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

       ASIA'S DIPLOMATIC AND SECURITY STRUCTURE: PLANNING U.S. ENGAGEMENT

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

                                    HEARING

                                   BEFORE THE

                      SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                     OF THE

                          COMMITTEE ON FOREIGN AFFAIRS
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  MAY 23, 2018

                                   __________

                               Serial No. 115-152

                                   __________

            Printed for the use of the Committee on Foreign Affairs

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Available: http://www.foreignaffairs.house.gov/, http://docs.house.gov,

                          or http://www.gpo.gov/fdsys/

                                    __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    30-177 PDF                  WASHINGTON : 2018

    -----------------------------------------------------------------------------------
    For sale by the Superintendent of Documents, U.S. Government Publishing Office,
    http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
    U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
    E-mail, gpo@custhelp.com.

                          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

    Amy Searight, Ph.D., senior adviser and director, Southeast Asia
      Program, Center for Strategic and International Studies........     7
    Aparna Pande, Ph.D., director, Initiative on the Future of India
      and South Asia, The Hudson Institute...........................    18
    Michael D. Swaine, Ph.D., senior fellow, Asia Program, Carnegie
      Endowment for International Peace..............................    30

              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....................................     3
    Amy Searight, Ph.D.: Prepared statement..........................    10
    Aparna Pande, Ph.D.: Prepared statement..........................    20
    Michael D. Swaine, Ph.D.: Prepared statement.....................    33

                                    APPENDIX

    Hearing notice...................................................    52
    Hearing minutes..................................................    53
    Questions submitted for the record by the Honorable Ann Wagner, a
      Representative in Congress from the State of Missouri, and
      written responses from:
      Amy Searight, Ph.D.............................................    54
      Aparna Pande, Ph.D.............................................    56
      Michael D. Swaine, Ph.D........................................    57

       ASIA'S DIPLOMATIC AND SECURITY STRUCTURE: PLANNING U.S. ENGAGEMENT

                                  ----------

                            WEDNESDAY, MAY 23, 2018

                           House of Representatives,

                     Subcommittee on Asia and the Pacific,

                         Committee on Foreign Affairs,

                                Washington, DC.

        The subcommittee met, pursuant to notice, at 2:33 p.m., in
    room 2200, Rayburn House Office Building, Hon. Ted Yoho
    (chairman of the subcommittee) presiding.
        Mr. Yoho. Let the hearing come to order.
        Good afternoon, and thank you for being here today, and
    sorry for the delay. Sometimes that voting schedule does get in
    the way.
        Members present will be permitted to submit written
    statements to be included in the official hearing record.
    Without objection, the hearing record will remain open for 5
    calendar days to allow statements, questions, and extraneous
    materials for the record subject to length limitations and the
    rules. And the witnesses' written statements will be entered
    into the hearing.
        As my colleagues on the Asia-Pacific Subcommittee, the
    world's strategic and economic gravity is shifting eastward.
    Asia has already become the essential arena where the United
    States must compete to advance our economic interests and
    defend the American-led order that has underwritten global
    security and prosperity for decades.
        Moreover, we need a game plan. The United States won't be a
    credible competitor in this high-stakes arena without a long-
    term national strategy, and that is one of the goals we are
    focusing on in this committee and the Foreign Affairs Committee
    is to help map a long-term strategy that doesn't change with
    each administration as easily as we have seen in the past so
    that we have a long-term vision.
        Our main adversary in this competition, the People's
    Republic of China, is the master of generational strategies.
    When Xi Jinping came to power in 2012, China's Communist Party
    laid down two centenary goals, objectives for the 100th
    anniversary of the party in 2021 and the 100th anniversary of
    the PRC in 2049. Xi has followed this roadmap ever since.
        It has been nearly 500 days since President Trump's
    inauguration. Over the last several months, his administration
    has begun to lay out a body of work containing a long-term
    national strategy for the United States with significant
    attention to the Asia-Pacific region. This committee has a role
    to play in the strategic planning process, as I said earlier,
    which is why we have convened today's hearing.
        In December, the White House released a new U.S. National
    Security Strategy that reflects a return to great power
    competition, acknowledging a U.S-China relationship that is
    fundamentally competitive. Taking up a more honest vision of
    China's regional global role, the National Security Strategy
    casts aside decades of wishful thinking. It says policies based
    on the assumption that engagement with rivals and their
    inclusion in the international institutions in global commerce
    would turn them into benign actors and trustworthy partners.
    Turned out to be false.
        This view is an emerging consensus in and outside of
    government and across partisan lines. And I also would like to
    add that it is across different nations, because we are seeing
    this as other countries come in and talk to us, that they are
    saying the same thing. It will likely define Asia for years to
    come.
        The administration has begun to lay out a free and open
    Indo-Pacific strategy specific to Asia, which emphasizes the
    strategic interconnection of the Western Pacific and the Indian
    Ocean. The strategy promotes nations' freedom from coercion and
    the ability to defend their sovereignty and freedom internally
    in terms of good governance, human rights, and fundamental
    liberties. It also promotes openness, freedom of the sea,
    peaceful dispute resolution, and open trade in investments.
        These strategies go a long way toward defining a structure
    for U.S. engagement, a framework that our diplomats and the
    Armed Forces will operate within to advance not just U.S.
    national interests but those of our regional partners, and, you
    know, the alliances that we have. You know, a lot of people,
    you know, they think we have pivoted away from the Asia
    Pacific. Nothing could be further from the truth.
        But this work is far from over. There have been scant
    details on how the executive branch will operationalize its
    strategy for Asia. It is still unclear what role emerging
    mechanisms like the Quad will play in our Indo-Pacific
    strategy. Questions remain about how the U.S. strategy will
    integrate with those of our close partners like India, which is
    a major pillar of the Indo-Pacific vision the administration
    has laid down. Some experts are concerned that such a strategy
    would marginalize ASEAN, which has always been a core component
    of U.S. engagement in Asia, and it will continue into the
    future.
        Today, with the help of our expert panel, we will work
    toward some of these answers. We will discuss these strategies
    and their implication from an oversight perspective, and to
    inform our upcoming East and South Asia budget hearing with
    administration officials.
        I thank the witnesses for being here today, and again
    apologize for the delay. And I now turn to our ranking member,
    Mr. Brad Sherman, from California.
        [The prepared statement of Mr. Yoho follows:]
       [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                  ----------

        Mr. Sherman. This is a broad hearing with many things to
    discuss. I will mention a few.
        As to democracy and human rights, we see strong democracies
    in Japan, Taiwan, Mongolia, South Korea, and India, yet
    Southeast Asia is lagging. In general, it has an average score
    from Freedom House of 4.8, halfway between the 1 and the 7, the
    1 being the best. Burma's transition to democracy has now
    morphed into this terrible ethnic cleansing of the Rohingya
    with 600,000 refugees fleeing into Bangladesh. And China,
    hardly a democracy, oppresses its Uighur and Tibetan
    minorities, but more to the point--but even perhaps more
    significant--its government has no theoretical basis for its
    own legitimacy.
        Democracy, you know, can be accepted as legitimate.
    Theocracy or monarchy, where there is a culture that accepts
    that, might explain why they are running things. Communism was
    a theology perhaps or a theocracy, but Xi is not the vanguard
    of the proletariat. So the only answer they have to the
    question as to why they are running things is because they have
    provided a high level of economic growth, and at some point
    they won't. And we will test to see whether the Chinese people
    accept the Communist Party that isn't a Communist Party but is
    in power because they are doing such a great job at running the
    economy when they are not doing a great job at running the
    economy. We will see what happens.
        We see with India some $15 billion of arms sales, and naval
    exercises. We see India developing its ties with Southeast
    Asia, but only 2 or 3 percent of Southeast Asia's trade is with
    India. And it would be good if India presses Southeast Asia to
    move in the direction of democracy, we are reviving the
    quadrilateral group involving the U.S., Japan, Australia, and
    India. And where it is conducting maritime patrols or where it
    is working for development and democracy, this could be a
    useful working group.
        As to trade, we have a larger trade deficit with China in
    2017 than 2016. We have conducted talks in which the other side
    has refused to commit itself to any quantifiable reduction in
    the trade deficit, and we have caved. There isn't a term for
    this that Beijing will understand. It is called paper tiger,
    and it describes an approach where you scream about a trade
    deficit and then settle for no change, except that we eliminate
    our sanctions or roll them back with regard to ZTE. So that on
    the one hand, the President says he is going to create a new
    coalition to bring Iran to its knees and force them to make
    concessions that President Obama couldn't even dream of or
    chose not to. And at the same time the message goes out to
    companies around the world we don't really impose sanctions on
    big companies, we will pick a few small ones now and then. And
    so Iran will be deprived of a few small trading partners.
        There is one area where I think we need a more dovish
    approach, and that is the so-called islands. They are really
    islets, some of them rocks, off the coast of China, sometimes
    hundreds of miles off the coast of China. They are located off
    the shores of the most populated continent, yet for millennia,
    no one has ever chosen to live on them. That is how valuable
    they are.
        It is said that whoever controlled these islets would stand
    astride major trade routes with trillions of trade. All of that
    trillions is in and out of Chinese ports, so if China can
    control these islets, they could blockade their own ports.
    There are also some oil tankers that get close to some of these
    islets that could easily change their route and be far from
    these islets. So let us hope that neither in Beijing nor in
    Washington is a dispute over these islets a reason to fan the
    flames of war or fan the flames of increased military
    expenditure. We should work something out without allowing
    those in both countries that want to raise tensions to justify
    military expenditures to be successful.
        With that, I yield back.
        Mr. Yoho. Thank you.
        Do you want to have an opening statement, Dr. Bera?
        Mr. Bera. May I?
        Mr. Yoho. Yes, sir, you can.
        Mr. Bera. Thank you, Mr. Chairman.
        Obviously, a very timely hearing. And, you know, I think
    both the chairman and the ranking member touched on a number of
    issues that are of key importance to the region. I am going to
    add one more.
        When we think about some of the tensions in the South China
    Sea that continue and actually are escalating as you start to
    see the Chinese deploy missile systems on the Spratlys as they
    have had their first bomber landing on the Spratlys, and yet I
    know the administration has withdrawn their invitation to
    RIMPAC as a first step. What we can anticipate, you know, if we
    just think about how the Chinese respond, you know, if you give
    them an inch, they are going to ask for a foot, and then
    unfortunately we should have stopped them, you know, several
    years ago when it would have been less complicated.
        At this juncture, though, we have to send a strong message
    that militarization of the South China Sea, you know, claiming
    disputed territories is not acceptable, and we're going to be
    very interested, and I think in a bipartisan way, Members of
    Congress would be very supportive of the administration
    continuing to send a strong message that, you know, we have to
    keep these waterways open. We do not, you know, accept China's
    claims that this is their territory, and we have to stand in
    partnership with the nations in that region, the Philippines,
    Vietnam, and others to send that strong message and keep those
    waterways open.
        In addition, just, you know, sticking to kind of the
    maritime conversation, we are seeing that increased cooperation
    and partnership between the United States and India, and
    trilaterally or quadrilaterally with Japan, the United States,
    India, and Australia. And, you know, again, I think I speak for
    members of this committee--subcommittee as well as the full
    committee that we do think that from a strategic direction it
    is an incredibly important partnership, both bilaterally but
    also trilaterally and quadrilaterally, and certainly support
    continued movement and partnership in that direction. So I am
    very interested in hearing the witnesses' take on some of this.
        So thank you, Mr. Chairman. I will yield back.
        Mr. Yoho. Thank you, Dr. Bera. I appreciate it.
        I am going to say something I say often. You are probably
    going hear it more than once today. The world is going through
    a tectonic shift in world powers we haven't seen since World
    War II. You know, we went through a World War II powers emerge
    from that, and we are going through that today in a different
    fashion. I am 63 years old, and I have not ever seen the type
    of rivalry that we have seen. And I think what it comes down to
    is countries that have free and open thinking and democracies
    and things like that versus socialism with Chinese
    characteristics, which China is proposing or out there
    promoting. They can call it whatever they want. It is still
    communism, and we are seeing these two forces come together.
    You have got democracies and you have got that forum that Xi
    Jinping and the Communist Party is promoting.
        And so as you guys do your statements and the questions,
    that is where my focus is on how do we balance that to avoid
    conflict in the future, that we focus on economics, trade
    cultural exchanges and the advancement of all of us and not go
    into these conflicts that we have seen too much of.
        And so with that, let me introduce our speakers: Dr. Amy
    Searight, the senior adviser and director of the Southeast Asia
    Program at the Center for Strategic and International Studies;
    Dr. Pande--did I say that right, Pande?--director of the
    Initiative on the Future of India and South Asia at the Hudson
    Institute; and Dr. Michael Swaine, senior fellow in the Asia
    Program at the Carnegie Endowment for International Peace.
        I assume you all have testified before a committee before.
    You have got the little timer clock up there. Green light comes
    on when you have a lot of time. Yellow light is you start to
    slow down or finish. And then the red light. We are not
    crunched for time. I think you will be able to freely speak.
        So if you would, Dr. Searight, give your testimony. Thank
    you.

    STATEMENT OF AMY SEARIGHT, PH.D., SENIOR ADVISER AND DIRECTOR,
    SOUTHEAST ASIA PROGRAM, CENTER FOR STRATEGIC AND INTERNATIONAL
                                STUDIES

        Ms. Searight. Thank you, Chairman Yoho and Ranking Member
    Sherman. Thank you for inviting me to testify today on this
    really timely and important topic.
        As the United States and much of the world really
    intensifies its focus on North Korea and resolving the tensions
    there, it is important for us to maintain a broader and long-
    term view on key regional dynamics that are shaping Asia's
    diplomatic and security structure in ways that will impact the
    United States and the region for years to come.
        For countries in the Indo-Pacific, and in Southeast Asia in
    particular, this is a time of strategic flux and uncertainty.
    Many in the region are wondering if we are nearing an
    inflection point where Chinese engagement and influence will
    outstrip America's traditional leadership in the region. The
    United States has tremendous reserves of hard and soft power in
    the Indo-Pacific, but there is a growing sense that U.S.
    strategy and focus is adrift at a time when China is
    demonstrating laser-sharp focus on regional priorities. So as
    you said, Mr. Chairman, the United States really needs a game
    plan, a long-term strategy for the region.
        Southeast Asia is at the crossroads of the Indo-Pacific.
    The countries in the region are critically important to the
    United States in their own right, both in strategic and
    economic terms, but more broadly, the region of Southeast Asia
    represents the chessboard on which the great power rivalry
    between the United States and China is being contested.
        China's efforts to win over friends in Southeast Asia and
    pacify ASEAN as a counterbalance to its own actions has been
    formidable. The United States has upped its game in Southeast
    Asia in recent years as well, leading to some substantial gains
    on security partnerships and capacity building, yet questions
    remain about U.S. commitment and staying power.
        For the United States to craft a compelling and enduring
    strategy for the Indo-Pacific that resonates in Southeast Asia,
    we have to first consider the key priorities and concerns of
    countries in the region. And there are three I want to point
    to.
        The first is their interest in managing great power
    rivalry. As the strategic environment of Southeast Asia and the
    broader Indo-Pacific grows increasingly contested, countries
    are seeking ways to both engage and hedge against closer ties
    with China, while not being forced to choose between China and
    the United States.
        The second priority that we have to keep in mind is that in
    Southeast Asia economics remains paramount. For the governing
    elites of Southeast Asia, economics is the foundation of
    security. Whereas the United States has traditionally led
    regional efforts to foster economic openness and integration
    that has been critical to the region's economic success for
    decades, the U.S. withdrawal from the Trans-Pacific Partnership
    and the lack of a viable economic engagement strategy to
    replace it has created a strategic void at a time when China
    has been ramping up its highly ambitious Belt and Road
    Initiative.
        The third priority for the region is ASEAN centrality.
    ASEAN has been the central driver of regional cooperation and
    stability among its Southeast Asia member nations for over half
    a century, and has developed a remarkable track record of
    averting conflict and coercion among its members and building
    trust and cooperation through dialogue and adherence to norms
    of noninterference and peaceful resolution of disputes.
    Southeast Asian countries put great stock into ASEAN and ASEAN
    centrality since they know that ASEAN-led mechanisms are the
    best way for the collective interests of these countries to be
    taken into account.
        And here I also want to make the case for why ASEAN
    centrality matters for the United States. ASEAN-led frameworks
    from the ASEAN Regional Forum to the East Asia Summit to the
    ADMM-Plus provide a venue for the United States to work with
    like-minded partners to help define issues and shape regional
    goals and expectations. But ASEAN's primary value to U.S.
    strategic interests lies in its ability to shape the normative
    environment, and at times--at certain times, to a limited
    extent, speak with one voice.
        The norms-based regional architecture that ASEAN has
    created remains critical to a strategy of promoting a rules-
    based order that imposes some degree of normative pressure on
    countries seeking to subvert collective norms, as China has
    sought to do in unilaterally changing the status quo in the
    South China Sea.
        In my written testimony, I discuss at some length the
    reasons why the conception of the Indo-Pacific is a welcome
    shift in our geostrategic framing of the region because it
    highlights the important maritime challenges that have come to
    the fore as key priorities for the United States and our
    partners in the region, and it also highlights the increasingly
    important role that India is playing in the regional security
    order. But since my time is short, let me turn to the Trump
    administration's free and open Pacific strategy. And in
    particular, I want to point to two shortcomings in the strategy
    and the way it has been rolled out from the perspective of
    Southeast Asia.
        The first is the heavy security focus without a parallel
    economic approach. Most Southeast Asian countries welcome
    security cooperation with the United States, but they grow
    nervous about a United States that only appears engaged on the
    security front. The U.S. withdrawal from TPP sent shock waves
    across the region, and offering to replace TPP with a set of
    bilateral trade agreements premised on the notion that the
    primary goal is to erase bilateral trade deficits with the
    United States holds little appeal for countries in Southeast
    Asia.
        The second problem has been the conflation of the free and
    open Indo-Pacific with the Quad. The Quad met as a grouping for
    the first time in over a decade at the assistant secretary
    level on the sidelines of the East Asia Summit days after
    President Trump rolled out his free and open Indo-Pacific
    vision in his Da Nang APEC speech. The news media latched on to
    this development and overhyped the significance of the meeting.
        To be clear, I think that the Quad is a useful framework
    that holds long-term strategic potential and should be
    encouraged, but it will take some time before the Quad amounts
    to much in the way of substantive cooperation and strategic
    significance. It is still in its very early days. So all of the
    talk of the Quad has crowded out discussion of the role of
    Southeast Asia in a free and open Indo-Pacific and--in a free
    and open Indo-Pacific strategy.
        There has been no clear message of how Southeast Asia fits
    into this vision that has been conveyed to the region. This has
    led many to question whether the quad is the preferred
    strategic framework for the Trump administration and whether it
    will displace ASEAN unity.
        [The prepared statement of Ms. Searight follows:]
      [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                  ----------

        Mr. Yoho. Okay. Thank you, ma'am. I appreciate it.
        Dr. Pande.

     STATEMENT OF APARNA PANDE, PH.D., DIRECTOR, INITIATIVE ON THE
          FUTURE OF INDIA AND SOUTH ASIA, THE HUDSON INSTITUTE

        Ms. Pande. Good afternoon, Mr. Chairman and Ranking
    Member----
        Mr. Yoho. Turn your mic on.
        Ms. Pande. Okay. Sorry.
        Good afternoon, Mr. Chairman, Ranking Member. I would like
    to thank you for inviting me to speak here today.
        American grand strategy for Asia and the Pacific, since the
    end of the second World War, has centered on creating an Asian
    diplomatic and security architecture that ensured stability and
    security in the region. American preeminence ensured the rules-
    based order, which opposed notions of idealogical dominance or
    arbitrary assertions of territorial claims and disputes. The
    post-World War Asian security structure has rested on American
    economic and military might, combined with a network of
    partners and allies across the region.
        The economic and military rise of China over the last two
    decades poses a challenge to American preeminence. China is
    gradually creating a new Asian order with Chinese primacy at
    its heart. U.S. strategy needs to be one of renewed engagement
    with its partners and allies across the region--India, Japan,
    Southeast Asia--to construct a configuration that will be able
    to counter the Chinese march.
        Currently, China's economic and military rise faces no
    structured challenge. Japan's military role is inhibited by its
    constitution, while many in Australia and the United States
    have, for years, assumed China to be a benign power and have
    invested in an economic relationship favoring their potential
    challenger.
        Among Asian countries, India has consistently viewed
    China's expanding influence with suspicion. This is partly a
    function of historical experience. India had engaged Communist
    China as an Asian brother from 1949 to 1962, only to become
    victim of its military aggression over a border dispute. Since
    1962, India has noted China's efforts to build close ties with
    countries on India's periphery, thereby trying to possibly
    encircle India, as well as China's efforts, to lay the
    groundwork for military and naval bases throughout the Indian
    Ocean.
        With a population of more than one billion, India is also
    the country with sufficient manpower to match that of China.
    Thus, India would have to be central to any security
    architecture designed to contain China or aimed at ensuring
    that China does not transform its considerable economic clout
    into threatening military muscle in the Asia Pacific.
        India's growing economic and security relationships and
    interest in the Indo-Pacific region are aligned with its
    deepening partnership with the United States. However, India is
    different from traditional American allies, whether in Europe,
    Latin America, or Asia, for whom the United States was the key
    security provider.
        India wants to maintain its own security capabilities, does
    not wish to become a burden on the American taxpayer. It seeks
    a relationship that helps build India's resources and
    capabilities so that India can play a bigger role in the Indo-
    Pacific.
        U.S. policy toward the Indo-Pacific would, therefore,
    benefit by bearing the following in mind: India would never
    want a relationship of dependence or one in which the U.S. has
    to incur all costs. Treating India as a country critical to
    U.S. interests, the United States could think about a special
    partnership with India, whereby India could be exempt from many
    of the export control regulations that govern military sales.
    Thus, India would be able to deliver military capabilities
    without adding to America's burden of cost. Any attempts to
    balance ties between India and other South Asian states should
    be abandoned to enhance India's capacity to confront China.
        On the economic front, both India and the U.S. would
    benefit if U.S. trade policies were adjusted to enable the rise
    of India as a strategic competitor to China. Any short-term
    loss in dollars and cents would be offset by the immense
    benefit to the U.S. of having a major, 1-billion strong nation
    standing by its side to ensure that China and its closed system
    do not emerge dominant in the Asia Pacific for years to come.
        Thank you.
        [The prepared statement of Ms. Pande follows:]
     [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                  ----------

        Mr. Yoho. Thank you, Dr. Pande.
        Dr. Michael Swaine. Thank you.

      STATEMENT OF MICHAEL D. SWAINE, PH.D., SENIOR FELLOW, ASIA
          PROGRAM, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE

        Mr. Swaine. Thank you very much, Chairman Yoho, Ranking
    Member Sherman. It is a pleasure to be in front of your
    committee again. I am a security expert, so I will talk about
    security-related issues and the question of avoiding conflict
    in Asia.
        Right now, we are in a period of enormous transition in the
    Asia Pacific, as you know, away from a 70-year long period of
    American strategic clarity, economic strength, and military
    predominance to a much more unclear and potentially tumultuous
    period driven, above all else, by the changing power
    relationship between the United States and its major allies,
    particularly Japan, and a continually rising China.
        Although the United States remains the top maritime power
    and economic investor alongside Japan, across the region, and
    as in many ways expanding--and is in many ways expanding its
    absolute capabilities over time, it nonetheless is declining in
    relative terms compared with China. Beijing is now the major
    trader across the region, rapidly increasing its level of
    investments and deploying a formidable set of naval, air, and
    missile capabilities that clearly call into question the
    capacity of the United States and its allies to exercise
    freedom of action and prevail in a crisis or conflict along
    China's maritime periphery.
        In confronting this changing environment, Beijing and
    Washington currently hold fundamentally different notions about
    the best means of preserving stability and prosperity over the
    long term. The United States favors a continuation of American
    maritime military predominance and overall leadership. This
    includes the clear of capacity to prevail in any potential
    serious conflict with China, extending up to at least China's
    12-nautical mile territorial waters. This viewpoint is
    expressed or implied in current and past national security and
    national defense strategy documents.
        In contrast, Beijing favors, at the very least, something
    approaching a multipolar power structure or, at most, a Sino-
    centric structure. Either way, China is pursuing a more secure
    and preferential environment along its maritime periphery. This
    by implication or design means that American military
    predominance is clearly under threat.
        In fact, looking forward, it is my view that far from--and
    it is far from clear that U.S. and allied military predominance
    within the first and second island chains, that is to say out
    to approximately 1,500 nautical miles from the Chinese
    mainland, can be sustained on a consistent basis over the long
    term, just as it is virtually impossible for China to establish
    its own predominance in that region due to U.S. and allied
    strengths.
        Changing relative economic capabilities, military capital
    stocks, and advances in military technologies all call such
    developments into question. And studies have been done both at
    Carnegie and by the RAND Corporation that reinforce this
    notion. In the absence of stabilizing measures, the near-
    inevitable emergence of a clear level of Sino-U.S. allied
    parity in the Western Pacific will almost certainly increase
    the likelihood of crises and possibly even conflict over the
    handling of volatile issues, such as Taiwan and maritime
    disputes in the East and South China Seas.
        What is the primary danger here? The danger is that a
    rising China will overestimate its growing leverage and opt for
    various forms of pressure or coercion to greatly alarm others,
    and that the United States will overreact to such behavior in
    an effort to compensate for what is, in fact, its declining
    relative capabilities, thus threatening to make each disputed
    policy area into an unstable test of relative influence. We are
    already seeing this dynamic at work in the South China Sea and
    elsewhere.
        Given these considerations, it is my view that the best
    optimal outcome for both nations is the development of a stable
    and cooperative balance of power in the Western Pacific in
    which the most vital interests of both the U.S. and its allies
    and the Chinese are protected, and neither side enjoys the
    clear capacity to dominate the other militarily within at least
    the first island chain.
        In addition, the U.S., its allies, and China must also work
    to build a more integrated and dynamic regional economic
    network of benefit to all as a bulwark to a stable military
    balance. For the U.S., the security balance should center on
    retaining a robust yet defense-oriented U.S.-Japan alliance,
    supplemented by an expanding set of mutually verifiable
    understandings with Beijing and other Asian powers.
        Such understandings would be aimed at stabilizing the
    military balance with China at a level that both sides can live
    with. This level could be conceived as one in which each side
    possesses capabilities sufficient to deter the other from using
    force to resolve serious differences, but with each lacking the
    clear superiority that could in the eyes of the other foster
    aggressive intentions. Such a balance is most compatible with
    what is called a mutual denial strategy.
        Such understandings must also aim at diffusing and
    demilitarizing the most contentious issues in the region, from
    the Korean peninsula to Taiwan and maritime disputes. This can
    be attained most optimally in the context of a defense-based
    regional military balance.
        The goal of a more integrated and dynamic economic region
    would require the U.S., China, and other Asian economies to
    strengthen their domestic economic growth and deepen their
    commitment to free trade. Most importantly, successful, long-
    term integration will depend on getting Beijing and Washington
    to join a common trade architecture. That is why we need a TPP
    so much. The Chinese eventually would probably have been
    compelled to join TPP over time.
        The creation of a stable balance of power in the Western
    Pacific will require American initiative and strength, not
    passivity and certainly not one-sided concessions.
    Conditionality, reciprocity, and a willingness and ability to
    suspend or reverse actions taken or contemplated if China fails
    to cooperate are central to this process. It will also require
    the development of domestic consensus, allied and friendly
    support, sustained U.S.-China dialogue, and interlinked changes
    in several existing regional security policies.
        Maintaining prosperity and stability in Asia and within the
    U.S.-China relationship more broadly will require new ways of
    thinking, new approaches, and some risk taking. But in my view,
    the alternatives are far less attractive.
        Thank you.
        [The prepared statement of Mr. Swaine follows:]
     [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                  ----------

        Mr. Yoho. Thank you. I appreciate that and very compelling.
        And, again, I just can't overemphasize the significance of
    the Southeast Asia. We met with Admiral Harris, Harry Harris,
    back a couple months ago, and he was saying that within 50
    years, there will be more people living in that region in the
    world than outside of that region, and people want to know why
    is it important that we focus on that. I think that is a pretty
    good indicator of why. And these are things that we are very
    cognizant of.
        And I agree with all of you in that we didn't have a clear
    plan, and it hasn't been just over the last 8 years or the last
    16 years. I think we have been distracted as a Nation, and we
    need to focus where we are going to be 50 years from now or 100
    years from now, and we should have the policies in place of
    where we are going as a Nation. And that is what I see has been
    lacking in Washington, and I know the ranking member and
    myself, we have talked about this as building tools within the
    Foreign Affairs Committee, that we can use--the administration
    can use with our direction.
        The thing with TPP, when we first--when President Trump got
    in and he pulled out of that immediately, I know that ruffled a
    lot of feathers, but I think it was the right thing to do. It
    was a very decisive action, and then you have got to deal with
    the fallout. And I say it was the right thing to do, being
    decisive, number one. Number two, even candidate Clinton said
    she wasn't going to support that. We were told there wasn't the
    support here in the House. I wasn't supporting it, not that we
    get to vote on it, but it was one of those things you brought
    finality to it so now we can move on. And we have talked to a
    lot of those countries, and they talked about their distaste
    for us pulling out of that, and I fully understand that. And we
    also understand the window it opened up for China.
        Our goal is to focus on economics, trade, and national
    security. And when we talk about ASEAN, and we all know what
    ASEAN is, the 10 nations that account for 653 million people,
    $2.5 trillion worth of trade. And we know their neutrality
    rules of not interfering with other nations. We have brought up
    to the Prime Minister in ASEAN nations of why this is probably
    a good time to bring that group together, because we see what
    China is going to do. You saw what the Philippines did when
    they challenged China at the Court of Arbitration in The Hague
    and the Court ruled in the Philippines' favor, but yet China
    ignored it.
        Xi Jinping told President Obama in 2015 they would not
    militarize those islands, and so now they are militarized. They
    are landing bombers on there. And if we don't--I think one of
    you brought up if we don't stop it now, it is not going to be
    easier 3 years from now.
        We have got to come to a consensus and have that block of
    countries, not just ASEAN, we saw Canada weigh in and says
    China can't continue to claim territory that the rest of the
    world disputes. And if we don't stand up now, it is going to be
    harder and it is going to destabilize that area.
        And I think where it is all clear where Xi Jinping is going
    in the 19th party, Communist Party Congress, he said it was
    time for the--the era of China has come. No longer will China
    be made to swallow their interests around the world. It is time
    for China to take the world's center stage. I don't know about
    you, but I find that very threatening, and it is unacceptable.
    This is something, again, we as members of--with a lot of
    interest around the world, we have to stand up.
        And when I talked to the ASEAN nations and asked them why
    has it been so successful, and this is what we hear over and
    over again: American leadership, honoring of contracts, the
    rule of law. IP protection. All those things that we bring to
    the table that we know the other parties that are offering an
    alternative don't, and we have seen that over and over again.
    And, yes, they have got a very aggressive One Belt, One Road
    initiative, and that is why we introduced the BUILD Act that is
    bipartisan in the House, bipartisan in the Senate. In fact, we
    had Secretary Pompeo today talking about why this is such an
    important strategy or tool for the United States Government.
    And, again, we want to create the tools and craft the tools
    that an administration can use. And I challenged him or he
    challenged me saying that I didn't think we could compete
    dollar-for-dollar, nor do I want to with China. But he says, I
    think this tool will do that because we bring in the expertise
    and the funding of outside corporations, and we can partner up
    with other countries.
        So with that, let me get back to a question. What does the
    United States need to do operationally--to operationalize the
    free and open Indo-Pacific strategy? And what should be an
    immediate priority, and what should we consider long-term
    goals? Dr. Searight?
        Ms. Searight. Yes. I think the first priority is to more
    clearly articulate the vision, and make it more clear how
    Southeast Asia fits into it, how even the security side which
    is, you know, there has been a lot of talk about our security
    partnerships with countries like Vietnam, India and many
    others. There hasn't been a real articulation of how different
    lines of effort on the security side, economic side, et cetera,
    add up to a vision of, you know, a coherent strategy that the
    United States is really bringing to the table. So that is
    number one. I think that has been a little lackluster, although
    it is early. You know, it has only been 6 months since
    President Trump gave his speech, so there is room for other
    senior officials to lay that out.
        Secondly, I would go right to economics. And I agree with
    you, Mr. Chairman, that the BUILD Act, the proposed reforms of
    our development finance institutions would be a very welcome
    thing to pass, even though, you know, it is not large in terms
    of resources, but on the margins, it really can make a
    difference. And there is real interest, as you know, with
    countries like Japan and Australia, perhaps India, working with
    us in various ways to really promote a more responsible
    approach, high-standard approach to lending and infrastructure
    development. So forming a sort of loose coalition where we are
    all bringing our tools to the table and working with the
    private sector to help promote infrastructure development in
    the region would be very welcome. And in particular, I think
    there is a lot of potential for a U.S.-Japanese partnership on
    that.
        And finally, I would say--I have to say that I think that
    the United States should consider coming back to TPP. It was a
    real disappointment, not just because the United States decided
    not to join in, but it was--the reason why it was so shocking
    was that the countries in the region could not conceptualize
    that the United States would really walk away from an
    initiative where it had provided such leadership and such a
    clear vision for where the regional economic architecture
    should go. So if there was an alternative on the table that
    would be a similar vehicle for promoting high standards,
    rulemaking on key issues like digital trade, et cetera, if
    there was a vehicle like that, I would be fully supportive of
    that, but honestly, I don't see any alternative out there.
        And with TPP-11 launched, you have officials from Thailand
    and Indonesia taking a look, you know, talking about they want
    to come onboard at some point in time. It is still the defining
    discussion in the region on economics, and we are just not in
    the game.
        Mr. Yoho. I agree with you, and I am going to hold off on
    any other comments from you, the other two witnesses, so
    Ranking Member Sherman can weigh in.
        Mr. Sherman. Our foreign policy establishment promoted
    trade deals that have decimated America and sucked the marrow
    out of the middle of this country. Many were so destructive to
    the United States that in desperation our people reached out to
    elect Donald Trump President of the United States. And now we
    are told that we can be consistent and clear, have a clear
    vision if only we return to those policies again. The trade
    deficits don't matter. The jobs don't matter. What matters is
    staying true to the pro-Wall Street positions that have guided
    our policy in the past, and therefore, must be the true epitome
    of American patriotism.
        It is not the fault of the Midwest for voting for Donald
    Trump, it is the fault of the foreign policy establishment for
    giving us trade deals, such as those who urge,
    quote, deg. ``economic engagement.'' Wonderful slogan, I love
    it. And said, therefore, if we give MFN for China, our trade
    deficit will grow with China by only $1 billion per year. They
    were off. It is about a $300 billion increase. You know, I deal
    with numbers here in Washington all the time. Now they are off
    by 5 percent, they are off by 2 percent, they are off by 8
    percent. This estimate was off by 30,000 percent, because the
    people making the estimate had no care as to whether they were
    accurate.
        To turn to the people, I know it has been put forward that
    the idea of a new trade relationship with Southeast Asia has no
    appeal for Southeast Asia. I agree. If they can keep the status
    quo, they love that. The only way a new trade relationship with
    any of the areas of Asia will be appealing is if the
    alternative is a complete lack of access to the U.S. market.
    Then a fair trade relationship might start looking good. But as
    long as Asia hears from us that substantial power in Washington
    wants to continue the huge trade deficits, why should they
    agree to anything else, except maybe something that increases
    the trade deficit even more.
        But aside from trade, I have got a question for Dr. Pande,
    completely different angle. I made a statement on Sri Lanka's
    Remembrance Day to remember the tens of thousands of lives lost
    in Sri Lanka's civil war. Should we halt ties, security ties,
    with Sri Lanka until it makes progress on human rights issues,
    especially accounting for the disappeared and missing persons,
    and providing some degree of political autonomy to the Tamil
    minority?
        Ms. Pande. Ranking Member, while human rights are
    important, I understand your perspective. India did try this
    policy a decade ago, and India did try and use pressure on Sri
    Lanka and disengage slightly with Sri Lanka. The problem, China
    walked in and Hambantota, the port was built by China in Sri
    Lanka, almost 90 percent of Sri Lanka's debt is owned by China.
    So we have to have a policy which is balanced.
        Mr. Sherman. Excuse me. Usually, countries feel they have
    to pay their debt or they will be blacklisted by the western
    capital markets. If it is up to 90 percent, why don't we just
    issue a rule for the SEC that says a default on all the debt of
    Sri Lanka to China isn't a black mark against them in selling
    their debt to the west, and then China would learn not to own
    90 percent of a country's debt.
        Go on.
        Ms. Pande. So I believe it has to be balanced where you
    sort of--you remain engaged with the country, and China does
    not walk in, otherwise China is in Sri Lanka, China is in
    Maldives, China owns a large part of the debt in Bangladesh and
    Nepal. So a number of----
        Mr. Sherman. Not to mention the naval facilities in
    Pakistan.
        Ms. Pande. Yes, Pakistan.
        Mr. Sherman. I want to go on to Dr. Swaine. You have talked
    about an alliance that we have with Japan. NATO is a mutual
    defense alliance. We urge countries there to spend 2 percent of
    their GDP on their national defense. That is ridiculously low,
    since we spend 6 percent, then we lie to our people and say it
    is only 5 percent, by telling them not to notice that veterans
    are a cost of maintaining a defense capacity. But anyway, we
    settle for 2 percent. But it is a mutual defense. Every country
    has to defend the others.
        With Japan, we don't have a mutual defense. Japan has not
    been attacked in the last 50 years militarily. The United
    States was attacked on 9/11. The major NATO powers sent troops
    on the ground in Afghanistan. Japan sent none. How do we
    explain what kind of relationship we have with Japan?
        We can't call them our dependency. At the same time, it is
    not a mutual defense treaty. It is as if we are unpaid
    mercenaries? I don't know what the term would be. How do we
    turn our defense relationship with Japan into something that is
    mutual, instead of them claiming that because Douglas MacArthur
    thought that they shouldn't--they should have a clause in their
    constitution. They are responsible for their own constitution.
    It is not like there is a provision in it that said--you know,
    that they are a dependency of the United States, they can't
    change their constitution without the permission of the
    descendants of Douglas MacArthur.
        How do we get a mutual defense agreement with Japan instead
    of a one-sided one where we have to defend them, and they don't
    do anything for us, except help defend themselves?
        Mr. Swaine. Well, Representative Sherman, I am not somebody
    who believes that the U.S.-Japan alliance is an unfair
    alliance. I think the Japanese----
        Mr. Sherman. Well, we were attacked on 9/11. How many
    Japanese soldiers were put in harm's way to defend the United
    States after that attack?
        Mr. Swaine. I think you have to ask--you have to measure
    this in terms of to what degree was Japan prepared to provide
    assistance both in supporting U.S. forces in the Asia Pacific,
    which they were. Their support for U.S. forces in the Asia
    Pacific is a very vital one. It is absolutely essential.
        Mr. Sherman. They help us defend their region, but we were
    attacked by forces from Afghanistan. We died. Europe sent
    forces to Afghanistan. Japan sent none. So you have got NATO--
    --
        Mr. Swaine. No combat forces.
        Mr. Sherman. No combat forces, yes, people on the ground
    risking their lives. Britain did that. France did that. Germany
    did that. And they are inadequate. So if inadequate describes
    the European contribution to mutual defense, what term do I use
    for Japan that sent zero?
        Mr. Swaine. Well, I think the term for Japan is that they
    are committed to providing for defense of their interests in
    the Western Pacific, the interests of the United States----
        Mr. Sherman. I have gone way over time, but I think you
    have capsulized it. They are dedicated to protecting their
    interests.
        Mr. Swaine. Well, it is not just their interests, though,
    Member.
        Mr. Sherman. We have an interest in them. They have an
    interest in us. They defend their interests. They don't defend
    our interests, except if our interests and their interests are
    being defended. Obviously, the world is better because Japan is
    in it, and Japan is willing to contribute to the world the
    continued existence of Japan. But when we were attacked, not a
    single Japanese soldier was put in harm's way, and yet I am
    told every day that Americans have to be ready to die by the
    tens of thousands, if necessary, to defend our allies in
    Northeast Asia, and that every day our soldiers and sailors
    have to wake up and say, I might die today for that defense. It
    is not an exactly parallel relationship.
        I yield back.
        Mr. Yoho. I appreciate your thoughts and your comments on
    that.
        Mr. Sherman. And I have been able to overcome my shyness.
        Mr. Yoho. You have. I have even seen you laugh a few times
    on the committee. That is good.
        Moving forward. You know, we have got the serious problem
    going into the 21st century. All right. Good enough. Thank you.
    Thank you for being here.
        To set a strategy for the United States of America to let
    people in the Southeast Asia, all over the world, all of our
    allies, our trading partners know that America is committed,
    you know, pulling out of TPP, I know we lost some political
    clout there, there is no doubt about that, but I am of the camp
    that it wasn't going to pass, and the best thing is pull the
    Band-Aid off quick and move on.
        What would you recommend for the ASEAN nations, for our
    Indian partners, what would be the best move forward to show
    that America is committed? We have got the military presence we
    have there. So since you have already spoke, Dr. Searight, Dr.
    Pande, if you would go.
        Ms. Pande. India is onboard with the Indo-Pacific strategy.
    I agree with Dr. Searight that maybe a little more
    clarification of the strategy would help. However, from India's
    point of view, the Indian Ocean region is its sphere of
    influence, it is its backyard, and so India will remain
    engaged. It has started to engage more with ASEAN countries:
    India and Singapore, India and Vietnam, India and Indonesia.
    Recently, India will lease a port of Indonesia, Sabang, which
    is near the Malacca Straits. India has also built a lot of
    relationships with Oman where India is going to lease port of
    Duqm. So India has started to build its relationships, but it
    will need a little more help.
        You had mentioned earlier about where the U.S. is investing
    in the BUILD Act. There is also something like the MCC, the
    Millennium Challenge, and India, the U.S., and Japan are
    cooperating in Nepal. There is an India-U.S.-Japan
    infrastructure project for South and Southeast Asia. The three
    countries will collaborate on building ports, providing energy,
    and industrial parts.
        And so while it is not going to be dollar-for-dollar
    competition with OBOR, it is going to be qualitatively much
    better, and it is going to provide a sort of another
    alternative to countries like Bangladesh, Sri Lanka, Nepal, and
    countries in the broader Indo-Pacific.
        And finally, messaging. Just as disinviting China from
    RIMPAC sent a message and Quad sends a message, I believe
    signaling and messaging at periodic intervals does play a big
    role as well.
        Thank you.
        Mr. Yoho. Thank you.
        Dr. Swaine, what are your thoughts? I know you are not
    bashful either.
        Mr. Swaine. I have a somewhat different view on all this
    from what people have been saying. I think, on the one hand, it
    is very essential for the United States to have a strategic
    plan, as you say. It is absolutely essential. But that
    strategic plan has to include both efforts to strengthen the
    position of the United States and the region and that of its
    friends and allies, and efforts to engage the Chinese in ways
    that will reassure them about the ultimate objectives of the
    United States.
        The free and open Indo-Pacific strategy, as currently
    conceived and as reflected in the National Security Strategy
    and National Defense Strategy, is not that strategy. It is a
    very clear, in my view, zero sum, highly adversarial document
    unprecedented for the United States to have ever issued with
    regard to Asia and with regard to China, and I think it will
    eventually, unless there is some engagement effort to it that
    has to do with cooperation and reassurance in both directions,
    it will end up polarizing the region. It will end up forcing
    countries in the region to make decisions about whether they
    lean more to the United States or they lean more to the
    Chinese.
        And in many respects, the Chinese position in Asia, as I
    said in my remarks, is increasingly that of they are growing in
    their level, their relative level of influence. So people will
    not easily leap to supporting the United States for this
    strategy. So it is going to have to be adjusted in ways that
    are not so focused on two diametrically opposed world views,
    the revisionist world order of China and the free and
    democratic world order of the United States and its allies,
    because that is a recipe for the Cold War.
        Mr. Yoho. Right. No, I agree with you.
        Mr. Swaine. We will end up in a Cold War.
        Mr. Yoho. Yes. We have been through that, and I don't want
    to go through that again. I remember those years.
        And I think you brought up a very good point, very salient,
    of how do you incorporate China in this? You know, what I see
    is China is being the aggressor. You know, we have seen what
    they have done, just their actions, what they are doing in
    India now with the mining. They are going to divert all the
    water and those tunnels, a 1,000 kilometer tunnel I think it
    is. And they are just marching on, marching on. We see them in
    the Western hemisphere with the $10.3 billion they lent to
    Haiti, knowing that they won't be able to pay that back. They
    will have another strategic port in our hemisphere right off
    our coast, and these are things that I think are disconcerting
    all over.
        And then you see them going after the democracies, giving
    people alternatives, the pressure they put on Hong Kong, and
    then what they are doing with Taiwan. If we don't come to terms
    with them--and, you know, what I saw the initiative coming out
    of the White House is a strong stance, like stop. And I agree
    with you that we have to get to a point where what is
    acceptable? There is plenty of room on the world stage.
        But it can't be one over the other one, and it has to be
    mutually beneficial.
        Do you guys have any thoughts how the best way to proceed
    with that, if you were to negotiate with China and India and
    the regional partners in that?
        I think I made our stance pretty clear where we stand with
    ASEAN. You know, we are here. We have done our phone ops, we
    have increased that through this committee, the recommendations
    for that, the foreign military sales. Like with Vietnam, we are
    trying to expedite some of those things. But I don't want it to
    be confrontational. And I agree, you know, we have seen enough
    war and death and destruction. And it doesn't advance us very
    much. So in the end result of all those is we always wind up
    trading, so let's just focus on the trade and what we can do
    diplomatically.
        What are your thoughts of the best way to engage China on
    this?
        Mr. Swaine. Well, I've written an entire report on this
    subject called Creating a Stable Asia.
        Mr. Yoho. Trading with what?
        Mr. Swaine. Creating a Stable Asia.
        Mr. Yoho. Okay.
        Mr. Swaine. It is a Carnegie report. It came out about 2
    years ago, and it systematically lays out some of the arguments
    that I presented in very abbreviated form here.
        I think the first step here has to be a recognition and a
    discussion within the United States about where we want to be
    in 20 or 30 years in Asia. We haven't had that discussion.
        Mr. Yoho. We haven't.
        Mr. Swaine. But that discussion cannot rest on a common
    assumption that all will be right as long as United States
    retains its dominance. In my view, that is a futile and likely
    self-destructive argument. It has limits to it.
        Mr. Yoho. I would agree with you.
        Mr. Swaine. There are people who believe that that is
    exactly what needs to be done, and so they call for a vast
    increase in U.S. defense spending, for example, all kinds of
    economic initiatives, and they don't explain how exactly we are
    supposed to acquire these resources to do all these things. $50
    billion over 10 years, which is what the Trump administration
    has said they want to increase spending, is, relatively
    speaking, a drop the bucket in Asia. And the United States is
    not going to have the resources to leap ahead.
        So what it has to do, it has to get smarter about this. It
    has to think, if it is going to establish a balance of power in
    Asia that is a genuine balance, it has to start talking about
    where you can reach certain accommodations that are mutual on
    the most hot-button issues. First and foremost is Taiwan.
    Taiwan is still a very tumultuous and very volatile issue for
    the United States and China.
        Mr. Yoho. Absolutely.
        Mr. Swaine. The Chinese right now are very concerned about
    where things are going, as is the United States. I believe
    there needs to be some kind of understanding there.
        Now, we are prohibited from talking to the Chinese about
    anything that relates to restraint on either side because of
    the Six Assurances. We have a document I am sure you are
    familiar with.
        Mr. Yoho. Sure.
        Mr. Swaine. I believe that elements of that document are
    fast becoming obsolete.
        Mr. Yoho. Right.
        Mr. Swaine. If we don't establish some kind of
    understanding with the Chinese about limits on systems and
    limits on policies and assurances about nonuse of force, the
    Chinese are, ultimately, as they grow in their increase in
    power in that local regional area and they see domestic
    developments in Taiwan moving further away from them, they're
    going to be more inclined to use coercion----
        Mr. Yoho. Right.
        Mr. Swaine [continuing]. In this situation. And we have to
    have a set of policies in place that can deal with that
    eventuality if it occurs. And that's not one of declaring
    Taiwan as a strategic bastion for the United States, which is
    what some people are now arguing. That is a recipe for war with
    the Chinese.
        Mr. Yoho. Now, that is a well-made point.
        Dr. Searight?
        Ms. Searight. Yeah, I would just add, you know, I have
    mentioned already that the region wants to manage great power
    relations. They want the United States and China to figure out
    a modus vivendi to more or less get along. They don't want to
    be drawn into a big trade war, for example, between the United
    States and China.
        At the same time, they don't want to see, you know, what is
    sometimes referred to as a G2. So they don't want to see too
    much accommodation between the United States and China that
    will circumvent their priorities. So that is why ASEAN
    centrality is so important. They don't want to see the United
    States and China go off in a corner and decide how they are
    going to manage all kinds of regional issues and who gets what
    and not have their interests, you know, be fully represented.
        So I think, you know, the United States has basically been
    doing this, but you have got to walk that line in the middle.
    You have got to stand up--you know, the United States is
    welcome in the region. It is known what the United States
    stands for, and standing up for those principles is really
    important. So showing up is really important and standing up
    for the principles that we have all been talking about,
    everything from freedom and navigation and open economics to
    democracy, rule of law, human rights, good governance. And
    there is still a lot of--even though we have seen a lot of
    democratic backsliding in the region, and that is very
    concerning----
        Mr. Yoho. Yeah.
        Ms. Searight [continuing]. There are some bright signs too.
    You know, Malaysia's election was a stunning result, and it
    shows that the people of Malaysia, you know, at a certain
    point, they pushed back and demanded accountability from their
    government, demanded anticorruption and better governance, and
    made history. And I think that affirms kind of the values that
    we have long stood for in the region, and that is a real
    opening for us to embrace.
        Mr. Yoho. Thank you.
        Dr.Pande?
        Ms. Pande. I echo Dr. Searight in some ways. One,
    consistency of American policy. The allies need to know where
    the U.S. stands on different issues, on China, what it plans to
    do, sort of the economic or military so that they can also plan
    their strategies.
        Two, India sort of feels a G2 or a movement toward the G2,
    because India would not like China to be one of the countries
    or China to be the country which is responsible for South Asia
    or Southeast Asia.
        Mr. Yoho. Right.
        Ms. Pande. And finally, allow the regional partners like
    Japan, India, Southeast Asia, to play a role in the region, to
    do what they can do with this infrastructure, trade, building
    relationships, but let them build their own relationships,
    which in the end will benefit U.S. interests long term.
        Mr. Yoho. Now, I think you all touched on the same thing.
    You know, we can't do it alone. We are at a point where we
    can't. You know, we are an aging country. We have got a lot of
    debt. We are spread out throughout the world. But we have got
    great allies, we have got great partners, and we have got the
    rule of law that I think works well for us, and that other
    people respect.
        I have spoken to a lot of the ASEAN nations, a lot of the,
    you know, different associations. And it always comes up, we
    depend on American leadership. The world depends on American
    leadership. So we have those things that we can depend on. And
    I think the biggest thing is to work out a game plan on how we
    balance that power. You know, I am hoping that period of time
    where one nation conquering another nation is a bygone in
    history, but sometimes you wonder with what is going with a
    rising China. And like I said, to be supplanted from the world
    stage as a superpower won't be tolerated by us or any other
    country.
        Let me just go back, because you guys brought up Taiwan,
    and this is something I think is a very urgent hotbed. I think
    North Korea is very urgent, very serious, but I think what is
    going on in the Asia-Pacific theater is much more than that,
    and long term.
        The Tsai administration has established the new southbound
    policy. The free part of the free and open Indo-Pacific is
    about keeping nations free from coercion. This is very relevant
    for Taiwan, which is facing increased coercion from the PRC.
        How should Taiwan be prioritizing this Indo-Pacific
    strategy, in your thoughts? And this will be the last question,
    and we will all get out of here.
        Dr. Searight, you want to go first?
        Ms. Searight. I think Taiwan is important. I think, again,
    it is a question of standing up for our principles and standing
    up for, you know, being consistent in our policy. The
    Southbound Policy by the Tsai government is one that the United
    States should find ways to support. It is a very sort of
    economic and diplomatic-focused policy, and there are a lot of
    ways, I think, that the United States can help through
    Ambassadors in the region and think tank linkages and
    everything else, to help put the Taiwanese and Southeast Asians
    together. Because there is a business relationship there. There
    is a lot of Taiwanese investment in the region, but there is
    somewhat a lack of familiarity about, you know, what Taiwan's
    diplomacy is all about, what Taiwan stands for. So I think we
    can play a supportive role there.
        But I will let Dr.Swaine address the how to deal with China
    on Taiwan issue. That is more his lane.
        Mr. Yoho. We are just going to go right down the lane here,
    then we will go to you.
        Dr.Pande.
        Ms. Pande. India's relationship with Taiwan is primarily
    economic and trade. However, India's Act East Policy in the
    last few years has increased economic relationship with
    Southeast Asia and with Japan, South Korea, and Taiwan. And so
    the Act East, the southbound Indo-Pacific, I believe, sort of
    are in some ways coming together and that will benefit the
    region. But purely Taiwan question, I will leave to Mr. Swaine.
        Mr. Yoho. Thank you.
        Dr.Swaine, the pressure is on.
        Mr. Swaine. I believe the essential, the fundamental
    elements of U.S.-Taiwan policy should be held in place. I don't
    think there is any alternative to the United States
    acknowledging that there is the statement, basically, in the
    original communique with the Chinese and then the statements
    that accompany that in the Taiwan Relations Act. And that is a
    balancing act for the United States.
        Mr. Yoho. Right.
        Mr. Swaine. You know that. I think we have to continue with
    that balancing act for the time being. I think the Taiwan
    Travel Act jeopardizes that. It has the potential for shifting
    the understanding that we have had with Beijing now for 40
    years about what is the central basis for stability in the
    Taiwan Strait.
        The Chinese have maintained a commitment to seeking a
    peaceful resolution of the issue as a priority. It is in their
    formal statements. In return for that, the United States
    pledged that it did not challenge the Chinese view that there
    is one China. That is the basis of the understanding between
    the United States and China about Taiwan. If either one of
    those two things change in an unambiguous way, there are going
    to be real problems.
        The Chinese, I believe, are concerned now that Taiwan is
    engaged in what is called soft independence. I think they are
    overly alarmed about aspects of this, but their concern really
    focuses on the change in the domestic political environment on
    Taiwan.
        The Kuomintang, the nationalist party, is in considerable
    disarray. The idea of eventual unification is becoming more
    problematic.
        Mr. Yoho. It is.
        Mr. Swaine. The Taiwan people themselves vacillate on this.
    Growing numbers have been more identified as Taiwanese, but it
    reached the kind of height during the Ma Ying-jeou period, and
    it is actually going down somewhat now.
        Chinese are very pragmatic. The Chinese on Taiwan, they
    don't want to make declarations and support moves that would be
    really dangerous for themselves. I think they want more
    diversification in their economic relationships, which is why
    Tsai Ing-wen has the policy of looking in other areas. But they
    also recognize that their relationship with the mainland is
    essential to their development. It remains essential to their
    development.
        So what do you do in this kind of circumstance? You have
    got to be able to establish some kind of understanding that
    puts a lid on the impact of escalating military capabilities in
    this area. And that means you have got to have to talk about
    what is a basis for restraint in the deployment of forces or
    the development of forces that are specifically relevant to
    Taiwan.
        It is a challenging issue because a lot of these forces are
    dual-use, and they are not just focused on Taiwan. But it is
    one where I think there needs to be more dialogue about what is
    the basis for a stable floor in terms of the military
    deployments that both sides would have that would be relevant
    to Taiwan, and then how do you reassure each side that this
    basic pact is not going to be altered fundamentally?
        Mr. Yoho. If you have time, I would like to challenge you
    on--or I don't know if it is a challenge, just question you on
    it.
        Essential to their development, the relationship Taiwan has
    with China; I see it more as essential to their survival to
    maintain that relationship. But you were talking about the----
        Mr. Swaine. I would agree with that.
        Mr. Yoho [continuing]. The U.S. and China have an agreement
    from 40 years ago. You know, hands off here, we know where we
    stand. And you said--I think you said that China was honoring
    that. Yet when you look at the coercion that China has done
    against Taiwan: Going after them in the World Health Assembly,
    getting them uninvited, going after their diplomatic ties,
    getting them uninvited, breaking those ties, going to the
    Dominican Republic and offering them $3.1 billion to have them
    break ties with Taiwan, what they have done with American
    businesses because they recognize Taiwan as a destination
    country.
        Mr. Swaine. Right.
        Mr. Yoho. And they go after them and they keep going after
    them. So I don't see them being passive in this relationship. I
    see them being very aggressive, and it is putting the squeeze
    on them.
        And so at some point, you either decide to let it be
    consumed by China--Taiwan--or you say, we are going to honor
    the agreement we had of providing them with defensive
    mechanisms. And if we don't stand up today, as we have talked
    about the South China Sea, it is going to be harder in 3 years.
        And I think this is where I think we need to implore all
    the nations in the South China Sea that enough is enough. You
    know, I would ultimately like to see them demilitarize those
    islands. Is that possible? I don't know. But I know it will be
    easier today than 5 years from now. And I think we just need
    to--who do we want to align with? And the world is going to
    have to decide. You either align with people that are going to
    follow the rule of law and honor contracts or people that are
    going to tell you I am not militarizing the South China Sea,
    yet they turn around and do it. And they have told those lies
    over and over and over and over again.
        So I think the world will have to decide that. I'm going to
    side with the good guys.
        I thank you for your time to be here. I thank you for your
    statements and your patience while we had to go vote. And, you
    know, normally members are here, but when we start late, they
    kind of scatter like--well, when you turn the light on with
    some creatures.
        Anyway, thank you, and this hearing is adjourned.
        [Whereupon, at 3:43 p.m., the subcommittee was adjourned.]

                                A P P E N D I X

                                  ----------

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                     [all]