereignty over the individual land
    features. What it will do is potentially clarify what maritime
    entitlement those features are entitled to, among other issues.
    I would have to go back and look at the history of previous
    tribunals and get back to you on your question. But at the
    moment, the issue at question isn't who owns the land feature,
    but what maritime space is generated from a land feature. Is it
    a territorial sea or an exclusive economic zone?
        Mrs. Hartzler. Okay. Very good. How avoidable have recent
    near misses between U.S. and Chinese air- and seacraft been,
    and do you believe these incidents indicate that we are likely
    to see additional tense military encounters?
        Mr. Denmark. Congresswoman, as I mentioned, we have
    actually seen, the number of interactions between our aircraft
    and vessels in international places have increased in recent
    months and years. We have seen a decrease in the number of
    unsafe interactions between our two sides, as a result, I
    believe, of the risk reduction efforts that we have conducted.
    But as our forces continue to operate in relatively close
    proximity to one another, it is an issue that we are going to
    continue to be focused on, and these efforts at risk reduction
    are something that we are going to continue to pursue with the
    PLA.
        Mrs. Hartzler. So, back to the claim, a lot of my
    colleagues have advocated that the Senate adopt UNCLOS, and how
    would you respond to the concerns that I have heard that it
    would jeopardize American sovereignty by subjugating some of
    our rights to the U.N. and also perhaps jeopardize our fishing
    industry and the ability to fish certain areas? How would you
    respond to those concerns?
        Ms. Willett. It is our view, the Obama administration and
    the previous administrations, that the legal framework offered
    by the Convention on the Law of the Sea protects U.S. maritime
    interests and protects our rights around the world. On the
    specifics of what our accession and a ratification of the
    treaty might look like, I wouldn't want to speculate. That is
    something, I think, that would be part of the Senate
    deliberations.
        Mrs. Hartzler. Would you like to add anything?
        Mr. Denmark. If I could just add, from a DOD perspective,
    our military forces, even though we have not ratified UNCLOS,
    our military forces do operate in accordance with its
    guidelines, and we are very meticulous to make sure that all of
    our operations are conducted within the bounds of international
    law.
        Mrs. Hartzler. Thank you very much.
        I yield back, Mr. Chairman.
        Mr. Forbes. The gentlelady from Florida, Ms. Graham, is
    recognized for a little less than 5 minutes.
        Ms. Graham. I won't even take that long, Mr. Chairman. I
    appreciate it. Both of the chairmen, thank you for this
    opportunity.
        Ms. Willett, you mentioned that the United States will be
    looking at China's actions following conclusion of arbitration.
    Aside from the obvious--and I will say it has surprised me
    somewhat this hearing--and I have been here from the
    beginning--because it seems like the witnesses, that you all
    are somewhat hesitant, and I am assuming because of the
    sensitivity of the subject we are discussing, so I don't know
    if this would be maybe better addressed in a classified, Mr.
    Chairman. But aside from the obvious, what actions will you all
    be looking at from China's perspective that would signal
    noncompliance?
        Ms. Willett. Thank you, Congresswoman.
        I think the hesitance comes in part from the fact that it
    is a complicated legal question that has been put before the
    tribunal, and we do not have a ruling yet from the body that we
    could evaluate or even assess, you know, what noncompliance
    might look like. Thus far, our efforts have been focused on
    engaging intensively with China, with the other claimants, with
    the other parties in the region, to ensure that, following the
    ruling, everyone behaves with restraint, everyone is looking
    for ways to use the tribunal decision as a jumping-off point to
    restart diplomatic discussions about a common way forward that
    avoids conflict but looks for commonalities that can be built
    on so that in these disputed spaces, we can reduce the risk of
    misunderstanding and find a way for all of the parties involved
    to benefit and to behave in a manner that is consistent with
    international law and that isn't in violation of whatever the
    ruling is. But until we see the ruling, it is difficult to
    speculate on just what its implications are.
        Ms. Graham. And I think that is a fair comment. However, I
    will segue to something Mr. Denmark said. I certainly hope--and
    I will end with this--that if, in fact, there is a failure to
    live up to what our expectations are following the decision,
    unknowing what the decision is at this point, but I think we
    can all extrapolate out what would be a violation, that we do
    have--and you said, Mr. Denmark, that we are making sure we
    have the capabilities where we need them, and I wrote that
    down, make sure we have the capabilities where we need them. I
    think that is a key statement because, clearly, this is an area
    in the world where there are a lot of potential international
    implications if, in fact, they do not fulfill their
    obligations, being China.
        I will end with that. I don't really think there is a need
    to have a follow-up response, and I appreciate you all being
    here. Thank you very much.
        Mr. Forbes. We want to thank you both for being here. I
    told you at the beginning that we would allow you time to have
    any final comments. Unfortunately, these votes are called, so
    what I am going to allow you to do if you would like is to
    submit anything for the record to clarify any statement you
    have made or to put anything else in there that you feel we
    didn't cover that you thought was important. Is that okay with
    both the ranking members and with the chairman?
        With that, the other members have said that they do not
    need to return to ask their questions, so we are going to let
    you guys go. Thank you so much for being here.
        With that, we are adjourned.
        [Whereupon, at 4:59 p.m., the subcommittees were
    adjourned.]

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                                A P P E N D I X

                                  July 7, 2016

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                  PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                                  July 7, 2016

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     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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                  WITNESS RESPONSES TO QUESTIONS ASKED DURING

                                  THE HEARING

                                  July 7, 2016

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                 RESPONSE TO QUESTION SUBMITTED BY MR. SHERMAN

        Ms. Willett. We remain committed to preserving Taiwan's democracy
    and ensuring the freedom of the people on Taiwan from coercion,
    threats, and intimidation. In accordance with the Taiwan Relations Act,
    the United States would consider any effort to determine the future of
    Taiwan by other than peaceful means, including by boycotts and
    embargoes, a threat to the peace and security of the Western Pacific
    area and of grave concern to the United States. [See page 17.]

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                  QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                                  July 7, 2016

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                       QUESTIONS SUBMITTED BY MR. FORBES

        Mr. Forbes. Under the terms of the 1951 Mutual Defense Treaty
    between the United States and the Philippines, each party is bound to
    respond to attacks on the ``armed forces, public vessels or aircraft''
    of the other party, as well as ``island territories under its
    jurisdiction.'' Do the terms of this alliance cover Philippine forces
    in the disputed areas of the South China Sea? Do they cover the
    Scarborough Shoal?
        Ms. Willett. President Obama has been clear that we will stand by
    our commitments to the Philippines, as we do any mutual defense treaty
    ally. The long-standing, ironclad alliance between the Philippines and
    the United States has contributed to peace, stability, and prosperity
    in the Asia-Pacific region for more than 70 years. We do not comment on
    specific hypotheticals. We believe the language in the Mutual Defense
    Treaty is clear.
        Mr. Forbes. China has claimed that the outposts it is constructing
    in the Spratlys are for civilian purposes only, and that China will not
    ``militarize'' the islands. In the view of the United States
    government, what would count as ``militarization?''
        Ms. Willett. The United States opposes efforts by any claimant to
    use force or threat of force to advance its territorial or maritime
    claims. We have consistently voiced support for the peaceful resolution
    of disputes in accordance with international norms. We consistently
    call on claimants to cease further land reclamation, construction of
    new facilities, and militarization of their outposts in the South China
    Sea. We would consider the introduction and rotation of military
    assets, including but not necessarily limited to offensive weapons
    systems and combat aircraft, on occupied outposts as militarization.
        Mr. Forbes. As to China's maritime claims in the South China Seas,
    has the State Department or the Department of Defense performed an
    analysis, either officially or unofficially, as to the validity of
    China's territorial claims and reclamation activities? If so, can the
    administration provide such analysis to our committees?
        Ms. Willett. The Department conducted an analysis of China's
    maritime claims in the South China Sea in volume no. 143 of its
    longstanding publication Limits in the Seas, which was released
    December 2014. It is currently available on the Department of State
    website. The United States does not take a position on competing
    sovereignty claims over land territory in the South China Sea.
        Mr. Forbes. According to press reports, China has declared that it
    will be holding a week of naval exercises on the eve of the court's
    ruling, and has designated approximately 40,000 square miles of the
    South China Sea--an area roughly the size of Kentucky--as a no-go zone
    for foreign shipping. Are these reports accurate? How do you interpret
    China's actions?
        Mr. Denmark. The People's Liberation Army continues to conduct
    routine military operations--including military exercises--in the South
    China Sea. We were aware of China's naval exercise in the South China
    Sea that occurred during the timeframe that the arbitral tribunal
    announced its ruling. We recognize the right of any State to conduct
    exercises in accordance with the established international laws and
    norms. We understand this particular exercise was part of China's
    annual naval training plan and would refer you to the Chinese
    government for further information.
        U.S. forces operate in the Asia-Pacific on a regular basis,
    including in the South China Sea, and have done so for decades. All
    operations are conducted in accordance with international law. The
    establishment of a Warning Area in international waters for the conduct
    of an exercise does not give any country the right to prohibit the
    entry of ships or aircraft into that area. The United States and China
    agreed to these international standards as part of the Confidence
    Building Measures signed in 2014 and will discuss lessons learned from
    this event during our relevant diplomatic dialogues.
        Mr. Forbes. In 2013, China declared an Air Defense Identification
    Zone or ADIZ over the East China Sea. Some observers have suggested
    that China may intend to declare a similar zone over the South China
    Sea, and enforce it from its artificial island bases. How would the
    United States respond to the declaration of such an ADIZ?
        Mr. Denmark. When China announced its 2013 East China Sea (ECS) Air
    Defense Identification Zone (ADIZ), the United States made it clear
    that a unilateral and uncoordinated ADIZ over politically sensitive
    areas was provocative and raised tensions. This declaration has not
    affected U.S. military operations in any way.
        A Chinese declaration of an ADIZ over disputed territories and
    water space in the SCS would not grant it any new authority or
    strengthen its claims over the area. In fact, such a declaration would
    only serve to increase tensions with China's neighbors. Just as in the
    East China Sea, an ADIZ in the South China Sea would not change how the
    United States conducts military operations in the region. The United
    States will continue to fly, sail, and operate in accordance with
    international law, as U.S. forces do all around the world. U.S. forces
    will continue to be present and active in and around the SCS on a
    regular basis.
        Mr. Forbes. Some observers have suggested that rather than trying
    to achieve legal jurisdiction over the South China Sea, Beijing may
    simply strive for de facto control, and use its paramilitary forces,
    fishing boats, and ``maritime militia'' to achieve dominance in the
    region without crossing the threshold into outright conflict. How
    should the United States respond to and counter that kind of ``gray
    zone'' aggression against our partners? Do we have a strategy to do so,
    or the forces, tactics, and capabilities required?
        Mr. Denmark. To address security concerns in the region, including
    those referred to as ``gray zone'' aggression, the Department of
    Defense has executed a four-part strategy to achieve our broader
    national objectives:
          First, we have strengthened our own military capacity and
    presence in the region through efforts such as the Enhanced Defense
    Cooperation Agreement (EDCA) with the Philippines.
          Second, we have enhanced the tempo of our military
    operations in the region increasing our visible presence in the region.
    U.S. military forces are present and active in and around the Western
    Pacific on a daily basis. U.S. ships and aircraft operate routinely
    throughout the Western Pacific--including the South China Sea, East
    China Sea and Philippine Sea--and have for the last 70 years. In the
    past year, U.S. aircraft carriers, Ronald Reagan and John C. Stennis
    Strike groups, conducted routine operations in the international waters
    of the South China Sea and the Philippine Sea. The Stennis operated in
    the South China Sea for three months before joining the Reagan in the
    Philippine Sea for combined training and exercises. These routine
    operations were conducted in accordance with international law and
    demonstrated continued U.S. freedom of navigation in international
    waters in accordance with international norms, standards, rules and
    laws.
          Third, we continue to network our security relationships
    by enhancing our engagements and cooperation with and among our allies
    and partners, and thorough building partner capacity efforts such as
    the Southeast Asia Maritime Security Initiative.
          Finally, we have sought to leverage our military
    diplomacy with partners, including China, to reduce the possibility of
    misunderstanding and miscalculation between our forces.
        These efforts, combined with the strategic investments we are
    making at home, will ensure that we are ready to address all
    contingencies in the region.
                                     ______

                       QUESTIONS SUBMITTED BY MR. LARSEN
        Mr. Larsen. China has stated that it neither accepts nor recognizes
    the Permanent Court of Arbitration's ruling against its claims in the
    South China Sea. This has led to media speculation as to potential
    Chinese provocations and U.S. military responses. However, given the
    mutual goals of resource extraction and fishing among claimants to the
    contested waters, resolving these conflicting claims is primarily a
    diplomatic question. How can the State Department play a constructive
    role in this process?
        Ms. Willett. The Administration employs a comprehensive and
    multifaceted approach to the South China Sea that includes intense
    bilateral and multilateral diplomacy, a consistent military presence
    and operations, defense engagement and partner capacity building, and
    sustained economic engagement. As a non-claimant, one of our primary
    interests is in helping shape a rules-based strategic environment so
    that disputes are settled peacefully and in accordance with
    international law. Our consistent and steady presence in the South
    China Sea plays an important role in deterring any claimant from
    employing the use or threat of force to assert their claims, leaving
    open the door for constructive diplomatic or other peaceful processes
    among claimants. We are strengthening our defensive presence in the
    South China Sea. As part of a long term strategy, we are moving 60
    percent of our naval fleet to the Pacific and rotating more of our
    forces through friendly countries in the region. We are also
    strengthening maritime domain awareness and law enforcement
    capabilities in the region. This includes new security cooperation
    agreements with allies and partners in Southeast Asia and providing
    equipment and training to help partners better patrol offshore and
    ensure their ability to maintain an effective presence. On the
    diplomatic front, we are advocating for peaceful dispute resolution and
    compliance with international law. We continue to engage in intense,
    high-level diplomacy with all claimants, including advocating for them
    to take advantage of the July 12 Arbitral Tribunal's ruling to find a
    workable modus-vivendi in areas subject to dispute. President Obama,
    Secretary Kerry, and Secretary Carter continue to make our interests
    and concerns clear to all claimants in an open and frank manner. In
    addition, we have consistently called on all parties to negotiate a
    Code of Conduct in the South China Sea, which would build on the
    Declaration on the Conduct they negotiated in 2002.
        Mr. Larsen. What is the U.S. military's assessment of China's long-
    term goals as a naval power in Asia and beyond? Are there any ways a
    more powerful Chinese navy is in the U.S. national interest?
        Mr. Denmark. China's Navy is shifting its mission from ``near sea''
    defense to ``far seas'' protection, which was espoused as the Navy's
    objective in China's most recent Defense White Paper. China's maritime
    emphasis and attention to missions guarding its overseas interests has
    increasingly drawn the PLA beyond China's borders and its immediate
    periphery. The PLAN is increasingly conducting operational tasks
    outside the so-called ``first island chain'' with multi-mission, long-
    range, sustainable naval platforms that have robust self-defense
    capabilities. Over the past 15 years, China's ambitious naval
    modernization program has produced a more technologically advanced and
    flexible force. The PLAN now possesses more than 300 surface ships,
    submarines, amphibious ships, and patrol craft. China is rapidly
    retiring legacy combatants in favor of larger, multi-mission ships
    equipped with advanced anti-ship, anti-air, and anti-submarine weapons
    and sensors.
        As China's capabilities improve, we consistently encourage China to
    be a constructive partner in the region and to contribute positively to
    regional stability. China's contributions to global and regional public
    goods--such as humanitarian assistance and disaster relief--would be in
    the interests of the entire Asia-Pacific, including the United States.
        Mr. Larsen. Does the U.S. military believe that China's building up
    of ``islands'' and installation of military facilities in the South
    China Sea are the result of PLAN pressure and influence on China's
    civilian leadership, or are these the result of a centrally-directed
    strategy from China's top civilian leadership?
        Mr. Denmark. I would refer you to Chinese authorities to address
    questions about China's internal policy coordination process.
                                     ______

                       QUESTIONS SUBMITTED BY MR. SALMON
        Mr. Salmon. Since the hearing, the tribunal deciding the
    Philippines v. China arbitration has issued its ruling, largely
    invalidating China's claims in the South China Sea. China, predictably,
    has made clear that it refuses to recognize or abide by this ruling. As
    the tribunal lacks an enforcement mechanism, what will be the
    ramifications of China's noncompliance? Does this noncompliance stand
    to damage the credibility of international law? How can we hold them
    accountable?
        Mr. Denmark. As provided in the Law of the Sea Convention, the
    Arbitral Tribunal's decision in this case is legally binding on both
    the Philippines and China. China's stated non-compliance with the
    ruling does not negate the legitimacy of the ruling.
        Although the United Nations Permanent Court of Arbitration does not
    have a mechanism to enforce the ruling, this is common to all
    international maritime law. The expectation in this and other cases
    relating to international maritime law is that both parties will comply
    with their obligations and exercise restraint. We have encouraged China
    and all claimants to clarify their claims in accordance with
    international law as reflected in the Law of the Sea Convention, and to
    work together to creatively and peacefully manage and resolve their
    differences. The United States will continue to provide a credible
    presence in the region to create the diplomatic space for China and the
    Philippines to resolve their differences. Our military operations,
    though not intended to enforce the ruling, will continue to uphold
    freedom of navigation and overflight in the South China Sea, as we do
    around the world.
        Mr. Salmon. Our strategy towards the South China Sea has been
    limited to imposing reputational harm on China, rather than actually
    attempting to elicit a change in its behavior. Our freedom of
    navigation operations have shown that we will not recognize China's
    excessive claims, and our statements in support of international law
    show that China's noncompliance with the arbitral ruling is wrong; but
    this strategy hasn't stopped Chinese militarization of the area. Is
    imposing reputational harm really the best we can do? Other than
    upgrading the maritime security capabilities of our partners in the
    region, do we have any tools for inducing behavioral change in the
    South China Sea?
        Mr. Denmark. We are committed to defending our allies and
    protecting the rights, freedoms, and lawful uses of the sea and
    airspace guaranteed to all countries. The United States will continue
    to conduct routine and lawful operations in the South China Sea in
    order to protect the rights, freedoms, and lawful uses of the sea and
    airspace guaranteed to all countries.
        We have a multi-pronged strategy to defend and uphold these
    interests and principles and set the stage for change. First, the
    United States has strengthened our own military capacity and presence
    in Southeast Asia though such efforts as rotationally basing ships,
    aircraft and Marines in Singapore and the Philippines. Second we have
    enhanced the tempo of our military operations in the region which
    included a persistent and scalable Command and Control Detachment in
    the Philippines, dual carrier operations in the Philippine Sea and a
    deployed rotational air component to the Philippines. Third, we have
    enhanced our regional security network by building partner capacity
    through the Southeast Asia Maritime Security Initiative, training
    regional forces, and conducting multilateral exercises such as
    BALIKATAN and RIMPAC. Finally we have leveraged military diplomacy to
    reduce risk with China utilizing Confidence Building Measures, high
    level dialogues, and existing structures such as Western Pacific Naval
    Symposium (WPNS) and ASEAN Defense Ministers Meeting (ADMM) Plus.
        In combination with the broader United States Government diplomatic
    engagement strategy these lines of effort have provided an increased
    set of tools for creating more favorable conditions for claimants to
    lower tensions and take steps to peacefully resolve disputes, including
    through peaceful dispute mechanisms such as arbitration.
        Mr. Salmon. ASEAN is the multilateral body most directly involved
    in the South China Sea disputes, but has had trouble making forward
    progress due to its consensus-based procedures. Some members of ASEAN
    continue to ask for U.S. assistance to secure the region. The Maritime
    Security Initiative was recently implemented to assist coastal states'
    abilities to address challenges in the area, including China's
    belligerence. What more can we do to work with our friends in ASEAN to
    move toward a secure region? How can we facilitate progress within the
    framework of ASEAN? Will the disputes cause fractures in the ASEAN
    community and what can we do to prevent it?
        Mr. Denmark. The Association of Southeast Asian Nations (ASEAN) is
    critical to the regional security architecture. The United States
    supports ASEAN centrality, and has focused on enhancing ASEAN through
    engagement, building partner capacity, training and exercises. This is
    why DOD has invested in ASEAN thorough multiple high-level dialogues
    such as the East Asia Summit and ASEAN Defense Ministers Meeting-Plus
    (ADMM-Plus). In addition to the dialogue, DOD has taken action to back
    up the principles we espouse. We are deepening multilateral regional
    security architecture through the ADMM-Plus and its Experts Working
    Groups, through which we are pursuing practical defense cooperation,
    initiatives, and exercises to address challenges that affect us all
    more effectively.
        Additionally, we have begun implementing the Southeast Asia
    Maritime Security Initiative, which Congress authorized in Section 1263
    of the FY16 NDAA. This is a comprehensive, multi-year effort that will
    reinforce our partners' and allies' maritime security efforts and
    address shared challenges. In the Initiative's first year, we're
    helping the Philippines enhance its National Coast Watch Center and
    outfitting a previously provided excess high endurance cutter with
    reconnaissance and maritime sensors, advising Vietnam on maritime
    patrol capabilities, providing Indonesia and Malaysia with
    communications equipment and training, and advising Thailand on fusion
    center operations.
        In addition to building partner capacity, we also conduct several
    bilateral and multilateral exercises. Examples include BALIKATAN with
    the Philippines, and the Rim of the Pacific (RIMPAC) Exercise includes
    27 nations focused on building maritime cooperation, security, and
    disaster response capacity. Additionally, PACIFIC PATHWAYS builds
    partner capability and interoperability with Thailand, South Korea, the
    Philippines, Indonesia, and Malaysia.
        In recent years, we have also seen Asia-Pacific countries come
    together to strengthen bilateral and trilateral ties. For example,
    Malaysia, the Philippines, and Indonesia, members of ASEAN, are coming
    together to counter maritime threats in coastal waters. And Indonesia
    has proposed trilateral joint maritime patrols with Malaysia and the
    Philippines, including counter-piracy patrols in the Sulu Sea. The
    United States welcomes and encourages these burgeoning partnerships
    among like-minded partners who share our vision of a principled
    regional order. By networking security together, we believe we
    strengthen the ability of ASEAN and all countries to enjoy stability
    and prosperity in a dynamic region.
        Mr. Salmon. Secretary Kerry recently warned that the United States
    would treat a Chinese ADIZ over the South China Sea as a ``provocative
    and destabilizing act.'' Tensions were high when China declared an ADIZ
    in the East China Sea in 2013, and much of that strain has shifted
    south. Given China's militarization of the South China Sea, does China
    now have the infrastructure in place to declare an ADIZ? Would the
    United States and the international community comply with a Chinese
    South China Sea ADIZ? How would it differ with the Chinese ADIZ in the
    East China Sea?
        Mr. Denmark. When China announced its 2013 ECS ADIZ, we made it
    clear that declaring a unilateral and uncoordinated ADIZ in a
    politically sensitive area was provocative and raised regional
    tensions.
        A unilateral and uncoordinated declaration of an ADIZ over disputed
    territories and water space in the SCS would not grant China any new
    authority over the region and only serves to increase tensions with
    China's neighbors. Just as in the East China Sea, an SCS ADIZ would not
    change how the United States conducts military operations in the
    region. The United States will continue to fly, sail, and operate in
    accordance with international law, as U.S. forces do all around the
    world. U.S. forces will continue to be present and active in and around
    the SCS on a regular basis.
        Mr. Salmon. The Philippines v. China arbitral tribunal's award has
    defined the Scarborough Shoal as a rock under the Law of the Sea
    treaty. What implications does this definition have for the U.S.-
    Philippines alliance? What does this settling of the Shoal's status
    mean for the U.S.-Philippines Mutual Defense Treaty?
        Mr. Denmark. As President Obama and Secretary Carter have stated,
    our commitment to the Philippines is ironclad. This alliance has been
    nurtured over decades; tested in crisis; and is built on shared
    interest, values, and sacrifice. Our alliance relationships form the
    bedrock of our role in the Asia-Pacific, and accordingly, the stability
    and security that have helped so many in the Asia-Pacific to rise and
    prosper.
        The United States takes no position on competing sovereignty claims
    to features in the South China Sea and encourages all parties to seek a
    peaceful diplomatic resolution to their disputes.
                                     ______

                      QUESTIONS SUBMITTED BY MR. LOWENTHAL
        Mr. Lowenthal. Ms. Willett, last month the Foreign Ministers of
    ASEAN released a strong statement of concern on Chinese activities in
    the South China Sea. In what I think is a pretty extraordinary move,
    however, the ministers retracted the statement after coming under heavy
    pressure from China.
        What can the United States do to build greater consensus among the
    nations of Southeast Asia? Will ASEAN ever be able to speak with one
    voice on the Sea?
        Ms. Willett. The United States values ASEAN's role at the center of
    the region's multilateral security architecture, and believes that
    ASEAN centrality plays an important role in maintaining regional
    stability. We continue to invest in ASEAN institutions, including a
    commitment toward helping ASEAN further implement its own goals to
    become a more integrated and effective economic, political, and socio-
    cultural community. We also continue to diplomatically engage all ten
    members at all levels, using these opportunities to impress upon them
    the importance of ASEAN speaking out in favor of international law,
    rules, and standards.
        Our relationships throughout Southeast Asia are strengthening,
    support for a common vision of a rules-based regional order is
    deepening, and demand for us to play a more active role in upholding
    regional stability is increasing.
        If thwarting ASEAN consensus to prevent a specific mention on the
    July 12 Arbitral Tribunal ruling was meant as a means to draw attention
    away from the decision and its legally binding effect on the
    Philippines and China, those actions achieved the opposite result. In
    fact, the region and international community are increasingly vocal
    about calling for compliance with international law and against
    activities that raise tensions and complicate the situation. Last
    month, ASEAN foreign ministers jointly called for disputes to be
    resolved peacefully, with full respect for diplomatic and legal
    processes. The United States and ASEAN Member States also stressed the
    importance of international law, including freedom of navigation and
    overflight.
        Mr. Lowenthal. In the case that the UNCLOS tribunal rules in favor
    of the Philippines and China completely ignores the ruling, as signs
    have indicated, what would this mean for China's general commitment to
    international law?
        Ms. Willett. The tribunal's ruling will be final and binding on
    both China and the Philippines under the Law of the Sea Convention, an
    international treaty that both countries helped negotiate and willingly
    joined. China's public rejection of the tribunal's decision would
    certainly raise questions about China's commitment to honoring its
    international obligations and commitments. But we're especially
    watching China's actions, and whether it acts in a manner consistent
    with the arbitral decision or acts in violation of its treaty
    obligations. Actions by China that violate the tribunal's decision or
    otherwise escalate tensions would send a worrying signal to the
    international community about China's attitude to international rules
    and norms.
        As a result, we are working, together with allies, to convince
    China to act in accordance with international law--not just in the
    South China Sea, but on other issues as well. To this end, we engage
    directly with the Chinese government to underscore the importance of
    respecting and upholding the rules-based international order and to
    highlight the risks and costs of undermining it. We also engage with
    other countries in the region, as well as the broader international
    community, to build support for common principles and set shared
    expectations for Beijing.
        Mr. Lowenthal. Should we be worried about China's potential
    rejection of an unfavorable tribunal ruling as setting a precedent to
    ignore international legal commitments in the future?
        Ms. Willett. The tribunal's ruling will be final and binding on
    both China and the Philippines under the Law of the Sea Convention, an
    international treaty that both countries helped negotiate and willingly
    joined. China's public rejection of the tribunal's decision would
    certainly raise questions about China's commitment to honoring its
    international obligations and commitments. But we're especially
    watching China's actions, and whether it acts in a manner consistent
    with the arbitral decision or acts in violation of its treaty
    obligations. Actions by China that violate the tribunal's decision or
    otherwise escalate tensions would send a worrying signal to the
    international community about China's attitude to international rules
    and norms.
        As a result, we are working, together with allies, to convince
    China to act in accordance with international law--not just in the
    South China Sea, but on other issues as well. To this end, we engage
    directly with the Chinese government to underscore the importance of
    respecting and upholding the rules-based international order and to
    highlight the risks and costs of undermining it. We also engage with
    other countries in the region, as well as the broader international
    community, to build support for common principles and set shared
    expectations for Beijing.
        We have made real progress. We have demonstrably strengthened our
    relationships throughout the Asia Pacific region, deepened regional
    support for a common vision of a rules-based regional order, and seen
    an increase in regional demand for us to play an active role in
    upholding regional stability. The region and international community
    are increasingly vocal against activities that raise tensions. Instead,
    they are in favor of respect for international law and restraint among
    all claimants, including China.
        Mr. Lowenthal. What other avenues are available to the United
    States or the international community to pressure China to respect the
    tribunal's decision?
        Ms. Willett. As a non-claimant, our vital interest lies in helping
    shape a regional environment in which disputes can be settled
    peacefully and in accordance with international law. To this end, the
    Administration is pursuing a comprehensive and multifaceted approach to
    the South China Sea.
        Our consistent and steady presence in the South China Sea plays an
    important role in deterring claimants from employing the use of force
    to assert their claims, leaving open the door for constructive
    diplomatic or other peaceful processes among claimants. We are
    strengthening our security posture in the South China Sea. As part of a
    long term strategy, we are moving 60 percent of our naval fleet to the
    Pacific and rotating more of our forces through friendly countries in
    the region.
        We are also strengthening maritime domain awareness and law
    enforcement capabilities in the region. This includes new security
    cooperation arrangements with allies and partners in Southeast Asia and
    providing equipment and training to help partners better patrol the
    maritime domain and ensure their ability to maintain an effective
    presence.
        On the diplomatic front, we are advocating for peaceful dispute
    resolution and compliance with international law. We are engaging in
    intense, high-level diplomacy with all claimants, including advocating
    for them to take advantage of the July 12 Arbitral Tribunal's ruling to
    advance a modus vivendi in disputed areas. President Obama, Secretary
    Kerry, and Secretary Carter make our interests and concerns clear to
    all claimants in an open and frank manner.
        Mr. Lowenthal. Mr. Denmark, the United States has conducted several
    ``freedom of navigation'' operations in the South China Sea to ensure
    that these essential waterways continue to remain open for all.
    Australia has also conducted freedom of navigation flights in the sea,
    can we expect our other allies in the region, like the Philippines or
    Singapore, to also contribute to these efforts?
        Mr. Denmark. Our Freedom of Navigation Operations (FONOPs)
    demonstrate the commitment of the United States to operate wherever
    permitted under international law, and to uphold the rights, freedoms,
    and lawful uses of the sea that are enjoyed by all nations in
    accordance with international law. They are designed to support and
    sustain the principled rules-based order in the Asia-Pacific. The
    United States will continue to conduct FONOPs around the world,
    including in the South China Sea.
        Questions on the specific response by individual countries must be
    answered by their respective governments.
        Mr. Lowenthal. Should we be encouraging our allies to conduct these
    exercises?
        Mr. Denmark. The United States welcomes all states to exercise
    their rights, freedoms, and lawful uses of the sea and airspace.
        Mr. Lowenthal. With so many different actors and militaries
    operating in the region, how can we be sure that there are open lines
    of communication and misunderstandings do not lead to violent
    confrontations?
        Mr. Denmark. We actively seek to reduce the risk of
    miscommunication and miscalculation at sea through a variety of
    mechanisms. These include our bilateral and multilateral defense
    dialogues, such as ASEAN Defense Ministers Meeting (ADMM) Plus,
    combined exercises such as Rim of the Pacific 2016, and participation
    in multilateral organizations such as the Western Pacific Naval
    Symposium (WPNS).
        In 2014, the member states of WPNS agreed to the Code of Unplanned
    Encounters at Sea (CUES), which standardizes basic communications
    between naval ships and aircraft in an effort to minimize the risk of
    miscommunication and miscalculation. This, and other efforts such as
    our bilateral Confidence Building Measures with China, provide the
    practical mechanisms to mitigate risk of unintended incidents.
        We also maintain a robust military-to-military relationship with
    China that seeks to reduce risk and enhance mutual understanding. As
    part of this effort, U.S. military leaders regularly engage their
    Chinese counterparts and maintain regular channels of communications
    with them through the use of the Defense Telephone Link.

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