[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


                                  
                         [H.A.S.C. No. 115-72]

                    STRATEGIC COMPETITION WITH CHINA

                               __________

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                           FEBRUARY 15, 2018


                                     
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                      COMMITTEE ON ARMED SERVICES
                     One Hundred Fifteenth Congress

             WILLIAM M. ``MAC'' THORNBERRY, Texas, Chairman

WALTER B. JONES, North Carolina      ADAM SMITH, Washington
JOE WILSON, South Carolina           ROBERT A. BRADY, Pennsylvania
FRANK A. LoBIONDO, New Jersey        SUSAN A. DAVIS, California
ROB BISHOP, Utah                     JAMES R. LANGEVIN, Rhode Island
MICHAEL R. TURNER, Ohio              RICK LARSEN, Washington
MIKE ROGERS, Alabama                 JIM COOPER, Tennessee
BILL SHUSTER, Pennsylvania           MADELEINE Z. BORDALLO, Guam
K. MICHAEL CONAWAY, Texas            JOE COURTNEY, Connecticut
DOUG LAMBORN, Colorado               NIKI TSONGAS, Massachusetts
ROBERT J. WITTMAN, Virginia          JOHN GARAMENDI, California
DUNCAN HUNTER, California            JACKIE SPEIER, California
MIKE COFFMAN, Colorado               MARC A. VEASEY, Texas
VICKY HARTZLER, Missouri             TULSI GABBARD, Hawaii
AUSTIN SCOTT, Georgia                BETO O'ROURKE, Texas
MO BROOKS, Alabama                   DONALD NORCROSS, New Jersey
PAUL COOK, California                RUBEN GALLEGO, Arizona
JIM BRIDENSTINE, Oklahoma            SETH MOULTON, Massachusetts
BRAD R. WENSTRUP, Ohio               COLLEEN HANABUSA, Hawaii
BRADLEY BYRNE, Alabama               CAROL SHEA-PORTER, New Hampshire
SAM GRAVES, Missouri                 JACKY ROSEN, Nevada
ELISE M. STEFANIK, New York          A. DONALD McEACHIN, Virginia
MARTHA McSALLY, Arizona              SALUD O. CARBAJAL, California
STEPHEN KNIGHT, California           ANTHONY G. BROWN, Maryland
STEVE RUSSELL, Oklahoma              STEPHANIE N. MURPHY, Florida
SCOTT DesJARLAIS, Tennessee          RO KHANNA, California
RALPH LEE ABRAHAM, Louisiana         TOM O'HALLERAN, Arizona
TRENT KELLY, Mississippi             THOMAS R. SUOZZI, New York
MIKE GALLAGHER, Wisconsin            JIMMY PANETTA, California
MATT GAETZ, Florida
DON BACON, Nebraska
JIM BANKS, Indiana
LIZ CHENEY, Wyoming
JODY B. HICE, Georgia

                      Jen Stewart, Staff Director
                  Kim Lehn, Professional Staff Member
                      William S. Johnson, Counsel
                         Britton Burkett, Clerk
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Thornberry, Hon. William M. ``Mac,'' a Representative from Texas, 
  Chairman, Committee on Armed Services..........................     1

                               WITNESSES

Friedberg, Aaron L., Professor of Politics and International 
  Affairs, Princeton University, Woodrow Wilson School...........     2
Ratner, Ely, Maurice R. Greenberg Senior Fellow for China 
  Studies, Council on Foreign Relations..........................     7

                                APPENDIX

Prepared Statements:

    Friedberg, Aaron L...........................................    40
    Ratner, Ely..................................................    53
    Smith, Hon. Adam, a Representative from Washington, Ranking 
      Member, Committee on Armed Services........................    38
    Thornberry, Hon. William M. ``Mac''..........................    37

Documents Submitted for the Record:

    Dr. Friedberg paper, ``NSC 68 Plus 68''......................    65

Witness Responses to Questions Asked During the Hearing:

    [There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

    Mr. Coffman..................................................    93
    Mr. Wilson...................................................    93
                    
                    
                    STRATEGIC COMPETITION WITH CHINA

                              ----------                              

                          House of Representatives,
                               Committee on Armed Services,
                       Washington, DC, Thursday, February 15, 2018.
    The committee met, pursuant to call, at 10:00 a.m., in room 
2118, Rayburn House Office Building, Hon. William M. ``Mac'' 
Thornberry (chairman of the committee) presiding.

  OPENING STATEMENT OF HON. WILLIAM M. ``MAC'' THORNBERRY, A 
    REPRESENTATIVE FROM TEXAS, CHAIRMAN, COMMITTEE ON ARMED 
                            SERVICES

    The Chairman. The committee will come to order. Today the 
committee meets to receive testimony on strategic competition 
with China.
    Following our hearing with Admiral Harris yesterday, I 
think it is a good time to hear additional perspectives, 
especially with the knowledge and expertise of today's 
witnesses. They are Dr. Aaron Friedberg, professor at Princeton 
University, and Dr. Ely Ratner, senior fellow at the Council on 
Foreign Relations. Both are long-time experts on China, and we 
thank you both for being with us today.
    As the National Defense Strategy points out, long-term 
strategic competition with China is a principal priority for 
the Department of Defense, requiring an investment and 
attention that is both increased and sustained. American 
security and American economic prosperity are both at stake.
    The National Defense Strategy states, quote, ``China is 
leveraging military modernization, influence operations, and 
predatory economics to coerce neighboring countries to reorder 
the Indo-Pacific region to their advantage. China continues its 
economic and military ascendance, asserting power through an 
all-of-nation long-term strategy,'' end quote.
    Countering China's all-of-nation strategy is a real 
challenge for us. In recent years, we have frequently read or 
heard admonitions to integrate all elements of America's 
national power--political, economic, and military--but we have 
not yet really done so.
    If China chooses a path of responsible participation in 
world affairs, we should welcome and encourage it. But the U.S. 
must also be ready, able, and willing, working with our allies 
and partners, to adjust to other choices that China may make.
    In his book, ``Destined for War,'' Graham Allison points to 
two difficult truths, and I quote: ``First, on the current 
trajectory, war between U.S. and China in the decades ahead is 
not just possible, but much more likely than currently 
recognized. Indeed, on the historical record, war is more 
likely than not. Second, war is not inevitable. History shows 
that major ruling powers can manage relations with rivals, even 
those that threaten to overtake them, without triggering a 
war.'' End of Dr. Allison's quote.
    The bottom line is, a lot is at stake. And I look forward 
to hearing the insights of our witnesses today, as we sort 
through these various issues.
    Let me yield to the gentlelady from California as the 
acting ranking member.
    [The prepared statement of Mr. Thornberry can be found in 
the Appendix on page 37.]
    Mrs. Davis. Thank you, Mr. Chairman. I will just go ahead 
and put Mr. Smith, ranking member's, comments in the record, 
and look forward to the testimony. Thank you very much.
    [The prepared statement of Mr. Smith can be found in the 
Appendix on page 38.]
    The Chairman. I thank the gentlelady. Again, I appreciate 
both witnesses being here. Without objection, your full written 
statements will be made part of the record. And also, without 
objection, a paper that Dr. Friedberg has written for the 
Office of Net Assessment on the strategy China, ``NSC 68 at 
68'' I think is the title, will also be made part of the 
record. And let me highly encourage members to read that, which 
I have. I think it gives us some very useful options for going 
forward.
    [The information referred to can be found in the Appendix 
on page 65.]
    The Chairman. Again, I appreciate both of you for being 
here. Dr. Friedberg, the floor is yours.

  STATEMENT OF AARON L. FRIEDBERG, PROFESSOR OF POLITICS AND 
  INTERNATIONAL AFFAIRS, PRINCETON UNIVERSITY, WOODROW WILSON 
                             SCHOOL

    Dr. Friedberg. Thank you very much, Chairman Thornberry, 
members of the committee. Thank you for inviting me to be here 
today. It is an honor for me.
    In the time available, I would like to try to make three 
main points. First, the strategy that this country has been 
pursuing towards China over the past 25 years has failed.
    Second, as the chairman mentioned, China is presently 
following a wide-ranging, whole-of-government or whole-of-
nation strategy that aims to displace the United States as the 
preponderant power in East Asia and I think ultimately the 
world.
    Third, meeting this challenge will require that we adopt a 
new and comprehensive strategy of our own, one that more 
effectively mobilizes, integrates, and applies all of the 
various instruments of our national power and also those of our 
partners. This is doable. And unfortunately, we have not done 
it yet. I don't think we are currently doing it adequately. 
Time is getting short.
    Let me expand briefly on each of these points. Following 
the end of the Cold War, the United States adopted a two-
pronged approach for dealing with China. On the one hand, we 
sought to engage China across all fronts, diplomatic, cultural, 
scientific, and above all, economic. But at the same time, 
successive U.S. administrations worked to maintain a favorable 
balance of power in the Asia-Pacific region. We strengthened 
our own forward-based forces. We bolstered our traditional 
alliances. And we built new quasi-alliance partnerships with 
other countries, like Singapore and more recently India.
    So we pursued a strategy that involved engagement on the 
one hand, but also balancing. And the goals of that two-pronged 
strategy were essentially to preserve stability while waiting 
for engagement effectively to work its magic on China. 
Engagement was supposed to encourage China's leaders to see 
their interests as lying in the maintenance and strengthening 
of the existing U.S.-led international order, while at the same 
time accelerating liberalization of its economy and eventually 
the democratization of its political system.
    Since the turn of the century, and especially in the last 
10 years, it is become increasingly evident that this approach 
has failed to achieve its objectives. China has obviously 
become far richer and stronger, but instead of loosening its 
grip, the country's Communist Party regime has become even more 
repressive and more militantly nationalistic. Instead of 
evolving towards a truly market-based economy, as it was hoped 
and expected, Beijing continues to pursue--and in certain 
respects has expanded--its use of state-directed, market-
distorting, mercantilist economic policies.
    And finally, China's external behavior, its attitude 
towards its neighbors and towards the United States, as well, 
has become assertive and even in certain respects aggressive. 
China's military build-up is beginning to tilt the balance of 
military power away from us and our allies and towards China, 
and I would say China is now quite clearly a revisionist power. 
It seeks to change important aspects of the existing order in 
Asia and increasingly the wider world, as well.
    And although all of these tendencies were present and have 
been present for some time, they were amplified by the effects 
of the financial crisis and even more by the rise to power of 
Xi Jinping in 2013.
    Regarding China's strategy, like their predecessors, Xi and 
his colleagues are driven by a mix of insecurity and ambition. 
They fear dissent, social instability, and political unrest, 
and they are convinced that the United States and its 
democratic allies are out to encircle their country and to 
undermine their regime.
    At the same time, especially since the crisis, the 
financial crisis of 2008, China's leaders have concluded that 
America is in decline, that their own power is on the rise, and 
that the moment has come for China to reclaim its rightful 
place in the world.
    But even this overall long-term confidence is tinged with 
uncertainty and a sense of urgency. China's rulers know that 
they face serious difficulties in sustaining economic growth 
and meeting the demands of an increasingly complex and rapidly 
aging society. And no matter what their propaganda organs say, 
they continue to have a healthy respect for the resilience and 
power of the American system.
    One reason that they are pressing so hard now, I think, is 
that they see a window of opportunity that may not stay open 
forever. They want to lock in the gains that they made and 
advance towards their goals. So what are those goals?
    First and foremost, to preserve the Chinese Communist 
Party's monopoly on domestic political power. I think 
everything they do at home and abroad is motivated by that 
desire. Second, to restore China to what they see as its 
rightful place as the preponderant power in eastern Eurasia, 
including both its continental and maritime domains. And, 
third, to become a truly global player with power, presence, 
and influence on par with, and eventually superior to, that of 
the United States.
    As suggested at the outset, China seeks to integrate all of 
the various instruments of its power in pursuit of these goals. 
I have discussed this in greater detail in my written testimony 
and in a longer paper that Chairman Thornberry kindly 
mentioned, that I have submitted for inclusion in the record.
    To sum up very briefly, I think Beijing is trying to use 
its expanding military capabilities to push the United States 
away from East Asia and to weaken our alliances. It is 
deploying diplomatic and economic tools in tandem to try to 
pull others towards China and to extend its influence in Asia 
and beyond. And last but not least, under Xi Jinping, China has 
become more aggressive in using information or political 
warfare to try to undermine and weaken the ability and resolve 
of other countries, including the United States, to resist its 
efforts.
    Although they have thus far met with mixed results, China's 
efforts are impressive in their scope and ambition and in the 
resources that they bring to bear. So how should the United 
States respond? Let me just touch on a few of the main points 
that I try to elaborate in the written testimony, focusing 
primarily on the regional as opposed to the global dimension of 
our strategy.
    First, if we are going to have a strategy, we have to be 
clear about what the objectives are, and the objectives that we 
pursued previously I think are for the time being out of reach. 
I think as a result our objectives are going to have to be 
defined for the time being in largely defensive terms, to 
prevent the direct physical or indirect economic and 
geopolitical domination by China of Eastern Eurasia, and 
especially maritime East Asia, and to preserve the openness of 
the global commons, especially the waters and airspace of the 
vast Indo-Pacific region that connect them to one another and 
to us.
    Regarding the means, to achieve these ends I don't think we 
have to abandon the mixed strategy that we have been pursuing 
since the end of the Cold War, but we are going to have to 
adjust the blend of its elements. We and our allies will have 
to intensify our joint efforts in maintaining a favorable 
balance of power, even as China continues to grow strong, while 
at the same time not cutting, but modulating and in certain 
respects constricting our present posture of open and 
essentially unconstrained engagement with China. This is what 
might be called a countervailing strategy, rather than a 
strategy of containment.
    In the military realm, we need to counter China's efforts 
to raise doubts about our ability and willingness to project 
and sustain power in the Western Pacific in order to uphold our 
alliances and ensure freedom of navigation, and we need to find 
ways of doing this that will allow us to regain the initiative 
in the long-term military competition, increasing the burdens 
that China has to bear relative to those of the United States 
and its allies. And obviously, this requires money, but even 
more I think it demands strategic innovation.
    Somewhat more concretely, we need to make progress in three 
interrelated areas--countering and offsetting China's expanding 
anti-access/area denial network. The previous administration 
talked about and began the process of implementing a so-called 
Air-Sea Battle doctrine that was withdrawn for various reasons. 
It is not clear to me what the replacement for that yet is, but 
I think there has to be one.
    Secondly, strengthening the capability and credibility of 
our extended nuclear guarantee. I think the administration's 
recent Nuclear Posture Review was a step in the right direction 
here.
    And strengthening the ability of our friends and allies to 
withstand Chinese attempts at coercion using its developing 
power projection capabilities, including its capabilities for 
the so-called gray zone, paramilitary capabilities.
    In the diplomatic domain, we need to strengthen and extend 
our network of alliance and quasi-alliance ties, even as China 
tries to weaken and fragment them. Bolstering the credibility 
of our military security guarantees is essential to that 
effort, but there is more that can and should be done. If we 
don't want others in the region to be drawn ever more closely 
into a Chinese-dominated economic co-prosperity sphere, we need 
to provide them with the greatest possible opportunity to 
remain engaged in mutually beneficial trade and investment with 
us and with one another, and that is why in my view the Trans-
Pacific Partnership was a good idea, certainly from a strategic 
perspective, and withdrawing from it I think sent a disturbing 
signal.
    One part of the line that China is pushing in Asia is that 
the United States is a declining power with an increasingly 
narrow view of its own interests and that its commitments are 
therefore unreliable. To counter this narrative, U.S. diplomacy 
should highlight the common values that link it with its major 
regional allies and strategic partners, including, I think, 
India and also Taiwan, as well as Japan, South Korea, 
Australia, and others.
    Aside from commercial interests or purely geopolitical 
concerns about physical security, these shared beliefs provide 
an enduring foundation for cooperation. And here are two. I 
think there is more that can and should be done.
    As regards the economic dimension of our countervailing 
strategy, I don't believe that we can any longer afford to 
treat China as just another trading partner. It is not, both 
because of its refusal to abandon mercantilist policy tools and 
because it has clearly become a strategic rival of the United 
States. And we need to adjust our approach to economic 
engagement with China to take account of these realities, and 
this in my view would involve, among other things, joining 
forces with other advanced industrial democracies to pressure 
China to modify or abandon some of its more egregious market-
distorting policies, doing more to maintain our edge in 
strategically relevant technologies, including both measures to 
stimulate innovation here, but also to slow the diffusion or 
transfer of critical technologies to China. In my view, the 
CFIUS [Committee on Foreign Investment in the United States] 
reform bill that is working its way through Congress is a step 
in the right direction here.
    We have to reduce our vulnerability to possible Chinese 
economic leverage and counter Chinese attempts to exert 
economic leverage over other nations, including through its so-
called Belt and Road initiative, and we have to take steps to 
maintain an adequate defense industrial base.
    Finally, our strategy for countering China's political 
warfare campaign must have both defensive and offensive 
elements. And I think it is going to have to involve both 
government and the private sector. Regarding the defensive side 
of the equation, we need to do more to prevent hostile foreign 
powers that do not share our values from exploiting the 
openness of our system. So, among other things, I think the 
Federal Government should invest more resources in domestic 
counterintelligence targeted at this particular problem, but 
private-sector organizations and institutions, too, including 
think tanks and universities will have to take much of the 
responsibility for countering foreign influence attempts that 
are inappropriately manipulative and intrusive, even if they 
are not flatly illegal. And the best defense against many of 
these techniques I think is transparency.
    In addition to strengthening its own defenses, the United 
States should assist friendly governments seeking to harden 
themselves against Chinese influence operations. I think we are 
already doing that, for example, with Australia.
    Finally, U.S. political warfare strategy must also include 
an offensive component that seeks to convey certain messages to 
our friends, to our allies, to neutral parties, and to the 
extent that they can be reached, to the Chinese people, as 
well. Despite its protestations of benign intent, the CCP 
[Chinese Communist Party] regime is engaged in activities on a 
massive scale that are aggressive, destabilizing, flout 
international norms, and impose disproportionate costs on other 
societies.
    Notwithstanding the impressive growth of its material 
power, China has numerous social, economic, and environmental 
problems, and absent significant changes in the character of 
its domestic political system, its continued rise, to say 
nothing of its ability eventually to dominate Asia, perhaps the 
world, are by no means inevitable.
    Whatever its other accomplishments, the Chinese political 
system is brutal, repressive and profoundly corrupt. The CCP 
enriches its own members and their families even as it denies 
ordinary Chinese people the right to express their opinions, to 
choose their leaders, and to worship as they see fit.
    Fearful of its own people, the CCP regime invests enormous 
resources in monitoring and trying to control their activities. 
And this is a sign of weakness and vulnerability, not of 
strength. And it is a fact that we need to take into account as 
we seek to recalibrate our strategy for engaging with China.
    Thank you very much.
    [The prepared statement of Dr. Friedberg can be found in 
the Appendix on page 40.]
    The Chairman. Thank you. Dr. Ratner.

STATEMENT OF ELY RATNER, MAURICE R. GREENBERG SENIOR FELLOW FOR 
          CHINA STUDIES, COUNCIL ON FOREIGN RELATIONS

    Dr. Ratner. Thank you, Chairman Thornberry, Ranking Member 
Smith, distinguished members of the committee. Thank you for 
the opportunity to testify today on a topic of vital importance 
to the future of the United States.
    Let me start my testimony with four top-line observations 
on what I see as the current state of the U.S.-China 
competition. Number one, the United States and China are, in 
fact, now locked in a geopolitical competition that will 
ultimately determine the rules, norms, and institutions that 
govern international relations in the coming decades.
    Number two, the United States on balance is currently 
losing this competition in ways that increase the likelihood 
not just of the erosion of the U.S.-led order, but also the 
rise of an illiberal China-dominated Asia and beyond.
    To be concrete, here is what this would mean for the United 
States: weaker alliances, fewer security partners, and a 
military forced to operate at greater distances; U.S. firms 
without access to leading technologies and markets and 
disadvantaged by unique standards, investment rules, and 
trading blocks; weak international and regional institutions 
unable to resist Chinese coercion; and a secular decline in 
democracy and individual freedoms around the world. The net 
result would be a less secure and less prosperous United States 
that is less able to exert power and influence in the world.
    Number three, the U.S. government has failed to approach 
this competition with anything approximating its importance for 
the country's future. Much of Washington remains unfocused on 
the China challenge, and although the Trump administration has 
sounded some of the right notes in its first National Security 
Strategy and National Defense Strategy, many of its foreign and 
domestic policies do not reflect a government committed to 
projecting or sustaining power and leadership in Asia and the 
world.
    Number four, despite these trends, the United States can 
still, in fact, arrest China's momentum and prevent the growth 
of an illiberal order in Asia and internationally. The 
foundations of American power are strong and we can preserve 
our interests and turn this thing around if we muster the 
necessary strategy, attention, and resources.
    Turning to recommendations for U.S. policy, I should 
underscore and agree with what Dr. Friedberg said at the 
outset, that succeeding in strategic competition with China 
will require a comprehensive whole-of-government policy across 
security, economics, politics, diplomacy, information, and 
ideology. These all interact with one another and actually 
cannot be separated out from each other.
    In my written testimony, I provide several policy 
recommendations for Congress to consider. Let me use just the 
balance of my time to highlight four specific issues for your 
attention.
    First, Congress should prioritize defense resources for the 
China challenge. Our military investments and the way we use 
the force should reflect the statement in the National Defense 
Strategy that inter-state strategic competition, not terrorism, 
is the primary concern in U.S. national security. This should 
include reducing our footprint in Afghanistan and the Middle 
East and shifting limited resources to the Pacific.
    We also need to ensure, as is definitively not the case 
today, that U.S. partners associated with the China challenge, 
as compared to those in other regions, are receiving an 
appropriate proportion of the U.S. defense trade and arms 
transfers.
    Second, it will be imperative for the United States to 
avoid wars of choice, especially with North Korea. A preventive 
war with North Korea would make it far more difficult, if not 
impossible, for the United States to succeed in a strategic 
competition with China. Put another way, a decision to attack 
North Korea to deny them a nuclear capability in the absence of 
an act of North Korean aggression would likely forfeit the 
strategic competition with China.
    Third, with respect to the economic competition, it is 
absolutely essential for the United States to rejoin the Trans-
Pacific Partnership. China's coercive power and influence are 
growing in the absence of U.S. economic leadership, and even a 
$1 trillion U.S. defense budget would not make up the 
difference if countries in the region perceive China as 
economically dominant and the center of the region's economic 
future.
    In response, the United States can't just be playing 
defense with CFIUS reform and export controls, as important as 
those efforts are. We need to play offense, with a multilateral 
initiative to strengthen the rules of the international trading 
and investment system.
    Fourth and finally, Mr. Chairman, Congress should increase 
support for U.S. information operations and strategic 
messaging. Ideology and information are going to be central to 
this competition in ways we have not experienced since the end 
of the Cold War. Congress should call upon the Broadcasting 
Board of Governors in Radio Free Asia to testify on what it 
would take to significantly expand their China-related content 
throughout the region and beyond to provide a counterweight to 
China's global propaganda operation.
    Related to this, as Dr. Friedberg mentioned, the United 
States should also work with like-minded partners to root out 
malign Chinese Communist Party influence operations that are 
shaping information and debates about China around the world. 
Alternatively, failing to address this information space will 
make it much more difficult to succeed in other areas of the 
competition.
    Mr. Chairman, thank you for the opportunity to be here 
today, and I look forward to your questions.
    [The prepared statement of Dr. Ratner can be found in the 
Appendix on page 53.]
    The Chairman. Thank you. Thank you both. There is a lot to 
pursue there. I just want to, I guess, ask one question. And 
that--and you have both talked about whole-of-government, 
everything is integral, we have got to do better. But I want to 
just pull out for a second the military aspect.
    So if China thinks that we are in decline, that there is a 
narrowing window of opportunity for them, to what extent does 
that reflect their perception of our willingness to spend on 
defense, our willingness to be innovative? What portion of this 
perception that we are in decline is military versus other 
economic, social, other aspects? Dr. Friedberg.
    Dr. Friedberg. Chinese spend a lot of time making these 
judgments and assessments. They devote enormous energy----
    The Chairman. Would you pull that microphone right in front 
of you, please?
    Dr. Friedberg. I am sorry. They take very seriously this 
process of trying to assess trends, long-term trends. I think 
the answer to your question, my own sense is that if they look 
now at the situation in the world and in the Western Pacific in 
particular, they don't have any illusions about our military 
superiority and the strength of our alliances and so on.
    But as they look over the longer term, and in particular as 
they assess those societal trends, the character of our 
political discourse, our economic dynamism, and so on, I think 
for those reasons they believe that these long-term trends are 
running in their favor and that our resolve may weaken before 
our actual capabilities weaken. So it is partly about the 
military balance, but it is more about the future and these 
longer-term trends.
    The Chairman. Okay, so explain to me if you would just the 
window of opportunity that you said they could see closing 
soon.
    Dr. Friedberg. Two aspects of this. The Chinese doctrine or 
discussion of the strategic environment and competition has 
included for some time the notion that China has a 20-year 
window of strategic opportunity that started in 2002. And the 
idea is that Chinese strategists at that point, I think in part 
because of 9/11 and their recognition that the United States 
was going to be preoccupied in other places with other 
problems, would have an opportunity, unharassed, to develop its 
power and increasing its influence, but they have never 
believed that that was going to go on forever and that the 
competition would intensify.
    I think a little more concretely and specially, I think 
they--as I mentioned--regard the 2008 financial crisis as a 
major setback for us and for our system and for the idea that 
we sort of know what we are doing, our confidence and our 
resources. And I think also as they look at our political 
discourse today and divisions in our country and difficulty in 
reaching consensus about a whole array of issues, they see 
that, too, as providing an opportunity and they want to take 
advantage of it.
    The Chairman. Okay, Dr. Ratner, to what extent does 
military play into this perception of us?
    Dr. Ratner. I guess I would agree with Dr. Friedberg. I 
think the Chinese still respect U.S. military power in and of 
itself. I think where they have come to doubt us is in our 
resolve and attention. And in the South China Sea, for 
instance, I think they have been surprised at how easily they 
have been able to build out their sphere of influence, in 
essence pushing on an open door, and leading to so much self-
deterrence on the United States and fear of confrontation.
    Mr. Chairman, I know you cited Graham Allison's book and 
the Thucydides trap in terms of concerns about conflict between 
rising powers. I am much more concerned that a Chinese sphere 
of influence, Chinese domination will result from a permissive 
environment that we create by our inattention, rather than 
conflict as a result of being too confrontational.
    And I would agree with Dr. Friedberg that the political and 
economic components of this related to at once the global 
financial crisis, but also the withdrawal of TPP [Trans-Pacific 
Partnership], compounded with some of the political dysfunction 
here in Washington, compounded with some of the diplomatic 
actions that the Trump administration has taken to withdraw 
U.S. leadership in the world, has created an opportunity that 
is more for them to fill a vacuum and avoid rather than even 
having to push the United States out of its leadership role.
    The Chairman. Thank you. Ranking Member.
    Mr. Smith. Thank you, Mr. Chairman, and thank you for your 
testimony. It was very well summarized and I think a good 
outline of the problem and the challenge.
    What countries in the Asia region do you think are most 
important for us in terms of building alliances to accomplish 
what we are talking about here? And I think you outlined it 
perfectly in terms of what China is trying to accomplish and 
why it is bad for us and bad for the globe. But it starts with 
the countries in the region, and the countries in the region 
are sort of trapped to some extent between--they have got a big 
powerful neighbor there. They may not like what they are doing, 
but how do they navigate that?
    What are the most important countries? And what should we 
do to try to strengthen those alliances to maintain our friends 
and power in the Asia region?
    Dr. Friedberg. I think among our five traditional 
alliances, our formal mutual defense treaties and alliances in 
the region, the most--the big three are probably Japan, 
certainly the most important in terms of resources, and I think 
also commitment to cooperating with us in trying to counter the 
growth of Chinese power, which they feel is very directly 
threatening to their interests and even their survival.
    The Republic of Korea certainly is still an important ally 
and partner of the United States, although I think the views in 
Korea about exactly what direction they want to go are perhaps 
more in play than is the case in Japan.
    Australia, which has stepped up and really is playing a 
very important role I think in assisting us. It would be good 
if we had more cooperation, for example, from the Philippines 
in order to enable us better to counter what the Chinese are 
trying to do in the South China Sea. It would be good to have 
access to facilities and more active cooperation, perhaps, than 
we have had.
    Non-alliance countries or countries to whom we don't extend 
a security guarantee are also important. Singapore has played a 
major role in helping us to maintain our naval presence in the 
region, and India I think in the long run, too, because of its 
resources and its attitude towards the region and towards 
China, and because of our ideological commonality will be a 
critically important partner, although there our relationship 
is really just getting going.
    The issues I think differ in each case, but I think overall 
it is important for us to convey the sense that we are not 
going anywhere, we intend to stay in the region, to remain 
strong, and to help our allies to defend themselves. I think 
there are opportunities for expanded defense cooperation, 
certainly with Japan.
    There is something that is happening in the region I would 
say not in spite of us, but aside from what we are doing, which 
I think is very positive, which is that countries with whom we 
have sort of bilateral relationships are also now talking to 
one another and trying to cooperate more closely on strategic 
issues, Japan with India, for example, or Australia with India. 
Those are tendencies, too, that we should be encouraging.
    But I think it would be a mistake to believe that somehow 
the balance of power is going to be maintained automatically 
because these countries fear China. They do. They want to 
maintain their autonomy. But they look to us for leadership. I 
think no one in the region believes that they can maintain a 
balance without us. We need to make sure that they believe that 
we will be there with them.
    Dr. Ratner. Yes, my list would be similar to your specific 
question about which partners. I think Australia, Japan, and 
South Korea are clearly among the five, the most central to our 
security network in East Asia, and finding a way to keep the 
Philippine relationship survivable through this period with 
President Duterte will be really important, because we have an 
important historical and economic relationship with them, and 
they occupy a really important piece of geography. So we ought 
to keep our eye on that relationship, as well.
    In terms of non-ally countries, I would echo Singapore and 
India. I would add to that list Indonesia and Vietnam. I think 
these are countries, Mr. Congressman--and I believe yesterday 
you described them before Admiral Harris as fence-sitters. I 
think that is a good description. And I think these are 
countries that don't want to live in a China-dominated Asia, 
but if push comes to shove, they will.
    And they will--if they don't see an economic alternative 
and a security alternative, I think they will hold their nose 
and live within a China-dominated order. So I think there is 
opportunity there. On the economic side, you know, clearly, 
again, providing alternatives to a China-dominated centric 
economic order is going to be really important. And if the 
Trans-Pacific Partnership is not politically possible right 
now, then the Trump administration needs to be coming forward 
with some bold and ambitious initiatives, some of which I think 
are germinating but none of which have appeared yet.
    And on the security front, I would say, again, as I said in 
my oral testimony, I think we need to--if you look at the 
balance of the degrees to which we are building partner 
capacity in Asia versus other regions, it is quite 
disproportionately low. And so, for instance, the marquee 
initiative of the Asia Maritime Transparency Initiative--or, 
sorry, the major capacity-building initiative in Southeast 
Asia, I think this was $450 million or $425 million over 5 
years, at a time when we are spending north of $5 billion or 
$10 billion in Afghanistan, does not look to me like a country 
that again, according to the National Security Strategy, is 
placing the China challenge at the top of its U.S. national 
security interest.
    Mr. Smith. Okay, thank you both. Thank you, Mr. Chairman.
    The Chairman. Mr. Wilson is recognized for 5 minutes.
    Mr. Wilson. Thank you, Mr. Chairman. Dr. Friedberg, I agree 
with you that China appreciates the resilience and power of the 
United States. I have had the opportunity to go on delegations 
to China. It was really meaningful to me. My dad served in the 
Flying Tigers in World War II. He developed a great affection 
for the Chinese people and he hoped for the best for them.
    And then on my visits there, I have been at public 
presentations. I have also seen the monuments placed in 
recognition of the American military which served there during 
World War II, which they professed to me over and over again 
saved hundreds of thousands of lives of innocent Chinese 
civilians. So I have seen a positive.
    But at the same time, as I believe it will be mutually 
beneficial for China and America to be partners, we have a 
circumstance--and this is for both of you--of Chinese 
propaganda operations in the United States. And that is 
specifically I would like to hear your thoughts concerning the 
Confucius Institutes and the role they perform for the Chinese 
government within America.
    Since 2005, more than 100 Confucius Institutes have opened 
at American colleges and universities. Last year, the number of 
Confucius Institutes in the world rose by 40 percent. They are 
funded by the Chinese Government's Ministry of Education, and 
in 2009, the head of the propaganda for the Chinese Communist 
Party called the Confucius Institutes, quote, ``an important 
part of China's overseas propaganda set-up,'' end of quote.
    Some of these universities also host research center 
laboratories with the U.S. Department of Defense, where they 
conduct highly sensitive research. For each of you, do you 
believe the Confucius Institutes pose a threat to university-
affiliated research center laboratories which conduct highly 
sensitive research on behalf of the Department of Defense?
    Dr. Friedberg. Thank you. I agree the Chinese operations, 
information operations, propaganda, political warfare as they 
use the term, are pervasive in democratic societies, including 
our own, and I think we are just starting to pay adequate 
attention to this.
    Confucius Institutes originally were presented as 
mechanisms for encouraging Chinese language education in the 
United States and for introducing students and others to 
Chinese culture. They appear benign, and I suppose in some 
sense, some of their activities might be, but as you mentioned, 
they have this tie to the Chinese regime. They have also 
allegedly in a number of instances played a role in shaping 
discussion on college campuses and elsewhere of issues related 
to China and suppressing the expression of some views that the 
Chinese regime finds offensive.
    I think one of the features of the Confucius Institutes 
that has now aroused the greatest concern is that they in many 
cases involved essentially secret covenants between the funders 
and the host institutions, the universities, signed agreements 
that were not made public. And so there has been a kind of 
backlash against this, and I think on balance that is a good 
thing.
    There is another--there are several other sets of issues 
that you mentioned about research cooperation, about the role 
of Chinese students, visiting faculty at universities, and what 
risks that may pose, and the director of the FBI [Federal 
Bureau of Investigation] I think raised some questions about 
this in testimony before the Senate Intelligence Committee. 
Those are obviously very sensitive questions.
    I think there is a problem here. We have to be careful how 
we deal with it so that we are dealing fairly with students who 
come to this country and also people who may be of Chinese 
ethnicity that are American citizens and should not be exposed 
to prejudice or accused of things that they are not guilty of.
    There is also another aspect--if I could just very briefly 
touch on it--which I think may be more important than all of 
this, which is the nature of the relationships between Chinese 
and American businesses. Chinese investment in the United 
States, the pressure that the regime has put on American and 
other foreign companies to transfer advanced technology to 
China in order to have access to the Chinese market, that I 
think is a real and pressing area of strategic concern, as 
well.
    Mr. Wilson. Thank you. And Dr. Ratner.
    Dr. Ratner. Yes, I would only add that I think transparency 
is the answer here. I think to the degree that, you know, 
universities should be responsible and held accountable to both 
making public the amount of money that they are receiving from 
the Chinese Government, as well as what the specifics of those 
arrangements are, and to the extent that those deals are made 
public, I think the record of the last several months and years 
has been that they get corrected, again, sort of through 
transparency.
    And I would just add, I think the university issue is an 
important area, but I would agree with Dr. Friedberg that I 
think we do need a broader conversation about the role of the 
private sector in this discussion, as well as the role of the 
U.S. media and self-censorship, as well as the entertainment 
industry in the United States. So this isn't just a problem in 
universities.
    Mr. Wilson. Thank you very much.
    The Chairman. Ms. Davis.
    Mrs. Davis. Thank you, Mr. Chairman. And thank you both for 
joining with us today. I don't know if you happened to see the 
testimony yesterday, but Admiral Harris told the committee that 
he thinks North Korea's Kim Jong-un seeks to reunify the Korean 
Peninsula under his control, thinking about his grandfather, 
his father, and their failure to do that.
    So he is really--suggesting that he is on a path to achieve 
a united Korean Peninsula that is subject to Kim and the 
Communist regime. I wondered if you agree with that position or 
whether you think Kim Jong-un is motivated only by regime 
survival. What do you think China believes that his intentions 
are?
    Dr. Friedberg. Based on what I know about North Korea--and 
that was an issue that I worked on when I was in the government 
in the George W. Bush administration--I agree with Admiral 
Harris. I think that has been the goal of the North Korean 
regime going back to its founding. Kim Jong-un is not different 
in that regard, although he has capabilities that his father 
and grandfather sought, but had not yet acquired, and that 
makes him a greater threat.
    So, yes, I don't think he is intending just to survive. I 
think in his dreams he imagines being the great unifier of 
Korea. I do not think that that is plausible. I think we have 
to make sure that we deter any effort to achieve that through 
the use of coercion or force, but we have to be aware that 
those, in fact, are the objectives of the regime. It may appear 
crazy to us, but I don't think it is to Kim Jong-un or to the 
people around him.
    I think the Chinese assessment of North Korea is in flux. 
There is no love lost between the Chinese regime and the 
present North Korean regime. I think they are worried and 
annoyed at the things that he has done to provoke the United 
States, in part because they fear that is going to strengthen 
our defense position and our alliances there; but I think, 
unfortunately, the record shows that the Chinese regime is 
simply not willing to apply the kind of pressure that they 
could conceivably to North Korea to reach what we would regard 
as a satisfactory resolution of this standoff.
    Mrs. Davis. Yes. Dr. Ratner.
    Dr. Ratner. Yes, I am going to slightly disagree here. I 
think my answer to the question of what are Kim Jong-un's 
intensions is we don't know. And I think I would be a little 
cautious about--I mean, I think people have instincts and 
guesses. I would be cautious about anyone stating with 
certainty.
    I spent the last 2 years of the Obama administration in the 
White House seeing and reading all sorts of U.S. intelligence. 
I didn't come to that conclusion. And I think we ought to be 
cautious about doing so.
    I also think his intentions may change, and that is 
something we should keep an eye on. As capabilities grow, 
intentions grow, as well, so it is not impossible. But I think 
what we have seen so far suggests to me that a policy of 
deterrence and containment is the appropriate approach right 
now, given what would be the terrible costs of preventive war.
    Mrs. Davis. And China's view of his intentions? The same?
    Dr. Ratner. I don't know about China's views of his 
intentions. I think China is looking out for its own interests, 
which is stability, and they are going to do whatever they can 
to prevent conflict on the peninsula. And I think that is what 
we have seen so far; so they are engaging in a constant 
balancing act between applying enough pressure to keep the 
Trump administration at bay without so much pressure as to 
potentially destabilize the regime. So I think they have tried 
to stay in that box so far.
    Mrs. Davis. Thank you. I wanted to just--one other 
question. I mean, we all talk about the difference between our 
open system and obviously their closed system in that sense. So 
they have some cultural vulnerabilities, as well.
    How can we better leverage some of those weaknesses in 
strategic competition with them? And I am thinking about, 
obviously, the violation of human rights, freedom of 
expression, adherence to the rule of law. How do we leverage 
that? And what kind of job are we doing?
    Dr. Friedberg. I think that is a crucial question and an 
extremely difficult one to answer, especially as China has 
gotten richer and more powerful. But overall, it seems to me 
that it is a mistake for us to back away from talking about 
these issues, raising these issues, raising them in a general 
way in public, raising them with our Chinese counterparts.
    I think we have become more and more wary about doing that 
as China has grown richer and stronger. And that is a mistake. 
Now, to believe that we can directly or even indirectly have a 
major influence on the course of the evolution of this vast 
society and complex political system is an illusion. It is one 
that I think underpinned our strategy for a long time.
    I guess I would say just generally, we have to continue to 
believe in the things that we believe in, and not seem to have 
doubts about the values on which our system is based.
    I guess one last thing. We talk sometimes about American 
values, but in fact our system is founded on what we believe to 
be universal values. It is not our system. It is our belief in 
the sanctity of the individual and all that follows from that. 
And we have to make sure that people understand that we do 
believe in those things.
    Mrs. Davis. Thank you.
    The Chairman. Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman. I would like to thank 
our witnesses for joining us.
    Dr. Friedberg, I would like to go to you first. In your 
testimony, you point to China's operations in the South China 
Sea. You talk specifically about what they have done in 
expansion areas there. We know some of those islands are as big 
as Washington, DC.
    We also know that they have unveiled a new dredging, reef-
building, island-building ship called the Tiankun. And it can 
dredge up to 211 cubic feet of material every hour. That is 
two-and-a-half Olympic-sized swimming pools. Pretty amazing. We 
think with that they can build up to nine additional islands, 
fortify--or nine new islands, fortify existing islands, which 
really to me reinforces their intent to dominate--not just have 
a presence, but to dominate the South China Sea area, to push 
others out.
    And I want to go to your testimony where you say the true 
significance of these islands in the South China Sea may lie 
not in whatever role they might play in future conflict, but in 
the seemingly inability or unwillingness of the United States 
to prevent them from being built. I think that is a great 
point.
    Give me your perspective about what we clearly see from 
China and their efforts to expand and fortify this island 
chain. What does that mean to the United States? And what can 
we do currently to dissuade them or to stop that current 
effort?
    Dr. Friedberg. Thank you very much. Yes, China is I think 
trying now vigorously to assert longstanding claims to control 
virtually all of the water surface features, resources of the 
South China Sea. And they are doing it through the use of a 
variety of means, including this creation of artificial 
islands.
    In my view, as I mentioned in the testimony, as you quoted, 
the significance of this in part was to demonstrate that they 
could do it and we were not willing to stop them. And I think 
they kept on going because we did not have a very strong 
response.
    I do not think we can undo this. And probably we are not 
going to be able to significantly slow or prevent them from 
continuing with it. But what does it mean in the longer run? 
They are going to create these positions. These will enable 
them better to project and to maintain military power and a 
presence across this entire region.
    The significance of these fortified islands in a conflict 
with the United States or a big power is probably not great. 
They are very vulnerable. They could be easily destroyed in the 
opening stages of a conflict. Their significance in a possible 
confrontation with only the local powers, however, would be 
great.
    As far as what we can do about it, I think probably there 
are layers to the answer. One is, we have to make sure that we 
are able to maintain ourselves a more or less continuous 
presence in that region. We both mentioned the value of the 
Philippines and access to the Philippines for this purpose.
    In the long run, we have to develop and help our allies to 
acquire capabilities that could be used to neutralize some of 
the capabilities that the Chinese are developing in the region. 
But part of what we need to do is symbolic, but nonetheless 
important for being so.
    We need to deny the existence or not accept the reality of 
any attempt by the Chinese to impose zones of exclusion in the 
air or on the sea that exceed what they are entitled to under 
international law. So we need to demonstrate, and our friends 
and allies, too, our willingness to sail and fly wherever 
international law permits.
    We have done that in a rather sporadic way. I think we have 
called great attention to what we intended to do, and then we 
have not necessarily followed through. But there are a lot of 
other countries that share our concern. The British just sent a 
British Royal Navy vessel to sail through these waters. The 
French have expressed some interest in doing it. The regional 
countries, as well. We should be working with our partners to 
make sure that on any given day there are ships and aircraft 
passing through this zone, regardless of what the Chinese say.
    Mr. Wittman. Very good, thanks. Dr. Ratner, I want to go to 
your testimony where you talked about the efforts of China to 
reduce U.S. influence in the Indo-Pacific region and to exclude 
in certain areas, push us out. Give me your perspective on the 
things that China is doing now to exacerbate that even more, to 
make us stand off even further distances.
    With the development of hypersonics, you know, they are 
developing the DF-17, which has an extended range out to 2,300 
kilometers. Give us your perspective on what they are doing 
there and the continued effort to push us out, to exclude us in 
those areas, and hold at risk our assets in that region and 
where they are with the advancement of this very troubling 
technology.
    Dr. Ratner. I think that is right, Mr. Congressman, and it 
is really a whole suite of military capabilities that they have 
been developing that have made it increasingly risky for us to 
project power into the Western Pacific. And I think that is a 
real problem, politically, as well. They are driving divisions 
between us and our allies, undermining our partnerships with 
other countries, and economically, as well, through the Belt 
and Road initiative.
    So I would look at this very comprehensively. I think the 
military piece is important, but it is one of a much larger 
puzzle.
    Mr. Wittman. Very good. Thank you, Mr. Chairman. I yield 
back.
    The Chairman. Mr. Cooper.
    Mr. Cooper. Thank you, Mr. Chairman. And I would like to 
thank the witnesses, as well. Wanted to reiterate the point 
that both of them made, that the TPP agreement is in the United 
States best interests. And it sounds like both witnesses 
strongly supported bringing that agreement to fruition.
    When Dr. Friedberg opened his statement, he said 
unequivocally that U.S. policy toward China had failed. That 
sounds like you were too polite to say that we are now in the 
post-Kissinger era. Was Dr. Kissinger naive perhaps?
    Dr. Friedberg. Dr. Kissinger is many things, but naive is 
not one of those things.
    Mr. Cooper. Well, wrong then.
    Dr. Friedberg. No, I think we made a bet. We had a strategy 
that was based on a certain set of assumptions that were not 
entirely unreasonable, that through engaging China we could 
encourage favorable trends that would lead ultimately to its 
transformation.
    Thinking back to when we really decided particularly on the 
economic front to pursue that element of our strategy, it is in 
the immediate aftermath of the end of the Cold War, the early 
1990s. I think there was a belief that authoritarian regimes 
were on the way out and that there would be change quickly in 
China. This is also in the wake of Tiananmen, so it didn't seem 
like it was so far-fetched.
    The problem is that we became addicted economically and I 
think in a sense psychologically, as well, to the idea that 
simply continuing what we were doing would achieve these 
desirable strategic effects. It was economically beneficial to 
some sectors in our economy, although clearly not to others. 
And it appeared to be the reasonable thing to do. It wasn't 
obvious what the alternative was.
    So it is difficult for me looking back to fault people for 
making those choices. I guess the problem was and remains our 
unwillingness to acknowledge the accumulating evidence of the 
reality of what has been happening in China and our difficulty, 
which continues down to the present, of--in wrestling with the 
question of how we now want to, as I said, modulate, and in 
certain respects constrict our engagement.
    We are having great difficulty with that. We seem to be in 
a world where we think it is one thing or the other. We are 
either completely open or somehow completely closed. And nobody 
wants to be completely closed. And I think that is one of the 
greatest challenges we face. Reform of our system for 
overseeing foreign direct investment is part of this, but there 
are a broader set of questions about the character of our 
trade, about technology transfer, investment by American firms 
in China, that we have really just started to deal with.
    And we haven't made a lot of progress on that. And it is 
going to be difficult. There are a lot of interests, a lot of 
people who don't want any of that to change.
    Mr. Cooper. Dr. Ratner.
    Dr. Ratner. Yes, Congressman, I have an article just out 
this week in Foreign Affairs magazine with the former Assistant 
Secretary of State Kurt Campbell that makes this precise 
argument that the assumptions that undergirded our strategy 
since the end of the Cold War simply haven't panned out across 
how our combination of balancing and engagement would lead to 
China's evolution of economic opening, political opening, some 
degree of willingness to live within the U.S.-led security 
order in Asia, and then how China would behave in terms of 
integrating into the international liberal order.
    So I think what we are seeing today in terms of the 
National Defense Strategy and the National Security Strategy, I 
think we would have seen a version of this under a President 
Hillary Clinton, as well. So I don't think this is exclusive to 
President Trump or a Republican administration. I think we are 
at a moment of reckoning in our U.S.-China strategy, and I 
think we are wrestling now with, okay, we see the cognitive 
dissonance between what our expectations were and what the 
reality is, and what do we do next and how do we gear up for 
this competition?
    And again, I would just say I think the--I support the 
Trump administration strategy documents, yet it would be good 
to see them filling out in the other components of U.S. policy 
to gear up for that competition.
    Mr. Cooper. My time is running out. Any thoughts on the 
future of Hong Kong or Taiwan?
    Dr. Friedberg. I think the question of the future of Hong 
Kong has effectively been answered. The Beijing regime is 
increasing its grip on Hong Kong and suppressing efforts to 
maintain autonomy, although they haven't completed that yet.
    The question of the future of Taiwan remains very much 
open. It is clear that the Beijing regime wants eventually to 
bring Taiwan under its control, and for the most part the 
people of Taiwan resist that. That is not a change. I think the 
problem is that the balance of power is shifting, and China's 
capabilities for forcibly imposing such a resolution to this 
longstanding standoff are growing, and that is a problem that 
we are going to have to face.
    The Chairman. Ms. Hartzler.
    Mrs. Hartzler. Thank you. Dr. Ratner, I would be interested 
in your thoughts on the South China Sea. You said in your 
testimony that you think China was surprised at how quickly 
they were able to do it and the little resistance we got. What 
do you think we should have done? And/or most importantly, what 
do you think we should do now?
    Dr. Ratner. Thank you, Congresswoman. I have written 
extensively on this issue. I think given where we are now, we 
can Monday morning quarterback about what we should have done 5 
years ago. I think where we are now, I think we need to 
transition from a policy that was predicated on trying to 
restrain China through international law and dialogue to a 
policy predicated on militarizing the South China Sea on our 
own terms.
    And that means in terms of the U.S. military, but also in 
terms of how we are going about building partner capacity among 
the other claimants and to what end, in terms of helping them 
build their own anti-access/area denial capabilities, turning 
China's military strategy on its head, and giving these 
countries counter-intervention capabilities.
    I will say, though, that that strategy won't work unless 
the United States is viewed as a leader on economics and 
diplomacy, as well, because countries are going to be and 
already are increasingly reluctant to stick their necks out if 
they think that the future of the Asian economy is going to be 
with China and they will be punished or left out of opportunity 
for partnering with the United States or resisting China.
    So I think there has to be an economic component to this. 
An informational component, as well. There is a very specific 
recommendation in my written testimony encouraging Congress to 
include a provision in the 2019 NDAA [National Defense 
Authorization Act] to require the State Department to produce a 
public report, quarterly report on Chinese activities in the 
South China Sea. I think we need to be putting this information 
and the images we have on the front pages of regional 
newspapers. We are not doing that, and it is making it easier 
for regional governments to turn the other cheek, to turn a 
blind eye to this.
    Mrs. Hartzler. That builds on one of my questions. I think 
you have answered it. Does the United States have a strategic 
communications strategy to counter China? And what would an 
effective one look like? So anything you want to expound on 
that?
    Dr. Ratner. I think currently we are not focused on this 
area, and we absolutely will have to be, given the billions of 
dollars that China invests in shaping the narrative on the 
South China Sea. But the rest of the region, as well.
    But as it relates to the South China Sea, they have been 
very effective selling a story of calm and only outside 
disturbance and influence, and that has led to ASEAN 
[Association of Southeast Asian Nations] and other regional 
institutions being willing to back off this issue. So we should 
be very focused on the information side of this.
    Mrs. Hartzler. And not just on South China Sea. My question 
is broader. I don't think most Americans know all of the whole-
of-country plan that they have, and One Belt, One Road, and 
everything else. But last year, the South China Morning Post 
published an article describing efforts by China to exploit and 
gain access to U.S. nuclear weapons research by luring 
scientists back to China through financial incentives, appeals 
to patriotism, and the promise of better jobs.
    So in an annual report to Congress, the Department of 
Defense noted that China is actively pursuing an intensive 
campaign to gain access to U.S. technology by using Chinese 
nationals such as students or researchers who are studying at 
U.S. universities and working in U.S. labs. What can Congress 
do to help the Department of Defense and the Department of 
Energy mitigate this very serious threat to our national 
security?
    Dr. Friedberg. There is a--I mean, there are activities 
that have to do with classified information and projects which 
presumably are protected or should be protected from 
participation by people who don't have appropriate clearances 
and aren't supposed to have access. That is a job that we 
should be doing.
    I think, in fact, historically there are some examples 
where we seem to have failed and the Chinese in one way or 
another have gained access to information that has allowed them 
to move forward more quickly in developing their nuclear 
capabilities and others. So there is a counterintelligence 
issue.
    I think the more difficult problem lies in areas of so-
called dual-use technology or emerging technologies that are 
being developed initially for commercial reasons, but which 
clearly have enormous potential for development of military 
systems, things like artificial intelligence, robotics, big 
data analytics, and so on. That seems to me to be the most 
difficult problem.
    And that is also something that has--in my understanding, 
at least, has not been adequately covered by the mechanisms 
that we have for reviewing proposed investments by Chinese 
firms or firms that are linked by one step or two steps to 
China. And we have to scrutinize those and probably regulate 
them more carefully than we have in the past. If it is possible 
for venture capital firms to come and buy up start-ups that are 
doing work that may have enormous strategic significance, that 
is a problem for our security.
    There will be objections to that, because it also involves 
commerce and openness. We don't want to shut ourselves off. But 
I think we have to start by looking at what is actually going 
on.
    The Chairman. Ms. Hanabusa.
    Ms. Hanabusa. Thank you, Mr. Chairman. Dr. Friedberg, the 
interesting thing about one of the publications that you 
attached is the concept of the NSC 68, which seems to be the 
genesis of the Cold War philosophy. And though you seem to have 
different points as to why it may not be as applicable, people 
do find an analogy to what is going on with China with what 
happened back then.
    I guess my interest is more along the lines of, one of the 
confusions that I think people have is, what exactly is the 
Trump administration's position on isolationism? Which was, as 
you know, the genesis of the beginning of the whole Cold War 
discussion. You know, are we going to actively pursue in the 
Indo-Pacific or Asia-Pacific region? Or are we going to simply 
just react, which seems to be kind of the mode that we are in?
    I believe if you heard Admiral Harris' testimony yesterday, 
one of the things that he keeps warning about is the fact that 
we created--the United States created a period of calm and sort 
of stability within Asia-Pacific and the beneficiary was China, 
not us. It was China. As a matter of fact, the whole concept of 
the pivot to Asia-Pacific was because the perception is we 
pivoted away and we concentrated on the Middle East instead.
    And in the meantime, China grew, because there was no one 
there to keep China in check. So I would like to get a better 
sense of what you meant or why you even put in NSC 68. It seems 
to be there to prompt the discussion, and I am concerned about 
the isolationism issue.
    Dr. Friedberg. Thank you very much. Yes, I used the 
reference to NSC 68 for exactly the reason that you indicate. 
This is--the situations are not entirely comparable. In fact, 
they differ in many ways. But it seems to me we are probably in 
a period that resembles the one that we were in back in the 
late 1940s and maybe down to 1950, where we are not certain 
exactly what the character of our relationship is going to be 
with this new emerging power, but there is increasing concern 
about it, and where we have not yet reached national consensus 
on how we are going to respond and what our strategy is going 
to be.
    Now, the analogy breaks down, because I think the situation 
is different and the strategy has to be different. But it seems 
to me, as I said before, we have to find a position that is 
somewhere in between true containment, Cold War attempts to cut 
off trade and technology and so on--that is not going to 
happen--something between that and doing what we are doing now, 
which is not adequately defending our interests.
    As far as----
    Ms. Hanabusa. If I may just interrupt you there. But, see, 
Dr. Friedberg, the reason why it seems to be so analogous is 
that what our emphasis seems to be, especially with the release 
of the new NPR [Nuclear Posture Review], we seem to be going 
back to the triad and the whole issue of our dominance or our 
position militarily in the region seems to be shifting to 
nuclear.
    And as a result of that, that is where I believe that the 
analogy also comes into play, if you would like to continue.
    Dr. Friedberg. On the nuclear issue, that is part of the 
equation. We have to, I think, do things to make sure that not 
only China, but Russia, too--Chinese and Russian leaders don't 
believe that they could use nuclear weapons in some limited way 
and we would not have an adequate response, and I think that is 
part of what the Nuclear Posture Review is getting at.
    But I think the other levels of our capability, including 
in particular our conventional capability, are extremely 
important here and in fact probably in some ways more 
important. I mentioned the anti-access/area denial problem. We 
had a question about this. This is something that we have 
recognized now for over a decade, but we have not really I 
think fully and adequately addressed it.
    I mentioned Air-Sea Battle. It had its problems, but it was 
a public and comprehensible response to a real problem. And I 
think whatever we are doing in secret in our war plans and our 
weapons development, at some point we have to be able to tell a 
story to our allies, to our own people, to China, about what 
our military strategy is going to be and why we think it is 
going to work. We did that in the Cold War. We had so-called 
flexible response.
    Ms. Hanabusa. So, Doctor, you agree that we are not being 
very clear as to where we are standing on all of this and what 
our position is in the Indo-Pacific area?
    Dr. Friedberg. We are not being clear enough. I think we 
are starting to get greater clarity, but we are not close to 
where we need to be.
    Ms. Hanabusa. Thank you very much. Mr. Chair, I yield back.
    The Chairman. Mr. Gaetz.
    Mr. Gaetz. Thank you, Mr. Chairman. I wanted to ask about 
China's systemic strategy of intellectual property theft, 
particularly at college campuses. You have each spoken to the 
value of transparency in that system. And I was wondering what 
tools might be available where research is being conducted at a 
college campus. You typically are in search of investment. You 
see what might be a thinly veiled Chinese business, but really 
it enjoys the support of the Chinese Government up here. And 
then the technology is then commercialized back in China.
    What would be some of the forward-leaning strategies you 
would suggest for our higher education partners so that they 
don't fall into that trap?
    Dr. Friedberg. Well, I think the place to start, as you 
suggested, is with transparency. And part of the problem is 
that universities, but also think tanks and other institutions 
of that sort, are dealing with counterparts who have links, in 
fact, to the Chinese party and the Chinese state which are not 
immediately obvious.
    So China has set up a number of foundations which are--
appear to be analogs to American not-for-profit foundations 
that fund research and do other things in the United States and 
elsewhere. But if you look carefully at how they are 
structured, who the members of their boards are, there are 
obvious links to the party and they are part of what is called 
the so-called united front effort that China engages in.
    So I would say--start with transparency. And the trustees 
of universities, for example, as well as faculty have to be 
aware if university administrators are signing agreements with 
entities that have these kinds of links. And in some cases, I 
think at least there will be an inclination not to engage in 
them.
    There may also be legal questions. And I don't claim to be 
an expert on those or what our options would be there. But I 
think there are some things we probably just don't want to 
allow, connections between entities in China that are directly 
linked, for example, to the PLA [People's Liberation Army].
    In Australia, PLA-linked research institutions have set up 
cooperative arrangements with Australian universities, and the 
Australian government is now re-examining those and probably is 
going to implement laws that forbid them. I don't know that we 
have had that degree of penetration. But if we did, it would be 
something that ought to be regulated.
    But we need to start by shedding light on what the nature 
of these connections actually is.
    Dr. Ratner. The only thing I would add would be, there is 
obviously a role here for the universities to get together 
themselves and in association groups and come up with standards 
of behavior or shared norms around how they are going to be 
accepting Chinese money. Because there is a little bit of a 
hang together or hang separately component to this kind of 
competition over funds, and if there were standards of 
transparency or otherwise and everyone was operating at the 
same level, that would create a fair playing field and not lead 
to some of these more secret, private, malicious agreements.
    Mr. Gaetz. Thank you, Mr. Chairman. Yield back.
    The Chairman. Mr. Panetta.
    Mr. Panetta. Thank you, Mr. Chairman. Gentlemen, thank you 
for being here. I appreciate your time, your efforts, as well 
as your expertise on this topic.
    I am not sure which one of you mentioned, but you talked 
about that our allies need to feel like the United States is 
not going anywhere. My question to you is based on your 
expertise, do our allies--what do our allies feel about the 
United States and the future of our involvement in that area? 
You have probably been there. You have read a lot more than I 
have. And so I pose to you that question, but I also want to 
ask, what is the propaganda efforts that are aiding any sort of 
sentiment about the United States future intention there, 
China's propaganda efforts? And is there anything that we are 
doing to counter those efforts, as well?
    Dr. Friedberg. Thank you. Of course, Asia is a big place. 
Each one of these countries is a big country.
    Mr. Panetta. Understood.
    Dr. Friedberg. So there is a range of views. If you look at 
some of the public opinion polls, there are expressions of 
uncertainty. If you talk to people privately, depending on 
where you are, I think there is a deep concern about where we 
are headed, maybe not in the short run--and there might have 
been immediately after our election, given some of the things 
that President Trump had said as a candidate about our allies 
and uncertainty about what he was going to do and some relief 
that none of the worst things actually happened. There was no 
tearing up of alliances and so on.
    But there is a sense of uncertainty and concern--and I 
think also now an uncertainty about the functioning of our 
political system. If it is possible for an administration to 
come in which appears at least to be wanting to head off in a 
totally different direction, even if it doesn't this time 
around, could it happen the next time or the time after that?
    I think there has been a degree of confidence in our 
presence and our commitment over the last 60, 70 years which is 
not as strong as it once was. And it has partly to do with us, 
but it also has to do with China. And you mentioned their 
propaganda efforts. Those are considerable and ongoing. 
Sometimes they are subtle. Sometimes they are not so subtle. 
Chinese counterparts in their contacts with Australian 
diplomats or South Koreans or academics will say, do you really 
want to be tied so closely to the United States? We are here. 
We are not going anywhere. The Americans are increasingly 
unreliable. It could be dangerous for you. You could get drawn 
into a conflict with us. You really should reconsider.
    But maybe even more important than that, because they have 
done that for some time, is the fact that they now have these 
economic resources that they can bring to bear as an inducement 
to encourage closer cooperation and as a tool that they can use 
to try to punish other countries, including advanced industrial 
countries allied to the United States, for not doing things 
that China wants. And we have seen that in the case of South 
Korea. The Chinese imposed what were in effect economic 
sanctions, although they didn't say that, on Korea for agreeing 
to allow us to base part of our anti-missile defense system on 
their territory. And they inflicted real pain on South Korea. 
They backed off after a while, but I think the message was 
clear.
    Mr. Panetta. Mr. Ratner, I think one your four points, 
number four was strategic messaging. And I guess this kind of 
ties into that question. Do we need to do more of that to 
counter this propaganda?
    Dr. Ratner. Yes, we absolutely do. And I think, again, the 
broader narrative in the region right now is one of Chinese 
ascension and American decline. And until we arrest that, how 
much steel we float out in the Pacific is going to make no 
difference.
    And so I would put that right up there with the pillar now 
at this point of economics and politics and diplomacy and 
military. There is an informational, ideological component to 
this that we had stopped thinking about for 20 years that is 
going to be front and center to this competition. Our U.S. 
officials in their public engagements need to be talking more 
about the virtues of democracy and open markets, as well as 
related to an earlier comment highlighting some of the 
weaknesses of the Chinese system.
    Because one of the things that we have seen over the last 
year or so, particularly over the last 6 months, is Xi Jinping 
and the Chinese government propaganda machine being very 
affirmative in their own alternative model of governance in the 
world. And that is something we do not want, because it is 
going to produce more economic and political liberalism in a 
way that is going to undermine United States interests and 
United States values.
    So we need public officials talking about that. And we need 
Congress to devote more resources to the institutions that we 
have, like the Broadcasting Board of Governors, that can do 
strategic messaging and information operations around the 
world.
    Mr. Panetta. Great. Thank you, gentlemen. Thank you, Mr. 
Chairman, I yield back.
    The Chairman. Mr. Bacon.
    Mr. Bacon. Thank you, Mr. Chairman. And appreciate you both 
being here today. I had to step out for another committee 
hearing, so if I have duplicated a question, I apologize.
    My first question is, do you think we are being clear with 
our messaging on our commitment to Taiwan? Or is there any 
ambiguity in China's mind, in your opinion, that we stand by 
our allies, the Taiwanese?
    Dr. Friedberg. I guess I would say on the one hand, no. I 
think the Chinese realize that we continue to regard Taiwan as 
an entity to whom we have a lasting commitment. We have the 
Taiwan Relations Act. We have a legal and now ideological 
commitment to Taiwan.
    I don't think there is reason for them to doubt that for 
the moment. They may at the beginning of this administration 
have been concerned that perhaps we were going to go further in 
the other direction and do things that previously we had not to 
recognize or acknowledge Taiwan's autonomy. And that has not 
really happened, either.
    The question is what they think about the long run and what 
they think about our commitment in the long term. And they are 
trying very hard to use all of the instruments of their power, 
as I said, to push us away, to make it seem that intervention, 
military intervention on the behalf of Taiwan would be a 
disaster for us, to deter us from doing that. At the same time, 
they have been developing economic ties with Taiwan and binding 
the island even more closely to the mainland, and they engage 
in political warfare in Taiwan, as well. In some ways, Taiwan 
is a microcosm of what they are now doing, I think regionally 
and globally, bringing to bear all of these instruments.
    I guess I would say, the last thing, the concern is might 
the Chinese leaders at some point reach the conclusion that 
they could or had to act to resolve this issue once and for 
all? This has been on the back burner for the last several 
years because the Taiwanese Government was one that the Chinese 
thought they could work with. It is changed in the last couple 
of years because of the Taiwanese elections.
    Some people think Xi Jinping regards this, the solution of 
this problem as his ultimate legacy. I do not think that he is 
going to do anything immediate or rash, but I am concerned 
about how this is going to play out over the next couple of 
years.
    Dr. Ratner. I would just say--I think that they are--I 
would agree fundamentally our position remains fairly strong 
there, but I do think there are two aspects to President 
Trump's approach to Asia policy to date that are of concern, as 
it relates specifically to Taiwan.
    One is an overly narrow focus on North Korea and trade at 
the expense of other issues in the region. And I would put 
Taiwan in the same category as South China Sea in that regard. 
And then the other is just the degree to which President Trump 
has suggested at times a transactional nature of the U.S.-China 
relationship, where if you help with us on North Korea, maybe 
we will not come down on you so hard on trade. He even said 
publicly at times that his direct engagement with President 
Tsai Ing-wen would be either consulted upon with Beijing or 
determinative of the broader mood within the U.S.-China 
relationship.
    So I think both of those are things that we should steer 
away from and we need a broader policy that is comprehensive 
and based on our interests and values and neither narrow nor 
transactional.
    One solution to this for the Trump administration would be 
to think about very specifically how it thinks about 
integrating Taiwan into its Indo-Pacific strategy. So I think 
talking about Taiwan, the Taiwanese, and Tsai Ing-wen have 
talked about wanting to be a part of this, and seeing--and I 
think there is a lot of questions for countries outside the 
quad, specifically the India, Japan, Australia, United States 
arrangement--how do countries fit into this? And I think 
fitting in Taiwan in a very explicit way would be a useful way 
to buttress U.S. commitment.
    Mr. Bacon. One other question here. Dealing with North 
Korea, would you say China's--how would you rate them from 1 to 
10, let's just say, on their economic pressure on North Korea? 
Are they like at a five? Or can they do a lot more economically 
or clamping down on financial or trade? I would love to have 
your thoughts. Would reintroduction of nuclear weapons by the 
United States into that area, would that be helpful as a 
leverage point? Thank you.
    Dr. Friedberg. It is a very good question. And now I am 
trying to do the math and figure out how I should give you an 
answer to that. It is definitely not 10. It is not zero. I 
think it fluctuates between two and four. They crank it up a 
little bit when they need to signal us that they are being 
helpful, but they undercut it at the same time by engaging in 
trade, allowing Chinese entities to operate on Chinese--rather, 
North Korean entities to operate on Chinese soil. There is a 
lot more that they could do to cut off the financial flows and 
to impose economic pain on North Korea if they wanted to do it.
    Nuclear weapons, I don't think the South Koreans want us to 
put nuclear weapons back on the peninsula. I don't think we 
need to do it for military reasons, but especially if we fail 
in our efforts to denuclearize the north, the nuclear deterrent 
is going to be once again an increasingly important part of our 
posture there. And that is I think why some elements of what is 
suggested in the Nuclear Posture Review make a lot of sense.
    Mr. Bacon. Chair, I think I am out of time. I yield.
    The Chairman. Mr. Veasey.
    Mr. Veasey. Thank you, Mr. Chairman. Dr. Friedberg, you 
talked earlier about how when the Chinese were upset about 
certain American presence in South Korea that they imposed what 
was essentially some form of sanctions. I was wondering, you 
know, if you go back to when Jimmy Carter said that he was 
going to pull out of the peninsula, and back then China was not 
the power that they are today, and the Chinese and the 
Russians, you know, asked for the American presence--for us to 
stay there, obviously, a lot of things have changed since the 
1970s. China is much more powerful now.
    But what would be their ultimate plan for the peninsula, if 
the United States were not there? I mean, to me, it seems like 
having us there right now while they are trying to ascend in 
military power around the world is somewhat convenient for 
them. I mean, what would they do with an armed North Korea, if 
the United States were not there?
    Mr. Friedberg. I think their objective, the Chinese 
objective in the long run, if they could get it, would be a 
perhaps unified Korean Peninsula under the control of a regime 
that was friendly and favorably disposed towards Beijing----
    Mr. Veasey. Even with nukes?
    Dr. Friedberg. They would I think prefer that that country 
not have nuclear weapons, but that it be neutral, effectively, 
that it terminate its alliance with the United States, that the 
U.S. military presence in Korea would be withdrawn. I think 
they feel like that would be a situation that they could work 
with. The economic ties that they now have to South Korea are 
so extensive, that gives them potential leverage.
    They would like to see the peninsula neutralized. I do not 
think they would want to see it under the control of the north 
with nuclear weapons. I think that would be a nightmarish 
problem for them. Would they be satisfied with a democratic 
unified Korea with a government that was neutral and had pulled 
away from the United States? I think they probably would, 
provided that it was dependent on China, and acquiescent to 
China's wishes.
    Mr. Veasey. I also wanted to ask both of you to answer this 
one. When you start thinking about the long-term goals for the 
Chinese, of course, you know after World War II, we basically 
went to allies and said, you know, you can--in a post-World War 
II world, you can have a democracy and good governance and we 
sort of spread these Western ideas to other countries. And that 
standard has held pretty standard--or held pretty solid since 
World War II.
    My question to you is, what do the Chinese--like, if 
America was to go into a decline and we were not to have the 
presence that we have in the Pacific right now, like what would 
the Chinese offer these countries that have already bought into 
our philosophy of how you govern and how you lead around the 
world? Or would they just be okay with them doing their own 
thing? Would they not seek to impose their footprint in the way 
they govern in these areas around the Pacific?
    Dr. Friedberg. I think the--what the Chinese would like to 
do is to create not initially a global order, but a regional 
order that they would dominate with themselves at the center 
economically, politically, strategically, and that would be 
made up of countries that were favorably disposed to them, 
detached from the United States. Some portion of those 
countries, particularly along the so-called Belt and Road and 
especially on continental Eurasia, would have authoritarian 
regimes with which the Chinese are quite comfortable.
    They would adhere to Chinese standards regarding movements 
of people. They would probably be part of a kind of 
authoritarian intranet that would be cut off from the rest of 
the world or regulated in its access. I think they have an 
emerging vision of a Eurasian system that is dominated by 
themselves and which is essentially an authoritarian subsystem 
within a larger global order.
    You mentioned the end of the Second World War. We created a 
liberal order which consisted of democratic countries in Europe 
and Asia and North America. At the end of the Cold War, we 
tried to expand that system, hoping by bringing in countries 
like Russia and China, we could encourage them to transform. 
They have not done it. And now they are sort of lodged in our 
system and doing things to weaken and destabilize it. And that 
to me is the big problem that we have to deal with.
    Mr. Veasey. Thank you. Mr. Chairman, I yield back.
    The Chairman. Mr. Hice.
    Mr. Hice. Thank you, Mr. Chairman. Let me just go a little 
bit further on that train of thought, then. And, Dr. Ratner, I 
will begin with you. I mean, looking at China's--not only their 
military flexing of the arm, but also the economic side of 
things, how are they using their economic strength to coerce 
other countries and governments to accept their own will, be it 
political or security-wise or what have you?
    Dr. Ratner. That is a good question, Congressman, and it 
has been absolutely central to their broader foreign policy and 
security strategy to use their economic power to shape decision 
making around politics and diplomacy and security decisions. 
And I think that is the reason why, again, these perceptions of 
inevitability of Chinese economic dominance is so important. 
And they have been using a variety of inducements related to 
loans and assistance related to their Belt and Road strategy 
and have also been using a variety of penalties. And we have 
seen that with South Korea, as Dr. Friedberg mentioned.
    We have seen it really throughout a number of countries in 
the region where Beijing will close off particular trading 
commodities or whatnot in response to their displeasure with an 
action by a government, whether it is cutting off salmon 
because of the Nobel Peace Prize that they didn't like from 
Europe.
    So they have been using that quite proactively. And this is 
something that has been--is increasingly studied and I think 
people are understanding how to get a better understanding of 
this. And there are a variety of ways in which we can support 
these countries defend themselves against this kind of 
coercion.
    One, as I mentioned earlier, would be to build up higher 
standard trade investment rules to which these countries would 
find an alternative to Chinese economic coercion and economic 
power. And the other is, we can provide some of these countries 
with capacity to be able to evaluate some of these deals. So 
the Chinese often come with these debt-laden, high interest 
loans, where countries end up in debt traps and end up having 
to forfeit, for instance, critical infrastructure back to 
Beijing to pay back their loans. Those are things we can get 
out on the front end and help these countries make sure that 
the kinds of deals they are getting into with China are 
economically viable.
    Mr. Hice. Okay, well, another issue with that--and I 
appreciate the answer--all right, we have got laws that we 
abide by, for example. There is countries out there committing 
human violations, and that impacts our trade with those 
countries, and we have certain laws that we abide by. Does 
China have similar laws? Or it appears to me that they don't.
    So we hold back on trade, and they just move in. So how do 
we counter that aspect of it, as well? And I will just leave 
both of you--I would like to hear from both of you on that.
    Dr. Ratner. I will just quickly and then turn it over to 
Dr. Friedberg. But I think there were elements, for instance, 
of the Trans-Pacific Partnership that included standards around 
labor standards, environmental standards, the rights of women, 
the rights of children. And the purpose of that is to prevent 
this race to the bottom which will occur in the absence of the 
United States putting forward its liberal values in the world. 
So I think that that is a real concern, and there are 
increasing cognizance around corporate social responsibility 
among Chinese firms.
    But still certainly they don't have the environmental and 
social considerations and legal framework that we do.
    Dr. Friedberg. Yes, I agree with everything that Dr. Ratner 
has said. Just I guess a couple quick points. One of the things 
that is changed here has to do with, of course, the growth of 
the Chinese economy. Two things in particular. The size of the 
market and the fact that it is now so important that by 
threatening to cut off access to it, China really has 
considerable leverage that it can exert for political reasons, 
stopping buying salmon from Norway. It is a big deal for 
Norway, and it was a real punishment. They can use it for 
economic purposes to extract technology and so on.
    And the other thing, of course, now is that they are an 
exporter of capital and they are making investments around the 
world. And one of the things that they are doing--one of the 
things they offer which they say is competitive with what is 
being offered by the West or better, is to simply ignore these 
issues of governance, human rights standards, and so on.
    That is part of the package that they offer. They are 
essentially saying to others in the developing world, you can 
have a system like ours, which is sort of market-oriented or -
driven growth, with authoritarian politics and we will help you 
do it.
    Mr. Hice. Yes, and that seems like it could be problematic 
in the future. I appreciate your answers and appreciate you 
guys being here. I yield back.
    The Chairman. Mr. Smith.
    Mr. Smith. Just building off that last comment, I think the 
great power struggle that has been described as re-emerging is 
100 percent accurate. And it is China and Russia at the same 
time. And the struggle really is more ideological than I think 
people have acknowledged, that both China and Russia envision 
authoritarian kleptocracy, basically, is their approach to 
economics and politics.
    And to some degree, that is just so they could protect 
their own regimes. I think in both cases it is gone beyond that 
to a philosophy that they want to see those types of 
governments throughout the world, and that is who they want to 
do business with.
    Now, China in particular, like you said, they will do 
business with whoever and part of their message is, we do not 
care what you do. We are not going to be like the United 
States. We are not going to be quibbling over the fact that you 
are, you know, executing people randomly or doing things like 
that. Run your government however you want to run it. We just 
want to do business.
    What really worries me in this great power thing is that 
thus far our response and the dialogue at least in the Trump 
administration has been all about the military side of it, that 
has been--you know, here is what China is building, here is 
what Russia is building, here is how we have to confront it.
    And while certainly if you want to draw an analogy to the 
great power struggle we had with the Soviet Union, military 
might is a component part of that. Vastly more important in my 
view is winning the ideological war, which, Dr. Ratner, you 
talked about as one of your key points. We have abandoned the 
playing field. The State Department is being cut by 30 percent. 
I think legislatively we set up a fund for them to have sort of 
an information campaign. They are just not spending the money 
and they have not appointed anyone to run it.
    We--like you said, if we are going to convince Indonesia 
and Vietnam and Thailand and, heck, even the countries in 
Africa, where China is doing business, that we have a better 
model, we have got to actively engage in that. We have got to 
actively engage in information warfare. Russia is eating our 
lunch on it. I think that is by and large understood by 
everybody except the President, of course.
    But China, I think, is a lot more aggressive and successful 
in this area than we have acknowledged. And it is really not 
that difficult. If this is something we care about as a 
country, we can develop the message that says here is why our 
model is better than what Russia and China are offering.
    And one minor little piece, the chairman and I dove into 
something called Smith-Mundt a few years back, and still have 
the bruises to prove it, but we did the right thing, because 
part of the problem is now the way an information warfare 
campaign is conducted is primarily on the internet. And there 
are limitations on what the U.S. Government can put out there 
that is consumed by U.S. people. And you really can't put 
anything out there on the internet without it at some point 
being consumed by U.S. people.
    I think we need to get away from that and be able to full 
scale launch an information campaign that says democracy, 
freedom, and capitalism are better than authoritarianism and 
kleptocracy. Be with us, because we are taking you to a better 
place. We are not doing that. That is not either of your 
faults. I just wanted to make that observation.
    And to the extent you have any influence with people within 
the administration, we got to deliver the message that we have 
got to start fighting the information war or, you know, a $2 
trillion military isn't going to help us advance our interests 
in this great power struggle that is emerging. And if you want 
to comment on that, you are welcome to.
    Dr. Friedberg. Thank you, Congressman Smith. I agree 
completely with what you have said, and in particular the point 
you made at the very beginning. To talk about this as great 
power competition and to ignore the fact that it has this 
ideological component is fundamentally misleading. I think it 
misunderstands or encourages people to underestimate the 
antagonism that both Russia and China and their leaderships 
feel towards us, the threat that they feel from our system, and 
the vigor with which they are trying to oppose it.
    It is an ideological struggle. It has not been until 
recently the case that either of these seem to be actively 
trying to spread their own version of government and ideology, 
although China is now in that game more actively. They have 
been more defensive; now they are taking the offensive.
    The only thing I would add--and, again, I agree with what 
you have said about the importance of the information piece of 
this--that ultimately--and it may be a little bit of a cliche--
but ultimately it is what we do that is going to be more 
important than what we say.
    Mr. Smith. Show, don't tell, right?
    Dr. Friedberg. Yes, we can say all we want. Our system is 
better. What the Chinese are now saying is, look at these guys. 
They are a mess. They messed up the global economy in 2008. 
They are having trouble getting their economy growing at 2 
percent, and we are growing at 7 percent. And look at their 
political system, it is also a mess.
    Mr. Smith. Show, don't tell also is important that 2 
percent of $19 trillion is--well, I don't know if it is more 
than 5 percent of $11 trillion, but it is a bit misleading. We 
are starting from a higher number there. But I take your point.
    But we also in that have to figure out what the appropriate 
metrics are. I mean, it is like any debate, any argument. You 
know, you have got facts that make you look good and facts that 
make you look bad, and your job is to make the decision-maker 
look at the ones that you want them to look at in the way that 
you want them to look at them.
    So, yes, show, do not tell, is part of it. But you also 
have to make the argument. I mean, gone are the days where, you 
know, people could campaign for an elective office without 
actually campaigning, just say here is who I am, here is my 
resume, look at what I have done, it will all be good. No, it 
is a constant argument out there in the world.
    And again, we got to go vote. But we are not engaged at the 
moment in that argument. And I think we need to get engaged. 
Thank you both. Outstanding testimony. Thank you, Mr. Chairman.
    The Chairman. I thank you both, too. I completely agree 
with the last conversation. The only thing I would add is, 
people will listen a lot more carefully to what you have to say 
if you have a strong military presence there. So these things 
are mutually reinforcing. And we need to hit on all cylinders. 
And I agree with both of you that we have not been.
    This was very helpful. Thank you both for being here. The 
hearing stands adjourned.
    [Whereupon, at 11:36 a.m., the committee was adjourned.]

    
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                           A P P E N D I X

                           February 15, 2018
      
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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                           February 15, 2018

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                   DOCUMENTS SUBMITTED FOR THE RECORD

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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                           February 15, 2018

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                   QUESTIONS SUBMITTED BY MR. WILSON

    Mr. Wilson. Since 2005, more than 100 Confucius Institutes have 
opened at American colleges and universities. Last year the number of 
Confucius Institutes in the world rose by almost 40 percent. They are 
funded by the Chinese Government's Ministry of Education and in 2009 
the head of the propaganda for the Chinese Communist Party called the 
Confucius Institutes ``an important part of China's overseas propaganda 
set-up.'' Some of these universities even house research center 
laboratories with the Department of Defense where they conduct highly 
sensitive research.
    Do you believe that the Confucius Institutes pose a threat to 
university-affiliated research center laboratories which conduct highly 
sensitive research on behalf of the Department of Defense?
    Dr. Friedberg. [No answer was available at the time of printing.]
    Mr. Wilson. In dealing with near-peer adversaries I agree that it 
must involve a whole-of-government response. My question lies in the 
definition and application of what whole-of-government looks like.
    Do you believe that there are sufficient touchpoints for a diverse 
and relevant group of senior government officials to convene and 
discuss a specific regional threat like China?
    What more do you think is needed to holistically counter the China 
problem-set?
    Dr. Friedberg. [No answer was available at the time of printing.]
    Mr. Wilson. It is my opinion that one of the best forms of soft 
power in the Asia-Pacific region is partnership building capacity.
    Could you please explain the ongoing and future efforts to engage 
India as a strategic partner in the ballistic missile defense mission 
to provide stability in the Asia-Pacific region?
    Do you believe that more needs to be done?
    Dr. Friedberg. [No answer was available at the time of printing.]
    Mr. Wilson. Since 2005, more than 100 Confucius Institutes have 
opened at American colleges and universities. Last year the number of 
Confucius Institutes in the world rose by almost 40 percent. They are 
funded by the Chinese Government's Ministry of Education and in 2009 
the head of the propaganda for the Chinese Communist Party called the 
Confucius Institutes ``an important part of China's overseas propaganda 
set-up.'' Some of these universities even house research center 
laboratories with the Department of Defense where they conduct highly 
sensitive research.
    Do you believe that the Confucius Institutes pose a threat to 
university-affiliated research center laboratories which conduct highly 
sensitive research on behalf of the Department of Defense?
    Dr. Ratner. [No answer was available at the time of printing.]
    Mr. Wilson. In dealing with near-peer adversaries I agree that it 
must involve a whole-of-government response. My question lies in the 
definition and application of what whole-of-government looks like.
    Do you believe that there are sufficient touchpoints for a diverse 
and relevant group of senior government officials to convene and 
discuss a specific regional threat like China?
    What more do you think is needed to holistically counter the China 
problem-set?
    Dr. Ratner. [No answer was available at the time of printing.]
    Mr. Wilson. It is my opinion that one of the best forms of soft 
power in the Asia-Pacific region is partnership building capacity.
    Could you please explain the ongoing and future efforts to engage 
India as a strategic partner in the ballistic missile defense mission 
to provide stability in the Asia-Pacific region?
    Do you believe that more needs to be done?
    Dr. Ratner. [No answer was available at the time of printing.]
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. COFFMAN
    Mr. Coffman. To what degree is China using foreign investment to 
infiltrate U.S. national security assets including companies that 
supply equipment to DOD, compromising base security in the U.S., and 
undermining our national security objectives? It was also recently 
reported that the U.S. Army discontinued use of drones manufactured by 
a Chinese company due to security concerns. In your opinion, to what 
extent does China attempt to infiltrate our defense industry supply 
chain with equipment that has the potential to spy on our military? 
What should the U.S. do to counter China's destabilization of our 
supply chain for defense equipment?
    Dr. Friedberg. [No answer was available at the time of printing.]
    Mr. Coffman. Dr. Friedberg, in your testimony you state the 
importance of maintaining an adequate industrial base. At this time, 
the United States and our allies rely heavily on China in the rare-
earths market. What national security concerns do you have regarding 
China's dominance of the rare-earths market? In your opinion, should 
the U.S. focus more on building up our own production and refinement 
base to ensure independence from China? Do you believe that the U.S. 
and our allies should work together to develop a degree of independence 
from China's rare-earths production and refinement capabilities?
    Dr. Friedberg. [No answer was available at the time of printing.]
    Mr. Coffman. Mr. Ratner, it is well-known that China is investing 
in United States companies at an unprecedented rate in the pursuit of 
gaining access to new technologies. How does China's foreign direct 
investment negatively impact the national security of the United 
States?
    Dr. Ratner. [No answer was available at the time of printing.]
    Mr. Coffman. Mr. Ratner, in your testimony you state the importance 
of updating the Committee on Foreign Investment (CFIUS). I am a 
cosponsor of the Foreign Investment Risk Review Modernization Act of 
2017 that would update CFIUS. Can you please detail how China is 
exploiting the current system, and what updating CFIUS will do to 
improve our national security?
    Dr. Ratner. [No answer was available at the time of printing.]
    Mr. Coffman. To what degree is China using foreign investment to 
infiltrate U.S. national security assets including companies that 
supply equipment to DOD, compromising base security in the U.S., and 
undermining our national security objectives? It was also recently 
reported that the U.S. Army discontinued use of drones manufactured by 
a Chinese company due to security concerns. In your opinion, to what 
extent does China attempt to infiltrate our defense industry supply 
chain with equipment that has the potential to spy on our military? 
What should the U.S. do to counter China's destabilization of our 
supply chain for defense equipment?
    Dr. Ratner. [No answer was available at the time of printing.]

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