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


         U.S. RESPONSES TO CHINA'S FOREIGN INFLUENCE OPERATIONS

=======================================================================


                                HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 21, 2018

                               __________

                           Serial No. 115-118

                               __________

        Printed for the use of the Committee on Foreign Affairs
        

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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM R. KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID N. CICILLINE, Rhode Island
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                LOIS FRANKEL, Florida
SCOTT PERRY, Pennsylvania            TULSI GABBARD, Hawaii
RON DeSANTIS, Florida                JOAQUIN CASTRO, Texas
MARK MEADOWS, North Carolina         ROBIN L. KELLY, Illinois
TED S. YOHO, Florida                 BRENDAN F. BOYLE, Pennsylvania
ADAM KINZINGER, Illinois             DINA TITUS, Nevada
LEE M. ZELDIN, New York              NORMA J. TORRES, California
DANIEL M. DONOVAN, Jr., New York     BRADLEY SCOTT SCHNEIDER, Illinois
F. JAMES SENSENBRENNER, Jr.,         THOMAS R. SUOZZI, New York
    Wisconsin                        ADRIANO ESPAILLAT, New York
ANN WAGNER, Missouri                 TED LIEU, California
BRIAN J. MAST, Florida
FRANCIS ROONEY, Florida
BRIAN K. FITZPATRICK, Pennsylvania
THOMAS A. GARRETT, Jr., Virginia
JOHN R. CURTIS, Utah

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 ------                                

                  Subcommittee on Asia and the Pacific

                     TED S. YOHO, Florida, Chairman
DANA ROHRABACHER, California         BRAD SHERMAN, California
STEVE CHABOT, Ohio                   AMI BERA, California
TOM MARINO, Pennsylvania             DINA TITUS, Nevada
MO BROOKS, Alabama                   GERALD E. CONNOLLY, Virginia
SCOTT PERRY, Pennsylvania            THEODORE E. DEUTCH, Florida
ADAM KINZINGER, Illinois             TULSI GABBARD, Hawaii
ANN WAGNER, Missouri
                           
                           
                           C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Peter Mattis, fellow, China Program, The Jamestown Foundation     8
Ms. Shanthi Kalathil, director, International Forum for 
  Democratic Studies, National Endowment for Democracy...........    22
Aynne Kokas, Ph.D., assistant professor of media studies, 
  University of Virginia.........................................    29

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Ted S. Yoho, a Representative in Congress from the 
  State of Florida, and chairman, Subcommittee on Asia and the 
  Pacific: Prepared statement....................................     4
Mr. Peter Mattis: Prepared statement.............................    10
Ms. Shanthi Kalathil: Prepared statement.........................    25
Aynne Kokas, Ph.D.: Prepared statement...........................    31

                                APPENDIX

Hearing notice...................................................    54
Hearing minutes..................................................    55
The Honorable Gerald E. Connolly, a Representative in Congress 
  from the Commonwealth of Virginia: Prepared statement..........    56

 
         U.S. RESPONSES TO CHINA'S FOREIGN INFLUENCE OPERATIONS

                              ----------                              


                       WEDNESDAY, MARCH 21, 2018

                       House of Representatives,

                 Subcommittee on Asia and the Pacific,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The subcommittee met, pursuant to notice, at 2:00 p.m., in 
room 2167 Rayburn House Office Building, Hon. Ted Yoho 
(chairman of the subcommittee) presiding.
    Mr. Yoho. The hearing will come to order.
    Good afternoon, and thank you for being here today on a 
snow day. When everything else is closed down you guys chose to 
be here and I thank you for that.
    At the 19th Communist Party Congress in October, Xi Jinping 
proclaimed a new era when China would realize the Chinese dream 
of national rejuvenation and move closer to center stage and to 
make greater contributions to mankind.
    Part of the contributions Xi intends to make to mankind is 
the spread of socialism with Chinese characteristics. I think 
that's still called communism.
    He says it is a new option for other countries and nations 
who want to speed their development while preserving their 
independence.
    For a time, this Chinese model meant a compromise between 
Communist leadership and a free market principle. Under Xi 
Jinping, it has increasingly become a byword for one-man 
authoritarian rule.
    At the close of the National People's Congress just 
yesterday Xi revisited the themes of his party Congress speech 
but with some major differences.
    This time he spoke having--he spoke, having dissolved his 
own term limits and sharply militaristic tones, saying, ``We 
are resolved to fight the bloody battle against our enemies.''
    I want to repeat that because I think that's very strong 
language and I think it sets a tone of the future of their 
direction. ``We are resolved to fight the bloody battle against 
our enemies with a strong determination to take our place in 
the world.''
    State media has begun referring to him as Mao Zedong's 
title helmsman and fake elected representatives wept in the 
audience in a Pyongyang-style display of reverence.
    Xi is confirming the free world's greatest fears about what 
he might attempt to do with China's growing power. This is 
something we all need to be aware of and I thank the panelists 
for being here.
    To accomplish rejuvenation at home and recast the world 
order in an authoritarian mold, China, under Xi, is making 
concerted efforts to attain great power, status, and adopting 
some great power behaviors along the way.
    One of these behaviors is growing and spreading its 
influence around the world. In some respects, this is normal. 
The United States is not shy in our global efforts to promote 
democracy and universal values.
    But the foreign influence operations that China employs are 
different than those undertaken by responsible international 
stakeholders.
    U.S. influence efforts are open and transparent, building 
soft powers which derives from the pervasiveness and 
attractiveness of the United States and brings about desired 
outcomes voluntarily.
    In contrast, many of China's influence operations are 
covert and coercive. They seek to distract, manipulate, 
suppress, and interfere. They create what the National 
Endowment for Democracy has named ``sharp power''--the ability 
to coerce certain outcomes rather than induce them voluntarily, 
like soft power.
    Here in the United States and abroad, China's coercive 
influence operations present threats to media integrity, speech 
rights, academic independence, and political processes.
    There is no shortage of congressional interest in this 
challenge. Just this week, Representatives Moulton and Stefanik 
introduced a bill to counter foreign propaganda by requiring 
greater transparency in media, and Representative Wilson 
introduced legislation that would require Confucius Institutes 
to register as foreign agents, and hopefully those members will 
be here. We invited them.
    Other offices are working on similar proposals and broader 
related reform efforts are underway, including overhauls of the 
Committee on Foreign Investment in United States and Foreign 
Agents Registration Act.
    Congress is pursuing proactive measures as well such as my 
own BUILD Act to reform development finance efforts and 
increase U.S. effectiveness abroad using the policies of the 
United States Government to help people build their own 
economies for their benefit, unlike the One Belt, One Road, 
which goes one way and that's to China.
    This afternoon I look forward to the panel's view on what 
more must be done to counter the coercive influence operations 
and whether Congress should focus on new initiatives, reforming 
outdated or insufficient authorities, or simply promoting the 
enforcement and utilization of measures that have already been 
passed into law.
    The challenge before us is significant--not just a threat 
to our open society but relevant in a much more and a larger 
global competition.
    After the fall of the Soviet Union, democracy stood 
unchallenged as the surest path to success.
    Now Xi is deliberately challenging the supremacy of 
democracy around the world with his personal brand of 
authoritarianism. He is presenting the world with a false 
dilemma that nations must choose between growth and freedom.
    If the developing world believes his lies, Xi may succeed 
in building an alternative order of subservient strongmen who 
will meekly go along with China's global ambitions in exchange 
for patronage in their own spheres of influence.
    The stakes in this contest are high and China's influence 
operations are the tip of the spear.
    On a final note, I would also mention that the Members of 
Congress are well aware that the real threat comes from the 
Chinese Communist Party, not every citizen of China or every 
person of a Chinese background.
    In Australia, the party has sought to discredit reasonable 
reactions to its interference by casting them as McCarthyist 
hysterics and making accusations of racism.
    I am sure that the same tactics will be deployed as the 
United States seeks to protect itself from the same coercive 
influence. Many policy experts have wise warned about the 
dangers of allowing a rational response to devolve into a 
reactionary panic.
    We will not allow that to happen here.
    [The prepared statement of Mr. Yoho follows:]
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    Mr. Yoho. With that, members present will be permitted to 
submit written statements to be included in the official 
hearing record and without objections the hearing record will 
remain open for 5 calendar days to allow statements, questions, 
and extraneous materials for the record subject to length 
limitations in the rules, and the witnesses' written statements 
will be entered into the hearing.
    I thank the witnesses for being here today and I now turn 
to our ranking member from California, Mr. Sherman, for any 
remarks he may have.
    Mr. Sherman. Mr. Chairman, you quoted the Chinese leader as 
demanding for China a place in the world. That is so 
reminiscent of the demands of Kaiser Wilhelm who demanded for 
Germany a place in the sun.
    Both Germany, slightly over 100 years ago and China today 
are revisionist powers. We often talk about the lessons of the 
1930s and Munich, et cetera. But we would be well advised to 
study the lessons and the failures of 1914 as we deal with this 
revisionist power on the other side of the Pacific.
    I will have to be absent for part of this hearing because 
the Middle East Subcommittee is meeting about the Saudi 123 
nuclear cooperation agreement, and as a former chair of the 
Terrorism and Nonproliferation Subcommittee, I will impress 
them with a few nuggets of alleged wisdom and then return to 
this room by way of the Financial Services Committee, which is 
voting at the same time.
    China has much to add to the world conversation. A free and 
fair exchange of ideas is quite reasonable. As a kid, I 
listened to the short-wave radio from Moscow and Beijing.
    We have nothing to fear from the fair presentation of 
China's views. But when they exercise unfairly acquired 
economic muscle, an economic muscle acquired through policies 
that we allow and that Wall Street protects, when they use that 
economic muscle to snuff out competing voices, then we should 
be concerned.
    I represent more of the entertainment industry than any of 
my colleagues and we are so proud that we in southern 
California shape the world's dreams and the world's thoughts.
    But there are those who think they should be shaped in 
Beijing to promote China's preferred narratives. China is 
trying to take the censorship they've long forced upon their 
own people and export it here.
    And they have two ways to do this. They have the studios by 
the quotas and they've got the studios by the screens. We have 
allowed China to send in as many different garments into our 
country as they choose--big shoes, small shoes, big ties, small 
ties. We are only allowed to send 35 movies into China.
    Now, how does that hurt us? First, it hurts us 
economically. Second, it means we have a limited impact on 
Chinese citizens.
    But third, it is a statement to every studio in America--if 
you make a movie we don't like, we won't let it into our 
country and we won't let in any of your other movies either. We 
are only going to let in 35.
    We could let in the 35 from your competitors. We have got 
you by the quotas, and whether that quota is 35 or 40, it is 
critical to our national security that there be no quota at 
all, and until and as long as there is a quota, there should 
only be 35 different garments coming from China into the United 
States or maybe 17 garments and 18 electronic devices.
    Second, we have allowed the AMC Theaters to be acquired by 
Chinese interests. So they've got them by the screens. If you 
make a movie about Tibet, they are not going to show it on 
their screens and they may not show any of your movies on their 
screens.
    That kind of economic power used to cut off the next Tibet 
movie, used to demand that never is the Chinese Government or 
its agents a villain in any movie. That interferes with free 
expression in the United States.
    When artists speak out against China on issues of human 
rights, they may be blacklisted by the studios or worried about 
being blacklisted and kept off either the screens in China or 
the AMC screens here in the United States.
    And so we see PLA soldiers as heroes in major American 
movies. Will we ever see another movie about Tibet?
    At the time when China in every international forum talks 
about noninterference, China is systematically seeking to 
control the discussion of ideas here in the United States. This 
has got to be stopped and the first step, I believe, are these 
hearings to shine a light on it.
    But unless we are willing to say no more garments, 
electronics, et cetera, can come into our country under terms 
that are different than our movies can go into their country, 
they will have us by the studios.
    I yield back.
    Mr. Yoho. Well, well said.
    Ms. Titus, do you have some opening statements?
    Ms. Titus. Just briefly, Mr. Chairman.
    Mr. Yoho. Yes, ma'am.
    Ms. Titus. Well, thank you very much and thank you for 
holding this hearing.
    You know, as we scale back our diplomatic efforts, we know 
that China is ready to step in and fill that power vacuum. It's 
increasing its influence everywhere.
    I serve as a member also on the House Democracy Partnership 
and we visit and try to support developing democracies.
    Everywhere we go, whether it's Southeast Asia or Latin 
America we hear how the Chinese are there, ready to build 
hospitals, airports, bridges, whatever, and as we pull back 
they pull in.
    I've read some of the testimony and I see that there is a 
lot of emphasis in here about transparency, accountability, 
free exchanges of ideas all being so important in order for us 
to counter this censorship that China is pushing.
    You also say that actions that fan xenophobia and restrict 
pluralism just play into their hands. They weaken our 
democratic institutions and they make the Communist Party's own 
case for why we are a flawed system.
    I hope that as you proceed to testify or answer questions 
you'll address how, under this administration, which seems to 
exemplify all of those problems--lack of transparency, lack of 
accountability, no free exchange of ideas, xenophobia, build a 
wall, Muslim ban--how that kind of politics and rhetoric are 
hurting our efforts to counter this influence by China.
    Thank you, and I yield back.
    Mr. Yoho. Thank you for your comments.
    Next, we will introduce our panelists.
    Mr. Peter Mattis, fellow in the China Program at the 
Jamestown Foundation; Ms. Shanthi Kalathil, director of the 
International Forum for Democratic Studies at the National 
Endowment for Democracy; Dr. Aynne Kokas, assistant professor 
of media studies at the University of Virginia and fellow at 
the Kissinger Institute on China and the United States at the 
Wilson Center.
    Thank you for being here. Mr. Mattis, if you'd start.

   STATEMENT OF MR. PETER MATTIS, FELLOW, CHINA PROGRAM, THE 
                      JAMESTOWN FOUNDATION

    Mr. Mattis. Thank you very much, Mr. Chairman, and for the 
other members for inviting me to attend. It's an honor to 
appear before you today.
    I've divided my testimony into a few quick parts. The first 
is why the CCP interferes in countries abroad, a brief 
description of what they are trying to do, and perhaps I'll 
spend most of my time focusing on some of our responses.
    First is that the Chinese Communist Party places its 
highest priority on building and maintaining political power 
and that is not something that is just at home but it is 
something that in the 20th century communism has always had to 
push beyond borders because security for these kinds of 
governments comes from the inside out and there is no obvious 
sense of where the borders start or where they end.
    And if this sounds a little bit abstract, let me read a 
small section from China's national security law. It says, 
``National security refers to the relative absence of 
international or domestic threats to the state's power to 
govern, sovereignty, unity and territorial integrity, the 
welfare of the people, sustainable economic and social 
development, and other major national interests, and the 
ability to ensure a continued state of security.
    National security efforts shall adhere to a comprehensive 
understanding of national security. Make the security of the 
people their goal, political security their basis, and economic 
security their foundation. Make military, cultural, and Social 
Security their safeguard.''
    This definition of security has two notable features. The 
first is that it's defined by absence of threats, not by the 
ability of the party state to respond to them or to manage 
them.
    This view of security pushes them toward a preemptive 
approach to thinking about how to cut these threats off before 
they are ever an issue.
    The second is that security extends to the realm of ideas. 
Some of these dangerous ideas, as they've been identified in 
CCP documents, include civil society, Western concepts of 
journalism, and Western concepts of constitutional democracy.
    And the combination of these themes--ideas and preemption--
almost necessitate the CCP to be looking to shape and interfere 
with decision making abroad.
    And in case we think that this is something that is sort of 
a rogue actor or it's just one agency here or there or it's not 
a coherent effort, this is something that is controlled at the 
highest levels of government, beginning with the Politburo 
Standing Committee.
    There is a member with the responsibility for United Front 
work on the Politburo Standing Committee who currently is Wang 
Yang, the chairman of the Chinese People's Political 
Consultative Conference, and there are Politburo members 
responsible for the propaganda in the United Front departments.
    And it runs all the way through the system. They attempt to 
do this by shaping the context, the way in which China is 
discussed, the questions that we ask, and the way we try to 
frame them--drive the conversation toward perhaps how do we 
avoid war away from something like how do we compete 
effectively.
    They spend a great deal of effort on controlling the 
diaspora and that occurs through trying to take over Chinese 
language media, which is now basically worldwide, is more or 
less controlled by the CCP, and to a smaller extent, a small 
group of outlets run by the Falun Gong that can't be squeezed 
by the party. But most independent outlets have gone away.
    There is surveillance on the Chinese diaspora. There is 
intimidation. There are efforts to mobilize them for political 
purposes and there is a broad effort to attack or to influence 
the political core of democracies, and they do this by trying 
to influence the people with whom you interact, whether it's 
Americans who speak to you about China or whether it's the 
people that you meet if you take a trip to China.
    They do this by creating high-level dialogues--the Track 2 
and Track 1.5--so that they can avoid the filtering that staff 
or other professionals who are focused on China might provide, 
and counter intelligence officials in the United States, in 
Canada, in Australia, in New Zealand as well as others have 
seen efforts to try to build up local politicians because 
today's councilman might be tomorrow's legislator at the 
national level.
    In terms of a response, it's not that we don't necessarily 
have the law or the tools. It's that there has to be the 
prioritization coming from the top and for the executive 
departments that are most responsible like the Department of 
Justice.
    At the next level you need a higher level of knowledge than 
we have of Chinese activities and how the Chinese Communist 
Party functions, and we also need to keep the discussion open 
and not let it be shut down, because ultimately we are a 
democracy. We do allow freedom of speech. We do allow freedom 
of association and expression.
    And the public conversation is important because the 
government resources will only ever be focused on the illegal 
rather than sort of the gray area and it's up to us as citizens 
to decide what is okay--what is appropriate engagement.
    [The prepared statement of Mr. Mattis follows:]
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                              ----------                              

    Mr. Yoho. Thank you for your comments.
    Ms. Kalathil.

  STATEMENT OF MS. SHANTHI KALATHIL, DIRECTOR, INTERNATIONAL 
 FORUM FOR DEMOCRATIC STUDIES, NATIONAL ENDOWMENT FOR DEMOCRACY

    Ms. Kalathil. Thank you.
    Chairman Yoho, Ranking Member Sherman, thank you for the 
opportunity to testify before the subcommittee on this 
important issue today.
    My remarks will focus on how a rising China has 
increasingly been able to wield influence that chills free 
expression within democracies and around the world.
    This is not simply about telling China's story, as Chinese 
authorities like to claim. It is also about shutting down a 
more contextualized version of China's story and suppressing at 
a global level the discussion of a growing number of issues 
that the Chinese Communist Party finds sensitive.
    As Xi Jinping's power consolidation and other events have 
demonstrated, China is moving both in a more authoritarian and 
a more global direction, which means these trends are likely to 
intensify.
    Over the years within its borders, the Chinese Government 
has relied on technological innovation to enable advanced 
censorship and surveillance, which is now made possible by big 
data and a weak rule of law environment.
    Mr. Yoho. I am going to interrupt you a minute. Can you 
pull that microphone a little closer? We are having a hard time 
hearing up here.
    Ms. Kalathil. Yes. Is this better?
    And control and cooptation of the infrastructure of ideas 
and communication as key, such that the interests of those 
powering the infrastructure within China run parallel to, or at 
the very least, not counter to the interests of the Party.
    The CCP has used similar tactics on an international scale 
to dampen or distort the free exchange of ideas. As noted in 
the National Endowment for Democracy's recent report on sharp 
power, authoritarian regimes inevitably project overseas the 
values that they live by within their borders.
    This projection of influence has already had a chilling 
effect within democracies. Recent examples have been numerous.
    Some academic publishers, for instance, have argued that by 
censoring a small percentage of their content at the source, 
the remainder can be made available.
    Variations of this argument, what you might call the 
greater good argument, have been advanced by numerous 
institutions and companies to justify acquiescing to CCP 
censorship.
    Confucius Institutes, which have been lauded internally by 
Chinese officials as successful influence vehicles, have also 
come under scrutiny as a growing number of scholars voice 
concerns that the presence of such Chinese Government-funded 
centers on campus within democracies including in the United 
States are constraining academic freedom.
    In regions of the world ranging from Latin America to 
Central Europe to sub-Saharan Africa, the Chinese Government 
has actively shaped this infrastructure of ideas through 
backing think tanks, investing in media outlets and 
infrastructure, and co-opting elites through exchanges and 
privileged access to officials and experts in China.
    Moreover, the Chinese Government's multi-pronged effort to 
shape the future of the internet has implications for free 
expression, privacy, and surveillance globally.
    Unfortunately, Silicon Valley often invokes the greater 
good argument to justify its participation in the Chinese 
Government's censorship or surveillance apparatus.
    Why is it important to address this greater good argument, 
which is advanced by those who say some degree of CCP-imposed 
censorship or interference is worth tradeoff.
    Because in the eyes of the CCP any decision by democracies 
to compromise their values is binary--either you're willing to 
do so or you aren't. Degree is unimportant.
    For some time, as the CCP's ambitions have grown, 
democracies have essentially conveyed the message that they are 
not willing to defend their own core values.
    As a result, the Chinese authorities increasingly set the 
rules with institutions within the democracies on standards of 
free expression, a development with enormously troubling 
implications if we remain on this trajectory.
    Democracies are slowly coming to grips with this fact. Yet, 
while the issue must be confronted head on, it would be a 
mistake to think that the best way to address such heavy-handed 
tactics by authoritarian regimes is through similarly heavy-
handed tactics by democracies that would have the effect of 
subverting the very values that undergird democratic systems.
    Democracies should be proactive in asserting why norms such 
as transparency, accountability, pluralism, and the free 
exchange of ideas are critical to their interests.
    They must also be precise and thoughtful in formulating 
nuanced responses to authoritarian influence. Actions that fan 
xenophobia, restrict pluralism, or contravene core principles 
will not only weaken democratic institutions but will 
conveniently make the CCP's own case that democracies are 
inherently flawed and hypocritical.
    With this in mind, democracies might consider several 
options, including continuing to uncover the ways in which the 
CCP's influenced activities are impinging on democratic 
institutions outside China's borders and to share information 
on best practices for dealing with these activities while 
respecting democratic values; facilitating democratic learning 
and supporting the capacity of local independent media to 
report in a dispassionate way on issues relating to China, 
particularly in countries and regions without deep capacity to 
do so; seeking transparency in institutional agreements with 
Chinese Government-affiliated institutions such as Confucius 
Institutes and others, collectively supporting existing norms 
relating to academic freedom and freedom of expression so that 
individual actors are not susceptible to being picked off and 
pressured by the Chinese Government or its surrogates; within 
relevant private sector industries, standing up initiatives 
that establish voluntary and mutual adherence to accepted norms 
of free expression and fundamental human rights; and 
encouraging democratic solidarity among countries that are 
grappling with their engagement with China.
    Such solidarity will invariably lead to more effective and 
democratically-sustainable outcomes, given the scope of the 
challenge.
    Thank you.
    [The prepared statement of Ms. Kalathil follows:]
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    Mr. Yoho. Thank you for your comments.
    Dr. Kokas.

 STATEMENT OF AYNNE KOKAS, PH.D., ASSISTANT PROFESSOR OF MEDIA 
                STUDIES, UNIVERSITY OF VIRGINIA

    Ms. Kokas. Chairman Yoho, Ranking Member Sherman, and 
members of the U.S. House of Representatives Foreign Affairs 
Subcommittee on Asia and the Pacific, it is an honor to be 
here.
    Funding from the FLAS, the Fulbright U.S. Student Program, 
the East-West Center, and the Woodrow Wilson Center where I am 
currently in residence have been central to my ability to 
research China both now and as a student in public universities 
in California and in Michigan.
    Particularly in an era of increased Chinese influence in 
the United States, there is a crucial bipartisan national 
security need to fully fund the study of China by American 
scholars and students.
    My remarks today focus on three key topics related to media 
industry influence--number one, the current challenges of 
Chinese influence on the U.S. media industries; number two, the 
challenges of deterring Chinese influence on the U.S. media 
industries; and number three, recommendations.
    The regulatory landscapes of the Chinese and U.S. media 
industries differ starkly. While free market principles guide 
the U.S. media industry, Chinese media content is subject to 
highly centralized regulation.
    Moreover, Chinese President Xi Jinping, as the chairman 
noted, has explicitly asserted the importance of expanding the 
favorable representation of China around the world through the 
media industries.
    U.S. films face uncertainty in China's market. China and 
the U.S. are currently renegotiating the U.S.-China film 
agreement, which expired in February 2017, in response to the 
quota on foreign films imposed by this agreement.
    Many U.S. studios participate in official Sino-U.S. film 
co-productions which circumvent the film quota in return for 
allowing Chinese regulators to shape content at every stage of 
the production process. And I am talking about big budget, $100 
million--$200 million films.
    Studios and other content producers also anticipate Chinese 
censorship. One Fox Television executive stated that their firm 
makes ``China-compliant content'' to reduce time to 
distribution for TV series with Chinese market aspirations, and 
these aren't TV series that have guaranteed distribution in 
China. These are just that aspire to Chinese distribution.
    Now, Netflix has also discussed distributing ``airplane 
cuts'' or censored films in order to access the Chinese market.
    The difficulty of accessing China's media market 
incentivizes U.S. firms to allow Chinese content standards to 
influence how they produce media for the global market.
    Now, while U.S. firms face a highly restricted market entry 
environment in China, Chinese firms have a relatively free hand 
to invest in the United States.
    Chinese firms have acquired U.S. studios like Legendary 
Entertainment, theatrical distribution infrastructure like AMC 
and Carmike, as well as establishing multi-film deals and 
individual film financing deals.
    Now, under these circumstances the U.S. film industry has 
gone out of its way to collaborate with Chinese regulators.
    In 2013, 2015, 2016, and 2017, U.S. media industry leaders 
invited Chinese regulators to give talks explaining how to 
comply with Chinese content regulations in Los Angeles.
    Studios value the financial benefits of collaborating with 
Chinese partners in many ways more than they are concerned with 
the influence of Chinese regulators on content.
    When the United States is no longer the largest media 
market in the world, which is rapidly approaching, U.S. leaders 
will have to decide what is more central: Financial growth or 
cultural influence.
    And I realize that it's challenging to think about these 
things as a binary, but this is the situation that we may be in 
and we should at least consider.
    Now, my recommendations are as follows. Based on research 
for my book, ``Hollywood: Made in China,'' here are five 
recommendations to limit Chinese influence on the U.S. media 
industries.
    Number one, prohibit Chinese regulators from lobbying U.S. 
industry leaders at events hosted in the United States.
    Number two, require financial reporting of state-backed 
media production investment in the U.S. for any country the 
United States Trade Representative deems noncompliant with its 
WTO obligations for audio/visual industry.
    Number three, consider a nonbinding resolution urging U.S. 
media producers to resist further censorship by foreign 
governments for the purposes of market entry, and this is part 
of a larger suite of activities which I think should occur in 
terms of raising awareness and calling out companies that are 
making statements suggesting that they're changing their 
content.
    Number four, prohibit state-owned media investment in the 
U.S. by any country deemed by the United States Trade 
Representative to be noncompliant with WTO regulations for the 
audio/visual industry.
    And number five, block U.S.-based IPOs for any media firms 
from countries that the USTR deems not to be in compliance with 
WTO market obligations.
    Implementing these regulations will create a more difficult 
investment environment for state-backed Chinese firms seeking 
to influence Hollywood studios. It will also make it more 
inconvenient for Hollywood studios to make films shaped by 
Chinese regulators or backed by Chinese state-owned entities.
    I would like to reiterate my gratitude to the U.S. Congress 
for its historical bipartisan support for the study of China 
and for giving me this opportunity to share my work.
    Thank you.
    [The prepared statement of Ms. Kokas follows:]
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    Mr. Yoho. Thank you for being here and we are excited about 
this because there's been a lot to talk about what China is 
doing and what their intent is, and I think it's very evident. 
It's right out in front of us if we just listen.
    And, you know, I read your testimonies beforehand and I 
think you guys are all spot on and so we look forward to 
highlighting this so that we can make policies to direct what 
we do as a nation.
    And I want to let you know how important it is that you're 
here because you're the ones that are giving us the expert 
advice and that a lot of times turns into recommendations we 
give to the State Department or to the administration and/or is 
legislation, as Mr. Wilson will talk about here in a minute.
    But I think if we listen to just the words in the past, if 
we go back to Deng Xiaoping--well, actually if we go to Mao 
Zedong, in 1949 he mapped out a 100-year plan to rebuild the 
Chinese Empire, and he had the Great Leap Forward and he 
brought in all the laborers and they were going to feed all of 
China with the farm laborers.
    It was forced labor. Production went down and millions of 
people died. During his reign, he's credited with 40 million to 
80 million people dying under his reign.
    But yet, they hail him as a great leader and a great 
philosopher. I don't know if we would do that in this country.
    And then if you look at Deng Xiaoping, his quote, and 
again, this is building the direction of China. You know, you 
have got the 100-year mapped out under Mao Zedong--1949. We are 
well into that, almost 69 years into that, and then Deng 
Xiaoping quotes, ``Hide our strength and bide our time,'' or 
another way is ``Hide our capacities and bide our time.''
    And there was a great documentary that was done. I think it 
might have been in early 1980s when he said China cannot 
compete with Japan or other countries like the United States in 
computers and IT and manufacturing but what we can do is we can 
corner the market on rare earth metals, and they did.
    And then you move on to Robert Gates' book, a book called 
``Duty.'' When we were negotiating military sales with Taiwan, 
as we've done since the 1970s, China always balked at it and 
didn't like it.
    But in his book--I think it was in 2013 during the 
negotiations China raised holy Cain with their Ambassadors and 
their admirals saying how wrong this was and this was not right 
to do.
    And our negotiator says, ``Well, we've been doing this 
since the 1970s. Why now the complaint?'' And this is what they 
said and I think, again, this is a signal--``Yes, I know you 
did. But back then, China was weak. We are strong now.''
    And then you move on to Xi Jinping and the 19th Party 
Congress back in October 2017 when he took center stage or he 
was up there, and he says that the era of China has arrived.
    No longer will China be forced to swallow their interests 
around the world. The era of China has arrived for us to take 
the world's center stage.
    I take that as a threat, you know, like they want to knock 
somebody off the stage, you know, and we shared this with 
people in Hong Kong in their pro-Beijing members that were 
there, and we said, I take that as a personal assault on 
Americans' sovereignty and that will not be tolerated and 
please carry that back to Beijing, and I hope they did.
    And then with the opening statements here of what Xi 
Jinping just said--I guess it was this week--``We are resolved 
to fight the bloody battle against our enemies.''
    I think that's a concern for everybody--the bloody battles 
against our enemies. We are not at war with China. We are not 
at war with anything they're doing other than their aggression 
that they're showing in the South China Sea, their aggression 
against democracies around the world, and they're throwing out 
their form of socialism with Chinese characteristics, which I 
said in the opening statement, you can put lipstick on a pig, 
but it's still a pig.
    You know, they can call it what they want but it's still 
communism because it's authoritarian rule. And you were so 
right talking about--actually it was Ms. Kalathil talking about 
the greater good argument of Silicon Valley, and Hollywood too, 
as you have brought up.
    They're willing to sell the profits, they're willing to get 
rid of the integrity that makes a business great for the short-
term profits. And, again, keep in mind China is playing the 
long game here and we need to smarten up. And I am thankful 
you're here to bring this out more in the open.
    So how can we best counter what Xi Jinping's promotion of 
China's governance is and the model in the developing world? 
That's one.
    Does this need to be done through diplomacy, trade, 
military, or all of the above? And is China using, in your 
opinion, the Belt Road initiative to drive countries toward 
this model?
    And Mr. Mattis, if you will start and just answer these as 
quick as you can and we'll get on to the other members.
    Mr. Mattis. The first way, I think, to counter is that we 
have to do defense well.
    It's not necessarily about what China is doing but 
protecting our own sovereignty because when we don't enforce 
our laws, when we don't protect our citizens, we are--and we 
don't protect our industries then we are ceding our sovereign 
rights as a government and as a country to allow this 
interference.
    And all of these things start at home before they become 
questions of how do we deal with Chinese diplomacy--how do we 
deal with their efforts to expand their influence abroad?
    Ms. Kalathil. Thank you. With respect to the developing 
world and with other countries, one of the things that we found 
in our report on sharp power is that young democracies in 
particular who are interested in perhaps understanding more 
about China often don't have the capacity to do so.
    Their independent media sectors are quite weak. They are 
easily susceptible to financial pressure or to being bought out 
by Chinese Government-related interests.
    So there's a tremendous need to put China into context in 
these countries and in the countries that we studied which 
includes Slovakia, Poland, Argentina, and Peru. There are a 
number of other countries on the African continent where this 
would hold true as well.
    So I think a first step, if we were to support or if 
democracies could support better understanding of China in a 
way that is not influenced by the Chinese Government's own 
narrative that would be a big step.
    Mr. Yoho. Dr. Kokas.
    Ms. Kokas. I would like to reinforce what Mr. Mattis said 
regarding enforcing our own laws and institutions.
    It's essential to set the standard and to identify what 
role we can play. But more importantly, I think within this 
context it's also important to continue to participate in 
multilateral and multi stakeholder regional institutions and I 
am particularly thinking about increased participation in multi 
stakeholder internet governance institutions where China has 
been making huge inroads and investing and sending staff to 
participate and set these new standards.
    Thank you.
    Mr. Yoho. Thank you.
    Next, we'll go to Mr. Tom Marino.
    Mr. Marino. Thank you, Chairman.
    I am going to approach this from a geopolitical position 
and then each of you can respond. I will start with you. I am 
sorry. I am drawing a blank on the name.
    Ms. Kokas. Kokas.
    Mr. Marino. Yes. We'll start with you, please.
    Ms. Kokas. All right.
    Mr. Marino. And then go to your right.
    It is said that China will defeat the United States and 
other democracies not by its military. However, it will win by 
controlling the world market and international economy.
    For example, take the continent of Africa and the countries 
within there. China takes oil and minerals, great abundances, 
and anything else it can get its hands on.
    In return, China invests in Africa's infrastructure, 
finance, among other things and other ventures. This insincere 
philanthropy saddles Africa with large debt.
    Nevertheless, this move by China is only the beginning. It 
is a test for China's growing international ambitions, i.e., in 
their sights Iran, Afghanistan, of course, North Korea, and 
South America.
    Would you please comment on their aggression economically 
in these developing countries and continents?
    Ms. Kokas. Mr. Marino, thank you very much for that 
excellent question, and I think that one of the ways we need to 
frame this is how U.S. companies also operate within these 
spaces.
    So when we are looking at financing and investment, U.S. 
companies have also been very active in investing in these 
markets and extractive industries.
    Now, one of the key differences is the connection between 
the state, the party, and the industries, and this is the 
crucial distinction here.
    Now, I think to the degree that Chinese investment is an 
extension of Chinese state power, this is concerning from my 
perspective in terms of setting standards, particularly setting 
standards for new industries and in developing countries that 
don't necessarily have those standards yet, particularly in 
telecommunications.
    I think that this is also of concern when we are looking at 
potential industries such as rare earth where we have a larger 
long-term competition.
    So thank you.
    Ms. Kalathil. Thank you.
    You know, with respect to the countries of Africa and 
developing countries in general, I think China has made 
tremendous inroads not just with its investment but with its 
overall approach where it portrays itself as a fellow 
developing country that has actually managed to lift itself out 
of poverty very effectively, and I think it would be a mistake 
to discount the power of that narrative within developing 
countries because they do look to China as an example.
    And so the narrative that China represents something of a 
model does not fall on deaf ears. I think it does have some 
resonance.
    It is part of the challenge to be able to show the 
complexity of that rise and to show that there are aspects of 
the Chinese system of governance which may be inimical to 
democracies around the world.
    This is not being clearly conveyed. I recently was in 
Africa talking to a number of independent journalists and civil 
society, activists, and there's a distinct dearth of knowledge 
with respect both to the Chinese internal system of governance 
as well as to the true ramifications of its investment and 
development policies overseas and, again, that goes back to a 
tremendous lack of capacity.
    I think independent journalists have long tried to cover 
some of the aspects that Dr. Kokas just mentioned about the 
actions of multinationals in the mineral sector in developing 
countries and within Africa.
    But there has been less attention to the Chinese presence 
and I think that's partly because the governments of many of 
these African countries have struck deals with the Chinese 
Government and it creates an environment that makes it very 
difficult to explore the true ramifications of those 
investments.
    So these independent journalists and civil society 
activists and academics and policy makers throughout the 
developing world need the capacity to better understand the 
full ramifications of Chinese investments and to be able to 
report and discuss these things in a way that's free of Chinese 
Government influence.
    Mr. Marino. Thank you.
    Mr. Mattis, you have 20 seconds.
    Mr. Mattis. We have the Foreign Corrupt Practices Act that 
can provide some effectiveness at dealing with practices that 
have clearly gone into the corrupt or the coercive.
    We also have the ability to bring people to the United 
States and educate them. I will simply use the example of a 
friend of mine who is from Sudan or South Sudan and was brought 
to the U.S. and educated, and his brother did the same thing in 
China.
    And their views of what governments should do, how they 
should act, how they should relate to civil society, how they 
should relate to media couldn't be starker.
    Mr. Yoho. Thank you for the questions and the answers.
    We'll next go to Mr. Connolly from Virginia.
    Mr. Connolly. Thank you, Mr. Chairman.
    I don't know what you all did to scare up all the Democrats 
but I thought you'd want a little company.
    At any rate, thank you, and thanks so much for being here.
    Dr. Kokas, you come from, of course, one of the greatest 
universities on the planet. I lecture there once a year so I 
very much enjoy going down, and if you see Professor Gerry 
Warburg please say hello for me.
    Ms. Kokas. Absolutely.
    Mr. Connolly. He's a good friend at that school.
    How worried should the United States be about the fact that 
China is exercising soft and sharp power, as it's been called, 
you know, and things like, you know, the new Silk Road, making 
enormous investments throughout the developing world, but they 
are fixed investments.
    I mean, they're not moveable. They do indebt countries, and 
I was in Sri Lanka last year and in Hambantota they built a 
whole new port. They built a hospital.
    They built the amphitheater and a conference center and all 
of it pretty empty, and the debt was beyond Sri Lanka's ability 
to carry it and, of course, now they're signing a long-term 
lease for the Chinese to manage it. It's in a strategic 
location that is of some concern to the United States and 
India.
    But if they want to build stuff for other countries that is 
immovable, even if we think it's not a good economic investment 
or they could--there's an opportunity cost associated with 
this.
    In a sense, how concerned are we to be?
    Ms. Kokas. So with a lot of the BRI investments, I am 
taking a wait and see approach because it will be interesting 
to see how developing countries respond to this over the long 
term because a lot of these deals are not great deals.
    Now, I think that you make a great point that these are 
individual choices by individual sovereign countries and 
there's only a certain degree of influence that the U.S. can 
have in those situations.
    I think what your point underscores is the need to 
participate in multi-stakeholder institutions and regional 
institutions very actively in order to be able to shape 
perspectives about these questions for people in these regions 
and for leaders in these regions.
    But our ability to counteract Chinese investment in 
individual countries really can only be counteracted, from my 
perspective, by parallel investment or by influence in multi-
stakeholder institutions.
    So thank you.
    Mr. Connolly. Ms. Kalathil, what kind of good will is China 
aggregating to itself with these kinds of investments, 
especially when you hear and I've certainly heard in country 
after country they stick to themselves.
    They create a Chinese camp. They don't hire local labor. 
They import Chinese labor. There's no ripple effect in the 
economy. Yeah, we are left with a new hotel or a hospital or 
whatever it is, but we haven't really reaped the benefits of 
local labor participating in the project and they're kind of 
aloof and separate and keep their own to themselves. They don't 
kind of mingle after hours with the locals.
    You actually hear that in terms of certain--there's even a 
racial aspect to it. There's certainly an economic and social 
aspect to it.
    How much good will do they muster from these kinds of 
investments, at the end of the day, do you think?
    Ms. Kalathil. Thank you. That is a good question.
    I think one of the things that we discovered in putting 
together our sharp power report is that oftentimes with the 
Chinese Government it's less about fostering good will and 
perhaps rising numbers of people around the world who approve 
of China and it's more about achieving some kind of strategic 
interest, particularly when it comes to these kinds of 
investments.
    You had mentioned the Belt Road initiative. You know, one 
under explored aspect of that is the digital Silk Road, which 
actually is less about fixed investment and more about 
transmission of media products, of various channels for 
influence.
    Those sorts of things, again, are less about creating good 
will and less about accumulating some kind of positive image of 
China, more about conveying a very particular narrative about 
China and shutting down dissent around that.
    Thank you.
    Mr. Connolly. Thank you, Mr. Chairman. My time is up.
    Thank you all for being here.
    Mr. Yoho. Thank you for your questions and answers.
    Now we'll go to Mr. Rohrabacher from California.
    Mr. Rohrabacher. I know at times when you look at the 
public debate on what relations we should have with this 
country or that country, it is a bit disturbing for me to see 
not just double standards but triple standards when it comes to 
China, and that is China is investing in Hollywood movies today 
and taking about anything that China could be made to look bad.
    That is incredible that we are letting another country do 
that to our communications in this country. ``Independence 
Day''--that movie all of a sudden--major figures in the movie 
turned out to be Chinese generals and commanders, and just in 
the movie ``Gravity''--I mean, it was based on an astronaut 
that went up and was being damaged by space debris and the 
original script it was a Chinese space station that exploded 
and caused the space debris.
    But in the rewrite that the American people see, oh, it's--
the Chinese are the heroes and she's saved by the Chinese space 
station.
    Something's wrong there. Something's really wrong. We are 
allowing our people to have their minds molded in that way. 
This, quite frankly--I know I get a lot of criticism for making 
these comparisons--I mean, compared to what's going on with the 
Russians trying to influence our way of thinking, this is like 
100 times beyond that.
    I mean, they're hackers--we all know the hacking that goes 
on. In China massive hacking as compared to anybody else but 
it's way beyond anybody else in the world.
    We are talking about the Third World countries, that now 
look to China as a developing country we could be like. They 
don't look at it that way.
    The Chinese are bribing these people all up--all over the 
world and we aren't doing anything about it. We aren't stepping 
up to the plate, and they're bribing these people. The Third 
World dictators are selling out their own people in order to 
get short-term Chinese cash in their bank account somewhere in 
probably Switzerland or with an American and international 
financial communities as partners in this theft of Third World 
assets.
    What are their assets? The poor people in these world they 
only have the assets of their country and that's being stolen 
from them by bribes from the--from not just Chinese 
businessmen.
    Let me ask you this--is that bribery and that type of 
activity that I am talking about, is this just a bunch of 
Chinese businessmen operating independently of what their 
government wants or is this part of a strategy that the Chinese 
Government and the Chinese leadership have in order to achieve 
power and achieve their goals?
    Maybe just go real quick down the line and I will let you 
comment on that.
    Mr. Mattis. I hate to give you a yes and no answer. But the 
Chinese Government does provide the direction and does not 
disapprove of the methods, I should say.
    It's a goals-oriented approach to build relationships with 
foreign elites and if that requires bribes, if that requires an 
outrageous speaking fee to come speak at someone's resort, to 
think of John Ashe at the U.N. General Assembly, then they're 
willing to tolerate those kinds of methods or to encourage them 
where that's appropriate.
    Ms. Kalathil. I would agree with Peter Mattis' comments and 
also add that I think that the Chinese Government is also quite 
aware of those institutions in developing countries as well as 
democracies that may appreciate the money.
    And sometimes this is not in the form of bribery. It comes 
in other forms and I think that's what we have to try and shine 
a light upon.
    But we also have to understand that in the case of, for 
instance, educational institutions it's a very tricky issue 
because if the Chinese Government comes with money and says, 
we'd like to fund some sort of initiative to study China but it 
has to be according to certain specifications, it's very 
difficult for institutions that are strapped for money to say 
no to that and I think that's the added dimension of that.
    Mr. Rohrabacher. Let's hope so because we see this Chinese 
money actually influencing different people as to whether we 
will permit certain people to march in a parade in our own 
country.
    We've seen that. We've seen a hostile country that's 
government is hostile to things we believe in, preventing 
people--the Falun Gong and others--from marching in parades in 
our country.
    That's outrageous. But I don't see much focus on it.
    Ms. Kokas. Thank you very much for the question.
    This is outside of my area of expertise so I yield my time.
    Mr. Rohrabacher. All right. Well, thank you very much, Mr. 
Chairman.
    Mr. Yoho. Thank you for bringing that out.
    Next we'll go to Mr. Joe Wilson, who is the author of the 
Foreign Influence Transparency Act, I believe it is.
    Mr. Wilson. Yes.
    Mr. Yoho. Thank you.
    Mr. Wilson. And thank you, Chairman Ted Yoho, for your 
vision to conduct this hearing on foreign influence today.
    I appreciate the witnesses for taking time to address the 
growing concern of Chinese influence in our democracy. As a 
grateful son of a World War II Flying Tiger who served in China 
where he developed a great fondness for the people of China, I 
value working together with China for mutual benefit of our 
countries.
    However, it is troubling when China takes advantage of this 
relationship. One issue in particular that I have been working 
on is China's ongoing influence campaign through the 
establishment of its Confucius Institutes throughout the United 
States, which I appreciate Chairman Ted Yoho citing earlier 
today.
    There are currently 103 active Confucius Institutes that 
were described in 2009 by Lin Chang Chung, the head of 
propaganda for the Chinese Communist Party, ``As an important 
part of China's overseas propaganda set-up.''
    It is for this reason that yesterday I introduced H.R. 
5336, the Foreign Influence Transparency Act, which would 
require transparency of these institutes and institutes like 
that through modifying the Foreign Agent Registration Act to 
promote public disclosure.
    And for each witness, do you believe it's appropriate to 
require organizations like the Confucius Institutes to register 
under the Foreign Agent Registration Act?
    And we'll begin with Dr. Kokas. I attended JAG school at 
UVA so I have a fondness for your institution.
    Ms. Kokas. We always love meeting our alums and especially 
ones doing such wonderful things.
    Mr. Wilson. Thank you.
    Ms. Kokas. So thank you so much for that great question, 
and as a professor this is a particularly meaningful issue for 
me, and what I would underscore is there is a very easy way to 
get Confucius Institutes off of U.S. campuses and that is by 
increasing the funding for the study of Chinese from the U.S. 
Federal Government.
    And for my colleagues and my students who are using these 
resources, most of it has to do with a lack of state and 
Federal funding for the study of the Chinese language.
    So this isn't because we are preferenced to bring Chinese 
faculty onto campuses or into elementary schools or middle 
schools or high schools. It's because at the state, local, and 
national level, Chinese language education has been severely 
cut.
    Now, to your question about whether or not it's valuable to 
register Confucius Institutes under FARA, I am hesitant to 
support that approach because of the importance of academic 
freedom and I do question how this type of registration would 
not only affect things domestically but also for U.S. students 
and scholars who are trying to go abroad and study abroad in 
China.
    And I think, as you pointed out, continuing this dialogue 
and continuing to be able to have scholarly and academic 
exchange is essential for future development and growth of the 
relationships between our two countries.
    Mr. Wilson. And, of course, what I am proposing is not a 
bar at all.
    Ms. Kokas. Yes.
    Mr. Wilson. It's disclosure and for students to know----
    Ms. Kokas. Yes.
    Mr. Wilson [continuing]. The relationship with the 
government, with the Communist Party and not at all a bar to 
Mandarin language or whatever.
    Ms. Kokas. Yes. So I think that there definitely is an 
upside to identifying more clearly what those origins are and I 
will tell you a story about something when I was in Virginia.
    I was giving a talk at William and Mary, and there was a 
Confucius Institute leader who oversaw a talk that I was giving 
and asked specific leading conversations, and I didn't know 
before I went to give the talk that the Confucius Institute was 
sponsoring the talk.
    So there are a lot of different ways in which this can have 
influence and that actually shaped our discussion in the talk 
and the ways in which I had to, as a professor, respond to a 
lot of these issues.
    So I think that that is important. But I think one of the 
best ways to counteract that, again, is increased funding for 
Chinese language education.
    Thank you.
    Mr. Wilson. Thank you.
    Ms. Kalathil. Thank you, Representative Wilson.
    While I can't speak to the specifics of your proposed 
legislation, I would say that I think democracies in general 
would appreciate and do well from increased transparency around 
Confucius Institutes.
    I think that also happens at the institutional level and 
what we found is that much of the knowledge about Confucius 
Institutes comes from reporting and in the United States from 
FOIA, and there has to be a better way to increase transparency 
around the agreements that universities have struck with the 
Confucius Institutes and a way to get that information out to 
the broader public.
    Mr. Wilson. Thank you very much.
    Mr. Mattis.
    Mr. Mattis. I am firmly in favor of the discussion that 
your bill creates because it is about a conversation about what 
is appropriate--what are the rules of engagement.
    The agreements should be open and they should be important. 
I think Confucius Institutes are not important for the 
individuals that are in them that are brought over from China 
as language teachers or whatever else.
    They're important for the institutional relationship that 
is established between the university and Hanban back in China 
or ultimately the United Front Work Department and it's that 
that institutional relationship provides leverage.
    So it's less about the individuals that are there and more 
about how that connection or how the loss of funding or how the 
loss of other academic programs might be used to pressure those 
universities.
    Mr. Wilson. And I thank each of you and thank you again, 
Chairman Yoho.
    Mr. Yoho. Thank you.
    We'll next go to Mr. Chabot of Ohio.
    Mr. Chabot. Thank you, Mr. Chairman.
    First of all, I apologize for coming a little late. As you 
probably maybe already announced, there were two Foreign 
Affairs hearings going on at the same time.
    The other was on Saudi Arabia potential nuclearization and 
things right across the hall and so I went there and now here. 
So if I am repeating anything, I apologize, and I will just 
kind of throw this open and--and this to anybody.
    First of all, as far as pressure, censorship, et cetera, 
either from the Chinese Government or Chinese interests either 
at home or especially here in the U.S. on a couple of groups 
that I just wanted to ask you about, first, just on, you know, 
students and making sure that the Chinese side of things kind 
of pushes out everything else--that they get their message 
through and the pressure that they're putting on entities here 
in the U.S.
    Anybody want to talk about that? I know you have already 
talked about this to some degree but I will open it up.
    Yes, sir.
    Mr. Mattis. So you're asking about sort of the nature of 
what Chinese students here in the United States are subjected 
to from their own government?
    Mr. Chabot. Correct.
    Mr. Mattis. Well----
    Mr. Chabot. And also perhaps former citizens of China who 
now have either become U.S. citizens or still have family 
members back there who they have to keep in mind that they may 
be under pressures or threats back home even though they happen 
to be here now.
    Mr. Mattis. First, they get used as props for rallies and 
attendees at sort of where Chinese leaders are present in--as a 
counter protest, for example, during the Olympic torch relays 
in 2008--to put pressure on representatives who have large 
Chinese constituencies that can be used to promote letter-
writing campaigns or email-writing campaigns about Tibet, about 
human rights, about other policy or suggestions that are 
antithetical to the Party.
    Second, there is, in some cases, very direct coercion put 
on family members and someone who has done something in the 
United States, to pick, for example, the Radio Free Asia 
reporters who have been reporting on the crackdown in Zheijiang 
were contacted and told that they had family members who had 
been arrested and that if they were to be released that they 
would need to stop their reporting.
    And these kinds of threats are more common than we know in 
part because there's no real safe place for people to turn to 
say, this is what's happening to me, this is what is occurring.
    And so, in a sense, we are allowing a foreign government to 
commit acts of violence, intimidation, to violate the civil 
rights of our own citizens or people who are protected by our 
law on our soil.
    Mr. Chabot. Thank you.
    Another group that was particularly targeted in the PRC was 
Falun Gong, obviously, and I've read several books that came 
out within the last few years about literally members that were 
swept up over there and put in hospitals and literally organs 
harvested.
    And, you know, it sounds so over the top that one might 
think that this is just kind of made up. But everything that 
I've seen it's absolutely true and we've had quite a few Falun 
Gong practitioners that I met with in my office and we've had 
in committees here over the years and they also have talked 
about, you know, family members back home that the government 
in their various ways keep an eye on them over here and there's 
retribution back there, whether or not they're practitioners in 
the PRC or not.
    So anybody want to touch on Falun Gong you may not already 
have prior to me getting here? Yes.
    Ms. Kalathil. I mean, I can just briefly say that I think 
your identifying this issue is something that is happening 
within China as well as outside of China is quite pertinent and 
that extends not only to the Falun Gong but all these other 
groups that the Chinese Government considers sensitive, whether 
it's members of the Tibetan exile community or students that 
support more exploration of that idea.
    That is what is the most concerning, and I would just add 
in addition to what Peter said about the coercions of Chinese 
students in the United States, which I think is absolutely 
correct, and I think that the emphasis actually is correct on 
the Chinese Government for exerting that pressure.
    One gap that seems to have been identified is that those 
students are particularly vulnerable because they lack the 
broader bridges to the community and the university and so it 
is perhaps incumbent upon universities to try to create a 
better atmosphere so that those students also feel more 
connected to the university and they're not so dependent on the 
consulates for support and guidance.
    Ms. Kokas. Could I add----
    Mr. Chabot. Yes, ma'am.
    Ms. Kokas [continuing]. Very briefly to that?
    Yes, and in the university environment there is a 
challenge, because a lot of Chinese students exist within 
Chinese language communities in which bullying or coercion 
occurs over Chinese social media, and then even when the 
students take it to the university administration it's 
difficult for the university to actually act upon it because 
there isn't enough support for international institutes and 
international studies at the institution for there to be 
Chinese language-speaking administrators who can help to 
address these challenges.
    So there are actually mechanisms in place at the university 
level to help support and protect students that are being 
bullied by other students.
    But the challenge of our multinational and global 
universities is that there frequently isn't enough support for 
international students. So I would just urge additional support 
of that nature.
    Mr. Chabot. Thank you very much.
    My time has expired, Mr. Chairman.
    Mr. Yoho. Thank you for your questions. Thank you for your 
great answers.
    If you have got just a little bit more time I would like to 
ask a couple other things and Ranking Member Sherman may be 
back here. He had to vote.
    Actually, we've got Scott Perry here. Are you ready to go--
ask questions or do you want me to talk for a minute?
    All right. Go ahead. I will yield to you right now.
    Mr. Scott Perry from Pennsylvania.
    Mr. Perry. Thank you, Mr. Chairman. I am sorry to be late 
here. There's too many things going on.
    But I will just do some blanket stuff and we'll see who 
wants to answer the questions. I am concerned about the 
Confucius Institute and their operations in the United States, 
the amount of students that they have studying here. The fealty 
that is paid by the universities, so to speak, to China because 
they fund their students here and, of course, the universities 
want that funding.
    They pay the full ride and many American students can't 
afford to come to the schools. So not only is it that influence 
that comes from the students being here and taking information 
back to China, which might be otherwise proprietary or just as 
soon proprietary, but also from the teaching component of 
Chinese professors that are propagandizing.
    And so, in a sense, I don't know what the vehicle is but I 
would be interested to hear from you folks what you think we 
can do about that from the standpoint of we have an open 
society with a First Amendment, right.
    But that doesn't mean that we wish for other hostile 
nations or adversarial nations to come in and utilize the 
provisions of our constitutional freedoms to undermine our 
Government and our society. But, literally, I don't think 
there's any question really that that's happening.
    So the question for you is what do we do in the confines of 
the constitutionality and current law to address that, and if 
we don't have current law to address it, what would you propose 
would be appropriate?
    Ms. Kokas. Mr. Perry, may I take that question?
    Mr. Perry. Please do.
    Ms. Kokas. Thank you very much, and thank you for that 
excellent question.
    And I would actually like to tell you a personal story that 
relates directly back to this. So my graduate funding was 
supported by FLAS--Foreign Language Area Studies--and through 
that funding I actually taught Mandarin to two students, both 
Chinese students and U.S. students, at University of 
California, Los Angeles.
    The gutting of that program means that my current 
institution where I teach--the University of Virginia--does not 
have that type of funding anymore.
    So that's graduate students who aren't being funded. That's 
fewer Chinese language classrooms that are being offered. These 
are not expensive programs.
    When we think about the potential possibility for 
countering Chinese influence, using already existing programs 
that are already in place, adding additional funding there, and 
allowing universities that don't necessarily have funding to 
teach Chinese language to use U.S. Federal Government funding 
rather than Confucius Institutes.
    Most of the institutions that rely on Confucius Institutes 
to teach Chinese language are not doing so because they prefer 
to take money from Hanban.
    It's because they don't have any other options and they 
believe that it's important to train their students for the 
21st century.
    Mr. Perry. And I agree with that----
    Ms. Kokas. Yes.
    Mr. Perry [continuing]. And I agree with you that that's 
important and that is one of the benefits, right. It's great to 
have that other language and if the Chinese Government wants to 
pay for us----
    Ms. Kokas. Yes.
    Mr. Perry [continuing]. To have our students learn it, I am 
all for that.
    The question is the propaganda that comes along with maybe 
not the language teaching----
    Ms. Kokas. Yes.
    Mr. Perry [continuing]. But the other components.
    Ms. Kokas. So I can give you actually some very specific 
recommendations with regard to this.
    First of all, there are other foreign governments that pay 
for language and cultural education. So, for example, the Korea 
Foundation pays for professors and endows professorships.
    However, the institution is able to select who the 
professor is. This is a crucial difference. So the professors 
and the teachers of Chinese language at universities and 
elementary schools and middle schools and high schools are 
selected by the Chinese Government.
    So working with deals in order to be able to only accept 
that funding provided that that institution has more oversight 
over who was actually selected as the professor is one 
important----
    Mr. Perry. So can I ask you something about that?
    Ms. Kokas. Yes.
    Mr. Perry. How has that been determined? Is that a country 
by country proviso or is that just kind of the way it's done--
China demands to have this selection right as a component or 
proponent of the funding coming along with it, and if the 
schools, for instance, says no, we reserve the right to choose 
the instructor then China just says no, is that because there's 
nothing in law.
    There's nothing in statute or rule or whatever that is a 
prohibition. It's just a country by country agreement with 
school by school.
    Ms. Kokas. Precisely. Yes.
    The other point that's important to note is that one thing 
that's quite easy to do is actually put up and create more 
transparency in the MOUs that different universities are 
signing because different universities sign different 
agreements with Confucius Institutes and typically institutions 
that have less institutional power and less finding sign less 
favorable agreements.
    So a database of MOUs. Also, the ability the requirement 
that all institutions be able to leave that Confucius 
relationship on the spot if there are any perceived violations 
is also an important point.
    Mr. Perry. Are there privacy concerns if, assuming that 
most of the institutions that accept Confucius Institute 
funding and also Federal funding at the same time, are there 
privacy concerns from the institution's standpoint that they 
would not want to make those agreements open to public scrutiny 
or government scrutiny?
    Ms. Kokas. That's beyond my expertise.
    However, my guess would be in a public institution there 
would be more flexibility than in a private institution with 
regard to those agreements.
    Mr. Perry. I yield, Mr. Chairman.
    Ms. Kokas. Thank you.
    Mr. Yoho. No, I appreciate your dialogue and you bring up a 
very important issue. You know, you're talking about our former 
government and open--you know, all of our amendments but 
freedom of speech, freedom to participate, and I think it's 
time for us as a nation we need to look at these things when we 
have foreign countries, as we've seen with Russia, as we've 
seen with China, dictating or pushing the narrative that 
weakens our democracy and bolsters their--and, you know, the 
last thing that China wants is a successful democracy and we 
see them going after Cambodia.
    We see them going after all these fledgling democracies and 
their wish is that they fall apart so that they can have the 
Socialist form of government that they proclaim with Chinese 
characteristics, as you and I know as communism, and they want 
to promote that.
    So I think this is a dialogue maybe we need to continue and 
I appreciate you bringing that up.
    If you have time, and I think the best way to phrase this 
is I want to start out with the United Front, which is a soft 
power advocate for China, and the role of the Chinese--they 
said in this the role of the Chinese citizen is to serve the 
Communist Party and that's the antithesis of what we believe 
here in America.
    You know, we believe our rights come from a Creator and 
that government is instituted by we the people to protect our 
God-given rights and that the government is there to fight for 
the protection of your rights, not to serve government.
    And so we are at polar opposites and I would like to see 
how that plays out in their future. I kind of see how it will.
    I want to ask you, with the statements I made in the 
beginning about the different sayings by the different leaders 
and knowing what China is doing, they're wiping out past 
cultures while rewriting their own history.
    If you look at Tibet, they're changing the demographics of 
the Tibetan region and putting in Chinese nationals to dilute 
the population, eventually, getting rid of the Tibetan history.
    They're doing this with Mongolia. Certainly they're doing 
it with Hong Kong. You know, that used to be part of Great 
Britain and they let it go back in I think it was 1997. But 
with Taiwan it's a different story.
    You know, Taiwan fought a civil war. They lost. They moved 
to Taiwan, and it was recognized as a country until the Nixon 
era.
    But, again, China is stepping in and has made bloody 
threats over these countries. But my question to you, when it 
comes to businesses in America are there pure Chinese 
nationals--just Chinese citizens that have come here but 
they're still Chinese citizens that have created businesses in 
the U.S. without the influence or the hand of the CCP--the 
Chinese Communist Party--in your experience or in your 
research?
    Mr. Mattis, go ahead. You look like you want a bite at 
that.
    Mr. Mattis. Well, I would say that here are plenty of 
examples of Chinese citizens who have come to the United States 
for the same reason that many predecessors from Europe, from 
Africa, from elsewhere in the world has come to the United 
States--that this is a place where there is opportunity. This 
is a good place to be an entrepreneur.
    This is a good place to raise a family. And so there are 
definitely examples of people who have come for all of the 
reasons that we recognize and celebrate.
    Mr. Yoho. Okay. But if we go up to a bigger scale business, 
say, that employs 100 or 500 people, would it change? Would 
they be here on their own or would they--you know, we know the 
people that have restaurants and, you know, small businesses.
    But as you get to a larger business would that hold true 
for that or would you see a hand of the Chinese Government--
their Secret Service or military?
    Mr. Mattis. That depends on their interests back in China.
    Mr. Yoho. Okay.
    Mr. Mattis. If they have substantial business interest 
there, then they are vulnerable to coercion. They could be 
punished for participating in political activities that the 
Party doesn't want through the--sort of the compromise of their 
assets back home.
    Mr. Yoho. Okay.
    Ms. Kalathil, any comments, or Dr. Kokas, either one?
    Ms. Kalathil. I think just to add to Peter's comments, you 
know, I think at the level of the larger companies within that 
are vulnerable to CCP influence, I would say it's more relevant 
to those companies that have started within China and that are 
now moving overseas as opposed to the situation that you 
described.
    I think you can find many, many companies that were started 
in China in the absence of significant foreign competition 
perhaps and that now are moving overseas and through a variety 
of means of influence the Party is able to pull levers over 
what they invest in or how they direct their interests.
    Ms. Kokas. So to build on what Shanthi and Peter had 
mentioned, my major concern in this case is actually that by 
not supporting immigrant entrepreneurs that rather than staying 
in the United States and building technology here that they 
decide to return to China because this is no longer a 
hospitable place.
    And I will give an example of an AI company that I was 
speaking at a conference that I was at at Brown that was 
developing mobility technology as well as new medical 
technologies and the founder was trained in the Bay Area at 
public institution, worked at Google, and then because of 
discrimination that he and his family felt, he went back to 
China and established his company there.
    So my major concern is actually in that way, that we lose 
out on incredible immigrant talent because of any kind of----
    Mr. Yoho. All right. Was he a Chinese national?
    Ms. Kokas. He was a Chinese national.
    Mr. Yoho. Okay. And remember what we said in the beginning. 
China will come out and say this is a form of racism. So, you 
know, I don't want to have conspiracies going on. But----
    Ms. Kokas. But this wasn't a Chinese Government official 
that was saying this. This was----
    Mr. Yoho. Right.
    Ms. Kokas [continuing]. The individual that was saying it 
in a personal conversation.
    Mr. Yoho. But we know first hand that there's students 
going to MIT that have already gotten their graduate degree in 
China.
    Then they've come over here to apply as a brand new student 
and they get accepted to the better programs because of their 
talent, and we know this first hand.
    I've just seen too many examples and the reason I brought 
up the first question about the purity of a Chinese business is 
because I've had so many business people that say if a Chinese 
business is here, just assume it's their government, their 
Secret Service, and military because it's all one. They're all 
connected.
    You know, the role of the Chinese people is to serve the 
government and if they're a Chinese national--this is what I've 
been told--and we've had one of our agencies--three-letter 
agencies that I can't talk about, and he just said if you're on 
the internet just assume China's in your internet. I mean, we 
know these things, and so I think we need to tread a little bit 
smarter.
    You had another comment you wanted to say.
    Ms. Kokas. Yes. Of course. Thank you very much, Chairman 
Yoho.
    With all due respect, once we start conflating Chinese 
people in the United States with the Chinese Government, then 
we risk moving back to very, very dark periods of our nation's 
history.
    Mr. Yoho. I think that's fair. I think that's real fair and 
that's something we really need to watch for.
    But on the same token, we can't be naive with what, like 
Mr. Perry brought up that we have an open society. We operate 
on these rules and other people don't, to their advantage.
    Mr. Perry, do you have any other comments you want to make?
    Mr. Perry. I don't think the chairman is talking about is 
Chinese people living in the United States. I think what he's 
talking about is the Chinese Government that sponsors either 
students, professors, or business people with the express 
purpose of coming to the United States to parlay either what 
they get here or what they can do here for the good of the 
Chinese Government, and certainly that's not Chinese people 
that are in the United States that love America and want to be 
an American and live the American dream and have that 
opportunity.
    But I think I would agree with the chairman that we would 
be naive as a country and as individuals to think that China 
has the United States' best interest at heart.
    They want access to our markets but they would certainly 
rather not see us be a society that has free markets and open 
competition.
    They prefer the Socialist/Communist model and they have 
since the 1950s and the 1940s when they changed to that model 
and they have shown no proclivity whatsoever to change that at 
all.
    So I think we just have to be clear-eyed about the reality 
of the circumstance and do what we have to do within the 
confines of our Constitution to preserve our free democracy.
    And if we don't, we don't do that at our own peril.
    Mr. Yoho. And I think that's a good point being brought up 
because, you know, you look at our country and we've got so 
many great diasporas here, whether it's the Korean, the 
Vietnamese. You know, they've assimilated and become proud 
Americans with their heritage and we all accept that.
    But I think in what's going on there's a different China 
than there was before. We've never seen the threat to democracy 
in my life. I will be 63 next month. I expect a birthday card 
from you.
    But I've never seen this in my lifetime. You know, I grew 
up during the Nikita Khrushchev era and I remember him knocking 
on the podium with his shoe. But that was different.
    You know, what we are seeing now is the subversive and the 
aggressive power of China, and we didn't even get into the 
South China Sea.
    You know, if we look back at 2000, there was less than 
50,000 Chinese students in here. Today, there's over 329,000.
    Keeping in mind what Deng Xiaoping said or Mao Zedong said 
in 1949, they have a 100-year plan. You can fall into the 
conspiracy and you can get wrapped up in that or you can be 
cautious and move cautiously and I think that's what we are 
looking to do out of this hearing is how do we form policies.
    And you brought up a great point--we can't be xenophobic 
about anybody but we sure need to be cautious about how we 
tread and we need to value who we are as a nation so that it 
stays there for another 100 years from now.
    And, you know, we look at what's going on in Australia--the 
bribing of a senator to be favorable to Chinese policies. We 
know that's happened. We know they got caught.
    It's the ones that didn't get caught that we don't know 
about--could that be in our country? These are things we always 
need to watch and the Australian national who went back to 
China to bury his father's ashes with his mother and they 
stopped him, and it was a message to send to other Chinese 
nationals that your political views are not welcome here so 
that it's a form of suppression for other people.
    You know, I can't tell you much I thank you. Our team back 
here has already told us they've got a couple ideas for bills. 
So thank you, and we appreciate your time.
    The committee, the Subcommittee on the Asia-Pacific, 
Foreign Affairs, as of this date, March 21st, has come to an 
end, sadly.
    But we appreciate it, and it's adjourned. Thank you for 
your time.
    [Whereupon, at 3:26 p.m., the committee was adjourned.]

                                   

                                   

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