[Senate Hearing 114-780]
[From the U.S. Government Publishing Office]
S. Hrg. 114-780
U.S. - CHINA RELATIONS: STRATEGIC
CHALLENGES AND OPPORTUNITIES
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
APRIL 27, 2016
__________
Printed for the use of the Committee on Foreign Relations
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web:
http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
30-070 PDF WASHINGTON : 2018
----------------------------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, [email protected].
COMMITTEE ON FOREIGN RELATIONS
BOB CORKER, Tennessee, Chairman
JAMES E. RISCH, Idaho BENJAMIN L. CARDIN, Maryland
MARCO RUBIO, Florida BARBARA BOXER, California
RON JOHNSON, Wisconsin ROBERT MENENDEZ, New Jersey
JEFF FLAKE, Arizona JEANNE SHAHEEN, New Hampshire
CORY GARDNER, Colorado CHRISTOPHER A. COONS, Delaware
DAVID PERDUE, Georgia TOM UDALL, New Mexico
JOHNNY ISAKSON, Georgia CHRISTOPHER MURPHY, Connecticut
RAND PAUL, Kentucky TIM KAINE, Virginia
JOHN BARRASSO, Wyoming EDWARD J. MARKEY, Massachusetts
Todd Womack, Staff Director
Jessica Lewis, Democratic Staff Director
John Dutton, Chief Clerk
(ii)
C O N T E N T S
----------
Page
Corker, Hon. Bob, U.S. Senator From Tennessee.................... 1
Blinken, Antony J. Deputy Secretary of State, U.S. Department of
State, Washington, DC.......................................... 3
Prepared statement........................................... 6
Responses to Additional Questions for the Record Submitted by
Senator Marco Rubio........................................ 36
Responses to Additional Questions for the Record Submitted by
Senator David Perdue....................................... 41
(iii)
U.S.-CHINA RELATIONS: STRATEGIC CHALLENGES AND OPPORTUNITIES
----------
WEDNESDAY, APRIL 27, 2016
U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 10:34 a.m., in
Room SD-419, Dirksen Senate Office Building, Hon. Bob Corker,
chairman of the committee, presiding.
Present: Senators Corker [presiding], Risch, Rubio, Flake,
Gardner, Perdue, Isakson, Cardin, Menendez, Coons, Kaine, and
Markey.
OPENING STATEMENT OF HON. BOB CORKER,
U.S. SENATOR FROM TENNESSEE
The Chairman. The Committee on Foreign Relations will come
to order.
I want to thank our distinguished witness today for being
here. You may notice a significant absence on the other side of
the podium. There was an all-conference meeting that was
scheduled by Senator Reid at 10:30 a.m., so our colleagues on
this side of the aisle I think may be a little late. But we
certainly will welcome them when they come.
Again, we thank you, Tony, for being here today and
testifying before us.
When President Obama and President Xi met at Sunnylands in
2013, the Obama administration was hopeful about a new
direction with U.S.-China relations. Yet since then, it has
been difficult to see a lot of cause for optimism. Whether it
is China's militarization of the South China Sea or cyber theft
or discriminatory trade and investment policies, there are far
more downsides than upsides in the U.S.-China relationship over
these last days.
Regrettably, as the strategic challenges increase, the
opportunities for positive engagement diminish. I say this as
someone who has always tried to take a balanced view toward
China in the hopes of fostering a positive engagement, because
this relationship remains one of the most consequential for
U.S. political, security, and economic interests.
We have reached a point now, though, where there is no
denying the fact that China has positioned itself as a
geopolitical rival to the United States. The calculated and
incremental strategy on the part of Beijing to challenge U.S.
power is having real consequences for U.S. interests and
international norms in the Indo-Pacific and beyond. It is even
more troubling that the administration still does not seem to
have a coherent China policy.
For example, in the South China Sea, neither the rhetoric
nor the freedom of navigation operations have deterred or
slowed down China's land reclamation activities, including the
stationing of military-related assets on these artificial
islands.
Moreover, many experts assess it is increasingly likely
that Beijing will declare an air defense identification zone in
the South China Sea. China could undertake further
destabilizing actions, if the international tribunal ruling, as
expected, goes against Chinese interests.
I am also frustrated and concerned about the lack of
progress on a number of economic and trade-related issues.
For more than 4 years, the U.S. and China have been engaged
in a trade war over solar panels and polysilicon imports and
exports to make those panels.
Tony, I hope, in particular, you are listening to these
comments.
As this dispute drags on, it is hurting U.S. producers of
polysilicon, one of the main components in the production of
solar panels. China is the largest producer of solar panels,
and, until this trade dispute, the country imported significant
quantities of polysilicon made in the United States.
I know that Ambassador Froman, and I have talked with him
about this, has raised this issue with China's Ministry of
Commerce from time to time. But from what I understand, the
latest offer from China on polysilicon imports is unacceptable,
and it looks like simple protectionism.
This market obviously needs to reopen mutually beneficial
trade, and I expect this issue to be resolved soon and in a
serious way.
The reasonable request made by U.S. polysilicon industries
here in the U.S. must be taken into account. Surely, the
Chinese Government and the U.S. Government will be wise enough
to fully resolve this problem before this committee considers
the U.S.-China Bilateral Investment Treaty, should it mature
and be ready to be put forth here.
As I have said previously, I fully appreciate the
complexity of the U.S.-China relationship and the need for
constructive engagement on a number of issues important to both
Washington and Beijing. But merely managing differences with
China is not a successful formula, particularly when such
management cedes U.S. influence and places American interests
at risk in the Indo-Pacific and beyond.
North Korea is one area where we hope that there is
additional room for cooperation between the United States and
China--I know Senator Gardner will certainly want to get into
that with his questioning--and that Beijing will follow through
on commitments to fully implement new multilateral sanctions.
But only time will tell.
I hope we will be able to have a thoughtful discussion
today, one that outlines tangible steps the administration
plans to take in the coming months to safeguard U.S. interests,
preserve international norms, and maintain peace and stability
in the Indo-Pacific.
I want to again thank our witness. I want to thank him for
working with us on the issue we talked about just before the
meeting started. I want to thank him for his service to our
country. We look forward to your testimony.
As you know, without objection, your written testimony will
be entered into the record. So if you would, if you could
summarize in about 5 minutes or so, we look forward to
questions. Again, thanks for being here.
STATEMENT OF ANTONY J. BLINKEN, DEPUTY SECRETARY OF STATE, U.S.
DEPARTMENT OF STATE, WASHINGTON, D.C.
Mr. Blinken. Mr. Chairman, thank you very much. Members of
the committee, thank you. It is very good to be back before
this committee and have the opportunity to discuss our
relationship with China, which, as you outlined very well, Mr.
Chairman, is complicated, indeed.
I just got back this past weekend from what was my sixth
visit to the Asia-Pacific region in a little over a year. I
have seen with each trip that the rebalance efforts that we
have been making to Asia have, in fact, advanced our interests
and helped shape Asia's upward trajectory by bolstering our
alliances, building new partnerships with emerging countries,
strengthening regional institutions and the rule of law,
advancing our economic ties, and engaging with China.
I am very pleased to discuss the last pillar of our
rebalance with you today. Secretary Kerry has called our
relationship with China our most consequential relationship,
and it is, indeed, crucial that we try to get it right.
The approach that we have taken with China tries to do
three things. It seeks to broaden and deepen practical
cooperation on issues of shared concern. It directly confronts
and then tries to resolve or at least narrow our differences
wherever we can, and where we cannot, manage those differences
peacefully.
Over the past year, we believe we have seen real progress
on important issues that do advance our interests. The
relationship that we have been working with China paved the way
for a landmark joint announcement on climate change that
galvanized the international community to reach a global
climate agreement in Paris last December and signed in New York
just last week. We engaged China in the global response to
Ebola with positive effect. We grounded our work together to
craft a deal that prevents Iran from developing a nuclear
weapon far into the future. We produced new confidence-building
measures between our militaries. And we sparked growing
collaboration to meet development challenges from Afghanistan
all the way to Sierra Leone.
From top to bottom, the administration has worked to expand
and deepen our diplomatic, military, economic, and people-to-
people ties to China.
Since the President took office, our exports to China have
nearly doubled. China is now the largest market for American-
made goods outside of North America. It is also one of the top
markets for U.S. agriculture exports and a large and growing
market for U.S. services.
These efforts to deepen bilateral ties have been designed
to turn a challenging rivalry into healthy competition and to
try to break out of zero-sum thinking on both sides.
We have seen results of this approach in our collaboration
on some of the most difficult issues, including most recently
North Korea and the provocative destabilizing and
internationally unlawful actions it continues to take to
advance its proscribed missile and nuclear programs.
While we have taken significant steps to make it more
difficult for North Korea to acquire technology and equipment
for those programs, or the resources to pay for them, the fact
remains that their development continues. As a result, they get
closer to the day when they have the capacity to strike at our
allies, at our partners, and at the United States with a
ballistic missile armed with a miniaturized nuclear warhead.
That is simply unacceptable.
This threat, combined with an inexperienced leader who acts
rashly, makes it an urgent priority not only for us but,
increasingly, for China. While the United States and China
share an interest in ensuring that North Korea does not retain
nuclear weapons capability, we have obviously not always agreed
on the best way to reach that objective.
In the last few months, however, we have worked together to
draft and pass the toughest U.N. Security Council resolution in
a generation to try to compel the leadership of the DPRK to
rethink its pursuit of nuclear weapons and ballistic missiles.
If fully and effectively implemented, U.N. Security Council
Resolution 2270 will significantly reduce the regime's ability
to procure, pay for, or produce weapons of mass destruction,
and will challenge the calculus of the leadership in North
Korea, but, I want to emphasize, only if it is fully and
effectively implemented.
As North Korea's largest trading partner, China has unique
leverage. We welcome President Xi's commitment at the Nuclear
Security Summit earlier this month to fully implement the
Security Council resolution. It is too early to draw firm
conclusions about China's enforcement, but there are some early
trade restrictions that China has imposed that suggest that
China is committed to following through on implementation of a
resolution that it took the lead in producing at the U.N., but
the jury remains out.
We have encouraged China to contribute more to apply its
significant capabilities as a rising economic and political
power responsibly in order to help meet practical needs in the
international community, from wildlife trafficking to public
health.
We have also seen China step up in a meaningful way to the
challenge of conflict in fragile countries. In Afghanistan, we
joined together, the United States and China, with Afghanistan
and Pakistan to form something called the Quadrilateral
Coordination Group on the Afghan peace and reconciliation
process.
And the 2015 U.N. Leaders' Summit on Peacekeeping, at that
summit, President Xi announced a new Chinese peacekeeping rapid
response standby force, training peacekeepers from other
countries, and $100 million for the African Union peacekeeping
operations. China contributes more troops and police to
peacekeeping missions than any other member of the permanent
five members of the Security Council, and it is the second
largest funder.
Of course, even as we try to build cooperation with China,
we are directly engaging our significant differences with the
goal to resolving or narrowing them while preventing conflict.
Significant areas of difference remain around China's assertive
and provocative behavior in the South China Sea, its conduct in
cyberspace, its denial of internationally recognized human
rights and fundamental freedoms to its own citizens.
We, of course, are not a claimant to the territorial and
maritime disputes in the South China Sea, but we have a clear
national interest in the way those claims are pursued to
include upholding freedom of navigation, respect for
international law, and the peaceful resolution of disputes. And
our alliance commitments remain ironclad.
We oppose the use of force or the threat to use force to
try to advance maritime or territorial claims, and we call on
all parties in the South China Sea, not just China, to resolve
disputes in a peaceful manner.
These issues need to be decided on the merits of China's
and the other claimants' legal claims, and adherence to
international law and standards, not the strength of their
militaries or law enforcement ships or the size of their
economies.
For years, we clashed with China over our opposition to
cyber-enabled theft for commercial gain by state actors. We
persisted in engaging China on that issue. In the lead up to
President Xi's visit last fall, China and the United States
agreed to an unprecedented set of cyber commitments, including
an agreement that neither government will conduct or knowingly
support cyber-enabled economic espionage for commercial gain.
We are watching very closely to ensure this commitment is
followed by action.
We remain concerned by recent moves by China that reduce
space for free expression, including a raft of new domestic
legislation that, if enacted as drafted, could shrink space for
civil society and academia, inhibit U.S. business activities,
and result in further rights abuses. We are alarmed by the
ongoing crackdown on lawyers, religious adherents, and civil
society leaders, and by growing attempts to restrict
internationally recognized fundamental freedoms, including the
freedom of expression.
We are deeply troubled by China's willingness to threaten
journalists with expulsion or the nonrenewal of their visas as
a tool to influence their reporting.
The President, Secretary of State Kerry, and others
regularly raise individual cases and systemic concerns with
China. We will continue to reinforce the message that
protecting human rights and fundamental freedoms of
association, peaceful assembly, religion, and expression, and
respecting the rights of members of minorities, will make China
more stable, more secure, and more prosperous.
Mr. Chairman, for 7 decades now, and as you noted, the
United States has invested in a system of international
institutions and principles and norms designed to protect the
right of all nations to pursue their interests irrespective of
their size or strength. This international architecture has
created a foundation of peace and stability that unlocked a
period of unprecedented economic growth, and nowhere more so
than in East Asia. It has not only benefited the United States,
it has benefited China and all the countries in the region. It
is our shared interest to see that these standards are
strengthened, not undermined.
We have shown a readiness to welcome China as a global
leader and responsible advocate for the international order. We
want China as our partner in many endeavors, and we believe our
nations and the world would be undeniably better for it. But in
the end, only China can choose to assume that role and
demonstrate the commitment to international law and standards
necessary to achieve it.
Thank you very much, and I welcome your questions.
[Mr. Blinken's prepared statement follows:]
Prepared Statement of Deputy Secretary of State Anthony Blinken
Chairman Corker, Ranking Member Cardin, Senators, thank you for the
opportunity to come before you today to discuss our relationship with
China. I would also like to recognize this Committee's leadership on
policy in the broader Asia-Pacific region.
This past weekend, I returned from my sixth visit to the Asia-
Pacific in a little over a year. With each trip, I have seen growing
dividends of President Obama's rebalance to Asia and our common efforts
with our Pacific partners and friends to strengthen a rules-based,
norms-based, institutions-based order that is advancing U.S. interests
and addressing regional and, increasingly, global challenges.
Having inherited a nation immersed in the greatest financial crisis
since the Great Depression, President Obama recognized from his first
day in office that America's leadership in the Asia-Pacific was not
merely peripheral to our future prosperity and security--it was
indispensable.
Nowhere in the world are our economic and strategic opportunities
clearer or more compelling than in the Asia-Pacific--home to three of
our top ten trading partners, five of the seven of our defense treaty
alliances, the world's largest and fastest growing economies, and some
of the most wired and innovative people in the world.
The rise of Asia will help define this new century. How it rises--
according to which rules, by which means, to what ends--will have
significant impact on our national well-being, perhaps more so than any
other region in the world.
Over the last seven years, our rebalance to Asia has helped shape
and influence this trajectory by bolstering our alliances, building new
partnerships, strengthening regional institutions and rule of law,
advancing our economic ties, and engaging deeply with China.
Our intensive engagement in Asia has helped foster an increasingly
broadly accepted vision for the future of the region, and for our role
in it. A vision wherein countries come to each other's aid in times of
disaster or crisis. Where borders are respected and countries cooperate
to prevent small disputes from growing larger. Where disagreements are
settled openly, peacefully, and in accordance with the rule of law.
Where diversification of trade and investment flows allow countries to
pursue their interests freely. And where the human rights of each and
every person are fully respected.
This is the environment in which we are advancing our relationship
with China. Secretary Kerry has called our relationship with China our
``most consequential'' relationship. It is crucial that we get it
right.
As the President has said repeatedly, we welcome the rise of a
peaceful, stable, and prosperous China that plays a responsible role in
global affairs. We assess that we have more to fear from a weak and
insecure China than from a confident and capable China.
Our approach to China seeks to broaden and deepen practical
cooperation on issues of shared concern; directly resolve or narrow our
differences wherever we can; and manage those differences peaceably
where we cannot. We have encouraged China to contribute more--to apply
its significant capabilities as a rising economic and political power
responsibly in order to help meet practical needs in the international
community, from peacekeeping to public health.
Over the past year, this approach has produced real progress on
important issues that advance U.S. interests.
It paved the way for a landmark joint announcement on climate
change that ignited momentum in the months leading to the historic
Paris climate deal. And it brought city, state, and provincial leaders
from China and the United States together to surface local solutions to
combat global warming.
It engaged China in the global response to Ebola.
It grounded our work together to craft a deal that prevents Iran
from developing nuclear weapons.
It produced new confidence-building measures between our
militaries, and it sparked growing collaboration to meet development
challenges in partner countries, from Afghanistan to Sierra Leone.
deepening bilateral ties
From top to bottom, this Administration has expanded and deepened
our diplomatic links with China. Secretary Kerry and National Security
Advisor Rice meet and speak regularly with their counterparts. The
Secretary has even hosted State Councilor Yang Jiechi in his Boston
home. Ambassador Baucus is among the most actively engaged U.S.
ambassadors in the field, and he and his team work tirelessly in
support of U.S. interests. And the Administration has created new
multi-ministry engagement mechanisms, such as the U.S.-China Strategic
and Economic Dialogue and the Strategic Security Dialogue, that force
decisions that cut across an unwieldy Chinese bureaucracy and expand
our access to the Chinese Politburo and State Council. In other words,
we now have more direct and diverse channels of communication. This has
led to a structural strengthening of the relationship--helping to lower
the bar for identifying areas of cooperation, while at the same time
enabling opportunities to narrow differences early on.
The same could be said for our colleagues at the Pentagon and the
military-to-military relationship. This summer China will participate
in the multinational RIMPAC exercise for the second time--an exercise
that will include 27 countries working together to increase their
collective capacity to cooperate on international humanitarian
assistance and disaster relief operations.
We have also implemented confidence building measures that reduce
the risk of incidents in the South China Sea or anywhere else our
forces might come into contact. These measures are based on
internationally recognized standards for safe and professional
conduct--institutionalization of which may also reduce the risk of
unintended incidents between the Chinese military and its neighbors.
With China hosting the G-20 this year, China's economy will be an
important area of focus. An economically vibrant China that moves
toward more sustainable and balanced growth benefits the global and
U.S. economies. We continue to push China to implement much needed
economic reforms to help unlock sustainable long-term growth.
We have also pressed China to change a number of discriminatory
policies and practices that harm U.S. companies and workers, while also
pushing for expanded opportunities for U.S. companies competing with
Chinese companies. Since President Obama took office, our exports to
China have nearly doubled, and China is now the largest market for
American-made goods outside of North America. It is also one of the top
markets for U.S. agricultural exports and a large and growing market
for U.S. services. But there is more work to be done, and we will use
every opportunity to create a more level playing field for U.S. firms,
farmers, and workers.
The high-standards of the Trans Pacific Partnership (TPP) are
increasingly eliciting interest within China itself, which is not a TPP
signatory. I was in northeast Asia when the agreement on TPP was
completed. In Beijing, I was struck by what I saw: a manifest turn from
indifference to serious examination--and even interest in some
quarters. Even a state-affiliated newspaper published an article
highlighting the potential benefits of TPP for China.
And we have also made a significant investment in expanding our
people-to-people ties, underwriting greater bonds of trust and
understanding between the next generations in both of our countries.
Last year more than 2.3 million Chinese nationals received a business
or tourist visa to enter the United States and 304,000 Chinese students
studied for credit at universities across the United States, a number
representing around 30 percent of all foreign students in the United
States. And through the Consultation on People-to-People Exchange, we
have a new mechanism to promote additional opportunities for exchanges
in both directions.
These efforts to deepen our bilateral ties have been designed to
turn suspicious rivalry into healthy competition; to break free of
zero-sum thinking and build a relationship with China that yields
practical cooperation on regional and global issues.
strengthening regional stability
We have seen results of this approach in our collaboration on some
of the region's toughest issues, including North Korea and the
provocative, destabilizing, and internationally unlawful actions it
continues to take to advance its proscribed missile and nuclear
programs.
While we have taken significant steps to make it more difficult for
North Korea to acquire technology and equipment for those programs or
the resources to pay for them, the fact remains that their development
continues. As a result, they get closer to the day when they have the
capacity to strike at our allies, at our partners, and at the United
States with a ballistic missile armed with a miniaturized warhead. That
is unacceptable. This threat--combined with an inexperienced leader who
acts rashly and does not respect international law--makes it an urgent
priority not only for us but also for China.
While the United States and China share an interest in ensuring
that North Korea does not retain a nuclear weapons capability, we have
not always agreed with China on tactics for engaging North Korea.
But in the last few months we have worked together to draft and
pass the toughest UN Security Council Resolution (UNSCR) in a
generation to compel the DPRK leadership to rethink its pursuit of
nuclear weapons and ballistic missiles. It came about because China
increasingly recognizes that North Korea's actions are the greatest
source of instability in the region. At the same time, the United
States has made clear it will take whatever steps are necessary to
protect itself and its allies and partners--including steps that are
not aimed at China but which raise its concern, such as the potential
deployment of the THAAD missile defense system to the Republic of
Korea.
If fully and effectively implemented, UNSCR 2270 will significantly
reduce the North Korean regime's ability to procure, pay for, or
produce weapons of mass destruction. More than any single previous
expression of international opprobrium, UNSCR 2270 will challenge the
calculus of the leadership in North Korea.
As North Korea's largest trading partner China has unique leverage
in this regard. We welcomed President Xi's commitment at the Nuclear
Security Summit earlier this month to fully implement the UNSCR. It is
too early to draw firm conclusions about China's enforcement, but early
trade restrictions that China has imposed suggest China is committed to
following through on implementation.
The United States has demonstrated that it is prepared to engage
countries with which we have the deepest of differences to advance our
national security. The nuclear agreement with Iran is case in point.
This was only possible because Iran took concrete steps to freeze, and
in some regards roll back its nuclear program, while allowing
international inspections, which created the time and space to
negotiate the Joint Comprehensive Plan of Action--an agreement that, as
a practical matter, ensures Iran cannot acquire a nuclear weapon far
into the future.
China's commitment to reduce its Iranian oil purchases helped build
the economic pressure that brought Iran to the negotiating table, and
China continues to contribute to the JCPOA's implementation, playing a
leading role in redesigning and rebuilding the Arak heavy water
research reactor.
addressing global challenges
Seven years ago, Chinese leaders were reluctant to take on
significant responsibilities in dealing with regional and international
challenges. With our engagement, they are increasingly tackling issues
of global importance from climate change to wildlife trafficking,
global health to peacekeeping.
As the two largest economies and carbon-emitters, the United States
and China have long been indispensable to global climate agreement
negotiations. When those negotiations failed to produce an agreement in
Copenhagen in 2009, there was finger-pointing and recriminations, but
no obvious path forward and little optimism we could achieve a future
agreement.
Yet in November 2014, our presidents made a historic joint
announcement of our post-2020 climate targets. That announcement
galvanized the international community to reach a global climate
agreement in Paris last December.
This came about through deep personal engagement from the
President, Secretary Kerry, and others. But it also came about because
China eventually concluded its own interests--in addressing domestic
environmental concerns and projecting a global leadership role--
coincided with those of the United States and the international
community. And with a new joint statement on climate change last month
from Presidents Obama and Xi, and our two countries signing the
agreement in New York last week, we are encouraged that we will
continue to lead global efforts on this issue moving forward.
China is also an essential part of global efforts to address other
urgent environmental issues, including wildlife trafficking. China is
the largest consumer of wildlife products such as ivory, and its
continued legal ivory market has had theunintended consequence of
fueling illegal ivory trafficking. As recently as a few years ago, our
cooperation on this issue was nonexistent, but our persistent
engagement produced important results last September, including an
agreement to implement near complete bans on the import, export, and
domestic commercial trade of African elephant ivory in both countries.
We also engaged China in the global response to Ebola. American and
Chinese healthcare specialists worked side-by-side in West Africa to
help drive the cases of Ebola to near zero. China's significant
contributions to the international effort far exceeded its responses to
prior international crises, and, frankly, stunned many long-time China
observers.
In an effort to build on our Ebola cooperation, during President
Xi's State Visit to Washington last September, our countries announced
a formal partnership on development that includes building health
capacity in Africa. These efforts, as well as Xi's UN General Assembly
pledge of $2 billion in support of the UN Sustainable Development
Goals, will help address the great needs of developing countries while
inculcating in China best practices in sustainable development.
And finally, we have seen China step up in a meaningful way to the
challenge of conflict in fragile countries.
In Afghanistan, our alignment of interests has led us to join
recently Afghanistan and Pakistan to form the Quadrilateral
Coordination Group on the Afghan peace and reconciliation process.
Chinese Foreign Minister Wang Yi joined Secretary Kerry last fall to
co-host a high-level event on Afghanistan's reconstruction at the UNGA,
and the $327 million that China has pledged for Afghan reconstruction
will provide crucial support to the Afghan government and people.
At the 2015 UN Leaders' Summit on Peacekeeping co-hosted by
President Obama, President Xi announced a new Chinese peacekeeping
rapid response standby force of 8,000 troops, a commitment to train
2,000 peacekeepers from other countries, and $100 million in aid to the
African Union for its peacekeeping operations.
While many of these developments are not the stuff of flashy
headlines, that does not make them any less consequential. We are
making methodical progress in pushing China to match its contributions
to its capabilities on some of the world's most intractable challenges.
And in the process, we are demonstrating that wewelcome China working
alongside us--and investing with us--in strengthening the existing
international order.
engaging and narrowing our differences
Even as we build cooperation with China, we are directly engaging
our differences with a goal to resolving or narrowing them while
preventing conflict.
This is important, as significant areas of disagreement remain--in
particular those concerning China's assertive and provocative behavior
in the South China Sea, its conduct in cyberspace, and its denial of
internationally recognized human rights and fundamental freedoms to its
citizens, as well as in some cases nationals of other countries.
China's behavior in the South China Sea is a regular feature of our
engagement with Beijing, and also our consultations with allies and
partners in the region, who are concerned by dramatic land reclamation,
construction, and increasing militarization on reefs and other features
throughout the South China Sea.
While we are not a claimant to the territorial and maritime
disputes in the South China Sea, we have a clear national interest in
the way those claims are pursued--to include upholding freedom of
navigation and overflight, unimpeded lawful commerce, respect for
international law, and the peaceful resolution of disputes. And our
alliance commitments remain iron-clad.
We oppose the use or threat of force to try to advance maritime or
territorial claims, and we call on all parties in the South China Sea--
not just China--to resolve disputes in a peaceful manner. These issues
should be decided on the merits of China's and other claimants' legal
claims and adherence to international law and standards, not the
strength of their militaries or law enforcement ships or the size of
their economies. The belief that all countries are entitled to equal
rights irrespective of their size or strength is at the heart of our
approach to this issue.
We continue working closely with China, other claimants, and others
in the region to build regional consensus behind these principles.
At the East Asia Summit in December, 10 of the 18 leaders
emphasized the importance of non-militarization of outposts, reflecting
growing regional concerns about China's activities in the South China
Sea and consensus around the need to lower tensions.
In February, the United States and ASEAN issued a joint statement
at the Sunnylands Special Leaders' Summit, which reaffirmed their
shared commitment to peaceful resolution of disputes in accordance with
international law, including full respect for legal and diplomatic
processes. Weeks later, ASEAN Foreign Ministers issued their own
statement, which reinforced the themes of the Sunnylands Summit. In
March, the European Union issued a statement on the South China Sea. In
April, G-7 Foreign Ministers released a statement on maritime issues.
China has heard this international chorus, and they don't like it.
They know their actions are placing them at odds with the aspirations
of the region, strengthening our alliances, and pushing others in the
region to deepen security ties with the United States. The further
China goes down this path, the sharper the choice it will face between
adjusting its approach and clarifying its claims to be in accordance
with international law, or instead, risking conflict, instability, and
isolation.
Our progress on these challenges would also be improved with U.S.
accession to the Law of the Sea Convention, as has been conveyed by our
combatant commanders in their recent testimonies before the Senate.
China doesn't only face these tough decisions on the water but also
within cyberspace. For years, we clashed with China regarding in our
opposition to cyber-enabled theft for commercial gain by state actors.
Following the 2014 indictment of People's Liberation Army members for
cyber-enabled theft from U.S. entities to benefit their competitors in
China, China suspended our bilateral cyber working group. But we
persisted, making clear our understanding of acceptable State behavior
and our intent to take action against bad actors. In the lead up to
President Xi's visit last fall, China and the United States agreed to
an unprecedented set of cyber commitments including an agreement that
neither government will conduct or knowing support cyber-enabled
economic espionage for commercial gain.
We are watching closely to ensure this commitment is followed by
action, but it represents a significant step forward from China's
previous posture of denying all activity emanating from China, and
defying calls to rein it in. In short succession, the United Kingdom
secured a similar agreement and the G-20 joined the United States,UK,
and China in reaffirming that states should not conduct or support
cyber-enabled theft for commercial gain.
While we seek to work with China to promote stability in
cyberspace, we remain concerned about recent moves by China that reduce
space for free expression, including a raft of new domestic legislation
that, if enacted as drafted, could shrink space for civil society and
academia, inhibit U.S. business activities, and result in rights
abuses.
Along with international partners, activists, and business leaders,
we have made clear our concerns, and there have been some signs that
China may be listening: they have delayed the passage of the cyber-
security and information and communications technology laws from last
year, and made significant, albeit still insufficient, changes to other
national security legislation. Again, implementation matters most.
We are alarmed by the ongoing crackdown on lawyers, religious
adherents, and civil society leaders and by growing attempts to
restrict internationally recognized fundamental freedoms, including the
freedom of expression. Hundreds of Chinese citizens have been detained,
formally arrested, or held in incommunicado without due process. This
includes the apparent abduction of five individuals associated with a
Hong Kong bookstore, an action that strongly suggests that China has
taken extrajudicial or extraterritorial action that is inconsistent
with its international commitments. We also are deeply troubled by
China's willingness to threaten journalists with expulsion or the non-
renewal of their visas as a tool to influence their reporting.
As China's human rights situation has deteriorated, we have raised
our concerns directly and candidly, including at the highest levels.
The President, Secretary Kerry, and others regularly raise individual
cases and systemic concerns with Chinese leaders. We will continue to
reinforce the message that protecting human rights and the fundamental
freedoms of association, peaceful assembly, religion, and expression,
and respecting the rights of members of minorities, will make China
more stable, secure, and prosperous. These are freedoms that I believe
American and Chinese citizens value; we are urging Chinese authorities
to value them as well. We also urge respect for equal rights of ethnic
minorities, including Tibetans and Uighurs. We call on China to engage
the Dalai Lama or his representatives, because we believe such a step
would be conducive to stability.
As part of our efforts, we have increased coordination with
likeminded countries. Last month, we led the first ever joint statement
on China human rights at the United Nations Human Rights Council. We
will continue to coordinate our efforts with like-minded partners to
encourage China to protect the rights of its citizens.
We view China's adherence to its international commitments as an
important indicator of the type of power that China seeks to become.
The 1984 Sino-British Joint Declaration and the Basic Law are the
bedrock of Hong Kong's autonomy as a Special Administrative Region of
China. We strongly support Hong Kong's high degree of autonomy and rule
of law tradition, as well as for the democratic development and
protection of civil liberties in Hong Kong. This is why we are so
concerned about China's actions involving the booksellers in Hong Kong.
Beyond the immediate issue of the welfare of the five booksellers, this
case called into question Beijing's commitment to ``one country, two
systems.''
Taiwan will soon transition to a new administration. During this
sensitive period, we have been clear with both Beijing and Taipei that
we have a fundamental interest in maintaining cross-Strait peace and
stability, and that we remain committed to our one-China policy based
on the three joint communiques and the Taiwan Relations Act. We have
encouraged Beijing to exercise flexibility and restraint. We similarly
have called on both sides to engage in constructive dialogue on the
basis of dignity and respect, because we believe direct channels of
communication reduce risk of miscommunication that could lead to
miscalculation. We would like to see continued improvement in cross-
strait relations.
closing
For seven decades, the United States has invested in a system of
international institutions and principles designed to protect the right
of all nations to pursue their interests, irrespective of their size or
strength. This international architecture has created a foundation of
peace and stability that has unlocked a period of unprecedented
economic growth, nowhere more so than in East Asia. This has not only
benefited our nation, it has also benefited China. It is in our shared
interests to see that these standards are strengthened, not undermined.
We welcome China as a global leader and responsible advocate for
the international order. In areas ranging from climate to public health
to peacekeeping, we have shown the benefits to both of our countries
and the world when wecooperate. At the same time, we will continue to
stand firm in defense of the rules-based international order. We want
China as our partner in many endeavors and believe our nations and the
world would undeniably be better for it. But in the end, only China can
choose to assume that role and demonstrate the commitment to
international law and standards necessary to achieve it.
I thank you for your time and look forward to taking your
questions.
The Chairman. Mr. Secretary, thank you for your testimony.
As a courtesy to the committee, I am going to withhold, and
wait for interjections along the way, my time.
So I am going to turn to Senator Gardner, and I look
forward to his questions.
Senator Gardner. Thank you, Mr. Chairman, for this hearing
today. It is a very important hearing, one of the most
important hearings that we will hold this Congress.
And thank you, Secretary Blinken, for your participation in
this today. It is very important that we hear from you. I
appreciate you taking the time to do this.
On February 18, 2016, President Obama signed the bill that
Senator Menendez and I had worked together on, the North Korea
Sanctions and Policy Enhancement Act. It became P.L. 114-122,
expanding U.S. sanctions against Pyongyang and others who aid
the North Korean Government. It was followed by the U.N.
resolution.
As you know, the legislation calls for mandatory
investigations and designations of entities, regardless of
where they are based. We know that China is North Korea's
largest trading partner. With over $1.2 billion in bilateral
trade last year, that is a significant amount.
China has pledged to comply with the sanctions and has
undertaken some new measures, according to the New York Times,
including an article on March 31. ``Cross-border trade, legal
and illegal, flows pretty much as usual, and seems to be
largely unhindered by the new rules, traders and local
officials said.'' So that would sort of counter the measures
that they have said they have put into place.
On April 13, 2016, according to an announcement by China's
General Administration of Customs, China's trade with North
Korea rose by 14.7 percent in the first quarter of 2016, while
imports from North Korea rose by 10.8 percent.
To what extent has the PRC so far complied with the
relevant international restrictions on North Korea, including
those imposed by the U.N. resolutions?
Mr. Blinken. Thank you, Senator.
Let me first thank you for the legislation, which we think
has been a very, very valuable tool to put in play, along with
the U.N. Security Council resolution. Indeed, as you mentioned,
the President signed the executive order in order to implement
both the legislation and the U.N. Security Council resolution.
We believe that the combination of the U.N. Security
Council resolution and the authority in the legislation gives
us the most effective tools we have had to try to compel a
change in North Korea's calculus and also to strongly encourage
other countries to fully implement their obligations.
So among those obligations, as you know, with regard to the
U.N. Security Council resolution, are that all cargo in and out
of North Korea should be subject to mandatory inspection. For
the first time, we have sectorial sanctions that limit or ban
even the exports of coal, iron, gold, rare earth materials, and
also the import of aviation or rocket fuel. There are
prohibitions on small arms and other conventional weapons
imports, in addition to financial sanctions targeting banks,
assets, and ban all dual-use nuclear and missile-related items.
So with regard to China's compliance, two things.
First, because China took a lead role in actually designing
the resolution and caring it forth to the Security Council, we
believe it would be logical for it to follow through on
actually implementing the resolution. As you said, it has
issued certain new regulations regarding restrictions on the
importation of coal, rare earth, and other materials.
Similarly, it has issued regulations with regard to exporting
to North Korea jet fuel, including rocket fuel. It has said the
right things as well.
But the proof is in the pudding, and what we are watching
very carefully is whether, in fact, it will implement those
regulations.
I saw the story that you referred to, Senator. I think it
is a mixed bag. Clearly, there is trade that continues to go
back and forth across the border. This is something we are
looking at very carefully, along with our Japanese and Korean
partners.
Some of the bigger ticket items, though, it appears as if,
at least initially, there are efforts to stop the flow. Now, it
is one thing to stop it even for a brief period of time. It is
another thing to sustain that. That is the other challenge I
think we have to face, to make sure that it is sustained.
Senator Gardner. The administration was required to
undertake mandatory investigations under the P.L. 114-122. Have
those mandatory investigations begun?
Mr. Blinken. My understanding is that we are looking into
any entities or individuals that we have evidence are violating
the restrictions, the sanctions.
Senator Gardner. So those mandatory investigations have
begun?
Mr. Blinken. I believe so. But let me come back to you with
that.
Senator Gardner. Okay. And if so, do you know how many of
these investigations are concerning entities that are located
in China?
Mr. Blinken. I cannot give you a number, but I am happy to
come back to you on that.
Senator Gardner. And has the administration determined so
far that any of the entities based in China, directly or
indirectly, engaged in illicit conduct described in section
104(a) of the act?
Mr. Blinken. To my knowledge, we have not made any
determinations as of yet, but I am happy, again, to come back
to you with the status.
Senator Gardner. Do you know any date of the findings to be
released or the conclusions of the investigations?
Mr. Blinken. I do not have a date for you, but again, I am
happy to come back with more detail.
Senator Gardner. Does the administration plan to execute
national security waivers provided under the law with regard to
any of these entities, particularly those in China?
Mr. Blinken. Senator, I cannot say in advance. I think what
we will have to see is where we are on the full implementation
of the Security Council resolution and the requirements under
the law and executive order, and make a determination as well
on that basis.
If we are seeing strong, good, sustained cooperation, that
might be something to factor in. But it is certainly something
that we need to consider as we go forward.
Senator Gardner. I am particularly interested in the status
of the investigations and the status of any national security
waivers that the President might determine under the mandatory
investigations required by the act.
I want to shift now to the South China Sea. PACOM Admiral
Harry Harris talked in February during his testimony before the
Armed Services Committee that China is clearly militarizing the
South China Sea. You would have to believe in a flat Earth to
believe otherwise. I believe that was his quote.
China's continued reclamation activities in the South China
Sea are a violation of international law. Militarization of the
islands is a clear attempt to bully its smaller neighbors and
to clearly challenge the United States as a Pacific power in
one of the most important trade zones, navigation zones, in the
world.
Do you agree that we need to dramatically boost our efforts
underlined under various legislation that has been included in
the NDAA and others?
Mr. Blinken. We share your concerns, and, indeed, this is
something that we are intently focused on. We are working
across-the-board to address this concern.
As you know, Senator, we are not a claimant ourselves. But
as I said earlier, we have a profound national interest in the
way the various claimants pursue their claims. Anything that
threatens freedom of navigation, that threatens the peaceful
resolution of disputes, or that undermines international law,
including the Law of the Sea obligations, is a problem for us.
In addition to the extent China is making it more difficult
for us to carry out our own commitments in our alliances, that
is also a problem for us.
Senator Gardner. Do you believe that our FONOP operations
right now are what you would characterize as routine?
Mr. Blinken. Yes.
Senator Gardner. Do you think the current pace of activity
is a routine activity?
Mr. Blinken. I would say, Senator, we have seen a number of
FONOPs, or freedom of navigation operations, increase over the
last couple of years. I think you can anticipate that they will
proceed on a regular basis.
Senator Gardner. Do you believe the current pace of
activity is what will indicate activities in the future as
well?
Mr. Blinken. I do not want to anticipate how the pace may
change, but I can say that we are engaged in regular FONOPs,
and those will continue.
Senator Gardner. I would hope that we would actually step
up our pace of activities in the South China Sea and move to
routine efforts, freedom of navigation operations. I believe
that sending one a quarter is simply inefficient to send a
strong message to China that we are not just putting some kind
of lip service or some very minimal action, that we actually
engage in routine activities in the region, that we would step
up our activities and make these more than just a regular
occurrence, but a routine, indeed, occurrence.
I also believe that we need to step up our asymmetric
diplomatic efforts when it comes to the South China Seas
activities.
Clearly, the freedom of navigation operations that we have
undertaken in the South China Sea as of today have not sent the
message to China that this is a navigable waterway under
international law. And I believe, and I would be interested in
your opinion on this, that they will ignore the decision. I
would like to know our diplomatic strategy after the decision
issued by The Hague on the Law of the Sea Treaty.
I would also be interested in hearing your thoughts on
asymmetric diplomatic actions that we can take in theaters that
are beyond the South China Sea in order to gain the attention
of China to let them know that this is an egregious activity
that must stop.
Mr. Blinken. Thank you, Senator. A couple things on that.
First, we have been very actively and very aggressively
messaging China privately and publicly about its obligations,
as well as obligations of other claimants. We have been working
very closely with all the claimants to secure from them an
understanding that, for example, the arbitration is an
appropriate mechanism to resolve these disputes, and it will be
binding on the parties, once it is issued.
We have been rallying support for these principles,
including at the special summit, the first summit of the ASEAN
countries with the United States at Sunnylands. The declaration
that came out of that affirmed the vision of a rules-based
order. We have been strengthening, at the same time, the
maritime capacity of most of our partners in the region.
As long as the United States remains fully present in the
region, any tactical advantage that China derives from some of
these outposts will be vastly outweighed by the net effect of
surrounding itself with increasingly angry, increasingly
suspicious neighbors, who are increasingly close to the United
States. As a strategic proposition, China's actions are
alienating virtually every country in the neighborhood, and
they are looking to the United States increasingly.
So our engagement with those countries has reached, I
think, unprecedented levels. If you go down the list of
countries in Southeast Asia, as well as in Northeast Asia, the
relationship with our treaty allies as well as with emerging
partners is deeper and stronger than it has been. And, in
particular, the cooperation on maritime security is greater
than it has ever been.
So the arbitration decision is an important moment, and it
is our hope that whatever the decision, China and the
Philippines will respect the decision and adhere to it. Indeed,
we have said to China, if the decision gives you reason on any
of the different issues in dispute, we will be the first to
defend it. But similarly, if the Philippines is given reason,
we will defend that very strongly.
The Chairman. I think we are good. Thank you.
Mr. Blinken. Thank you.
The Chairman. I would, just before turning to Senator
Menendez, say that freedom of navigation operations that happen
once a quarter are viewed as nothing but symbolic. With the
availability of vessels that we have in the region, I do not
know why we are not doing it weekly or monthly to
operationalize that in a real way.
I do not think there is any question but that China views
that solely as a light-touch, symbolic effort. I have no idea
why we are not cruising within those 12 nautical miles on a
weekly basis.
But with that, Senator Menendez?
Senator Menendez. Thank you, Mr. Chairman.
Mr. Secretary, as the co-author with Senator Gardner on the
North Korea sanctions act, I would ask you to give me the same
set of answers you are going to give him. I would have asked
you those lines of questions, and I appreciate that Senator
Gardner did, so I will not belabor it other than to say I think
it was a moment in which we saw how we can, in a bipartisan
way, be a partner with the executive branch. I hope the
executive branch would embrace that more in the future in
similar sets of circumstances. So I would like to see those
answers as well.
I see much of the United States political and economic
future depending on the Asia-Pacific. That means robust
engagement across the region, but that engagement needs to be
strategic.
From my perspective in the region, China is dominating,
leaving partners there fearful that the United States will
stand by as China exploits the lack of Western challenges to
its aggressive posturing. It seems to me that instruments of
national power--diplomacy, economic, intelligence, and
military--are only useful when they are fully deployed.
And while I have heard your comments and those of the
administration, and the attempt to do your best, China is doing
its worst.
It is not playing the role that it could be playing with
respect to North Korea, a stabilizing influence.
It is constructing artificial landmasses and militarizing
them--it is not just that they are trying to claim them; they
are militarizing them--that threaten shipping lanes and
international boundaries.
It is conducting cyberattacks and cyber espionage against
the United States, including the high-profile theft of the
personal information of 21 million Americans, including maybe
yours and mine. Some would call that an act of war.
And on human rights, you yourself publicly noted at the
U.N. Human Rights Council in March that the United States is
``alarmed by the ongoing crackdown on lawyers, religious
adherents, civil society leaders, and by growing attempts to
restrict internationally recognized freedoms, including the
freedom of speech,'' and, for that matter, China's consistent
support for Russia against the United States and other Security
Council members on important votes.
So is it that China does not understand that their
activities are escalating threats against our national
interests? Or has China chosen to push our limits, believing
that we will not impose consequences?
Mr. Blinken. Senator, I think that in various areas, China,
increasingly, but not dispositively, understands that its
actions are potentially having repercussions that are
undermining its interests.
So as it acts in the South China Sea in a manner that is
aggressive, and, as you said very rightly, not only reclaiming
pieces of land but building on them, and then not only building
on them but militarizing them, they run the serious risk of
alienating virtually everyone in the neighborhood and pushing
those countries in the direction of the United States. That is
not a good strategic proposition for China.
Now, whether it fully absorbs that lesson and works in a
much more cooperative fashion to resolve these disputes, that
remains to be seen.
With regard to North Korea, just to cite another example,
we said for a long time to the Chinese that if they would not
join us in trying to effectively use the leverage that they
have over North Korea to try to move the regime and Kim Jong-un
on the very objectionable and unlawful conduct they are engaged
in with the nuclear missile program, we would be compelled to
take steps to further defend our partners and allies, and
ourselves.
While these steps would not be directed at China, they
might well be things that China does not like. Indeed, that is
exactly what we have done, including beginning formal
consultations on the deployment of a THAAD missile defense
system to North Korea, to which China objects, to include
increasing our presence and posture in the region.
We now have in the Asia-Pacific region in general, overall,
close to 60 percent of our entire Navy. We have our most
sophisticated assets deployed in the region, F-22s, F-35s,
Poseidons.
Again, this is not directed at China, but to the extent
that China is not using its influence in a positive way, and
the leverage that it has in a positive way, we are going to
continue to take additional steps to defend ourselves.
So I think China has to factor all of that in. But I would
agree that the jury is still out.
Senator Menendez. So let me ask you this, if their actions,
as you say, are affecting their own interests, but they seem to
be on a course that continues to affect their own interests in
the negative, to take your view, then pushing countries within
the region closer into association and commitment with the
United States is one element, but the result of that is
obviously those countries in and of themselves do not have the
wherewithal to face the challenge that China presents
economically and militarily.
So the question is, for example, other than that of course
we appreciate the relationship with countries in the region,
longstanding in many cases, notwithstanding whatever China does
on our own bilateral basis and multilateral basis, but what is
it that you do about the continuing escalation in the South
China Sea of China's claiming of territories and militarizing
them? What is it that you do to stop the continuous march that
they are on? Because right now, I view us as observers of what
is going on, maybe as protesters of what is going on, but not
much beyond that.
Mr. Blinken. Senator, I think we are taking significant
actions to uphold freedom of navigation, to uphold
international law, and to encourage the peaceful resolution of
disputes.
First, we have worked together with virtually all of the
countries in the region to establish those principles and to
create a greater understanding of what requirements are of
international law.
Second, as we have discussed, we have been engaging in
freedom of navigation operations. Their number has increased.
The Chairman. There is something wrong with the microphone.
Senator Menendez. Hopefully, that was not the Chinese
interfering. [Laughter.]
Mr. Blinken. Their number has increased. We have engaged in
joint patrols, most recently with the Philippines. We have been
engaged in air patrols over some of the land features that
China has been acting on.
We have been working to build the maritime capacity of
virtually all of the countries in the region. We have a
significant program to build that capacity. It is focused
intensely on the Philippines, Vietnam, and other countries that
have expressed strong interest.
At the same time, we have strengthened our treaty alliances
with all of the countries with whom we have alliances, and we
are working to engage other partners.
So in all of this, we are both developing the capacity and
asserting the principles of international law that we expect
all of the countries in the region to adhere to.
Senator Menendez. Let me make two observations, Mr.
Chairman, in closing.
One is that some of us believe that we need a more robust
engagement in this regard, and a more robust response. I would
just simply say that part of our challenge, which I recognize,
if we are going to be intellectually honest, is that, with
China as our banker, that is an increasing challenge. And we
need to liberate ourselves from that in order to not have that
as part of the equation going on here.
The second thing is I want to wave my saber early. I know
you are not going to tell me what the 2016 TIP Report is going
to be like, but I will tell you this, I want to know the
standards, the material steps that China needs to take to
demonstrate the kind of significant progress it would need to
raise its ranking, because I am concerned about what happened
in the last TIP Report, in general.
I would be extremely alarmed, after listening to your
comments at the U.N. Commission on Human Rights, and others,
that all of a sudden China does well. Passing a law is not
enough, unless you have enforcement.
Thank you, Mr. Chairman.
The Chairman. Thank you.
First of all, I am always glad when my friends on your side
of the aisle mention the indebtedness that we have. I want to
thank you for that. I think it is still the greatest national
security threat we have.
But to our Secretary, I just want to recite what you just
said. We have 60 percent of our naval assets in the region, yet
we conduct freedom of navigation operations once a quarter.
China knows we have 60 percent of our assets there, and they
know that what we are doing is playing. They understand that we
are not really serious about this issue that you have been
asked about now by two Senators.
I would just say it is evident that there is not much
seriousness and really pushing on this freedom of navigation
issue, when we have 60 percent of our vessels in the region and
once a quarter we take them within 12 nautical miles of areas
that they are improving.
With that, Senator Isakson?
Senator Isakson. Thank you, Mr. Chairman.
I want to talk about two things that are redundant. One is
North Korea, and one is the South China Sea. I apologize for
continuing to bring those up. The other is sub-Saharan Africa,
if I could, for just a second.
First of all, with regard to North Korea, you said, if I
heard it right in your stated testimony, that China played a
critical role in development of U.N. Resolution 2270. Is that
correct?
Mr. Blinken. Yes, it is, Senator.
Senator Isakson. You then said that it was important that
China demonstrate they would fully and effectively embrace that
resolution. Is that correct?
Mr. Blinken. That is correct.
Senator Isakson. Does that mean they have yet to
demonstrate they are going to fully embrace that resolution?
Mr. Blinken. It takes time to gauge whether any of the
countries are fully implementing the resolution. We have to see
countries take practical measures to fulfill their obligations,
including with regard to inspections, including with regard to
exports from North Korea. And China, of course, because of its
unique relationship, is particularly important in this regard.
But this is something that takes some time to fully
evaluate.
Senator Isakson. Which leads me to my point or question,
every alcoholic needs an enabler. Every addict to any bad habit
of human nature needs an enabler. I worry sometimes that China
may be an enabler to North Korea, for reasons that benefit them
by keeping the United States busy.
So if they are not fully and effectively a part of 2270,
even if they tried to help develop it, then they are not
helping us in a situation that is very dangerous to the United
States.
And every time Pyongyang launches a missile or talks about
nuclear fissile material or anything, it is always talking
about it vis-a-vis the United States, never the Chinese, yet
the Chinese are right there on the border.
I read yesterday somewhere, and I wish I had written it
down because I did not, the Chinese put 2,000 more troops on
their border with North Korea.
Is that right? That is what I understand.
Mr. Blinken. I saw that report.
Senator Isakson. Then you have a situation where the
enabler, if they are the enabler--I am not making an
accusation; I am making an observation--but if they are an
enabler for North Korea, they are putting 2,000 troops on their
border to send the signal, hey, do not mess with us. But yet we
are looking to them to be the helpful arbiter in 2270.
China is having the best of both worlds. On the one hand,
they are enforcing their security. On the other hand, they are
not really helping us to enforce what we need for the world
community. Can you address that?
Mr. Blinken. Thank you, Senator.
I would say that China is both increasingly frustrated with
North Korea and its actions, and increasingly concerned about
the implications of those actions for China's interests, not
just our interests.
China does share an interest with us in seeing North Korea
denuclearize, but it has chosen different means of trying to
achieve that objective.
Is it is especially concerned, as you know, with the
prospect of instability on the peninsula that leads to millions
of North Koreans heading into China. It also has found utility
in having North Korea as a strategic buffer between us and our
ally, in this case, South Korea.
But what China seems increasingly to be recognizing is that
the greatest source of instability in the region is North Korea
and the actions of its regime. That is why it is taking a
tougher line.
Similarly, it has repeatedly tried to get the North Koreans
to stop the provocative actions. And instead of stopping those
actions, North Korea has actually humiliated the Chinese by
engaging in those actions on the very day or the day after
senior Chinese officials were visiting Pyongyang to try to get
them to stand down.
So for those reasons, as well as what I said earlier, the
fact that we have made clear to China that we will take steps
to better protect ourselves and our partners if this continues.
And we have. Even though those steps are not directed at China,
they are things that China is not enthusiastic about. For all
those reasons, we think it is more serious.
Now, whether it does enough and whether it fully uses its
leverage and whether it fully implements the resolution, that
remains to be seen.
Senator Isakson. Following up on that point, I hope the
State Department will send a signal to us, if they reach a
point that they see that the Chinese are not fully and
effectively engaging in their role in terms of 2270. If they
are having it both ways--on the one hand, they are saying they
are helping us and the U.N. to get a good resolution. On the
other hand, they are looking the other way on the North Korean
border, they are looking the other way on their responsibility,
it does not help us at all and we need to call them out for it.
That is my point.
I will skip the South China Sea, because I am going to run
out of time, because I want to go to sub-Saharan Africa. But I
want to associate myself with everything the chairman said with
regard to the visibility of the United States naval assets in
the South China Sea. The current visibility that we have is
paltry at best, and we need to send the right signal to the
Chinese that we do care about the South China Sea, and we do
care about open and navigable waterways in that part of the
world.
My last point is on sub-Saharan Africa. I have been there a
number of times. I have seen the Chinese working in building
roads, building buildings, building hospitals, building all
kinds of things, and extracting a lot of rare earth minerals,
extracting a lot of assets and energy and things of that
nature.
Are they continuing on their push to do that in Africa?
Mr. Blinken. Yes.
Senator Isakson. What are we doing to match that from a
standpoint of our own soft power interests?
Mr. Blinken. I would say two things, Senator.
First, we have seen in Africa--and, by the way, in other
regions, including in Latin America--a significant increase
over the last decade or so of China's economic and political
engagement. It is typically driven by commodity exports to
China. That is what they are mostly after.
We have seen an increase in loans from state-run banks in
China to countries in Africa and other parts of the world.
From our perspective, if, and this is a big ``if,'' if as
China engages it actually upholds international trade and
investment standards, if it upholds worker and environmental
rights, intellectual property rights, if it does all those
things, and if it engages in transparent transactions with good
governance, then additional investment, particularly in
infrastructure, for example, is a positive, and we would like
to find ways to work with China, and in some places we have.
On the other hand, if it engages in practices that are a
race to the bottom in terms of the way it invests, that is a
bad thing, and something we have real concerns about, which we
have expressed directly to the Chinese.
You are also seeing, I think, including as I know you have
seen in your travels, that the initial bloom on the rose can
wear thin. So a country gets significant investment from China,
but then if it undertakes an infrastructure project but it
imports all of the workers from China for that project, that is
something that the host country is usually not enthusiastic
about. If the quality of the product that is built is
underwhelming, that is something that the host country is
eventually not enthusiastic about either.
So I think there is a sort of market signal that gets sent
over time that China has to, if it wants to keep doing this, up
its game to higher standards.
Now, the challenge that we have is that China has state
resources that it can apply that we do not have. They have
money that they can invest officially that we cannot match with
our various programs.
We need to clear the way in particular for the private
sector, our private sector, to be able to engage, to invest, to
trade. That is our great strength, and that is why working to
improve the business climate in these countries is so
important.
We can be a facilitator. We can catalyze. But ultimately, I
think the private sector is the key actor.
There, I am very confident that when these countries are
able to work with our companies, to see our technology, our
innovation, our products, that is where they are going to want
to go.
Senator Isakson. My time is up, but I just want to
underline what you just said. That is why this committee's work
on AGOA and passing that last year was so helpful to the United
States in terms of sub-Saharan Africa and the entire continent.
The second thing I would say is that I have seen some
evidence that China's investment of money in some of the
African countries has a little bit to do with their influence
with those countries in the U.N., in leveraging those votes in
the U.N. Although the U.N. is not a governmental body, per se,
it is a body that has a lot of influence, and we have to be
very careful to see that they are not buying influence in the
U.N. for their own purposes.
Mr. Chairman, I yield back.
The Chairman. I want to thank you for that exchange. There
is no doubt that, in many cases, China will invest in a metal-
rich country, and then end up using their own workers and, over
time, end up charging far more for repayment than was
necessary. That is a totally self-interested model.
On the other hand, I will say there is something to be
learned, and I appreciate this last exchange. What we did with
Electrify Africa, what you did, what members of this committee
did, was really empower the private sector to put in place
processes that, over time, over the first 4 years, will allow
50 million people in Africa to have electricity--50 million
people--and, over time, hopefully, 600 million.
So I do hope that this exchange will help us. Much of what
we do in foreign aid is a Cold War model, let's face it, where
we are trying to buy influence. But we are not really
furthering our business interests. We are not really furthering
the quality-of-life on a sustainable basis of the people we are
dealing with.
So I do think there is something to be learned from this,
and an evolution that we ourselves should make to benefit
people that we are applying foreign aid to, and benefit our own
businesses.
But with that, I want to turn to our ranking member. I know
he had a very important day yesterday in Maryland and this
morning was still dealing with that. I appreciate him coming in
and his participation in this committee hearing.
Senator Cardin. Thank you, Mr. Chairman.
I do apologize for being late. This is the day after the
primary election in Maryland. I had obligations in my State
this morning and could not get here until just recently, so I
apologize to our witness.
I wear two hats in regard to the Senate Foreign Relations
Committee, one as the ranking Democrat on the full committee,
but also the ranking Democrat on the East Asia and Pacific
Subcommittee chaired by Senator Gardner.
The two of us have been working very carefully in regard to
China, which was one of our biggest foreign policy challenges
that we have on so many different dimensions. It is critically
important we get this relationship right in the rebalance to
Asia.
Some of this discussion has already taken place. Let me
just underscore the military aspect of this.
Senator Gardner and I are very concerned about the use or
threat of military force to address territorial and regional
disputes in the China seas. We have seen repeated activities by
China, which really defy the rule of law in resolving
territorial issues, and also jeopardizes freedom of navigation
as well as potential military conflicts.
There is currently a case pending by the Philippines under
the Law of the Sea. It will be interesting to see how the
response go to that particular action.
But this is the committee of jurisdiction as it relates to
that issue, and Senator Gardner and I today will be introducing
the Asia-Pacific Maritime Security Initiative Act, which will,
we believe, give clear direction on the U.S. policies, as has
been articulated by this administration and previous
administrations, and our commitment to maintain the freedom of
navigation and to protect our treaty obligations, as well as to
make sure that the international waters are protected, in
regards to commercial interests.
So it builds on the administration's Maritime Security
Initiative and provides the Departments of State and Defense
with strategic context and resources they need to take clear
and concrete measures to support rule-based order for the Asia-
Pacific region.
So, Mr. Secretary, we look forward to working with you. As
many times the administration has said, we speak much stronger
when we speak in a united voice and when Congress is giving you
the clear direction you need in order to implement U.S. policy.
Now, there are other issues I want to make sure that we
have a chance to talk about.
On the economic front, there are significant issues,
particularly in light of China's declining economy and the
realization of adjustments it needs to make. It is the United
States and China, two largest trading countries in the world.
Clearly, how they deal in international trade is of great
interest to us. We have major concerns about currency
manipulation and protection of intellectual property as we have
seen in recent years.
But I want to concentrate on the good governance issue,
just for one moment. There is a real concern whether China will
open space for its citizens to express their own views and
ideas, or will continue to brutally oppress its own people. We
have seen that in the stifling of the ability to disagree with
your government, with the religious freedom, with access to the
Internet, freedom of the media. There are corruption and
fighting corruption issues.
All that, I think, very much affects the future
relationship between the United States and China, and I would
argue affects the long-term growth and stability of China
itself.
So can you just share with us what steps the United States
is taking to make it clear that we expect continued progress
made on the governance side as it relates to human rights and
anticorruption?
Mr. Blinken. Thank you very much, Senator.
We share this concern. We share the concern about the
crackdown on civil society, on lawyers, on the media. More than
300 people over the last months detained, arrested, some
incommunicado.
We have seen, most recently, the use of forced confessions
in state media before people were put on trial or charges were
issued against them, particularly in the case of those who were
in Hong Kong and were apparently abducted by Chinese
authorities.
And we have seen a raft of new laws that potentially, in
their implementation, seriously infringe on human rights and
civil liberties, the national security law, the cyber law, the
NGO management law, et cetera.
We have, in public and in private, very vigorously
expressed our concerns to the Chinese Government at the highest
levels, starting, of course, with the President.
On my own most recent trip to China in January, I raised
this with all of my counterparts. I met with a number of
lawyers whose friends had been imprisoned. We mobilized 12
countries at the United Nations at the Human Rights Council
meetings, to issue a joint statement expressing their concern
and the concern of the international community.
We have, of course, our own human rights report, which you
are very familiar with, that is very clear about our concerns
about China's actions. We have called for the release of Falun
Gong practitioners, more than 2,000 of whom are jailed, and
religious freedom for Christians, Tibetan Buddhists, Uighur
Muslims.
We had just recently the International Women of Courage
Award issued to Ni Yulan, an extraordinary woman who,
unfortunately, was not given a visa to come to the United
States to receive the award. We gave her the award in Beijing,
and then the authorities actually cracked down on her after
receiving the award at our Embassy. But she wanted to receive
it, and she wanted to help shine a light on those fighting for
human rights, religious freedom in China.
So this is a regular, active, and high-level part of our
engagement with China across-the-board.
We also have human rights dialogue with China that seeks to
make progress on these issues.
Ultimately, though, I think it is exactly what you said.
China has to come to the recognition that it will not fulfill
its potential, if it continues to hold its citizens down, and
that the stability it seeks is actually undermined, not
advanced, by repressive actions. That realization has not yet
taken hold.
Senator Cardin. I thank you for that answer. I want to ask
one other question in regards to North Korea. I was listening
to your exchange with Senator Isakson, I think it was, on the
North Korea issue.
Yes, they joined us in the United Nations Security Council
resolution in regards to North Korea's activities, but it sort
of defies logic. China has perhaps the most at stake as to what
is happening, along with the Republic of Korea, in what is
happening on the Korean Peninsula.
And yet it seems like we have seen this before. They get
tough for a little while and then they relax. It seems like
they worry about regime change in North Korea, and, therefore,
they back off and they continue to reward North Korea, which
sends a really mixed signal to their government about being
able to get away with these types of international violations.
Is there any indication we have that China may, in fact,
remain strong in condemning the type of activities we have seen
in North Korea?
Mr. Blinken. Maybe, Senator, that the best guarantee are
the ongoing provocations by the North Korean regime. We have
seen since the resolution was passed further provocative
actions. I think we can anticipate that there will be more to
come. It is certainly possible in advance of the Korea Workers'
Party Congress, which is to take place on May 6, that the
regime will do something else, another missile test, maybe even
another nuclear test.
Every single one of those provocations is another dig at
China. I think it is, again, underscoring for China something
we have been saying for a long time, and that it is now
increasingly beginning to realize, which is that the greatest
source of instability in the region is North Korea and the
actions of its regime, and that if it fears instability, and we
understand that it would, that it should use the leverage that
it has, which is unique, to try to get the regime to change its
conduct.
So we see increasing signs that it is doing that, but the
resolution has to be fully implemented, and that implementation
has to be sustained, as you rightly said.
That is what we are looking at.
Senator Cardin. I would just encourage you to keep a big
spotlight on what China is doing or not doing in regards to
North Korea.
I believe Senator Perdue was next.
Senator Perdue. Thank you.
Thank you for testifying again.
I lived in Singapore and Hong Kong years ago. I worked
extensively in China the latter part of my career in business.
I personally believe the adage that the 20th century was the
century of the Atlantic and the 21st is the century of the
Pacific. I really believe that.
So I welcome your heightened efforts to engage China, to
deal with them diplomatically, because I think the 21st
century, to a large degree, depends on what we do economically,
socially, politically, with China.
So I think these are formative years right now. They have
only been out since the late 1980s and reengaged in the modern
world. They have 20 provinces that have yet to really achieve
the economic miracle of the 13 coastal provinces.
I met with Admiral Harris late last year, and he was
explaining how, in his opinion, we are approaching parity
militarily with China in the Asian theater, that they are
spending upwards of $300 billion a year on their military, up
some 10 percent each year the last few years. Our military
expenditures have declined the last 5 years by about 14
percent.
Having said that, it is how they are using it and what that
is enabling them to do in the South China Sea vis-a-vis North
Korea, et cetera, in Africa, and so forth.
But I think one of the questions I have for you today is, I
want to relate to the cyber issue and it relates to the
military spending too, because I think the world is very
dangerous on five different levels. You have the rise of Russia
and China. You have ISIS. You have nuclear proliferation threat
with rogue nations. You have cyber warfare and a hybrid warfare
that we are dealing with right now. Then the arms race in space
that we are not talking about.
So I want to put China and perspective in that, but
relative to their efforts in cyber warfare, I know that
President Obama and President Xi met in March of this year
after the September agreement, that we had some cyber
commitments back then that, and I quote, ``Neither country's
government will conduct or knowingly support cyber-enabled
threat of intellectual property.'' That was in September last
year.
Just a few days after the March 31 meeting between the two
Presidents, Admiral Mike Rogers, commander of U.S. Cyber
Command, testified before Congress, and I quote, ``Cyber
operations from China are still targeting and exploiting U.S.
Government, defense industry, academic, and private computer
networks.''
Are you aware of specific cases that Admiral Rogers is
discussing there?
And secondly, what are we doing diplomatically with them
that you can talk about today in open session, relative to this
cyber activity that they continue to conduct and enable?
Mr. Blinken. Thank you very much, Senator.
First, I very much share your views about the importance of
the region as a whole, as well as China in particular.
Second, with regard to cyber, we, indeed, have profound
differences with China over its behavior in this space. That
really came to a head last year in advance of the summit, as
you said, between President Obama and President Xi Jinping.
We have differences over the philosophy of how the
cyberspace is managed, and, of course, we have differences over
China's actions in cyberspace, especially a place we have drawn
a very bright red line, and that is with regard to cyber theft
for commercial gain.
It is no secret or surprise that countries seek to get
information about each other. But what we do not do, what we
will not do, and what we insist that others do not do, is to
use cyber tools to gain information for commercial gain. We
have tried to impress that on the Chinese.
Out of that meeting, because we elevated this issue, we got
a series of commitments from China: a timely response to
requests for assistance when there is malicious activity that
we see emanating from China in the cyber domain; no theft for
commercial gain; working together to identify and promote norms
of state behavior in cyberspace during peacetime; and then a
minister-level, secretary-level mechanism to fight cybercrime.
Since that meeting, and in recent months, we have seen some
positive steps toward making good on those commitments. There
was a reaffirmation at the G-20 meeting most recently of
international law, that it applies to state conduct in
cyberspace--the Chinese signed on to that--and that all states
need to abide by norms of responsible behavior, and no theft
for commercial gain. That was reasserted.
We held the first secretary-level, minister-level dialogue.
Our Secretary of Homeland Security as well as the Attorney
General took part. There will be another one in June.
We have been engaged in tabletop exercises.
Senator Perdue. I am sorry to interrupt. I recognize the
commercial dimensions. I am going to run out of time.
Mr. Blinken. I am sorry.
Senator Perdue. No, no. This is great information.
But we do have evidence that this is state involvement and
that the PLA is involved, and so forth. Is that correct?
Mr. Blinken. So in the past, as you know, we actually
indicted people affiliated with the PLA, or members of the PLA,
for that conduct. We are working very actively when we see
something happening to try to find the source of that and to
act accordingly.
With regard to the cases that Admiral Rogers referenced, I
am not exactly sure which ones those were, but I am happy to
follow up, and there may well be active investigations.
Senator Perdue. I have one other question in this area.
In September last year, there was a joint statement put out
that included four points of this agreement, September 15, I
believe it was. We reported the State Department, I think, and
the White House reported that the agreement had four points.
This is a small point, but I want to get clarity on it.
When it was reported in China, in Xinhua, their paper, they
included a fifth point. So the question is, does the fifth
point relate to the Office of Personnel Management
specifically? Was there something in there that was a reason
that we did not want to disclose that?
Mr. Blinken. There is an ongoing investigation of what
happened with regard to the Office of Personnel Management.
Certainly, I think we all share the concern, both as a matter
of public policy and as a personal matter, since, as was
referenced earlier, that intrusion gained access to the files
of many people working in government.
Trying to attribute the exact source of that intrusion is
an ongoing effort.
Senator Perdue. I understand. Was there a fifth point in
the agreement?
Mr. Blinken. I am not recalling, except other than to say
we have made it clear to the Chinese that there are some
actions in the cyber realm, again, understanding that countries
try to get information from each other, that there are some
intrusions that are too big to ignore. And certainly, what
happened with regard to OPM would fit into that category.
Senator Perdue. When do you think we will have a definitive
report on that intrusion?
Mr. Blinken. Let me, if I can, Senator, come back to you on
that. I need to check with my colleagues. Thank you.
Senator Perdue. Thank you, Mr. Chairman.
The Chairman. I apologize. We were in a little bit of
conversation.
I want to take make a commercial announcement, if I could.
I know there has been some discussion in the caucus regarding
the Cotton amendment. I know we are going to have a cloture
vote at noon.
I just want to say that I met with him earlier today. He
dropped the provision in his amendment that was problematic
relative to licensing, so that U.S. companies could still
license the purchase of heavy water, relicense to purchase
heavy water. The only provision that he still has in his
amendment is blocking next year's appropriations money from
being used to buy heavy water directly with U.S. Government
funding.
I have talked to the Energy Secretary about it. There is no
plan for that anyway. All the heavy water we are going to
purchase is now in Oman, and the funds are set aside for that
out of this year's money.
It seems to me he has shown some flexibility. I just wanted
to share the other side of this. I appreciate that very much,
and I hope that somehow, probably not at noon, I understand,
but, later today, we will figure out a way to move ahead,
because he is showing responsible flexibility on this. And I
hope that we will not just take a dogmatic position that
Congress cannot have its will, if you will, on some of these
provisions that matter to folks.
Senator Cardin. Mr. Chairman, first of all, thank you for
the manner in which you have been trying to resolve these types
of issues.
This is clearly within the jurisdiction of our committee,
because it deals directly with the Iranian compliance with the
JCPOA. So it is clearly a matter for our committee to take up.
I get a little prickly when there are appropriation
amendments offered that are within the jurisdiction of the
Senate Foreign Relations Committee. Taking the collective input
of our committee I think would be useful. Of course, that is
not available when we get these amendments and then we are
asked to act on them.
There is going to be sensitivity to anything that is done,
anything remotely related to the JCPOA. We know that. It is
always helpful to be able to know the facts before we have to
vote on it. Sometimes the Members that are not on this
committee offer amendments that do not know all the facts.
I want to see the Appropriations Committee move forward,
the appropriations process move forward. I just think they
would be better off not offering amendments that are within the
jurisdiction of another committee on an appropriations bill.
That is regular order.
So I think we would have been better off if there was no
amendment offered, and that this committee could take up this
issue. If there is a problem in regards to Iran's disposal of
heavy water, let us take it up. Let us try to develop the right
policy. But do not try to do it on an appropriations bill.
At least, that is my view, that we are better off using the
order of this committee than trying to resolve it on the floor
the Senate.
The Chairman. I appreciate the protection of our
committee's jurisdiction. I would just say that it is also in
the Energy Committee, and this is an appropriation for the
Energy Committee. And the Energy Secretary is the person who is
charged with purchasing heavy water from Iran. It is, actually,
the way it is written now, in particular, a fairly thoughtful
amendment, and I would hope that what would happen is the
Energy Secretary and Chief of Staff at the White House and
others would engage with all of us, and we would figure out a
way to resolve this and move ahead.
Senator Cardin. I am with on that. I agree.
The Chairman. So with that, Senator Markey?
Senator Markey. Thank you, Mr. Chairman, very much.
It is just important to know that we purchased the nuclear
warhead material from the Soviet Union, thank God we did, 500
metric tons. We used it to generate electricity in the United
States. Thank God that we did that. It cost us $1.6 billion. It
was a win-win for our country. Thank God that Libya dismantled
its nuclear weapons program. Thank God that South Africa
dismantled its nuclear weapons program.
So toward the goal of advancing our nonproliferation
objectives, which are the highest that we have, ostensibly, in
our government, repurchasing that heavy water from Iran
advances that goal. I just think we have to keep that in mind.
It has been a bipartisan goal that we have had over the years.
We should not interrupt a program like this without
understanding its long-term consequences.
Secretary Blinken, 2 weeks ago, the Department of Justice
indicted China General Nuclear Power Corporation, a state-owned
firm, of conspiring over the course of 2 decades to illegally
obtain U.S. nuclear technology. The Justice Department has
previously indicted five members of the Chinese military on
charges of hacking into Westinghouse computers to steal reactor
designs.
From your perspective, if proven, would allegations that
have been made constitute violations of the U.S.-China nuclear
cooperation agreement that entered into force last year?
Mr. Blinken. Senator, I would have to look at the very
carefully. I would want to give you a considered opinion. If I
can come back to you on that, I would appreciate it.
Senator Markey. That would be fine, but I just want to say,
from my perspective, that these alleged thefts of U.S.
technology are deeply alarming. They raise the question of
whether China can be trusted not to divert U.S.-origin
technology or fissile material to military purposes. And they
underscore the imperative of tightening regulations on U.S.
nuclear exports to China.
Together with the proliferation risks exemplified by the
case of serial proliferator Karl Li, this latest indictment
reinforces the concerns that I raised about the new U.S.-China
civil nuclear agreement when the committee reviewed it last
May. Although the agreement went into effect last year without
the conditions that I suggested during our review, which I
thought was a huge mistake, I will soon introduce legislation
that would, among other things, require the President to
temporarily suspend nuclear technology transfers to China until
violations like the ones cited in these indictments are, in
fact, resolved.
We just cannot allow China to continue to steal U.S.
nuclear secrets with impunity or turn a blind eye to
proliferation by notorious scofflaws within its jurisdiction.
That is where I really do feel that the U.S.-China agreement is
still very weak, and we are just going to have to deal with it.
So I am going to be looking to work with members of this
committee on a bipartisan basis so that we can police this and
hopefully work together in order to advance the goal of
nonproliferation.
I want to ask you some questions as well about the deadly
influx into the United States of the synthetic opioid fentanyl
from China. We are now seeing an alarming increase in the
number of deaths caused by illicitly manufactured fentanyl and
synthetic opioid painkillers.
They, unfortunately, are emanating as a percent very
largely from China coming into our country.
Just in Massachusetts alone, 336 people died from fentanyl-
related overdoses last year. You multiply that by 50 States,
and you can see that this fentanyl crisis is absolutely
overwhelming the numbers that we have historically been seeing
from OxyContin, Percocet, or heroin. In fact, increasingly,
they mixed the fentanyl in with the heroin.
But a new phenomenon has opened up where fentanyl itself
alone is being sold on the streets. And it does not take one
hit of Narcan to have someone survive. It takes two hits or
three hits of Narcan. That is how serious this epidemic is in.
And China is the epicenter of the problem, which is going to
kill tens of thousands of Americans per year, unless we stop
it.
So can you give me an update as to what the conversation is
that is going on between the United States and China? And what
additional actions are you planning on taking?
Mr. Blinken. Thank you very much, Senator.
Like you, we have seen the impact that this is having on
communities across the country, including particularly in New
England. It is devastating. We have also seen bipartisan
leadership in Congress to try to address this problem, which is
greatly appreciated.
Indeed, China has to be a big part of the solution. We have
been engaging them both directly and in multilateral
organizations to reduce the production and trafficking of
fentanyl and also any precursor chemicals as well as synthetic
drugs more broadly.
Last week, there was, actually, as I know you know, a
meeting of more than 150 countries in New York at the U.N.
special session on drugs. China took part at a very high level,
its Minister of Public Security representative. The effort
there is to work on both decreasing global demand, reducing the
availability of these chemical precursors, and holding states
accountable for their responsibilities under the three
international drug conventions. China is, indeed, a party to
all three of those conventions.
So we have been trying to encourage China to meet its
obligations in these multilateral fora, but also in our direct
conversations.
We have as well with China something called the Joint
Liaison Group on Law Enforcement Cooperation. There is a
working group, in particular, on counternarcotics where we also
try to advance this effort.
We have seen some progress, but not enough. We have seen
progress in terms of enforcement of cases. We have seen
progress in terms of China putting, I believe, 116 drugs and
psychotropic substances on their control list, including
fentanyl. So that was a step forward.
The DEA has the primary lead on this, and I am happy as
well to go back to them to be able to tell you----
Senator Markey. I do not know what the authority is that
the DEA has to tell China to cut it out, to just stop it or
else--or else--or else--or else. The same thing is true with
the proliferation of nuclear materials--or else. I mean, we are
dead serious about these things. These are ticking time bombs,
the nuclear materials and the fentanyl. These are the things
that are going to kill people--kill them.
So fentanyl is just the epidemic that is rising. China is
at the center of it. And I am still not sure that fentanyl has
been elevated to the level of intellectual property, for
example, as an issue. It should be at least as high as
intellectual property--at least. It is going to be killing tens
of thousands of people a year in the United States.
So I just think it is critical that this conversation take
place at the highest level, and that they know, Xi knows, and
everybody else knows, that that this is the top priority.
So once you let nuclear nonproliferation and fentanyl go
by, now you are talking about things which can be managed for
the most part, but these things cannot be managed. They have
long-term consequences that go far beyond the term of office of
any one President or any one Cabinet officer.
So I just do not think the head of the DEA is a high enough
level. I do not think anyone in China knows the name of the
head of the DEA in the United States. With all due respect,
even in the United States, he or she might as well be in the
witness protection program. Who is that person?
They need to know that that person who is saying to you
from the DEA that this is a huge problem for our country is
being backed up at the highest levels. And if the Chinese
leaders do not know, then we are going to suffer a world
whirlwind of consequences in our country.
So I thank you for your service.
Mr. Blinken. I heard you clearly on that, Senator.
Thank you.
Senator Markey. I appreciate it.
The Chairman. Thank you. I hope the Senator at some point
will indulge me and share with me the name of the head of DEA.
Senator Kaine?
Senator Kaine. Thank you, Mr. Chair.
Thank you, Mr. Secretary.
How would the U.S. efforts to address China's land
reclamation activities in the South China Sea and also to
defend freedom of navigation in that part of the world be more
effective if the Senate ratified the U.N. Convention on the Law
of the Sea?
Mr. Blinken. It would certainly give us a stronger leg to
stand on, because we constantly, in our engagements with the
Chinese as well as other claimants, refer to the Law of the Sea
Treaty and the obligations thereunder and, in particular, the
arbitration that is now taking place between the Philippines
and China, which is a critical moment in seeing if we can move
to a place where these differences are resolved peacefully
through mechanisms like arbitration. That is under the Law of
the Sea Treaty. Under the convention, that arbitration should
be binding on the parties. We continue to point this out to the
Chinese.
The Chinese love to say to us, ``You really have no
standing to talk about the Law of the Sea, because you have not
ratified it. So stop talking to us about it. You really are not
in a good place to do that.''
The last time I was in China talking at great length about
the South China Sea with our counterparts, I said that we are
in the ironic situation where the United States has not
ratified the Law of the Sea, but we abide by it; China has
ratified it, but ignores it.
But it would certainly help us in making the argument to
actually proceed to ratification. I think we are hearing that
across-the-board, from our military as well as from business
leaders and others who have testified to that before this
committee.
Senator Kaine. There has not been a focus on it during my
time in the Senate, but just my recollection is 167 nations
have ratified the convention, including China. The U.S. is the
only major power not to have ratified the treaty. The past
three presidential administrations, bipartisan, have supported
ratification, along with all service chiefs, Secretaries of
State, U.S. business community. There have been two positive
votes in SFRC for ratification, one in 2004, one in 2007. But
it has not seen a vote on the Senate floor.
The Law of the Sea Convention is not solely relevant to
contemporary issues with China in the South China Sea. It is
also relevant to claims being made by Russia in the Arctic for
extracontinental drilling rights. The U.S. might be able to
make such claims as well because of Alaska, but we cannot make
those claims under the Law of the Sea without ratification.
So I appreciate your concern about that, and I hope that we
might see the advantages of the U.S. taking it up.
We express concern in this committee frequently, and in
other committees frequently, about Chinese island reclamation
activities. I do not know why we would want to cut off one path
for diplomatic challenge to those island activities.
Those are the only questions I had, Mr. Chairman.
The Chairman. Thank you.
Senator Markey. Mr. Chairman, may I have 30 seconds?
The Chairman. You can. Let me just say, the Law of the Sea
Treaty probably was brought up prior to you coming here, I
think.
Just for what it is worth, there just was not a case made
for it. In fairness, some of the companies that came up here to
advocate for it, you would call them after their testimony, and
they would say, ``Look, on a list of 10 items we have, this
would be number 11. It is just not on the radar. The
administration asked us to testify.''
So I think that there really was not much of a case made.
There were some sovereignty concerns, no doubt.
But it seems to me that as we watch this case play out
right now, we can learn about whether this process is one that
has some degree of validity. So we will see what happens with
the tribunal and go from there.
Senator Markey?
Senator Markey. Thank you, Mr. Chairman, very much.
I was speaking, obviously, facetiously, when I was talking
about the DEA. Chuck Rosenberg is the head of the DEA. He does
a fantastic job, as do the DEA agents all across our country.
But right now, they are frightened about the impact that
fentanyl can have on our country--frightened. And the pathway
is China through Mexico up to Ohio, up to Massachusetts, to
Virginia, to Tennessee, to Maryland. That is the route.
So Chuck Rosenberg needs help. The DEA needs help. The DEA
cannot tell China what to do. We need officials at the highest
level.
Americans are going to die from this. This is a national
defense risk that is far greater than any other that China
poses to us, and it is happening on a daily basis, this
epidemic that is killing Americans.
So I just want to say that Chuck Rosenberg and the DEA
agents are heroes, but heroes need help.
They are battling this every day. When a DEA agent goes
into a home right now, the fumes actually from the fentanyl
that they find in the house could kill them right there, the
DEA agent, kill them right there, okay? That is how dangerous
this stuff is. So even as they are trying to police it, they
get killed as they walk into the house with the fumes.
That is China coming in through Mexico, and we owe these
DEA agents, Chuck Rosenberg and his entire team, the help which
they need.
Thank you, Mr. Chairman.
The Chairman. I think we may finish by noon, so I am hoping
to do so, but I know----
Senator Cardin. I just want to make a brief comment on the
Law of the Sea, and I support the ratification of the Law of
the Sea. I think it is unlikely we are going to get that in
this Congress.
But I know the chairman is working with our staff to see
whether there are certain treaties that we could not get
completed this year to at least start a track record of how we
consider treaties. There are some that are pretty much I think
teed up for ratification, if you could get them through this
Congress.
And then I would hope, early in the next Congress, the Law
of the Sea would be one of the ones that we might want to have
a hearing on and see where we are as far as the importance.
Then we would have the experience of the Philippines case,
which I thank the chair makes a very good point on.
The Chairman. So that my position is not misunderstood, the
tax treaties that we have before us should have already passed,
and they are hurting American companies right now, and they
should pass. I have issues with the Law of the Sea. I do not
want my discussion of the Law of the Sea, for people to think
that I think it is a good treaty. I have some issues with it,
and I do have some sovereignty concerns, and those have not
been explained fully to me.
As always, on every issue, we want to make sure we fully
understand what is at stake, and how it involves U.S. national
interests. But I had significant concerns that were not
answered last time. Again, I think we will have an opportunity
to see how it works with this Philippines-Chinese issue.
Do you want to make a final statement of maybe 60 seconds
before we adjourn?
Mr. Blinken. Thank you, Mr. Chairman. Let me just say that
I very much appreciate this morning the opportunity to discuss
a very complicated but vitally important relationship with
China. I very much appreciate the leadership of this committee
in working on many of the issues that flow from that
relationship.
Indeed, I think the work that was done on the DPRK and, in
particular, the legislation that gave us an important and
powerful new tool is a very good example, as you have said, of
the executive and this committee working closely together in
the national interests.
So I just want to thank you, thank the ranking member, and
all the members of the committee, for the good work that we
have been able to do, and I hope we will be able to continue in
the months ahead. Thank you.
The Chairman. Thank you. I think we have filibustered long
enough that Rubio is going to step in, in just a second, so I
think that is the case.
But if you guys need to head on down to the floor, I think
that would be fine.
I guess one of the benefits of becoming a household name is
the entire audience staying here, waiting to listen to your
questions.
Senator Rubio. I appreciate it.
I am sorry. I had to run over to Commerce. We have to get
better elevators in this building. Is it my turn?
I appreciate you doing this. I really do. Thank you for
being here today.
I want to just start out with a statement from an article I
read. I just want to ask if you agree with this line: China is
consistently pursuing a single long-term strategy with the
effective control of the entire South China Sea as its ultimate
goal.
Mr. Blinken. Yes, I think that is China's objective.
Senator Rubio. Okay. I just wanted to make that clear,
because at the end of the day, some of these things are covered
as some sort of one-off experiments or explorations. This is,
in fact, the pursuit of their nine-dash line position. You see
it in their passport documents. For example, we saw today in
the Wall Street Journal, I know this was discussed earlier,
``U.S. Sees New Flashpoint in South China Sea Dispute.'' This
time it is the Scarborough Shoal, which is only, I believe, 120
nautical miles off the coast of the Philippines, where they
have now begun preliminary exploration.
I want to talk about human rights. There was a report
earlier this week that China's overseas NGO management law is
being considered by the National People's Congress standing
committee. According to this report, the text is going to
require NGOs to register with the public security bureau, I
guess indicating that the Chinese Government continues to see
foreign NGOs as a potential threat to national security.
First of all, has the State Department expressed its
concern over this proposed legislation?
Mr. Blinken. Yes, Senator, repeatedly and, indeed, at the
highest levels, starting with Secretary Kerry. I have done it
repeatedly. We share exactly that concern.
It sends a very bad signal to have NGOs overseen by the
Ministry of Public Security. I think you are exactly right.
Senator Rubio. There are also reports that there are
possible carveouts for academic exchange programs in the new
draft, which seems to indicate that some favored
nongovernmental programs will continue while others are going
to face more intense scrutiny.
Is the State Department going to seek carveouts for certain
NGOs?
Mr. Blinken. No. What we are seeking to do is to make sure
that the entire community of such organizations and
institutions, whether they are academic, whether they are not-
for-profit, whether they are business associations, whether
they are professional associations, that are working in China
to the benefit actually of China and the Chinese are all
treated the same way and treated appropriately.
Senator Rubio. Can I ask you, why has the President not met
with any Chinese rights lawyers, activists, religious leaders,
feminists, or others who have been harassed, detained, and
repressed by the Chinese Government during what has been a
marked deterioration in human rights and rule of law in China
on his watch?
Mr. Blinken. Senator, I would have to go back and check and
see the meetings that he has had. I have not been on those
trips. I can tell you that on my most recent trip to China, I
am obviously not the President, I made a point of meeting with
lawyers whose colleagues and partners and, indeed, in one case
someone that----
Senator Rubio. You are pretty aware of the rights community
within China. Are you aware of any meeting the President has
ever had with any of them?
Mr. Blinken. I believe he has, but I need to go back to
check. Certainly, other senior members of the White House, the
National Security Advisor, and others have met with members of
the human rights community.
Senator Rubio. For some time, there has been this
conversation regarding the utility of various human rights
dialogues and concerns that these dialogues have yielded little
in terms of substantive outcomes and have had the unintended
consequence of ghettoizing human rights in U.S. foreign policy.
So can I ask, can you share with us any significant
deliverables during the course of the Obama administration that
have emerged as result of U.S.-China human rights dialogue?
Mr. Blinken. Senator, I think it is two things.
One, it is not either/or. It has to be both. In other
words, these issues need to be and are raised not simply in the
context of human rights dialogue, but at the highest levels by
the President, by the Secretary of State, by other senior
officials. At the same time, having these dialogues and working
groups can be a way to see if we can advance in practical
areas. That is the idea.
Now, we have seen, over the course of time, various
political prisoners released. Now, that may be in advance of a
summit meeting or some other meeting, but we see that. We are
looking, though, for systemic change as well as the release of
political prisoners.
So it goes to laws, including the NGO law that you just
cited. It goes to, across-the-board, the way the Chinese
approach this issue. I think it is a process that just takes a
lot of time to see progress.
We are doing two things--more than that, but, in
particular.
First, this is something, again, that is on the agenda of
every single meeting we have at every level with the Chinese.
Second, we are trying to put a spotlight on it
internationally. We went to the Human Rights Council in Geneva.
We led an effort by more than a dozen countries to show the
deep concern that exists across the world about some of China's
recent actions in terms of repression of lawyers, civil rights
activists, religious leaders, et cetera. We have our human
rights report, as you know, that tries to put the spotlight on
it. We have given awards to leading members of the rights
community to put a spotlight on it.
That is very important, too, because, at the end of the
day, it goes to China's reputation around the world. That is a
reputation that, as China engages more and more around the
world, it cares more and more about.
Senator Rubio. Okay, my last question is, I have been
following the troubling developments in Hong Kong, including
the long arm of Beijing's power on display most dramatically
with the abduction of the booksellers. We have also seen
shrinking space for press freedom and academic freedom all
across China, particularly concerning the ongoing trials
against several of the young pro-democracy activists like
Joshua Wong, who was a leader in the Hong Kong Umbrella
Movement of 2014.
Has the U.S. Consulate sent a representative to observe his
trial?
Mr. Blinken. I am not aware that we have. Let me check and
come back to you. We share your concern.
Senator Rubio. Has the State Department expressed those
concerns with his particular case with the Chinese Government?
Mr. Blinken. Absolutely. We are watching it very carefully.
We are following the trial. Let me check. I believe we have, if
we have had an opportunity. But let me come back to you on
that.
Joshua Wong, Alex Chow, Nathan Law, all of these people.
Senator Rubio. The last one is, is the U.S. working with
our allies like Sweden to press for the return of bookseller
Mr. Minhai, a naturalized Swedish citizen, Gui Minhai? He is a
naturalized Swedish citizen. Have we worked with our allies to
press for his return?
Mr. Blinken. Yes, and I have raised that myself directly
with my counterparts when I have been there.
We find the actions that have taken place in Hong Kong to
be of deep concern.
As you know, Senator, there are basic guarantees that were
written into the Sino-British Joint Declaration to the Basic
Law, and these guarantees go to freedom of expression, freedom
of association, freedom of assembly, an independent judiciary,
an independent executive and legislative branch.
The only thing that is carved out for China in this is
foreign policy and defense. And we have seen increasing Chinese
encroachments on the rights that are established under the
Basic Law.
And the bookseller's case is an egregious one, including
apparently the abduction of people from Hong Kong to mainland
China, and even the abduction of people from other countries.
This is something that we have raised directly with senior
Chinese leadership, and it is, I think, raising and ringing
alarm bells not just here in the United States but around the
world.
Senator Rubio. Thank you.
The Chairman. We thank you for being here. I think what you
have heard today from both sides of the aisle are significant
concerns about territorial issues and claims, the militarizing
of those; economic issues; the issues of human rights that was
just raised; the lack of cooperation, which is almost beyond
belief relative to the North Korean issue; and I think a sense
on both sides of the aisle that where the administration has
been with China is truly just managing differences.
I do not know if you are a short-timer or the election
process ends up generating a longer tenure for you, but I would
just say in the remaining months that you have here, I hope
that you will take concerns that were expressed on both sides
of the aisle and understand that I think most people who care
about foreign relations matters here do you feel that we are
lacking something that is more coherent on all fronts, and what
we are really doing, again, is just managing differences as we
move along.
I appreciate the committee's interest in China, in what
they are doing, the concerns that they have about the
relationship. I think all of us understand that it is still the
most important relationship over time that we are going to
have. And I think all of us hope that the administration will
be more strident in their actions and more clear over time as
to what the overall strategy is.
But we thank you for your testimony. The record will remain
open until the close of business Friday. If you would answer
questions fairly promptly, we would appreciate it.
The Chairman. Again, thank you for your service.
With that, the meeting is adjourned.
[Whereupon, at 12:14 p.m., the hearing was adjourned.]
----------
Additional Material Submitted for the Record
Responses to Additional Questions for the Record
Submitted by Senator Marco Rubio
Question 1. Do we have appropriate authorities to sanction Chinese
companies working in the South China Sea? Are we prepared to use all
authorities to respond to China's provocations?
Answer. We are prepared to use all available authorities, as
appropriate, to respond to Chinese actions in the South China Sea that
threaten U.S. interests. The President has authority under the
International Emergency Economic Powers Act (IEEPA) to impose sanctions
to deal with any unusual and extraordinary threat, which has its source
in whole or substantial part outside the United States, to the national
security, foreign policy, or economy of the United States, if the
President declares a national emergency with respect to such a threat.
Although there are no current sanctions programs specifically targeting
China over the South China Sea, the President has the authority to
implement a sanctions response if the President determines it is
necessary and appropriate under IEEPA.
Question 2. Can you state for the record that we do not accept
China's attempt to distinguish between the freedom of navigation for
civilian vessels and the generally recognized freedom of navigation for
all vessels, including military vessels and aircraft? At what level of
the Chinese government have we conveyed this policy?
Answer. Freedom of navigation, as we use the term, refers to all
the rights, freedoms, and lawful uses of the sea provided for under
international law. We consistently convey this to Chinese officials at
all levels. We make clear that the same rules and standards that apply
globally also apply to the South China Sea.
More specifically, we have made clear that we do not recognize or
accept any Chinese attempts to regulate our military activities in ways
that are contrary to international law, as reflected in the Law of the
Sea Convention. These include unlawful attempts to regulate military
activities in China's exclusive economic zone; demands for prior
notification for foreign warships to exercise the right of innocent
passage through China's claimed territorial sea; and attempts to warn
foreign vessels and aircraft away from features China controls in
various areas of the South China Sea without regard to whether those
operations would be lawful under international law.
The United States is committed to upholding freedom of navigation
for all vessels, from the largest aircraft carrier or container ship to
the smallest boat operating at sea. We will continue to fly, sail, and
operate wherever international law permits, and we welcome all nations
to exercise these legitimate rights and freedoms as well.
More fundamentally, the U.S. military presence in the Asia-Pacific
is more than a century old and has been instrumental in supporting the
rules-based international system that has laid the foundation for peace
and prosperity in the region and from which all countries in the
region--including China--have greatly benefited.
Question 3. Reuters reported that in mid-March the United States
agreed to China's request to remove four ships from the sanctions list.
Why would we accept this weakening of the North Korea sanctions?
Answer. This is an example of sanctions working effectively to shut
down commercial ties with a designated North Korean entity. In U.N.
Security Council Resolution (UNSCR) 2270, the U.N. Security Council
identified as blocked property (i.e., vessels that must be impounded)
31 vessels controlled by the U.N.-sanctioned North Korean shipping
firm, Ocean Maritime Management (OMM). A key basis for identifying
these ships as OMM-controlled was the presence onboard of North Korean
crews contracted through OMM. After the UNSCR's adoption, the owners of
four identified vessels asserted their vessels were not controlled by
OMM. We did not simply take their word for it. We insisted the ship
owners provide evidence to the U.N. Security Council's North Korea
sanctions committee that they had replaced the North Korean crew
onboard the ships, and provide assurances they would not hire any North
Korean crew for the vessels in the future. Only then did the committee
vote to remove these vessels from the list of blocked property.
By imposing these sanctions, we pressured these ship owners to
sever contracts with OMM, thereby cutting off a source of revenue to
the North Korean regime and ensuring these vessels could not be used to
support illicit North Korean proliferation.
We continue to closely monitor maritime traffic to and from North
Korea for any links to prohibited entities or activities. We will
continue to pursue sanctions designations, as appropriate, through the
U.N. Security Council and under U.S. law.
Question 4. Why have we not designated the jurisdiction of North
Korea as a primary money laundering concern?
Answer. The Department of State remains concerned about North Korea
as a destination for money laundering, narcotics trafficking, and other
financial crimes, especially as it continues to fail to live up to its
international obligations.
The North Korea Sanctions and Policy Enhancement Act of 2016 states
that the Department of Treasury, in consultation with State and
Justice, shall determine whether reasonable grounds exist for
concluding that North Korea is a jurisdiction of primary money
laundering concern within 180 days of its passage (August 16, 2016).
The Departments of State, Justice, and Treasury continue to
evaluate this matter carefully.
Question 5. Why are State and Treasury briefing teams engaged in a
worldwide campaign to tell companies and banks how to avoid U.S.
sanctions?
Answer. As you know, under the Joint Comprehensive Plan of Action
(JCPOA), the United States and the European Union (EU) lifted nuclear-
related sanctions on Iran on Implementation Day, the day that the
International Atomic Energy Agency confirmed that Iran had fulfilled
key-nuclear related commitments. While we lifted nuclear-related
sanctions, many of our non-nuclear-related sanctions, including those
related to Iran's destabilizing activities within the region, human
rights abuses, support for terrorism, and ballistic missiles programs,
remain in place and continue to be enforced. In addition, the U.S.
domestic trade embargo remains in place.
In an effort to provide greater clarity to the public and private
sectors on what sanctions were lifted and what sanctions remain in
place, the Departments of State and Treasury have been participating in
extensive outreach with the public and private sectors, mostly at the
request of other governments, in order to explain U.S. commitments
under the JCPOA, inform stakeholders of what sanctions were lifted, and
to inform stakeholder of which sanctions remain. Our engagement is
focused on providing clear information about U.S. sanctions laws to
assist companies in ensuring that their activities are consistent with
U.S. law and therefore are not sanctionable.
Question 6. Can you state unequivocally for the record that the
United States will not provide Iran access to the U.S. dollar? Can you
state unequivocally that the State Department has not asked the
Treasury Department to address this issue?
Answer. The United States did not commit to restoring Iran's access
to the U.S. financial system under the Joint Comprehensive Plan of
Action (JCPOA). Moreover, while the Department of the Treasury can
speak to this issue in more detail, the Administration is not planning
to reinstate the ``U-turn'' authorization as has been widely reported.
It is important to note, however, that under the JCPOA, the U.S.
did commit to removing secondary sanctions on the provision of U.S.
banknotes to Iran on Implementation Day, and this is now permissible
activity as long as U.S. persons or the U.S. financial system is not
involved. Further, while we continue to work with Treasury to ensure
that Iran receives JCPOA-related sanctions relief, this effort does not
involve assisting Iran in gaining access to the U.S. financial system,
which we have noted is not a U.S. commitment under the JCPOA.
Question 7. The Financial Action Task Force (FATF) has called for
counter-measures against Iran; can you confirm the United States will
not facilitate Iran's ability to conduct U.S. dollar transactions until
FATF rescinds its calls for counter-measures?
Answer. The Administration is not planning to reinstate the
authorization for ``U-turn'' transactions or give Iran access to the
U.S. financial system. The Administration fully stands by our previous
statements, and on April 1, President Obama confirmed during a press
conference that reports that the Administration will grant Iran access
to the U.S. financial system are inaccurate. In fact, we will continue
to vigorously enforce the sanctions that remain against Iran, including
our primary sanctions that generally prohibit U.S. financial
institutions from clearing U.S. dollars through the U.S. financial
system for Iran-related transactions, holding correspondent account
relationships with Iranian financial institutions, or entering into
financing arrangements with Iranian banks.
Question 8. Iran continues to test ballistic missiles designed to
deliver nuclear weapons, including a test earlier this month of an ICBM
based on North Korean technology and a missile test on March 9 that
included a missile reportedly emblazoned with the statement ``Israel
must be wiped off the arena of time'' written in Hebrew. How can we
continue to ignore such obvious threats to our ally Israel and the
safety of the entire region?
Answer. We share the concerns of Congress about Iran's ballistic
missile activity and its destabilizing effect in the region. Iran's
efforts to develop increasingly capable ballistic missile systems are a
significant nonproliferation challenge and a very real threat to
regional and international security. We retain a wide range of
multilateral and unilateral tools to address Iran's ballistic missile
development efforts and we continue to deploy those tools.
Following Iran's October ballistic missile launches, the United
States, on January 17, designated three entities and eight individuals
involved in a network that has been procuring materials and other
equipment for Iran's ballistic missile program. Iran conducted another
set of dangerous and provocative missile tests in March. On March 24,
we designated two Iran-based entities directly involved with Iran's
missile program. Designated entities and individuals are subject to
U.S. asset-blocking sanctions, effectively cutting them off from the
U.S. financial system, and potentially making any non-U.S. person who
deals with them subject to secondary sanctions.
We continue to work with partners to interdict missile-related
transfers to Iran and to target Iranian missile proliferation
activities in third countries. This includes working multilaterally
through our participation in the Missile Technology Control Regime and
the Proliferation Security Initiative.
We also continue to work closely with our Gulf allies, as part of
the Camp David process the President started last year, to develop
missile defense capabilities and systems to mitigate the regional
threat posed by Iran's missiles. This missile defense effort, of
course, is complemented by our longstanding relationship with Israel to
develop one of the world's most advanced missile defense systems.
Additionally, we are continuing our unprecedented level of security
and intelligence cooperation with Israel. Israel remains the leading
recipient worldwide of U.S. Foreign Military Financing (FMF). The
current ten-year $30 billion Memorandum of Understanding between the
United States and Israel, under which Israel currently receives $3.1
billion per year, is just one example of our strong, ongoing
partnership and the United States commitment to Israel's security.
Question 9. Why did the U.S. agree to a lower standard of ``calls
upon'' in the U.N. Security Council Resolution implementing the JCPOA
rather than the previous outright ban using the stronger ``decides''
language?
Answer. Unfortunately, Iran has consistently ignored for years U.N.
Security Council resolutions requiring it not to conduct ballistic
missile activity. Thus, the prohibitions on Iran's access to missile
technology and expertise are the most important and effective
restrictions on Iran's missile program, and they remain in full effect.
U.N. Security Council Resolution (UNSCR) 2231 maintains all legally
binding requirements on states to deny Iran access to missile
technology and expertise, and the international community continues to
rely on these provisions to limit Iran's missile program.
Under UNSCR 2231, transfers of items to Iran that are contained on
the Missile Technology Control Regime (MTCR) Technical Annex require
approval in advance of the Security Council. As a permanent member of
the Council, we have the ability to veto any such transfer. The MTCR
Technical Annex was also the basis for the missile-related restrictions
under previous UNSCRs targeting Iran (UNSCRs 1737, 1747 and 1929).
Iranian ballistic missile launches remain inconsistent with UNSCR 2231,
which is a clear and unanimous expression of the Council's position on
Iran's ballistic missile programs.
Question 10. Is it the administration's position that any
ballistic missile test is a violation of UNSCR 2231? If the UNSCR 1929
provision on ballistic missiles were still in effect, would the
ballistic missile tests have been violations of UNSCR 1929?
Answer. In early March 2016, Iran conducted a series of ballistic
missile tests, which included tests of the Qiam-1short range ballistic
missile (SRBM) and Shahab-3 medium range ballistic missile (MRBM).
United Nations Security Council Resolution (UNSCR) 2231 calls upon Iran
not to undertake any activity related to ballistic missiles designed to
be capable of delivering nuclear weapons, including launches using
ballistic missile technology. As a general matter, ballistic missiles
designed to be capable of delivering a payload of at least 500
kilograms to a range of at least 300 kilometers are inherently capable
of delivering nuclear weapons. This is why the vast majority of
missile-related items and technology that require explicit Security
Council authorization to be exported to Iran under UNSCR 2231 (2015)
are related to missile systems with these basic capabilities.
The Qiam-1 and Shahab-3 ballistic missiles tested by Iran clearly
are designed to exceed these basic range and payload performance
parameters and thus are inherently capable of delivering nuclear
weapons. For this reason, on March 11, U.S. Ambassador to the United
Nations Samantha Power made a public statement raising concerns about
Iran's missile launches, calling them provocative and destabilizing and
pledging follow-up in the Security Council. The U.S. requested the
discussion of the launches that occurred in the Security Council on
March 14. Along with France, Germany, and the UK, we also submitted a
report on these launches to the Security Council, which asked for a
meeting of the Security Council in its UNSC Resolution 2231 experts
format to consider an appropriate response. We used the April 1 experts
format meeting to underscore our concerns about these launches in
defiance of UNSC Resolution 2231. We rejected the notion that it is in
any way excusable for Iran--or any other country--to behave contrary to
the clear and unanimous expression of the Security Council's will. U.S.
missile experts briefed on the launches at this meeting to help make
clear to our Council partners that the launches were inconsistent with
the resolution. In parallel, the United States designated (sanctioned)
two Iran-based entities directly involved with Iran's missile program
pursuant to Executive Order (E.O.) 13382 on March 24.
The United States continues to use a number of tools to prevent
transfers of equipment and technology to Iran's missile programs and
impede Iran's missile development efforts. Unfortunately, these March
2016 launches continue a longstanding pattern of Iran ignoring Security
Council resolutions targeting its missile activity. Under UNSCR 1929,
which was in effect until January, 2016, Iran routinely conducted
missile launches, including tests of the Shahab-3, which violated that
resolution. As is the case with the March 2016 launches, the United
States called attention to Iran's destabilizing missile activities,
reported those launches to Security Council, and urged the Council to
address Iran's testing of ballistic missiles designed to be capable of
delivering nuclear weapons. Regretfully, a number of other Council
members consistently blocked U.S. efforts to seek a more vigorous
response to these violations of UNSCR 1929.
Question 11. Now that China's onerous new NGO law has officially
passed, is the administration developing contingency plans for the USG-
funded programming in China which will be negatively impacted beginning
in January 2017?
Answer. The new Law on the Management of Foreign NGO Activities has
created a highly uncertain and potentially hostile environment for
foreign non-profit NGOs and their Chinese partners that will no doubt
discourage activities and initiatives. We expect it will have a
significant impact on U.S.-funded programming in China, and we are
closely following Chinese government implementation plans as we
continue to review our programming policies in light of the law's
passage. Our implementing partners are also reviewing or carrying out
contingency plans in response to this development.
We remain committed to supporting programs intended to have a
direct and lasting impact in China, including projects promoting rule
of law reform, human rights, and a free and flourishing civil society.
We will continue to urge China to respect the rights and freedoms of
human rights defenders, journalists, religious and ethnic minorities,
business groups, development professionals, and all others who make up
civil society, including by protecting the ability of foreign NGOs to
operate in China.
Question 12. When was the last time the administration requested
an American consulate in Lhasa and what was the official response? Are
the Chinese presently seeking to open any additional consulates in the
U.S.?
Answer. The Department continues to explore options to expand
consular facilities in China. In 2005, China formally requested to open
new consulates in Boston and Atlanta. In 2008, we responded with a
diplomatic note expressing our interest in expanding our diplomatic
presence in China, with Lhasa and Xiamen as top priorities. The Chinese
government has not responded to the Department's request. We also
continue to work to regularize our consular and diplomatic access to
the Tibet Autonomous Region. For more detail, please see the ``Report
to Congress on Status of Efforts to Establish a United States Consulate
in Lhasa, Tibet'' transmitted to the Senate Foreign Relations Committee
in 2015.
Question 13. Is the administration pressing the Chinese government
in the lead-up to the G20 they'll be hosting this Fall to make tangible
progress on certain human rights and rule of law issues, especially
related to religious freedom violations in Zhejiang province where the
summit will be held? Will there be any consequences if they fail to do
so?
Answer. Secretary Kerry recently re-designated China as a ``Country
of Particular Concern'' (CPC) under the International Religious Freedom
Act for particularly severe violations of religious freedom, a
designation first made in 1999.
On April 27, Secretary of State John Kerry highlighted ongoing
official harassment of Tibetan Buddhists and restrictions on their
faith as cause of great concern during public remarks.
On March 6, Deputy Secretary Anthony Blinken expressed his alarm
over the ongoing crackdown on religious adherents in his public remarks
to the United Nations Human Rights Council.
We remain particularly concerned by the ongoing detentions of
church leaders and activists in Zhejiang province, many of whom were
detained for protesting a government campaign to remove crosses from
church buildings and demolish others. This includes human rights lawyer
Zhang Kai and Pastor Gu ``Joseph'' Yuese, both of whom released earlier
this spring but remain under restrictions.
The United States strongly believes that the protection of human
rights and freedom of religion is critical to China's prosperity,
security, and stability. We continue to raise our religious freedom
concerns at the highest levels, both privately with Chinese government
officials and in public forums. We will continue to call on the Chinese
government to release all activists and pastors, ensure they are free
from future harassment, and bring to an immediate end the cross removal
and church demolition campaign.
__________
Responses to Additional Questions for the Record
Submitted by Senator David Perdue
Question 1a. You've stated that China needs to play a
``constructive role'' regarding North Korea. Indeed, given its
historically close relationship with Pyongyang and continuing economic
ties, China's strict implementation of the U.N. sanctions against North
Korea is crucial to their effectiveness. Since 2010, China is believed
to have accounted for more than two-thirds of North Korea's total
trade. The Obama administration has credited China with helping to pass
U.N. Security Council Resolution 2270, which imposes new sanctions on
North Korea over its nuclear weapon and missile activities. China's
Ministry of Commerce and General Administration of Customs went so far
as to issue a public notice on April 5th, detailing not only what's
banned under U.N. sanctions, but also what is still allowed.
Specifically, to the Chinese business community, China has emphasized
categories of trade that are still allowed under those sanctions--
including trade imports of coal, iron ore, and iron that China deems to
be completely for ``livelihood purposes.'' I'm not sure exactly what
China means when it says ``livelihood purposes,'' given the fact that
Chinese food and energy shipments to North Korea, which provide a
lifeline to Pyongyang, are not covered by sanctions.
When the Obama administration agreed to exemptions in sanctions for
``livelihood purposes,'' what did it understand ``livelihood
purposes'' to mean?
Answer. The United Nations' targeted sanctions against the
Democratic People's Republic of Korea (DPRK) are designed to stem the
flow of funds, materials, and expertise that the regime uses to further
its nuclear and ballistic missile programs, while also minimizing the
impact these measures have on North Korea's impoverished people. Some
U.N. sanctions measures include an exemption for ``livelihood
purposes.'' This exemption is intended to allow for transactions that
provide for basic necessities and other materials, consumer goods, and
common equipment needed for DPRK citizens to carry out their daily
lives and allow the North Korean people to maintain a reasonable level
of sustenance and comfort, while not generating any revenue (for
example, through resale) for prohibited regime activities, including
its nuclear and ballistic missile programs.
Question 1b. Has the State Department been able to clarify how
China defines the term?
Answer. It is too early to reach a definitive conclusion regarding
China's interpretation and implementation of this term, only two months
after the adoption of UNSCR 2270. We are actively working with all U.N.
Members States, including China, to ensure that they vigorously
implement the sanctions measures included in U.N. Security Council
Resolution (UNSCR) 2270 and previous UNSCRs, including through
bilateral consultations and engagement through the U.N. Panel of
Experts for DPRK sanctions. UNSCR 2270 includes a request to member
states to report domestic measures taken to implement sanctions. China
has submitted such implementation reports in the past for previous
resolutions, describing its view on sanctions measures, when requested
in previous DPRK sanctions UNSCRs (1718, 1874, and 2094). These reports
are available on the U.N. website. We will closely review China's
submission for the 2270 report due on June 2, 2016, as well as what the
U.N. Panel of Experts will uncover over the next year and report on in
its 2017 Final Report expected in February 2017.
Question 1c. How concerned are you about China's public focus on
trade that continues to be allowed under sanctions?
Answer. We continue to monitor closely China's trade with the DPRK.
Chinese efforts to educate the public on sanctions measures, with
respect to both permitted and proscribed activities, are expected and
important to their effectiveness.
Question 2a. China has traditionally been unwilling to put strong
economic pressure on North Korea over its nuclear and missile
activities for fear of destabilizing the regime in Pyongyang, and
potentially unleashing refugee flows into China, among other
consequences.
Do you believe China's calculus has changed?
Answer. While the United States and China may not share a perfectly
congruent set of interests with regard to North Korea, we have long
agreed on the fundamental importance of denuclearization. China's
actions in the U.N. Security Council--working with us to impose the
strongest U.N. sanctions in a generation--demonstrate that China is
particularly concerned by North Korea's recent behavior.
Question 2b. How committed do you believe China is now to seeking
to change North Korea's behavior through economic pressure?
Answer. President Obama and President Xi discussed at length during
their recent meeting in Washington the importance of effective
implementation of U.N. Security Council Resolution 2270, and China's
leaders have publicly committed to full enforcement. While it is too
early to assess China's implementation of the UNSCR, we have seen some
encouraging steps, such as the promulgation of trade regulations to
implement the UNSCR's restrictions on coal and mineral trade.
China has now repeatedly called on the DPRK to live up to its
international obligations and commitments, including by taking
meaningful, concrete, and irreversible steps toward verifiable
denuclearization. We will continue to urge China to do more until we
see concrete signs that Kim Jong-un has come to the realization that
the only viable path forward for his country is denuclearization.
Question 2c. Do you believe we can change North Korea's behavior
through economic pressure?
Answer. We are realistic. Pyongyang has prioritized the pursuit of
nuclear weapons over just about anything else, including the lives of
its own people. We do not think economic pressure alone will
automatically convince the regime's leader to cease. However, the DPRK
has never before been subject to the kind of pressure contained in
UNSCR 2270. This UNSCR is not ``more of the same''--it represents a
major increase in pressure compared to the previous UNSCRs.
To achieve our goal--complete, verifiable and irreversible
denuclearization--we will need a serious and sustained campaign to
enforce these sanctions, along with diplomatic efforts to negotiate
credible denuclearization.
Question 3a. While I was pleased to see China support U.N.
Security Council Resolution 2270, imposing new sanctions on North Korea
for its nuclear weapon and missile activities, I'm curious if we made
any concessions to get them to ``yes.''
Do you believe China's decision to support UNSCR 2270 was related
in any way to the discussions between the U.S. and Seoul over
the deployment of a U.S. Terminal High Altitude Area Defense
(THAAD) missile defense system to South Korea?
Answer. The United States and China have long agreed on the
fundamental importance of a denuclearized North Korea. China's decision
to support UNSCR 2270 was, in our view, the only responsible choice for
a P5 member of the U.N. Security Council. It was also a logical
response to the DPRK's repeated and dangerous provocations which
increasingly threaten regional stability and thus directly affect
China's own security.
We remain in contact with Chinese leaders at the highest levels,
and have repeatedly confirmed to them that THAAD is a purely defensive
system designed to counter short- and medium-range regional ballistic
missiles and that its potential deployment in the ROK would not impact
China's strategic deterrent.
Question 3b. To win China's support at the U.N., did the United
States or South Korea make any commitments to Beijing related to THAAD?
Answer. The United States made no commitments or trades with
Beijing related to THAAD in order to secure China's support for UNSCR
2270. THAAD is not a bargaining chip. As for South Korea, I don't want
to speak for our ally, so I would refer that question to the ROK
government. What I can say is that President Park has clearly stated
the South Korean government will review a potential THAAD deployment
based on its own security and national interests.
Question 4a. I'm very concerned by China's aggressive activities
in the South China Sea. While President Xi said in September that
China, ``does not intend to pursue militarization'' of the Spratly
Islands, actions speak louder than words. Just last month, it was
reported that China has deployed surface-to-air missiles and an anti-
ship cruise missile battery on a disputed island in the Paracel Chain.
And on the day of our hearing, the Wall Street Journal reported that a
new potential flashpoint has emerged-that Beijing is considering
expanding the area where it is seeking to reclaim islands and extend
its influence.
Can you describe our diplomatic efforts aimed at lowering tensions
in the South China Sea? What, if anything, is being done to
discourage China's aggressive behavior?
Answer. We share the concerns outlined in your question. Our South
China Sea strategy has several elements. First, we are actively
strengthening our alliances and partnerships. This includes closer
consultations with allies, upgraded diplomatic relations with ASEAN,
new defense cooperation agreements, and providing equipment and
training to help partners better patrol at sea. We are assisting our
allies and partners in Southeast Asia to increase their maritime
security capacity and enhance intelligence-sharing, especially in the
area of maritime domain awareness. Second, we have raised our concerns
in intense, high-level diplomacy with China. President Obama, Secretary
Kerry, Secretary Carter, and I have had frank discussions with our
Chinese counterparts about their provocative actions. Third, we are
pushing for territorial disputes in the South China Sea to be resolved
peacefully. We have consistently called on all parties to complete
negotiations of a Code of Conduct in the South China Sea, which would
build on the Declaration they made in 2002. And we publicly express our
support the right of any country to use available international legal
mechanisms, including arbitration, as the Philippines is doing. Fourth,
we are strengthening our defense presence in the South China Sea. As
part of a long-term strategy, we are positioning 60 percent of our Navy
fleet to the Pacific and rotating more of our forces through friendly
countries in the region. And fifth, we protest excessive maritime
claims by any countries through our Freedom of Navigation operations,
upholding the right of all to fly, sail, and operate everywhere the law
allows.
Question 4b. Given the news about China's intent to expand the
area where it's seeking to reclaim islands, is our current approach
failing?
Answer. The short answer is no. Our relationships throughout the
region 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. From my discussions
with counterparts in the region, it is becoming increasingly clear that
China's actions have fueled renewed calls for a greater U.S. presence
in the region. In February, ASEAN leaders joined the President in
calling for maritime disputes to be resolved peacefully. We and our
ASEAN friends also stressed the importance of international law,
including the freedoms of navigation and overflight. These messages
have been echoed elsewhere, most recently by the G-7.
There is no doubt China has heard our concerns. I have articulated
them to my counterparts on numerous occasions, and I know that other
countries within and outside the region have expressed similar concerns
to China about its recent activities in the South China Sea. What is
clear is that if China ignores these concerns and continues down its
current path, its standing in the international community will suffer
as will its relations with its neighbors.
Question 4c. Does there remain any doubt in your mind that China's
ultimate objective is to claim disputed territories through the use of
force?
Answer. We believe that China's strategic objective in the South
China Sea (SCS) is ultimately to consolidate effective control over the
area while avoiding armed confrontation with the United States or
China's neighbors. China's leaders recognize that they must balance
their ambitions in the SCS against their interest in continued economic
growth and development, as well as in maintaining stable ties with the
United States and their neighbors.
Question 4d. Can you explain why such behavior represents a
flagrant violation of international law?
Answer. China is pursuing ambiguous and expansive maritime claims
that it has yet to define in a manner consistent with international
law, as reflected in the Law of the Sea Convention. China has also
declared straight baselines, most notably in the Paracel Islands, that
do not comport with the international law of the sea, unlawfully
extending the limits of China's claimed internal waters and territorial
sea. The Department of State has discussed China's maritime claims in
depth in its Limits in the Seas series, in particular studies 117 and
143.
Unfortunately, there are also numerous examples of China's
interference with freedom of navigation and overflight and other lawful
uses of the sea. These include unlawful attempts to regulate military
activities in its exclusive economic zone; demands for prior permission
for foreign warships to exercise the right of innocent passage through
its claimed territorial sea; and attempts to warn foreign vessels and
aircraft away from features it controls in various areas of the South
China Sea without regard to whether those operations would be lawful
under international law.
China has also declared an Air Defense Identification Zone in the
East China Sea which (among other problems) unlawfully purports to
apply to aircraft exercising the freedom of overflight in international
airspace with no intention of entering Chinese national airspace.
Question 5. China recently announced that its defense budget would
grow another 10 percent in 2015. Although official statistics are not
reliable, a leading estimate suggests that Chinese defense spending
sped past $200 billion per year in 2014, a six-fold increase over the
course of 15 years. Meanwhile, the Pentagon's base budget has fallen by
14 percent over the past five years, and the 2015 Department of Defense
report on military and security developments involving the People's
Republic of China finds that ``China's military modernization has the
potential to reduce core U.S. military technological advantages.''
Further, President Xi has recently launched a plan to revamp China's
armed forces, making them a more modern force capable of projecting
power outside of China's traditional sphere of influence.
In light of these facts, do you agree that the regional balance of
power continues to shift in China's favor?
Is it possible to begin shifting the balance back in our favor
while sequestration remains in place?
Does the continuing shift in China's favor undermine the U.S.
ability to deter provocative behavior, such as China's
intimidation tactics in the South and East China Seas?
How do you view President Xi's plans to revamp China's military? If
President Xi succeeds in this overhaul, how will this impact
our calculus in the region, and in dealing with China? Do you
predict we'd see an even more aggressive China and challenges
to our military dominance worldwide?
Answer. We carefully monitor China's military developments and
encourage China to exhibit greater transparency with respect to its
capabilities and intentions. As Chinese economic and political
interests expand beyond its own borders, it is not surprising China
would seek to protect its overseas interests. For example, Chinese
decisions such as building a logistics facility in Djibouti have been
informed by their experience in evacuating Chinese citizens from Libya
and Yemen, and by China's expanding role in international efforts like
counter piracy and U.N. peacekeeping. China has also claimed that the
need to protect its maritime and territorial claims in the South and
East China Seas, as well as its position on Taiwan, drives the
modernization and growth of its military forces.
For 2016, China has announced a military budget increase of
approximately 7.6 percent. This followed 10 years of annual budget
increases of more than10 percent. We encourage China to use its
military capabilities, as we do with all countries, in a manner
conducive to the maintenance of peace and stability in the Asia-Pacific
region.
It is important that the United States and China have a
constructive military-to-military relationship, one that focuses in
particular on risk reduction as our forces come into closer and more
frequent contact in the Asia-Pacific region. The Confidence Building
Measures (CBMs) concluded with China in 2014 and 2015 on the rules of
behavior of our ships and planes during unplanned encounters and on
major military notifications will serve to reduce risk and increase
transparency.
Regarding sequestration, as Secretary of Defense Carter has said,
``under sequestration . . . our nation would be less secure,'' and
``we would have to change the shape, and not just the size, of our
military, significantly impacting parts of our defense strategy.''
The United States has had a security presence in the Asia-Pacific
since the end of World War II, a presence we believe has laid the
foundation for peace and stability that has facilitated phenomenal
economic growth for all countries in the region. We plan to continue
that presence to ensure our allies and partners are free from coercion.
We call on all parties in the region--not just China--to resolve
disputes in a peaceful manner that is consistent with the rules-based
international system that has laid the foundation for peace and
security in the Asia-Pacific for the last 70 years and that includes
the freedom of navigation and overflight, unimpeded lawful commerce,
and the peaceful resolution of disputes.
As China's military capabilities have increased, we have not stood
still. As part of the Rebalance, the United States has further
strengthened our alliances with Japan, the Republic of Korea, and most
recently, with the Philippines where we signed an Enhanced Defense
Cooperation Agreement on April 11to increase bilateral cooperation and
long-term modernization of Filipino forces. We have also worked to
develop new defense partnerships with countries like Vietnam, Malaysia,
and Indonesia. We are now focusing on increasing the maritime security
capacity of our allies and partners in Southeast Asia.
We continue to work closely with partners in the region--and
China--to build a regional consensus behind the principles that
undergird this rules-based order. China has been selective in its
response. Elsewhere we are making notable progress. For example, in
February, the United States and ASEAN issued a joint statement at the
Sunnylands Special Leaders' Summit, which affirmed the shared
principles of freedom of navigation and overflight and unimpeded lawful
commerce, and affirmed the right of countries to pursue peaceful
resolution of disputes in accordance with international law and the
1982 Law of the Sea Convention. China has heard this international
chorus. It knows its actions are increasing China's isolation,
strengthening our alliances, and pushing others in the region into
security relationships with us. China will need to decide whether to
join us in supporting the established rule-based international order or
face greater instability and isolation.
We have noted China's recent military reorganization. Because of
the increasing interaction between our two militaries, the
administration has sought to pursue a constructive and productive
military-to-military relationship with China as one part of an overall
bilateral relationship capable of managing strategic differences,
addressing common global challenges, and advancing our shared
interests.
Question 6a. China has called for a ``dual track'' approach to the
North Korean challenge, involving negotiations over denuclearization on
one track, and negotiations over the replacement of the Korean
armistice with a peace agreement in a separate track. The Obama
administration has said that it will agree to return to comprehensive
negotiations only after North Korea takes the initial steps of freezing
its nuclear program and opening its nuclear facilities to international
inspectors.
If North Korea takes those steps, would the Obama administration be
willing to return to talks that include a peace treaty on their
agenda?
Answer. The United States has long made clear that we remain open
to authentic and credible negotiations based on the September 2005
Joint Statement agreement reached with all members of the Six-Party
Talks. The United States has long been committed to the full
implementation of all facets of the Joint Statement, including its core
goal of the verifiable denuclearization of the Korean Peninsula in a
peaceful manner and other issues, which includes the establishment of a
peace regime. But before we can enter such talks, North Korea must
first take concrete steps toward denuclearization and demonstrate its
willingness to live up to its commitments and international
obligations.
Question 6b. China has called for a ``dual track'' approach to the
North Korean challenge, involving negotiations over denuclearization on
one track, and negotiations over the replacement of the Korean
armistice with a peace agreement in a separate track. The Obama
administration has said that it will agree to return to comprehensive
negotiations only after North Korea takes the initial steps of freezing
its nuclear program and opening its nuclear facilities to international
inspectors.
How realistic is this scenario?
Answer. North Korea's track record indicates it is neither serious
about denuclearization or peace, nor that it would be a credible
negotiating partner. In 2016 alone, North Korea has committed a spate
of provocations, including conducting a nuclear test, launching a long-
range ballistic missile, testing a submarine-launched ballistic
missile, and conducting three mobile intermediate-range ballistic
missile launches.
Question 6c. China has called for a ``dual track'' approach to the
North Korean challenge, involving negotiations over denuclearization on
one track, and negotiations over the replacement of the Korean
armistice with a peace agreement in a separate track. The Obama
administration has said that it will agree to return to comprehensive
negotiations only after North Korea takes the initial steps of freezing
its nuclear program and opening its nuclear facilities to international
inspectors.
Do you agree with Assistant Secretary Russel's comments that North
Korea's efforts on a peace treaty are quote, ``diversionary
tactics to shift the international community away from
denuclearization''?
Answer. We should judge North Korea by its actions, not its empty
rhetoric. And North Korea's actions make clear that its purported
openness to peace treaty discussion is an attempt to deflect attention
away from the fact that the biggest obstacle to peace and regional
stability is the DPRK's continued pursuit of its nuclear and ballistic
missile programs; penchant for provocative, destabilizing behavior; and
failure to abide by its commitments and obligations.
Question 7. You delivered the United States' National Statement at
the March 2016 session of the U.N. Human Rights Council, in which you
expressed concern over China's domestic crackdown on human rights. In
the same council session, the US organized an unprecedented joint
statement on China-on behalf of 12 nations-criticizing China's
``deteriorating human rights record.''
Why do you think more nations did not sign on to this joint
statement on China?
China dismissed the statement as, quote, ``an attempt to interfere
in China's domestic affairs and judicial sovereignty under the
pretext of the human rights issue.''
What can the US do to overcome this ``judicial sovereignty''
argument globally?
Answer. China continues to pressure Human Rights Council (HRC)
members not to support any effort to highlight its deteriorating human
rights conditions. Although this tactic has been effective with some
members, the United States was joined by 11 countries in delivering the
first China-focused statement in the history of the HRC in March. We
consider this to be a significant accomplishment, and judging by the
reaction of the Chinese representative to the HRC, the Chinese too
regarded it as significant. We will continue to work with international
partners to call on China to uphold its laws and human rights
commitments and make clear that China cannot use the ``judicial
sovereignty'' argument to shirk its international obligations. The
Universal Declaration of Human Rights, to which China is a signatory,
stipulates that sovereignty does not provide a limitation on
fundamental freedoms.
Question 8. China's legislature is also set to pass a law
governing foreign NGOs, which would give the government broad latitude
to regulate activities and funding of foreign NGOs operating in China.
What can you tell us about the status of this law?
To what degree does the latest text address concerns raised by the
U.S. government and other U.S. entities?
Answer. The National People's Congress passed the Law on the
Management of Foreign NGO activities on April 28. Although sustained
U.S. engagement led to the law's passage being forestalled for over a
year and some objectionable provisions being eliminated, the final
version does retain problematic elements such as requiring foreign NGOs
to register with and submit to the supervision of the Ministry of
Public Security. The law also formalized criminal penalties for NGO
activities deemed illegal by Chinese authorities. The United States
will continue to work with likeminded countries as well as civil
society actors to now urge China to implement the law in a way that
addresses the concerns of the international community about the ability
of foreign NGOs to operate in China, before the law goes into effect
January 1, 2017.
Question 9. The State Department's most recent human rights report
criticizes China for its treatment of North Korean refugees. A
consistent issue is that China continues to consider all North Koreans
as ``economic migrants'' rather than refugees or asylum seekers, and
forcibly returned many of them to North Korea. The Chinese government
also continues to prevent the U.N. High Commissioner for Refugees
(UNHCR) from having access to North Korean and Burmese refugees in
China. Reports continue to show that various exploitation schemes
targeting North Korean refugees exist in China, such as forced
marriages, forced labor, and prostitution.
Can you tell me what is being done to press this issue of treatment
of North Korean refugees and asylum seekers with China? Are we
making any progress here?
Answer. The United States takes seriously reports of refoulement,
whether in China or elsewhere. Prior to April 2015, there were credible
reports that Chinese authorities forcibly repatriated North Koreans.
Since then, there have been no confirmed reports, but NGOs continue to
assert that repatriations occur along the China-DPRK border.
We continue to encourage the Government of China to provide
appropriate protections for North Korean refugees and asylum seekers,
including some who may have been victims of human trafficking.
Secretary Kerry has raised our concerns with Chinese officials on
multiple occasions, and Ambassador King, Special Envoy for North Korean
Human Rights, has reiterated these concerns with Chinese interlocutors
in Beijing and at the Human Rights Council in Geneva.
Question 10. On March 18, 2016, President Obama signed into law
legislation to require the Secretary of State to develop a strategy to
obtain observer status for Taiwan in INTERPOL. The host country for the
85th INTERPOL General Assembly this fall is Indonesia.
Has the State Department reached out yet to Indonesia on this
matter? When do you estimate the State Department's strategy
will be fully prepared?
What more can the State Department do to help Taiwan expand its
international space?
Answer. We remain committed to supporting Taiwan's membership in
organizations that do not require statehood and promoting its
meaningful participation in organizations where membership is not
possible. We fully support Taiwan's engagement with the International
Criminal Police Organization (INTERPOL), and we are continuing to
develop a strategy aimed at helping Taiwan obtain greater access to
INTERPOL resources, including observer status in the organization. We
will continue to coordinate with all of the relevant parties at
INTERPOL including this year's General Assembly host, Indonesia. It is
our belief that enabling Taiwan to directly interact with INTERPOL and
share pertinent information about criminals and suspicious activity
contributes to regional and international security.
In June 2015, the American Institute in Taiwan (AIT) and the Taipei
Economic and Cultural Representative Office in the United States
(TECRO) launched the Global Cooperation and Training Framework (GCTF),
an innovative initiative that showcases Taiwan's strengths and
expertise by addressing global and regional challenges. Through GCTF,
the U.S. and Taiwan jointly conduct high-impact training programs to
build the capacities of experts throughout the region in key areas. Our
priorities for this year include women's rights, global health, energy,
and information and communications technology. We have held four major
conferences under GCTF thus far, which have all helped Taiwan
strengthen its relationship with its neighbors and dedicate resources
to programs that increase regional stability.
Question 11. I appreciate our discussion regarding cybersecurity
concerns with China and implementation of the cyber security
commitments made between President Obama and President Xi in March of
this year, and I wanted to follow up on your offer to clarify your
answers on this subject. If you'll recall, during the hearing I posed a
question about specific cases testified to by Admiral Mike Rogers where
China continues to target and exploit key government, defense,
academic, and private computer networks.
Could you elaborate on these specific cases?
With the understanding that multiple agencies are involved in the
efforts to address the cybersecurity challenge from China,
could you tell us how the State Department is addressing the
challenge?
Answer. We refer you to our colleagues in the U.S. Intelligence
Community for information on the remarks by Admiral Rogers.
As two of the world's largest cyber actors, we believe that the
United States and China must have sustained policy engagement on cyber
issues, combined with meaningful practical cooperation, in order to
positively contribute to international stability in cyberspace. The
Strategic Security Dialogue (SSD)--which takes place just prior to the
Strategic and Economic Dialogue--has served as an important mechanism
to raise cyber issues of strategic importance, including activities of
concern that can lead to instability. Engagement via the SSD is
complemented by two new dialogues established by the cyber commitments:
a Senior Experts Group to discuss international security issues in
cyberspace and the law enforcement and network protection-focused Cyber
Ministerial, led for the United States by the Department of Justice and
Homeland Security.
As we move forward, we will continue to monitor China's cyber
activities closely and press China to abide by all of its September
2015 commitments as agreed to by President Obama and President Xi. We
have been clear with the Chinese government that we are watching to
ensure their words are matched by actions.
Question 12. We also spoke briefly on the discrepancies between
the public White House version of the September 2015 cyber agreement,
which includes four points, and the version circulated by China's state
news agency, Xinhua, which refers to a five-point agreement.
Is there in fact a fifth point in the agreement?
If so, why did the administration choose not to make public this
fifth point? (which appears to be related to the intrusion into
OPM)
Answer. We refer you to the White House Fact Sheet on President Xi
Jinping's State Visit to the United States, which outlines the U.S.-
China Cyber Commitments. The Department is happy to provide further
information in a classified setting.
Question 13. I would also like to follow up on what the
administration has learned from China in relation to the OPM intrusion?
Has China arrested suspects, as The Washington Post reported in
December 2015?
As you alluded in your testimony, when can Congress expect to see a
definitive report on this incident?
Will this report include action items for how the administration
plans to respond to this incident? To future incidents, should
they occur?
Answer. We are aware of Chinese media reports that China arrested
suspects and that they believed the incident was criminal in nature.
There is an ongoing investigation by the FBI over what happened in the
OPM incident. I refer you to FBI for the status of that investigation.
We will not comment on the attribution to specific actors.
Determining attribution is a complicated process, and publicly
identifying those actors, once identified, is a step that the U.S.
government will consider when we believe it will further our ability to
hold accountable those responsible for an incident.
Question 14. Today, China is the United States' second-largest
trading partner, its third-largest export market, its biggest source of
imports, and the largest foreign holder of U.S. debt in the form of
U.S. treasury securities, holding more than $1.3 trillion. China has
recently seen slowing growth which has caused them to invest more of
their foreign earnings domestically. However, the amount of U.S. debt
held by China still concerns me greatly. In 2011, Admiral Michael
Mullen said that the national debt is the greatest threat to our
nation.
How does China's holding of such a large portion of our debt impact
our decision-making with regard to security? Particularly with
security decisions in this increasingly violate region?
Answer. Foreign holdings of U.S. Treasury securities do not impact
our decision-making with regard to security; this includes China's
holdings. China holds U.S. Treasury securities for the same reason that
other investors do--for their safety and stability, and because the
market for Treasuries is deep, liquid, and not influenced by individual
decisions to buy or sell. Externally owned U.S. debt is held by a
diverse group of countries, and we are not overly reliant on any one
overseas holder of U.S. Treasury securities.
Question 15. At an estimated $365 billion in 2015, the U.S. trade
deficit with China is significantly larger than its trade deficit with
any other partner. One problem we face now is that we have gotten out
of balance on the trade front with China, and I'm concerned that this
lack of balance on trade is causing China to act out more aggressively.
Answer. U.S. consumer demand and China's continued role as an
exporter for a vast number of consumer and industrial goods for the
developed world are at the heart of the trade deficit. These are
structural problems in both our economies. China, as we have seen, has
made some attempt to shift from its reliance on export-led growth
toward increased domestic consumption. We continue to encourage China
to make the reforms necessary for this economic shift. In addition, we
are negotiating a Bilateral Investment Treaty that will greatly level
the playing field for U.S. investors and ensure that U.S. products and
services enjoy the necessary environment to increase our exports to
China.
Question 16. Do you think that increased trade and economic
dependency between our two nations might ease China's recent military
behavior?
Answer. Examples in the Asia region indicate that China's strong
economic ties with its neighbors do not preclude it from aggressive
military behavior. China's military growth and expansion are byproducts
of its economic development and growing international interests.
We welcome the rise of a peaceful and prosperous China that plays a
responsible role in the international community. We don't seek to
contain China, but rather seek to influence China's choices toward
acting as a responsible member of the international rules-based system.
We also recognize that in order to protect its citizens and its
expanding interests overseas, China will seek to modernize and develop
its military capabilities. We continue to encourage China to exhibit
transparency regarding its military capabilities and intentions.
[all]