[Senate Hearing 116-263]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 116-263
 
                            CHINA AND RUSSIA

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

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 29, 2019

                               __________

         Printed for the use of the Committee on Armed Services
         
         
         
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             U.S. GOVERNMENT PUBLISHING OFFICE 
 41-302 PDF           WASHINGTON : 2020                  


                      COMMITTEE ON ARMED SERVICES

    JAMES M. INHOFE, Oklahoma, 
             Chairman
ROGER F. WICKER, Mississippi        JACK REED, Rhode Island
DEB FISCHER, Nebraska               JEANNE SHAHEEN, New Hampshire
TOM COTTON, Arkansas                KIRSTEN E. GILLIBRAND, New York
MIKE ROUNDS, South Dakota           RICHARD BLUMENTHAL, Connecticut
JONI ERNST, Iowa                    MAZIE K. HIRONO, Hawaii
THOM TILLIS, North Carolina         TIM KAINE, Virginia
DAN SULLIVAN, Alaska                ANGUS S. KING, Jr., Maine
DAVID PERDUE, Georgia               MARTIN HEINRICH, New Mexico
KEVIN CRAMER, North Dakota          ELIZABETH WARREN, Massachusetts
MARTHA McSALLY, Arizona             GARY C. PETERS, Michigan
RICK SCOTT, Florida                 JOE MANCHIN, West Virginia
MARSHA BLACKBURN, Tennessee         TAMMY DUCKWORTH, Illinois
JOSH HAWLEY, Missouri               DOUG JONES, Alabama

                                
                        John Bonsell, Staff Director
                     Elizabeth L. King, Minority Staff 
                                Director
                                

                                  (ii)

  


                         C O N T E N T S



                            January 29, 2019

                                                                   Page

China and Russia.................................................     1

Colby, Elbridge, Director, Defense Program, Center for a New          4
  American Security; and Former Deputy Secretary of Defense for 
  Strategy and Force Development.
Ratner, Ely, Executive Vice President and Director of Studies,       17
  Center for a New American Security; and Former Deputy National 
  Security Advisor to the Vice President.
Wilson, Damon M., Executive Vice President, Atlantic Council.....    26

Appendix A.......................................................    67

                                 (iii)


                            CHINA AND RUSSIA

                              ----------                              


                       TUESDAY, JANUARY 29, 2019

                              United States Senate,
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:00 a.m. in 
Room SD-G50, Dirksen Senate Office Building, Senator James M. 
Inhofe (chairman of the committee) presiding.
    Committee members present: Senators Inhofe, Wicker, 
Fischer, Rounds, Ernst, Tillis, Sullivan, Cramer, McSally, 
Scott, Blackburn, Hawley, Reed, Shaheen, Gillibrand, 
Blumenthal, Kaine, King, Warren, Peters, Manchin, Duckworth, 
and Jones.

          OPENING STATEMENT OF SENATOR JAMES M. INHOFE

    Chairman Inhofe. The hearing will come to order.
    The committee meets today to receive testimony on strategic 
competition with China and Russia.
    I would like to welcome our witnesses. We have the right 
witnesses this time. We appreciate your attendance.
    We have Elbridge Colby. He is the former Deputy Assistant 
Secretary of Defense for Strategy and Force Development. He is 
what I consider to be probably one of the or maybe the key 
person in developing the National Defense Strategy (NDS).
    Ely Ratner, a China expert, co-author of a major article, 
``The China Reckoning: How Beijing Defied American 
Expectations.'' It is well worth your time to read that.
    Damon Wilson is a Russian expert, as well as an expert on 
NATO [North Atlantic Treaty Organization] and going all the way 
into East Europe and the Balkans.
    I welcome all of you here for this hearing. I had a chance 
to talk to the three of you and kind of explained my concern. 
One of the problems that I have--and it is a problem that we 
all have but we do not talk very much about it--and that is the 
threats that we are facing, the seriousness of the threats. 
There is this euphoric attitude that people have had since 
World War II that somehow we have the best of everything. We 
were listing some of the things--General Milley talking about 
how we are outgunned and outranged with our Chairman of the 
Joint Chiefs of Staff, was talking about how our quantitative 
and qualitative advantages have eroded. Nuclear modernization--
we were out of business for a long period of time. All of a 
sudden now we have even China with a triad system. It is 
working on hypersonics. You know, the average man on the street 
does not know what we are talking about, but that is something 
that is entirely new. I am convinced that both China and Russia 
are ahead of us.
    And so I see this hearing as a way to maybe give us some 
credibility up here because you are all three recognized 
experts in this area.
    We are also right now having another good thing. We have 
had hearings to this effect to show and demonstrate very 
clearly that our people in uniform are willing to talk about 
these things that they were not willing to talk about before.
    So that which we all remember so well that was so 
successful in the Cold War is something that perhaps is not as 
successful right now. Peace through strength is really 
something we need to be doing and emphasizing and telling the 
American people where we are right now.
    The reason it is important--we are going to be looking at 
the budget that it takes to run this thing. We know what 
happened just a few years ago, and we know that we were down 
inadequately. You have to get the support of the American 
people before you can do a good job of defending America. And 
that is what this is all about.
    So I appreciate very much all of you being here today.
    Senator Reed?

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman, for 
holding this very important hearing on the strategic security 
challenges posed by Russia and China.
    I also want to join you in welcoming the witnesses who are 
distinguished experts. Thank you, gentlemen.
    Revisionist powers Russia and China are actively working to 
undermine the rules-based international order that has been the 
cornerstone of peace for decades. As the recent National 
Intelligence Strategy states, ``Traditional adversaries will 
continue to gain and assert influence, taking advantage of 
changing conditions, in the international environment, 
including the weakening of the post-World War II international 
order and dominance of Western democratic ideals, increasingly 
isolationist tendencies in the West, and shifts in the global 
economy.'' Moscow and Beijing are using all tools of national 
power to challenge the international order and advance their 
own strategic interests at the expense of others.
    This morning's hearing is an opportunity to hear from our 
witnesses regarding their assessments of the emerging strategic 
competition with these near-peer rivals and their 
recommendations for ensuring that the United States is able to 
deter aggression and deploy the right elements of national 
power, both military and non-military elements, to prevail in 
the competition with Russia and China.
    In the case of Russia, President Putin has rejected United 
States-led international order that he considers incompatible 
with his strategic objective of returning to great power 
status. Russia's military modernization, nuclear saber-
rattling, and violations of its arms control and other 
international obligations threaten to undermine the strategic 
security architecture that has prevented high-end conflict. 
Putin also seeks to operate unconstrained in the ``near 
abroad'' countries of the former Soviet Union and has shown his 
willingness to use military force to violate the sovereignty of 
his neighbors if not deterred.
    Russia is also conducting a campaign of hybrid warfare 
below the level of direct military conflict to harm Western 
nations without firing a single shot. Our democracy was 
attacked in 2016 and such attacks continue to this day with 
increasing sophistication. Russia has used political, military, 
diplomatic, economic, informational, cyber, and other tools of 
national power to try to divide us from our allies and paralyze 
our ability to unite in our common defense. These Russian 
operations are no less a threat to our national security than a 
military attack would be, yet we have failed to respond to them 
with the same level of seriousness and resolve. I am interested 
in hearing our witnesses' assessment of the national security 
threat posed by Russia's hybrid warfare campaign and their 
recommendations for how we should prioritize our resources to 
counter Russia's malign aggression.
    China is engaging in a global economic and military 
expansion that will challenge United States primacy and 
influence in the decades to come. President Xi's determination 
to undermine international norms, engage in coercive and 
predatory policies toward smaller and weaker countries, and 
undermine the national security of the United States and its 
allies and partners makes this expansion particularly 
concerning. We are now in a long-term strategic competition 
with an autocratic regime that has the resources and the intent 
to challenge and potentially supplant U.S. leadership. How we 
respond to this challenge will be critical for our national 
security and the security of our partners and allies in the 
region.
    I am interested in hearing from the witnesses how we should 
be meeting this challenge across all domains, diplomatic, 
military, economic, and trade. I am especially concerned about 
China's Belt and Road Initiative, which has left several 
countries, notably Sri Lanka and Malaysia, severely indebted to 
China. It is an economic initiative with significant national 
security implications for the United States.
    In addition, I have grave concerns about the internal 
stability of China. President Xi's crackdown of the Uighurs in 
the west and bellicose statements about Taiwan present serious 
human rights problems for the international community. As the 
leader of the free world, the United States should not shy away 
from confronting the Chinese Government for its brutal and 
systematic crackdown on ethnic minorities and human rights 
activists within its own borders.
    The National Defense Strategy has laid out, I think, a 
compelling argument, and I am glad we have our experts today to 
supplement that argument with their detailed and very wise 
observations.
    With that, thank you, Mr. Chairman.
    Chairman Inhofe. Thank you for the excellent opening 
statement.
    We are going to interrupt this since we now have a quorum 
that is present.
    I ask the committee to consider a list of 385 pending 
military nominations. All these nominations have been before 
the committee the required length of time.
    Is there a motion to favorably report this list of 385 
pending military nominations?
    Senator Reed. So moved.
    Chairman Inhofe. Is there a second to the motion?
    Senator Wicker. Second.
    Chairman Inhofe. All in favor, say aye.
    [Chorus of ayes.]
    Chairman Inhofe. Opposed, no.
    [No response.]
    Chairman Inhofe. The motion carries.
    [The list of nominations considered and approved by the 
committee follows:]
 Military Nominations Pending with the Senate Armed Services Committee 
  Which are Proposed for the Committee's Consideration on January 29, 
                                 2019.

    1.  Col. Frank A. Rodman, ANG to be brigadier general (Reference 
No. 25)

    2.  BG Robert D. Harter, USAR to be major general (Reference No. 
27)

    3.  Col. Charles M. Schoening, ARNG to be brigadier general 
(Reference No. 28)

    4.  In the Army Reserve there are 3 appointments to be major 
general and below (list begins with David W. Ling) (Reference No. 29)

    5.  In the Marine Corps there are 4 appointments to the grade of 
lieutenant colonel (list begins with Saleh P. Dagher) (Reference No. 
35)

    6.  In the Marine Corps there are 375 appointments to the grade of 
lieutenant colonel (list begins with Rico Acosta) (Reference No. 36)

_______________________________________________________________________
                                                                    
TOTAL: 385

    All right. We will start, Mr. Colby, with you. And we want 
to hear from all three of you, and try to keep your remarks 
somewhere around 5 minutes so we will have time. We have good 
attendance this morning. We want to have time for questions. 
So, Mr. Colby, you are recognized.

STATEMENT OF ELBRIDGE COLBY, DIRECTOR, DEFENSE PROGRAM, CENTER 
  FOR A NEW AMERICAN SECURITY; AND FORMER DEPUTY SECRETARY OF 
           DEFENSE FOR STRATEGY AND FORCE DEVELOPMENT

    Mr. Colby. Thank you, Mr. Chairman, Ranking Member Reed, 
and distinguished members of the committee, for the opportunity 
to appear before you. It is a great honor to testify before 
this body on a topic of the highest importance to our Nation: 
the implementation of the 2018 National Defense Strategy.
    This strategy entails a fundamental shift in the 
orientation of our Nation's Armed Forces toward preparing for 
war against China or Russia precisely in order to deter it. 
This shift is urgently needed as our military advantages 
against both have substantially eroded in recent decades. It is 
a strategy that reflects not only the right priorities but also 
the hard choices needed to realize this goal and is a 
testament, in particular, to the leadership of former Secretary 
Mattis and Acting Secretary Shanahan.
    The NDS is predicated on a clear vision, as expressed in 
the National Security Strategy. America has an enduring 
interest in ensuring that the key regions of the world, 
especially Asia and Europe, do not fall under the sway of a 
potentially hostile power. Great powers, especially China and 
to a lesser degree Russia, are the only states that could 
realistically establish such hegemony. To prevent such an 
outcome, we need a whole-of-government strategy to sustain 
favorable regional balances of power through our alliance 
system.
    To make this alliance system work, however, we and our 
allies need to be able to effectively defend its members 
against plausible Chinese or Russian theories of victory. This 
includes the members of that network most vulnerable to such 
strategies such as Taiwan and the Baltic States. Thus, while we 
will not succeed without an effective whole-of-government 
strategy, we will certainly fail without a sufficiently strong 
defense, and this is clearly in question.
    What are these potential Chinese or Russian theories of 
victory? Because of America's greater total power and the 
existence of nuclear arsenals on both sides, these states' most 
pointedly menacing theory of victory is the fait accompli. That 
is, Russia could seek to create propitious circumstances 
through disinformation, rapidly overrun the Baltic States and 
eastern Poland with its conventional forces, and then rely on 
the threat of its nuclear arsenal to check or neuter our 
counteroffensive to liberate our NATO allies. China, meanwhile, 
could use similar methods to isolate Taiwan or eventually parts 
of the Philippines or Japan, launch an air and sea invasion, 
and then make an American counteroffensive too costly and risky 
to countenance.
    These are not merely military strategist parlor games. They 
are real and gravely serious and will become more threatening 
if we fail to adapt. They are particularly real for states in 
East and Southeast Asia, as well as in Eastern Europe, 
wondering whether it is prudent to stand up to Chinese and 
Russian domineering. These countries will look carefully to see 
whether affiliating with us will result in an adequate defense. 
If they do not see this, they will be incentivized to cut a 
deal with Beijing or Moscow in ways that will make it very 
hard, if not impossible to maintain those favorable balances of 
power.
    The problem is that our legacy defense approach is not 
suited to dealing with these theories of victory. Rather, our 
Armed Forces for the last generation have largely been formed 
on what might be called the Desert Storm model. This involved 
reacting to an opponent's attack on an ally with a time-
consuming construction of an iron mountain of armed might. Once 
that was done, the United States would launch a withering 
assault to establish all-domain dominance and only then eject 
the enemy from our allies' territory. This model was 
tremendously successful against Iraq and also employed against 
Serbia, but it is precisely the model on which China and Russia 
have so assiduously gone to school in the last 2 decades or so.
    We need a new approach. We need our military to be able to 
contest Chinese or Russian forces from the very beginning of a 
war, blunting their advances so they cannot establish the fait 
accompli, and frustrating their assault without our forces ever 
expecting to gain the all-domain dominance that they could 
attain against Iraq. With its invasion blunted or readily 
reversed, neither China nor Russia would have a way to end a 
war favorably. Rather, Beijing or Moscow would face the awful 
choice of expanding the war in ways that play to United States 
and allied advantages or swallowing the bitter but tolerable 
pill of settling on terms the United States could accept. This 
will make them far less likely to try it in the first place.
    As the NDS makes clear, this requires a joint force that is 
more lethal, resilient, agile, and ready, meaning forces that 
can, at short notice, operate through withering enemy attacks 
and still strike effectively at the assaulting forces of these 
near-peer adversaries even without full control of the air, 
land, sea, space, or electronic domains. This strategy has very 
substantial implications for force structure, employment, and 
posture, as well as for how our Armed Forces interact with our 
allies and partners. I laid some of these out, as well as how 
Congress can contribute to realizing the strategy, in my 
written statement.
    Fundamentally, however, the strategy's logic is very 
simple. Our military advantage in key regions has eroded and 
will continue to do so absent increased and sustained attention 
and resources. If we fail to do this, we jeopardize the 
alliance architecture that is crucial for denying Beijing or 
Moscow dominance in their regions.
    Our Armed Forces must, therefore, above all concentrate on 
preparing to fight and defeat China or Russia in strategically 
significant plausible scenarios like Taiwan or the Baltics 
precisely in order to deter such a war from happening.
    Crucially, because this is so demanding, it means doing 
less of everything else or doing it much more efficiently. 
Everything not directly connected to readying our forces to 
fight China or Russia should be considered under a harsh and 
skeptical light. Elective wars in the Middle East, assurance 
and presence activities, subordinate departmental plans 
optimized for the gray zone, continued investment in suboptimal 
legacy systems, all of these directly detract from our ability 
to head off the most serious threats to our national interests. 
If something does not relate to improving the joint forces' 
warfighting effectiveness in a key scenario against China or 
Russia or more efficient ways of doing things in places like 
the Middle East, then it must be made to meet a very high bar.
    Given all this, recent indications the Department of 
Defense has lagged in implementing the strategy are especially 
troubling. The National Defense Strategy Commission, chartered 
by Congress, found that there are confusing and incompatible 
signals being transmitted within the Department, resulting in a 
lack of coherence in implementing the strategy. There is no 
time for misalignment. Our military advantage is eroding 
against our most powerful competitors. Nor is there need for 
confusion. The strategy lays out a clear path for how to 
address this challenge. It is not, nor was it in any way 
intended to be the last word on the subject. To the contrary. 
But it provides, however, a clear framework within which the 
crucial future work needed to realize it should take place.
    As Chairman of the Joint Chiefs Select General Milley has 
eloquently put it, the Army--and I am confident the 
Department--is aligning itself with Secretary Mattis' National 
Defense Strategy and will not walk away from it.
    The National Defense Strategy is a strategy informed by our 
Nation's proud past but with its sights set firmly on the 
future of preparing for war in order to preserve a favorable 
peace and of principled realism so that we might live in a 
world of right not might. Now is the time to put the strategy 
into effect without delay.
    I look forward to your questions and thank you for your 
time and attention.
    [The prepared statement of Mr. Colby follows:]

                Prepared Statement by Elbridge A. Colby
    Thank you, Mr. Chairman, Ranking Member Reed, and distinguished 
members of this Committee, for the invitation to appear before you. It 
is a great honor to testify before this body on a topic of the highest 
importance to our Nation--the implementation of the 2018 National 
Defense Strategy (NDS), a Strategy which entails a fundamental shift in 
the orientation of our Nation's Armed Forces toward great power 
competition.
                        i. personal involvement
    During 2017 and 2018, I served as Deputy Assistant Secretary of 
Defense for Strategy and Force Development. In this capacity, I led a 
superb team of civilian and military officials from key parts of the 
Department tasked with developing the National Defense Strategy, 
reporting to Secretary Mattis and Deputy Secretary Work and Deputy 
Secretary (now Acting Secretary) Shanahan. In light of this experience, 
there are a number of distinctive attributes of this Strategy that I 
believe it is useful for the Committee to know.

      This Strategy is a result of the leadership and deep 
personal engagement of Secretary Mattis as well as Deputy Secretaries 
Work and Acting Secretary Shanahan. The Department's top leadership 
engaged regularly and in depth with the Strategy team and reviewed the 
document numerous times. Secretary Mattis met repeatedly with the team 
for long sessions; he considered the hardest issues in the Strategy and 
made clear choices about them in close consultation with then-Deputy 
Secretary Shanahan, who made the Strategy his priority in his first 
months in office and played a crucial, personal role in bringing the 
Strategy to fruition. The Strategy therefore reflects the considered 
judgment of those charged with leading the Nation's defense.

      At the same time, this Strategy was not a purely top-down 
document. As Secretary of the Air Force Heather Wilson has related, the 
last version of the Strategy she recalls reviewing was on the order of 
the sixty-sixth version of the draft. From the earliest stages of its 
development, the Strategy received input from across the Department, 
and the range of Department leaders had the opportunity to review and 
comment on the Strategy as it evolved. Essentially everyone had their 
say. While the Strategy is--by design--a reflection of leadership 
judgments rather than a consensus or lowest-common denominator 
document, it benefited from the collective wisdom of the U.S. defense 
enterprise as well as from input from the Intelligence Community and 
other relevant organs of the U.S. Government.

      The Strategy team and Department leadership received 
input from Congress and outside experts from the beginning of the 
document's development, and it was red-teamed several times by leading 
defense experts.

      The Strategy was also informed by both strategic and 
operational-level wargaming.

              ii. a recap of the national defense strategy
    This hearing has been called to ascertain how the implementation of 
the Strategy is faring. I believe there is no more important issue on 
which the Committee can focus oversight, as the Strategy requires 
``urgent change at significant scale'' for our national interests to be 
effectively protected. \1\ This is especially pressing because the 
National Defense Strategy Commission, a body chartered by Congress and 
composed of leading defense experts who had unparalleled access to the 
Department, reported that its members are ``skeptical that DOD has the 
attendant plans, concepts and resources needed to meet the defense 
objectives identified in the NDS, and [they] are concerned that there 
is not a coherent approach for implementing the NDS across the entire 
DOD enterprise . . . [The Commissioners] came away troubled by the lack 
of unity among senior civilian and military leaders in their 
descriptions of how the objectives described in the NDS are supported 
by the Department's readiness, force structure, and modernization 
priorities...'' \2\ This is cause for significant concern.
---------------------------------------------------------------------------
    \1\ Summary of the 2018 National Defense Strategy of the United 
States of America: Sustaining the American Military's Competitive 
Edge,'' Washington, DC: U.S. Department of Defense, 2018, 11.
    \2\ Eric Edelman, Gary Roughead, et al, Providing for the Common 
Defense: The Assessment and Recommendations of the National Defense 
Strategy Commission. Washington, DC: U.S. Institute of Peace, 2018, 18.
---------------------------------------------------------------------------
    Before discussing the Department's progress in implementing the NDS 
and how Congress can facilitate it, however, I believe it is valuable 
first to recap concisely what the Strategy, in concert with the 2017 
National Security Strategy (NSS) with which it is so closely tied, 
assesses and directs.
    The National Defense Strategy can be summarized as follows:
U.S. Defense Strategy in our Broader Grand Strategy
    The United States has a lasting interest in maintaining favorable 
regional balances of power in the key regions of the world, especially 
East Asia, Europe, and the Persian Gulf. These favorable balances 
preserve our ability to trade with and access the world's wealthiest 
and most important regions on fair grounds, and prevent their power 
from being turned against us in ways that would undermine our freedoms 
and way of life.
    Alliances are the critical mechanism for maintaining these 
favorable balances, and it is in the United States interest to continue 
to be able to effectively and credibly defend our allies and 
established partners such as Taiwan, in concert with their own efforts 
at self-defense.
The Particular Threat Posed by China and Russia
    China in particular and to a lesser extent Russia present by far 
the most severe threats to our alliance architecture. The once 
overwhelming U.S. conventional military advantage vis a vis these major 
powers has eroded and will continue to erode absent overriding focus 
and effort by the United States and its allies and partners.
    China and Russia pose a particular kind of threat to United States 
allies and established partners like Taiwan. Beijing and Moscow have 
plausible theories of victory that could involve employing a 
combination of ``gray zone'' activities (such as through the use of 
subversion by ``little green men,''), robust anti-access/area denial 
(A2/AD) networks, lethal and fast maneuver forces, and strategic 
capabilities, especially nuclear arsenals. The adept integration of 
these assets could enable Beijing or Moscow first to overpower United 
States allies and seize their territory while holding off U.S. and 
other allied combat power. China or Russia could then, by extending 
their A2/AD and defensive umbrella over these new gains, render the 
prospect of ejecting their occupying forces too difficult, dangerous, 
and politically demanding for Washington and its allies to undertake, 
or undertake successfully.
    The fait accompli is not the only but it is the most severely 
challenging of the theories of victory the Chinese or Russians could 
employ--especially against Taiwan in the Pacific or the Baltics and 
Eastern Poland in Europe.
    Particularly in the case of China, these threats will worsen and 
expand as the power of the People's Liberation Army grows. Taiwan is 
the focal point today; before long, unless the ongoing erosion of our 
and our allies' military edge is reversed, the threat will be to Japan 
and the Philippines and thus to our whole position in maritime Asia, 
the world's most economically dynamic region.
The Need to Focus on Great Power Competition and its Implications
    Accordingly, as Secretary Mattis put it in January 2018, ``Great 
power competition--not terrorism--is now the primary focus of U.S. 
national security.'' \3\ The United States' defense establishment must 
therefore focus on and adapt to this top priority--at scale and 
urgently, as the Strategy emphasizes.
---------------------------------------------------------------------------
    \3\ Speech by Secretary of Defense James Mattis at Johns Hopkins 
University, School of Advanced International Studies, January 19, 2018.
---------------------------------------------------------------------------
    What does this new prioritization mean and what does it entail?
    At its deepest level, it requires a fundamental shift in the way 
the Department of Defense conceives of what is required for effective 
deterrence and defense. This is because the United States and its 
allies will be facing great powers--especially in the case of China. 
This is a dramatically different world than that which characterized 
the post-Cold War period, in which our Armed Forces could focus on 
``rogue states'' and terrorist groups due to the lack of a near-peer 
competitor. Today and going forward, however, China in particular will 
present us with a comparably-sized economy and a top-tier military 
operating in its own front yard.
    Above all, this requires a change in the mindset of our defense 
establishment. We have left a period of overwhelming American dominance 
and have entered one in which our Armed Forces will have to prepare to 
square off against the forces of major economies fielding the most 
sophisticated conventional and survivable nuclear forces. Our Armed 
Forces will therefore need to shift from an expectation that they could 
dominate the opponent to one in which they must expect to be contested 
throughout the fight--and yet still achieve the political objectives 
set for them in ways that are politically tenable.
    Fortunately, our political-strategic goals, as indicated in the NSS 
and NDS, are defensive. We hope only to prevent our allies and partners 
like Taiwan from being suborned or conquered by our opponents. We 
therefore must defeat Chinese or Russian invasions or attempts at 
suborning our allies, and force Beijing or Moscow to have to choose 
between unfavorably escalating--and demonstrating to all their 
aggressiveness and malign intent by doing so--or settling on terms we 
can accept. This, to emphasize, is a different goal than regime change 
or changing borders. Rather, it is about preserving the status quo by 
favorably managing escalation to win limited wars.
    How our forces achieve this objective in the event of conflict will 
be of the essence. Our forces must be exceptionally lethal and capable, 
optimized to defeat China or Russia. At the same time, however, wars 
with China or Russia must remain limited because the alternative is 
apocalypse, which neither side wants--thus we must plan and prepare for 
them as limited wars. Above all, this requires focusing on defeating 
the other side's theory of victory, and particularly the fait accompli 
strategy.
    The NDS is specifically designed to deal with this challenge. Its 
military and force implications proceed from the political-strategic 
demands the NSS and NDS set out. As a core concept, the NDS calls on 
the Department to expand the competitive space--meaning above all to 
adopt a competitive mentality in everything that Department personnel 
do, one that refuses to take American superiority for granted, that 
searches for new or untapped sources of advantage, and that ensures 
that it is China and Russia that fear more what we might what do--
rather than the other way around. \4\
---------------------------------------------------------------------------
    \4\ ``Summary of the 2018 National Defense Strategy of the United 
States of America'', 4.
---------------------------------------------------------------------------
    The NDS therefore directs substantial changes in the following 
elements of our Armed Forces:
      Warfighting approach;
      Force structure: size, shape, and composition;
      Force employment;
      Posture; and
      Relationships with allies and partners.
Warfighting Approach
    The Strategy calls for a different approach to warfighting from the 
post-Cold War era. This call stems from the political-strategic 
requirement to defeat the adversary's theory of victory by, at a 
minimum, rapidly delaying and degrading or ideally denying China or 
Russia's ability to impose the fait accompli on, for instance, Taiwan 
or the Baltics.
    This necessitates a change from what might be called ``the Desert 
Storm model'' of warfighting. This model involved the time-consuming 
construction of an ``iron mountain'' of U.S. military capability in the 
region of conflict before the United States launched a withering 
assault to establish all-domain dominance and then ejected the enemy 
from our ally's territory. The Desert Storm model was enormously 
successful against ``rogue state'' adversaries--but it is also exactly 
the model on which China and Russia have ably and assiduously gone to 
school. By the time the United States constructs this iron mountain in 
response to a Chinese attack on Taiwan or Russian invasion of the 
Baltics, the war may already be lost because the costs and risks of 
ejecting an enemy now fortified in its new gains may be too prohibitive 
or because allies will not support the massive and terrifying 
counteroffensive needed for victory.
    The United States consequently needs a new warfighting approach 
adapted to this threat. This new warfighting approach involves United 
States forces resisting Chinese or Russian attacks from the very 
beginning of hostilities, fighting in and through enduringly contested 
operational environments to first blunt Beijing or Moscow's assault and 
then defeat it--without ever gaining the kind of all-domain dominance 
that the United States could establish against Iraq or Serbia. With its 
invasion blunted or readily reversed, neither China nor Russia would 
have a way to end the war favorably; rather, Beijing or Moscow would 
face the awful choice of expanding the war in ways that play to United 
States advantages or swallowing the bitter but tolerable pill of 
settling on terms the United States can accept. Such a posture should 
deter a minimally rational adversary from choosing to pursue such a 
course.
    The National Defense Strategy's Global Operating Model represents a 
new conceptual paradigm designed to help frame the Department's efforts 
to realize this new warfighting approach. This Global Operating Model 
is designed to defeat Chinese or Russian theories of victory, and 
especially the fait accompli.

      Its ``Contact'' Layer is designed to orient activities in 
the ``gray zone,'' especially in concert with allies, to prevent Russia 
or China from dominating the crucial perceptual landscape or surprising 
the United States and its allies by augmenting allied defenses, 
collecting intelligence, and challenging salami-slicing activities.

      Its crucial ``Blunt'' Layer is designed to focus U.S. and 
allied force development, employment, and posture on the crucial role 
of ``blunting'': delaying, degrading, and ideally denying the enemy's 
attempt to lock in its gains before the United States can effectively 
respond. Crucially, blunting is a function--not an attribute--of the 
force. The central idea is to prevent China or Russia from achieving a 
fait accompli--it does not require a fixed force. Indeed, blunting is 
likely to be done best by a combination of munitions launched from afar 
as well as forces deployed and fighting forward.

      The ``Surge'' Layer is designed to provide the decisive 
force that can arrive later, exploiting the operational and political 
leverage created by the ``Blunt'' Layer to defeat China or Russia's 
invasion and induce them to end the conflict on terms we prefer.

      The ``Homeland'' Layer is designed to deter and defeat 
attacks on the homeland in ways that are consistent with the Joint 
Force's ability to win the forward fight and favorably manage 
escalation.

    Likewise, the Strategy's core attributes of the future Joint Force 
also point to this new warfighting approach. The Strategy directs U.S. 
Armed Forces to become more lethal, resilient, agile, and ready. These 
terms have specific meanings, all designed to shift to a force able to 
fight through contested operational environments to deny the opponent's 
theory of victory:

      Lethality refers to the Joint Force's ability to strike 
at enemy maneuver forces without the kind of all-domain dominance the 
United States military has enjoyed over the last generation. Going 
forward, the Joint Force must be increasingly lethal in its ability to 
strike at key Chinese or Russian forces from the beginning of 
hostilities, even through dense air defense and other A2/AD networks.

      Resilience refers to the ability of the Joint Force and 
its enabling infrastructure to operate and achieve its objectives even 
in the face of determined and sophisticated multi-domain attack.

      Agility refers to the Joint Force's ability to become 
more operationally unpredictable while remaining strategically 
predictable, forcing the opponent to fear when, where, and how U.S. 
Forces might appear and act rather than being able to anticipate when, 
where, and how they will perform.

      Readiness refers to the preparedness of the Joint Force 
on short notice to contest Chinese or Russian attempts to implement 
their theories of victory. This is a more narrow definition of 
readiness than that often used in defense discussions, one focused more 
on readying the Joint Force more for specific missions rather pursuing 
full-spectrum preparedness. Under the NDS approach, some units may not 
need to be highly ready; those crucial to blunting Chinese or Russian 
attacks against vulnerable allies, on the other hand, will need to be 
at a high pitch of preparedness.

    To be realized and translated from concept into prepared forces, 
however, the Global Operating Model and these attributes require new 
operational concepts focused on these objectives and derived through 
rigorous gaming, experimentation, and training. These new concepts 
should be designed to overcome the operational problems laid out in the 
classified version of the Strategy.
Force Structure: Size, Shape, and Composition
    The Strategy has marked implications for the size, shape, and 
composition of the Joint Force. Most significantly, the Strategy places 
a clear prioritization on being able to deter and, if necessary, to 
prevail over a major power adversary like China or Russia in a 
strategically significant, plausible scenario. Consequently, it 
prioritizes ensuring that the United States Armed Forces are able to 
win a fight over Taiwan or the Baltics before investing in the capacity 
to fight two wars simultaneously. This is only logical; losing the war 
in the primary theater would render success in any secondary theaters 
either fleeting or futile. Being able to fight two or more wars 
simultaneously is a good, but it is a good subordinate to that of 
winning in the primary, decisive fight.
    Accordingly, the Strategy, as Secretary Mattis put it, prioritizes 
``capability over capacity''--or, put another way, ``capable 
capacity.'' That is, the Joint Force must focus on what it takes to 
beat China or Russia in a key, plausible scenario--and this means 
enough forces of high caliber combined with attritable lower-end 
assets. This in turn requires budgets that prioritize manned and 
unmanned forces optimized to fight China or Russia over increases in 
personnel, force structure, and legacy systems best suited for taking 
on Saddam Hussein's Iraq or Slobodan Milosevic's Serbia. At the same 
time, it puts high emphasis on developing and fielding lower-cost and 
more sustainable ways of conducting secondary missions, such as 
operations against non-state actors in places like the Middle East.
Force Employment
    The Strategy focuses on readying the Joint Force for plausible 
conflicts with China or Russia--precisely in order to deter them. The 
problem is that the Joint Force is not as ready for such conflicts as 
it should be. Instead, United States Forces have been focused on 
operations in the Greater Middle East and a wide variety of ``shaping'' 
missions, especially since 2001.
    This must change. The Joint Force needs to prioritize readying for 
major war against China or Russia--through realistic exercises 
(including with allies) and training at places like Red Flag, Top Gun, 
and the National Training Center, as well as through needed rest and 
recuperation amidst a demanding readiness improvement schedule.
    By necessity, this requires that the Joint Force also do less of 
these ``shaping'' and other secondary activities, and especially that 
the primary forces needed for major war be largely spared such duties. 
Continuing the current pace of operations and patterns of employment, 
such as using F-22s and B-1s over Syria and Afghanistan, will expend 
the readiness of the Joint Force on these peripheral missions rather 
than augmenting it against China and Russia.
    In summary, U.S. Armed Forces should become, as in most of the Cold 
War, primarily a training and readiness-oriented force prepared for war 
against a near-peer opponent, and not, as in the post-Cold War period, 
a military largely focused on operations in the Middle East and on 
``shaping'' activities.
Posture
    The Strategy represents a reemphasis on forward presence--but a 
forward presence of a particular kind. It is not about presence for its 
own sake or for symbolic or reassurance purposes. Rather, it is about 
combat-credible forward forces--that is, forces that are or can rapidly 
get forward, survive a withering Chinese or Russian assault, and blunt 
the adversary's aggression. And it about is bases, operating locations, 
and logistic networks that can perform their missions in support of 
these goals even under heavy and sustained enemy attacks.
    In the Pacific, this means investing in base defenses--including 
not only missile defenses but also camouflage, hardening, deception 
techniques, and other passive measures--that can make our relatively 
small number of bases more resilient, while also investing in a wider 
range of primary bases as well as secondary and tertiary operating 
locations throughout maritime Asia.
    In Europe, posture is crucial. Much of the threat posed by the 
Russian theory of victory is due to the anachronistic placement of 
United States and allied forces, which reflects a pale fraction of the 
pre-1989 force laydown trapped in amber. Accordingly, the Strategy 
calls for a substantial near-term investment in rectifying the 
deficiencies in our deterrent and defense for Eastern Europe. This 
includes posturing more heavy equipment and advanced munitions in key 
places in Europe and readying allied infrastructure in Eastern Europe 
for rapid reinforcement.
Relationships with Allies and Partners
    Another category of crucial changes initiated by the NDS is in our 
defense relationships with our allies and partners. The Strategy is 
clear: the era of untrammeled United States military superiority is 
over, yet we face not only high-end threats from China and Russia but 
also serious threats from North Korea, Iran, and terrorists with extra-
regional reach. We simply cannot do this all by ourselves. This means 
that rebalancing our alliances and empowering new partners is not only 
a matter of equity--as important as these are--but of strategic 
necessity. We need our allies and partners to contribute real military 
capability both to deterring China and Russia directly as well as to 
handling secondary threats.
    This entails significant changes in how we deal with our allies and 
partners. We need to empower our allies as well as partners like India, 
Vietnam, Indonesia, and the United Arab Emirates to be able to defend 
themselves better from Chinese or Russian coercion, to handle secondary 
but still important shared threats with less United States involvement, 
or both.
    Accordingly, we should see much more streamlined and liberalized 
procedures for arms and technology sales and transfers as well as for 
more intelligence sharing. States that share our broad interests, 
including ones, like Vietnam, with which we do not always agree, should 
be able to purchase military equipment more rapidly and with greater 
confidence in the sustainability and reliability of purchasing from the 
United States.
iii. what should successful implementation of the nds look like in the 
                               near term?
    What, then, should successful implementation of the NDS look like 
in the near term? The measures laid out below, while by no means 
exhaustive, would represent meaningful progress toward the fulfillment 
of the Strategy.
Warfighting Approach
    The Department must make progress on developing innovative 
operational concepts. These must be oriented on overcoming the 
operational problems identified in the Strategy in ways that favorably 
manage escalation and achieve our national political-strategic ends.
    Unfortunately, as the NDS Commission noted, there is little 
evidence that the Department has yet made meaningful progress on 
developing these new operational concepts. \5\ Congress cannot make 
informed judgments about the Department's budget request and other 
authorization issues without understanding the Department's approach to 
developing such concepts, however, since they are vital to determining 
what capabilities the Department needs and what the Joint Force's 
composition and size should be.
---------------------------------------------------------------------------
    \5\ Providing for the Common Defense, vii.
---------------------------------------------------------------------------
      In this context, Congress might request a formal report 
from the Department on the state of its progress on developing novel 
operational concepts designed to deal with the operational problems 
identified in the Strategy.
Force Structure/Budget
    The Department's fiscal year 2020 budget proposal is the first 
designed from its inception under NDS guidance. As Acting Secretary 
Shanahan has indicated, this should be the ``masterpiece'' budget in 
terms of implementing the NDS. The budget should therefore reflect 
measurable progress in realizing the NDS vision. This in particular 
means budgets and programs should be demonstrably linked to improving 
the Joint Force's performance in the most stressing, strategically 
significant potential warfights against China or Russia. In practice, 
in the near term this should mean significant investments in augmenting 
capability rather than growing the size of the Joint Force, including 
in the FY20 budget. \6\
---------------------------------------------------------------------------
    \6\ I highly commend to the Committee's attention an excellent 
short list of key top priority investment areas designed to address the 
National Defense Strategy's requirements in David A. Ochmanek, 
``Restoring U.S. Power Projection Capabilities: Responding to the 2018 
National Defense Strategy,'' Arlington, VA: The RAND Corporation, 2018, 
10-11.
---------------------------------------------------------------------------
    Key indicators of progress in the budget request toward 
implementing the NDS would include, but are not limited to:

      Rectifying clear, major shortfalls for key scenarios 
(especially Taiwan and the Baltics) through:

      o  Procurement of substantial numbers of munitions designed to 
increase the existing Joint Force's lethality against Chinese invasion 
or Russian maneuver forces, such as longer-range anti-ship missiles 
(e.g., the Long-Range Anti-Ship Missile), longer-range air-launched 
cruise missiles (e.g., the Joint Air-to-Surface Standoff Missile-
Extended Range), and guided anti-armor weapons for attacks on ground 
maneuver forces. These types of munitions are must-buys to increase the 
defensibility of Taiwan and the Baltics.

      o  Sustained and substantial investment in augmenting threatened 
base and logistic network defense and resilience. This includes 
adequate active defenses for key bases and nodes (e.g., the Army's 
Indirect Fire Protection Capability, Increment 2) but also especially 
passive defenses to increase their resilience (e.g., funds for 
hardening, decoys, camouflage, deception techniques, et al).

      More robust space-based, airborne, and terrestrial assets 
for conducting surveillance and reconnaissance to support situational 
awareness, battle management, and targeting in heavily contested 
environments.

      Funding for a ``high-low'' mix of highly capable, lethal, 
and survivable platforms (e.g., penetrating aircraft and munitions, 
space systems, and attack submarines) and more attritable systems 
designed to complement and enable these more expensive platforms (e.g., 
lower cost unmanned aerial and underwater systems and smaller 
satellites).

      Investment in lower-cost systems and formations for 
secondary and tertiary missions. These include but are not limited to:

      o  Light-attack aircraft, including potentially unmanned such 
platforms.

      o  Smaller, tailored Army formations on the model of the Security 
Force Assistance Brigade (SFAB) optimized for training and assisting 
partner militaries.

      Reduction and, wherever possible, elimination of forces 
that are not survivable and useful in a high-end scenario and are too 
expensive for economical employment in low-end operations.

      o  The Department's cancellation in FY2019 of JSTARS--a platform 
of dubious utility in a potential conflict with China or Russia--was an 
important step forward in this vein.

      The Congress should consider providing authorization and 
resourcing to enable the Secretary of Defense to reserve a substantial 
fund of money to be awarded to Services and other entities based on 
proposals they submit that hold promise in addressing the key 
operational problems laid out in the Strategy. \7\ This would encourage 
the development of innovative programs to deal with the challenges 
prioritized in the NDS.
---------------------------------------------------------------------------
    \7\ David A. Ochmanek, ``Improving Force Development Within the 
U.S. Department of Defense: Diagnosis and Potential Prescriptions.'' 
Arlington, VA: The RAND Corporation, 2018.
---------------------------------------------------------------------------
Force Employment
    The Joint Force is not ready enough for major war with China and 
Russia. As this is the most important and dangerous security threat 
affecting our national interests, rectifying this shortfall must be the 
primary goal of the Joint Force's activities. Such activities should 
include:

      Focus Joint Force activities on high-end training and 
invest in improving training facilities and techniques to prepare the 
Joint Force for high-end combat against China and Russia.

      Conduct exercises, including with allies in Europe and 
Asia, designed to actually test the Joint Force and allies' readiness 
to fight and prevail against Russia or China.

      o  Such exercises should be designed in light of the Global 
Operating Model's framework to demonstrate the ability of United States 
and allied forces to blunt Chinese or Russian fait accompli strategies, 
including through falling in on prepositioned stocks and engaging the 
adversary quickly.

          For example, in EUCOM, focus NATO alliance exercises 
much more on high-end fighting.

    Given how demanding improving the Joint Force's readiness for major 
war with China or Russia will be, United States forces must 
consequently do less of everything else not connected to that goal. 
Accordingly, the Congress should expect the Department to propose to:

      Reduce activities not connected to this priority goal, 
including a wide range of exercises; shaping, assurance and presence 
missions and operations.
Posture
    In both Europe and Asia, United States posture is not optimized to 
deal with our potential adversary's theories of victory. Accordingly, 
the NDS calls for a substantial increase in investment for European 
posture designed to quickly and materially address the imbalance in 
military power on NATO's Eastern flank and improve the Alliance's 
ability to defeat a Russian fait accompli strategy, followed by a 
plateauing of this investment in the medium term to focus on the more 
substantial long-term Chinese threat. In Asia, in addition to resources 
for making bases and operating locations more defensible and resilient, 
investment should focus on increasing options for operating locations 
throughout maritime Asia and the Western and Central Pacific.

      Congress should expect and require investments in the 
European Deterrence Initiative and within Service budgets to continue 
to go toward enhancing the combat-credibility of United States forces 
in Europe and the ability of Surge Layer forces to fall in on 
prepositioned stocks in the event of crisis or conflict.

      o  This should include prepositioning heavy equipment and 
advanced munitions.

      Congress should expect near-term growth in investments in 
our European deterrent and defense posture but a plateauing of this 
investment over the coming years as United States and NATO posture, 
capability, and readiness against the Russian threat improves.

Ensuring Clear and Consistent Guidance for the Department
    There is a significant problem within the Department of Defense 
with the proliferation of strategic guidance. Candidly, there is too 
much guidance and it is not as rigorously aligned as it should be. Too 
much guidance is redundant at best and at worst confusing, conflicting, 
and detrimental to effectively aligning the Department behind 
leadership intent.
    The National Defense Strategy, the document established by Congress 
and embraced by Secretary Mattis and Acting Secretary Shanahan as the 
Secretary of Defense's preeminent strategic guidance, provides clear 
guidance not only at the high political level but also in terms of 
force structure and composition, development, employment, and posture. 
It establishes clear priorities and identifies areas for reducing 
emphasis. In addition, the Secretary's Defense Planning Guidance (for 
budget and force development) and Guidance for the Employment of the 
Force/Contingency Planning Guidance (for force employment) provide 
clear follow-on specialized guidance.
    Every other document issued by subordinate officials--civilian and 
uniformed--in the Department should closely and clearly reflect these 
priorities. Yet this is not always the case, resulting in confusion, 
stasis, or misaligned activities.
    Congress can help rectify this problem by:

      Expressing its view that the Defense Planning Guidance 
and Guidance for the Employment of the Force/Contingency Planning 
Guidance clearly and effectively ensure the implementation of the 
National Defense Strategy in their respective domains.

      Providing for clearer lanes in the road for the documents 
issued by the Chairman of the Joint Chief of Staff. In particular:

      o  Providing a clearer, more narrowly scoped purpose for the 
National Military Strategy, and specifically providing that it focus on 
realizing the military dimensions of the National Defense Strategy. 
This should include a clear focus on operational concept development, a 
core military responsibility.

      o  Clarifying that the Chairman's Program Recommendations and 
Global Campaign Plans should be derived from the Defense Planning 
Guidance and Guidance for the Employment of the Force/Contingency 
Planning Guidance, respectively.

Allies and Partners
    Allies and partners are key to the success of the Strategy. They 
must understand and buy in to the Strategy for it to succeed. And they 
must be able to obtain the arms, technologies, and intelligence 
necessary to integrate with our Strategy.
    Congress can help encourage this crucial element of the Strategy 
by:

      Advocating for a releasable version of the classified 
Strategy to be shared not only with close allies but also the broader 
set of allies and partners crucial to the Strategy's success.

      Reduce barriers to selling or providing financing for 
purchases of arms consistent with the Strategy (such as systems useful 
for developing indigenous A2/AD networks) to the wider range of allies 
and partners identified in the Strategy, such as India, Vietnam, and 
Indonesia. To realize this goal, Congress could:

      o  Ensure that strategic considerations predominate in 
interagency and congressional decisions and authorizations about 
whether to sell arms and transfer technologies (consistent with 
security concerns).

      o  Remove CAATSA penalties and barriers for partners such as 
India, Vietnam, and Indonesia. China is the most significant strategic 
challenge the United States faces. Penalizing partners crucial to 
helping us check Chinese assertiveness not only inhibits their ability 
to do so, but actively alienates them. It also undermines our long-term 
ability to shift these states away from their historical reliance on 
Russian arms sales toward our own and friendly states' defense 
industries.

          Moreover, the best way to deal with the military 
threat posed by Russia is to augment our posture and forces in Europe, 
not to penalize partners that have historically relied on Soviet/
Russian arms.

    There are several allies and partners on which the Committee could 
most productively focus in light of their unique importance. Taiwan is 
especially significant because it is the most vulnerable member of the 
United States alliance and partnership architecture, especially over 
time, and because its own behavior is crucial to its defensibility. 
Japan and Germany, meanwhile, are the largest economies among United 
States allies. Greater and more focused defense effort from Tokyo is 
essential to the allied defense posture in the Indo-Pacific in light of 
the continuing military build-up by China. A cognate increase in effort 
by Berlin, meanwhile, is crucial to developing a more equitable and 
thus more politically sustainable NATO defense posture.

      The United States is committed to the defense of Taiwan 
against unprovoked aggression, but Taiwan itself must demonstrate much 
greater commitment and seriousness in providing for its own defense. 
Congress can help by ensuring the Administration provides and 
implements substantial defense sales to Taiwan that are in conformity 
with an asymmetric strategy along the lines of Taiwan's new Defense 
Concept.

      o  While Taiwan's defense spending has inexcusably lagged, 
President Tsai Ing-wen's administration has committed to increased 
defense spending. Congress should encourage this and urge Taipei to 
fulfill its pledge.

      o  Taiwan needs help from the United States to help defend 
itself. The Congress should therefore ensure defense sales and 
transfers to Taiwan are regular and actually useful for Taiwan's 
defense.

      o  In particular, Taiwan needs to shift from a legacy force 
toward an asymmetric one capable of blunting and degrading a Chinese 
invasion or blockade. In particular, this means a shift from a focus on 
procuring vulnerable, big-ticket items like short-range aircraft and 
surface ships to an emphasis on A2/AD systems that can degrade a 
Chinese invasion or blockade and buy time for United States 
intervention. This entails Taiwan focusing on procuring short-range 
UAVs, coastal defense cruise missiles, sea mines, mobile air defense 
systems, and rocket artillery.

      o  Taiwan's Tsai administration has endorsed this approach but 
faces internal resistance, often political or bureaucratic in nature. 
To help, Congress should applaud Taiwan's shift to this new Defense 
Concept and ensure United States defense sales and transfers to Taiwan 
are consistent with the asymmetric strategy.

      Congress can applaud and support allies and partners that 
are working to align with the National Defense Strategy, and encourage 
others to do so. It can do so through direct engagements both here and 
on Congressional Delegations (CODELs). In particular:

      o  Japan's level of defense spending is far too low for the 
threat environment it faces, and inconsistent with a mature, equitable 
alliance relationship with the United States. The administration of 
Prime Minister Shinzo Abe has, however, been working hard to change 
this, and deserves support.

          Moreover, Japan's new National Defense Planning 
Guidelines are a cardinal example of an allied strategy that is very 
much in line with the National Defense Strategy.

          Thus, while Congress should continue to press Japan 
to increase its defense spending, it should applaud Japan for its new 
Guidelines and its efforts to bring Japan's defense efforts into 
conformity with the security conditions it faces and an appropriate and 
sustainable alliance relationship with the United States.

      o  Germany has lagged behind its obligations to NATO collective 
security for several decades. During the Cold War, the Bundeswehr was 
the most capable NATO military, save that of the United States. Yet 
Germany effectively almost demilitarized after the Cold War, and today 
is incapable of meaningfully contributing directly to the collective 
defense of NATO's newer entrants--a collective defense from which the 
Federal Republic benefited so greatly during the Cold War.

          But Germany appears to have turned a corner, and 
Berlin has recommitted its military to the NATO collective defense 
mission and to increasing its defense spending from 1.2 percent to 1.5 
percent of GDP by 2031. This is not enough, but it is a start that 
deserves support.

          Congress could, while encouraging Germany to continue 
to increase defense spending, applaud the Federal Republic for its 
commitments and renewed seriousness in the service of NATO defense.

Defense Spending
    Adequate funding is crucial for successful implementation of this 
Strategy, and thus for defending America's interests abroad. Hard 
choices in the Department's programs and operations are necessary 
simply to keep up with the Chinese and Russian military challenge; they 
are not a basis for a smaller defense budget.
    As Secretary Mattis regularly put it, ``the United States can 
afford survival.'' \8\ The Congress should therefore insist that the 
Department follow through on the hard choices laid out in the Strategy 
but also provide the substantial and consistent funding needed to 
realize it.
---------------------------------------------------------------------------
    \8\ Speech by Secretary of Defense James Mattis at The Reagan 
National Defense Forum, December 1, 2018.
---------------------------------------------------------------------------
An Active Congress and Senate Armed Services Committee
    Congress--and especially this Committee--played a crucial role in 
setting the conditions for success for the NDS, including by sending a 
clear signal of the importance of prioritization and providing for a 
classified version of the Strategy. The NDS is as much Congress' 
Strategy as the Department's.
    Because of Congress' tremendous importance in the Nation's defense, 
realizing the strategic shift initiated by the NDS will require 
Congress to play a central role.
    Most importantly, Congress and especially this Committee can 
continue to make clear, as Chairman Inhofe has already indicated, its 
strong and continued support for the National Defense Strategy. This is 
especially important and timely in light of the leadership transition 
in the Department.

      In this vein, the Committee should ensure that the next 
nominee for Secretary of Defense commits to advancing and implementing 
the National Defense Strategy.

    Congress can also support and enable the implementation of the 
Strategy by both supporting the Strategy's hard choices and providing 
adequate and consistent levels of funding to the Department.
    This is central because what differentiates the NDS from run of the 
mill strategic documents is not only its clear, overriding focus on the 
major contemporary security challenge the Nation faces--great power 
competition--but also the hard choices reflected in the Strategy that 
Congress demanded and that the Department's leadership made. The 
Strategy reflects the understanding that the demands of preparing for 
great power competition require conducting secondary missions in a more 
economical way.
    Saying that great power competition is important but failing to 
delineate clearly what not to do effectively undermines the ability to 
genuinely prioritize on this most pressing challenge. If the political 
leadership of the Department is unwilling to say with some precision 
not only what the Department's priority is but also where risk can be 
taken and cuts can be made, no one below them will do so--nor should 
they be expected to do so. It is the job of the political leadership of 
the Department to assume responsibility for those hard calls and 
credibly communicate those decisions to subordinate echelons. Secretary 
Mattis and Acting Secretary Shanahan--in what is probably an 
unprecedented act (at least in the post-Cold War era) of leadership--
did exactly this.
    Congress' support for these hard choices--and thus for actually 
prioritizing great power competition--is crucial and equally 
commendable.

      Congress should therefore work with the Department to 
support and authorize, as appropriate, the Department's implementation 
of the hard choices reflected in the Strategy.

    There is no better forum than this Committee for ensuring that 
serious deliberation over the Nation's crucial defense matters receives 
the official and national attention it deserves. This Committee does 
not need to attempt to dictate the right answers to the Department, but 
it can ensure the right issues are being soberly and expertly discussed 
and highlighted, as it did during the 1970s and 1980s.

      In this vein, the Committee could hold both closed and 
open hearings on key issues that require attention, featuring both 
Department officials and outside experts, such as:

      o  The results of the most recent and authoritative assessments 
of key conflict scenarios;

      o  New operational concepts;

      o  New ways of performing missions in secondary theaters, such as 
the Middle East, more economically; and

      o  Improving interoperability with allies and partners to defeat 
Chinese and Russian theories of victory.

      In addition, the Committee could help communicate more 
effectively to and with the American public concerning the serious and 
growing threat posed by great power military competition--and, given 
its size and sophistication, China in particular--and why this 
challenge demands priority even as our national security infrastructure 
continues to manage threats from terrorists and ``rogue states.''

      At the same time, it is crucial that the National 
Security Strategy and National Defense Strategy priorities be reflected 
across government. The Committee could therefore work with the Senate 
Foreign Relations Committee and Senate Select Committee on Intelligence 
to ensure strategies and efforts are aligned, a crucial part of 
ensuring the United States effectively expands the competitive space.
Conclusion
    The 2018 National Defense Strategy represents a fundamental shift 
in our country's defenses. Its core purpose was to identify and 
anticipate the most consequential and dangerous threats to our Nation's 
interests, provide clear and actionable guidance to the Department of 
Defense as to how to maintain effective deterrence and defense against 
those threats, and by implementing these decisions stand the best 
chance of preserving a favorable peace in the coming years. It is a 
Strategy that directs hard choices and rigorous prioritization now, so 
that we may balance the power of a rising China and check a revanchist 
Russia. Failing to make those hard choices and investments now will not 
relieve us of the obligation to make them--it will only make them 
harder and costlier in the future.

    Chairman Inhofe. Excellent statement. Thank you very much.
    Mr. Ratner?

STATEMENT OF ELY RATNER, EXECUTIVE VICE PRESIDENT AND DIRECTOR 
  OF STUDIES, CENTER FOR A NEW AMERICAN SECURITY; AND FORMER 
     DEPUTY NATIONAL SECURITY ADVISOR TO THE VICE PRESIDENT

    Dr. Ratner. Mr. Chairman, Ranking Member Reed, 
distinguished members of the Committee, thank you for the 
opportunity to be here today to discuss a topic of vital 
importance to the United States.
    For today's hearing, I was asked to provide a comprehensive 
assessment of United States strategic competition with China 
across all of its manifestations, and my written testimony 
includes 20 recommendations for Congress, including in 
economic, ideological, and military domains.
    I would like to use my opening statement, however, to talk 
about the big picture because if we aspire to do what is 
necessary as a Nation to rise to the China challenge, it is 
imperative that our leaders and the American people have a 
clear understanding of what is at stake. Let me begin with five 
top-line observations.
    First, the United States and China are now locked in a 
geopolitical competition that will endure for at least the next 
decade. United States-China competition is structural and 
deepening. What we are experiencing today is not an episodic 
downturn in the United States-China relationship, nor is the 
current rise in tensions primarily due to President Trump or 
his administration. The United States, the United States 
Congress, and the American people should be preparing now for 
long-term competition with China.
    Second, the United States, on balance, is currently losing 
this competition in ways that increase the likelihood not just 
of the erosion of United States power, but also the rise of an 
illiberal Chinese sphere of influence in Asia and beyond. The 
emergence of a China-led order would be deeply antithetical to 
United States values and interests, and the net result would be 
a less secure, less prosperous United States that is less able 
to exert power and influence in the world.
    Third, to avoid these outcomes, the central aim of United 
States strategy in the near term should be preventing China 
from consolidating an expansive and illiberal sphere of 
influence. It is essential that the United States stop China 
from exercising exclusive and dominant control over key 
geographic regions and functional domains.
    Fourth, the U.S. Government is still not approaching this 
competition with anything approximating its importance for the 
country's future. While I support the overall thrust of the 
Trump administration's China policy, as articulated in the 
National Security Strategy and the National Defense Strategy, 
it is also the case that many of the Trump administration's 
foreign and domestic policies, for instance, on alliances, 
international institutions, trade, human rights, and 
immigration, do not reflect a government committed to enhancing 
American competitiveness or sustaining power and leadership in 
Asia and the world. In key areas, I would characterize the 
Trump administration's China policy as being confrontational 
without being competitive.
    Fifth, despite current trends, the United States can still 
prevent the growth of an illiberal China-led order. Continued 
Chinese advantage in the overall competition is by no means 
inevitable. The United States can successfully defend and 
advance its interests vis-a-vis China if Washington can muster 
the right strategy, sustained attention, and sufficient 
resources.
    With that context, I would like to use the balance of my 
time, Mr. Chairman, to describe four essential tenets that 
should guide U.S. strategy going forward.
    First, the foundations of American power are strong, and we 
should be approaching this competition from a position of 
confidence. The United States continues to possess the 
attributes that have sustained our international power and 
leadership for decades. Our people, demography, geography, 
abundant energy resources, dynamic private sector, powerful 
alliances and partnerships, leading universities, democratic 
values, and innovative spirit give us everything we need to 
succeed if only we are willing to get in the game.
    Second, rising to the China challenge is ultimately about 
us, not them. Preventing China from developing an illiberal 
sphere of influence does not require mounting a Cold War-style 
containment strategy. Instead, the United States Government 
should be focused on enhancing American competitiveness to 
defend and advance U.S. interests in key geographic regions and 
functional domains. How the United States fares in its 
competition with China will ultimately depend on America's own 
competitiveness.
    Third, we have to compete across all domains of the 
competition, including military, economics, diplomacy, 
ideology, technology, and information. It would be a mistake to 
approach our China policy as siloed and tactical responses to 
particular problems. Whether we are talking about the South 
China Sea, intellectual property theft, or human rights, 
succeeding on any individual issue will require strength and 
sophistication across all areas of the competition.
    Fourth and finally, maintaining a bipartisan consensus on 
China will be essential to America's long-term success. 
Fortunately, there appears to be strong and growing bipartisan 
support for a more competitive U.S. response. It is imperative 
that this bipartisanship endure in the years ahead. U.S. 
leaders, including on Capitol Hill, should view bipartisanship 
as a necessary and core feature of United States-China policy.
    Mr. Chairman, I look forward to your questions and to 
discussing my policy recommendations in more detail. Thank you 
again for the opportunity to be here today.
    [The prepared statement of Dr. Ratner follows:]

                  Prepared Statement by Dr. Ely Ratner
                        i. strategic assessment
    Chairman Inhofe, Ranking Member Reed, distinguished members of the 
Committee, thank you for the opportunity to discuss a topic of vital 
importance to the United States. I want to begin with five key 
observations on the current state of strategic competition between the 
United States and China:
    1) The United States and China are now locked in a geopolitical 
competition that will endure for at least the next decade.   United 
States-China competition is structural and deepening across the central 
domains of international politics, including security, economics, 
technology, and ideology. What we are experiencing today is not an 
episodic downturn or cyclical trough in the United States-China 
relationship, nor is the current rise in tensions primarily due to 
President Trump or his administration. The United States, the United 
States Congress, and the American people should be preparing for long-
term competition with China.
    2) The United States, on balance, is currently losing this 
competition in ways that increase the likelihood not just of the 
erosion of United States power, but also the rise of an illiberal 
Chinese sphere of influence in Asia and beyond.  How this competition 
evolves will determine the rules, norms, and institutions that govern 
international relations in the coming decades, as well as future levels 
of peace and prosperity for the United States. There is no more 
consequential issue in U.S. foreign policy today. Should the United 
States fail to rise to the China challenge, the world will see the 
emergence of a China-led order that is deeply antithetical to United 
States values and interests: weaker United States alliances, fewer 
security partners, and a military forced to operate at greater 
distances; U.S. firms without access to leading markets, and 
disadvantaged by unique technology standards, investment rules, and 
trading blocs; inert international and regional institutions unable to 
resist Chinese coercion; and a secular decline in democracy and 
individual freedoms. The net result would be a less secure, less 
prosperous United States that is less able to exert power and influence 
in the world.
    3) To avoid these outcomes, the central aim of United States 
strategy in the near term should be preventing China from consolidating 
an illiberal sphere of influence in vital regions and key functional 
domains.  It is imperative that the United States stop China's advances 
toward exerting exclusive and dominant control over key geographic 
regions and functional domains. Only once the United States halts 
China's momentum--and in doing so reassures the world about America's 
commitment to its traditional leadership role--can Washington 
conceivably construct a durable and favorable balance of power. This 
does not mean mounting a Cold War-style containment strategy that seeks 
to roll back or weaken China. Instead, where China would otherwise 
develop harmful forms of dominant control, the United States should 
seek to build ``spheres of competition'' to contest strategic areas. 
U.S. policy should focus on enhancing American competitiveness to 
defend and advance U.S. interests within these vital spheres of 
competition.
    4) The U.S. Government is not approaching this competition with 
anything approximating its importance for the country's future.  Much 
of Washington remains distracted and unfocused on the China challenge. 
The Trump administration sounded some important notes in its first 
National Security Strategy and National Defense Strategy, and there are 
strategic thinkers and sophisticated analysts inside the Trump 
administration who are attempting to piece together a more competitive 
strategy. That being said, many of the Trump administration's foreign 
and domestic policies (for example on alliances, international 
institutions, trade, human rights, and immigration) do not reflect a 
government committed to enhancing American competitiveness or 
sustaining power and leadership in Asia and the world. In key areas, 
the Trump administration's China policy is confrontational without 
being competitive.
    5) Despite current trends, the United States can still prevent the 
growth of an illiberal order in Asia and internationally.  Continued 
Chinese advantage in the overall strategic competition is by no means 
inevitable. In fact, the United States can successfully defend and 
advance its interests with a concerted effort that brings together the 
right strategy, sustained attention, and sufficient resources. 
Moreover, China has its own substantial vulnerabilities, particularly 
compared to the robust and enduring foundations of American power. As 
much as China's diplomats and propaganda organs have complained 
bitterly about United States officials speaking in more competitive 
terms, it is no secret that Beijing has been intensely focused on 
strategic competition with the United States for decades. In fact, 
China has been gaining ground across the geopolitical competition 
primarily because it has most often been the only side competing.
                ii. how we got here and what's at stake
    United States policy toward China since the end of the Cold War was 
predicated on steering its development and shaping the regional 
environment such that Beijing would ultimately decide not to challenge 
United States dominance in Asia. At its core, it was a strategy for 
preventing a China challenge from ever surfacing in the first place. 
This approach was guided by the promise that economic modernization and 
interdependence would lead to political and market reforms internally, 
while also creating overwhelming incentives for China to integrate into 
the prevailing international order. At the same time, given 
uncertainties about China's intentions, the United States and its 
allies developed military capabilities to deter Chinese aggression and 
dissuade Beijing from aspiring to regional hegemony. There have been 
ongoing debates in Washington about which element merited greater 
emphasis, but this combination of ``engagement'' and ``balancing'' 
served as consensus United States strategy toward China for decades 
after the end of the Cold War.
    This policy approach was valid as long as there were indications 
that it was working--or at least enough ambiguity and uncertainty about 
China's future behavior. Such was the case throughout most of the 1990s 
and early 2000s, when China adhered to a fairly cautious and 
conservative foreign policy. But that era has ended, and the results 
are deeply troubling. Contrary to United States aspirations, China is 
becoming more authoritarian, the regime is tightening its grip on the 
economy, and its foreign policies are increasingly ambitious and 
assertive in seeking to undermine and displace the United States-led 
order in Asia. \1\
---------------------------------------------------------------------------
    \1\ See Kurt Campbell and Ely Ratner, ``The China Reckoning: How 
Beijing Defied American Expectations,'' Foreign Affairs, March/April 
2018, https://www.foreignaffairs.com/articles/united-states/2018-02-13/
china-reckoning.
---------------------------------------------------------------------------
    This is not to say that Beijing does not deserve greater voice or 
influence commensurate with its position as a major power. But there is 
a difference between greater Chinese power (even China being the most 
powerful country in the region), and a situation in which Beijing 
exerts hegemonic control over Asia. The latter would include: the 
Chinese military administering the South and East China Seas; regional 
countries sufficiently coerced into not questioning or challenging 
China's preferences on military, economic, and diplomatic matters; the 
de facto unification of Taiwan; Beijing with agenda-setting power over 
regional institutions; a China-centric economic order in which Beijing 
sets trade and investment rules in its favor; and the gradual spread of 
authoritarianism, including proliferation of China's model of a high-
tech surveillance state. Preventing that future should serve as the 
central near-term aim of United States-China strategy.
               iii. guiding principles for u.s. strategy
    As the United States embarks on blunting China's efforts to 
establish an illiberal order, it should do so with the following four 
tenets:

    1. The foundations of American power are strong:  We should be 
approaching the China challenge from a position of confidence. Despite 
all the pessimism about American dysfunction and decline, the United 
States continues to possess the attributes that have sustained its 
international power and leadership for decades. Our people, demography, 
geography, abundant energy resources, dynamic private sector, powerful 
alliances and partnerships, leading universities, democratic values, 
and innovative spirit give us everything we need to succeed if only 
we're willing to get in the game.

    2. Rising to the China challenge is ultimately about us, not them:  
Since the end of the Cold War, United States policy toward China has 
sought to open its society and economy, while also encouraging it to 
become a responsible member of the international community. Instead, we 
find ourselves today confronting an increasingly illiberal, 
authoritarian, and revisionist power. We should expect that China will 
continue heading in this direction (at least) as long as Xi Jinping and 
the Chinese Communist Party are in charge. It is therefore no longer 
viable for the United States to predicate its strategy on changing 
China. Rather, how the United States fares in its strategic competition 
with China will ultimately depend on our own competitiveness, which 
means we need to be committed and focused on enhancing our national 
strength and influence. \2\
---------------------------------------------------------------------------
    \2\ Daniel Kliman, Elizabeth Rosenberg, and Ely Ratner, ``The China 
Challenge,'' 2018 CNAS Annual Conference, June 21, 2018, https://
www.cnas.org/publications/commentary/the-china-challenge.
    \3\ Ely Ratner, ``Rising to the China Challenge,'' Testimony before 
the House Armed Services Committee, February 15, 2018, https://
www.cfr.org/report/rising-china-challenge.

    3. We need a comprehensive China strategy across all domains of the 
competition: Regardless of the specific topic--Chinese economic 
coercion, human rights, or the South China Sea--the United States needs 
a comprehensive strategy that enhances U.S. competitiveness across all 
domains of the competition, including military, economics, diplomacy, 
ideology, technology, and information. \3\ It would be a mistake to 
approach our China policy as siloed and tactical responses to 
particular problems. Succeeding on any individual issue will require 
---------------------------------------------------------------------------
strength and skill across all areas of the competition.

    4. Building and sustaining a bipartisan consensus on the China 
challenge will be of utmost importance to America's long-term success:  
Fortunately, there currently exists a strong degree of bipartisan 
support for a more competitive U.S. response. It is imperative that 
this bipartisanship endure in the years ahead. Political fissures on 
China will have at least three negative consequences: inhibiting the 
ability of the United States Government to focus attention and 
resources on the China challenge; undermining the necessary confidence 
of United States allies and partners that they should side with an 
America willing to confront China's revisionism; and creating openings 
for Beijing to divide and conquer within the United States political 
system. U.S. leaders, including on Capitol Hill, should view 
bipartisanship as a necessary and core feature of United States-China 
policy.
                    iv. recommendations for congress
    This section contains 20 recommendations for Congress divided 
between the economic, ideological, and security domains of the 
competition.
Economic Competition

    1. Congress should hold hearings to re-examine the costs and 
benefits of rejoining the Trans-Pacific Partnership (TPP), now known as 
the Comprehensive and Progressive Agreement for Trans-Pacific 
Partnership (CPTPP).
    United States exclusion from regional trade agreements in Asia will 
have both economic and strategic consequences for the United States. 
Now that the CPTPP is in force, U.S. businesses and workers will begin 
to suffer the costs of trade diversion away from the United States. At 
the same time, the negative externalities of China's expanding power 
and influence are growing larger in the absence of United States 
economic leadership. With no viable alternative to a future defined by 
China-led economic order, countries in the region are increasingly 
reluctant both to partner with the United States and to resist China's 
acts of coercion, most notably in the South China Sea. Similar dynamics 
are emerging elsewhere, where this trend is repeating itself in South 
Asia, the Middle East, and even parts of Europe and Latin America. 
United States efforts to set high-standard trade and investment rules, 
knitting together TPP with the Transatlantic Trade and Investment 
Partnership (TTIP) with Europe, would bracket both sides of the 
Eurasian continent, thereby reducing China's coercive leverage, 
resisting the spread of illiberalism, and creating political space for 
continued security cooperation with the United States. The Trump 
administration's strategy of pursuing a ``free and open Indo-Pacific 
region'' is the right framework, but it will fail without an economic 
component on par with the scale and scope of TPP. The politics of this 
are obviously difficult right now in the United States, but both 
political parties need to find a way back to supporting fair and high-
standard multilateral trade deals. Congress should revisit the costs 
and benefits of remaining outside these agreements, while also 
articulating what specific adjustments would be required to garner 
political support in Washington. By refusing outright to join regional 
trade agreements, the United States is inviting continued Chinese 
economic coercion and, ultimately, Chinese dominance of Asia and 
beyond.

    2. Congress should support and enhance non-tariff tools of economic 
statecraft to respond to China's illegal and unfair trade and 
investment practices.
    The Trump administration is rightly seeking to address a wide range 
of unacceptable trade and investment practices by China, including 
forced technology transfer, intellectual property theft, and market 
access restrictions. If current negotiations fail, the Trump 
administration has threatened to widen the scale and scope of United 
States tariffs on Chinese goods. This would be a mistake. Blanket 
tariffs are not an effective tool because they are indiscriminate and 
serve as a tax on American businesses and consumers. Moreover, there is 
real potential for escalating tariffs to negatively impact the United 
States 1.economy and financial markets, which would likely spur 
political divisions and commensurate calls for a return to a less 
competitive approach toward China. To avoid these outcomes, even when 
China inevitably falls short in making structural economic reforms, 
Congress should support the Trump administration's efforts to freeze 
the tariff war. At the same time, however, the United States Government 
should also vigorously pursue other tools that include targeted 
tariffs, investment restrictions, export controls, regulatory changes, 
greater information sharing with the private sector, and law 
enforcement actions that curb China's ability to profit from its 
illicit and unfair behavior. As part of that, Congress should urge the 
Trump administration to employ Executive Order 13694, which provides 
authorities for sanctions against companies that have used cyber means 
to steal intellectual property for commercial gain.

    3. Congress should limit the ability of the Executive branch to 
levy Section 232 tariffs against U.S. allies and partners on national 
security grounds.
    The United States should be working with--not alienating--allies 
and partners to address the China challenge, including sharing 
information on China's activities, coordinating on trade and investment 
restrictions, and rerouting global supply chains. It will be 
exceedingly difficult to address China's coercive, unfair, and illegal 
trade and investment practices on our own. It was a mistake for the 
Trump administration to lead with Section 232 tariffs on some of our 
closest allies, and similarly misguided to threaten auto tariffs 
against the European Union or withdrawal from NAFTA or KORUS. Instead, 
the United States needs an international economic strategy that 
differentiates between allies and strategic competitors. Congress 
should therefore set limits on the ability of the Executive branch to 
levy damaging tariffs on close U.S. allies and partners on national 
security grounds. \4\
---------------------------------------------------------------------------
    \4\ Peter Harrell, ``Congress must rein in White House economic 
national security powers,'' The Hill, June 7, 2018, http://thehill.com/
opinion/national-security/390958-congress-must-rein-in-white-house-
economic-national-security-powers.
    \5\ These recommendations were designed by Daniel Kliman, senior 
fellow at the Center for a New American Security.

    4. Members of Congress should organize bipartisan Congressional 
Delegations and parliamentary exchanges to engage with key partners on 
China.
    Recent legislative efforts by the U.S. Congress, particularly on a 
new investment screening regime, provide important lessons learned for 
partner governments. Congress can play an essential role in sharing 
strategies, information, and expertise with partner legislatures that 
are only beginning to grapple with the issues and complexity associated 
with confronting China's illiberal and revisionist actions, including 
on trade and investment. Moreover, doing so in a bipartisan fashion 
will send a particularly important signal to the world and to China 
that the United States is politically united on this issue.

    5. Congress should call for bureaucratic reforms inside the U.S. 
Government, accompanied by an official strategy, to help the United 
States better organize for China's economic challenge.
    The United States Government is not institutionally configured to 
deal with the China economic challenge. Congress can help rectify this 
shortcoming by passing two pieces of proposed bipartisan legislation: 
one requiring the administration to publish a National Economic 
Security Strategy; and another that creates a new Office of Critical 
Technologies and Security to coordinate United States policies in the 
technology competition with China.

    6. Congress should play an active oversight role in the creation of 
the new U.S. International Development Finance Corporation (USDFC). \5\
    The Trump administration and Congress deserve credit for taking 
steps to use development finance more strategically. To that end, 
Congress can play an important role in shaping the new USDFC (stood up 
as part of the BUILD Act) by ensuring it is optimized for United States 
competition with China. For example, Congress should encourage the 
USDFC to: 1) include a strategy office that coordinates with U.S. 
defense and intelligence agencies; 2) tolerate a degree of risk in high 
priority regions; and 3) have authority for surge funding for the rapid 
delivery of development finance when political circumstances warrant.

    7. Congress should appropriate resources for the United States 
Government to provide technical assistance to potential recipients of 
Chinese Government financing.
    China's economic carrots and sticks--particularly under the rubric 
of its Belt and Road strategy--are giving Beijing considerable leverage 
over security and political issues in third countries, including in 
Latin America and Europe. It bears underscoring that there is 
significant global demand for infrastructure, and no viable alternative 
to replace entirely China's potential provision of resources. That 
being said, it will run counter to United States interests if recipient 
countries are subject to corruption and coercion, burdened with 
commercially non-viable development projects, or caught in debt traps 
that China exploits for political and strategic ends. The United States 
should team up with like-minded countries (including Australia, India, 
Japan, and Singapore) to provide technical assistance to help recipient 
countries evaluate proposed loans and infrastructure projects. 
Washington should also consider which existing multilateral 
institutions could act as a clearinghouse of best practices or a 
neutral forum to assess Belt and Road projects. \6\ Cognizant of 
potential moral hazard, the United States could also consider working 
with other advanced economies to make funds available at affordable 
interest rates for governments stuck in China-induced debts traps. 
Countries like Sri Lanka and Myanmar should have alternatives to 
handing over strategic infrastructure to Beijing if they find 
themselves indebted to China.
---------------------------------------------------------------------------
    \6\ Daniel Kliman and Abigail Grace, ``Power Play: Addressing 
China's Belt and Road Strategy,'' Center for a New American Security, 
September 2018, https://www.cnas.org/publications/reports/power-play.
    \7\ Elsa Kania, ``China's Threat to American Government and Private 
Sector Research and Innovation Leadership,'' Testimony before the House 
Permanent Select Committee on Intelligence, July 19, 2018, https://
www.cnas.org/publications/congressional-testimony/testimony-before-the-
house-permanent-select-committee-on-intelligence.

    8. Congress should focus on enhancing American competitiveness by 
continuing to support increases in funding for basic research, 
formulating strategic immigration and visa policies, and investing in 
education, among other priorities.
    Ensuring America's continued economic strength and technological 
leadership is vital to sustaining U.S. competitiveness. \7\ The U.S. 
Government should therefore continue its long tradition of providing 
seed funding for critical technological breakthroughs. Additional 
domestic policies focused on enhancing American competitiveness will be 
critical to the strategic competition with China, including responsible 
fiscal policies, strategic immigration and visa policies that attract 
and retain top talent, skills retraining for workers adversely affected 
by China's predatory economic policies, emphasis on improving STEM 
education, and efforts to build a bipartisan consensus on the China 
challenge.
                        ideological competition
    9. Congress should pass the bipartisan Uyghur Human Rights Policy 
Act.
    China has placed upwards of a million Muslims in internment camps 
in the western province of Xinjiang, while also instituting an 
Orwellian surveillance state that interferes and monitors nearly every 
aspect of private life. These actions are both morally repugnant, and 
represent a harbinger of a high-tech authoritarian governance model 
that China is already actively exporting. Holding Beijing to account 
for this behavior should be a priority for the United States. The 
United States Congress should therefore pass proposed legislation to 
ensure that this issue receives the attention it deserves 
internationally, and to hold both Chinese officials and private 
companies accountable if they contribute to these unconscionable human 
rights abuses.

    10. Congress should provide resources and direct the Defense 
Department to develop the means to circumvent China's ``Great 
Firewall'' and make it easier for Chinese citizens to access the global 
Internet.
    At times, it will be important for the United States to be able to 
communicate directly with the Chinese people. The United States 
Government should therefore invest in developing and deploying the 
technologies necessary to circumvent authoritarian firewalls, including 
in China. This would involve both developing cyber capabilities to 
disrupt China's censorship tools, as well as finding new ways for 
citizens inside China to access a free and open Internet.

    11. Congress should review declassification processes and 
authorities to ensure timely release of relevant intelligence.
    United States intelligence agencies regularly acquire information 
about China's illiberal, illegal, and otherwise counter-normative 
behavior against its own people and abroad. Too often, this information 
is unnecessarily classified and withheld from U.S. policymakers, the 
American people, and U.S. allies and partners. Selective 
declassification of certain information would better inform the United 
States public and the international community about the often corrupt 
and abusive domestic and foreign policies of the Chinese Communist 
Party. Congress should therefore consider when it may be appropriate to 
loosen declassification processes and authorities to engage in more 
effective U.S. information operations.

    12. Congress should take measures to undermine the Chinese 
Communist Party's influence operations in the United States.
    There are a number of measures the United States Congress can take 
to expose and weaken the ability of the Chinese Communist Party to 
shape discourse and attitudes in the United States. For example, 
Congress could amend the Foreign Agents Registration Act (FARA) to 
require greater disclosure of foreign influence operations, while 
providing additional resources to the Department of Justice for FARA 
enforcement. \8\ Congress should also urge universities, think tanks, 
and media companies to provide greater transparency and disclosure of 
projects, institutes, and other resources that are attached to Chinese 
Government funding. In doing so, it is vitally important that Congress 
and the United States Government differentiate between the Chinese 
people and the Chinese Communist Party, targeting counter-influence 
activities squarely at the latter in rhetoric and practice.
---------------------------------------------------------------------------
    \8\ See Peter Harrell, ``China's Non-Traditional Espionage Against 
the United States: The Threat and Potential Policy Responses,'' 
Testimony before the Senate Judiciary Committee, December 12, 2018. 
https://www.cnas.org/publications/congressional-testimony/chinas-non-
traditional-espionage-against-the-united-states-the-threat-and-
potential-policy-responses.

    13. Congress should explore reconstituting a 21st Century version 
of the U.S. Information Agency.
    The United States should revive its ability to engage in 
information operations and strategic messaging, which have not featured 
prominently in United States-China policy for decades. The goal should 
be to provide a counterpoint to the billions of dollars China spends 
each year in propaganda to sell a vision of its own ascendancy and 
benevolence, alongside U.S. decline and depravity. The resulting 
perceptions of the inevitability of China's rise and of future 
dependence on China have reinforced Beijing's coercive toolkit. More 
United States media and information platforms could provide a degree of 
level setting about the facts and fictions of China's power, expound 
the strengths of the United States, and cast a more skeptical shadow on 
certain expressions of Chinese influence, including its governance 
model, its ideological assertions, and the overall strength of its 
economy. U.S. information operations could also highlight Xi Jinping's 
deep unpopularity around the world, as well as his mismanagement of 
China's economy and failure to deliver on much-needed economic reforms. 
If creating a new institution like the U.S. Information Agency is not 
feasible, the U.S. Government will still need more modern and 
sophisticated information dissemination tools. As part of that effort, 
Congress should ensure that Radio Free Asia and the Global Engagement 
Center at the State Department are sufficiently resourced. 
Alternatively, failing to augment U.S. resources in the information 
space will make it much more difficult to succeed in other areas of the 
competition.

    14. When appropriate, Congress should reinforce the Trump 
administration's public reproach of China by passing sense of the 
Senate resolutions criticizing China's actions.
    It is essential that the United States Government publicize and 
criticize China's revisionist behavior. If the United States remains 
silent during incidents of Chinese coercion and intimidation against 
foreign governments and private businesses, it is far more difficult 
for others in the international community to stand firm. Congress can 
help by naming and shaming acts of Chinese aggression, supporting 
United States allies and partners, and holding private companies 
publicly accountable if they are compromising U.S. values and interests 
for commercial gain.
                          security competition
    15. Congress should shift and prioritize defense resources for the 
China challenge.
    The Trump administration's January 2018 National Defense Strategy 
included the critically-important insight that: ``Inter-state strategic 
competition, not terrorism, is now the primary concern in U.S. national 
security.'' Congress should endorse this formulation and prioritize 
defense spending accordingly by supporting a more lethal force, 
strengthening alliances and partnerships, and reforming the Defense 
Department to enhance performance and affordability. At the same time, 
the United States will have to be judicious in how it uses the force. 
This means being willing to make hard tradeoffs that shift limited 
United States resources--for example intelligence, surveillance, and 
reconnaissance assets--from the Middle East and Africa to the Indo-
Pacific, and from the war on terror to strategic competition with 
China. Finally, to sustain America's military advantage in the Western 
Pacific, Congress should ensure that the future force also includes 
platforms that are smaller, lower-cost, more expendable, unmanned, and 
autonomous.

    16. Congress should urge the Trump administration to revise United 
States declaratory policy in the South China Sea.
    China is steadily moving toward dominance of the South China Sea. 
China's control of the South China Sea, one of the world's most 
important waterways, would pose a significant threat to United States 
commercial and national security interests. China's track record in 
recent years--willfully blocking freedom of navigation and using 
economic coercion over political and security issues--is a troubling 
indicator of how Beijing would likely exploit administrative control 
over commercial and military access to the area. Moreover, as the main 
artery between the Pacific and Indian Oceans, the South China Sea is a 
critical military arena in which a dominant China would have 
significant leverage over vulnerable chokepoints and sea-lanes, as well 
as launching pads to project military power beyond East Asia. Despite 
the stakes, United States policy in the South China Sea remains 
insufficient, defined primarily by freedom of navigation operations and 
episodic shows of force. The United States needs a new approach that 
includes a combination of economic, military, informational, and 
diplomatic measures. \9\
---------------------------------------------------------------------------
    \9\ Ely Ratner, ``Course Correction: How to Stop China's Maritime 
Advance,'' Foreign Affairs, July/August 2017, https://
www.foreignaffairs.com/articles/2017-06-13/course-correction. 6
---------------------------------------------------------------------------
    In the near term, Congress should examine and urge two important 
changes to U.S. declaratory policy. First, the United States should 
clarify that the Mutual Defense Treaty with the Philippines covers the 
South China Sea. In the absence of this change, Philippine officials 
have indicated that they may seek to renegotiate or even scrap the 
treaty. It should go without saying that the United States alliance 
with the Philippines is an essential component of United States 
strategy in the region (which is also why Beijing is working so hard to 
break the alliance apart). In exchange for this act of reassurance, the 
United States could request more robust implementation of the Enhanced 
Defense Cooperation Agreement (EDCA) signed in 2014 by Washington and 
Manila.
    Second, in the context of China's blatant revisionism, the United 
States should reexamine its position of neutrality on sovereignty 
claims in the South China Sea. One option worthy of consideration would 
be to adopt a ``Senkaku model,'' whereby the United States would 
recognize administration of certain islands without taking a formal 
position on the sovereignty claims. This would allow the United States 
to partner with and support the efforts of other claimants to defend 
the features they administer, and prevent Chinese administrative 
control of the South China Sea.

    17. Congress should provide greater resources to help build more 
capable and independent U.S. allies and partners.
    The U.S. Government should work to boost the military power of 
United States allies (especially Japan, South Korea, and Australia) and 
critical partners (including India, Indonesia, Malaysia, Singapore, 
Taiwan, and Vietnam) by, for instance, loosening restrictions on 
certain technology transfers and investing more to enhance partner 
capacity and interoperability. Frontline states should have independent 
capabilities to act as a first line of deterrence and defense, and the 
United States should assist partners in developing their own counter-
intervention capabilities to ward off Chinese coercion. To do so, 
Congress should ensure that United States allies and partners 
associated with the China challenge are receiving an appropriate 
proportion of United States defense trade and arms transfers, including 
through foreign military financing, foreign military sales, and excess 
defense articles. \10\ The new Asia Reassurance Initiative Act (ARIA) 
was a step in the right direction and should be fully funded, but 
United States capacity building in the region still pales in comparison 
to current United States resources going toward building foreign forces 
in Afghanistan and the Middle East.
---------------------------------------------------------------------------
    \10\ For example, see Eric Sayers, ``Assessing America's Indo-
Pacific Budget Shortfall,'' War on the Rocks, November 15, 2018, 
https://warontherocks.com/2018/11/assessing-americas-indo-pacific-
budget-shortfall/.

    18. Congress should support exemptions under CAATSA for countries 
seeking to balance against China.
    It is appropriate for the United States to seek to reduce Russian 
revenue from overseas arms sales. In certain instances, however, the 
Countering America's Adversaries Through Sanctions Act (CAATSA) is 
undermining the ability of the United States to create a favorable 
balance of power in Asia. To be more specific, Russia's diversified 
security partnerships in Asia (including with India and Vietnam) are 
strategic assets for the United States. Sanctioning or threatening to 
sanction these partners undercuts their ability to provide frontline 
deterrence and defense against China, and damages United States 
relations with important partners. Moreover, it is not in the interest 
of the United States to isolate Russia in Asia, which, if successful, 
could have the effect of forcing China and Russia into a strategic 
security partnership that would not otherwise exist. Congress should 
therefore support CAATSA exemptions for Asian powers that are procuring 
Russian weapons to balance against China. In the longer term, the 
United States Government should explore what kinds of policies or 
incentive structures might lead regional partners to willingly 
diversify away from reliance on Russian systems.

    19. Congress should encourage active ``burden-shifting'' to China, 
including in Afghanistan.
    China's interests in security and stability are growing in regions 
where the United States is expending considerable resources. United 
States policymakers should map areas where China's interests are rising 
and, concurrently, the United States is overextended or bearing 
disproportionate costs. Rather than imploring Beijing to ``burden-
share'' or be a ``responsible stakeholder,'' the United States should 
consider unilateral measures to reduce its outlay of resources where 
United States and Chinese goals sufficiently overlap and where China's 
interests are sufficiently large such that Beijing would be forced to 
pick up the slack. Afghanistan is the most obvious example. It is no 
longer justifiable that the United States is sacrificing American lives 
and spending several billions of dollars a year in Afghanistan while 
China provides only tens of millions of dollars.

    20. Congress should not support new wars of choice.
    It will be far more difficult, if not impossible, for the United 
States to succeed in a strategic competition with China if Washington 
initiates a new war of choice, including against North Korea or Iran. 
In addition to the horrendous human costs, America's strategic position 
in Asia and globally would be significantly diminished. United States 
attention and resources would be devoured at the expense of United 
States interests in Taiwan, the South China Sea, the East China Sea, 
and the Indian Ocean. To put it bluntly, starting a war of choice with 
North Korea or Iran would also be a decision to forfeit strategic 
competition with China.

    Chairman Inhofe. Thank you, Mr. Ratner.
    Mr. Wilson?

    STATEMENT OF DAMON M. WILSON, EXECUTIVE VICE PRESIDENT, 
                        ATLANTIC COUNCIL

    Mr. Wilson. Chairman Inhofe, Ranking Member Reed, and 
distinguished members of the Committee, thank you for the 
opportunity to testify. I plan to focus on how our allies fit 
into our strategy.
    In an era of great power competition, the United States 
should adopt a more permanent deterrence posture and bolster 
its alliances as a strategic comparative advantage over our 
adversaries. If we are concerned about near-peer competition, 
rightly so from Russia and China, the United States must not 
only invest in its own capabilities but also in its global 
alliance structure.
    Polarization within our Nation and tumultuous relations 
within our alliances risk making the United States look 
vulnerable to our adversaries. While some of these divisions 
are real, the United States and its allies are in fact more 
strategically aligned in grand strategy enjoying the support of 
Republicans and Democrats than they have been, I would argue, 
since perhaps 9/11, if not 1989.
    Our Nation and its closest friends agree that the great 
challenge of the 21st Century will be the competition between 
the free world and authoritarian, corrupt, state-led 
capitalism, chief among them China and Russia. The National 
Security Strategy and National Defense Strategy articulate this 
great power competition clearly, but we still have work to do 
to implement policies to achieve this strategy. Specifically, 
we are not as focused on how to bolster our alliances as a key 
component of our strategy to compete effectively.
    To better address the Russian threat, the United States 
needs to bolster its military presence in Europe to establish 
what an Atlantic Council task force on the U.S. force posture 
in Europe calls ``permanent deterrence,'' especially in the 
Baltics, Poland, and the Black Sea region. Our allies need to 
be part of this force posture with us. Our policies need to 
prioritize arms and technology sales and transfers to our 
allies, and divisions among us cannot become opportunities for 
Russia to weaken NATO cohesion or resolve.
    Our task force argues that Europe has once again become a 
central point of confrontation between the West and a 
revisionist Russia. Under Vladimir Putin, Russia is determined 
to roll back the post-Cold War settlement, undermine the 
sovereignty of Russia's neighbors, shatter the alliance, and 
overturn the United States-led rules-based order that has kept 
peace. Moscow's invasion and continued occupation of Georgian 
and Ukrainian territories, its military build up in the west, 
and its hybrid warfare against democratic societies have made 
collective defense and deterrence an urgent mission.
    Today, NATO is in the midst of its greatest adaptation 
since the Cold War. The United States is playing its part, 
including through generous funding of the European Deterrence 
Initiative.
    Last July's NATO summit was, at the same time, among the 
most acrimonious and the most productive in recent history, 
bolstering the alliance's rapid reaction capabilities and 
hybrid warfare defense, and promising to enlarge the alliance 
into the Balkans. While much more remains to be done, allies 
are making strides towards their defense investment pledges. 
Since 2016, European allies have spent an additional $41 
billion in defense. Through 2020, they will spend an extra $100 
billion, and their plans submitted to NATO call for an 
additional $350 billion through 2024. By 2024, Germany is 
projected to have the largest defense budget in Europe.
    Furthermore, the United States-backed Three Seas Initiative 
is advancing cross-border infrastructure to wean Central Europe 
and the Baltic states off of Russian energy dependency while 
providing alternatives to Chinese investment, making the 
region's economies more resilient.
    In the case of Russia, there can be no successful strategy 
to confront Putin's aggression without a strong NATO. The 
questioning of our commitment to the alliance is dangerous and 
only weakens our position. This body's strong support for NATO 
sends an important signal.
    And for Europe, China is becoming a greater geopolitical 
reality as it comes closer via cyberspace, trade and 
investment, and now military presence close to Europe's shores. 
The United States should confront any Chinese challenge with 
Europe, as well as its Asian allies, by its side.
    The current tensions between Washington and its allies, 
ranging from burden sharing to trade, are real. But these 
should not overshadow the shared challenges we face together.
    Unenforced errors that unnecessarily divide Washington from 
its friends should be avoided, such as the trade tactics that 
have now seen Europe and Canada join common cause with Moscow 
and Beijing at the World Trade Organization. The United States 
should limit its trade challenges on national security grounds 
to our adversaries rather than our allies.
    The acceptance of Russia and China as the main geopolitical 
challenge of the 21st Century leads to the conclusion that U.S. 
interests are best served when Washington and its allies act 
together. The United States is much better positioned if it 
does not assume the burden of countering Beijing and Moscow 
alone. Implementing a National Defense Strategy focused on 
near-peer competition with Russia and China requires that we 
put our alliance at the core and not the periphery of our 
strategy.
    We have already seen what can happen when Moscow and 
Beijing engage in bilateral negotiations with their neighbors, 
using their power and their leverage to extract concessions, 
lock weaker partners into exploitative economic deals, or even 
to rewrite borders.
    The United States leading a global set of alliances can 
deter this threat.
    Thank you for this opportunity.
    [The prepared statement of Mr. Wilson follows:]

                 Prepared Statement by Damon M. Wilson
    Chairman Inhofe, Ranking Member Reed, and distinguished members of 
this Committee, thank you for the opportunity to testify today on the 
implementation of the National Defense Strategy. I will offer strategic 
remarks today and submit more detailed work we've undertaken at the 
Atlantic Council for the record.
    In an era of great power competition, the United States should 
adopt a more permanent deterrence posture--one that features a mix of 
permanent and rotational capabilities in Europe and Asia--and bolster 
its alliances as a strategic comparative advantage over our 
adversaries. If we are concerned about near-peer competition from 
Russia and China, the United States must invest not only in its own 
capabilities, but also in its global alliance structure.
    Intense polarization within our Nation and tumultuous relations 
within our alliances risk making the United States look vulnerable to 
our adversaries. While some of these divisions are real, the United 
States and its allies are more strategically aligned in grand 
strategy--enjoying the support of Republicans and Democrats--than they 
have been since 9/11, if not 1989. \1\
---------------------------------------------------------------------------
    \1\ Damon Wilson, Washington and Its Friends Are More United Than 
You Think, Atlantic Council, January 2, 2019; https://
www.atlanticcouncil.org/blogs/new-atlanticist/washington-and-its-
friends-are-more-united-than-you-think
---------------------------------------------------------------------------
    Our Nation and its closest friends agree that the great challenge 
of the 21st Century will be the competition between the free world and 
authoritarian corrupt state-led capitalism, chief among them China and 
Russia. The National Security Strategy and the subsequent National 
Defense Strategy articulate this great power geopolitical competition 
clearly, but we still have work to do to implement policies to achieve 
this strategy. Specifically, while implementation is focused on China 
and Russia, we are not as focused on how to bolster our alliances as a 
key component of our strategy to compete effectively.
    For the purposes of today, I will primarily focus on Russia.
    To better address the Russian threat, the United States needs to 
bolster its military presence in Europe to establish what the Atlantic 
Council Task Force on U.S. Force Posture in Europe calls ``permanent 
deterrence,'' especially in the Baltics, Poland, and the Black Sea 
region. Our allies need to be part of this new force posture with us, 
our policies need to prioritize arms and technology sales and transfers 
to our allies, and any divisions among us cannot become opportunities 
for Russia to weaken NATO cohesion or resolve.
    The Atlantic Council task force argues that Europe has once again 
become a central point of confrontation between the West and a 
revisionist Russia. Rather than the Fulda Gap, this time the 
confrontation takes place along the Suwalki Gap--and in the Baltic, 
Black, and Arctic Seas. ``Under President Vladimir Putin, Russia is 
determined to roll back the post-Cold War settlement, undermine the 
sovereignty of former Soviet states, and overturn the US-led rules-
based order that has kept Western Europe secure since the end of World 
War II and enlarged to countries of Central and Eastern Europe after 
1989. Moscow's invasion and continued occupation of Georgian and 
Ukrainian territories, its military build-up in Russia's Western 
Military District and Kaliningrad, and its ``hybrid'' warfare against 
Western societies have heightened instability in the region and have 
made collective defense and deterrence an urgent mission for the United 
States and NATO.'' \2\
---------------------------------------------------------------------------
    \2\ General Philip Breedlove and Ambassador Alexander Vershbow, 
Permanent Deterrence: Enhancements to the U.S. Military Presence in 
North Central Europe, Washington, DC, Atlantic Council, December 2018, 
1.
---------------------------------------------------------------------------
    At the height of the Cold War, the United States deployed 300,000 
personnel to Europe, including four divisions and five Brigade Combat 
Teams (BCT). In 2012, the U.S. removed the last two heavy armor 
brigades, and withdrew all U.S. tanks and other heavy vehicles. By 
2014, the U.S. Army retained two light BCTs and 65,000 U.S. personnel 
stationed in Europe. U.S. posture in Europe now emphasizes deterrence 
by reinforcement and the rotational presence of forward deployed combat 
units.
    Today, NATO is in the midst of its greatest adaptation since the 
Cold War. The United States has played its part, including through 
generous funding of the European Deterrence Initiative.
    Last July's NATO summit was at the same time among the most 
acrimonious and the most productive in recent history, bolstering the 
Alliance's rapid reaction capabilities and hybrid warfare defense, and 
promising to extend the Alliance's reach into the southern Balkans 
through further enlargement. \3\ Importantly, allies are making strides 
toward their defense investment pledges: since 2016, European allies 
have spent an additional $41 billion in defense; through 2020, they 
will spend an extra $100 billion; and their plans call for an 
additional $350 billion through 2024. By 2024, Germany is projected to 
have the biggest defense budget in Europe.
---------------------------------------------------------------------------
    \3\ David Wemer, Here's What NATO Achieved at Its Brussels Summit, 
Atlantic Council, July 12, 2018; https://www.atlanticcouncil.org/blogs/
new-atlanticist/here-s-what-nato-achieved-at-its-brussels-summit
---------------------------------------------------------------------------
    Furthermore, the US-backed Three Seas Initiative is advancing 
cross-border infrastructure to wean Central Europe and the Baltics off 
of Russian energy dependency while providing alternatives to Chinese 
investment, making the region's economies more resilient.
    Despite these efforts, we face a formidable and evolving adversary. 
Ahead of NATO's seventieth anniversary this April, there is more that 
can and should be done to enhance the Alliance's deterrence posture in 
Europe.
    Our task force agrees that significant enhancements to the existing 
U.S. presence could and should be undertaken to bolster deterrence and 
reinforce Alliance cohesion consistent with the National Defense 
Strategy. We propose a package of permanent and rotational deployments, 
which would build on significant U.S. capabilities already deployed in 
Poland and should be complemented by NATO Allied capabilities. Our 
recommended package would make elements of the current U.S. deployment 
in Poland permanent, strengthen other elements of that deployment by 
reinforcing the BCT deployed there with various enablers, assign 
another BCT on a permanent or rotational basis to Europe, reestablish a 
continuous rotational presence in the Baltic States, and increase the 
U.S. naval presence in Europe. The task force members are confident 
this can all be done while maintaining NATO solidarity and enhancing 
burden-sharing among allies.
    We must also bolster our presence in the Black Sea region, help our 
allies replace Soviet-era equipment, and continue to arm close partners 
including Finland, Georgia, Sweden, and Ukraine.
    Even if we periodically differ with our allies, the U.S. strategy 
should inevitably drive Washington to bolster and expand its alliances 
in the coming years. In an era of geopolitical competition, America's 
friends and allies are the United States' best competitive advantage. 
Viewing our alliances that way would compel consistent policies to lead 
our alliances to ensure coherent, united fronts in standing up to 
Russian and Chinese aggression.
    In the case of Russia, there is no possible successful strategy to 
confront Putin's aggression without a strong NATO. The public 
questioning of our commitment to the Alliance is dangerous and only 
weakens our position. This body's strong support for NATO sends an 
important signal.
    And for Europe, China is becoming a greater geopolitical reality as 
it comes closer via cyberspace, trade and investment, and now military 
presence close to Europe's shores. The United States should confront 
any Chinese challenge with Europe as well as our Asian allies by our 
side.
    The current tensions between Washington and its European, Canadian, 
and Asian allies are well-documented, running from burden-sharing to 
trade. They are real. But these should not overshadow the shared 
challenge we face together: the coming struggle between a free world 
and great power authoritarians.
    Unforced errors that unnecessarily divide Washington from its 
friends must be avoided, such as the trade tactics that have now seen 
Europe and Canada join common cause with Moscow and Beijing at the 
World Trade Organization. \4\ The United States should limit its trade 
challenges on national security grounds to our adversaries rather than 
our allies. Unnecessary division plays into the hands of Washington's 
geopolitical competitors.
---------------------------------------------------------------------------
    \4\ Jakob Hanke, EU and China break ultimate trade taboo to hit 
back at Trump, Politico, November 21, 2018; https://www.politico.eu/
article/eu-and-china-break-ultimate-trade-taboo-to-hit-back-at-trump/
---------------------------------------------------------------------------
    The acceptance of Russia and China as the main geopolitical 
challenge of the 21st Century leads to the conclusion that United 
States interests are best served when Washington and its allies act in 
unison. The United States is much better positioned if it does not 
assume the burden of countering Beijing and Moscow alone. Implementing 
a National Defense Strategy focused on near-peer competition with 
Russia and China requires that we put our alliances at the core, not 
the periphery, of our strategy.
    We have already seen what can happen when Moscow or Beijing engage 
in bilateral ``negotiations'' with their neighbors, using their power 
and leverage to extract concessions, lock weaker partners in 
exploitative economic deals, or even to rewrite borders.
    The United States leading a global set of alliances can deter this 
threat.

    See Appendix A: ``Permanent Deterrence: Enhancements to the U.S. 
Military Presence in North Central Europe''.

    Chairman Inhofe. Well, thank you very much. Those are 
excellent opening statements.
    Mr. Colby, I think you commented a little bit about this 
without identifying anybody out there doing it, but I 
remember--I think it was in March--the RAND Corporation did, I 
thought, a very effective article that woke up a lot of people, 
saying that if Russia should take on NATO, including our 
contribution to NATO, we would probably lose. That is the type 
of thing that people need to be talking about.
    I know it is a little bit controversial. I had this 
discussion with some of the uniformed people who say that we 
should not be talking so much about the capabilities of our 
opponents. On the other hand, you have got to do that if you 
are going to end up getting the resources necessary for us to 
combat that. So that is a little bit of a problem that we have.
    Let us start with you, Mr. Colby. First of all, I think you 
are probably aware that we have kind of adopted this as our 
blueprint, which you had a lot to do with, and we appreciate 
the good work that you did there.
    Sometimes the debate about a defense budget is posed as a 
choice between an increased budget on one hand and making tough 
choices on the other hand. When I listened to all three of you 
and the committees that we have had, I think the challenge is 
so great that we need everything. I would like to have you 
comment about that choice argument that is being made.
    Mr. Colby. Yes, sir, Mr. Chairman, I agree with you. I 
think we are going to have to maintain an increased, as 
necessary, spending just to stay competitive. I mean, if you 
look at the scale and scope of the Chinese military buildup 
over the last 20 to 25 years, it has slowed a little bit, but 
it is basically almost a 10 percent year on year increase. 
Meanwhile, our allies have lagged, which some of them are 
starting to improve.
    But, no, I think we are going to have to make hard choices 
and maintain very robust spending just to keep up.
    Chairman Inhofe. Well, I agree with that. I am concerned 
that our message is not getting across.
    Mr. Ratner, you talked about the South China Sea. We were 
in the South China Sea watching the initial stages of the 
building of the islands by China. And our allies over in that 
part of the world are very much aware of what China is doing 
there. They have won the argument in my opinion. I mean, if you 
look and analyze what they are doing with the islands, it is 
like you are preparing for World War III. When you are talking 
to our allies over there, you wonder whose side they are going 
to be on.
    I think it is working in that part of the world and other 
parts of the world. They are now involved in places in Africa 
that they never even thought about before. So I do not think we 
are making a lot of headway at that thing.
    What I would like to do, in terms of educating the American 
people, I would like to get from all three of you, first of 
all, do you agree with our discussion here that it is necessary 
that there needs to be a wakeup call as to the talent that is 
out there from our adversaries and, secondly, what we can do to 
bring this up to the public's attention. It is a difficult 
thing to deal with. Any thoughts on that?
    Mr. Colby. Yes, Mr. Chairman. I actually completely agree 
with you, and I think the benefits of trying to hide these 
things is far outweighed by the importance that you and other 
Members of Congress and the political leadership of this 
country can have in helping the American people understand the 
gravity and severity of the threat. I think there are two 
things going on here.
    One is great powers, particularly China, are the only 
countries that could really change the way our whole world 
operates and ultimately our country. You know, the American 
military could lose a war. That is the reality. The Chinese and 
the Russians know that. They have sophisticated satellites. 
They have various means of electronic communication. They pick 
up a lot of stuff. I am more concerned that the American people 
understand that and have the urgency so that we can stay ahead 
of this threat which is very urgent.
    Chairman Inhofe. Yes.
    Mr. Ratner, what is your feeling about that?
    Dr. Ratner. Sure. I would just add two comments.
    The first, I think what is lacking today in American 
discourse, including from our leaders, is a clear articulation 
of what is at stake. I think bringing this all together, not 
thinking of it as just islands in the South China Sea or 
intellectual property theft, but bringing it together in terms 
of a comprehensive, in the case of China, challenge to the 
international order and the threats posed to United States 
peace and prosperity associated with a Chinese sphere of 
influence is something we need to paint a picture of, work from 
the end, look at the end, and work backwards. That would be the 
first thing I would say. So I think we need to be clear about 
the stakes.
    The second thing is, as I mentioned in my testimony, I 
think the importance of a bipartisan message on this could not 
be more important because I think the American people can get 
confused sometimes that what we are seeing today is a product 
of the Trump administration, and having Members of Congress and 
others going out together, Republicans and Democrats, with a 
clear message on this issue could not be more important to 
sending a signal that the country as a whole is in it to get 
this right.
    Chairman Inhofe. That is good.
    Mr. Wilson, I am going to do the rest of my questions for 
the record to try to keep our timing right. But I will be 
asking the same question of all three of you. So that will be 
forthcoming.
    Senator Reed?
    Senator Reed. Well, thank you very much, Mr. Chairman, and 
thank you, gentlemen, for your testimony.
    Mr. Wilson made a very compelling argument about the 
international collaboration and cooperation as essential. And 
just, Mr. Colby, your comments too. Do you agree?
    Mr. Colby. Yes, absolutely, Senator. I am not sure 
everything in particular, but nothing pops up to mind as 
disagreeing. But absolutely, collaboration is essential and 
alliances are essential.
    Senator Reed. And NATO particularly with respect to Russia?
    Mr. Colby. Absolutely.
    Senator Reed. And, Mr. Ratner, your views too.
    Dr. Ratner. Yes, fundamental to the China challenge 
cooperating with allies and partners.
    Senator Reed. One of the points in your testimony was a 
notion--and if you could elaborate--that we have to make 
investments to compete with China, not just in the Department 
of Defense but in many other areas, research and development, 
building an economy that can not only compete but outdistance 
the Chinese. Can you elaborate on that? Because I think that is 
a very important point.
    Dr. Ratner. Sure, Senator. And it is no accident that the 
economic and ideological recommendations in my testimony come 
first before the military because I agree with Mr. Colby that 
the military is absolutely essential, but it has to be 
integrated into a broader strategy.
    So in terms of domestic policies to enhance American 
competitiveness, I would look toward increasing science and 
technology research, STEM education among our youth, visa and 
immigration policies that are devised to attract and retain 
talent in this country as part of a human capital strategy, 
enhancing American infrastructure, improving our health care 
system, having sound fiscal policies, and getting our 
bureaucracy organized to implement this challenge as well. So I 
think all of these play an important role.
    Senator Reed. In a sense, we need to make investments not 
only in our traditional defense and national security agencies, 
but also in many other aspects of American governance. Is that 
your position?
    Dr. Ratner. No doubt. Investments in those other areas will 
enhance our military competitiveness as well.
    Senator Reed. Mr. Colby, do you agree?
    Mr. Colby. Yes, absolutely, Senator. The only thing I would 
say is I think the military is kind of a cornerstone because I 
think if the Chinese or the Russians see that they can use 
military power--and that is I think what Senator Inhofe might 
have been getting at--if people feel that they are going to be 
subject to military coercion, the rest is not going to be as 
helpful. But absolutely, all are crucial.
    Senator Reed. And again, Mr. Wilson, you made a very 
compelling case for NATO and for engagement. One of the other 
aspects I think--your comments first and then the others--is 
that we seem to be already engaged with the Russians, I mean, 
the constant sort of below the radar and sometimes above the 
radar, if you will, cyber operations, political operations, et 
cetera. It is in some respects the phase one or the phase zero 
of the next battle. Can you comment on that? And then I will, 
if there is time, ask your colleagues also.
    Mr. Wilson. Yes, Senator. I think that is exactly right, 
that we are facing both an increasing capability and intention. 
If you look at Russian behavior in the invasion of Georgia 
versus Ukraine, it shows intention in both, but the 
capabilities they have brought to bear certainly increased. And 
so what I think we face with an adversary, particularly in the 
case of Russia, our near-peer competitors, is there a 
calculation of what they can get away with. Therefore, our 
deterrence posture is both about--I used to work for Lord 
Robertson at NATO, and he would always say it is about both our 
capability and our credibility. And so it is that match on our 
side. Do we have the capabilities that are brought to bear to 
draw them to conclude that it is not worth it, matched with 
that sense of credibility that deterrence is about the 
psychology of the adversaries, they believe we have the resolve 
that we stand clearly by things like article 5? I think what we 
are seeing is a probing and a testing and a Russian strategy 
that is consistent. As they make gains without pushback, they 
pursue further gains.
    Senator Reed. Thank you.
    And that line, Mr. Colby, your comments about this hybrid 
warfare and constant interaction at the cyber level and other 
levels with Russia--and then I will ask quickly, Mr. Ratner, 
about China.
    Mr. Colby. Sure, Senator Reed. I think that is a crucial 
point. I mean, obviously, there is an ongoing level that I 
think is probably mostly met with by other elements of national 
power. I think the most concerning aspect is if the Russians 
could use that to shape the narrative in Europe and here even 
about their use of military force being advantageous. My 
favorite example of this--pick your poison--is Fort Sumter. The 
south having fired on Fort Sumter first, would the union have 
had the degree of resolve? So it is very important that we have 
a military posture that is interrelated with our kind of 
political and information side, but that does require really a 
focus on the military side.
    Senator Reed. Thank you.
    And, Mr. Ratner, finally, any comments on China in this 
venue?
    Dr. Ratner. Only that I agree with the point that this is 
an important tactic they are using, and our response has been 
inadequate to date. I would be happy to provide a longer answer 
about what we should do in response at another time.
    Chairman Inhofe. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Inhofe. Thank you, Senator Reed.
    Senator Wicker?
    Senator Wicker. Thank you very much, Mr. Chairman. This is 
a vitally important hearing. Thank you for calling it.
    Senator Reed, thank you for emphasizing the importance of 
NATO. To the extent that your question reemphasizes our 
commitment as a Senate and as a Congress to that vital 
alliance, I want to associate myself with those sentiments.
    I do want to get back to the China question. Yesterday, the 
Justice Department unsealed sweeping criminal charges against 
Huawei: violation of United States sanctions, as well as 
outright intellectual property theft. I want to offer into the 
record at this point, Mr. Chairman, an op-ed from today's 
``Wall Street Journal,'' ``The 5G Promise and the Huawei 
Threat,'' authored by former House Intel chairman Mike Rogers.
    Chairman Inhofe. Without objection.
    [The information follows:]

                  the 5g promise and the huawei threat
Big Brother is coming to your home via cheap Chinese goods.
By Mike Rogers
Jan. 28, 2019 7:47 p.m. ET

    Federal prosecutors unsealed a pair of indictments Monday, charging 
the Chinese technology company Huawei with crimes including bank fraud, 
sanctions violations and theft of trade secrets. Huawei's behavior is 
finally being recognized for what it is. Beijing is using companies 
like Huawei and ZTE as an extension of its intelligence network, 
engaging in criminal behavior to advance not only the bottom line but 
the interests of the Chinese state. With the 5G future close at hand, 
this realization can't come a moment too soon.
    This isn't a new problem. In 2012, after a yearlong investigation, 
the House Intelligence Committee raised the alarm about Huawei and ZTE 
in a bipartisan report. The report focused the attention of the 
intelligence community on the criminal and espionage threat.
    Huawei calls our concern ``little more than an exercise in China-
bashing,'' but it's widely shared internationally. From Poland to 
Canada, Australia to France, Western countries are waking up to the 
threat of Chinese state and commercial espionage, and are taking 
countermeasures.
    Why does this matter to you? Because the next-generation 
communication network, 5G, will revolutionize the way we use 
technology, and China wants dominance from the start. Rather than 
operating from a central location, 5G network sensors are pushed to 
endpoints such as networked refrigerators, thermostats, aircraft, 
factory machines, autonomous vehicles and things we haven't yet 
conceived that will be tied into the 5G network.
    This requires a radical rethinking of how we secure our data. It's 
pointless to lock the doors of your house if you leave every window 
open and add a few new ones for good measure. China has made it clear 
that it wants to dominate 5G technology and its deployment. Through 
Huawei and the products it manufactures, Beijing is working to control 
the 5G network rollout, control the international standards for its 
deployment, and infect the foundation of the 5G system for its own 
benefit. Big Brother is coming into your home thanks to cheap products 
from China.
    As the indictment demonstrates, and as our allied intelligence 
services have agreed, China's control of 5G is a very bad idea. We must 
recognize that Huawei and other Chinese companies care nothing about 
free-market competition. Their aim is to control, access and exploit 
data.
    Beijing must be put on notice that its use of Huawei and ZTE as 
extensions of its intelligence apparatus is unacceptable. China must be 
prevented from dominating 5G and made to see that there are 
consequences for violating international norms.
    Businesses and governments must stand up to Beijing. Failing to do 
so compromises the national security of America and its allies.
    The 2019 National Defense Authorization Act bans federal agencies 
and contractors from using Huawei and ZTE technology. Last year the 
Federal Communications Commission proposed excluding companies that buy 
from Huawei and ZTE from receiving certain federal funding. These 
actions are a start, but not enough. Huawei is a security risk we can't 
afford at any price.

    Senator Wicker. Chairman Rogers says this in the second 
sentence of his op-ed. Huawei's behavior is finally being 
recognized for what it is.
    So help us, Mr. Ratner and Mr. Colby, understand what China 
is up to with regard to Huawei and to a lesser extent ZTE. Mr. 
Ratner, you mentioned on page 4 of your testimony a 
comprehensive strategy that includes a lot of things, military, 
economics, diplomacy, ideology, and technology. Is that what 
you are talking about here? Mr. Colby, you talk about the 
enemy's theory of victory is dominance of this new 5G level of 
just very advanced technology is going to be part of China's 
theory of victory. Mr. Ratner first.
    Dr. Ratner. Thank you, Senator.
    I would look at the Huawei issue through four separate 
lenses, the first being the legal. Of course, the company is 
engaged--and this is what the indictment was about--in illegal 
activities, stealing trade secrets, obstructing a criminal 
investigation, evading sanctions and ought to be dealt with 
from a law enforcement capacity. That is the first lens to view 
this through.
    The second is through the security lens, which I think is 
what you are primarily referencing here----
    Senator Wicker. Right.
    Dr. Ratner.--and the threat it poses to supply chains, 
critical infrastructure. That is absolutely real. We know that 
the Huawei leadership has members of the Communist Party within 
it, and the company has long and deep relationships with both 
the PLA [People's Liberation Army] and the Ministry of State 
Security in China and, of course, is subject to Chinese law and 
their new national intelligence law which gives the government 
the right to use the networks and data as they wish.
    Third, I would look at the Huawei issue separate from its 
functionality but through the lens of China's unfair trade and 
investment practices, which our country still is on the wrong 
side of to the extent that we do not have access to their 
markets and they have access to ours. And we ought to think 
about a principle of reciprocity.
    And then finally, the overall technology competition.
    So these are all coming together within the Huawei issue 
and they all merit a response. We need defensive measures, and 
we need to invest in our own technologies as well. We need to 
be cooperating with allies and partners. So the technology 
competition I think stretches across the military and the 
economic and requires a comprehensive response.
    Senator Wicker. Mr. Colby?
    Mr. Colby. Thank you, Senator Wicker. I agree with Dr. 
Ratner on this as so many other points.
    I would say I think it absolutely is part of their overall 
theory of victory which is to do I think a couple of things. 
One is to generate the leverage within various countries that 
could be part of this alliance or partnership architecture that 
would be designed to check Chinese aspirations to dominate the 
region and potentially beyond. Things like Huawei will give 
them economic leverage, informational leverage, I mean, 
blackmail leverage, bribery we have seen in places like Sri 
Lanka. This dissolves or corrodes the resolve in these 
countries potentially to stand up to Chinese potential 
coercion.
    Then there is also the sentiment I think that maybe the 
world is going China's way, as they used to say about the 
Soviets in the 1970s, that maybe we better just go with the 
Chinese. I think that is why these countries, some of them 
allies, many of them kind of partners, nontraditional allies, 
are really the center of gravity because we need to work with 
these countries not in a sort of charity motivated way, but we 
need to be able to form a network that together is sufficiently 
cohesive to stand up to these Chinese----
    Senator Wicker. Is the National Defense Strategy adequate 
in discussing this issue?
    Mr. Colby. I think absolutely, sir. I think the point can 
be made more robustly and more eloquently by people like this 
body and political leaders so the American people see that 
these alliances are sort of enlightened self-interest, not sort 
of charity. I think that is a different way that maybe we can 
start talking about these alliances, that it is sort of almost 
like a business enterprise that we share these broad interests. 
But that involves our allies doing more and contributing more. 
But really, we are doing this in our own interest to prevent 
the Chinese from dominating East Asia in particular.
    Senator Wicker. Thank you.
    Chairman Inhofe. Thank you, Senator Wicker.
    Senator Shaheen?
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you all very much for being here.
    Mr. Wilson, I especially appreciated your comments about 
NATO and certainly share the views of Senator Wicker and 
Senator Reed about the importance.
    Are you concerned that there have been mixed messages sent 
about our support for NATO to our other NATO partners and the 
rest of the world?
    Mr. Wilson. Yes, I am. I think that it is important that 
there be, as I said, deterrence being part psychology, just 
absolute clarity that there is absolute resolve and rock solid 
support for the alliance and its commitments, article 5.
    I also think the broader tenor of our debate on burden 
sharing, which is an important one--it sometimes helps to put 
the center of gravity in a different place. I like to see how 
we can think about our alliances and our alliance structure as 
a force multiplier for our capabilities, our interests, and our 
values and how we are leveraging other nations' investments and 
their defense to help us achieve our strategic objectives. And 
I think that context of while keeping absolute pressure on our 
allies to do more, appropriately so, understanding that this is 
a force multiplier in effect for our tool and remaining rock 
solid in our commitment to what article 5 means in terms of the 
defense of all of our allies.
    Senator Shaheen. Thank you. I share that view and have 
heard recently from one of our NATO partners who expressed 
concern that there was a message being sent by a recent 
interview on one of our networks that suggested that we would 
support article 5 only if the partner nation was up to date 
with their burden sharing responsibilities. Have you heard that 
concern from any of our NATO allies, and would you share the 
concern that that sends a very bad message about our commitment 
to NATO?
    Mr. Wilson. As I said prior, I think the calculation, in 
this case, of Russia is what can we get away with, and if we 
see a pathway to be able to actually divide or shatter this 
alliance, that is an invitation for their action. And so I 
think the credibility of the alliance depends on that clarity 
of our commitment to it and a consistency in that messaging. I 
think that is why this body's message on the alliance has been 
so important.
    Senator Shaheen. Despite whether someone has fulfilled 
their commitment to burden sharing or not.
    Mr. Wilson. That is correct.
    Senator Shaheen. Thank you.
    Dr. Ratner, a couple of weeks ago, as I am sure you 
remember, China landed on the dark side of the moon. At that 
time, our NASA [National Aeronautics and Space Administration] 
employees were not working. Our researchers were not working 
because we were in a government shutdown. How does that address 
the credibility and the strength that we need to be positioning 
with the rest of the world when that is what is happening in 
the United States?
    Dr. Ratner. Senator, I think that is an excellent question. 
Obviously, there were direct economic costs from the shutdown, 
and that affects our ability to compete with China. I think as 
you referenced, there are two other effects in terms of our 
overall competitiveness.
    The first relates to our ability to sustain our alliances 
and partnerships, and to do that, we need Asia and the world to 
have confidence that the United States has the focus and the 
resources and, frankly, the competence to enhance American 
competitiveness to compete with China. And when our Government 
is shut down, that sows doubts and that feeds into the 
calculations of countries as to whether they want to stand up 
to China and whether they want to partner with us.
    Secondly, to the extent that there is--and I agree with Mr. 
Wilson--an emergent ideological competition between the free 
world and an emergent authoritarianism, we do not like the 
juxtaposition, as you described, to be projecting to the world 
that our Government is shut down while China is landing on the 
dark side of the moon. I think we need to be the shining city 
on the hill again.
    Senator Shaheen. Thank you.
    Mr. Colby, I am not sure that I completely understand some 
of the arguments that you are making. You talk about on page 5 
of your testimony that the new warfighting approach involves 
United States forces resisting Chinese or Russian attacks from 
the very beginning of hostilities and to blunt Beijing or 
Moscow's assault and then defeat it. I certainly agree with 
that sentiment, but what I am having trouble reconciling is how 
you go from there to a conclusion that therefore we should not 
be focused, as I understood you to say, on any action that 
China or Russia may be taking in other parts of the world where 
we have an interest.
    For example, you mentioned the Middle East as a place where 
we should not be, as I interpreted your remarks, putting undue 
resources. And yet, if we do not blunt Russian and Chinese 
actions in those areas, does it not give them an opportunity to 
enhance their ability to compete with the United States in 
other parts of the world?
    Mr. Colby. Ma'am, thank you for the question.
    I think from a strategic perspective, East Asia and 
Southeast Asia and Europe are the decisive theaters. Things are 
ultimately decided there. For the Chinese to project power 
without having resolved a favorable situation in the Western 
Pacific and East Asia, they would essentially project power 
into the Middle East at our sufferance. They would be 
essentially using their capital but leaving themselves 
vulnerable to our counterattack.
    The problem is that Asia is the richest part of the world, 
and Europe is the second probably richest part of the world. 
And China is the most plausible potential kind of hegemon. The 
way they can do that is they can pick off the small states, 
starting with Taiwan and then moving to the Philippines and 
Vietnam, et cetera. They do not necessarily have to fight a 
war. They can use things like Huawei. They can use 5G. They can 
use corruption. And then in the back of everybody's mind is if 
I fight them, I know I am going to lose.
    What I am really getting at is the Chinese or the 
Russians--their incentive is not to start a massive World War 
III with the Americans. Their incentive is to start a small war 
and then say, look, if you are going to fight back, this is 
going to get very risky. And by the way, we have ways of 
hurting you at home. Sure, nuclear weapons, by the way, are out 
there, but so is cyber attack. So is precision conventional 
strikes. Are the American people ready for that?
    And I think that again gets back to the chairman's point 
about really sort of educating I think--educating sounds 
patronizing, but illuminating to the American people just how 
serious these stakes are because if the Chinese take over Asia 
and take over not Genghis Kahn style, but basically they are 
the ones who set the rules of the road, to Dr. Ratner's point, 
that is ultimately going to have a very, very serious effect on 
our lives. I think the election interference that we suffered 
in 2016 could very much pale in significance to what we could 
see in a world where Asia is dominated by China.
    Senator Shaheen. Well, I am out of time. I certainly 
appreciate what you are saying. I just think there are some 
flaws in your strategy if we think that we should withdraw from 
every other part of the world other than Europe and Asia in a 
way that gives opportunity to Russia and China for whatever 
they might want to do there.
    Mr. Colby. Could I just clarify quickly, ma'am? The 
strategy does not call for withdrawing. It calls for the more 
efficient use. So we have been using B-1's and F-22's in the 
air over Afghanistan and places like that. That has a very, 
very real opportunity cost for how we are doing. That is why we 
could lose. The place we could really lose, that is where we 
need to put our resources is the argument and the strategy.
    Senator Shaheen. Thank you.
    Chairman Inhofe. Thank you, Senator Shaheen.
    Senator Rounds?
    Senator Rounds. Thank you, Mr. Chairman. Let me begin just 
by saying thank you for putting together this particular 
hearing. I think it is critical that we be able to share in 
open session with the American people just how serious this is.
    I would like your comments on this, gentlemen. Number one, 
it is not so much that China and Russia today are more than 
near-peer to us with regard to our nuclear capabilities or our 
space capabilities, but rather their current trajectory is such 
that their development is on a faster pace in those strategic 
areas. I think this is the part which the American people will 
want us to be working on now to make investments so that 3 
years, 5 years, and 10 years down the road we do not put the 
next generation of leaders in a position where they are 
wondering why we did not see this coming.
    I would like your thoughts. It used to be air, land, and 
sea that we talked about as the domains in which we needed to 
be dominant. But today there are two more, both space and 
cyberspace. It would appear to me that our near-peer 
competitors, China and Russia in particular, have taken it upon 
themselves to, in a way, shortcut dominance by becoming very, 
very good and working in areas of cyber and in space that can 
hinder our ability to be dominating on air, land, and sea.
    Mr. Colby, would you care to comment on that?
    Mr. Colby. Yes. Thank you, Senator. I certainly agree with 
your sentiment.
    I think one thing is important. The Russians and the 
Chinese are quite different. Fundamentally China is an 
economy--for the first time in our history, we will be facing a 
competitor of comparable size and economic sophistication to 
ourselves. It was not true of Nazi Germany. It was not true of 
the Kaisers. It was not true of the Soviet Union. It is not 
true of contemporary Russia. Contemporary Russia and likely 
future Russia poses a very severe but focused threat. I think 
it is using primarily asymmetric and time-distance advantages 
in Eastern Europe, coupled with its very robust strategic 
forces.
    The Chinese have started to do that, but they are beginning 
to develop actual peer--for instance, for a while they were 
doing mostly counter-space. Now they are launching satellites 
at a bristling rate. They are developing nuclear submarines to 
go far abroad. They are developing aircraft carriers. We are 
going to be dealing with a peer competitor.
    What I would say about cyber and space, everything is a 
contested domain. I would say it is not so much how we do in a 
given domain like hypersonics or space. It is really about 
these scenarios because that is what we are going to be focused 
on. That is what the Chinese are going to be focused on. That 
is what if you are in Hanoi or Manila or Tokyo, you are 
thinking how does this war end if I stick my neck out with the 
Americans. Whatever the force is that we need for that, that is 
the standard I think we need to go towards.
    Senator Rounds. Thank you.
    Mr. Ratner?
    Dr. Ratner. I would agree with Mr. Colby and maybe just 
build on it a little bit with some of the fine work that he did 
in the National Defense Strategy, which is we need to look at--
and we are doing this at our home institution of the Center for 
a New American Security, doing work on what is the future of 
American war going to look like. What is going to be the 
American way of war? To start with the scenarios embedded in 
the strategy and then work toward what is our warfighting 
approach, what is our force structure going to look like, our 
force employment, our posture, how are we going to integrate 
with alliances. All of these things are in need of reform and a 
hard new look, but it starts I think with the plausible 
scenarios.
    Senator Rounds. Thank you.
    Mr. Wilson?
    Mr. Wilson. I would just add that I think your point on the 
trajectory is spot on. I agree with Mr. Colby that if you think 
about the challenge that we face from Russia today it is from 
an economy less the size than Italy, than the Netherlands. What 
is remarkable is the remarkable military modernization that an 
authoritarian centrally controlled system has been able to 
develop to really enhance the capabilities that do pose, I 
think, a severe problem in targeted areas because of the 
demonstrated willingness to use them. It is on a different 
scale from China, but that trajectory has been very rapid in 
the Russian military modernization program.
    Senator Rounds. Thank you.
    If we entered into any sort of a major conflict, can any of 
you imagine a scenario in which we would not be at war in 
space?
    Mr. Colby. No. I think for a long time, Senator, people 
thought that space might we a sanctuary, including people who 
were responsible for the space command. I think if you got into 
that kind of war, there would probably be certain kinds of 
limitations. Those would be themselves contested, but space 
would certainly be a contested domain. It is so vital for 
warfighting in this era.
    Senator Rounds. Mr. Ratner?
    Dr. Ratner. I agree.
    Senator Rounds. Mr. Wilson?
    Mr. Wilson. I agree, but again, I do think it is what can 
the adversary get away with. And so those efforts for Russia or 
even China to be able to essentially have a confrontation with 
us that is not a direct confrontation I think is where we are 
most vulnerable.
    Senator Rounds. Thank you.
    Thank you, Mr. Chairman.
    Chairman Inhofe. Thank you, Senator Rounds.
    Senator Peters?
    Senator Peters. Thank you, Mr. Chairman.
    Thank you, gentlemen, for a very fascinating discussion 
about these topics. I appreciate your work on it.
    I want to talk specifically about technological advances 
and pick up on Senator Rounds' discussion about space and cyber 
in particular in an area that I think folks are categorizing as 
a major arms race, and that is in artificial intelligence (AI) 
and machine learning which, as you know, will be transformative 
for warfare in ways that we probably cannot fully appreciate at 
this point. It is moving very, very quickly.
    There have been suggestions that the United States is 
actually falling behind in AI in terms of our relative position 
with China and that we lack really a coherent strategy to deal 
with that.
    So, gentlemen, certainly Mr. Colby, Mr. Ratner, I would 
appreciate your comments as to how do you see the United 
States' approach to AI particularly relative to China, but 
Russia is working on these projects as well. What are we 
getting right? What do we need to improve?
    Mr. Colby. Well, thank you very much, Senator Peters. I 
would really commend the work of our colleague, Paul Scharre, 
who I think is a leading scholar on this. I would also commend 
Congress' creation of the AI Commission, which is being led by 
Eric Schmidt and Bob Work, both of whom were involved in 
developing the National Defense Strategy.
    So the strategy is really not taking our technological edge 
for granted. I think AI may be the crucial piece of the puzzle. 
You know, it is hard to say.
    I do not have defined views yet on what exactly we need to 
do, but I think we need to look at this in a competitive way, 
leverage the advantages in our system, the fact that we have 
competition, and that there are going to be imperfections that 
are arising out of an authoritarian, state-controlled, 
mercantilist politicized system, as well as that of our allies. 
That is a point I think maybe we can delve into a little bit 
later.
    But, one of the advantages here is that we have highly 
technologically capable allies in places like Japan, Korea, 
partners like Taiwan, Europe, et cetera. We should be seeking 
to, where possible, work collectively. I think the era of 
unipolarity is over. We can still serve the advantages and 
goals that we have sought to achieve throughout our history, 
but certainly since World War II, but we are going to have to 
do it in a different way. Part of that is going to have to be a 
more equitable relationship with our allies. That is going to 
involve their doing more, and it is also going to involve 
potentially our giving up some of our autonomy in decision-
making.
    Dr. Ratner. Senator, it is a really important question. I 
would also commend the creation of the National Security 
Commission for Artificial Intelligence. I think that is a huge, 
important first step. My understanding is they will potentially 
have their first report out next month. I would hope Congress 
would take their recommendations seriously.
    There are three areas that we need to focus on as it 
relates to artificial intelligence. I think the most important 
is the human capital question and ensuring that we have the 
talent pipeline and immigration policies to attract and retain 
the brightest minds in the world, including at our 
universities.
    We also need to think hard about data security. The Chinese 
data inside their country is not particularly strong, and that 
is something they are going to need to advance their artificial 
intelligence. That is one of the reasons why they are trying to 
appropriate and steal as much data overseas as they can. We 
ought to be working inside our own country and with allies and 
partners on data privacy and data security.
    Then we have to think about how to integrate artificial 
intelligence for the purposes of this committee into our 
defense and military apparatus. I think the creation of the 
Joint Artificial Intelligence Center to coordinate some of 
these activities is important. I think the work that the 
Defense Innovation Unit is doing out in California is also 
important.
    I think we are getting our act together, and this is really 
important but we are going to have to maintain focus here.
    Senator Peters. Mr. Wilson?
    Mr. Wilson. If I may just add, I think it is important on 
the cyber front to recognize that I think we do have peer 
competition, particularly with Russia in this case.
    On the greater technological challenge, I think for us and 
for this body to help frame an understanding that this great 
technological evolution that we are going through has profound 
implications on whether free democratic societies really get 
there first or the authoritarians. That is the same as we think 
historically about technological developments, the nuclear 
weapons. Who got there first had profound geopolitical 
implications.
    The strength that we bring to the table will be our private 
sector ingenuity, although the Chinese are quickly catching up 
to that. The weakness that we bring is a national coherence and 
a strategy to help coalesce that into something for national 
purposes.
    Senator Peters. Thank you, gentlemen.
    Chairman Inhofe. Thank you, Senator Peters.
    Senator Cramer?
    Senator Cramer. Thank you, Mr. Chairman.
    Thank you, witnesses, for finally a public discussion about 
it. I think this is long overdue. I mean, there have been some 
public discussions but not quite as blunt, maybe even as scary 
as we are having right now. I think it is important. It is 
important to me as a policymaker because I like to be able to 
talk about it in ways that spread the influence a little bit, 
and you have been helpful.
    What I would like to have you each comment on is what is 
our biggest challenge going forward domestically, politically? 
Is the biggest issue in front of us financial investment? I 
appreciate Mr. Colby's reference to being more efficient in 
other places. I think there are efficiencies that can go around 
that could get us to do more and do better with what we have. 
Or is it attitude? Or is it really a culture institutionally? 
And that is what I fear.
    In other words, as policymakers and as people of influence, 
whether it is in passing a law or encouraging the institutions, 
what do you think can be done to speed up this process of 
modernization? What has made us so risk averse? I see almost a 
paralysis in our entire government. It did not manifest itself 
in the worst sense with this issue. But I would just like to 
hear from each of you if you have ideas of what we can do to 
encourage the bureaucracy a bit.
    Mr. Colby. Thank you, Senator.
    Maybe I sound a little bit like a broken record. I have 
given this a lot of thought. Ultimately it does come down to an 
appreciation of threat. I want to be very clear here that I am 
not trying to paint some sort of lurid, kind of colorful 
picture. But I think it is also the appreciation of the 
contingency of the world that we have known for the last 
generation or even since the Second World War. I often think it 
is a parallel a little bit to the financial crisis of 2008 that 
you could--I mean, 75 years since the last great depression. 
Right? So people basically wrote it down to effectively zero.
    I think there is a natural tendency for people to basically 
say a world of great power competition in which somebody really 
antithetical to us could actually take over is something I do 
not really believe. In the Defense Department, people say we 
would have trouble, but we would not actually lose. I think the 
reality is we could actually lose, and as Dr. Ratner has 
rightly said, if we do not compete effectively and better, we 
could lose the grand competition to China in particular. We do 
not have to because we have immense reservoirs of national 
power, which almost paradoxically make us less anxious. You 
know, it is good to be an American.
    But I think to me that is why this committee's role, this 
hearing, the role of Members of the Senate and the House can be 
so important in saying, look, we are not saying the sky is 
falling in yet, but if we do not take account of it, we are 
basically going to be at the sufferance of the Chinese over 
time.
    Dr. Ratner. I would agree with all that.
    I think we are, many, still stuck in an early post-Cold War 
ideological paradigm where we believe the world is naturally 
and inevitably heading toward greater freedom and democracy and 
open markets in the end of history paradigm. Clearly we are 
learning today that is not the case. So it is taking a rethink 
about sort of our fundamental assumptions about the future of 
international politics.
    I do think, Senator, as I said earlier, that we need a 
clear articulation of what is at stake here. There are a lot of 
voices saying a lot of different things, and that is why this 
hearing today is so important to say them clearly and paint a 
vision of what, in my instance, a Chinese sphere of influence 
would actually look like and what it would mean for the 
American people, to be clear of that.
    Then finally to your question about, yes, we need 
institutional reform, but I hope we do not need a crisis. I 
think one thing that all the Members here in Congress could do 
is to sew together I think the message of American 
competitiveness and great power competition with the message of 
American renewal and strength, and then if those two come 
together, we will do what we need to do to compete effectively.
    Mr. Wilson. Thank you for that question, Senator.
    I would add to this the framework that we are essentially 
in a great battle of ideas. We have renewed on a competitive 
stage ideologically which we had not been used to. I think part 
of what is important here is confidence in our system, self-
correction in our system, and demonstrating that our democratic 
institutions, while always messy, are still the best means to 
deliver prosperity and security for our citizens and for us to 
have confidence in that, for the American people to have 
confidence in that, and for our adversaries to actually be 
envious of that to show that this system works. At the end of 
the day, the best antidote to some of the hybrid strategies we 
have faced are the resilience and confidence in our own 
democratic processes and institutions and making them work.
    Senator Cramer. Thank you.
    Chairman Inhofe. Thank you, Senator Cramer.
    Senator Duckworth?
    Senator Duckworth. Actually, Mr. Chairman, my colleague 
from West Virginia is on a time crunch. If it is all right with 
you, I would like to let him go first.
    Chairman Inhofe. That is fine with me.
    Senator Manchin. Thank you, Senator Duckworth. I appreciate 
it.
    Thank you all for being here.
    Just an observation. Basically what we have been told and 
what we believe is that the advancements that China has been 
able to make on such a rapid scale and also Russia too has been 
done because of the cyber, if you will, cyber hacking, the 
espionage that goes on for them to elevate themselves so 
quickly. If we were better at protecting our cyber and our 
intelligence and did a better job--and we have seen this coming 
for some time. If we were able to be secured right now, would 
that slow them down? Would they be unable to have the rapid 
advancements? Because China has openly stated it wants to be a 
global front runner in artificial intelligence by 2030. It 
stated it wants to make 30 percent of its military equipment 
automated by 2025. I would say the dangers are great for that 
to happen. What is the best way to slow that down or prevent 
that from happening?
    Mr. Colby. Well, Senator, I completely agree with you. I 
fear the horse may somewhat be out of the barn in the sense 
that the Chinese have already stolen a ton and also are 
developing their own indigenous capabilities to do things. But 
anything helps in a competition like this. Even relatively 
modest increments help a lot.
    Acting Secretary Shanahan I know is consumed with things 
like cyber hygiene, getting our industrial base to take good 
care. I think in a sense our whole cyber architecture--and it 
is not just cyber, it is also human intelligence. It is also 
the sense of the threat, the sense that this is something that 
the Chinese are trying to do. But, you know, maybe we built our 
cyber architecture in a world characterized by an end-of-
history thinking instead of saying that there are potential 
hostile state actors out there that we need to take account of.
    Dr. Ratner. Senator, I would definitely agree with the 
point that we do need more defensive measures in the form of 
investment reviews and export controls and law enforcement. But 
it is also the case that I think the caricature of China only 
stealing its way to innovation is an outdated view. I think 
that was the case for about a decade. But as Mr. Colby 
mentioned, there is more indigenous innovation there. But we do 
need the defensive measures. We also need to be cooperating 
with our allies and partners on this because if we have 
effective defenses ourselves and our other advanced economies 
do not, then China can go shopping there quite quickly.
    Then finally, of course, the most important thing is 
investing in our own competitiveness. So this is not just about 
defense.
    Mr. Wilson. I would simply add to underscore that point 
that as we have become more aware and acted more quickly on 
this in the United States, we need to be as cognizant of 
working with our allies and partners to advance their efforts 
on this front as well. The European Union has been slow, only 
more recently beginning to adopt CFIUS [Committee on Foreign 
Investment in the United States]-like but not quite procedures. 
We have seen German technology companies that have been 
acquired through Chinese investments. I think this is part of 
something that we can lead other societies and our allies and 
partners to help them be as cognizant as we are now.
    Senator Manchin. It has been reported since 2012 that 
Russia has been actively developing military technologies that 
may violate the Intermediate-Range Nuclear Forces (INF) Treaty. 
What do you see as the benefit for the United States remaining 
in an Intermediate Nuclear Force Treaty even as Russia actively 
is attempting to circumvent the treaty?
    Mr. Colby. Senator, I believe that it makes sense for the 
United States at a minimum to renegotiate the treaty and, if 
that is not possible, to withdraw. Actually the military 
utility is primarily dealing with China where conventional 
intermediate-range missiles would help in an increasingly 
competitive military balance. I do not think that conventional 
range INF systems are actually that necessary. In the European 
theater, they're what we primarily need are posture 
enhancements and prepositioning and exercising of our forces 
and greater exertions by our allies like the Germans. But I 
think the administration's bringing this and really forcing the 
issue is commendable. I hope there is a way to get to some kind 
of new agreement with the Russians if they show themselves 
sufficiently reliable.
    Senator Manchin. With time running out, I have one 
question, and the two that have not answered maybe can.
    Which country faces independently the greatest threat to 
the United States? China or Russia? We will start at the end.
    Mr. Wilson. I think over the long term, the answer is no 
doubt China. I believe in the short term, it is Russia because 
of the intention and the capability to act, which we have seen 
demonstrated.
    On the INF issue, even the Russians have been pointing to 
the Chinese as a rationale for their concerns about what they 
are doing. I think the burden now becomes with the 6-month 
clock starting. Can we use this to extract and leverage some 
type of agreement, some type of measures at a minimum on 
transparency through this process?
    Senator Manchin. Dr. Ratner?
    Dr. Ratner. I will just say quickly on the INF, I do think 
it is worth looking hard at modifying the treaty before 
withdrawing. I think it does have potential military utility in 
the Pacific for the reasons Mr. Colby mentioned, as well as the 
potential to cause a cost imposition on the Chinese and force 
them to spend their money on expensive defensive measures 
rather than weapons to kill Americans and attack American 
bases.
    Senator Manchin. Which country?
    Dr. Ratner. Which country of the two faces the largest 
threat from the United States?
    Senator Manchin. Yes.
    Dr. Ratner. What I would do here, sir, is I think 
differentiate between the Chinese Communist Party and the 
country of China. I think the Chinese Communist Party faces a 
threat from a United States that is competitive in the 21st 
Century.
    Senator Manchin. Mr. Colby?
    Mr. Colby. Certainly China I think currently and over the 
long term. But I agree with Mr. Wilson's point that actually 
Russia has not only the capability and potentially the degree 
of alienation to do something about it, but since it is 
probably in decline, its window may be closing. So we 
definitely need to take measures to deter that.
    Senator Manchin. Thank you.
    Thank you, Mr. Chairman.
    Chairman Inhofe. Thank you, Senator Manchin.
    By the way, that comment is very timely in that I believe 
it is Saturday our 60 days are up. And so we better be thinking 
about that.
    Senator Hawley?
    Senator Hawley. Thank you, Mr. Chairman.
    Thank you, gentlemen, for being here today. Your testimony 
has been very informative.
    Mr. Colby, can I just start with you? I was struck by a 
number of things in your prepared testimony, including your 
discussion about the need to reposture our forces in both 
Europe and Asia to deal with this new great power competition.
    But let me ask you about another type of reposturing. You 
say in your prepared testimony at the bottom of page 8 and the 
top of page 9--I thought this was very striking--with regard to 
our relationships with allies and partners, we simply cannot do 
this, meaning everything outlined in the National Defense 
Strategy--we simply cannot do this all by ourselves. And then 
you go on. We need our allies and our partners to contribute 
real military capability to deterring China and Russia.
    Now, we have talked a little bit today and other members 
have asked you about what I might term our legacy alliance 
structures like NATO, legacy because they come to us from a 
different era. As we think about the new era of great power 
competition, can you just flesh out a little bit what you are 
alluding to here about the necessary reposturing in our 
alliance structures in order to meet these new challenges?
    Mr. Colby. Well, thank you, Senator. Actually I have been 
looking for an opportunity to talk about this because I think 
you hit the nail on the head. I mean, two points.
    One is, I think as you said, the era of unipolarity is 
over. In the 1990s and the 2000s, the United States was so much 
more powerful than any potential adversary that effectively the 
United States military could perform any missions essentially 
by itself. You can ask them yourselves, but if you would give 
Bill Cohen or Don Rumsfeld a truth serum, they would say, well, 
allies are nice to have for the flags, but realistically the 
American military generally prefers to operate alone. That is 
no longer true not only in the most stressing scenarios, say 
the Baltics where we really would need, say, Polish and German 
assistance, but actually in the totality of circumstances 
because I think to Senator Shaheen's point, this is not a 
strategy that says, hey, Iran is not a problem, North Korea is 
not a problem, terrorists are not a problem. To the contrary. 
But the most stressing scenarios, the ones that are most 
important for the United States to focus on, are in the central 
theater and at the high level of warfare. We need the French to 
do things in Mali and so forth. That means giving up a bit of 
our decision-making or our influence and having a bit more of 
an equitable relationship. It also means more permissive arms 
transfer and intelligence sharing provisions.
    At the same time, our allies must do more. It is 
unacceptable for us to be spending 3 to 4 percent of our 
national gross domestic product and a place like Germany or 
Japan to be spending 1 percent. We work very closely with the 
Germans and the Japanese. They have a very acute strategic 
perception of what is going on. They need to match it with an 
adequate national commitment that reflects the severity of the 
challenge.
    I would also say, Senator, that our alliance architecture--
we tend to think about alliance with a capital A, like NATO. 
Our alliance architecture--we should preserve things like our 
United States-Japan alliance, of course, United States-
Philippines, NATO, et cetera. But I think we are increasingly 
going to be need to be thinking small A, which sometimes people 
tend to refer to as partners. But our relationship with India 
to many people would already be an alliance. We are not going 
to pledge to defend India in the way that we did Japan or 
Germany. Well, actually Germany was very involved in defending 
itself. But Japan, for instance, after World War II. They are 
going to defend themselves, but we share interests in blocking 
a Chinese aspiration for hegemony. So we are going to need to 
be more plastic and strategic in how we go about considering 
these new partnerships.
    What I would just say on that is we need to prioritize the 
strategic dimension. We need to agglomerate enough geopolitical 
and military power to check the Chinese. That means sometimes 
not getting everything we want out of the relationship, whether 
that be ideological or economic or what have you. That might 
stick in our craw sometimes, but if we do not get the power 
relationship right, we will not have the free and open order.
    Senator Hawley. Can you just say briefly just a bit more 
when it comes to the Asian theater? In the European theater, we 
have NATO. But talk about these new partnerships and the sort 
of plasticity that might be required particularly in Asia.
    Mr. Colby. Sure. Well, I think it is no accident that if 
you looked at Secretary Mattis' travel schedule, he was in 
Southeast Asia and South Asia all the time. He was in Vietnam, 
which we fought a war with that did not go so well for us. He 
was in Malaysia, and the current defense leadership is there. I 
think that is exactly right. You know, we are not John Foster 
Dulles going around trying to sign everybody up for an Asian 
NATO. That is not going to work for a variety of reasons.
    But I think we need to really deepen our relationships in a 
way that is politically sensitive over time because that is 
essentially the soft theater for the Chinese to assert their 
power. They know the Japanese are a hard target. They are going 
to put pressure. To some extent South Asia. These are the 
places where they can make a lot of hay and make a lot of 
movement. If they can basically convince Manila, for instance, 
where there is concern not just with Duterte but with others in 
the Philippine defense establishment about American 
reliability, then they can say, look, you have got to come with 
us because even if you prefer the Americans, the world is going 
our way and you do not want to be left exposed before us when 
we have the chance to penalize you.
    Senator Hawley. Thank you.
    Mr. Ratner, can I just quickly ask you, switching to China 
and some of your prepared remarks and remarks today? You talk 
about the need to embrace not just confrontation but also 
competitiveness with China. You also point out that China has 
embraced a model of high tech authoritarianism, which seems 
exactly right to me.
    We are all familiar or hopefully familiar with the fact 
that China is requiring these technology transfer agreements 
for companies, United States companies, doing business there. 
You know, just looking at some headlines from this past year, 
Apple has now signed onto these technology transfer agreements, 
putting sensitive encryption keys in China; Facebook giving 
data access to Chinese firms that have been flagged by United 
States intelligence; Google patent agreements with Chinese 
firms.
    Should we be concerned about these technology transfer 
requirements on the Chinese side and should we perhaps consider 
preventing these in the law?
    Dr. Ratner. Senator, it is an important question. I think 
the answer is on a case-by-case basis. But I do think that the 
way forward here is not to wag our finger and ask these 
companies to act in the national interest, but to set 
boundaries on their behavior. If there are instances where 
these companies are transferring technology that have important 
security or future technological implications for American 
competitiveness, then certainly the U.S. Government should 
consider new export controls.
    Senator Hawley. Great.
    Thank you, Mr. Chairman.
    Chairman Inhofe. Thank you, Senator Hawley.
    Now Senator Duckworth.
    Senator Duckworth. Thank you, Mr. Chairman.
    Mr. Colby, I cannot help but notice that much of the 
discussion surrounding the National Defense Strategy and great 
power competition discusses increased investments in tactical 
aircraft, missiles, armored vehicles, other large weapons 
platforms. What I have not heard much about are investments in 
transportation and logistics systems that can operate in a 
contested environment to support these weapons platforms. For 
example, the number of U.S.-flagged ships has gone down 
significantly.
    What is your assessment of the current state of U.S. 
military transportation and logistics systems to support great 
power competition? Do we have what it takes to be able to, as 
you mentioned, agilely move our forces to where we need to go 
and sustain them in order to react more quickly?
    Mr. Colby. Ma'am, that is a great question. I would say it 
is very problematic. Actually in the defense strategy, 
logistics is highlighted, as is information as an independent 
warfighting domain. In a sense, the strategy is trying to take 
the focus away from how many BCTs do you have, how many capital 
ships, et cetera and saying what are the forces that you need 
all through the chain from A to Z that will allow you to 
complete the mission. So I think logistics is crucial, 
including civilian logistics.
    I think the basic logic there should be that we need our 
forces and our logistics chain to be able to operate under a 
plausible Chinese or Russian sustained attack, that you are 
never going to have the total sanctuary that we enjoyed in the 
unipolar era. Now, that does not mean that everything has to be 
perfectly secure. Every satellite we put into space does not 
have to survive, but as an architecture it needs to operate.
    The other key thing and I think a really core piece of the 
logic here is we want our architecture to be able to work in a 
way that for the Chinese or the Russians to attack it, they 
will have to escalate and expand the war in ways that are bad 
for them.
    Senator Duckworth. So, in your opinion what are some of the 
investments that the Department can make to ensure this 
logistical readiness so that our military will be able to 
provide the warfighters in the field with the appropriate 
resources to execute the National Defense Strategy? You talk 
about this logistical architecture. What do we need to do to 
build this logistical architecture to where we need it to be?
    Mr. Colby. Well, I am not sure what exactly it will entail 
in terms of investments. I would imagine it is going to be kind 
of a soup to nuts thing. A couple of points that I would say 
are we would want realistic exercising, in a sense something 
like the Operation Reforger model of the 1980s, which is 
basically how are you getting from the United States to the 
conflict zone abroad while under attack. That will tell us a 
lot about what we need and where our vulnerabilities are. I 
would also say selective investments in things like cruise and 
ballistic missile defense specifically designed, imparts 
crucial nodes in our logistics architecture both in the United 
States and abroad that, again, are not going to be able to give 
us perfect security. But if the Russians have to launch 100 
missiles to take out Ramstein rather than two, that is going to 
be very important for Germany's political decision-making.
    Senator Duckworth. Thank you.
    This is both for you and also for Dr. Ratner. Should we be 
doing something about the Chinese's low-end capabilities such 
as their coast guard vessels, their fishing fleets that have 
been known to interfere with maritime-enabled traffic? It is 
not all just their military, but they have all of these other 
low-end network things that are out there.
    Dr. Ratner. That is exactly right, and in fact, they have a 
maritime militia that has knitted together fisheries and coast 
guard with the PLA. I do think we should approach these vessels 
and forces based upon their behavior and not the color of their 
hull. So if there are coast guard ships engaging in coercive 
military activity, particularly if the PLA is parked over the 
horizon, I do not think we should treat them like law 
enforcement vessels. We should treat them like military 
vessels.
    The other thing that we can do in this space that we have 
not done nearly enough of is information warfare and strategic 
messaging where we have an immense amount of intelligence that 
is not particularly sensitive, that does not require unknown 
sources and methods about the Chinese coast guard and other 
forms of illegal and coercive activity in the South China Sea 
and elsewhere, and we ought to be splashing that across 
newspapers all across the region every day of the week. From my 
experience in government, it was incredibly hard to unlock this 
intelligence to even share it with close partners, and we ought 
to have much faster and more widespread declassification 
authority on this information.
    Mr. Wilson. Senator, if I just might pick up your first 
question, if I might.
    Senator Duckworth. Yes.
    Mr. Wilson. Our strategy so often depends on reinforcement, 
particularly in Europe. We have seen demonstrated through many 
exercises through the alliance some of the unanticipated 
difficulties we have had in moving forces across borders in the 
European domain to prepare for the Russian challenge. It is 
partly why we saw the NATO summit establish a new logistics 
command to be based in Germany, why we have underway a military 
mobility initiative that really requires working with the 
European Union on how to facilitate movement of our Armed 
Forces across territories, and why what we are doing with this 
Three Seas Initiative in Central Europe is so important because 
we lack in many places the cross-border infrastructure required 
for this type of mobility. I would factor that into the 
strategy.
    Senator Duckworth. Thank you.
    Thank you, Mr. Chairman.
    Chairman Inhofe. Thank you, Senator Duckworth.
    Senator McSally?
    Senator McSally. Thank you, Mr. Chairman.
    Thank you, gentlemen, for your testimony today. It has been 
a good discussion.
    I want to pick up on the--Russia generally we see--I think 
you all agree--is on the decline where China is on the rise. 
Yet, Russia poses threats in their decline in how they are 
acting and their adventurism militaristically and just trying 
to impact our influence around the world.
    What other things--you have mentioned many so far. What 
other things can we do with all elements of our national power 
to mitigate the threat as Russia is in the decline or 
accelerate it, to accelerate the decline in a way, whether that 
is energy policy or other things that we could do on top of 
what you have already talked about? If we can manage this as 
best as we can maybe over the next decade or so, perhaps that 
threat is further diminished than it is now, and we look at 
China as the longer-term challenge. So what other ideas do you 
have related to that, if that is even an accurate way to be 
thinking about it?
    Mr. Wilson. Thank you, Senator. I think that is a very 
important question, a very important way to think about it.
    Russia's strategy is out to blunt United States strength 
but to do so in a way where China risks displacing us, the 
Russians are looking to disrupt us. It is actually a much lower 
bar. It is easier to accomplish. It is the games they play in 
the Balkans and other areas. They are not building. They are 
disrupting. And so they need cheap wins essentially to trip us 
up.
    They cannot compete economically with us. This is part of 
the loss during the Cold War. How do they keep up on the 
military modernization? I think that is why the sanctions 
regimes that we have in place because of their behavior are so 
important. Putin's conclusion after the Georgian invasion that 
he could get away with it without consequence is part of what 
we have been dealing with. I think this multilateral sanctions 
regime with our European allies and Asian allies actually is 
quite important to help ensure that they do not have the 
ability to compete with us as long as this is the type of their 
behavior.
    The energy security issue is fundamental. Russia wields 
energy as a way to influence, coerce decisions from its 
neighbors. There has been significant progress, but 
unfortunately, it has not been rapid enough. But we are seeing 
progress through many of Central Europe, still much more of a 
problem along Russia's periphery and its neighbors. I think our 
pressure and working with the European Union and others as a 
first order priority is important. Efforts like Nord Stream 
today actually undermine what should be a coherent Western 
strategy on diversifying our European energy supplies.
    Finally, I think a coherent effort where we are thinking 
about our defense strategy and engaging with allies and 
partners where we are bolstering their capabilities. I think we 
do need a permanent, continuous modest presence in the Baltic 
States for deterrent purposes. But it is about an 
intentionality of whether it is Sweden, Finland, the Baltic 
States, Georgia, Ukraine building a strong set of capabilities 
that those countries have on Russia's perimeter.
    Senator McSally. As a deterrent. Great. Thanks.
    Mr. Colby?
    Mr. Colby. Yes. Thank you, Senator.
    One thing I would really say is that we really do not want 
to increase the incentives for the Russians and Chinese to come 
together. Recent reports indicate that they are coming more 
together. The Russians are actually moving. The conventional 
wisdom which said, oh, they are actually relatively distant is 
starting to fall apart. This is a very grave situation. We have 
very, very serious differences with the Russians, obviously.
    My sense is from a geopolitical perspective we have 
specific deterrent requirements vis-a-vis the Russians which 
relate in particular to our eastern NATO allies. We should 
focus most of our effort, at least in the military sphere and 
the kind of security sphere, on defending those allies and a 
credible method to do so. I lay out a lot of this in detail.
    One thing that I would raise for the committee's attention 
is the CAATSA [Countering America's Adversaries Through 
Sanctions Act] provisions. I am not familiar with the entire 
bill, but the provisions that penalize places like India, 
Vietnam, Indonesia are really, really, really harmful and 
counterproductive for us. I totally support deterring and 
penalizing, as appropriate, Russia, but we need to do it in a 
way that is consistent with our strategy vis-a-vis China and 
that is counterproductive.
    Senator McSally. Great. Thanks. I am running out of time.
    I do have a follow-up question unrelated on Venezuela. So 
the influence of both China and Russia is apparent in helping 
to destabilize the situation there, and it is unfolding every 
single day. Do any of you have any comments on their influence 
there and how we prevent that in the future and help manage the 
situation right now?
    Dr. Ratner. Well, only that I think it is a harbinger of 
what China-led order would look like if they had a much broader 
sphere of influence in terms of protecting and defending non-
democratic regimes and also impeding the ability of the 
international community to galvanize to be able to respond. If 
we do not get our act together in Asia, we are going to see 
this movie over and over and over again throughout the 
developing world.
    Senator McSally. Thanks. I am out of time. I yield back.
    Chairman Inhofe. Thank you, Senator McSally.
    Senator Warren?
    Senator Warren. Well, thank you, Mr. Chairman, and thank 
you to our witnesses for being here.
    We are here today to talk about the strategic challenges 
presented by Russia and China, and that is important. But we 
just concluded the longest government shutdown in American 
history because President Trump wants to build a monument to 
division on our southern border.
    Now, this shutdown had terrible consequences not just for 
families but for our economy as a whole. The White House's own 
internal models reportedly showed that the shutdown reduced our 
economic growth. The President's own chief economist warned 
last week that if the shutdown continued, our economic growth 
in the first quarter of this year could be very close to zero. 
We cannot afford to shoot ourselves in the foot with dumb 
political stunts like government shutdowns if we want to remain 
competitive.
    Let me start by asking Dr. Ratner. Do you think the 
government shutdown that risks grinding our economic growth to 
a halt makes us more competitive with China or less competitive 
with China?
    Dr. Ratner. Senator, earlier Senator Shaheen asked the same 
question. I think my answer was clearly there are direct 
economic costs which hurt our competitiveness with China, and 
this also has negative effects on our alliances and 
partnerships, given perceptions of dysfunction of American 
democracy, and it hurts us in the ideological battle against an 
emergent form of authoritarianism.
    Senator Warren. So let me just go a little bit more on 
this. I serve on the Banking Committee, and in 2017, we heard 
testimony from James Lewis, a former senior Commerce Department 
official responsible for national security and China. He told 
us that our underinvestment--and here I want to focus on 
scientific research. He said underinvestment in scientific 
research, quote, creates a self-imposed disadvantage in 
military and economic competition with China. He also said that 
maintaining our competitiveness requires, quote, investment 
both by encouraging private sector investment and by government 
spending in those areas like basic research where private 
sector spending is likely to be insufficient.
    Dr. Ratner, do you agree?
    Dr. Ratner. I do agree, Senator. I would add to that that I 
think not only do we need to invest more in research, but we 
need to invest more in STEM education and have strategic visa 
and immigration policies that attract and retain the best 
talent from around the world.
    Senator Warren. And can I ask you? I know that Senator Reed 
mentioned this, but I just want to emphasize and ask you to 
maybe put a little more meat on the bones on this. What do we 
need to be doing domestically to enhance our competitiveness in 
this area with China?
    Dr. Ratner. Senator, I said in my opening statement that 
ultimately how America fares in the strategic competition with 
China is going to be about us, not about them. It is going to 
be about American competitiveness. It is, of course, going to 
have a foreign policy component, but it is going to have a 
domestic policy component as well that includes the type of 
research and education and immigration and visa initiatives 
that I just spoke to, as well as enhancing American 
infrastructure, having a robust health care system, fixing our 
fiscal policy, and making a whole set of bureaucratic reforms 
that get us ready for this competition. Clearly, getting our 
own house in order but being our strongest selves is task 
number one.
    Senator Warren. Thank you. I agree. I worry that we view 
competition with China too often just through a military lens. 
In order to project our power abroad, we must be strong here at 
home. Strong, sustained investments in education, in scientific 
research are not only related to our strength abroad. They are 
truly the foundation of it.
    Thank you very much, Mr. Ratner, and thank you all for 
being here.
    Thank you, Mr. Chairman.
    Chairman Inhofe. Thank you, Senator Warren.
    Senator Blackburn?
    Senator Blackburn. Thank you, Mr. Chairman.
    Thank you all so much for your time and your testimony and 
talking with us about this today.
    When I was in the House, I spent a good bit of my time 
working on issues that pertain to the virtual space. I think we 
all appreciate and recognize that with China American 
displacement is indeed one of their goals. They are approaching 
what they do as not only through their traditional military 
lens but also technology and fighting a virtual war or a war in 
the virtual space that we are being hit with every single day.
    One of the things we have really not touched on today that, 
Mr. Ratner, I want to come to you and have you talk a little 
bit about it because I think it is so instructive as we look at 
how China and Russia are organized, authoritarian states, 
different ideology, integration, we silo private sector, 
government sector. There it is all one platform.
    I want you to talk about scale because as we look at 
fighting 21st Century warfare, fighting in the virtual space, I 
think scale is going to be important for us as we adapt, as we 
move forward. I will come to you, and then, Mr. Wilson, if you 
add to that. Mr. Colby, too.
    Dr. Ratner. Well, Senator, I have a couple reactions.
    First, I do think the authoritarian, state-led model is at 
the core of this competition, and many of the contradictions 
between the Chinese Government and the United States stem 
precisely from that and from the interests of the Chinese 
Communist Party. I do think that is an important factor.
    In terms of scale, I think we ought not overestimate the 
success of that model, and our own success is not going to be 
in replicating it. In fact, we ought to not violate our own 
tenets about what we believe in terms of market mechanisms and 
democracy so as to chase after a China model because they have 
enormous resources, but they have enormous inefficiencies, some 
of which are coming home to roost now and many of which we are 
going to see over the next decade or so.
    I think my response to the question of how do we look at 
their model against ours is certainly we need to make some of 
the investments, and there is a role for government here in 
terms of investing in science and technology, some of the 
issues we talked about earlier. There are opportunities for the 
private sector and the government to integrate better, and 
there is a lot of work to do on that front. But I do not think 
the answer is--and I do not think this is what you are 
suggesting--to adopt China's model. I do not think that is how 
we achieve scale. I think we need better integration.
    Senator Blackburn. No. I am not suggesting that at all. 
Quite the contrary. But I think as you look at artificial 
intelligence, as you look at the expansion of 5G and the 
commercialization of 5G, and look at how China is developing 
this partnership with Russia, and scalability is important to 
them because they want to set the standards and displace us in 
that realm. It is an awareness that we should have as to what 
they are seeking to do.
    I agree and have supported the premise for years that we 
should not use technology from Huawei or ZTE because of the 
embedding of spyware and malware.
    Dr. Ratner. And, Senator, I would just say I think to the 
extent that the Belt and Road Initiative is part of China's 
strategy to gain that kind of scale, what has gotten most of 
the attention to date are the bridges and the ports. But it is 
the digital Silk Road that we ought to be really worried about 
and focused on, and we ought to be competing in the developing 
world to ensure that China does not control the communications 
and data throughout the world.
    Senator Blackburn. Yes.
    Mr. Wilson and Mr. Colby to answer.
    Mr. Wilson. Thank you, Senator, for that question.
    I think your point on scale is very appropriate because it 
is a sense of scale in which the trajectory is intimidating 
where China could go on scale. That is why we are concerned 
about how they can use big data AI or how they can become peer 
competitors, how, as Mr. Colby said, you can imagine a scenario 
where we actually potentially could lose, and as you I think 
just rightly very importantly pointed out, scale providing a 
potential power to set global standards whether on trade 
practices or other norms or even ultimately military 
interoperability.
    I think that is why it comes back to us having confidence 
in our model and understanding that we win through the power of 
our ideas, that we are competing for influence, that we are in 
a very competitive space around ideas and ideology, and to 
demonstrate the vibrancy of a free market, democratic system as 
the best delivery vehicle for our citizens I think ultimately 
is part of the key success story of how we mitigate and 
neutralize the sense of scale that China can leverage over 
time.
    Senator Blackburn. Nothing to add, Mr. Colby?
    I yield back.
    Chairman Inhofe. Thank you.
    Senator Kaine?
    Senator Kaine. Thank you, Mr. Chair, and thanks to the 
witnesses.
    I want to ask you about NATO and about Space Force. So let 
me begin with NATO.
    The 70th anniversary is April. The President's comments or 
reports about thinking about withdrawing from NATO have raised 
great concerns. Those have been addressed.
    But they have also raised an interesting question which is 
the Constitution says that the Senate must ratify treaties, but 
the Constitution is silent about the U.S. withdrawing from 
treaties. On a matter like this, if the Constitution is silent, 
it creates an ambiguity, but an ambiguity can be resolved by 
statutory action.
    I have introduced a bill, together with eight colleagues, 
four Democrats, four Republicans, largely members of this 
committee and the Foreign Relations Committee, to do two 
things: one, to say that a President cannot withdraw from NATO 
without either a two-thirds vote in the Senate or an act of 
Congress--that would be both houses subject to veto and 
override--to try to clarify that a treaty entered into with 
this treaty ratification could not be unilaterally abandoned by 
the President.
    The second piece would be if a President decided to do that 
unilaterally, there would be no funds available to be spent for 
the withdrawal of U.S. troops who are deployed with NATO, et 
cetera.
    Do you think a provision like that, if passed in a 
bipartisan way, would send a positive message to both allies 
and adversaries?
    Mr. Wilson. Senator Kaine, thank you for that question. 
Thank you for your leadership on the alliance as well.
    I do. I think the clear signal coming from Congress of rock 
solid support--we have seen votes in the House and the Senate 
on various issues related to the alliance over the past 2 years 
with astounding majorities. It has sent a very important signal 
I think to all of our allies and to the world.
    The premise of this is that NATO is for our interests, 
remembering that the first time article 5 was invoked was for 
allies to come to our defense.
    Senator Kaine. After 9/11.
    Mr. Wilson. In every operation we have been in since, we 
have had allies by our side.
    It was at the acrimonious Brussels summit where the 
presence of Senator Tillis and Senator Shaheen sent a very 
clear message to our allies about the strong support.
    So I support these discussions. I support this measure.
    I think it is important that we manage the debate in our 
country responsibly, however, so that we do not give a sense of 
the credibility of the proposition that this is a serious issue 
of American withdrawal from the Alliance.
    Senator Kaine. Could I just quickly ask, Mr. Colby and Mr. 
Ratner? Would you also agree that it would be a positive 
message to allies and adversaries to pass this NATO provision?
    Mr. Colby. Well, Senator, I do not know enough. I do not 
have enough to say about the constitutional aspects. But I 
certainly think withdrawing from NATO would be a grave mistake 
of historic proportions, and anything of that gravity should 
only be done, I would think as a matter of prudence and good 
judgment, in consultation with the other parts of the body.
    Senator Kaine. In fact, just because you said it that well, 
let me ask is there any treaty that the U.S. now part of that 
you think is as monumental or consequential as NATO?
    Mr. Colby. Probably not, not even the UN maybe. I do not 
know.
    Senator Kaine. Right. There are all kinds of treaties, but 
if this is the most momentous and consequential treaty that the 
U.S. is in and it was ratified by a two-thirds vote of the 
Senate, to have sort of an ambiguity and have a possibility 
that a President may withdraw when a Congress wants to stay in, 
that would be pretty destabilizing. The idea on something of 
that magnitude, whether we are in or whether we are out, it 
would be a good thing if there were political consensus between 
the Article I and II branches about that. Would you not agree?
    Mr. Colby. I would just say, Senator, that I think I would 
agree that having a consensus is good. I also think it is 
crucial to have, as I was trying to have with Senator Hawley, a 
new discussion about burden sharing that actually harkens back 
to some of the roles--I guess it was the Foreign Relations 
Committee with the Mansfield Amendment. There needs to be a 
serious conversation with the NATO allies about this, but we 
should be committed to NATO.
    Senator Kaine. Mr. Ratner, quickly before I get to Space 
Force.
    Dr. Ratner. I would support that effort from Congress, sir.
    Senator Kaine. Great. Thank you.
    Mr. Chair, I hope we might take this up as part of the NDAA 
discussion because I think especially in this 70th anniversary 
year of NATO, it would be really good to make sure that what we 
do moving forward, moving backward, getting out, is done as a 
consensus between the Article I and II branches and that 
unilateral action I think could be very dangerous.
    Space Force. We have not had a presentation in this 
committee by the Pentagon and making their pitch about the 
Space Force idea. I am an agnostic. I am very open to it. We 
see the Chinese landing on the dark side of the moon. Maybe we 
need to do something different.
    Based on what you know right now, do you think the 
administration's Space Force idea is a good one or a bad one, 
or is it kind of too early to say?
    Mr. Colby. Senator, I am kind of with you. I am agnostic on 
it on principle, but I would say it is too early to say. I 
mean, part of me says, oh, God, another bureaucracy. Just what 
we need. But then very serious people on space have 
consistently said that space is being neglected. And to Senator 
Duckworth's point, it is one of those areas that is a little 
bit more back-officey that is actually vital for the 
warfighting effort. I think I would really look forward to the 
Department's presentation saying this is not just going to be 
another bureaucracy, but it is actually going to increase focus 
in an intelligent, cohesive way that is consistent with the 
National Defense Strategy.
    Senator Kaine. I am over time. But good, bad, or too early 
to say? Can you just quickly?
    Dr. Ratner. I would agree exactly with what Mr. Colby said.
    Senator Kaine. Great. Thanks.
    Thanks, Mr. Chair.
    Chairman Inhofe. Thank you, Senator Kaine.
    Senator Tillis?
    Senator Tillis. Thank you, Mr. Chair.
    Actually I thought Senator Kaine's questions were very good 
and very important.
    I happen to be, Mr. Wilson, in Brussels while the NATO 
summit was going just about to get in front of a group of 
people to talk about the importance of the Alliance when the 
President I think expressed frustration that some people 
logically assume that we are only 1 day away or 24 hours away 
from withdrawing from the Alliance. Look, General Mattis 
famously said the only thing worse than going to war with 
allies is going to war without allies. I think that there is a 
person with stars on their shoulders in any line of service 
that thinks that withdrawing from the NATO Alliance is a good 
idea, and I believe that the President would heed their advice.
    My concern is mainly making sure that the NATO partners, 
the NATO allies recognize we understand the importance of it. I 
think, Mr. Colby, you said it would be a grave mistake of 
historical proportions. I believe that that is true. And what 
we want to do in the work that I have done with Senator Shaheen 
is continue to reinforce the message.
    By the same token, if you are particularly facing down the 
threat of Russia, in addition to, Mr. Colby, everything you put 
in your written testimony and in your opening statement, the 
thing that really matches up to make that an unlikely conflict 
is a very strong NATO alliance where the NATO allies and 
partners are investing their fair share, making sure they are 
ready, they are capable and interoperable while we are working 
on all the other things that we need to do.
    But, Mr. Wilson, I do appreciate your comment about the 
allies, and I think that we just have to continue to reinforce 
that message. I think anybody here on the panel would all share 
Mr. Colby's view of the dire consequences not only in Europe, 
but really around the world. You all agree with that. Right? 
Yes.
    Now, Mr. Colby, you said something in your opening 
statement and your written testimony that I am trying to figure 
out. On the one hand, you say we have got to muster more 
resources. We have to match the challenge. We are capable of 
doing it, but we are either losing right now or losing ground 
at least.
    You also alluded to the concept of--I think you called 
them--elective activities in the Middle East. We also know that 
in the Middle East, in Africa, South America, that both Russia 
and China are playing there.
    What does a cessation of activities in the Middle East look 
like? Is it a withdrawal or just a different kind of 
engagement? Because if we create a vacuum there, the two 
adversaries that we are focused on today will absolutely take 
advantage of it in my view.
    Mr. Colby. Thanks for the opportunity, Senator.
    I think the main point here is what do we want our military 
to focus on. The point is that in the most strategically 
significant, plausible scenarios in the central theaters, we 
are in a position where we increasingly could lose a war. What 
the Chinese and the Russians are up to, what certainly al Qaeda 
is up to, and others are up to in the Middle East, in Africa, 
et cetera are important. What the strategy is saying is the 
military should focus on making sure that it is prepared to 
fight and win the nation's war along with our allies and 
partners.
    It is not a withdrawal strategy. It is saying we are going 
to be in the Middle East over the long haul in fact, but we 
need to do it more efficiently. Things like light attack 
aircraft instead of
B-1, things SFAB [Security Force Assistance Brigade], Army 
advise and assist units. These are ways of allowing essentially 
a high-low mix of the force, most of the force focused on the 
high end, going to Top Gun, going to Red Flag, going to NTC 
[National Training Center], but then portions of the force, 
including unmanned and working with allies and partners to help 
out and keep stability in those areas.
    I think the main point, though, is that we should not get 
distracted by what the Russians or the Chinese are doing in 
these secondary theaters because, as I said to Senator Shaheen 
earlier, that is secondary. I mean, secondary is still 
important. But if the Chinese can basically suborn Taiwan, 
which I think is a possibility--I really want to try to ring 
the alarm bell on Taiwan because I think something could happen 
in the near future if we are not careful about it. Everybody in 
Asia is going to look at that. Nothing that serious is going to 
happen from what the Chinese are doing, say, in Latin America. 
So I think that is where our focus needs to be.
    Senator Tillis. Got you.
    Mr. Ratner, I think in your opening comments and your 
written testimony, you talked about the concept of competing 
with versus challenging China. I agree with that to a certain 
extent. I have worked in the high tech sector most of my career 
and am very familiar. I have actually got a company down in 
North Carolina that has a facility now that the Chinese have 
stood up in China that are Carolina Pipe and Foundry. It 
literally looks like you transported yourself to Charlotte, but 
it is in China.
    I think, on the one hand, we want to compete, but in order 
to compete and compete on a level playing field, we have to 
challenge. I think it is working that balance, particularly 
with intellectual property, particularly with competition in 
the global space. We will go back to your testimony but would 
like some more thoughts on how you really flesh that out.
    But I do think that some of the President's pressure on 
China to challenge them, to make it very clear that we 
understand the financial underpinnings of their economy and 
that without a good relationship with the United States, then 
their 50-year plan probably is not going to work out. We have 
got to strike a balance there. I look forward to continued 
discussion beyond the limits of the time we have here.
    Dr. Ratner. Senator, I will just say briefly I do not 
disagree with you. I would be happy to clarify my remarks. The 
statement I made was about being confrontational without being 
competitive, not challenging China.
    Senator Tillis. Thank you.
    Chairman Inhofe. Thank you, Senator Tillis.
    Senator Jones?
    Senator Jones. Mr. Chairman, if it please, with your 
permission, I would like to defer to Senator King. He has got 
an important presidential nominee coming in.
    Chairman Inhofe. Very good.
    Senator King. Thank you, Mr. Chairman.
    To follow up on the question--and I do not think this is 
something we are going to do in 5 minutes. You all may not be 
aware, but we have these little digital clocks up here.
    But there is a fundamental question that I have asked 
several times at this committee, once of Henry Kissinger, as a 
matter of fact. What does China want? In other words, we are 
building up our military. They are building up their military 
on the assumption that we are both defending against the other. 
My question is, are they looking for economic hegemony in the 
world, in the region? Are they looking for territorial 
conquest?
    I mean, I think of China as differently motivated than 
Russia, for example. Can one of you give me a minute or so on 
what China wants and then perhaps follow up? I would love to 
see some scholarly work on this because I think we need to 
understand our potential adversary's motivations in order to 
formulate a strategy. If it is simply economic competition, let 
us talk about intellectual property and all those things. Mr. 
Ratner, do you want to tackle that?
    Dr. Ratner. Sure. In short, I think what China wants is to 
make the world safe for authoritarianism and to ensure the 
stability of the Chinese Communist Party. Because they view the 
U.S.-led order as antithetical to their interests, their 
economic interests and their security interests and their 
political interests, they are looking to back the U.S. military 
out of the region. They are looking to undermine the ability 
of----
    Senator King. Are they looking to invade Hawaii or 
California? I mean, do they have territorial ambitions, or do 
they just want us to tend to our region and they tend to their 
region?
    Dr. Ratner. They certainly have territorial ambitions in 
the South and East China Sea.
    I think I would say, Senator, they do not have a strategy 
in a vault like we do in terms of these very detailed, forward-
looking grand strategies, but where we ought to look is what 
the interests of the leadership are, but also what the 
interests of the Communist Party are. And the interests of the 
Communist Party are to have a region of Asia and beyond that is 
not free, in which the United States is excluded from the 
economics and trade of the region and technology standards, in 
which institutions are inert, in which democracy and freedom is 
not advancing, in which the U.S. military is not able to 
operate, and in which U.S. alliances and partnerships erode 
over time. It is an illiberal sphere of influence that will 
expand and, if left unfettered, will undermine severely U.S. 
interests and peace and prosperity.
    Senator King. Well, I think the other piece is they 
currently have not the will but the will can always be a change 
of regime 5 minutes away.
    I want to move on. I realize this is a provocative 
question, and I hope you all will think about some writing on 
this. You know, that is the title of the article, ``What Does 
China Want''?
    You talked about NATO, and I think you covered that very 
thoroughly in the answers to Senator Kaine's questions. Is 
there anything that Vladimir Putin would like better than the 
U.S. withdrawing from NATO? Mr. Wilson?
    Mr. Wilson. I think his goal of restoring the prestige of 
the former Soviet Union comes hand in glove with seeing the 
destruction of the alliance.
    Senator King. The two are related. Somebody said you cannot 
understand Putin unless you understand Frederick the Great. 
There is Russian history involved here.
    Mr. Colby, do you want to comment on that question?
    Mr. Colby. Yes. I think the Russians seem to want to divide 
and ultimately probably get rid of NATO.
    I would just say, Senator, I think on the earlier question 
on China, very briefly.
    Senator King. I could tell you were aching.
    Mr. Colby. I know. I know. Actually I am working on a book 
on this.
    But I think fundamentally you do not have to have that 
aggressive a conception of the Chinese leadership to be very 
worried because it is totally in their interest to secure 
hegemony, not territorial control but basically sway, the 
internal policies of the regional countries. That is the 
largest economic bloc in the world. Do the American people 
think they are going to be immune from that kind of influence?
    Senator King. Did we make a mistake by withdrawing from the 
TPP?
    Mr. Colby. Well, I supported the TPP at the time.
    Senator King. Because we have ceded that regional----
    Mr. Colby. I think we absolutely need to have an economic 
strategy, as Dr. Ratner has eloquently put it, that is 
integrated. What the right trade agreement looks like I do not 
know, but we definitely need something.
    Senator King. Final point, and this is not Russia or China, 
but it is so topical I have to ask. Venezuela. This morning in 
an Intelligence Committee hearing, where I was before I came 
here, Senator Rubio listed refugee flow, human rights 
violations, corruption, alliance with adversaries. My problem 
is you could read that list along a lot of countries in the 
world. How do we define our vital interests in terms of 
intervening in another country no matter how bad the leader is? 
We have not had good luck with that.
    Mr. Colby. I think you are absolutely right, Senator. I 
think the main thing is maintaining favorable regional balances 
of power in the key regions of the world, which are Asia and 
Europe. Venezuela is a human tragedy and it is important for 
our interests, but it should not, as Senator Rubio I think 
said, be something of primary focus for our military forces, at 
least at this stage.
    Senator King. Mr. Wilson?
    Mr. Wilson. I agree that the focus is not military, but I 
do think the scale of the crisis unfolding in Venezuela is 
often underestimated. This is, I think, a first tier 
international crisis, and a strategy that is focused on how do 
you bolster the strong regional alliances and a lot of the 
democratic states willing to stand and help support the 
Venezuelan people, democratic forces in Venezuela, and for us 
to have a very keen sense that China, Russia, Cuba have been 
looking at how to use Venezuela as a base for their operations 
in this hemisphere. That is something I think we have to stay 
on top of.
    Senator King. Of course, ironically one of the results of 
our obviously and openly coming out against Maduro would be to 
strengthen Maduro. He could say this is 100 years of American 
imperialism. It is a very difficult situation. I appreciate 
your thoughts and thanks for joining us today.
    Thank you, Mr. Chairman.
    Chairman Inhofe. Thank you, Senator King.
    Senator Sullivan?
    Senator Sullivan. Thank you, Mr. Chairman.
    Gentlemen, thank you for--this has turned into a really 
good hearing--all of your public service to our country. I know 
all of you have served in different capacities, and I 
appreciate that as well.
    I want to continue this discussion on allies. Would you not 
all agree that probably our most important strategic advantage 
is that we are an ally rich Nation and our adversaries and 
potential adversaries are ally poor? Not a lot of countries 
looking to join the Iran team or the North Korea team or the 
Russia team or, for that matter, even the China team unless 
their arms are twisted. Is that not correct?
    I think Senator Kaine's line of questioning was really 
important. But in my discussions with the President--I do not 
see him--you know, the ``New York Times'' like to breathlessly 
report unnamed sources on the impending pullout of NATO. I do 
not believe that is happening. It is a problem, though, when 
you have countries like Germany that consistently spend about 1 
percent of their GDP. I do not even know if they are hitting 1 
percent now. Is that not a problem, Ambassador Wilson?
    Mr. Wilson. It is a problem.
    Senator Sullivan. What do we do about this? The President 
is trying to press them. I do not think he--or certainly there 
is not going to be support on pulling out of NATO. But at the 
same time, they are a very powerful country economically. They 
compete really hard against us, and they do not pull their 
weight. Is that not part of the problem?
    Mr. Wilson. Senator Sullivan, a couple points in response 
to that. Thank you.
    First, you are right. This is an alliance that, as the 
National Defense Strategy puts, is built on free will and 
shared responsibility, a fundamental difference. It is an 
incredible alliance structure not based on coercion and 
intimidation, but essentially inspiration. I think that is an 
important strategic asset.
    Second, the point of our clarity of resolve behind the 
alliance is so that we do not have our allies involved in 
hedging. Right now, there is an unhealthy debate, frankly, in 
Europe of whether we can count on the United States. I think it 
is a waste of time. The discussions in Europe about strategic 
autonomy are completely misplaced because it applies autonomy 
from the United States.
    Senator Sullivan. I am going to let you finish. But there 
is this notion that again comes up in the papers. But in terms 
of actions that we, this Congress and this administration, have 
taken with regard to Putin--let me just--Javelin missile system 
to Ukraine. Pretty important. Right?
    Mr. Wilson. Absolutely.
    Senator Sullivan. The previous administration would not do 
that. The previous President was essentially afraid to do that. 
We did that.
    A lot more troops in the Baltics and Poland. Correct?
    Mr. Wilson. That is correct.
    Senator Sullivan. Does Putin not understand, you know, 
101st Airborne on the ground and armor on the ground more than 
rhetoric?
    Mr. Wilson. I think there is no doubt that we have done 
more to bolster the alliance in recent years.
    Senator Sullivan. With actions.
    Mr. Wilson. Yes, with actions, with actions.
    Deterrence is credibility and capability, and we are moving 
on that capability side. We have to keep that credibility piece 
connected.
    Senator Sullivan. Are our European allies recognizing that? 
They recognize that the Ukrainians can now take out T-72 tanks 
in eastern Ukraine when a couple years ago they did not have 
that capacity. Or that we have troops in Poland or that we have 
troops in the Baltics? Is that recognized?
    Mr. Wilson. It is. Yes, it is.
    Senator Sullivan. What more do we need to do? This is just 
for all of the panelists because is there not a strategic 
competition for allies right now, and would Russia not love to 
splinter our NATO alliances? And would China not love to 
splinter our Japan, Australia, Korean alliances and troop 
deployments there? What should we be thinking, and what should 
this administration be doing more with regard to making sure 
that we double down on this strategic advantage, deepening 
current alliances and broadening alliances to other countries 
for both our competition with Russia and China?
    Mr. Wilson. I think that is exactly right. That premise is 
exactly right, Senator.
    As I see it, we need an intentional strategy on how--we are 
not just thinking about U.S. presence, which matters, but a 
U.S. strategy to bolster the capability and defenses of our 
allies, particularly those that are most capable and those that 
are closest to Russia.
    This is where I think our pressure has had some effect. We 
see $40 million more on the table this year. Germany is one of 
the key challenges. It now has set a pathway to achieve 1.5 
percent, not the 2 percent threshold.
    Senator Sullivan. By when?
    Mr. Wilson. By 2020--by 2024.
    Senator Sullivan. Is that not a problem?
    Mr. Colby. I think it is 2021 actually.
    Mr. Wilson. Yes, 2021.
    Mr. Colby. Can I just jump in?
    I think we need to be very clear that our burden sharing 
strategy has failed over the last generation, and it is 
absolutely unacceptable for our allies not to be carrying their 
weight. The Trump administration has, as you said, done more 
for European defense than anybody in a long time and has made 
more progress on burden sharing. There is a lot more to go. 
Things can be done better.
    I think, Senator, to your point, the National Defense 
Strategy was actually very consciously sketched out with this 
in mind, which is we got to get somewhere between, obviously, 
abandonment and basically giving the Europeans and the Asians 
the impression that we are going to be able to do everything. 
What it is saying is we are committed, but we cannot do 
everything. It is a credible signal of our limited ability to 
do everything. They need to step up.
    If they really want to be independent, if you are Japan, 
for instance, and you have had 1 percent--look, we have been 
trying to get the Japanese to do more on defense spending since 
the 1950s. In Germany, we had huge debates. The balance of 
payments crisis, and the Congress was very involved in that. We 
are going to need to be tough on them. The Germans cannot go to 
places like Davos and the Munich security conference and say we 
are the moral leaders of Europe without spending what is 
required of them. Now, they are making progress. But I think 
this body and others do need to maintain pressure even as we 
maintain the fundamental commitment. That is going just have to 
be a balancing act that policymakers are going to have to deal 
with.
    Senator Sullivan. I am finished unless Mr. Ratner wants to 
mention China.
    Dr. Ratner. I would be happy to respond if I had another 60 
seconds, Mr. Chairman.
    Chairman Inhofe. Yes, I know you would.
    [Laughter.]
    Chairman Inhofe. Thank you, Senator.
    Senator Blumenthal? Oh, I am sorry. Senator Jones.
    Senator Jones. Thank you, Mr. Chairman.
    And thank each of you for your service and also for being 
here today.
    Mr. Ratner, I would like to follow up on an area that has 
not really been touched on, but you touched on it primarily in 
your written statement. That is the idea about tariffs and how 
that is affecting our standing, particularly where we are with 
China. You talked about the harms caused by the 
administration's section 301 tariffs and section 232 tariffs, 
and I could not agree with you more on that.
    I have, last Congress, introduced a bill with Senator 
Alexander and others. I think Senator Blackburn is joining us 
on that, the Automotive Jobs Act, which really focuses on the 
automobile industry, but also a bill, the Trade Security Act, 
with Senator Portman and Senator Ernst that would really take 
the national security designation away from Commerce and put it 
with people who really know what they are talking about over at 
the Department of Defense.
    I was struck with Senator Sullivan's comments about we are 
an ally rich Nation and we are competing for allies. I think 
you alluded to this. We are kind of kicking our allies in the 
shins a little bit as we are focused on our trade and our 
tariffs with China.
    I would like for you, if you would, just elaborate a little 
bit on the negative consequences that you are seeing from the 
trade war, the trade strategy, for lack of a better term, that 
we see coming with the administration right now.
    Dr. Ratner. Sure, Senator. Thank you.
    As I said in my written testimony, I do think the way in 
which the Trump administration has applied tariffs against our 
allies and partners has been extremely harmful for a couple 
reasons. One, it has limited their political space to cooperate 
with us on other aspects of the China challenge and, in 
addition, has created an international narrative around 
American protectionism that is not differentiated between the 
illegal and unfair trade practices of the Chinese which should 
be our focus and around which we should be mobilizing our 
partners in the international community, differentiated from 
some of the lower level disagreements we have with allies and 
partners. So the fact that the administration led with the 232 
tariffs I think was unwise compared to a strategy that was very 
focused on China specifically.
    Senator Jones. Do you think we should try to move that 
designation of national security out of Commerce and over to 
Defense, or have you even had a chance to look at the bill that 
we introduced?
    Dr. Ratner. I have, Senator. In fact, in my 
recommendations, I would encourage Congress to constrain the 
ability of the administration in a variety of ways from having 
this authority on--particularly against U.S. security partners 
to use the national security authority for tariffs.
    Senator Jones. You mentioned targeted tariffs and other 
tools for curbing China's illegal behavior. Can you give me 
some specifics about what that might look like?
    Dr. Ratner. Sure. I think the Trump administration says 
they have done their best to target the tariffs at issues 
associated with some of their subsidies and Made in China 2025 
Plan. I think the reality is they are much more indiscriminate 
than that. I would certainly support tariffs against Chinese 
companies that are particularly benefiting from their unfair 
practices and some of their subsidies in a way that harm 
American interests.
    I think there is a space for tariffs particularly against 
the state-owned enterprises but indiscriminately I think is a 
less effective tool than targeted tariffs, as well as law 
enforcement measures and export controls and investment 
restrictions and the full suite of other defensive measures we 
have to deal with China's behavior.
    Senator Jones. Thank you.
    Mr. Colby, along the same lines, is Russia looking at this? 
Are they exploiting these divisions particularly by acting more 
aggressively abroad such as in the Baltic States?
    Mr. Colby. Well, I defer to Mr. Wilson. I think he knows a 
lot about that.
    I would say that the Russians are looking to exploit 
divisions within the alliance and the potential for them to use 
coercive measures, including military measures, that would play 
upon a lack of resolve and cohesion among the allies.
    Senator Jones. Mr. Wilson, do you want to respond?
    Mr. Wilson. I would just add that very much a Russian 
strategy is divide and conquer, where can they coerce decisions 
favorable to them through intimidation and coercion.
    The Baltic States actually have quite strong resolve across 
all of their political parties to manage this challenge. Where 
they see them being more effective is where they can peel off 
parties, peel off forces, influence the debate within 
countries, and we see that playing out very actively in a place 
like Ukraine today.
    Senator Jones. Well, thank you all for being here.
    Thank you, Mr. Chairman.
    Chairman Inhofe. Thank you, Senator Jones.
    Senator Blumenthal?
    Senator Blumenthal. Thank you, Mr. Chairman.
    Thank you all for being here today.
    I want to ask a kind of bigger picture question. I am 
struck being on this committee by how new forms of technology, 
whether it is hypersonic missiles or cyber, seem to be making 
some of our conventional weapons platforms more vulnerable, for 
example, aircraft carriers. They cost $12 billion, $13 billion 
or more. That is what the latest one costs. But I think there 
is growing evidence that they may be more susceptible to attack 
in various ways or disruption as contrasted with submarines 
that are still strong, stealthy, reliable not only as a means 
of nuclear deterrence but also the Virginia class fast attack 
is a very versatile and important force.
    I wonder if you could--and I am struck by your mention, Mr. 
Colby, about theories of victory that our adversaries may have. 
To what extent are our weapons platforms becoming more 
vulnerable? I am not going to say obsolete, but more vulnerable 
as a result of those new technologies.
    Mr. Colby. Well, thank you, Senator. I think the Chinese 
and the Russians have both spent the last 10 to 20 years 
specifically trying to do that.
    Essentially much of the force we have today is what you 
could think of as a middle weight force. It was designed to 
fight two simultaneous wars against a Middle East state and 
basically North Korea. And that assumed that something like an 
aircraft carrier could get close and pound the enemy or that we 
could operate from very concentrated nodal bases in the 
Pacific.
    We now have to go back to a situation, as we did during the 
Cold War, when we would expect our forces to be under attack. 
The fact that our forces are becoming more vulnerable is 
inevitable. Space satellites are going to be vulnerable. The 
carrier is going to be more vulnerable to things like anti-ship 
ballistic missiles.
    So the key question is, what do you do with it and how do 
you balance it against buys with things like submarines?
    As you know, the industrial base on our submarines is 
constrained. Unfortunately, it is decisions dating back to the 
early 1990s, which we now rue. I think a lot of what we need to 
be doing is certainly trying to keep as many submarines as 
possible in the fleet, maximizing magazine capability, 
including through, say, prepositioning, as well as developing 
things like unmanned underwater systems and the like and 
bringing our allies. The Japanese national defense planning 
guidelines that they just released are very commendable, 
focused on blocking potential adversary attacks on their 
islands and so forth. That is a lot of the things we can do.
    Senator Blumenthal. Any of you have thoughts about that 
topic?
    Dr. Ratner. No. Just that I agree. There are, of course, 
powerful bureaucratic and political interests in maintaining 
our existing force, and the effort to see the kind of 
substantial reform that is called for in the National Defense 
Strategy is going to require real leadership. I think 
intellectually people agree with this argument, but getting 
from here to there is the challenge before us.
    Mr. Colby. Senator, if I could just say--I am not sure you 
were here, but I think this, once more, gets back to the point 
of the threat, to Dr. Ratner's point about bureaucratic and 
organizational and political interests. These are life in the 
big city.
    But I think the point is if people truly understand and 
appreciate the degree and severity of the threat, it will be 
harder to make the sort of legacy-style arguments. You know, 
the carrier has a bright future if you look at things like 
longer-range unmanned aviation and these kinds of things. But 
that itself is a hard slog.
    Senator Blumenthal. You are ditto.
    Mr. Wilson. I defer to my colleagues on this.
    Senator Blumenthal. Thank you very much, Mr. Chairman.
    Thank you all.
    Chairman Inhofe. Thank you very much.
    First of all, we appreciate very much--this has been a real 
education I know for me and some of the others here. I 
appreciate it very much. It was not intended to go this long, 
but that was the level of interest in hearing from you folks 
and we appreciate it very much.
    With that, we are adjourned.
    [Whereupon, at 12:12 p.m., the subcommittee adjourned.]

                           APPENDIX A

      
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