[Senate Hearing 116-315]
[From the U.S. Government Publishing Office]
S. Hrg. 116-315
ADVANCING U.S. ENGAGEMENT AND COUNTERING
CHINA IN THE INDO PACIFIC AND BEYOND
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 17, 2020
__________
Printed for the use of the Committee on Foreign Relations
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web:
http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
42-239 PDF WASHINGTON : 2020
--------------------------------------------------------------------------------------
COMMITTEE ON FOREIGN RELATIONS
JAMES E. RISCH, Idaho, Chairman
MARCO RUBIO, Florida ROBERT MENENDEZ, New Jersey
RON JOHNSON, Wisconsin BENJAMIN L. CARDIN, Maryland
CORY GARDNER, Colorado JEANNE SHAHEEN, New Hampshire
MITT ROMNEY, Utah CHRISTOPHER A. COONS, Delaware
LINDSEY GRAHAM, South Carolina TOM UDALL, New Mexico
JOHN BARRASSO, Wyoming CHRISTOPHER MURPHY, Connecticut
ROB PORTMAN, Ohio TIM KAINE, Virginia
RAND PAUL, Kentucky EDWARD J. MARKEY, Massachusetts
TODD YOUNG, Indiana JEFF MERKLEY, Oregon
TED CRUZ, Texas CORY A. BOOKER, New Jersey
DAVID PERDUE, Georgia
Christopher M. Socha, Staff Director
Jessica Lewis, Democratic Staff Director
John Dutton, Chief Clerk
(ii)
C O N T E N T S
----------
Page
Risch, Hon. James E., U.S. Senator From Idaho.................... 1
Prepared Statement........................................... 3
Menendez, Hon. Robert, U.S. Senator From New Jersey.............. 5
Prepared Statement........................................... 7
Stilwell, Hon. David R., Assistant Secretary for East Asian and
Pacific Affairs, U.S. Department of State, Washington, DC...... 9
Prepared Statement........................................... 13
Reeker, Hon. Philip T., Senior Bureau Official, Bureau of
European and Eurasian Affairs, U.S. Department of State,
Washington, DC................................................. 20
Prepared Statement........................................... 23
Chung, Julie J., Principal Deputy Assistant Secretary for Western
Hemisphere Affairs, U.S. Department of State, Washington, DC... 25
Prepared Statement........................................... 27
Additional Material Submitted for the Record
Responses of Assistant Secretary David R. Stilwell to Questions
Submitted by Senator Robert Menendez........................... 57
Responses of Ambassador Philip T. Reeker to Questions Submitted
by Senator Robert Menendez..................................... 59
Responses of Principal Deputy Assistant Secretary Julie J. Chung
to Questions Submitted by Senator Robert Menendez.............. 60
Responses of Ambassador Philip T. Reeker to Questions Submitted
by Senator Ben Cardin.......................................... 62
Responses of Assistant Secretary David R. Stilwell to Questions
Submitted by Senator Edward J. Markey.......................... 65
Responses of Ambassador Philip T. Reeker to Questions Submitted
by Senator Edward Markey....................................... 66
Responses of Assistant Secretary David R. Stilwell to Questions
Submitted by Senator Ted Cruz.................................. 68
Responses of Assistant Secretary David R. Stilwell to Questions
Submitted by Senator Cory Booker............................... 69
(iii)
ADVANCING U.S. ENGAGEMENT AND COUNTERING
CHINA IN THE INDO-PACIFIC AND BEYOND
----------
THURSDAY, SEPTEMBER 17, 2020
U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 10:03 a.m., in
room SD-106 and videoconference, Dirksen Senate Office
Building, Hon. James E. Risch, chairman of the committee,
presiding.
Present: Senators Risch [presiding], Gardner, Romney,
Portman, Young, Cruz, Perdue, Menendez, Cardin, Shaheen, Coons,
Murphy, and Merkley.
OPENING STATEMENT OF HON. JAMES E. RISCH,
U.S. SENATOR FROM IDAHO
The Chairman. Senate Foreign Relations Committee will come
to order. And welcome, everyone, and good morning.
We are going to have Senators participating both live and
virtually. As a result of that, since it is difficult to
determine when they showed up virtually, what we are going to
do is go on seniority. So, if that is agreeable with everyone,
that is what we will do.
And today, we welcome three witnesses to talk with us:
David Stilwell, who is Assistant Secretary of State for East
Asian and Pacific Affairs; Philip Reeker, Senior Bureau
Official for the Office of European and Eurasian Affairs; and
Julie Chung, Principal Deputy Assistant Secretary for Western
Hemisphere Affairs. Appreciate all of you being here this
morning.
Today, of course, we are going to be talking about China.
And obviously, China presents us with many challenges--with
opportunities also, but, right now, challenges. And there has
been a lot of legislation that has been introduced, as far as
China is concerned. What we are--there was a bill that we
introduced earlier this year that tries to bring together as
many as possible. I am told that, just recently as maybe today
or yesterday, that the Minority introduced a bill, of which
Senator Schumer is the lead sponsor of the bill. But, in any
event, this is not a partisan issue. This is an American issue.
And when I put the bill together originally, I did so to bring
together the thought process from all sides. And we consulted
with a number of people, both on this side of the aisle and on
the other side of the aisle, and there is a lot of input from a
lot of bipartisan effort in the bill. In addition to that, we
went out to the think tanks, both Republican, Democrat,
conservative, liberal, and got those in the bill. I am glad to
hear that there has been this bill introduced by the Minority.
I am hoping we can bring them all together into one bill that
we can all get behind, because, as I said, this is an American
issue, it is not a partisan issue.
In July, Deputy Secretary Biegun testified before the
committee on the Administration's strategy for advancing
effective competition with China. Today, we will take a deeper
look at U.S. strategy in three important regions: the Indo-
Pacific, Europe, and the Western Hemisphere.
This hearing has three objectives. First, I look forward to
Department's assessment of China's impact in these regions,
what China's interests are, and what it is doing to secure
those interests. A lot of those activities, of course, are
common knowledge, and they are in the popular press, but there
are other things going on that I think it is important that we
drill down to.
Secondly, and even more important, we are here today to
better understand in concrete and specific terms how the United
States is advancing our interests, expanding our alliances and
partnerships, and countering China's attempts to undermine
prosperity, security, and good governance in these regions.
Again, that is an important thing to shed light on for the
American people. Certainly, those of us who deal in these kinds
of things are well aware of China's activities everywhere. We
all know that virtually everywhere you go in the world, China
is there, attempting to better its position. And I think it is
important that we shine a light on this.
In the Strategic Act of the bill I talked about, that I
introduced earlier, I make clear that we must address China as
a global challenge. It is my view that our highest priority in
American foreign policy must be the Indo-Pacific region. The
future of the region is decisive for the United States, both
economically and in terms of security. Prioritizing the Indo-
Pacific means several things. It means expanding our economic
engagement in the region's growing markets, especially in
Southeast Asia. It means consistently demonstrating the
political will to deepen existing treaty alliances and grow
other security partnerships. And it means ensuring the region
is resourced properly as a proportion of the State Department's
budget and personnel. China's primary foreign policy objective
is to achieve regional supremacy in the Indo-Pacific, and then
to use that dominant position to propel itself into becoming a
leading world power. Getting our policy right in this region
impacts our policy in the other regions we are examining today.
On Europe, one of my major priorities is to help advance a
constructive agenda with our transatlantic partners on the
shared challenges China presents. We are already moving in that
direction, and I have met with numerous leaders from European
countries, and exchanged ideas, and I can tell you that that
idea is hitting a welcoming audience.
On both sides of the Atlantic, we have strengthened
investment screening to protect critical infrastructure and
technologies. We are cooperating to uphold the integrity of
international institutions, and the United Kingdom, France,
Germany, and others are deepening their engagement in the Indo-
Pacific. This is a good foundation. We can, and must, build on
it together and thwart the Chinese government's efforts to
divide us from one another. I am very encouraged that the
United States has agreed to join the new dialogue on China that
was proposed by the European Union, and I look forward to
hearing about that and other efforts today.
In the Western Hemisphere, the negative effects of Chinese
influence are clear. This includes China's predatory finance
mechanisms for infrastructure projects all around the world,
projects that are often of questionable value and create high
debt burdens, severe environmental damage, and social unrest.
Aggressive and illegal Chinese fishing practices violate
territorial integrity of coastal Latin American countries,
raising significant long-term security concerns. And China's
blatant efforts to trade on the lives of Canadians citizens of
Michael Spavor and Michael Kovrig are appalling. I am
encouraged by President Trump's efforts to reaffirm U.S.
leadership in the region and his willingness to collaborate
with our neighbors to promote a more prosperous future through
transparent and accountable frameworks.
Finally, this hearing is an opportunity to conduct
oversight of the Department's coordination of U.S. strategy and
initiatives across these different regions. This coordination
is important to ensuring that our strategy is articulated
coherently and executed effectively.
Again, thank you, to the witnesses, for being here.
And I am going to turn it over now to Senator Menendez, who
I know shares many, many of my concerns in this regard. And
hopefully, we will be able to work together to create an
American answer to these.
So, Senator Menendez.
[The prepared statement of Chairman Risch follows:]
Prepared Statement of Chairman James E. Risch
Welcome everyone and good morning.
We are going to have senators participating both live and
virtually. As a result of that, since it's difficult to determine when
they showed up virtually, what we're going to do is go on seniority. So
if that's agreeable with everyone, that's what we will do.
Today, we welcome three witnesses to talk with us: David Stilwell,
who's Assistant Secretary of State for East Asian and Pacific Affairs;
Philip Reeker, Senior Bureau Official for the Office of European and
Eurasian Affairs; and Julie Chung, Principal Deputy Assistant Secretary
for Western Hemisphere Affairs. I appreciate you all being here this
morning.
Today we're going to be talking about China, and obviously China
presents us with many challenges. With opportunities also, but right
now challenges.
There's been a lot of legislation that has been introduced as far
as China is concerned. There was a bill that we introduced earlier this
year that tries to bring together as many as possible. I'm told that
just recently, maybe today or yesterday, the minority introduced a bill
of which Senator Schumer is the lead sponsor of the bill, I'm told.
But in any event, this is not a partisan issue. This is an American
issue. When I put the bill together originally, I did so to bring
together a thought process from all sides. We consulted with a number
of people, both on this side of the aisle and on the other side of the
aisle, and there's a lot of input from a bipartisan effort in the bill.
In addition to that, we went out to the think tanks, Republican,
Democrat, conservative, liberal, and got those in the bill. I'm glad to
hear there has been this bill introduced by the minority. I'm hoping we
can bring them all together into one bill that we can all get behind.
Because as I said, this is an American issue. It is not a partisan
issue.
In July, Deputy Secretary Biegun testified before the committee on
the Administration's strategy for advancing effective competition with
China. Today we will take a deeper look at U.S. strategy in three
important regions: the Indo-Pacific, Europe, and the Western
Hemisphere.
This hearing has three objectives.
First, I look forward to the Department's assessment of China's
impact in these regions--what China's interests are and what it is
doing to secure those interests. A lot of those activities, of course,
are common knowledge and they're in the popular press. But there are
other things going on that I think it's important we drill down to.
Second, and even more importantly, we are here today to better
understand--in concrete and specific terms--how the United States is
advancing our interests, expanding our alliances and partnerships, and
countering China's attempts to undermine prosperity, security, and good
governance in these regions.
Again, that's an important thing to shed light on for the American
people. Certainly, those of us who deal in these kinds of things are
well aware of China's activities everywhere. We all know that virtually
anywhere you go in the world, China is there attempting to better its
position. I think it's important that we shine a light on this.
In the STRATEGIC Act, the bill I talked about that I introduced
earlier, I make clear that we must address China as a global challenge.
It is my view that our highest priority in American foreign policy must
be the Indo-Pacific region. The future of the region is decisive for
the United States--both economically and in terms of security.
Prioritizing the Indo-Pacific means several things. It means
expanding our economic engagement in the region's growing markets,
especially in Southeast Asia. It means consistently demonstrating the
political will to deepen existing treaty alliances and grow other
security partnerships. And it means ensuring the region is resourced
properly as a proportion of the State Department's budget and
personnel.
China's primary foreign policy objective is to achieve regional
supremacy in the Indo-Pacific, and then to use that dominant position
to propel itself into becoming a ``leading world power.'' Getting our
policy right in this region impacts our policies in the other regions
we're examining today.
On Europe, one of my major priorities is to help advance a
constructive agenda with our transatlantic partners on the shared
challenges China presents. We're already moving in that direction, and
I've met with numerous leaders from European countries and exchanged
ideas. I can tell you that that idea is hitting a welcoming audience.
On both sides of the Atlantic, we have strengthened investment
screening to protect critical infrastructure and technologies. We are
cooperating to uphold the integrity of international institutions. And
the United Kingdom, France, Germany, and others are deepening their
engagement in the Indo-Pacific.
This is a good foundation. We can and must build on it together,
and thwart the Chinese government's efforts to divide us from one
another. I am very encouraged that the United States has agreed to join
the new dialogue on China that was proposed by the European Union, and
I look forward to hearing about that and other efforts today.
In the Western Hemisphere, the negative effects of Chinese
influence are clear. This includes China's predatory finance mechanisms
for infrastructure projects all around the world. Projects that are
often of questionable value, and create high debt burdens, severe
environmental damage, and social unrest. Aggressive and illegal Chinese
fishing practices violate the territorial integrity of coastal Latin
American countries, raising significant long-term security concerns.
And China's blatant efforts to trade on the lives of Canadian citizens
Michael Spavor and Michael Kovrig are appalling.
I am encouraged by President Trump's efforts to reaffirm U.S.
leadership in the region and his willingness to collaborate with our
neighbors to promote a more prosperous future through transparent and
accountable frameworks.
Finally, this hearing is an opportunity to conduct oversight of the
Department's coordination of U.S. strategy and initiatives across all
these different regions. This coordination is important to ensuring
that our strategy is articulated coherently and executed effectively.
Again, thank you to the witnesses for being here. I'm going to turn
it over now to Senator Menendez, who I know shares many of my concerns
in this regard, and hopefully we'll be able to work together to create
an American answer.
STATEMENT OF HON. ROBERT MENENDEZ,
U.S. SENATOR FROM NEW JERSEY
Senator Menendez. Thank you, Mr. Chairman. And my thanks
for convening today's hearing.
As you and I have discussed, we share a common view that we
have entered a new and more competitive era with China, China
now displaying global ambitions, which is why I think many on
this committee have concerns that the Administration's
strategies and policies to deal with this new China still fall
well short of answering the enormity of the challenge.
China today, led by the Communist Party and propelled by Xi
Jinping's hyper-nationalism, is unlike any challenge we have
faced as a Nation before. And, as we will have an opportunity
to discuss today, China is more active and more assertive
around the globe than ever before.
Unfortunately, during the last 4 years, the Trump agenda
has served to only empower Chinese aggression, weaken U.S.
influence, and fail American workers. This moment demands a
strong, strategic response that can begin to rebuild American
leadership and invest in our ability to out-compete China in
the generation ahead.
That is why today I have joined with a number of my
Democratic colleagues to introduce the America LEADS Act. This
bill seeks to do three things: invest in American
competitiveness, invest in American alliances and partners,
invest in our values, and invest, I would add, in our economic
statecraft and ensure China pays a price for its predatory
actions.
America LEADS provides a comprehensive and coherent
strategy and strategic approach for addressing the new
competitive U.S.-China relationship, and defines policies and
allocate critical resources that combine and mobilize all
aspects of U.S. national power, starting with the recognition
that American competitiveness starts with investments here at
home--in our workers, in education, in science and technology,
and in innovation--and driven by the need, after almost 4 years
of destruction under President Trump, to retool the U.S.
economy and workforce to compete in the 21st century. The
broader diplomatic and security architecture of our strategic
approach in America LEADS is grounded in getting China right by
first getting the Indo-Pacific strategy right, centered in our
alliances and partnerships, animated by the values that make
America exceptional, and furthered by a forward-leaning
approach to our economic statecraft and a tough, pragmatic, and
realistic appraisal of how to best combat China's predatory
economic and trade policies.
Critically, and relevant to today's hearing, the
legislation also includes provisions for the development and
implementation of robust regional strategies to meet the
challenge that China poses in Europe, the Western Hemisphere,
Africa, the Middle East, the Arctic, and, of course, the Indo-
Pacific itself. I know the Chairman has China-centered
legislation, as well, that addresses many similar issues. And,
as we discussed at the hearing with Mr. Biegun the other month,
I look forward to working with him on areas of convergence
between our bills to forge a strong, unified, and bipartisan
approach on this issue.
Turning more specifically to the hearing today, I am very
interested in hearing from Ambassador Reeker and Ms. Chung to
get a sense of their perspective on where we stand in their
respective regions of responsibility, Europe and Western
Hemisphere. There is a lively debate across EU countries, and
between Europe and the United States, on the right approach to
China. So, as we are here in the U.S.--so, as we here in the
U.S. fully come to grips with developing the right policy, our
friends in Europe should be among our closest partners.
I do not know that anyone would argue that the President's
destructive approach to the transatlantic relationship has made
our efforts to advance a joint agenda on China any easier.
Imposing tariffs on our allies is not a good recipe for
success. Personally and publicly insulting leaders across
Europe is not a recipe for success. An essential building block
of our China response must have at its core a strong
transatlantic alliance, which today, of course, does not exist
as it has in the past.
And, for too long, the U.S. has sought to pressure Europe
without providing real alternatives to China. 5G is perhaps the
best example where the United States did not adequately
emphasize European alternatives to Huawei while simply
pressuring our allies. That sort of approach is not sustainable
for forging a joint strategy on China.
But, even within the strained confines of President Trump's
idea of transatlantic relations, we have to endeavor to make
progress. I welcome the call by EU's Josep Borrell for a U.S.-
EU Working Group on China. That is an important first step. The
details will matter to ensure that it is not just another talk
shop, and I look forward to hearing more about this initiative
from Ambassador Reeker.
The power of the American economy and European economy,
working together, provides formidable negotiating leverage,
vis-a-vis China. In fact, it may be the sole factor that truly
moves the needle with Beijing. We should be laser focused in
enhancing that leverage to the fullest extent possible.
Here in our own hemisphere, U.S. diplomatic and economic
engagement and China's presence need not be viewed through the
solitary lens of a zero-sum game. However, when we fail to show
up, as, under President Trump, we have, we should not be
surprised that China's influence expands at our expense. And
the President's misguided belief that every challenge needs to
be solved with a sledge hammer, whether it was placing punitive
tariffs on our North American neighbors or cutting foreign
assistance off to our Central American partners, has only
inflicted damage on the very relationships we need to counter
the more corrosive elements of China's engagement in our
hemisphere. And, frankly, the Trump administration's results
speak for themselves.
Since 2017, at a rate of one per year, Panama, the
Dominican Republic, El Salvador have broken diplomatic
relations with Taiwan at the behest of Beijing. In Venezuela,
utilizing the ZTE surveillance technology in the form of the
``carnet de la patria,'' the Maduro regime has expanded its
social control over the Venezuelan people, and remains firmly
in control of its criminal cabal. When our allies in Canada
rightfully arrested Huawei CFO Meng Wanzhou for extradition to
the United States, the Trump administration responded with
little more than press statements as Beijing placed tariffs on
Canadian trade and kidnapped Canadian citizens under fabricated
criminal charges.
And, most recently, as Latin America and the Caribbean has
become the epicenter of the global COVID-19 pandemic, the Trump
administration has overpromised and under-delivered on
coronavirus assistance, while China's government committed a
billion dollars in new lending to governments in the region for
vaccine access and delivery.
And the Development Finance Corporation, which Congress
stood up precisely to provide a new and reinvigorated approach
to international finance and development assistance, in part so
that we could better compete with China, has yet to make
significant investments in our own hemisphere.
When it comes to addressing China's presence in our
hemisphere, the Trump administration's rhetoric has outpaced
its actions, and its attempts at swagger have surpassed the
need for substance. We must course-correct. That is why, last
month, I was proud to introduce the Advancing Competitiveness,
Transparency, and Security in the Americas, with Senators
Rubio, Cardin, Cruz, and Kaine. This groundbreaking bipartisan
bill will strengthen U.S. diplomatic, economic, and security
assistance in the Americas and help our closest partners
acquire the tools they need to defend their national interests
from China's predatory practices.
Given the shortcomings of President Trump's ``all bluster
and tactics, no strategy'' approach to China in Europe, in the
Western Hemisphere, and elsewhere, it is more and more clear by
the day that we need a real strategy to cope with the
competitive challenge of China.
So, I look forward to a genuine conversation with our
witnesses about how we can work together to develop a
comprehensive approach to China, to reset our strategy and
diplomacy, to reinvest and replenish the resources of our
national strength and competitiveness at home, to place our
partnerships and allies first, that reflects our fundamental
values as Americans.
Thank you, Mr. Chairman.
[The prepared statement of Senator Menendez follows:]
Prepared Statement of Senator Robert Menendez
Mr. Chairman, my thanks for convening today's hearing. As you and I
have discussed, we share a common view that we have entered a new and
more competitive era with China . . . a China now displaying global
ambitions . . . and where I think many on this Committee have concerns
that the Administration's strategies and policies to deal with this new
China still fall well short of answering the enormity of the challenge.
China today, led by the Communist Party and propelled by Xi
Jinping's hyper-nationalism is unlike any challenge we have faced as a
nation before--and as we will have an opportunity to discuss today
China today is also more active and more assertive around the globe
than ever before.
And unfortunately, during the last 4 years, the Trump agenda has
served to only empower Chinese aggression, weaken U.S. influence, and
fail American workers. This moment demands a strong, strategic response
that can begin to rebuild American leadership and invest in our ability
to out-compete China in the generation ahead.
That is why today I have joined with a number of my Democratic
colleagues to introduce the America LEADS Act. This bill seeks to do
three things: (1) invest in American competitiveness; (2) invest in
American alliances and partners; (3) invest in our values, and (4)
invest in our economic statecraft and ensure China pays a price for its
predatory actions.
America LEADS provides a comprehensive and coherent strategic
approach for addressing the new, competitive, U.S.-China relationship
and to define policies and allocate critical resources that combine and
mobilize all aspects of U.S. national power--starting with a
recognition that American competitiveness starts with investments here
at home--in our workers, in education, in science and technology, and
in innovation . . . and driven by the need, after almost 4 years of
destruction under President Trump, to re-tool the U.S. economy and
workforce to compete in the twenty-first century.
The broader diplomatic and security architecture of our strategic
approach in America LEADS is grounded in getting China right by first
getting the Indo-Pacific strategy ``right,'' centered on our alliances
and partnerships, and animated by the values that make America
exceptional, and furthered by a forward-leaning approach to our
economic statecraft and a tough, pragmatic and realistic appraisal of
how to best combat China's predatory economic and trade practices.
Critically, and relevant to today's hearing, the legislation also
includes provisions for the development and implementation of robust
regional strategies to meet the challenge that China poses in Europe,
the Western Hemisphere, Africa, the Middle East, the Arctic, and, of
course, the Indo-Pacific itself.
I know the Chairman has China-centered legislation as well that
addresses many similar issues, and, as we discussed at the hearing with
Mr. Biegun the other month I look forward to working with him on the
areas of convergence between our bills to forge a strong, unified, and
bipartisan approach on this issue.
Turning more specifically to the hearing today, I am very
interested in hearing from Ambassador Reeker and Ms. Chung to get a
sense of their perspective on where we stand in their respective
regions of responsibility, Europe and the Western Hemisphere.
There is a lively debate across EU countries--and between Europe
and the United States--on the right approach to China. So as we here in
the U.S. fully come to grips with developing the right policy, our
friends in Europe should be among our closest partners.
I don't know that anyone would argue that the President Trump's
destructive approach to the transatlantic relationship has made our
efforts to advance a joint agenda on China any easier. Imposing tariffs
on our allies is not a good recipe for success. Personally and publicly
insulting leaders across Europe is not a recipe for success. An
essential building block of our China response must have at its core a
strong transatlantic alliance. Which today of course does not exist.
And for too long, the U.S. has sought to pressure Europe without
providing real alternatives to China. 5G is perhaps the best example
where the U.S. did not adequately emphasize European alternatives to
Huawei while simply pressuring our allies. That sort of approach isn't
sustainable for forging a joint strategy on China.
But even within the strained confines of President Trump's idea of
transatlantic relations, we must endeavor to make progress. I welcome
the call by the EU's Joseph Borrell for a U.S.-EU working group on
China. This is an important first step. The details will matter to
ensure that it is not just another talk shop and I look forward to
hearing more about this initiative from Ambassador Reeker.
The power of the American economy and European Union economy
working together provides formidable negotiating leverage vis a vis
China. In fact, it may be the sole factor that truly moves the needle
with Beijing. We should be laser focused in enhancing that leverage to
the fullest extent possible.
Here in our own hemisphere, U.S. diplomatic and economic engagement
and China's presence need not be viewed through the solitary lens of a
zero-sum game. However, when we fail to show up--as under President
Trump we have--we should not be surprised that China's influence
expands at our expense. And the President's misguided belief that every
challenge needs to be solved with a sledgehammer--whether it was
placing punitive tariffs on our North American neighbors or cutting off
foreign assistance to our Central American partners--has only inflicted
damage on the very relationships we need to counter the more corrosive
elements of China's engagement in our hemisphere.
And, frankly, the Trump administration's results speak for
themselves.
Since 2017, at a rate of one per year, Panama, the Dominican
Republic, and El Salvador have broken diplomatic relations with Taiwan
at the behest of Beijing.
In Venezuela, utilizing ZTE's surveillance technology in the form
of the Carnet de la Patria, the Maduro regime has expanded its social
control over the Venezuelan people and remains firmly in control of its
criminal cabal.
When our allies in Canada rightfully arrested Huawei CFO Meng
Wanzhou for extradition to the United States, the Trump administration
responded with little more than press statements as Beijing placed
tariffs on Canadian trade and kidnapped Canadian citizens under
fabricated criminal charges.
And, most recently, as Latin America and the Caribbean has become
the epicenter of the global COVID-19 pandemic, the Trump administration
has over-promised and under-delivered on coronavirus assistance, while
China's government committed $1 billion in new lending to governments
in the region for vaccine access and delivery.
And the Development Finance Corporation, which Congress stood up
precisely to provide a new and reinvigorated approach to international
finance and development assistance in part so that we can better
compete with China, has yet to make significant investments in our own
hemisphere.
When it comes to addressing China's presence in our hemisphere, the
Trump administration's rhetoric has outpaced its actions and its
attempts at swagger have surpassed the need for substance. We must
course correct.
That's why last month, I was proud to introduce the Advancing
Competitiveness, Transparency, and Security in the Americas with
Senators Rubio, Cardin, Cruz, and Kaine. This groundbreaking bipartisan
bill will strengthen U.S. diplomatic, economic, and security assistance
in the Americas, and help our closest partners acquire the tools they
need to defend their national interests from China's predatory
practices.
Given the shortcomings of President Trump's ``all bluster and
tactics, no strategy'' approach to China in Europe, in the Western
Hemisphere, and elsewhere, it is more and more clear by the day that we
need a real strategy to cope with the competitive challenge of China .
. . so I look forward to a genuine conversation with our witnesses
about how we can work together to develop a comprehensive approach to
China . . . to reset our strategy and diplomacy . . . to reinvest and
replenish the sources of our national strength and competitiveness at
home . . . to place our partnerships and allies first . . . and that
reflects our fundamental values as Americans.
Thank you, Mr. Chairman.
The Chairman. We will now turn to our first witness.
David Stilwell is the Assistant Secretary of State for the
Bureau of East Asian and Pacific Affairs. Prior to his
appointment as Assistant Secretary, he served in the Air Force
for 35 years. He retired in 2015, with the rank of brigadier
general, as the Asia Advisor to the Chairman of the Joint
Chiefs. He served multiple tours of duty in Japan and Korea,
and with the Defense Attache at the U.S. Embassy in Beijing.
Most recently, he served as the Director of the China Strategic
Focus Group at U.S. Indo-Pacific Command in Hawaii.
Assistant Secretary Stilwell, we welcome you. The floor is
yours.
STATEMENT OF HON. DAVID R. STILWELL, ASSISTANT SECRETARY FOR
EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF STATE,
WASHINGTON, DC
Mr. Stilwell. Thank you, Chairman Risch, Ranking Member
Menendez, and members of the Foreign Relations Committee.
We appreciate the opportunity to testify before this
committee to discuss the threat posed by the Chinese Communist
Party, that threat to the United States and the global order,
and what we are doing about it.
I am here to tell you--today with several Department
colleagues. The fact that the three of us are testifying on CCP
malign influence across three different geographic regions is a
testament to the global challenge we face and how the
Department is adjusting to meet this challenge.
For years, we and the international community credited
Beijing's commitments that facilitating China's entry into the
rules-based international order would lead to increasing
domestic reform and opening. Beijing's persistent flouting of
these commitments has shattered those illusions. It is now
clear to us, and to more and more countries around the world,
that PRC foreign and security policy seeks to reshape the
international environment around the narrow interests and
authoritarian values of a single beneficiary; that is, the
Chinese Communist Party.
Beijing's malign conduct is increasingly being noticed:
bullying behavior of foreign companies and governments,
manipulation of international organizations, silencing critics
abroad, buying, stealing, or forcing tech transfers, spreading
disinformation, egregious human rights abuses, stabilizing--or
destabilizing territorial revisionism. Beijing's cover-up of
the outbreak of COVID-19 especially highlighted the global
dangers of the CCP's lack of transparency and use of
disinformation.
Today, we are engaging with the Chinese Communist Party as
it is, and not as we wish it would be or as it seeks to present
itself rhetorically. Our competition with the People's Republic
of China need not lead to conflict. In fact, by competing, we
are restoring balance and stability in areas where the United
States and the world previously allowed Beijing to foment
imbalance and instability.
At the State Department, our China policy efforts are
guided by the 2017 National Security Strategy and grouped
around four pillars laid out in that Strategy: protect American
people, homeland, and way of life; promote American prosperity;
preserve peace through strength; and advance American
influence. We have organized to ensure that all our officers
have sufficient policy clarity, training, resources, data, and
messaging direction to successfully tackle the China challenge.
This has meant breaking down bureaucratic barriers, shifting
resources, and developing new coordination mechanisms. We have
developed new data-driven diplomacy tools to give our officers
the information and analysis they require. We have asked all of
our posts to designate officers to focus specifically on China
policy portfolio. In response, they have drastically increased
their diplomatic reporting on CCP activities and influence. We
are also tripling our cadre of forward-deployed, regionally-
focused China experts who support our posts and identify
regional trends in Chinese Communist Party behavior.
In the information space, the battle against CCP malign
activities requires messaging that is well-informed, well-
crafted, and well-executed around the world. Our public
diplomacy teams work with the Bureau of Global Public Affairs
and the Global Engagement Center to promote a positive vision
of U.S. leadership, expose PRC malign conduct, and counter
propaganda and disinformation.
In the economic sphere, PRC state-led lending and
investment distorts markets, encourages corruption, and creates
an uneven playing field for American companies and local
competitors. We are on the forefront of raising global
awareness about this. With bipartisan congressional support, we
and other agencies are deploying new and innovative mechanisms
in key areas, including strategic infrastructure, energy,
commercial competition, and investment screening.
In the technology arena, we have taken important measures
to deny the PRC the ability to acquire sensitive technologies
to further its mil-civ strategy. These measures include
ensuring PLA-affiliated STEM students and researchers are not
able to enter the United States for graduate-level study in
fields related to military modernization and informing
universities of the risks of partnering with PRC institutions.
For over 2 years, we have called on countries to secure
their 5G networks from untrusted vendors, and more and more
countries and companies are doing--and companies are doing just
that. Last month, Secretary Pompeo announced the Clean Networks
Initiative, focused on safeguarding citizens' privacy and
companies' most sensitive information from manipulation or
disruption by foreign adversaries, including via apps in app
stores, cloud service providers, and undersea cables. We are
also bringing transparency and reciprocity to Beijing's vectors
of malign influence, including propaganda outlets, Confucius
Institutes, United Front organizations, state-owned
enterprises, and more. Since February, we have designated as
foreign missions the U.S.-based operations of nine propaganda
outlets and the Confucius Institutes U.S. Center. In March, we
capped the number of PRC nationals allowed to work at these
designated state media outlets. In July, we closed the PRC
consulate in Houston due to serious concerns about the
inappropriate activities of its diplomats. We now require
senior PRC diplomats to seek permission before many meetings,
large events, and visits to academic institutions, as Beijing
has long done to our diplomats in China.
In support of these efforts, we sincerely appreciate
congressional leadership in establishing the new Counter China
Influence Fund in Fiscal Year 2020 appropriations bill. This
very important provision provides the Department with a
flexible mechanism that will bolster our efforts to strengthen
our partners' resiliency to Chinese malign influence worldwide.
The initial round of CCIF funding solicitation resulted in over
400 project submissions from around the globe, with demand far
outstripping the appropriated funding.
If I can just continue, there is a lot to go over, here.
Turning to the broader region, the resilience and strength
of our global alliances and partnerships is paramount to
addressing strategic competition with China, and in no region
is this more true than the Indo-Pacific. Our Indo-Pacific
vision is about supporting the sovereignty, autonomy, and
pluralism of Indo-Pacific states facing Beijing's attempts to
dominate the region. We support a region that is open to trade
and investment, free from coercion, and secure. The United
States and a diverse cohort of allies and partners now speak
clearly in terms of the Indo-Pacific.
Similar concepts have been put forward by Japan, India,
Australia, Taiwan, and South Korea, as well as by ASEAN in the
ASEAN Outlook for the Indo-Pacific, showing remarkable
alignment across our partners. We advanced our economic
initiatives in lockstep with our allies and partners in areas
like high-standard infrastructure, energy security, investment
screening, and many more. We are strengthening commercial
diplomacy to boost alternatives to PRC predatory economics that
leaves countries saddled with unsustainable debt and vulnerable
to political and economic pressure.
To promote good governance, we launched the Indo-Pacific
Transparency Initiative, 2 years ago, which has programs
focused on particular vectors of PRC influence, including
corruption, disinformation, and information control, and
coercive financing.
We are reinforcing our security commitments. Security
assistance helps partners protect their sovereignty and
maritime resources. We have doubled development assistance to
Pacific island partners through the Pacific Pledge. We are
developing new arrangements to coordinate with like-minded
partners. In September 2019, the first quad ministerial-level
meeting of the United States, Australia, India, and Japan
marked a new milestone in Indo-Pacific diplomatic engagement.
Respecting Taiwan, our U.S. commitment to implementing the
Taiwan Relations Act and the Six Assurances is firm, as is our
commitment to the one-China policy, including our insistence
that cross-Strait issues be resolved peacefully, without
coercion or intimidation. Recent visit by Secretary Azar
demonstrates that the United States will work with Taiwan on
vital issues, such as global health. Upcoming dialogues will
further advance our robust economic ties. We will also continue
to vigorously support Taiwan's meaningful participation in
international organizations.
On the South China Sea, Secretary Pompeo, this summer,
announced a change in U.S. policy on maritime claims, making
clear that Beijing's claims to offshore resources across most
of the South China Sea are unlawful, as is its campaign of
bullying to control them. Last month, the Secretary also
announced visa restrictions for employees of PRC state-owned
enterprises involved in South China Sea militarization,
including the China Communications Construction Company. This
was coordinated with Department of Commerce additions to the
Entity List.
In all of our efforts, outreach to other countries is
critical, and we are seeing results. Dozens of countries have
now taken action to restrict untrusted Beijing-linked vendors
from their 5G networks. We have also seen stricter investment
screening mechanisms in the EU and more than a dozen other
countries. Some 54 countries came together to deny the PRC
candidate to the top leadership position in the World
Intellectual Property Organization. Twenty-three countries
joined us in cosigning a joint event on Xinjiang at the U.N.
Third Committee. More and more countries are taking action
against Confucius Institutes, United Front organizations, and
propaganda outlets. We have released several joint statements
on Hong Kong with allies and partners, many of whom have
suspended extradition treaties with Hong Kong and imposed
export controls. We are encouraging all countries to push for
transparency and reciprocity in the relations with the PRC, and
to expose and counter CCP vectors of influence and
interference, including by PRC state media personnel,
diplomats, PLA researchers, and state enterprise and employees,
and others.
In conclusion, the United States continues to have an
important relationship with the PRC, as do most countries in
the world. We are not asking countries to choose between the
United States and China, but to hold Beijing accountable for
its malign behavior and, in the process, to protect their own
national sovereignty, security, and long-term economic well-
being. We are asking the international community to join us in
standing up for universal rights and the rules-based
international system, and have provided for the world's
collective peace, security, and prosperity for generations. We
are making great strides toward this goal, and we deeply
appreciate this committee's support to our continued efforts.
Thank you.
[The prepared statement of Mr. Stilwell follows:]
Prepared Statement of David R. Stilwell
Chairman Risch, Ranking Member Menendez, and Members of the
Committee: Thank you for the opportunity to testify before the
Committee to discuss the threat posed by the Chinese Communist Party
(CCP) to the United States and the global order, and what we are doing
about it. I am joined by my Department colleagues, PDAS Julie Chung
from our Bureau of Western Hemisphere Affairs, and A/S Philip Reeker
from our Bureau of European and Eurasian Affairs. The fact that the
three of us are testifying on CCP malign influence, representing three
different geographic regions, is a testament to the global challenge we
face and how the Department is adjusting to meet this challenge.
As Secretary Pompeo has repeatedly said, China is the first foreign
policy challenge he thinks about each morning. Every one of us at the
Department of State is focused on succeeding in this critical effort. I
will center my testimony on an overview of our China policy, the CCP's
actions globally and how State is responding, and then focus
specifically on what we are doing in the East Asia and Pacific region.
how we got here
For years, we and the international community operated under the
assumption that facilitating China's entry into the rules-based
international order would lead to increasing domestic reform and
opening. We agreed that China, under the CCP, would abide by its
international commitments at the WTO and elsewhere. The persistent
flouting of these commitments, increasing under President Xi Jinping,
demonstrated that it has failed to meet those expectations. It is now
clear to us, and to more and more countries around the world, that the
CCP under General Secretary Xi Jinping is not seeking to join the free
and open international order we and our allies and partners have fought
and died to defend for generations. Instead, PRC foreign and security
policy seeks to disrupt and reshape the international environment
around the narrow self-centered interests and authoritarian values of a
single beneficiary, the Chinese Communist Party.
Today we are engaging with the Chinese Communist Party as it is,
not as we wish it to be, or as it seeks to present itself rhetorically.
Secretary Pompeo summed up this strategic shift in his October 30, 2019
speech: ``It is no longer realistic to ignore the fundamental
differences between our two systems and the impact that . . . the
differences in those systems have on American national security . . .
Today, we are finally realizing the degree to which the Communist Party
is truly hostile to the United States and our values.'' This requires a
clear-eyed view of the CCP's motives and actions around the world, not
only by the U.S. government, but by our companies, our institutions,
and by our citizens. And to be truly successful in this effort, it
requires that we work together with our allies and partners around the
world to recognize and meet the CCP challenge.
We must also be clear what is at stake: The United States has
maintained a position of global leadership for generations because our
actions have benefited countless nations around the world and
strengthened the international system. The CCP is now using any and all
means to undermine the international rules-based order and project
power across the world, especially in the Indo-Pacific region. All
nations should worry how this outcome would negatively affect the
global community and the values we share.
increasing ccp aggression
A few months ago, as the world was coming to grips with the reality
of the global pandemic, one of China's leading virologists warned that
the coronavirus was ``just the tip of the iceberg.'' She was speaking
as an epidemiologist and urging a global response to prevent future
outbreaks, but that analogy is a useful way to think about CCP
aggression and malign activities globally.
For each visible example of CCP malign activity worldwide, there
are many more lurking beneath the surface. Part of our job in the
Department, and especially in the EAP Bureau, is to help bring more of
that iceberg into the open for other nations to see the CCP for what it
truly is--an aggressive, autocratic, ambitious, paranoid, hostile
threat to free and open societies and the free and open international
order.
Beijing's aggressive behavior takes many forms, including assaults
on foreign companies and governments; manipulation of international
organizations; silencing of critics abroad; buying, stealing, or
forcing the transfer of technology to further its military and economic
ambitions; and spreading disinformation. Beijing's cover-up of the
outbreak of COVID-19 has made urgently clear to the international
community the dangers of the CCP's lack of transparency and use of
disinformation to global health and security. This is not an
aberration; this is a reflection of how the CCP operates.
The past several months alone have seen particularly egregious
examples of Beijing's conduct: violence on the border with India;
aggressive moves in the South China Sea and around Taiwan and the
Senkakus; a push to wipe out Mongolian and Tibetan culture and language
in China; and a continued campaign of repression and forced labor in
Xinjiang. Australian journalists have fled China due to harassment by
security services. Beijing unilaterally imposed a draconian National
Security Law in Hong Kong, including clauses that allow the PRC to
issue extraterritorial arrest warrants for those criticizing the
government while in other countries. These are not the actions of a
responsible global actor but a lawless bully.
how our policy has changed
At the Department of State, we are working hard every day to
counter the CCP's malign activities around the world. In implementing
the President's 2017 National Security Strategy, we are pushing back on
revisionist powers, such as the PRC, who use technology, propaganda,
and coercion to shape a world antithetical to our interests and values.
We are holding the CCP to its commitments, both to us and to global
rules, norms, and organizations. We will call them out publicly when
they fall short. And we will vigorously defend our interests and those
of our friends and allies when they are threatened. Not since the Cold
War have we focused our efforts so intently on a single foreign policy
challenge, and I can assure you we are firing on all cylinders across
the full spectrum of the China challenge.
Let me be clear: The American and Chinese people have close ties
going back generations, and we continue to welcome Chinese students,
visitors, investors, and immigrants. We have an important relationship
with China, as do most countries in the world. We are not asking
countries to choose sides, but rather to stand up to protect their own
national sovereignty, security, values, and economic well-being. We are
also asking the international community to join us in standing up for
the international rules, norms, and organizations that have provided
for our collective peace, security, and prosperity for generations.
This clear-eyed approach to China means we are insisting on
reciprocity across the entirety of our relationship, from trade and
investment to visas and diplomatic access. We will continue to uphold
the rights and freedoms the United States has always stood for, whether
exposing human rights abuses in Xinjiang and Tibet, fighting for press
freedom, or supporting individual freedoms and democratic processes in
Hong Kong.
Our competition with the People's Republic of China need not lead
to conflict. In fact, by competing, we are restoring balance and
stability in areas where the United States and the world previously
allowed Beijing to foment imbalance and instability, to the detriment
of us all. We will also seek to cooperate with China in those areas
where our interests align, and remain committed to achieving progress
on a broad range of topics, including resolving trade inequities,
achieving DPRK denuclearization, and stemming the deadly, unacceptable
flow into the United States of fentanyl, whether manufactured in China
or made elsewhere with Chinese precursors.
internal policy framework and reorganization
Our China policy efforts at the Department of State are guided by
the 2017 National Security Strategy (NSS) and grouped around the four
pillars laid out in that strategy: 1) protect the American people,
homeland, and way of life; 2) promote American prosperity; 3) preserve
peace through strength; and 4) advance American influence. On May 20,
the White House published a report on the United States Strategic
Approach to the People's Republic of China detailing efforts across the
government.
Within the State Department, we have organized to ensure that all
of our bureaus, offices, and posts around the world have sufficient
policy clarity, training, resources, data, and messaging direction to
successfully tackle the China challenge in their areas of operation.
This has meant breaking down bureaucratic barriers, shifting resources,
and developing new coordination mechanisms.
I co-chair a new coordination body with all of our regional and
functional bureaus to coordinate our lines of effort on China policy
across the Department. Other agencies also coordinate on these lines of
effort. The mechanism has a special focus on bringing together the
policy and messaging sides of the house to ensure the two are working
hand in glove. We've also asked all of our posts around the world to
designate reporting and public diplomacy officers to focus specifically
on the China policy portfolio in their host country, and to ensure
posts' interagency leadership teams are sufficiently focused and
coordinated on our number one foreign policy challenge.
On the analytical side, we've developed new data-driven diplomacy
tools to give our officers the information and analysis they require.
Our posts have also drastically increased their diplomatic reporting on
CCP activities and influence in every country, providing a trove of
additional information to inform our understanding of the China
challenge. We're also tripling our cadre of forward-deployed,
regionally focused China experts, who play a critical role in
supporting our posts and identifying regional trends in CCP behavior.
general state department china policy areas
Public Diplomacy and Counter Propaganda and Disinformation
The battle against CCP malign activities requires messaging that is
well-informed, well-crafted, and well-executed all around the world.
Accordingly, our public diplomacy teams are working in partnership with
the Bureau of Global Public Affairs and the Global Engagement Center
(GEC) to promote a positive vision of U.S. leadership, expose malign
conduct, and counter propaganda and disinformation.
From the Secretary on down, all of our leaders and public diplomacy
practitioners are empowered to convey these messages. Our Ambassadors
in the field across all geographic regions have been particularly
effective in taking this challenge on. The Bureau of Global Public
Affairs (GPA) supports our team in the field by regularly disseminating
topline messages and senior leader statements. GPA also publishes
original content that describes American values and contrasts CCP
behavior with global norms.
The GEC has significantly expanded its work on the China challenge
over the last year. GEC works in partnership across the Department, our
posts overseas, the NSC, and relevant departments and agencies to
coordinate strategies and tactics. GEC's efforts to counter CCP
propaganda include increasing awareness of the problematic aspects of
the One Belt One Road initiative, human rights abuses in Xinjiang,
Tibet, and elsewhere in China, and Beijing's abuse of open research and
academic environments to achieve its military objectives. GEC programs
build global resilience to PRC disinformation through media training
and other support to investigative journalists and to map PRC influence
in the information environment to guide current and future approaches.
The GEC also supports efforts to provide accurate information about
U.S. policies and contributions of U.S. businesses to local communities
to restrict the space where CCP propaganda can take root. Across the
Department, we leverage GEC's analytical tools and networks of credible
partners and local voices overseas.
Economic Actions
Globally, one of the CCP's most insidious and powerful influence
vectors is its economic clout, which it uses as leverage in other
strategic areas. PRC state-led lending and investment often distort
markets, encourage corruption, avoid transparency, and create an uneven
playing field for American companies and local competitors. PRC
initiatives like ``One Belt One Road'' seek to fuse Beijing's economic
and strategic goals to the detriment of host country sovereignty,
security, and sustainable economic growth. The United States has been
on the forefront of raising global awareness about the dangers of this
type of PRC lending and investment.
The United States levels the playing field for American companies
by promoting free enterprise and transparent, private sector investment
through improved market access and competitiveness and increased
business-to-business ties. With bipartisan congressional support, the
United States Government is deploying new and innovative mechanisms in
key areas:
Strategic Infrastructure: The Department works across the
U.S. Government to maximize resources to attract more private
sector investment into emerging markets, such as through the
Development Finance Corporation (DFC) and USAID. The
Infrastructure Transaction and Assistance Network (ITAN) is
another great example of this. This group of 11 agencies has
identified and advanced more than $125 billion in
infrastructure deals in the Indo-Pacific. We have launched
complementary efforts like the Strategic Ports Initiative to
focus on infrastructure that is critical to U.S. interests.
Energy Sector: Programs like Asia EDGE, Power Africa, and
America Crece advance the energy security of partners and
create new markets for U.S. liquefied natural gas (LNG).
Blue Dot Network: The Blue Dot Network, or BDN, launched at
the Indo-Pacific Business Forum in November 2019 with partners
Japan and Australia, is a multi-stakeholder initiative to
certify quality infrastructure investment projects.
Deal Teams: Through the Deal Team initiative launched by the
Departments of State and Commerce in February, we are improving
interagency collaboration at posts and between our overseas
missions and Washington, to help U.S. firms win projects abroad
against firms that use unfair practices to capture contracts.
We also seek to equip states to resist coercive economic practices,
unsustainable debt burdens, and other dangers:
Investment Screening Outreach: The Department works closely
with the Treasury Department to encourage foreign governments
to implement investment-screening mechanisms that are rigorous,
transparent, and national-security focused.
Debt Service Suspension Initiative: The United States is
faithfully implementing the G20-Paris Club Debt Service
Suspension Initiative (DSSI) by suspending official bilateral
debt payments from the poorest countries to year-end 2020. This
provides countries fiscal space to fund social, health, and
other measures to respond to the pandemic. With partners, the
World Bank, and the IMF, we are leveraging the DSSI to increase
debt transparency and tackle opaque and unsustainable PRC
lending.
Military-Civil Fusion and Sensitive Tech
Through its Military-Civil Fusion development strategy the PRC is
working to ``fuse'' its economic and social development strategies with
its security strategies to build an integrated national strategic
system and capabilities in support of Beijing's goals. In doing so the
PRC exercises subterfuge in its international economic and academic
collaboration, as well as in its investments in key advanced,
sensitive, and emerging technologies. The PRC's intent is to divert
technology acquired through civilian trade and/or exchanges--including
through both licit and illicit means--to military end uses. The PRC
seeks to render ineffective traditional U.S. tools to protect our
economy, such as export controls, visa screening, and investment
screening for proliferation risk.
The Department has taken important measures to safeguard our
critical infrastructure and technology and deny the PRC the ability to
target and acquire sensitive technologies in the United States to
further its military and commercial capabilities. These included the
suspension of entry of certain PRC students and researchers seeking J
and F visas for work in fields relevant to military modernization.
For over 2 years, the United States has called on countries around
the world to secure their 5G networks from untrusted vendors, such as
the PRC's Huawei and ZTE. On April 29, Secretary Pompeo announced the
5G Clean Path initiative to protect the voice and data traversing 5G
standalone digital cellular telecommunications systems and networks
that service U.S. diplomatic communications at home and abroad. More
and more countries and companies around the world are putting in place
strong measures to secure their 5G networks.
But 5G infrastructure is only one part of a broader
telecommunications and emerging technology landscape and these same
risks of untrusted vendors subject to the unchecked powers of
compulsion of authoritarian states like the PRC apply across this
ecosystem. To address this broader threat, on August 5 Secretary Pompeo
announced the Clean Network initiative, a comprehensive approach to
safeguarding citizens' privacy and companies' most sensitive
information from manipulation or disruption by foreign adversaries.
This Department and interagency effort addresses important and
previously overlooked technology areas including apps and app stores,
cloud services providers, and undersea cables.
Combatting Malign Influence
Malign CCP influence manifests itself through a diversity of
organizations, from PRC diplomatic missions to propaganda outlets,
Confucius Institutes, United Front organizations, state-owned
enterprises and more.
On the media front, since February we have designated the U.S.-
based operations of nine PRC propaganda outlets--including Xinhua,
People's Daily, and China Global Television Network--as foreign
missions. In March, we capped the number of PRC nationals allowed to
work at these designated state media outlets to more closely match the
number of independent American journalists Beijing allows to operate in
the PRC.
We have likewise designated the Confucius Institutes U.S. Center
(CIUS) as a foreign mission. While claiming no other aim than to teach
Americans about Chinese language and culture, the Confucius Institutes
also promote the Chinese Communist Party's agenda and subvert academic
freedom.
We must recognize these entities for what they are--organizations
under Beijing's control and vectors for CCP propaganda and influence.
Americans should know that they are not independent media or simple
educational institutions. We are also encouraging social media
companies to label PRC official media accounts clearly so that everyone
recognizes them as propaganda tools of the CCP. In July, we closed the
PRC Consulate in Houston due to serious concerns about the
inappropriate activities of its diplomats. We now require senior PRC
diplomats to seek permission for many meetings, large events, and
visits to academic institutions. Of course, the longstanding barriers
that Beijing imposes on U.S. diplomats in China remain far more severe.
We appreciate Congressional leadership in establishing the new
Counter Chinese Influence Fund (CCIF) in the FY 2020 appropriations
bill. This very important provision provides the U.S. interagency with
a flexible mechanism that will bolster our efforts to strengthen our
partners' resiliency to China's malign influence worldwide.
The Director of Foreign Assistance at the State Department is
currently leading the effort to review proposals from Washington and
posts around the world. The Department and USAID are prioritizing
proposals in four areas: Commercial Engagement, Good Governance,
Promoting Security and Resilience, and Winning the Technology
Competition. There is strong demand from the field. The initial round
of CCIF funding solicitation resulted in over 400 project submissions
from around the globe, with demand far outstripping the appropriated
funding. Initial allocation decisions are planned by early October.
Hong Kong
We have led the global response to the PRC's crackdown in Hong
Kong, including by spearheading joint statements with like-minded
countries, imposing financial sanctions and visa restrictions on PRC
officials in both Beijing and Hong Kong, including Chief Executive
Carrie Lam, cancelling our extradition treaty and exchange programs,
and instituting export restrictions. Our efforts paved the way for many
other countries to speak out against PRC actions, and to take similar
measures of their own.
Xinjiang
More than any other government, the United States has taken
concrete action to respond to the human rights crisis in Xinjiang. In
October 2019, the Department announced visa restrictions on officials
responsible for, or complicit in, human rights abuses. This complements
the Department of Commerce's addition to its Entity List of 48 entities
in the PRC, including elements of the Public Security Bureau and
commercial companies, implicated in human rights abuses.
U.S. Customs and Border Protection has issued Withhold Release
Orders (WROs) prohibiting imports of specified merchandise produced by
several companies who operate in Xinjiang based on information that
reasonably indicated the use of forced labor in their operations. We
issued a business advisory to caution businesses about the risks of
supply chain links to human rights abuses, including forced labor, in
Xinjiang and elsewhere in China. The Treasury Department sanctioned two
PRC government entities and six current or former government officials
in connection with serious rights abuse against ethnic minorities in
Xinjiang, including Politburo member Chen Quanguo.
Indo-Pacific
The resilience and strength of our global alliances and
partnerships is paramount to addressing strategic competition with
China, and in no region is this more true than the Indo-Pacific--a
region that accounts for more than half the world's population and GDP.
As we take account of China's efforts globally, we must continue to
remember that the Indo-Pacific is the frontline in our strategic
competition with China.
In recognition of the geopolitical importance of the Indo-Pacific,
President Trump announced the U.S. Strategic Framework for the Indo-
Pacific 3 years ago in Da Nang, Vietnam, to advance a vision for the
Indo-Pacific region in which all countries prosper side by side as
sovereign, independent states. The Indo-Pacific Strategy is
fundamentally about supporting the autonomy of Indo-Pacific states
facing PRC attempts to dominate the region. It rests on cooperation
with allies and partners, as well as the centrality of ASEAN, APEC, and
other institutions in the regional architecture.
The Indo-Pacific Strategy has defined a shared vision for a region
that is open to trade and investment, free from coercion, and secure.
The United States and a diverse cohort of allies and partners now speak
clearly in terms of the ``Indo-Pacific.'' This is significant in
semantic and strategic terms. Similar concepts have been put forward by
Japan, India, Australia, South Korea, and Taiwan, as well as the
``ASEAN Outlook on the Indo-Pacific,'' showing remarkable alignment
across our partners. These efforts set forth consistent principles to
guide the region's future that push back on the PRC's authoritarian,
state-led development model.
We have advanced our economic initiatives in lockstep with our
allies and partners. I have already mentioned the Blue Dot Network--
launched with Australia and Japan--as one example. In the Indo-Pacific
region, we are working together on the ground, for example through a
five-country partnership with Japan, Australia, and New Zealand, to
bring electricity to the people of Papua New Guinea.
To promote good governance, which is integral to U.S. foreign
policy and national security interests and in line with U.S. values, we
launched the Indo-Pacific Transparency Initiative 2 years ago. With it,
we are optimizing longstanding programs and launching new ones focused
on particular vectors of PRC influence, including corruption,
disinformation and information control, and coercive financing. These
programs promote civil society, rule of law, respect for human rights
and fundamental freedoms, and transparent and accountable governments
across the region.
We are also reinforcing our security commitments. Our security
assistance to South China Sea claimant states helps partners protect
their autonomy and maritime resources.
State and USAID have doubled development assistance to our Pacific
Island partners through the Pacific Pledge. Never before have we had so
many people on the ground, in so many Pacific Island countries.
We are developing new arrangements to coordinate with like-minded
partners. In September 2019, the first ministerial-level meeting of the
United States, Australia, India, and Japan at the Quadrilateral
Consultations marked a new milestone in Indo-Pacific diplomatic
engagement.
Mekong
Building on the successes of the Lower Mekong Initiative, the five
Mekong partner countries and the United States launched the Mekong-U.S.
Partnership on September 11 as a strategic forum for cooperation.
The Partnership will continue existing work and expand our areas of
cooperation, including economic connectivity, energy security, human
capital development, and transboundary water and natural resources
management. This includes supporting these countries in holding the CCP
accountable for sharing water data from China's massive upstream dams
in Tibet and elsewhere.
We will also cooperate on emerging threats such as health security
capacity building and pandemic response, countering transnational
crime, cyber security, and countering trafficking in persons, illicit
drugs, and wildlife.
South China Sea
On July 13, Secretary Pompeo announced a change in U.S. policy on
maritime claims in the South China Sea, making clear that Beijing's
claims to offshore resources across most of the South China Sea are
unlawful, as is its campaign of coercion to control them. We are
standing with Southeast Asian states to uphold their sovereign rights
under international law. We welcomed your joint statement on the South
China Sea, Chairman Risch and Ranking Member Menendez, reflecting our
resolve in clarifying the United States' position that the PRC's
maritime claims in the South China Sea are unlawful. We have seen
Southeast Asian countries speak out more vocally as a result of our
policy change.
On August 26, the Secretary announced visa restrictions for certain
employees of PRC SOEs involved in South China Sea militarization and
land reclamation activity, including the China Communications
Construction Co. (CCCC), which was coordinated with Department of
Commerce additions to its Entity List. And we've seen results. In the
Philippines, in Malaysia, and as far afield as Panama and Costa Rica,
media, think tanks, and even government officials have raised questions
about CCCC activity and its impact on their economies. We can expect
them to subject future dealings with CCCC to greater scrutiny, and to
think a bit more deeply about the potential downsides of PRC
infrastructure assistance in the future.
Taiwan
Notwithstanding China's aggressive behavior in the region, our
relationship with Taiwan stands on its own and our relationship with
Taiwan is not a subset of U.S.-China relations. We have made clear that
the United States will continue to advance our engagement with Taiwan.
The recent visit by Secretary Azar to Taiwan demonstrates that the
United States will work with Taiwan on international issues, such as
global health, and upcoming economic engagements will further deepen
our robust ties.
We also will continue to vigorously support Taiwan's meaningful
participation in international organizations, especially where public
health, safety, and security are concerned. Taiwan's commendable COVID-
19 response demonstrates it has much to offer to the global community,
as does its commitment to democracy, human rights, and free markets.
On July 9, the Administration formally notified Congress of a
defense arms sale to Taiwan, just one recent example of how, consistent
with the Taiwan Relations Act (TRA), we will continue to provide Taiwan
defense articles and services to enable Taiwan to maintain a sufficient
self-defense capability. The U.S. commitment to implementing the Taiwan
Relations Act and the Six Assurances is firm, as is our commitment to
the U.S. one-China policy, including our insistence that cross-Strait
issues be resolved peacefully and without coercion or intimidation.
Indo-Pacific Business Forum
We also engage closely with the private sector in advancing our
policies and values. The Indo-Pacific Business Forum has emerged as a
premier annual event bringing together leaders from the private and
public sectors from economies across the Indo-Pacific region, including
the United States, to share knowledge, build relationships, and explore
opportunities. This year we are co-sponsoring the IPBF together with
the government of Vietnam and with leading business organizations as a
virtual conference in late October.
The IPBF supports and extends our Indo-Pacific strategy, as one
important tool to make our economic case to the region for the
transparent, private sector-driven model we promote, and its proven
track record for delivering sustainable growth, reducing poverty, and
fostering technological innovation. This model provides a clear and
compelling alternative to the PRC's state-led approach to development
that all too often leaves countries in the Indo-Pacific region saddled
with unsustainable debt and vulnerable to political and economic
pressure. American businesses also find significant value in new
markets in this dynamic region.
global outreach successes
In all of our policy efforts, outreach to other countries is
critical. We have been vigorously engaging our allies and partners on
the full scope of CCP malign activities, including 5G, military-civil
fusion, human rights abuses, environmental degradation, propaganda and
disinformation, and international organizations, among many other
issues.
In the technology realm, dozens of countries have now taken action
to restrict untrusted Beijing-linked vendors from their 5G networks.
We've also seen stricter investment screening mechanisms instituted in
the EU and more than a dozen other countries to help protect critical
technology or infrastructure, including from CCP control. On
international organizations, some 54 countries came together to deny
the PRC candidate the top leadership position of the World Intellectual
Property Organization. Twenty-three countries joined us in co-signing a
joint statement on Xinjiang at the U.N. Third Committee. Allies and
partners have also joined together to oppose Beijing's efforts to
insert language promoting CCP ideology and unilateral policy
initiatives in United Nations documents.
Regarding CCP influence and interference, more and more countries
are taking action against Confucius Institutes, United Front
organizations, and other vectors of CCP malign influence and
disinformation, including CCP influence efforts on university campuses.
On Hong Kong, we have released several joint statements with allies and
partners, many of which have also suspended extradition treaties with
Hong Kong and imposed export controls. In line with what we have done
in these areas, we encourage all countries to push for transparency and
reciprocity in their relations with the PRC, and to expose and counter
CCP vectors of influence and interference, including by PRC state media
and PRC diplomats.
conclusion
The United States has an important relationship with the PRC, as do
most countries in the world. We are not asking countries to choose
sides but simply to hold Beijing accountable for its malign behavior,
and in the process to protect their own national sovereignty, security,
and long-term economic well-being. We are also asking the international
community to join us in standing up for universal rights and the rules-
based international system that have provided for the world's
collective peace, security, and prosperity for generations. We are
making great strides toward this goal, and we deeply appreciate the
Committee's support of our continued efforts.
The Chairman. Thank you, Secretary Stilwell. That was
certainly a good tour around the issues that we deal with here,
and I think there is a lot to unpack here, as your statement
indicates.
We will now turn to Ambassador Philip Reeker, who has led
the Bureau of European and Eurasian Affairs since March 2019.
Immediately prior, Ambassador Reeker was posted in Germany,
advising the Commander of U.S. European Command. He has served
in numerous posts throughout Europe, including U.S. Ambassador
to North Macedonia and Counsel General in Milan.
Ambassador Reeker.
STATEMENT OF HON. PHILIP T. REEKER, SENIOR BUREAU OFFICIAL,
BUREAU OF EUROPEAN AND EURASIAN AFFAIRS, U.S. DEPARTMENT OF
STATE, WASHINGTON, DC
Ambassador Reeker. Good morning, Chairman Risch, Ranking
Member Menendez, members of the committee.
To my knowledge, this is the first time that the head of
the European Bureau has testified at a hearing on Chinese
influence. And I think this speaks, itself, in the terms of
underscoring the scope and scale of the challenge we face from
the Chinese Communist Party.
Assistant Secretary Stilwell has done an excellent job
laying out how the Department is implementing the
Administration's strategy on China, and I will focus my remarks
on how we see the challenge in Europe, what we are doing about
it, in coordination with our allies, and really why Europe
matters so much in an era of renewed strategic competition
between major powers.
Europe is home to most of America's closest and oldest
allies. As you know, it is the largest export market for U.S.
goods and services, and the United States and Europe are each
other's primary source and destination for foreign direct
investment. Together, the United States and the 27 members of
the European Union account for over 40 percent of the world's
GDP. The U.S. FDI in the EU and the UK of $3.6 trillion in 2019
is more than four times the U.S. investment in the Asia-Pacific
region.
Like Russia, the Chinese Communist Party has realized that
the transatlantic relationship is really the beating heart of
the West, and perhaps the biggest obstacle to the PRC's designs
for the future world order. China's global ambitions are simply
not possible if the transatlantic alliance remains strong and
united in opposing Chinese authoritarian overtures. China does
not necessarily seek new allies in Europe--they prefer vassals,
not partners--but it does want to drive a wedge between the
United States and our allies.
The starting point of our engagement with the Europeans
must be our shared values and basic conceptions about how
governments ought to behave toward their citizens and the
world. The U.S. and Europe may sometimes disagree on specific
policies or approaches, but we generally agree on the
fundamental concepts, like the importance of the rule of law,
transparent and accountable government, and basic human rights.
The Chinese Communist Party does not.
We must think of Europe not just in terms of what we can do
together elsewhere in the world, but as a theater of strategic
competition in its own right. Allies face malign influence and
pressure in their own countries that we must work with them to
counter. Using platforms like the One Belt, One Road
Initiative, the Chinese Communist Party endeavors to create
dependencies and cultivate client-state relationships. Through
the 17+1 Initiative, which involves 12 countries that are both
NATO and EU members, primarily in Central and Eastern Europe,
China aims to achieve access and ownership over valuable
transportation hubs, critical infrastructure, ports, and
industries.
Over the last 3 years, we have seen an increased awareness
in many European countries, what Secretary Pompeo has referred
to as a ``Transatlantic Awakening'' to the China challenge.
U.S. diplomats, from the Secretary on down, have been pounding
the pavement, or--virtually or otherwise, throughout Europe,
and the tide has turned. Our substantial and successful
diplomatic engagement contrasts sharply with the growing
backlash we are seeing caused by China's heavy handed ``mask
diplomacy'' during the pandemic throughout Europe. European
audiences are getting to see firsthand just how the CCP handles
criticism and questions, and they do not like what they see.
Our engagement is bearing fruit. Just to touch on a few
highlights:
Using authorities granted by legislation members of this
committee introduced, as mentioned, the bipartisan BUILD Act
and the European Energy Security and Diversification Act, we
have been able to begin leveraging the new Development Finance
Corporation to try to catalyze key investments in strategic
projects. Most notable, I would point to Secretary Pompeo's
pledge at the Munich Security Conference, earlier this year, of
$1 billion, a commitment to the Three Seas Initiative. In the
Czech Republic, where Secretary Pompeo visited just last month,
they have transformed from a target of Chinese influence to a
leader in the European Awakening. Seven countries have signed
bilateral memoranda of understanding with the United States on
5G security. The Secretary signed the most recent one, just
yesterday, with Lithuania Foreign Minister Linkevicius's
visiting here in Washington.
Fifteen European nations have adapted best practices from
our own CFIUS and FIRMMA legislation as models to draft their
own laws to protect their industries from malign foreign
investment. And, as Foreign Secretary Raab and Secretary Pompeo
discussed in their meeting here yesterday, the United Kingdom
plans to secure its networks from Huawei. France and Germany
both recently unveiled formal Indo-Pacific strategies that
reflect the changing consensus on the threat posed by China.
And I am told that France, Germany, and the UK, just this
morning, filed a Joint Note Verbale at the United Nations,
rejecting China's sweeping claims over the South China Sea.
NATO has formally agreed to address the opportunities and
challenges stemming from the Chinese Communist Party's growing
influence. The EU has referred to the PRC as a ``systemic
rival.'' And Sweden recently closed the last of the Confucius
Institutes present in that country.
More and more European nations are coming to the same
conclusion we have about the nature of the threat to our
values, our security, and our prosperity. They are doing so
because they want to, not because we tell them to. Our role has
been to share information, exchange experiences, and provide
the support and encouragement necessary to empower them to make
the right decisions.
As we confront the growing China challenge in Europe, we
must not forget that Europe is also the central focus of
ongoing Russian aggression and malign influence. Although
China's GDP is about eight times the size of Russia's, Russia
remains the primary military threat to Europe and the strategic
priority for most of our allies and partners, particularly
those in Central and Eastern Europe.
Russia and China are more closely aligned strategically
than at any point since the 1950s, and we see growing
cooperation across a range of diplomatic, military, economic,
and information activities. Russia and China are not a
monolithic bloc, and there are certainly tensions and friction
points in that relationship. But, their growing strategic
convergence is more than a simple marriage of convenience. It
is based on a shared assessment of the threat the United States
and our allies pose to their ambitions through our strength,
our prosperity, and our values. This dynamic is not going away
anytime soon, and we must understand and account for it in our
diplomacy and policies in this era of great-power competition
in Europe.
And regardless of whether we are talking about competition
against the Chinese Communist Party or the Kremlin or any other
rival, perhaps our greatest advantage remains, as has been
mentioned, our system of alliances, particularly in Europe. As
the President and the Secretary have stated on many occasions,
our allies need to shoulder their share of the burden, and they
are making progress in doing so.
The fact remains that the United States has friends. The
Kremlin and the CCP do not. This is a fundamental and enduring
difference between us and them, between the democratic West and
the authoritarian powers trying to divide us. The
Administration's efforts to support, empower, and consult our
European allies in countering the PRC are working. Progress is
not always immediate. And engaging with our allies on these key
issues sometimes leads to hard conversations and choices. But,
having these hard conversations now ensures that we have an
alliance that--and partnerships that are able to defend the
shared democratic values and traditions that define the West
and underpin the free world.
Mr. Chairman, Ranking Member, thank you for the opportunity
to testify, and I will look forward to your questions.
[The prepared statement of Ambassador Reeker follows:]
Prepared Statement of Ambassador Philip T. Reeker
Good morning Chairman Risch, Ranking Member Menendez, and Members
of the Committee. It is a pleasure to be here today with Assistant
Secretary Stilwell and Principal Deputy Assistant Secretary Chung to
discuss the Chinese Communist Party's malign activities around the
world. As far as I am aware, this is the first time the head of the
European bureau has testified at a hearing on Chinese Communist Party
influence, and I think this fact speaks for itself in terms of
underscoring the scope and scale of the challenge we face from the
Chinese Communist Party.
Assistant Secretary Stilwell has done an excellent job laying out
the Administration's broader strategy on China and the ways in which
the Department is implementing it. I will focus my remarks on how we
see the Chinese Communist Party challenge in Europe, what we are doing
about it in coordination with our Allies, and why Europe matters so
much in an era of renewed strategic competition between major powers.
With its advanced economies, international influence, and high-tech
industries, Europe has emerged as arguably the central front in the
Chinese Communist Party's efforts to supplant U.S. global leadership,
and re-order the international system to its benefit. It is therefore
critical that we frame our efforts to counter the Chinese Communist
Party in Europe around policies and language Europeans understand and
support, such as shared values and adherence to international norms.
Europe is home to most of America's closest allies. It is the largest
export market for U.S. goods and services, and the United States and
Europe are each other's primary source and destination for foreign
direct investment (FDI). Together the United States and the EU27
account for over 40% of GDP. The U.S. FDI in the EU and UK of $3.6
trillion in 2019 is more than four times the U.S. investment in the
Asia-Pacific region.
Like Russia, the Chinese Communist Party understands that the
transatlantic relationship is the beating heart of Europe and perhaps
the biggest obstacle to Chinese Communist Party designs for the future
world order. The Chinese Communist Party's global ambitions are simply
not possible if the transatlantic alliance remains strong and united in
opposing their authoritarian overtures. China does not necessarily seek
new allies in Europe--the Chinese Communist Party prefers vassals not
partners--but it does want to drive a wedge between the United States
and our allies and limit Europe's ability to unite against it.
For this reason, we must think of Europe not just as a force
multiplier for our policies in other parts of the world, but as a
theater of strategic competition in its own right. Through intensive
diplomatic engagements, using platforms such as the One Belt One Road
initiative, the Chinese Communist Party endeavors to create
dependencies and cultivate client-state relationships. Through its 17+1
initiative, involving 12 countries that are both NATO and EU members,
the Chinese Communist Party aims to achieve access and ownership over
valuable transportation hubs, critical infrastructure, ports, and
industries in Central and Eastern Europe. The Chinese Communist Party
is demonstrating its strategic interest in creating divisions between
EU member states and in multilateral institutions over issues such as
both traditional and non-conventional warfare, hybrid activities, the
South China Sea, internet security, and human rights.
Chinese foreign direct investment in Europe has grown from about $1
billion in 2008 to a high of approximately $42 billion in 2016, before
dropping again in recent years. The Chinese Communist Party's economic
engagement in Europe is significant. It pursues its economic goals
through predatory investments, intellectual property theft, and trade-
dependent relationships that leave governments, companies, and
economies open to coercion. Over the last 12 years, the Chinese
Communist Party has gained increasing influence over European markets
and supply chains. Since the 2008 financial crisis, Chinese Communist
Party industrial policy, such as Made in China 2025, has targeted
investments in strategic European industries, critical infrastructure,
such as ports, and emerging technologies such as robotics, artificial
intelligence, 5G, green energy, and nuclear energy.
The Chinese Communist Party relies on a network of overseas
networks for influence, surveillance, and control, including United
Front Work organizations and actors. Europe has more Confucius
Institutes than any other region of the world, with more than 190
institutes in 44 countries. In addition, the Chinese Communist Party
exploits corrupt institutions and individuals, where possible, to
achieve policy objectives and thwart efforts to stop them. The Chinese
Communist Party's use of strategic corruption, which is also a defining
feature of the Kremlin's regional strategy as well, plays an essential
but often understated role in facilitating the more high-profile
symbols of Chinese influence and power.
Over the last 3 years we have seen an increased awareness in many
European countries, what Secretary Pompeo has referred to as a
``Transatlantic awakening to the China Challenge.'' U.S. diplomats from
the Secretary on down have been pounding the pavement--virtual or
otherwise--throughout Europe. Our substantial diplomatic engagement and
the resulting positive results contrast sharply with the growing
backlash caused by China's heavy-handed ``mask diplomacy'' and angry
reaction to European criticism of its COVID response. European
audiences got to see firsthand just how the Chinese Communist Party
handles criticism and questions, and they didn't like what they saw.
This engagement is bearing fruit.
Using authorities in legislation authored by Members of this
Committee, the bipartisan Build Act and European Energy
Security and Diversification Act, we have been able to begin
leveraging the new Development Finance Corporation (DFC) to try
to catalyze key investments in strategic projects, most notably
the $1 billion commitment to the Three Seas Initiative
Secretary Pompeo pledged at the Munich Security Conference.
The Czech Republic, which the Secretary visited last month,
has transformed from a target of Chinese influence to a leader
of the European Awakening. The recent visit of the Czech Senate
President to Taiwan is merely the latest in a series of strong
actions by the Czech Republic to stand up to Chinese bullying
and cement its status as a regional leader in combatting
Chinese Communist Party influence.
More than 30 nations contributed to the Prague Proposals to
build secure 5G network infrastructure by not using vendors
from authoritarian states like the Chinese Communist Party.
Further, 5G MOU's are being planned with Ukraine, Georgia, and
Serbia, to gain commitment from these partner countries to
avoid using prohibited technologies. The 27 nations of the EU
agreed to an investment screening framework in 2019, and a
number of European nations have adapted best practices from our
CFIUS and FIRMMA legislation as models to draft their own laws
to protect their industries from malign foreign investment.
France and Germany both recently unveiled formal Indo-
Pacific Strategies that reflect the changing consensus on the
threat posed by China.
The United Kingdom is planning to secure its networks from
Huawei.
At NATO's December 2019 London Leaders' Meeting, NATO Heads
of State and Government formally declared for the first time
the need for NATO to address ``the opportunities and
challenges'' stemming from the Chinese Communist Party's
growing influence. The EU has labeled China as a ``systemic
rival.''
Denmark has bravely stood up to the Chinese Communist
Party's attempts to censor Danish newspapers. The Swedes have
closed all of the Confucius Institutes that resided on their
soil.
The U.S. has supported and empowered European-led
initiatives to take infrastructure development into their own
hands, and platforms such as the new Inter-Parliamentary
Alliance on China to check Chinese Communist Party malign
influence in legislatures around the world. We've engaged the
Department of Commerce and USAID to get more countries to
ensure that nations and their citizens control their critical
infrastructure.
This list is not exhaustive. The point is that more and more
European nations are coming to the same conclusion we have about the
nature of the threat to our values, our security, and our prosperity.
They are doing so because they want to--not because we tell them to.
Our role has been to share information and provide the support and
encouragement necessary to empower them to make the right decision.
Despite these successes, there is still more work to do. The
challenge the Chinese Communist Party poses to the United States is
long-term, and the U.S. and our Allies need to be ``in it for the long-
haul.'' It will require sustained focus and willpower to maintain the
momentum that we have gained over the past 3 years.
Nor can we focus our efforts on the relative simplicity of a one-
on-one competition like we did in the Cold War. In addition to
confronting the growing challenges from the Chinese Communist Party, we
must not forget that Europe is also the central focus of ongoing
Russian aggression and malign influence. Although China's GDP is about
eight times the size of Russia's. Russia remains the primary military
threat to Europe and a strategic priority for most of our Allies and
partners, particularly those in Central and Eastern Europe. Russia and
China are more closely aligned strategically than at any point since
the 1950s, and we see growing cooperation across a range of diplomatic,
military, economic, and information activities.
While Russia and China are not a monolithic bloc, or even a formal
alliance, and there are certainly tensions and friction points in this
relationship, their growing strategic convergence is more than a simple
``marriage of convenience.'' It is based on a shared assessment of the
threat the United States and our allies pose to their ambitions--
through our strength, our prosperity, and our values. We have to
understand this dynamic, particularly when it comes to great power
competition in Europe.
While the growing Russia-PRC convergence presents challenges, it
also presents opportunities to maximize the impact and cost-
effectiveness of our policies and assistance programs in Europe. To
give one example: the Chinese Communist Party and the Kremlin exploit
similar vulnerabilities--weak or corrupt institutions, elite capture,
non-transparent or unaccountable governance structures, etc. Therefore,
focusing our efforts on addressing problems like this--which we are
doing through our assistance programs, including the Countering Russian
Influence Fund and USAID's Countering Malign Kremlin Influence
Development Framework--enables us to counter two threats for the price
of one.
And regardless of whether we are talking about competition against
the Chinese Communist Party, or the Kremlin, or any other rival,
perhaps our greatest advantage remains our system of alliances,
particularly in Europe but also throughout the world. As the President
and Secretary have stated on many occasions, our allies need to
shoulder their share of the burden, and they are making progress in
doing so. But the fact remains that the United States has numerous
friends; the Kremlin and the CCP do not. This is a fundamental and
enduring difference between us and them, between the democratic West
and the authoritarian powers trying to divide us.
The Administration's efforts to support, empower, and consult our
European Allies in countering the Chinese Communist Party's influence
are working. Progress is not always immediate, and engaging with our
allies on these key issues sometimes leads to hard conversations and
choices. But the result of these hard conversations and tough choices
will be an alliance and partnerships that are better prepared for the
challenges that lie ahead and more capable of defending the shared
democratic values and traditions that define the West and underpin the
free world.
Mr. Chairman, Ranking Member, thank you for the opportunity to
testify here today. I look forward to your questions.
The Chairman. Thank you, Ambassador Reeker.
We will now hear from our third witness.
Julie Chung is Principal Deputy Assistant Secretary in the
Bureau of Western Hemisphere Affairs, and brings a wealth of
experience from both the Indo-Pacific and Latin America. She
was previously the Director for Japan in the Bureau of East
Asian and Pacific Affairs. She previously held positions as the
Deputy Chief of Mission in Cambodia, the Economic Counselor on
Thailand, and the Deputy Political Counselor in Colombia.
Principal Deputy Secretary Chung, the floor is yours.
STATEMENT OF JULIE J. CHUNG, PRINCIPAL DEPUTY ASSISTANT
SECRETARY FOR WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF
STATE, WASHINGTON, DC
Ms. Chung. Chairman Risch, Ranking Member Menendez, and
members of the committee, thank you for the opportunity to
testify about China in the Western Hemisphere today.
This issue is one of our most pressing priorities, and one
that requires close coordination with our neighbors, allies,
and our global partners. It also requires strong cooperation
between the Administration and Congress, so I welcome your
engagement and the chance to be with you today.
In the Western Hemisphere, we are implementing both the
Administration's National Security Strategy and its vision for
free and open Indo-Pacific. We have two strategic objectives:
one, to reinforce our position as the region's partner of
choice; and two, to counter China's malign activities, because
they threaten the region's prosperity, security, sovereignty,
and democracy. Today, Secretary Pompeo is on his way to
countries in our hemisphere--Guyana, Suriname, Brazil, and
Colombia--to reaffirm these values and partnerships.
The United States and the Western Hemisphere enjoy a 1.9
trillion trade in goods and services, and a stock--foreign
direct investment of $350 billion. In comparison, China has a
330 billion trade and a 120 billion FDI.
And over the past decade, we have seen a dramatic increase
in China's engagement in the region. China has sought regional
commodities, critical minerals, and export markets to fuel its
domestic growth. Chinese state-owned enterprises are investing
heavily in strategic sectors and pushing Latin American and
Caribbean countries to join its One Belt, One Road Initiative.
We have also seen an increase in questionable Chinese loans for
infrastructure projects.
All of this is concerning because of the way China does
business. China's corrosive capital and predatory lending
undermine the rule of law and erode good governance. A region
hungry for investment funds finds Chinese loans attractive, but
the sticker price on these deals does not reflect their hidden
costs. Further, China's corrupt practices threaten the region's
hard-won gains in the rule of law, labor rights, and the
environment, issues important to the citizens of the region.
Faced with this challenge, an important part of our
approach is to share with our partners information about the
risks of doing business with China. We also aim to demonstrate
that the United States and our allies and American businesses
provide better alternatives when quality, transparency, and
respect for national sovereignty are taken into account. We are
catalyzing private-sector financing and capacity-building for
the region's energy and infrastructure needs through the
Development Finance Corporation and the America Crece
Initiative, working with U.S. companies and the interagency to
enhance the region's competitiveness and revitalize its
economies.
Chinese engagement is particularly egregious in information
and communications technology. You know, companies like Huawei
and ZTE have significant market share in the region already,
and we are working with our partners so that they understand
the national security and human rights concerns about Chinese
vendors, many of which are state-owned and controlled by the
Chinese Communist Party. These concerns speak to the
sovereignty and human rights of the citizens in the region.
5G in the region is still in its infancy, so we do have an
opportunity to ensure our partners understand the risk of
opening their data to Chinese vendors, and they also know the
availability of trusted alternatives.
We continue to draw attention to China's fishing practices
that do not adhere to international norms in our region and
around the world. The massive Chinese fishing fleet of over 300
ships near the Galapagos this summer alarmed governments, the
fishing community, and environmentalists, alike. We are working
with our partners to increase cooperation and expand the
capacity to detect and deter illegal and under-regulated
fishing.
Support for democracy and human rights is a critical pillar
of our engagement. We continue to support civil society, fight
corruption, boost investigative journalism, and strengthen
oversight of procurement processes. Open and transparent
governance makes it harder for China to exploit our partners
through bribery or unfair deals.
Working with democratic partners from Asia, including
Taiwan, Japan, and the Republic of Korea, is an important tool
to raise awareness about China. The hemisphere is home to nine
of Taiwan's 15 diplomatic partners. We maintain vigilance as
China pressures these countries to flip recognition to Beijing.
Maintaining the status quo of Taiwan's diplomatic relations and
highlighting our shared democratic values and showcasing
Taiwan's regional engagement and partnerships are top
priorities.
Finally, our public diplomacy, especially our people-to-
people diplomacy, advances the fourth pillar of our strategy, a
hemisphere that embraces democracy and views the U.S. as a
valued partner in the region. We are forging relationships that
will reduce the space for China to spread its malign influence
and reinforce why our shared values are so important. Our
exchange programs, public-private partnerships, and grants help
showcase the innovation of the United States, the vitality of
our entrepreneurship, and the power of the individual to make a
difference in their community, strengthening our relationships
with civil society, businesses, and especially the youth. This
is the time to strengthen academic and professional exchanges,
more than ever, so we remain well-positioned for generations to
come.
Thank you for the opportunity to testify, and for your
support for our efforts, and I look forward to your questions.
[The prepared statement of Ms. Chung follows:]
Prepared Statement of Julie Chung
Chairman Risch, Ranking Member Menendez, and Members of the
Committee: Thank you for the opportunity to testify on China's
engagement in the Western Hemisphere. This issue is one of our most
pressing priorities and one that requires close coordination with our
interagency colleagues, hemispheric neighbors, and global partners.
Just as important, it requires strong cooperation between the
Administration and Congress, so I welcome your engagement on these
issues and the chance to be with you today. I joined the Bureau of
Western Hemisphere Affairs (WHA) in November 2018 to serve as Principal
Deputy Assistant Secretary (PDAS). I brought to WHA a specific focus on
China in the Western Hemisphere that drew on my years of service in
both our East Asia and Pacific and Western Hemisphere Affairs Bureaus.
China had been viewed for years as a regional issue for Asia, but we
are acutely aware that its actions have global implications that
require global coordination and action. There are extensive linkages
between the Indo-Pacific and the Western Hemisphere, through trade,
diaspora communities, and multilateral groupings like the Asia Pacific
Economic Cooperation (APEC). In WHA we have been leading an interagency
effort to implement in the Western Hemisphere the principles of the
Administration's National Security Strategy and Vision for a Free and
Open Indo-Pacific. At the highest level, we have two strategic
objectives: reinforce the position of the United States as the region's
partner of choice and counter China's malign activities because they
threaten hemispheric prosperity, security, and democracy.
Our approach to China is guided by our broader regional strategy,
which seeks a Hemisphere that is prosperous, secure, democratic, and
receptive to U.S. leadership and values. We must, of course, work with
likeminded partners in this effort. I would like to highlight some of
the challenges we face and successes we have had in each of these
areas.
economic
Over the past decade, we have seen a dramatic increase in China's
interest in the region as it has sought access to natural resources,
raw materials, and commodities, and markets for its exports to fuel
domestic growth. The United States remains the top trading partner for
over half of the 34 countries in the region, but China is now the top
trading partner for Brazil, Chile, and Peru. The United States has free
trade agreements with 12 countries in the Western Hemisphere. China has
three--Chile, Costa Rica, and Peru--and is negotiating with other
governments.
The United States is far and away the largest cumulative source of
foreign direct investment in the region. However, Chinese state
companies are investing heavily in the region and aggressively pursuing
Latin American and Caribbean participation in its One Belt One Road
initiative (OBOR), which is focused on infrastructure development
around the world. Nineteen Latin American and Caribbean countries
currently participate in the OBOR. We have also seen an increase in
Chinese concessional loans for infrastructure investment, funding
dozens of large-scale projects including roads, ports, and dams.
All of this is concerning because of the Chinese government's
predatory approach to lending and development, the way the Chinese
government does business, and its motivations. The Inter-American
Development Bank estimates the infrastructure investment gap in the
region is about 2.5 percent of GDP or $150 billion per year. A region
hungry for infrastructure investment finds Chinese concessional loans
attractive, but the ``sticker price'' on these deals does not reflect
their full and hidden cost. China's way of doing business threatens to
undermine the region's hard-won gains in transparency, the rule of law,
labor rights, and the environment. Chinese companies are frequently
backed by the Chinese Communist Party and are therefore rife with
corruption and human rights abuses. Their investments in the region
frequently come with excessive debt and opaque terms, low-quality
infrastructure, and environmental damage, and they crowd out local
development with an influx of Chinese materials, equipment, and
workers.
Faced with this challenge, an important part of our approach is to
share with our Latin American and Caribbean partners information on how
the PRC's behavior is out of line with internationally recognized best
practices for governance and sustainability and not in their best
interests. Our engagement has helped several countries, including Chile
and El Salvador, make better decisions for U.S. and regional interests.
We also aim to demonstrate that the United States, our allies, and our
businesses provide better alternatives when factors such as good
governance, quality, and transparency are taken into account. We are
working with partners to press for China's economic engagement to meet
high standards in terms of transparency, adherence to the rule of law
and anti-corruption practices, debt sustainability, labor rights,
environmental best practices, and the needs and concerns of local
communities. We have established a program to facilitate timely,
targeted bilateral engagements at the technical level to advance U.S.
interests and values on sensitive economic issues. Our delegations have
helped some of our partners in the region considering legislation on
foreign investment screening. A delegation to Ecuador focused on data
privacy, and a delegation to Peru illustrated best practices in
infrastructure procurement.
The Administration launched in December 2019 an expanded initiative
called Growth in the Americas (``America Crece'' in Spanish). This
whole-of-government effort aims to catalyze the private sector as the
primary engine of growth to develop infrastructure in Latin America and
the Caribbean. The focus is on improving the investment climate for all
types of infrastructure, including energy, airports, seaports, roads,
water, social, telecom, and digital networks. The effort incorporates
the expertise and resources of nine agencies across the federal
government. The U.S. International Development Finance Corporation
(DFC) is a critical tool in these efforts. We expect DFC to deploy at
least $12 billion in financing in the region. We need to align State
and USAID efforts and resources to fully leverage DFC's new
capabilities. We are also working to expand the Digital Cybersecurity
and Connectivity Partnership (DCCP) to the region, modeled on the work
the initiative has already accomplished in Asia. Under the DCCP, U.S.
Government agencies promote open, reliable, and secure communications
networks in Latin America and the Caribbean, one critical area where
prosperity and security intersect. I joined Deputy Secretary Sullivan
and Senior Advisor Ivanka Trump last year in South America and saw
firsthand the lives of women entrepreneurs transformed through
financing through the W-GDP 2X Initiative.
security
Chinese influence in the Americas is particularly strong in
information and communications technology (ICT). Chinese companies like
Huawei and ZTE have significant market share in their respective
industries in many parts of the region, and they are aggressively
expanding with mass advertising campaigns and promises of investment
and job creation. The United States works with Latin American and
Caribbean countries on ICT issues, and our well-established concerns
with Chinese companies focus primarily on their security implications.
Increasingly interconnected countries, economies, and communities are
vulnerable to interference if the companies managing their networks do
not follow the law or adhere to international norms. This threat is
especially great in emerging 5G networks.
Most Latin American and Caribbean countries are still focused on
expanding 4G networks based on significant previous investments. Some,
however, are eager to make space for 5G deployment and will hold
spectrum auctions within the next year. With 5G in Latin America and
the Caribbean still in its infancy, we have an opportunity to ensure
the region understands the risks of Chinese vendors and the
availability of trusted alternatives. Chinese firms might offer
attractive technology and pricing, but they create opportunities for
the Chinese government to tap into--and exploit--data flows, including
sensitive political, business, and military information. Companies such
as Huawei deny their intention to misuse the information they manage on
a daily basis, but Chinese law clearly states the obligation of all of
its companies to subordinate themselves to the State. Numerous
independent news reports have detailed the willingness of Huawei
officials to assist repressive regimes in spying on political
opponents.
We also are working with our regional partners on the security
risks of Chinese surveillance technology, which even democratic
countries like Uruguay and Argentina have installed. We remain
concerned about the Chinese government's attempts to export advanced
surveillance and monitoring systems as part of a broad effort to spread
its authoritarian model and influence foreign countries. Chinese
companies like Huawei and ZTE are selling, loaning, or transferring to
foreign governments so-called ``smart city'' and ``safe city''
systems--a broad array of surveillance and monitoring technologies,
including cameras with facial recognition and artificial intelligence
systems. These systems can be used to monitor individuals and
potentially violate human rights as the PRC is doing now, for example,
in Xinjiang. Latin American governments that accept Chinese projects
need to be vigilant about the potential for similar surveillance
technology to be included without protections for civil liberties.
We continue to draw media attention, coordinate with our partners
in the region, and conduct outreach with regard to the PRC's fishing
practices off the Ecuadorian EEZ surrounding the Galapagos and
elsewhere in our region to pressure the PRC to impose strong governance
over their distant water fishing fleet. The massive Chinese fishing
fleet that has been operating on the highs seas off the Ecuadorian EEZ
surrounding the Galapagos this summer appears to be leaving the area
for the year, but given its extractive capability, we are working with
our partners to prepare for when the fleet returns in future seasons,
as it has for many years. Some of these Chinese-flagged fishing vessels
were reportedly disabling collision avoidance transponders and leaving
marine debris. Fishing authorities continue to seek concrete evidence
of any illegal fishing connected to the Chinese fleet. The United
States is supporting and encouraging this effort through regional
cooperation to combat illegal, unreported, and unregulated (IUU)
fishing, such as improving monitoring, control, and surveillance
related measures of the South Pacific Regional Fisheries Management
Organization charged with managing the region's fishery. The U.S.
Ambassador to Ecuador traveled to the Galapagos earlier this month and
met with government officials, NGOs, researchers, and others in order
to bring focus on IUU fishing and maritime issues. The U.S. Coast Guard
cutter Bertholf was part of a military maneuver (passing exercise) with
the Ecuadoran Navy that took place near where the Chinese fleet was
located. NGOs are organizing and providing equipment, funds, and boats
needed in Galapagos National Park to detect and intercept illegal
fishing vessels in the Galapagos Marine Reserve. This is about the rule
of law, transparency, and the harmful exploitation of the environment
of our region.
democratic governance
Support for democracy and human rights is a pillar of U.S.
engagement in our overwhelmingly democratic hemisphere. With engagement
and programs, we continue to support civil society, counter corruption,
boost investigative journalism, strengthen oversight of procurement
processes and tenders, and support regional democracy. China has
directly contributed to regional instability and corruption by
bankrolling the illegitimate dictator of Venezuela, Nicolas Maduro,
with more than $62 billion in loans between 2007 and 2017. As Secretary
Pompeo noted, China's treatment of Muslims, including the Uighurs, in
western China is an enormous human rights violation, and we will
continue to raise the issue, highlighting how the Chinese Communist
Party's values clash with those of our Latin American partners.
working with democratic partners: japan, taiwan, rok
Working with democratic partners from Asia--including Taiwan,
Japan, and South Korea--is an important tool to raise awareness of
China's malign activities and promote transparent private investment in
the region. In August 2019, we launched the U.S.-Japan Dialogue on
Latin America and the Caribbean. We agreed to operationalize an
existing OPIC-JBIC MOU to co-finance an infrastructure project in the
region. Latin America has the largest regional contingent of countries
that recognize Taiwan: nine out of Taiwan's remaining 15 diplomatic
partners are in Latin America and the Caribbean. We see China
pressuring these countries with financial incentives to flip diplomatic
recognition to Beijing. Maintaining the status quo in terms of Taiwan's
diplomatic relations is a top priority, and we are finding innovative
ways to support Taiwan's position in the region. Last year, we
organized an October 16 ``Friends of Taiwan'' roundtable for Taiwan's
nine Western Hemisphere diplomatic partners to discuss what is working,
and what needs to change, for them to maintain ties with Taiwan rather
than the PRC, the first time we ever held such a meeting. We partnered
with Taiwan to bring its Global Cooperation and Training Framework
(GCTF) to Latin America and the Caribbean in September 2020, to
highlight the benefits of welcoming Taiwan's expertise into the region.
Although COVID-19 required a shift to a virtual format, the first
session, the U.S.-Taiwan Workshop on Digital Economy and COVID-19
Response, took place on September 8 with over 200 participants from 25
countries. This was the first time this flagship U.S.-Taiwan-Japan
development assistance training program has been held in the Western
Hemisphere. GCTF participants are drawn from countries that recognize
Taiwan, countries where Taiwan maintains unofficial relations, and
countries we believe are interested in expanding ties with Taiwan.
I have traveled so far to Argentina, Belize, Brazil, the Bahamas,
Costa Rica, El Salvador, Haiti, Paraguay, and St. Lucia to promote our
shared values and hold public meetings with ambassadors of Taiwan,
Japan, and South Korea, government leaders, journalists, the private
sector, and especially the youth. Together we raise awareness of the
dangers of malign Chinese engagement--stressing good governance, the
environment, worker rights, freedom of expression, privacy, debt
sustainability, and sovereignty--and we encourage local voices to speak
up. The need for this engagement with our partners remains crucial as
we have seen the PRC attempt to increase its outreach and rewrite the
narrative in the Hemisphere during the COVID-19 pandemic. Our
partnership based upon shared values with countries in the region will
be a key to returning the region to economic health and prosperity
following the crisis.
public diplomacy
Our public diplomacy advances the fourth pillar of our regional
strategy--a Hemisphere that continues to embrace U.S. values and
leadership--by forging relationships that reduce the space for China to
spread its malign activities. We have several successful programs that
are building these bonds for future generations. The Young Leaders of
the Americas Initiative (YLAI) expands ties between emerging
entrepreneurs and U.S. counterparts to support job creation and
economic growth. The Department's Academy for Women Entrepreneurs (AWE)
provides women the knowledge, tools, and networks they need to turn
their ideas into successful businesses. And the very successful 100,000
Strong in the Americas (100K) Innovation Fund, a public-private
partnership, supports educational exchanges that strengthen the links
between education, workforce development, and social inclusion to
address opportunity gaps.
Our exchange programs, extensive network of American Spaces and
American Space partnerships, and robust offering of post-identified and
managed small grants all help foster and deepen U.S. relationships with
influencers and target audiences. The Global Engagement Center (GEC)
supports our efforts to address propaganda and disinformation in the
Hemisphere by providing original research and working with U.S. public
diplomacy officers in the field. The PRC has recognized its cultural
capital deficit in the region and attempted to duplicate our playbook,
making huge investments to expand its network of Confucius Centers.
These networks allow the PRC to increase its cultural influence in the
Hemisphere and to send thousands of young people to China on academic
and professional exchanges. But we will not cede to the PRC the next
generation of leadership in our Hemisphere. From my meetings with young
hackathoners in Haiti to women entrepreneurs in the Bahamas to student
activists in Nicaragua, this is the generation who turns to the United
States for our innovation, opportunity, and values. This is the time to
strengthen our public diplomacy strategy so we remain well positioned
for generations to come. We must remain engaged in the Western
Hemisphere, and our diplomats in the field and those who support them
in Washington both need and appreciate your continued support.
The Chairman. Thank you, Secretary Chung.
We are now going to do a--as advertised, a round of 5-
minute questions, and it will be done on the seniority basis,
due to the fact that members are attending virtually.
First question I have is--and anyone can take a shot at
this--if you can tell me what--the new EU-U.S. dialogue on
China that is coming down the pike, where are we in the
planning stages, and what is estimated to be the--well, when
the first dialogue will occur?
Ambassador Reeker. Thanks, Mr. Chairman. I saved this for
your question, and kept it out of my spoken remarks.
As you know, the High Representative/Vice President of the
European Union, Mr. Borrell, proposed this dialogue. It was
shortly after the Secretary had joined the Foreign Affairs
Committee of the EU during the summer, and we have spent the
last couple of months working out the parameters of this
through our Mission in Brussels, through the EU Mission here in
Washington, and in direct contacts. We developed a set of
pillars that we plan to focus on: recovery, of course, from the
pandemic; focusing on reciprocity steps; and then resilience--
how do we deal with supply chains and other things?
Disinformation is a major topic that everyone has said we need
to discuss. And, of course, human rights. The Europeans have
also suggested we include a discussion on international
organizations and Chinese efforts to dominate those, and then
just share our experiences in dealing with China. So, the idea
is to have a forum where we can really review all aspects of
the Chinese presence in Europe, globally, and how we deal with
that.
The Secretary and High Rep. Borrell plan to kick this off.
We are looking for a date in the near future, trying to do
scheduling. I think we are resigned to the fact that this may
have to be virtual instead of in person, just given the
pandemic requirements. And then we will go from there to other
levels of engagement. The Deputy Secretary has also agreed to
participate. He has had a number of conversations with his
counterpart, Helga Schmidt, at the EU. The political directors
of all of the EU member states will gather and have this on
their agenda at the end of the month, under the German
presidency. And that is an opportunity for, then, the member
states to engage, as well. As you know, with the EU, we have to
look at both member-state experiences as well as overall
Brussels approach.
So, there are a number of fora there. Like I said, I hope
we can kick this off, if not at the end of this month, early
next month, and see this as a long-term project that engages in
a formal structure several times a year, and at working-group
levels, as well, so that we can really exchange ideas,
experiences, and strategies, going forward.
The Chairman. Thank you. I do not think anyone would
disagree that this is going to be a long-haul project, versus
instant gratification.
Senator Menendez.
Senator Menendez. Thank you, Mr. Chairman.
Deputy Assistant Secretary Chung, as you know, I and
members of this committee introduced bipartisan legislation
last month to strengthen U.S. competitiveness in Latin America
and the Caribbean, and to address China's economic, security,
and intelligence engagement. I believe that our efforts on this
bipartisan basis are complementary. ACTSA requires the
Departments of State and Treasury to provide technical
assistance to regional partners to help them safeguard their
infrastructure from predatory foreign investments, similar to
the Committee for Foreign Investment in the United States,
CFIUS. Can you tell me what initial steps have been carried out
on this front?
Ms. Chung. Thank you for your question, Senator.
On CFIUS and investment screening, this is something that
is a very important issue throughout the region, and throughout
the world, of course, and we thank you for the ACTSA bill. We
will consider that--the details of that, and discuss with our
staff on some feedback regarding that bill.
But, in terms of CFIUS and investment screening, we have
extensive engagements in the region. We have been sending
technical delegations to countries in the region to explain how
public procurement processes and transparent processes work. We
have helped governments build that capacity through the America
Crece Initiative. We have ten MOUs now signed with countries
throughout the region, and that is part of the tool to use in
addressing the corruption issues that China is bringing to the
region. How do we ensure the countries have the right tools in
place, the practices in place, the procurement practices and
regulatory framework so that private-sector companies will want
to come and invest in those countries and ensure they have a
level playing field?
Senator Menendez. Thank you.
Ms. Chung. So, we are working through the America Crece
Initiative.
Senator Menendez. Thank you.
ACTSA also strengthens the DFC's engagement in Latin
America, and authorizes additional eligibility for Caribbean
countries. Can you briefly outline how the Administration
prioritizes DFC engagement in the region?
Ms. Chung. Thank you, Senator, for the question.
DFC has been a wonderful tool and resource that we have
been able to now utilize more than ever and, from the former
OPIC's utilities, now expanding that broad--a broader base in
Latin America and the Caribbean. So, DFC, in our vision, has
already invested, and has pledged to invest $12 billion in just
the Western Hemisphere, alone; and, in Central America, $3
billion. So, it is already invested in Central America--in El
Salvador, for instance, on an LNG project, and other projects
that are forthcoming. But, we are working strategically with
DFC to ensure that these are strategic, that they have purpose,
and that they bring the right competitiveness and transparency
to the region.
Senator Menendez. ACTSA also requires a designation of a
China Engagement Officer at the Western Hemisphere Embassies to
report on China's presence in the region. Can you briefly
outline for us the reporting officers you have in the region?
Ms. Chung. Thank you, Senator.
We do have one China officer, China--officer based in the
Western Hemisphere, in Lima. We just got approval to get three
additional positions in the region. So, we are very excited to
be placing those three positions in Panama, Uruguay, and
Barbados.
In addition to that, every Embassy in the Western
Hemisphere has a China Working Group who does regular reporting
through our cable channels, and we coordinate all the messages
throughout the Western Hemisphere in our monthly message.
Senator Menendez. And finally, ACTSA requires the executive
branch to provide our regional partners with assistance on
cybersecurity and cyber defense. Can you briefly outline any
initial efforts in that regard?
Ms. Chung. On cyber issues, we have two very new
initiatives that we took from the Indo-Pacific that we are now
launching in the Western Hemisphere. One is the DCCP, the
Digital Cybersecurity Partnership. Now, that was only planned
for the eastern--for the EAP region. But, realizing the
importance of cybersecurity and 5G issues in the Western
Hemisphere, we launched this for the first time now in our
region, with an initial investment of $10 million. But, this
will provide for cybersecurity training and shared--best shared
practices, and working with our partners to make sure they are
aware of the cyber issues and have the right tools to address
them.
Senator Menendez. Well, I appreciate your responses. And it
is good to see that our bill and the Administration's
initiatives are mutually reinforcing. I will look forward to
working with the Chairman, hopefully, to schedule a markup on
ACTSA so we can have congressional support for some of these
initiatives.
Secretary Stilwell, as you know, authoritarian nations,
such as China and Russia, are utilizing emerging technologies
in new ways to surveil and repress both domestic and foreign
populations, as well as manipulate democratic elections.
Furthermore, these countries are now spreading their models for
digital authoritarianism to other countries who may be
attracted to these new modes of social control. What is the
Administration's strategy to counter the spread of digital
authoritarianism in the malign use of digital products and
services in the Indo-Pacific?
Mr. Stilwell. Senator, thank you for that question.
As my colleague from the Western Hemisphere noted, that
this strategy is not limited to EAP, but it has been
throughout--globally. We have been executing this effort to
take down things like Hikvision, DJI--these names are all well
known to us because we have been shining a light on these
activities that would otherwise seem benign but are, in fact,
nefarious.
The most recent, I think you will find you have seen is
identifying apps, seemingly innocuous--TikTok and others--as--
for what they are: massive collection platforms for information
used by the Chinese Community Party. I will point to--
yesterday, New Zealand discovered that their Prime Minister had
been targeted by this.
So, the strategy involves not just focusing on China,
itself, but helping the world defend from these things. I think
you may remember, Keith Krach and I, confirmed together 18
months ago, and he has been leading the way on many
initiatives--the Clean initiatives--you have heard that series
already--that also bring all these ideas into one place. And he
is uniquely qualified to talk about digital security.
Thank you.
Senator Menendez. Well, I am happy to hear from him in the
future.
I will just simply say, I was more focused on digital
authoritarianism, the use of technology to try to control
people, and nations that seem to be following China's lead and
accepting China's technology. So, I would love to hear from
that, for the record, as soon as you can.
Senator Menendez. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Menendez.
And I think you hit on a really important issue on the
cyber matters regarding control of massive groups of people.
This is a technology that is right in the wheelhouse of those
authoritarian countries that want to do that. So, I think that
is really important that we focus on that. So, thanks for that
line of questioning.
I am told Senator Johnson is with us virtually. Is that
true?
[Pause.]
The Chairman. Apparently not.
[Laughter.]
The Chairman. Let us--but, the next one on my list is
Senator Gardner.
Senator Gardner. Hey, Chairman Risch. Thank you very much
for this.
And thank you, to the witnesses, for testifying today.
As Chairman of the Senate Foreign Relations Committee,
Subcommittee on East Asia, the Pacific, and International
Cybersecurity, we have obviously been working with our
colleagues on efforts to shape new policy toward the Indo-
Pacific. China is now an emerging global power that is broadly
challenging the United States in nearly every domain--military,
economic, technological, and ideological. China now intimidates
countries across the globe, leverages its economic largesse to
coerce large and small countries, alike. It has embarked on an
initiative to seek submission and domination.
China's ``Made in 2025'' policy has leveraged cyber
industrial espionage and coercive technology transfer
practices, with the aim of dominating the global market share
of critical future technologies. Their Belt and Road Initiative
cultivates economic and political dependence, and threatens
participant sovereignty. Beijing's military modernization
programs comprise the most rapid military buildup in history,
threatening the stability and security of the most prosperous
region of the world. It is more important than ever to ensure
the United States maintains leadership in the Indo-Pacific
region and beyond, reaffirms alliances, bolsters economic links
between the world's advanced democracies, and promotes human
rights and the rule of law.
Now, the Administration and Congress must be united on
implementing a long-term strategy that will benefit the
American national security interests, promote American
businesses, and create jobs through trade opportunities, and
project American values of respect for the human rights and
freedom for--respect for human rights and freedom across the
globe. This includes countering China's malign influence, from
the Indo-Pacific to Europe to the Western Hemisphere. In
addition to maintaining a strong military that deters Chinese
coercion and expansionism, the U.S. must pursue a strategy that
secures U.S. technological primacy and economic security in the
coming decades.
Legislation like my Asia Reassurance Initiative Act ensures
that the United States Government will speak with one voice to
reassure our allies that we will continue to lead militarily,
economically, and technologically in the Indo-Pacific region.
As we recognize the increasingly global nature of this
competition with China, it is more important than ever that we
continue to lead the free and democratic countries of the
world, and shape the global economic and security landscape.
The first question I would ask--Secretary Stilwell, if you
would like to do this--ARIA incorporates and elaborates on the
Administration's Indo-Pacific Strategy, the defining element of
which is the enduring United States commitment to uphold
international law, to maintain an Indo-Pacific that is free of
coercion, military, economic, or in violation of basic human
rights and freedom. Could you talk about how this
Administration has implemented ARIA to work with the allies to
promote that networked vision of security cooperation and
counter Chinese coercion? Talk a little bit about how the free
and open Indo-Pacific and--strategy can better be--better be
adopted by our allies throughout the region or other countries
throughout the region that may be hesitant to be caught up in a
great-power competition, and how we can make sure that we are
upholding a free and open region.
Mr. Stilwell. Senator, thank you for that. And it is good
to see you virtually.
Senator Gardner. Good to see you, man.
Mr. Stilwell. The great part about all of this is that
the--ARIA and on--much of the legislation comports quite well,
aligns and meshes well with the Indo-Pacific Strategy. You
know, that tells the Chinese that Congress and the
Administration, on both sides of the aisle, are absolutely
aligned on the large majority of these efforts.
Executing this is much easier if we do it in networks, if
we do it, as you say, in groups. And I can point out any number
of examples in the region, but outside of the region as well.
You have seen India has come on very strong in this regard. The
concept of the Indo-Pacific has incorporated India into the
larger solution. Getting the word out matters. I have been very
encouraged by our colleagues in Europe that have understood the
threat, have come to, not just understand it, but act on it if
you have seen very positive activity that--you heard Minister
Borrell may say some very helpful things. A number of other
folks in Europe have come on strong in this regard. And it is
only going to continue. And that is because we are doing this
as a group effort, and not as a one--as the U.S. by itself, and
we are not doing it as just the Administration. It is the
entire government doing it.
So, we welcome legislation like ARIA and all the
cooperation between the Administration and the Congress.
Thank you.
Senator Gardner. Thank you, Secretary.
Beijing's hostility toward Taipei has been
counterproductive, obviously, and dangerous. The international
community in Beijing are progressively realizing that Taiwan
and China are on different trajectories and espouse wholly
incompatible systems of governance and values. And so, building
on the longstanding bipartisan support in the U.S. Congress for
Taiwan and the Taiwanese people, my Taipei Act, which recently
passed into law, expands Taiwan's links with the international
community and its presence in the global organizations.
You talked about that in your opening statement. But, how
important do you think something like a bilateral trade
agreement with Taiwan is? And what do you think the economic
benefits are? And can we see progress on that from the
Administration in the coming weeks and months ahead?
Mr. Stilwell. Senator, that is a very important point. As
you see the--Keith Krach, again, who I just mentioned, is in
Taiwan right now to celebrate the life and legacy of former
President Lee Teng-hui. And the relationship with Taiwan--one,
our goal is to comply with the law. That Taiwan--that law is
the Taiwan Relations Act and the Taiwan Travel Act and the
Taipei Act--all these things, to make sure that we allow Taiwan
the space--international space to deal with its larger neighbor
to the west in a way that resolves their differences through
dialogue and not through coercion--we mentioned taking--picking
off partners in the past--not through coercion or definitely
not through use of force. And so, cooperation between the
Administration and the Hill on things like arms sales and the
rest are, one, completely in line with all of our agreements;
and, two, ensure that this--that the situation, the issue
between the mainland and Taiwan is resolved peacefully.
Thanks.
Senator Gardner. Yeah.
And, Mr. Chairman, how am I doing on time? Am I still--do I
still have time left, or have I run--I am sorry.
The Chairman. Not so good.
[Laughter.]
Senator Gardner. Thanks, Mr. Chairman.
The Chairman. Thank you, Senator Gardner. We appreciate
that.
Senator Cardin is somewhere out there in cyberspace,
apparently. Am I right?
Senator Cardin. I am right here, Mr. Chairman.
The Chairman. All right.
Senator Cardin. Thank you very much.
And I thank all of our witnesses. This is a critically
important hearing.
China presents so many challenges to the United States. We
have human rights issues, where they violate the rights of
their own citizens, the Uyghurs being a prime example. There
are many other examples that are of great concern to us. They
violated their agreement in regards to Hong Kong, the one
country, two systems. I have joined with Senator Rubio and
others in a bipartisan effort to make it clear there will be
consequences to that violation of international agreements.
They represent direct security threats on what they are doing
in the China Sea. They always raise an issue as to the security
of Taiwan. And the list goes on and on and on.
But, I want to use my time to follow up on our own
hemisphere, as the Ranking Democrat on the Western Hemisphere,
to talk about China's influence in our own hemisphere. And I
will follow up on the points that Senator Menendez made during
his opening statement, during his questioning.
The United States should have a strategic advantage over
China in our hemisphere. We have historic ties. We have
cultural and geographical ties; we have a history. We are the
preferred partner. However, we have seen some really disturbing
trends in recent years. The Belt and Road Initiative: 19--19
Latin American and Caribbean nations have entered into economic
agreements with China. We look at, on the health front, Brazil,
with COVID-19 vaccines. We look at the community of Latin
American and Caribbean nations, the CELAC, they have entered
into a 5-year cooperative agreement with China. And we know
that China wants to use its economic power to undermine our
economic system so that they determine the rules of
international engagement, rather than in market economies, such
as the United States. So, we have joined, in a bipartisan
effort, as Senator Menendez said, the United States, in the
Advancing Competitiveness and Transparency and Security in the
Americas Act. Senator Menendez, Senator Rubio, Senator Cruz,
and Senator Kaine--we have all joined together.
So, my question to Secretary Chung is, what can we do? What
are we doing now, recognizing that China has made unprecedented
inroads in our own hemisphere, to shore up the economic ties?
And how can you work with Congress to make it clear that this
is an all-U.S. effort, that there is no division here in our
commitment to have closer ties with the countries within our
own hemisphere?
Ms. Chung. Thank you for your question, Senator.
First of all, in terms of the--during the COVID era, we
have seen China, again, deliver masks, PPEs. Some of it faulty.
Some of them had to be returned. So, going back to the question
of, Can you trust what China delivers? While the United States,
we provided over $20 billion globally for the COVID effort, and
$140 million just in WHA, the Western Hemisphere. That includes
PPEs, lab equipment, detection, and also 3,000 ventilators.
Now, beyond the immediate donations, which address the
immediate needs, we are looking farther down the road. How do
we help in the economic recovery efforts? And that is where,
Senator, when you talked about the whole-of-government effort,
our America Crece Initiative, the Growth of the Americas
Initiative, comes in. We want to help these countries, because
we expect, in 2020, a GDP decline of 9 percent due to the COVID
and ongoing issues. How do we help them recover in a way that
is transparent and long-lasting and sustainable? So, through
the America Crece Initiative, we bring in whole-of-government,
all the interagency together, and we are forging new
relationships through DFC, through investment agreements,
through further discussions on, How do we develop the trade
frameworks within these countries so that we can have long-
lasting relationships and economic growth beyond the immediate
needs of the COVID pandemic?
Senator Cardin. Let me make two other suggestions that
might help in this area.
One is the U.S. participation in the OAS. We passed, in our
committee, legislation that would strengthen the parliamentary
role within the OAS to make it clear that this is an
organization that we can better utilize to improve America's
influence in our own hemisphere. We are members of the OSCE, as
I am sure you are aware. Our participation there has made a
much stronger relationship between Europe and the United States
on the basic principles of our Nation. And I think we can do
the same within OAS. And I do not think it has been used as
effectively as we need to.
And the second point--I get your response to both, if I
might--is the Caribbean nations. There are many Caribbean
nations. They are relatively small. And it does not take a lot
of attention to make sure that we have their support on the
global community within the United Nations and in our own
hemisphere. We found, within OAS, we did not get the type of
support we wanted from the Caribbean states. So, it does not
take a lot of attention. And China is giving them that
attention, and the United States is not. So, I would just urge
us to recognize that we can do a lot more with a relatively
small amount of funds in some of these small island states.
Your response?
Ms. Chung. Thank you, Senator.
On the OAS, we have seen it as a multilateral institution
that actually works now. Under the leadership of Ambassador
Carlos Trujillo, we have engaged, revived the ability of the
members to speak up against the democratic--anti-democratic
forces in Venezuela, Cuba, and Nicaragua.
And another way that we are trying to utilize the OAS is to
provide space for Taiwan, our partner in the region. Last year,
we had a humanitarian assistance conference for Venezuela that
was held at the OAS. And we were able to get Taiwan's head of
the TECRO to come deliver remarks at the Hall of the OAS and
announce a $500,000 donation to the Venezuelan humanitarian
effort. That is unprecedented, to have Taiwan be there, and
that probably made our friends in Beijing very unhappy. But,
again, we are trying to provide that space for Taiwan as well
as other democratic actors in the region.
Another area where we have provided that space is through
the Inter-American Development Bank, IDB. This is where China
provides .004 percent of the contributions, and yet last year
China tried to demand that, when it hosted that meeting in
Chengdu, that (a), that Guaido's representative--President
Guaido's representative, would not be welcome; and (b),
Taiwan's representative would not be welcome. And Taiwan is an
observer to the IDB. So, the region, and in concert with the
United States, pushed back on China's attempts to try to create
its own rules and regulations in an international body, and it
was rejected, and the meeting was not held in Chengdu. It was
held in Ecuador instead.
So, these are some examples where we can use a multilateral
organization space to work together with our allies to speak
up.
In terms of the Caribbean, as I said earlier, Secretary
Pompeo is in the Caribbean today. He is on the flight right now
to Guyana and Suriname, onwards to Brazil and Colombia, but two
countries that recently held successful democratic elections,
and to reinforce our partnerships and our long-lasting
relationships with the Caribbean. Last year, I joined Deputy
Secretary Sullivan at SOUTHCOM with Admiral Faller and inviting
all the Caribbean members to a resilience conference to talk
about how the countries can work together with the United
States to combat disaster resiliency in the face of hurricanes.
And we continue to engage the Caribbean to the Caribbean
Security Initiative and the 2020 U.S.-Caribbean Partnership in
many ways across the region. And, in addition to that, the
Caribbean also is home to four countries that have diplomatic
relations with Taiwan. So, we continue to reinforce those
relationships, and Taiwan is closely monitoring and enhancing
their relationships with those countries, as well, in
recognition that Beijing is constantly trying to flip those
countries.
The Chairman. Thank you----
Senator Cardin. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Cardin.
We will now move to Senator Romney, who is supposed to be
with us virtually also.
Senator Romney.
Senator Romney. I am with you virtually. Thank you.
And I want to begin by expressing my appreciation to the
members of this panel for the work that you are doing in our
behalf. I think it is perhaps the most important work that is
going on in our government, because I think the issue of our
decade, and perhaps beyond that, is going to be how to deal
with the emergence of China as a great power. And they would
hope to become the greatest and only great power. So, I salute
your work.
I just want to underscore a few things I think we know. We
know that China's GDP will surpass our own by a lot, just given
the size of their population, ultimately. We know that, at this
stage, their procurement is pretty close to equal ours.
Military procurement, that is. And so, in the future, with a
greater economy, they will be able to substantially out-invest
us, in terms of procurement. We know that, geopolitically, they
are rising, and we are not. They are lining up people to
support them. People who, in the past, have not supported them
are now coming to their side. That is, in part, because they
see where the power goes. Friends often go where they believe
their interest is going to be best protected. And, as China
becomes stronger, we may find that they are able to collect
something which they have never had before, which is friends.
I think President Trump, by the way, was right to confront
China and to push back against their trade practices. I think
he made a mistake by not doing so in collaboration with our
allies, and being able to have much more clout pushing against
them. I think Secretary Pompeo was right to have spoken so
forcefully to awaken our allies to the threat posed by China
and to encourage a collaboration with them.
I would also note that many of us have very great concerns
about the human rights abuses going on in China, the outrageous
treatment of minorities, the Uyghurs, people of religious
faith, the people of Hong Kong. It is simply extraordinary. We
also see their activities in the South China Sea with great
alarm.
But--it is my own view, but it is very unlikely that they
will change these practices in a very significant way until
they feel pain. And the only pain that we are going to be able
to exert, other than words and people decrying them, would be
economic pain. And so, the question that I would ask with
regards to our panel, and Secretary Stilwell in particular, is,
are our allies and other nations that are--that follow the rule
of law, whether, you know, India, Japan, South Korea, the EU--
are they poised to combine, at some point, and to develop a
collaborative trade policy which will exert such pressure on
China that they will be diverted from the course they are on
and move towards a--comporting with the international order?
Are we there? And, if we are not there, what do we need to do
to get there?
Mr. Stilwell. Senator, thank you for that great question.
It is--it pretty much encapsulates my entire time in this
job and a lot of success that we have seen in this regard, in
getting others to find their voice. I mentioned, the Europeans,
of late, after Wang Yi's not-so-successful tour, have also
begin to acknowledge the problem.
As we all know, China uses its economic clout as a cudgel
to force countries to do things that are not in its own
interest. And the way many portray this in this new great-power
competition is the simple act of talking about it,
transparency. Because we know the information environment
inside the PRC is clogged, it is one way--you know, those who
speak out, like Dr. Li Wenliang, who pointed out the problems
with corona, are oftentimes squelched. And that is because the
government fears transparency. They do not want to be seen,
what is happening in Xinjiang.
And so, we identify that this is a values issue, where they
are using slave labor to produce things that we appreciate here
in the West. And I think those of us in the free world are
smart enough to take action--economic action to address this
sort of behavior. And so, you have linkages between economic
interest and values and who we are. And the United States--
Secretary Pompeo, the President--have all been very vocal about
this, as you said, is to connect those two.
What you have--the result of that, then, is, you have got
companies leaving China. You know, when you arrest Australian
reporters--or you threaten to arrest them because of something
that is happening in Australia, you now have zero Australian
reporters in the PRC. You can imagine, businesses are going to
feel the same thing with this new national security law.
Article 38 says that if you have said anything derogatory about
the PRC or about the government, that you are subject to
arrest. All these things work against that juggernaut that you
described, Senator, of this inevitability of Chinese domination
of the global economy. And, at the same time, we are seeing
great work and cooperation on the economic side. Again, Japan,
$2 billion to re-shore out of Taiwan--TSMC, the world's
greatest chip manufacturer, looking to re-shore here into
Arizona, creating American jobs.
So, I do not think it is as inevitable as they would make
it sound. I do think the U.S. has been able to generate
cooperation with allies, partners, definitely in the East Asia
Pacific region, and elsewhere, as everyone recognizes the
threat.
Thank you.
Senator Romney. Thank you, Mr. Secretary.
The Chairman. Thank you.
Senator Romney. My--I know my time is up. I just want to
underscore, I believe the importance of combining with these
other nations on a collaborative basis to confront China.
Thank you.
The Chairman. Thank you. I appreciate it.
For those of us that are attending via the Internet, I
would appreciate if you would put a clock in front of you for
the 5 minutes. There is--we have heavy attendance today, and
everybody wants a shot at this, so to--for respect of fellow
members, I would appreciate it if those of you who are not here
with the clock in front of you, like those of us that are here
have, if you would have your staff or someone keeping track of
that, we would--all of us would greatly appreciate that.
Senator Shaheen, who is not with us digitally, welcome.
Senator Shaheen. Always in person, Mr. Chairman.
The Chairman. Thank you.
Senator Shaheen. Thank you, to each of our panelists, for
being here. We really appreciate your insights.
And, as you all and my colleagues have said so eloquently,
China certainly represents a threat to the United States, both
economically and militarily.
Ambassador Reeker, economic and governance circumstances in
the Western Balkans really make that region particularly
appealing for China. Can you talk about what we are doing? What
is our strategy to address China in the Western Balkans?
Ambassador Reeker. Thank you, Senator Shaheen. As you know,
it is always a pleasure for me to discuss the Western Balkans.
Senator Shaheen. I knew that.
[Laughter.]
Ambassador Reeker. And we have really seen, I think, some
great developments there. As I mentioned in my remarks, as we
have discussed across the panel today, China poses a threat in
that region, as well, where they seek to divide these small
countries from their Western orientation. But, we have, as we
do with all of Europe, been engaging to make them aware of the
threat and the challenge, the problems with the Chinese debt
diplomacy. And we focus on reciprocity and resilience. And, for
us, in the Western Balkans, as you are keenly aware, we focus
on helping all of those countries expand their Western
orientation. We have seen great success there; Northern
Macedonia becoming, in spite of the virus this year, the 30th
member of NATO. Prosperity begins with security. We think
expanding the NATO alliance to include those countries, like
Montenegro, as well, just a couple years before, has been a
very positive step.
The Three Seas Initiative was developed by countries, a
dozen countries in the Central and Eastern European region, to
provide alternatives, particularly in a north-south direction,
for trade and infrastructure. And we have stepped in to support
the Three Seas, not as a member, but as an interested partner.
And Secretary Pompeo outlined, as I mentioned, that the
Development Finance Corporation is offering up to a billion
dollars in matching investment funds for opportunities
throughout that region.
So, we continue to engage with them. And you have seen,
recently, the great strides that were made between Serbia and
Kosovo in their long-term problem, which has hindered the whole
region, by focusing on the economic side, through the great
efforts of the White House and Special Presidential Envoy
Grenell bringing the leaders together, not to tackle the most
difficult neuralgic issues of recognition, but focusing on
things they could do to normalize economic relations between
Serbia and Kosovo. And that has given us some new
opportunities, as well.
Senator Shaheen. Can I--I am sorry to interrupt, but--and
perhaps Assistant Secretary Stilwell would like to weigh on
this--but, Serbia has actually become a key partner for China
in--and actually has opened an innovation center with Huawei
for digital transformation. So, do we have a strategy for
addressing Serbia and the other countries' interest in
partnering with China on Huawei and those investments that
China might be making in that area?
Ambassador Reeker. Go ahead.
Mr. Stilwell. Senator, yes, we do. It--I mean, look at the
work with the UK and helping them understand the downside of--
and national security risks with that. Look at----
Go ahead.
Senator Shaheen. [Inaudible.]
Mr. Stilwell. Okay. So, the strategy is transparency. These
decisions are made in a nontransparent way by, you know,
incentives and--call it ``bribes'' with these leaderships of
these countries to make decisions that are not necessarily in
the interest of their own people.
And so, we have focused heavily on making these sorts of
transactions more transparent.
Senator Shaheen. And so, what, specifically, has been our
success in Serbia? Have we been able to get the Serbs to help
us with the transparency piece?
Ambassador Reeker. I think it is a work in progress,
Senator. I think the more we can build our relationship with
Serbia and help them understand that we are open to their
interest in being more and more a part of the West, they will
come to see the same things other European countries are
realizing: who are the partners they can rely on, what are, you
know, trusted vendors, in terms of developing high-tech
infrastructure, the 5G Prague proposals, for instance, which
set out parameters for dealing with high tech. The European
Union has developed its own security toolbox. Serbia keeps an
eye on these things, and it is something we need to let them
come to that realization that there are options.
Senator Shaheen. Well, as we talk about trust and reliance,
what kind of challenge does it present for our partners in
Europe when we do things like remove troops from Germany
without consulting with our partners before making that
decision? Does that undermine our reliability with our
partners? And what does that say about our ability to get
cooperation when we are combating China?
Ambassador Reeker. As you know, I spent some time at
European Command prior to taking over this job. And we were
then already focused on the challenges, as outlined in the
National Security Strategy, of great-power competition,
including China. I think the real message that we have sent to
partners is evident, for instance, in the December 2019 NATO
Leaders Statement out of London, where we declared, for the
first time, that NATO should address opportunities and
challenges of China stemming from the PRC's growing influence.
We do this all together. We have been addressing things
like force posture over time. I will leave that to my Defense
Department colleagues to get into the details of that. But, I
think we have got this, and we are getting it right. The
eastern partnerships enhance forward presence. The things that
we did in response to Russian threats, direct existential
threats, we need to look at the broader range of threats, like
cyber and hybrid, China being very much a part of that, as
well.
And that is what we are doing collaboratively. I think we
have actually strengthened the alliance. Certainly, you have
seen the progress on burden-sharing and resources. And I think
some of the steps we are taking on the force posture are really
positive developments that reflect these kinds of more
contemporary concerns that they have.
Senator Shaheen. Well, I am out of time, so I will not ask
you the follow-up, but I am not sure I got an answer to my
question about Germany.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Shaheen.
Senator Barrasso, are you with us?
No, I am told.
Senator Portman.
[Pause.]
The Chairman. Apparently not.
Senator Paul.
[Pause.]
The Chairman. Senator Young.
[Pause.]
Senator Young. Mr. Chairman?
The Chairman. And who is that?
Senator Young. Yeah, this is Senator Young. Am I jumping
the gun, here?
The Chairman. You--we can hear you loud and clear, Senator.
The floor is yours for 5 minutes.
Senator Young. All right. Well, thank you, Mr. Chairman.
And, Ms. Chung, building on my colleague Senator Cardin's
questions earlier, the Administration has repeatedly warned
Latin America and Caribbean countries that China's economic
engagement with the region may foster corruption and lead to
unsustainable debt traps, as we have seen in other areas around
the world. How have government officials, private-sector
leaders, and civil-society groups in the region responded to
those accusations?
Ms. Chung. Thank you for your question, Senator.
As you have seen, China not only uses debt diplomacy and
poor-quality infrastructure and nontransparent practices, but
we see their investment hurting the environment, violating
local labor laws. We have brought these issues to light with
the region, raised it with our government counterparts, but
also getting the voices out from local partners, local NGOs,
local journalists, youth groups. That is where we see the
power, when we have the regions speaking out for themselves
about some of the concerns that China brings to the region.
One example is in Ecuador, the Coco Coda Sinclair Dam. As
we know that the Chinese funded that under President Correa's
term. That dam has 7,000 cracks, and they are growing every
day. It has killed workers. It has displaced people. It has put
people--villages out of jobs. It has, because of its corrupt
nature, put people in jail. People have seen, in the region and
throughout the world, the dangers of what Chinese investments
can bring. Again, appealing at first--low prices, great terms;
but, the long-term, the hidden costs are what people are
understanding.
So, I think countries and governments are more aware of
these dangers, more than ever, and taking a more cautious
approach. Again, doing more due diligence. In the end, it is
the governments that will decide whether or not to take such
deals. But, the more that we have civil society and others
speak out and see the ramifications of what Chinese investment
means, beyond economics--again, to the environment, to labor
laws, to society overall--I think that that understanding and
that knowledge is growing.
Senator Young. Yeah, that seems to be the key, you know,
whether it is our bilateral negotiations and diplomatic
relations or work--when we work through the IMF and other
multilateral institutions, to the extent we can bring
transparency to a lot of these decisions made by governments,
that oftentimes leads to positive results.
How is the Administration using DFC, the Development
Finance Corporation, and other forms of foreign assistance and
incentives to strengthen U.S. partnerships and counter Chinese
influence in the region?
Ms. Chung. Thank you for the question, Senator.
DFC is, again, a powerful tool that we have and think more
strategically about our engagement in the region and in working
with our partners. Just 2 days ago, DFC announced they would
work in partnership with Taiwan to provide SME funding,
financing, as--from the COVID recovery. And this was just
announced as of----
Senator Young. I am sorry, Ms. Chung.
Ms. Chung. I am sorry.
Senator Young. I regret--you know, as--I said ``in the
region.'' I was sort of vague. But, again, in Latin America, in
the Caribbean countries----
Ms. Chung. Yes.
Senator Young. --are these tools, these instruments of
diplomatic and developmental power being brought to bear in
that region? If so, how?
Ms. Chung. Yes. And that is the importance of what I am--my
point is that Taiwan and the United States are working together
in Latin America. So, they announced financing to provide SME
loan support for Latin America--the Central American region
through the CABEI, the Central American Bank of Economic
Integration. So, that is one example of where we are providing
that funding into the region.
There is also a $26 million loan that DFC has provided to
provide telecom towers in Peru and Ecuador, 500 telecom towers.
And this addresses both our strategic interests as well as a 5G
telecommunications interest that--where China is trying to take
over and really control that sector.
And then, working with others to make sure that--working
with the countries in the region to make sure that they have
the right tools to be able to assess and do the due diligence
through programs like America Crece.
Senator Young. So, this demonstrates, your last point
there, how this region, the Caribbean and Latin America, that
whole basin, is really instrumental in countering China. You
have 9 of Taiwan's 15 diplomatic partners located in that
Caribbean basin region. And I am grateful for your efforts and
those of your entire team to ensure that Taiwan has the
wherewithal to counter Chinese nefarious activity. So, thank
you very much.
Mr. Chairman, I yield back.
The Chairman. Thank you, Senator Young.
And Senator Coons, who is with us live.
Senator Coons. Yeah, thank you, Chairman Risch, Ranking
Member Menendez, for this important hearing.
And thank you, to our witnesses.
China is, as we all recognize, the greatest foreign policy
challenge the United States faces today, and how we engage with
China will shape this century, our place in the world, and our
role. And there is bipartisan recognition, we are better
equipped to compete with China if we work closely with our
allies and partners from around the world, in particular, who
share not just our interests, but our values. And so, I want to
commend Senator Menendez, Senator Rubio, and others, for the
crafting and introduction of the ACTSA bill.
Senator Young. So, I have been trying----
Senator Coons. Todd?
Senator Young. --every day----
Senator Coons. Senator Young.
The Chairman. Senator Young, you are still with us.
Senator Coons. I will keep going, if I may.
The Chairman. Please do.
Senator Coons. I just wanted to commend the introduction of
a bipartisan bill that recognizes the significance, the
centrality of Latin and South America, which are not only
closest to us geographically, but integral to our country's
culture, our economy, our role in the world. And China's
efforts to undermine or replace our relationships in this
region, as well as in the Indo-Pacific, are concerning, even
alarming.
There are positives. We have all talked about the DFC. The
good news, I think, is that, in every region, we want to see
more of this powerful tool that can help advance transparency
in American engagement. One of my real concerns is ways in
which the Trump administration has enabled China's growing
influence by threatening and, in some cases, succeeding in
abruptly withdrawing troops or withdrawing us from
international organizations. So, let me ask a few questions
designed to get some clarity around that, if I might.
Mr. Stilwell--or Assistant Secretary Stilwell, if I might,
just to put a point on that. The Administration reportedly
weighed withdrawing troops from South Korea, a move that
garnered bipartisan concern on this committee and on the Hill.
Can you assure us the Administration is no longer considering a
withdrawal of troops from South Korea, and that, if any such
changes were made, it would not happen without close
consultation with our allies and partners, as well as with
Congress?
Mr. Stilwell. Thank you, Senator.
Of course, these issues all require cooperation, so--
agreed, we will consult and--but, there is no discussion of
that in the State Department.
Senator Coons. Thank you. I respect and recognize that the
Administration is being forward-leaning in engagement with
Taiwan. We are in a moment of great, I think, regional
challenge. And I was wondering whether, as some commentators
have suggested, there is some consideration of ending strategic
ambiguity and clarifying our commitment to Taiwan, and whether,
if there were to be a public change in that position, the--
there would be consultation before that decision was taken.
Mr. Stilwell. Senator, that is a very good question. It has
been one that has been very publicly discussed. I gave a
speech, at the Heritage Foundation, on clarifying the Six
Assurances. The rationale behind that is to prevent and reverse
PRC's squeezing of China's international--of Taiwan's
international space, and get it back into a position that looks
something like what we agreed to in 1979 with the Taiwan
Relations Act. And that clarification is important. However,
this was not an indication of a change in strategy or policy.
It was simply reversing what we have seen in--as far as picking
off Taiwan partners, as far as keeping Taiwan from attending
the World Health Assembly, which the one place that figured out
corona first, and understood it best, were the people that
could have helped out, had they been allowed to participate,
and any number of other multilateral activities that Taiwan is
allowed to participate in meaningfully. And so, we are working
hard to clarify that.
Thank you.
Senator Coons. Thank you.
Ms. Chung, if I might, in the time I have got left. You
mentioned the DFC being on track to deploy 12 billion in
financing to Central America and the Caribbean. Tell me how
State and USAID are coordinating. OPIC was long a piece of a
development strategy. DFC has a broader range of tools and
resources and reach. And I think, if we are to use the DFC as a
way to advance our values, in terms of transparency and higher
labor standards and higher environmental standards, there also
has to be, internally, coordination with the USAID. How do you
see that proceeding? And do you see any role for the DFC and
for our presence in the region to directly combat digital
authoritarianism and strengthen civil society, as is urged in
the bipartisan legislation, ACTSA, that was referenced earlier
by the Ranking Member?
Ms. Chung. Thank you for the question, Senator.
In terms of USAID and State, we are in lockstep on our
China strategy through the America Crece, which is an
interagency effort, but also through USAID's Clear Choice
framework that looks at governance, that makes sure that a
procurement and civil society are all involved in the
transparency efforts, and to bring those issues to light when
we hear about opaque deals from China or any other country. So,
we are very--we are working very closely. We are looking at
USAID's programs and State programs to make sure we are closely
aligned. And the programs I would do on anticorruption and
civil society strengthening all go to build that space so that
China's malign influence do not come and take over that space.
So, we are very much closely aligned with USAID.
One example is in the illegal fishing area, which recently
we saw in the Galapagos. USAID has programs with the World
Wildlife Fund to do--to work on natural resource strengthening
programs. That also enables local groups to be able to fight
back when we see Chinese fishing ships come back into the
region.
And, in terms of DFC and working on digital
authoritarianism, there is no better example in the region than
in Maduro's regime, the authoritarian regime of Maduro, and
working in close concert with China. And China's ZTE has long
had a relationship with the Maduro regime in providing them
carnet de patria, which spies on civil society and opposition
leaders, and determines how--who gets what food allocations
within that country. And so, right now, of course, we are not
engaging in DFC in Venezuela, but, in a democratic future, when
we have a democrat transition in that country, we would love to
bring DFC into it and help rebuild.
Senator Coons. Thank you.
Thank you, to all the witnesses.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Coons.
Senator Cruz.
Senator Cruz. Thank you, Mr. Chairman.
Welcome, to each of you.
Mr. Stilwell, a few months ago, Deputy Secretary Biegun
testified before this committee, and we talked about reviewing
the Obama administration's 2015 guidelines for diplomatic
relations with Taiwan, which prohibit our Taiwanese partners
from displaying their flags and insignia. As you know, I filed
legislation to change those guidelines. But, as I have
emphasized, the State Department does not need that legislation
to pass to change the Obama guidelines. The Administration
could make those changes right now.
Deputy Secretary Biegun said he was not familiar with the
issue when he testified before this committee. And, as you
know, in written follow-up, he stated that changing the
guidelines would be in tension with the Taiwan Relations Act.
That is a curious statutory interpretation and an odd position
for the State Department to take. As far as I can see, there is
nothing in the TRA that requires these guidelines. Rather, it
is a policy decision to be made by the Administration.
What, in your judgment, in the TRA justifies preventing our
Taiwanese allies from displaying their sovereign symbols?
Mr. Stilwell. Senator, thank you for that question.
We have been discussing this concept of strategic ambiguity
with respect to Taiwan, and the--you know, I mentioned earlier,
the speech we gave at Heritage that helps to clarify those
things that need clarification, as you suggest right now with
this particular issue. But, one of the issues in the TRA that
speaks to this is the decision to leave the question of
sovereignty undecided, ambiguous. We will not take a position
on sovereignty. This is part of the back-and-forth between the
mainland and Taiwan. What we--what the Taiwan Relations Act and
the Administration policy wants is for this to be resolved
peacefully and through dialogue, not with coercion or use of
force. And so, the question of sovereignty was decided to be
left undecided and to be worked out between the two parties.
Senator Cruz. Are you testifying to this committee that the
Taiwan Relations Act mandates the 2015 guidelines?
Mr. Stilwell. The guidelines follow from the--Taiwan's--
Taiwan Relations Act, I believe----
Senator Cruz. No, they did not exist prior to 2015, and the
reason they were enacted was because, in 2015, the Taiwanese
raised their flag over their Twin Oaks estate in DC, and the
Chinese government got mad, and the Obama State Department
decided to kiss up to China and change the rules and appease
them. But, prior to 2015, there were no guidelines. Prior to
2015, Taiwanese military officials were allowed to wear
military insignia. That did not magically change--the statute
did not magically change, did it?
Mr. Stilwell. Sir, the broad sweep of the Taiwan Relations
Act did not change. It is the same.
Senator Cruz. And was it in violation of that statute when
Taiwanese military officials were wearing military insignia
prior to the 2015 guidelines?
Mr. Stilwell. Senator, I will simply say that, on the
question of sovereignty--and these are all related--that they--
leaving that decision between those two--it is best in--the
interpretation is to leave that decision undecided. But, let me
just note that this Administration has gone very far in
reversing all of the--those decisions that have been made in
the past, to clarify, to support. You saw the Secretary of
Health and Human Services attended. You have a Under Secretary
in the State Department in Taiwan right now. So, I believe what
we are doing is definitely in alignment with your interest, as
well as to support Taiwan, and to make sure that this--that
they have the ability to resist coercion by the Chinese.
Senator Cruz. So, I do not disagree that policy has
improved under this Administration. It is not surprising to me
that these guidelines were issued under the Obama
administration and under the leadership of Secretary of State
John Kerry. Their policy position was far weaker and entailed
far more appeasement to the Chinese Communists than the Trump
administration has had. These policy guidelines are utterly
inappropriate, in my view, for a Trump administration or for a
Department of State led by Mike Pompeo. They are not consistent
with the stated policy positions of the principals. It is a
matter of discretion. Your argument that the statute mandates
it is not a good-faith argument.
And so, I would urge State to revisit this issue, because
you have the ability to change these guidelines right now. It
was the Obama administration that made them up, and it did so
at the behest of the Chinese Communists. And if you can make
them up to make the Chinese Communists happy, you can repeal
them to make the Chinese Communists unhappy. And I get that the
Chinese government would be unhappy at repealing them. I view
that as a feature, not a bug.
Ms. Chung, as you know, there is broad concern over China's
predatory investments throughout Latin America, alongside
separate but related concerns about how China dominates
important industries, including the critical mineral supply
chain. I have introduced legislation, the ORE Act, which would
onshore the supply chain for such minerals. But, of course, the
concern over China's control is global.
In Latin America and beyond, China has specifically sought
to dominate the global supply of lithium. They currently
control half of the global production of lithium and 60 percent
of the battery production capacity. Argentina, Chile, and
Bolivia, known as the Lithium Triangle, has 70 percent of the
world's lithium reserves. And China has been pouring resources
into the region.
What steps are we taking to help these countries protect
their natural resources and to ensure that they do not fall
victim to Chinese predatory practices?
Ms. Chung. Thank you for the question, Senator.
As you say, the Lithium Triangle in South America, it is--
is critical area where Chinese are very heavily interested in
maintaining that--imports from that area. We are talking to
these various governments about proper measures--again, due
processes, screening measures, CFIUS-like investment screening
measures--before signing deals with China or any other country.
I think these are steps that, through technical delegations, we
are having active discussions with. In addition to that, we
have a--the Critical Minerals Working Group with Canada, and
both of us are very keenly aware of the sensitivities of supply
chains, and working more with the industries themselves. So, we
are building upon these discussions with Canada and our
neighbors in the Western Hemisphere, but this is of critical
interest to us.
Senator Cruz. Thank you.
The Chairman. Thank you, Senator Cruz.
Senator Murphy.
Senator Murphy. Thank you very much, Mr. Chairman.
Thank you, to all three, for your service.
It is hard to overestimate the value of the gift that we
have handed China through this Administration's mismanagement
of America's COVID-19 outbreak. First, it bolsters China's
argument that autocratic or semi-autocratic forms of
government, complete with the set of population control tools
that are being pioneered in Beijing, are more effective at
meeting modern threats than democracy. When a democracy cannot
get this epidemic under control after a half a year, when an
autocracy can get it under control in a matter of months, they
believe that that strengthens their argument.
And second, our failure has given China this massive head
start in the contest for global economic influence. China's GDP
contracted by 6 percent in the first quarter; it expanded by 3
percent in the second quarter. Ours contracted by 3 percent in
the first quarter; it contracted by 34 percent in the second
quarter. And it is not just that autocratic governments were
able to get this under control. South Korea did not have a 34
percent contraction in the second quarter; they had a 2 percent
contraction. And so, it is not that democracies are unable to
get COVID under control, but our failure to do so, as the
worlds most notable and leading democracy, has strengthened
China's argument that countries should follow their model, and
has just handcuffed our economy. I mean, our business leaders
cannot even travel around the world, because America is the
``sick child'' today. Well, China now steps into that vacuum.
We have compounded that error by withdrawing from the WHO.
In Latin America, increasingly, reports suggest that those
countries are relying on China, not the United States, in order
to help them deal with COVID-19. China made a $2 billion
commitment. News, just earlier this month, that State
Department detailees will be removed from WHO regional and
field offices all over the world. One of China's preeminent
defense planners at a conference in 2018 hailed Trump's America
First strategy, saying, and I quote, ``As the U.S. retreats
globally, China shows up.''
And so, my question is this for the panel. And I would love
your thoughts. You may contest the premise of my question. How
has the United States failure to control COVID strengthened
China's hand? And how has our withdrawal from the WHO allowed
for China to gain prominence on issues of global health?
Mr. Stilwell. Senator, that is a fantastic question. And I
appreciate the chance to lay out some of the thought process
that went behind this.
I think, in large part, the--there are a couple of key
failures here. One is the failure of China to control what
started off as a simple public health problem. And when they
did control it in the town of Wuhan, where we had a consulate--
we have a consulate--they did it by very inhumane and heavy
handed tactics. They welded people into their homes. They
rounded them up if they were sick, and pretty much isolated
them against their will. They separated parents from their
special-needs children, and those children died from exposure
because they were left. So, that is a model--that is certainly
a model for dealing with this that I do not think any American
would tolerate.
Secondly, we are the third-largest country in the world. We
had 22,000 people coming from China for at least 3 weeks after
the Chinese knew that this was a problem. And we were the first
to close our borders to China, and then to others on the 31st
of January, to deal with this.
Third, if you look at the numbers, originally the--we did
not put our numbers out per capita. And being such a large
country, when you compared our numbers to Belgium and Germany
and others, they looked worse, but, in fact, per capita, were
better.
Fourth, the--we are not an island. The countries that have
done so well--Korea, as you mentioned, Taiwan, New Zealand--
were able to cut themselves off from the rest of the world and
prevent the disease from coming in. But, they also cut
themselves off from commerce, travel, tourism, and all the
rest. And those countries now, especially in the Pacific, are
having a very hard time, economically, as the disease
eventually will make its way into their countries.
And so, as you know, this whole problem began with the
Chinese failure to deal with its World Health Organization
requirements through the International Health Regulations to
report these things.
Secondly, their intrusion into multilateral organizations
like the U.N. and the WHO had the WHO leadership telling the
world, ``It is okay. I can give you documentation.'' As late as
mid-February, they were saying, ``Do not overreact to this.
There is no human-to-human transmission,'' when the fact is,
there was. And so, that--the U.S. contributes between 400- and
500-million dollars per year to WHO. The Chinese contribute
around 40 million----
Senator Murphy. I think--I appreciate your answer, and I
appreciate the fact that you have got to sort of hold the line
here of the Administration. But, the failure to acknowledge
that we have done grave damage to America's reputation in the
world by not being able to control this virus, in the way that
plenty of other democracies were able to, I think, you know,
speaks to a real blind spot. And, let us just remember, it was
the President of the United States who was the greatest
cheerleader for China's response to COVID in January, February,
March, and April. There was no one who was standing up more
vocally for China's transparent response, their effective
response, than this President. That made it hard for a lot of
other people to get tough on China, when the leader of the free
world refused to do so.
So, I hope that we can, as a committee, have a little bit
more nuanced discussion about the effects of our failure on
COVID, and its impact on our reputation and ability to
influence events around the world.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Murphy.
Senator Perdue, are you with us?
[Pause.]
The Chairman. If not, we will go to Senator Kaine. Is
Senator Kaine with us?
[Pause.]
The Chairman. Senator Merkley, you are up.
Senator Portman. Senator Portman is with you.
The Chairman. Oh. There you are, Senator Portman. Thank you
very much. We will--Senator Portman, I guess you are here, on
seniority on our side. So, I guess we will go to Senator
Portman, and then we will go to--then to you, Senator Merkley.
Senator Portman, you are up.
[Pause.]
Senator Portman. Thank you, Senator Risch. Can you hear me
okay?
The Chairman. I can hear you now.
Senator Portman. Okay. Well, first of all, I really
appreciate you having the hearing. I have enjoyed listening to
our witnesses, and hearing your and Senator Menendez's opening
comments.
I have a question for each of the witnesses, just quickly,
if we could, at the start.
We have so many challenges with China. And, as former U.S.
Trade Representative, we have not even gotten into some of the
detailed trade challenges that we have had, but competitiveness
and--and we talked about the human rights challenges, we have
talked about the challenge to our technology and our
innovation, which I want to talk about in a moment. But, each
of the witnesses, just very, very quickly, how would you
describe our relationship with China? And specifically, would
you consider China to be an adversary, a global competitor, an
enemy? How would you describe China today in relation to its
relationship to the United States?
The Chairman. Mr. Stilwell, why do you not--start with you,
and----
Mr. Stilwell. Senator, thank you for that question. I can
answer that fairly question.
Our official policy is, China is a strategic competitor. I
will note that internal conversations in the PRC, they refer to
the United States as ``the enemy.'' They have been doing that
since 1950. In 2012, in the headline of the People's Daily,
when one of their Communist Party members ended up on the
Chengdu Consulate, the headline was, ``The Comrade Wang Lijun
Has Defected to the Enemy,'' unashamedly noting that. And so,
if you look at the difference in approaches and attitudes
toward each other, I think you can see that the approach from
the Trump administration was long overdue, yet we are not using
the word ``enemy.'' We are simply competing. And, in simply
competing, we are having great effect in normalizing Chinese
behavior in the United States, and its adverse behavior in the
United States and elsewhere in the world.
And a number of folks who are coming in support verbally
and strongly from these two regions and all others is growing
considerably as people recognize that the economic threats--you
do not have to bow to those, you can stand up for your
sovereignty.
Thank you.
Senator Portman. Anyone else have a different description
other than ``strategic competitor''?
Ambassador Reeker. Senator, it is Phil Reeker, from the
European Bureau. I would echo that the term ``strategic
competitor,'' as we describe it, certainly, in the National
Security Strategy, but to point out that, in Europe, we see
this as the PRC trying to establish their own strategic
foothold there and, indeed, promote an authoritarian model of
governance and state-controlled economy, and challenge U.S.
national security by weakening our political and economic and
military ties. Indeed, over the last, say, 12 years, the PRC
gained increasing influence over European markets and supply
chains, something the Europeans, particularly since COVID, have
been focusing on, in terms of resilience, and working with us
on that. The 2008 financial crisis really exposed that, where
the PRC, with lots of cash, came in and targeted investment
strategies in strategic industries and critical infrastructure,
including ports and other things.
We have seen a real sea change, particularly in the last 3
years, this ``awakening'' that Secretary Pompeo has talked
about, due to our own realization of China's long-term
strategy, sharing that with our European partners and allies,
including at NATO, where we have officially put into NATO's
doctrine, going forward, to look at the challenges and
opportunities of the PRC as a strategic competitor. And you
have seen the Europeans, of course, adopt investment screening
mechanisms at the national level. The EU, itself, adopting, for
instance, a cyber-sanctions thing. They had their first
designation of a Chinese entity under their cyber sanction
regulation.
Senator Portman. Thank you, Ambassador Reeker. Thanks for
that. Let me get to another question.
And, first of all, I appreciate the hard work that you are
doing in Europe. And I think people have begun to wake up to
the challenge. And, having been in Europe pre-COVID to talk
about some of these challenges, they do need to wake up, and
they can--you mentioned the CFIUS-type screenings in Europe,
kind of, catching up. You know, they are looking to us to
provide some information there to understand better how they
can screen investments.
You know, certainly, the challenges we face, we talked
about this morning, the answer is, let us work with the--with
others, and require China to do certain things, and impose on
China, you know, some additional level-the-playing-field
fairness, and so on. And I do not disagree with that. And I
mentioned trade earlier. That is an example where sometimes
they have done things that are just wrong, either by
subsidizing or by selling below cost, and violate the
international norms.
But it seems to me, a lot of our more productive approach
to China would be getting our own house in order. The
competitiveness would be the most obvious example of that.
But, there is another one that I have worked on a lot with
some colleagues on the committee, including the bipartisan
leadership of this committee, and that is, how do you safeguard
American intellectual property, American innovation, and
American taxpayer-paid research? And we have legislation called
the Safeguarding American Innovation Act. It comes out of a
year-long investigation into this issue and was able to expose
that, really, for two decades, China has been systematically
targeting American researchers, usually, again, U.S. taxpayer-
paid research, and systematically taking that research back to
China.
Since we came out with our report, and since we had a
shocking hearing on this topic about what has happened, the
FBI, Department of Justice, U.S. Attorneys have stepped up, and
there have been several great public arrests of Chinese
researchers, particularly with their Thousand Talents Program,
who have, again, taken U.S.-paid research, and taken it to
China to help fuel the Chinese economy, really, over the last
two decades, and also the Chinese military, because some of
this research is actually military research.
So, that legislation, we are trying to get passed on the
floor now. We have 19 bipartisan cosponsors, including Chairman
Risch. It is not only the result of a year-long investigation
and a hearing, it has also been reported out of the Homeland
Security, Governmental Affairs Committee. And I will tell you,
we are now told that the FBI is opening a new China-related
investigation every 10 hours, with about 2500 open
counterintelligence investigations across the country. That is
public information. And so, we know more, in classified
settings we cannot talk about today, but the point is, our
American research, our innovation, has been going out the door
to--particularly to China--other countries, as well, but China
is, through its Thousand Talents Program, is the main
perpetrator.
And my point is, we have five things in this legislation we
have to do internally to tighten up. And this is not about
telling China what they have to do. Frankly, it is about
telling our universities and our research institutions and our
Federal agencies, like NIH, National Science Foundation, the
Department of Energy, and others, they have to tighten up. It
is tightening up our visa requirements when we know people are
coming here to steal technology. We need a way to help the
State Department be able to screen those folks.
So, I wonder if any of you have any comments on
safeguarding America's Innovation Act and the need for us to
get our own house in order here to be able to protect taxpayer-
paid research, and to be, therefore, more competitive in an
increasingly difficult climate with China.
Mr. Stilwell. Senator, I will say, very briefly, you saw
the closure of the Houston Consulate. This is just the tip of
the iceberg of all the things that we have been doing that
align very nicely with what you are discussing.
Thank you.
Senator Portman. Yeah.
The Chairman. Thank you.
Senator Portman, I--we have--we are really short on time
here. If you have some additional follow-ups----
Senator Portman. I would just ask Senators--for the record,
Mr. Chairman. And thank you for the time.
The Chairman. Yeah. That is--that would be the way to do
it, is to send a question for the record. And I have no doubt
that the witnesses will respond promptly and appropriately. So,
thank you very much.
For the information of the committee, we have got a couple
of people yet to ask questions. And time is up on the vote. We
have two votes. I am going to try to stall the floor as long as
I can, until they send somebody up to arrest us. But, in the
meantime, Senator Merkley, why do you not----
Senator Merkley. Well, thank you, Mr. Chairman.
And I will ask our team up here to be as brief as you can
so that I can--we can get to the other Senators who have not
been able to ask questions.
Deputy Chung, there has been a lot of discussion of
strategic ambiguity in regard to Taiwan. An article by the
president of the Council of Foreign Relations, Richard Haas,
said that it is time to have to have strategic--to put an end
to strategic ambiguity, that it has run its course. This is in
the context of whether we would defend Taiwan if it was
attacked. Others have said, ``No, that would be a big mistake.
You might actually encourage an attack, but we should have a
much stronger, clearer, well-coordinated position with the rest
of the developed world, in terms of the economic sanctions that
would occur in--and perhaps including closing our countries to
Chinese products, which would be devastating to China if they
were to attack.'' And others have said, ``No, let us just keep
encouraging their participation in international organization.
That is enough.''
Where are you on this spectrum?
Ms. Chung. Thank you, Senator, for the question.
Our relationship with Taiwan and the Western Hemisphere has
really been unprecedented in the past 2 years.
Senator Merkley. Do not give me the whole history, because
we are on very short time.
Ms. Chung. Yep.
Senator Merkley. I am asking where you are on this spectrum
of strategic ambiguity and the tools that we have.
Ms. Chung. We are very clear on partnering with Taiwan, and
we have had nine of their countries that recognize it, but
seven additional countries in the region that have trade
offices. So, we want to enhance our relationship, and we want
to build upon this partnership with Taiwan. We are doing more
trilaterally, more joint financing, and certainly more
partnerships, like the Global Cooperation Training Framework,
to build out what we can do together with Taiwan. So, much more
forthright and public about our partnerships in the Western
Hemisphere.
Senator Merkley. Okay.
Do you share the concern that the growing military capacity
of China, and the growing, kind of, adventurism of President Xi
make this an important topic for us to keep thinking about?
Ms. Chung. I think--globally, that is true. In the Western
Hemisphere, of course, we are looking at all action that China
is doing to come into the region.
Senator Merkley. Thank you very much.
Mr. Reeker, China is financing a quarter of the coal
projects around the world--either financing them or offering to
finance them, including countries like Turkey and Bosnia and
Herzegovina. And are we working to provide financing for
cleaner energy strategies as we see the impacts of what is
happening here in the United States with the hurricane
intensity and the fire intensity?
Ambassador Reeker. Senator, I mentioned earlier the Three
Seas Initiative, which includes some of the countries you have
mentioned--Bosnia, Herzegovina, for example. A lot of what the
Three Seas Initiative is designed to develop are new, modern
infrastructure, including energy infrastructure. And the DFC,
as Secretary Pompeo announced, has put forward up to a billion
dollars in----
Senator Merkley. So, is this a yes? That we are trying to
discourage the Chinese sale of coal plants around the world?
Ambassador Reeker. We certainly are trying to give these
countries options for not taking Chinese debt diplomacy and
other engagements so that they know----
Senator Merkley. Thank you.
Assistant Secretary Stilwell, it worries me the
Administration has not renewed the J-1 visas for a number of
the foreign journalists employed by the U.S. Agency for Global
Media. They often help us shine a light on issues around the
world that puts them in a dangerous place with their home
countries. This is--includes the challenge of Chinese
journalists who might be sent home to China. And we know what
happens when people are in disfavor back home. Should we work
together to renew those J-1 visas, these folks who are working
in partnership with us who may be at risk if exported back
home--deported?
Mr. Stilwell. Senator, this is obviously a complicated
question. I will note that the PRC's using of its, ``media,''
which is, in fact, a state organization, and claiming that they
are journalists, endangers everybody. It endangers all Chinese
folks who are trying to do good journalism. And so, you know,
the Administration has taken steps to rectify that by
addressing the issue on I-visas to make sure that----
Senator Merkley. But, wait, what--here is why I am
confused. Why is it complicated? These folks are working for
us, they are being employed by us, they are helping us shine a
light on their home countries, often in unfavorable way, puts
them at enormous risk if they are returned home. It has always
been standard to continue to extend their visas as long as they
are still working for us. Why would we--why is it complicated?
I mean, why would we not protect them after they have worked in
partnership with us?
Mr. Stilwell. Senator, I am going to have to get back to
you on that one, but----
Senator Merkley. Okay. Look forward to that, because this
is--I do not think this has gotten attention, and it places
people at grave risk.
And finally, Mr. Reeker, there is a lot of pressure that
China is putting on countries, using its economic clout, not to
be critical of their enslavement of a million Uyghurs. That
pressure includes pressure on the Organization of Islamic
Cooperation. Those countries were quite vocal about the impact
of the Rohingya in Burma, but they have been cowed, discouraged
to comment on the treatment of the million Muslims enslaved in
China. Are we working with the OIC to give them, kind of, the
strength to speak up on human rights, including the abuses in
China?
Ambassador Reeker. Senator, thanks for highlighting that.
My Bureau does not work with the OIC directly, but we do work
with our European partners. And just yesterday, when Foreign--
--
Senator Merkley. Yes.
Ambassador Reeker. --Secretary Raab was here from Britain,
we highlighted very much, in the conversation with Secretary
Pompeo, the horrors of the repression in Xinjiang.
Senator Merkley. Are the Europeans really joining us in
this effort?
Ambassador Reeker. We are seeing a lot of outspoken
statements, including from our British partners yesterday, not
only Xinjiang, but also the human rights violations in Hong
Kong, speaking up for them. And we do see that in a number of
fora. It would be good if the Islamic world spoke up for
exactly the----
Senator Merkley. Did Disney make a mistake by working in
close cooperation with the regional government in China that is
enslaving the Uyghurs?
Ambassador Reeker. I am not familiar with Disney in this
capacity.
Senator Merkley. This is the filming of the film ``Mulan.''
Ambassador Reeker. I am not familiar with it.
Senator Merkley. Okay. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Merkley.
That--I am told there is no one else online.
And, Senator, did you want the floor for a second?
Senator Menendez. Just very briefly, Mr. Chairman.
I have a series of other questions, which I am going to
submit for the record--the Mekong River, on China's fishing off
of Ecuador, and what that means in a World Heritage site, and a
few others. I would appreciate substantive responses to them.
Thank you, Mr. Chair.
The Chairman. Thank you, Senator Menendez.
For the information of all members, the record will remain
open until the close of business on Friday. We ask the
witnesses to please respond as promptly as possible. Your
responses will also be made a part of the record.
And thank you, to the three witnesses. You have been very
patient with us. And we look forward to your responses. So,
thank you with that.
And the committee is adjourned.
[Whereupon, at 12:09 p.m., the hearing was adjourned.]
----------
Additional Material Submitted for the Record
Responses of Assistant Secretary David R. Stilwell to Questions
Submitted by Senator Robert Menendez
south china sea
I welcomed the Administration's clarification of our legal position
on China's unlawful claims in the South China Sea earlier this year.
However, as you know, international law is not self-enforcing:
Question. What is the Administration doing to implement this new
approach?
Answer. The United States is committed to upholding a rules-based,
free, and open South China Sea. We continue to bolster our security and
economic relationships with Southeast Asian claimants. We have made
clear that we stand by our Southeast Asian allies and partners in
defending their sovereign rights in the South China Sea, and we are
willing to consider various options available to deter and defend
against coercion.
In August, the Administration imposed visa restrictions on People's
Republic of China (PRC) individuals responsible for, or complicit in,
either the PRC's large-scale reclamation, construction, or
militarization of disputed outposts in the South China Sea, or its use
of coercion against Southeast Asian claimants to inhibit their access
to offshore resources. These individuals will now be inadmissible into
the United States, and their immediate family members may be subject to
these visa restrictions as well. In addition, the Department of
Commerce has added 24 PRC state-owned enterprises to the Entity List,
including several subsidiaries of China Communications Construction
Company (CCCC), for their role in Beijing's militarization of the South
China Sea.
Question. What consultations have you had with partners and allies
on their statements and actions?
Answer. The United States continues to engage regularly and at all
levels with allies and partners on the importance of maintaining a
rules-based and free and open South China Sea, including on both
strategic and legal matters. In recent months, a number of countries
have formally protested PRC maritime claims at the United Nations,
including Australia, France, Germany, Indonesia, Malaysia, the
Philippines, Vietnam, and the UK.
digital authoritarianism
Authoritarian nations, such as China and Russia, are utilizing
emerging technologies in new ways to surveil and repress both domestic
and foreign populations, as well as manipulate democratic elections.
Furthermore, these countries are currently spreading their models for
digital authoritarianism to other countries who may be attracted to
these new modes of social control.
Question. What is the Administration's strategy to counter the
spread of digital authoritarianism and the malign use of digital
products and services in the Indo-Pacific?
Answer. We work with allies and partners to promote an open,
interoperable, reliable, and secure global Internet based on shared
democratic values and respect for human rights, both online and
offline, as embodied in the National Security and Cyber Strategies.
Through diplomatic engagement and foreign assistance programs, we
oppose digital authoritarianism by bolstering partners' political will
and technical capacities, and empowering civil society. The
Department's Digital Connectivity and Cybersecurity Partnership
promotes increased connectivity and a competitive global marketplace
for the digital economy by supporting and regulatory reforms, U.S.
export assistance, and capacity building.
Question. How is the U.S. engaging our allies and partners to
dissuade them from integrating technologies and techniques predicated
on digital authoritarianism?
Answer. Guided by the 2018 National Cyber Strategy and the National
Strategy to Secure 5G, the United States leads the international
community in bilateral and multi-lateral fora to oppose digital
authoritarianism. The Department's programs and policy efforts seek to
universalize the framework for responsible state behavior in cyberspace
we have promulgated in the U.N. and elsewhere; defend human rights
online, including affirming people have the same rights online as they
do offline; encourage allies and partners to restrict use of untrusted
5G and other critical ICT networks vendors; promote multi-stakeholder
internet governance models; build cyber capacity; combat disinformation
online; and counteract use of the Internet for terrorist purposes.
Question. Authoritarian nations, such as China and Russia, are
utilizing emerging technologies in new ways to surveil and repress both
domestic and foreign populations, as well as manipulate democratic
elections. Furthermore, these countries are currently spreading their
models for digital authoritarianism to other countries who may be
attracted to these news modes of social control: Did the President of
the United States give a green light to the President of China to build
his concentration camps?
Answer. This Administration's actions to stop human rights abuses
in Xinjiang speak volumes. The President has personally heard from
Uyghurs affected by the PRC's campaign of repression, including Jewher
Ilham, who is the daughter of prominent Uyghur scholar Ilham Tohti, who
was given a life sentence in 2014. More than any other government, the
United States has taken concrete action to combat the PRC's campaign of
repression in Xinjiang, to include visa restrictions, financial
sanctions, export restrictions, import restrictions, and the release of
a business advisory. We have also joined with like-minded partners in
publicly condemning these human rights abuses.
Question. What is the Administration's position on China's use of
water that flows from Tibet, like the Mekong, and its impact on
Southeast Asia and the Indo-Pacific region?
Answer. The PRC's unilateral decisions to alter upstream water
flows on the Mekong without sharing sufficient data with downstream
neighbors have exacerbated a historic drought. We stand with the region
and the Mekong River Commission (MRC) in calling for more transparent
data sharing and encourage countries of the Mekong region to hold the
PRC accountable to its pledge to share its water data in partnership
with the MRC. Mismanagement by the PRC of the many rivers in the Indo-
Pacific poses an economic and security risk for the region. We urge
countries in the region to work together to manage critical natural
resources and river basins as a means of improving water security.
Question. Is there any plan to include water security into the
National Security Strategy for the region and explore using platforms
like the Lower Mekong Initiative or U.N. forums to create more
international awareness about this?
Answer. The Mekong-U.S. Partnership, which succeeds the Lower
Mekong Initiative, will continue to strengthen water security and the
rules-based approach to transboundary governance through the MRC. We
also work with U.S. interagency partners to address water issues
regionally and globally under the U.S. Global Water Strategy. With
regard to the Convention on the Law of the Non-navigational Uses of
International Watercourses, the United States, like many other
countries, is not a party. We believe that many of the concepts in the
convention can be a useful resource to countries seeking to work
together to improve water security, as can many of the resources
available via the U.N. Water interagency coordinating mechanism.
Question. I remain deeply concerned with China's pattern of
aggression in territorial disputes with India. From the 2017 Doklam
standoff, to the recent violence along the borders in Sikkim and
Ladakh, to China's new claims to Bhutanese territory, the Chinese
government has sought to redraw the map of South Asia without
respecting the region's people or governments. Such aggression resulted
in the tragic violence along the Line of Actual Control earlier this
year, and the international community must be clear that such behavior
is unacceptable. The U.S.-India partnership can play a vital role in
responding to Chinese aggression, and it is especially important that
this partnership rest on the democratic values that the Chinese
government lacks: How has the Department engaged with the Indian
government to develop a diplomatic strategy against Chinese efforts to
violate the sovereignty of countries in South Asia?
Answer. The Department has engaged closely with the Indian
government to resist Beijing's efforts to violate the sovereignty of
countries in South Asia. Our growing defense ties and regular high-
level engagements with India, including the Quad, State-DoD 2+2
Ministerial Dialogues, calls with senior Indian officials to discuss
the border situation, and engagements by our Ambassador in New Delhi,
reinforce our shared commitment to a free and prosperous South Asia. In
addition, Deputy Secretary of State Biegun's COVID-19 coordination
calls with Indo-Pacific counterparts, including Indian Foreign
Secretary Shringla, have fostered like-minded cooperation on supporting
South Asian countries vulnerable to PRC debt and economic pressure. We
will continue to use upcoming dialogues to discuss the challenges that
China poses to India and the region, and to offer U.S. support to India
and other South Asia nations that find their sovereignty and security
at risk as a result of China's continued aggression.
______
Responses of Ambassador Philip T. Reeker to Questions
Submitted by Senator Robert Menendez
Question. Who is the day-to-day lead within the Europe bureau on
coordinating U.S. policy with the continent on China?
Answer. Deputy Assistant Secretary Alexander Alden oversees the
Office of European Union and Regional Affairs and the Office of Policy
and Global Issues. In this capacity, he is responsible for
strengthening U.S.-EU relations and for coordinating efforts to counter
Chinese regional influence with the relevant offices and bureaus within
the Department.
human rights
Question. Europe has also been accused of pulling punches when it
comes to criticizing China's human rights record.
Specifically, how can we better partner with Europe to counter
these abuses, especially in Xinjiang and Tibet?
Answer. The United States actively consults with the European Union
and our European partners on how to respond to the PRC's egregious
human rights abuses in Xinjiang and elsewhere. This includes informing
European capitals about the reputational, economic, and legal risks of
doing business with supply chain links to forced labor and other human
rights abuses in Xinjiang and throughout China. In July, the
Department, along with Treasury, Commerce, and Homeland Security,
issued a Xinjiang Supply Chain Business Advisory. Several European
governments have expressed interest in developing the kinds of advisory
and punitive tools the United States uses to deter businesses,
including banks, from dealing with supply chains tainted by forced
labor and other human rights abuses. At the 74th United Nations General
Assembly in 2019, we joined the United Kingdom's joint statement on
Xinjiang, along with 17 European signatories, and we co-sponsored a
side-event with the UK, Canada, Germany, and the Netherlands on the
situation in Xinjiang. We will continue to engage regularly with our
European partners and Allies to advocate for respect for human rights
and fundamental freedoms in China while encouraging safe haven,
treatment, travel assistance, and other assistance to Uyghur and other
refugees and asylum seekers from there.
Question. Who is in charge of coordinating U.S.-EU human rights
policy on China?
Answer. The Department of State's Bureaus of Democracy Human
Rights, and Labor; International Organization Affairs; and European and
Eurasian Affairs conduct regular dialogues and engagements with the
European Union, including on the subject of human rights in China.
Question. What would you characterize as `wins' in this category?
Answer. Since the release of the 2017 National Security Strategy,
we have engaged with Europeans on the China Challenge. European
governments and the EU are taking action to confront the PRC on its
human rights record and reject PRC attempts to coerce them into silence
or compliance. We see progress on European `pushback,' whether it is a
decision in Sweden or Belgium to close a Confucius Institute in favor
of freedom of expression; the desire of the Czech Senate President to
visit Taiwan despite threats of retaliation from the PRC; the United
Kingdom's joint statement on Xinjiang, made along with 17 European
signatories at the 74th United Nations General Assembly in 2019; and
the side-events we co-sponsored with the UK, Canada, Germany, and the
Netherlands on the situation in Xinjiang. Several European governments
have expressed interest in developing the kinds of advisory and
punitive tools the United States uses to deter businesses, including
banks, from dealing with supply chains tainted by forced labor and
other human rights abuses. We also welcome the EU High Representative
for Foreign Affairs and Security Policy Joseph Borrell's announcement
that the EU is ``working on a comprehensive and coordinated EU
response'' to address the erosion of Hong Kong's freedoms, after UK,
France, and Germany announced the suspension of their extradition
treaties or pending treaty negotiations with Hong Kong. Coordination on
human rights policy issues will also be an important focus of the
upcoming U.S.-EU Dialogue on China.
Question. Has the U.S. urged Europe to change its views on the
Confucius Institutes and do you sense that European attitudes are
shifting on these Chinese cultural and educational efforts?
Answer. We have shared our experiences countering the Chinese
Communist Party's malign influence with European partners, including
issues related to research integrity, academic freedom, free speech on
campuses, and Confucius Institutes. Recent decisions in Europe to
shutter Confucius Institutes and increased scrutiny by European
legislators and journalists of PRC influence on university campuses
show that our engagement with likeminded partners is making a
difference and attitudes are indeed changing. European governments and
civil society are increasingly aware and active.
______
Responses of Principal Deputy Secretary Julie J. Chung to Questions
Submitted by Senator Robert Menendez
Question. COVID-19 response in Latin America: Latin America is the
current epicenter of the COVID-19 pandemic. China's Foreign Minister
recently announced a $1 billion loan program for COVID vaccine access
in the region. While USAID has delivered over 2,000 ventilators to the
region, I am concerned that the Trump administration's efforts once
again fall into the category of over promise and under deliver. Our
record is further complicated by the Administration's deportation of
dozens of COVID-positive immigrants to Guatemala and Haiti. We must do
more to show our hemispheric partners that we are in this fight
together:
Given the importance of the need for access to a future vaccine,
how is the United States supporting countries in Latin America and the
Caribbean to ensure equitable vaccine access across the region?
Answer. USAID is committed to supporting global access to safe and
efficacious vaccines against COVID-19 when available. USAID is working
with the National Security Council, State Department, and interagency
partners to ensure that needs in Latin America and the Caribbean are
appropriately prioritized in the global response efforts. USAID is a
longstanding Gavi donor, and since 2001, has supported Gavi to
vaccinate more than 822 million children in 73 countries--preventing
more than 14 million future deaths. In February 2020, the U.S.
Government announced a budget request for a new, $1.16 billion
contribution to Gavi over fiscal years 2020-2023. USAID has been a
major partner in health development in the LAC region over the past 50
years and can build upon those past investments to support vaccine
access.
Question. China and Environmental Concerns: For the fourth
consecutive year, a large Chinese fleet was illegally fishing at a
short distance from the boundaries of the Galapagos Islands,
threatening the marine life and biodiversity of a recognized U.N. World
Heritage site and potentially violating Ecuador's sovereignty.
Overfishing has many environmental repercussions and a detrimental
effect on tourism, which is a major source of income in Ecuador. The
Government of Ecuador, however, does not have enough capacity to detect
and deter Chinese fishing vessels, leaving illegal fishing to continue
unabated:
Can you explain the implications of these incidents and China's
broader environmental record in Ecuador?
Answer. Beyond the serious implications of illegal, unreported,
unregulated fishing, the previous Ecuadoran administration of Rafael
Correa engaged with the PRC with a disregard for the environment, rule
of law, and responsible practices. For example, 13 workers died due to
unsafe working conditions at the PRC-financed and built Coca Codo
Sinclair dam. The hydroelectric plant has never become fully-
operational due to corruption and faulty construction. A sinkhole that
caused the oil spill earlier this year may have resulted from activity
associated with this dam. The U.S. National Response Team provided
assistance to help mitigate the impact of the oil spill on local
communities, the environment, and provided guidance to avoid the
sinkhole reaching the dam intake and rendering it completely useless.
Question. How can the U.S. support Ecuador's efforts to deter these
practices?
Answer. The United States supports partners like Ecuador in
protecting ocean resources through the sharing of information, as well
as by providing technical advice and assistance. Recently, in
coordination with the Ecuadoran Navy, the U.S. Coast Guard cutter
Bertholf completed a joint patrol to detect and deter potential IUU
fishing near the Galapagos. Additionally, USAID is helping build
increased transparency and accountability into the management of
natural resources in the face of informal and illegal extractive
activities that affect livelihoods and the health of ecosystems.
Through America Crece, the U.S. is supporting Ecuador and other
countries in the hemisphere to evaluate infrastructure projects for
quality and transparency.
Question. As you know, I and members of the Senate Foreign
Relations Committee introduced bipartisan legislation last month to
strengthen U.S. competitiveness in Latin America and the Caribbean and
address China's economic, security, and intelligence engagement. The
bill, Advancing Competitiveness, Transparency, and Security in the
Americas Act (ACTSAA) requires the Departments of State and Treasury to
provide technical assistance to regional partners to help them
safeguard their infrastructure from predatory foreign investment,
similar to the Committee for Foreign Investment in the U.S. (CFIUS).
What initial steps have been carried out on this front?
Answer. We have a shared interest with our partners throughout the
Western Hemisphere in ensuring that predatory buyers do not endanger
our collective security by exploiting the global economic crisis to
gain control over sensitive technologies and critical infrastructure.
We have encouraged our allies and partners to protect critical
infrastructure and sensitive technology and information through
rigorous, transparent, whole-of-government foreign direct investment
screening processes focused on national security risks, while still
allowing capital flows to energize economic recovery. Working closely
with Treasury and other interagency partners, we deployed interagency
technical teams to countries such as Brazil, Canada, and Chile that
have sought to develop their capacity to institute national security
investment screening.
Question. Can you briefly outline how the Administration
prioritizes DFC engagement in the region?
Answer. The U.S. International Development Finance Corporation
(DFC) plays a critical role in leveraging the power of private sector
investment to advance U.S. foreign policy objectives in the Western
Hemisphere. Ensuring a robust recovery from the economic effects of the
COVID-19 pandemic will require significant private investment and the
DFC has committed to spur at least $12 billion in private investment in
Latin America and the Caribbean over the next 5 years. The Department,
both through our embassies and through the Secretary's role as Chairman
of the DFC Board of Directors, is working closely with DFC to identify
investment opportunities, particularly in less developed countries and
in certain sectors that may need greater assistance in facilitating
private investment. Through DFC and other economic foreign policy
tools, the Administration is providing our partners with alternatives
to unfair and opaque Chinese economic practices and promoting U.S.
solutions, rooted in transparency and the rule of law. As such, the DFC
plays a key role in advancing Administration's multi-pronged strategy
for countering the malign aspects of China's engagement and ensuring
the United States remains the region's preferred trade and investment
partner.
Question. ACTSAA requires the designation of a China Engagement
Officer at WHA embassies to report on China's presence in the region.
Can you outline the reporting officers you have in the region?
Answer. Our embassies are staffed with officers conducting
political, economic, consular, and public diplomacy efforts to maximize
the U.S. role as the partner of choice in the Western Hemisphere. They
monitor and respond to Chinese activities in their respective host
countries. All of our embassies and many of our consulates in the
Western Hemisphere have officers responsible for performing these
functions.
We also have a Regional China Officer (RCO) based in Lima, Peru,
who tracks regional trends and supports our reporting and public
outreach teams at our missions in the field. We look forward to hosting
three additional WHA-focused Regional China officers, who will be based
in Bridgetown, Montevideo, and Panama City starting in fall 2021. These
officers lead and coordinate our strategy to counter China's malign
activities by assessing the PRC's drive for influence in the region and
developing effective responses to that.
Question. ACTSA requires the Executive branch to provide our
regional partners with assistance on cyber-security and cyber-defense.
Can you briefly outline initial efforts?
Answer. The U.S. Government provides cybersecurity technical
assistance to partners in the Western Hemisphere. For example, the
Department of State funds partners like the Organization of American
States Inter-American Committee Against Terrorism (OAS-CICTE)
Cybersecurity Program to carry out cybersecurity capacity building
activities in the region. The Department also funds Western Hemisphere
countries to participate in global programs, such as the George C.
Marshall Center's Program for Cyber Security Studies. Through the
Global Defense Reform Program, the Department will embed a
cybersecurity and policy advisor within Ecuador's Ministry of Defense
Joint Cyber Defense Command. The Department provides technical
assistance to promote best practices for a national approach to
cybersecurity under the Digital Connectivity and Cybersecurity
Partnership initiative.
Question. Does China play a role--either direct or indirect--in
violations of human rights in Latin America and the Caribbean? If so,
please cite specific examples.
Answer. The People's Republic of China's (PRC) aggressive efforts
to expand market share for state-affiliated firms, carry out
infrastructure projects, implement disinformation campaigns, and export
surveillance and censorship tools play a direct and indirect role in
human rights violations in Latin America. The lack of transparency in
transactions with the PRC and PRC-based entities, as well as an
increase of the region's dependence on debt financing from the PRC,
empowers corruption. The PRC's infrastructure projects often ignore
both labor and environmental laws, undermining individual workers'
rights and labor standards more generally. The PRC's control over local
media outlets through bribes and other means silences investigative
journalists who draw attention to human rights abuses and suppresses
negative stories of the PRC's activities in the region. The PRC's
export of surveillance and control equipment to the region also
increases the risk to human rights defenders and those willing to
expose human rights violators.
______
Responses of Ambassador Philip T. Reeker to Questions
Submitted by Senator Ben Cardin
Question. To what do you attribute the recent shift in attitude of
European nations away from a China policy organized around economic
engagement toward one of limiting China's influence in Europe?
Answer. Since the publication of the National Security Strategy in
2017, the United States vigorously engaged with our European Allies and
partners to alert them to threats posed by the People's Republic of
China (PRC). Accelerated investment and acquisition of European
companies by PRC companies has led Europeans to understand their
economies are targets of Beijing's Made in China 2025 strategy,
resulting in Europeans beginning to develop national and EU-wide
investment screening mechanisms. The ``Transatlantic awakening'' on the
PRC has deepened over the last year. Revelations of human rights abuse
in Xinjiang, Beijing's targeting of Hong Kong with national security
laws, and increasing PRC hostility toward Taiwan and others in the
South China Sea have led Europeans to recognize the implications of
enabling the malign activities of the Chinese Communist Party (CCP).
With the outbreak of the COVID-19 pandemic Europeans suffered tragic
consequences of Beijing's disinformation campaigns and lack of
transparency. Continued U.S. engagement with European counterparts to
highlight the nature and the pattern of CCP aggression has further
shifted attitudes in Europe and contributed to the development of
strategies and mechanisms to make Europe more resilient and better able
to counter PRC malign influence.
Question. How has Beijing responded to efforts by European leaders
to reduce interdependence and balance relations?
Answer. I believe Beijing has been surprised by the speed and
degree to which many European leaders have reacted negatively to PRC
bullying and disinformation efforts. In 2019 the European Commission
issued its ``Strategic Outlook'' on EU-China relations that
characterized the PRC as a partner, a competitor, and a systemic rival.
The PRC is facing headwinds on a variety of issues in Europe, including
investment screening, 5G, domestic interference, and multilateral
engagement. The CCP is also facing increasing European public and
parliamentary criticism on human rights, Hong Kong, aggression in the
South China Sea, interference on university campuses, and many other
issues. European public polls show increasingly unfavorable views of
the PRC generally, and European politicians are increasingly forthright
in calling out and countering PRC malign influence. The frosty
receptions to the recent fence-mending trips to Europe by Foreign
Minister Wang Yi and Politburo member Yang Jiechi reveal the degree to
which European leaders are reducing dependence and rebalancing
relations with the PRC.
Question. How will the economic impact of the COVID-19 pandemic
affect the relationship between European countries and China?
Answer. Supply chain disruptions caused by the COVID-19 pandemic
and the severity of their impact on the health and livelihood of
Europeans have heightened concerns about Europe's economic dependence
on the PRC. Europe's auto and electronics industries were among the
hardest hit, while many countries experienced shortages of
pharmaceutical ingredients and other critical medical supplies imported
from China.
The pandemic has created a greater sense of urgency to diversify
supply chains that are predominantly rooted in the PRC in order to
boost European resilience. The EU has long sought to reduce dependence
on other countries for critical materials and technologies, as
evidenced by its new Industrial Strategy for Europe, released in March.
The European Commission issued guidelines to coordinate the EU's
approach to investment screening in light of the COVID-19 crisis and to
protect the EU's critical assets and technologies from potential
hostile takeovers and investments by non-EU companies.
Question. What are the prospects for an EU-China investment
agreement, and what might that entail?
Answer. The EU seeks an EU-China Comprehensive Agreement on
Investment (CAI) in order to create new investment opportunities for
European companies by opening the PRC market and eliminating
discriminatory laws and practices that prevent them from competing on
an equal basis with PRC companies.
In 2016, the two sides agreed on the scope of the agreement which
would go beyond a traditional investment protection agreement to cover
market access for investment, and ensure a level playing for EU
companies in the Chinese market. As we understand, negotiations are
complete on chapters relating to: the behavior of state-owned
enterprises, forced technology transfer, and transparency of subsidies.
Despite the political will to complete negotiations by the end of 2020,
the EU has indicated it will not move forward until China makes
significant concessions on the key remaining chapters relating to
market access, environment, and labor. As European Council President
Charles Michel recently said, ``Europe is a player, not a playing
field.''
The U.S. Government shares many of the EU's concerns regarding PRC
trade and investment practices and a lack of reciprocal market access.
The State Department is taking actions along with the interagency to
ensure a level economic playing field for American companies and to
counter Beijing's efforts to reshape the open, market-oriented, rules-
based economic order to its advantage.
Question. What does the future of the 17+1 initiative look like?
Answer. The 17+1 initiative is one mechanism that the PRC has
sought to use to expand its influence in Central and Eastern Europe. It
includes the countries in the region and fits into larger PRC ``Belt
and Road'' and ``Silk Road'' initiatives. The PRC attempts to use these
relationships to gain a toehold in the EU and Schengen Zone and,
therefore, access to Western Europe as well. In practice, however, the
17+1 has consisted more of photo-ops with officials than of concrete
outcomes.
The future of the 17+1 is unclear. In 2020, its annual summit was
postponed due to the coronavirus pandemic. The PRC's overly aggressive
pushing of its agenda, both surrounding the pandemic response and on
other issues such as Hong Kong, has turned off European partners, who
were already disillusioned by unfulfilled promises, and tempered their
enthusiasm about 17+1. PRC FDI in the EU has been declining in recent
years, reaching a 5-year low in 2019 of 11.7 billion euros, with the
Central Europe region accounting for just 3 percent of that figure.
Increased trade has benefited the PRC more than the European countries,
as the increase has been mostly in Chinese exports, and Chinese
ambassadors in Europe have sought to use European dependence on
investments in, and trade with, China to soften or influence EU policy
towards China, and/or to retaliate against steps or policies Beijing
does not like. All 17 countries in the initiative have seen their trade
deficit with the PRC increase since the group was established in 2012.
Question. How can the U.S. take advantage of the weakening
relationship between China and CEE countries to counter China's
influence in that region?
Answer. We are developing partnerships with European governments
and institutions to ensure that our relationships with the PRC are
based on reciprocity, transparency, accountability, and respect for
rule of law, property, labor rights, and human rights. Together with
Europe, we need to ensure a constructive and results-oriented
relationship with the PRC.
In recent years, there has been a ``Transatlantic Awakening'' to
the PRC Challenge, with increased European pushback. Examples include
decisions by Sweden and Belgium to close Confucius Institutes; the
Czech Senate President's visit to Taiwan despite threats of retaliation
from the PRC; and an EU report exposing and condemning PRC
disinformation tactics during the COVID pandemic. Both sides of the
Atlantic see the need to curb PRC aggression, assert our sovereignty,
and protect our economies.
The United States strongly supports the Three Seas Initiative
(3SI), which aims to improve North-South infrastructure between the
Baltic, Black, and Adriatic seas. The 3SI also has an important
geopolitical dimension. The PRC uses infrastructure investments and
offers of economic gain to create dependencies, to expand its political
influence, and to turn countries away from the West, democracy, and the
rule of law; the 3SI builds resilience against that threat.
With the United States driving the debate about trusted 5G vendors,
Xinjiang, and Hong Kong's autonomy, we have given these topics a global
platform and rallied countries in Europe and beyond to push back
against the PRC.
Question. How have European countries responded to the United
States' strategic approach to China?
Answer. We see a Transatlantic strategic alignment on the People's
Republic of China (PRC) developing over a shared threat perception and
common purpose to protect our democracies, open societies, and
economies. In recent years, European governments have rolled out
stronger investment screening regulations modelled on FIRRMA and CFIUS
legislation and adopted an EU-wide investment screening mechanism. The
EU identification of the PRC as an ``economic competitor'' and
``systemic rival'' and the adoption of a toolbox of measures to secure
5G networks are also important steps. Europeans have advocated for
greater market reciprocity and a level playing field for European
companies, understanding the threat that a state-controlled economy
poses to free market values and intellectual property rights.
Earlier this year European legislators launched a global
initiative, the Inter-Parliamentary Alliance on China, that
acknowledges the need for a whole-of-government approach. The U.S.
National Security Strategy also recognizes the need to use all
government tools in efforts to counter the PRC. At the 2019 Leaders
Meeting, NATO Allies formally declared for the first time that the
PRC's growing influence and international policies present `challenges
and opportunities' that need to be addressed by the Alliance. In
September, France, Germany and the UK submitted a joint note verbale in
the U.N. against the PRC's claims in the South China Sea. We joined our
G-7 counterparts in condemning the PRC's violation of the Sino-British
Joint Declaration on Hong Kong. We have also seen European leaders, at
all levels, reaffirm shared Transatlantic values of transparency and
free speech by speaking out publicly about the PRC's aggressive
disinformation campaigns throughout the COVID pandemic, as well as its
human rights violations in Xinjiang, the repression of protesters in
Hong Kong, and its hostile actions toward Taiwan. These are just a few
of the indicators of that growing strategic alignment between the
United States and our Allies and partners in Europe with regard to the
PRC.
Question. What effect has the United States' withdrawal from
multilateral organizations like the WHO had on relations between China
and Europe?
Answer. While the United States and many of our likeminded partners
have our differences on the subject of multilateralism, we agree that
these institutions should be rooted in democratic values and hew to
their missions. The United States and the Department are committed to
upholding the U.N. and related institutions that have fostered global
peace and prosperity over the past 75 years, including by continuing to
be the largest financial contributor to these organizations. We have
provided over $12.2 billion to international organizations in fiscal
year 2019 alone. The United States' demonstrated commitment to the U.N.
and related agencies is critical to the U.N. accomplishing its mission,
maintaining its integrity and impartial role of serving all its
Members, and rejecting efforts of the People's Republic of China (PRC)
that seek to coopt the U.N. to accomplish its own authoritarian goals.
Over the last 3 years we have seen an increased awareness in many
European countries, what Secretary Pompeo has referred to as a
``Transatlantic awakening to the China Challenge.'' U.S. diplomats from
the Secretary on down have been engaging--virtually or otherwise--on
China-related issues throughout Europe. Positive results from our
substantial diplomatic engagement contrast sharply with the growing
backlash to the PRC's heavy-handed ``mask diplomacy'' and its angry
reaction to European criticism of its COVID response. European
audiences got to see firsthand just how the Chinese Communist Party
handles criticism and questions, and they did not like what they saw.
Europeans are also increasingly concerned about the Chinese Communist
Party's exploitation of multilateral bodies.
Question. What would be the benefits of working more closely with
our European allies to mitigate security and other threats posed by
China?
Answer. Europe is home to many of America's closest and most
capable Allies. When we have common purpose, our European Allies and
partners are force multipliers in any endeavor the United States
undertakes. That is the greatest benefit of working with them to
mitigate threats posed by the People's Republic of China (PRC). The
Transatlantic Alliance underpins the standards of cooperation and
coordination in the international system that developed after World War
II. European governments share our interest in preserving and promoting
democratic and free market values. Our European Allies and partners
also wield global influence and can be intermediaries to gain more
supporters to a common cause. Our NATO Allies recognize the PRC's
international policies present challenges that must be addressed,
together as an Alliance, to ensure Transatlantic security. Systemic
connections between the United States and our European Allies and
partners on finance, trade, defense, supply lines, IT, media, and
research and development enables us to advance broad agendas when we
work together.
______
Responses of Assistant Secretary David R. Stilwell to Questions
Submitted by Senator Edward J. Markey
Question. The Taiwan Fellowship Act, modeled on the Mansfield
Fellowship Program between the United States and Japan, establishes a
2-year fellowship exchange program for Federal Government employees in
all three branches of government to learn, live, and work in Taiwan.
This legislation looks to expand bilateral cooperation with Taiwan at a
time that China seeks to isolate the island nation diplomatically:
Do you personally support this concept and how would you
characterize the level of support from Taiwan authorities?
Answer. The Department appreciates and shares many of the bill's
sentiments. The Administration is committed to supporting Taiwan as it
faces an ongoing PRC pressure campaign to shrink Taiwan's international
space. We would consider any exchange program that deepens U.S.
Government employees' understanding of Taiwan and its system of
governance an important component of our relationship with Taiwan. Next
steps moving forward should be taken in careful coordination with the
Department of State and the American Institute in Taiwan. As Department
experts have conveyed to Senate staff, the text as written is
prescriptive in ways that would result in heavy costs. We look forward
to continuing to work with Congress to ensure any bill text that
proceeds is framed as permissive authorities and preserves our shared
goals as well as the Department's flexibility. Further, AIT Taipei has
reported that the Taiwan Authorities similarly welcome the Act.
Question. The Taiwan Fellowship Act, modeled on the Mansfield
Fellowship Program between the United States and Japan, establishes a
2-year fellowship exchange program for federal government employees in
all three branches of government to learn, live, and work in Taiwan.
This legislation looks to expand bilateral cooperation with Taiwan at a
time that China seeks to isolate the island nation diplomatically:
Of the funds appropriated by Congress in fiscal year 2018, 2019 and
2020 for the American Institute in Taiwan (AIT), what amount of funds
went unobligated?
Answer. The unobligated balances for the American Institute in
Taiwan (AIT) over the past 3 fiscal years are as follows:
Question. Given the emphasis the Secretary has placed on
international law--in this instance hy has the Administration not
sought Senate ratification of the U.N. Convention on the Law of the
Sea?
Answer. This Administration has reaffirmed that the 1982 Law of the
Sea Convention generally reflects customary international law and that
the United States will continue to exercise its rights and jurisdiction
and perform duties in accordance with applicable international law,
including customary international law.
Question. Please describe the degree to which U.S. security,
commercial, and environmental groups and interests have urged you and
other senior Department leaders to pursue ratification of UNCLOS.
Answer. U.S. Chamber of Commerce and key American players in the
oil and gas, telecommunications, deep seabed mining, and shipping
industries have in the past supported the United States becoming a
party to this Convention.
______
Responses of Ambassador Philip T. Reeker to Questions
Submitted by Senator Edward Markey
Question. At this week's virtual summit between Xi Jinping and
three EU leaders, the Europeans reportedly raised China's human rights
issues directly to China's leader--from Hong Kong, to the Uyghurs, to
Tibet. European leaders are seeking major trade concessions from
Beijing, yet they weren't shy about their support for universal values:
Did the EU-China summit reaffirm that European allies can be vital
partners in speaking out and standing against Beijing's authoritarian
and expansionist behavior?
Answer. The EU and our European partners share our commitment to
the promotion of universal human rights around the world, including in
the People's Republic of China (PRC). We welcome unequivocal statements
by our partners to this end, including European Council President
Michel's statement following the September 14 EU-China summit on Hong
Kong, Xinjiang, Tibet, press freedom, and individual human rights
cases. We coordinate regularly with our European partners on human
rights issues and welcome opportunities to speak jointly with them on
human rights in the PRC, such as at the U.N. side-events we co-
sponsored in March and September 2019 with Canada, Germany, the
Netherlands, and the UK focused on human rights issues in Xinjiang and
as indicated by the July 2020 G-7 foreign ministers' statement on Hong
Kong. focused on the situation in Xinjiang.
Question. The EU's top foreign policy official recently wrote that
Europe should seek to cooperate closely with countries that champion
multilateralism and international law. On balance, have our European
allies and partners been supportive of the Trump administration's exits
or planned exits from institutions and agreements including but not
limited to the Paris Climate Agreement, the Treaty on Open Skies, the
World Health Organization, and the Joint Comprehensive Plan of Action?
Answer. The United States and our European Allies and partners
agree that multilateral institutions should be rooted in democratic
values and hew to their missions. The United States and the Department
are committed to upholding the U.N. and related institutions that have
fostered global peace and prosperity over the past 75 years, including
by continuing to be the largest financial contributor to these
organizations. We provided over $12.2 billion to international
organizations in fiscal year 2019 alone. The United States'
demonstrated commitment to the U.N. and related agencies is critical to
the U.N. accomplishing its mission, maintaining its integrity and
impartial role of serving all its Members, and rejecting efforts of the
People's Republic of China that seek to coopt the U.N. to accomplish
its own authoritarian goals.
EU President Charles Michel stated following the 22nd bilateral EU-
China Summit in June that ``[e]ngaging and cooperating with China is
both an opportunity and necessity. But, at the same time, we have to
recognize that we do not share the same values, political systems, or
approach to multilateralism.''
We continue to protect multilateral bodies as Transatlantic
partners. One example that demonstrates our continued shared values in
multilateral bodies is our commitment to protect intellectual property.
The Transatlantic community has thrived like no other part of the world
since World War II, in part because our countries protect intellectual
property. This year, Secretary Pompeo led a global diplomatic effort,
working with our European Allies and partners, to make sure that the
next director general of the World Intellectual Property Organization
would be one who protects intellectual property rights on behalf of the
world, not on behalf of China.
The Administration is advocating for greater transparency and
greater accountability in the multilateral sphere and encouraging our
European Allies and partners to also hold these bodies accountable. In
May the President announced the United States would terminate its
relationship with the World Health Organization (WHO). The President
has been clear that the WHO needs to reform, starting with its
independence from the Chinese Communist Party, and making substantive
improvements to the organization's ability to prepare for, prevent,
detect, and respond to outbreaks of dangerous pathogens with
transparency and accountability. In May 2020, the World Health Assembly
unanimously adopted a resolution that called for the establishment of
an independent panel to evaluate the global response to the pandemic of
COVID-19, including, but not limited to, an assessment of the WHO's
performance, as well as an investigation of the origin and spread of
novel coronavirus SARS-CoV-2. Consistent with our long-standing policy,
the United States will continue efforts to reform WHO and other
international organizations to ensure they operate transparently and
fulfill their mandates, as well as to urge WHO Member States to support
the U.S. call for reforms that strengthen transparency and
accountability.
On the Open Skies Treaty, although Allies do not all agree with our
decision to withdraw, they share our concerns regarding Russia's
violations and acknowledge that Russia bears the responsibility for the
erosion of the European security architecture through its repeated
violations of its arms control, nonproliferation, and disarmament
commitments and obligations, not to mention its actions in
contravention of Helsinki Final Act principles. We continue to work
closely with our Allies and partners to find common ground to move
forward collectively, including to address Russian non-compliance.
Question. The Pew Research Center survey released this week shows
severe declines in European views of the United States. Additionally,
in all 9 European countries surveyed, the percentage of people who
believe China has done a good job in handling the pandemic is more than
twice as high as the percentage saying the United States has responded
well to COVID-19. Is China's ``mask diplomacy'' in Europe succeeding?
Answer. In light of European audiences' awareness of the origins of
COVID-19, China's ``mask diplomacy'' has had limited effectiveness.
European journalists have largely shown the PRC's ``gifts'' to be
rooted in political opportunism rather than altruism. They have
highlighted the low-quality of donated PPE and PRC attempts to leverage
contributions for propaganda efforts.
Pew's research does indicate, however, that PRC practices of data
manipulation, censorship, and media control over international
reporting within China, has been successful at misleading European
publics as to the extent of their efficacy while obscuring the
authoritarian actions they have used to clamp down on the spread of
COVID-19.
Question. Secretary Pompeo recently unveiled the Report of the
Commission on Unalienable Rights. Do our European allies share the view
laid out in the report that there has been a ``proliferation'' of human
rights and we should make a distinction between ``inalienable rights''
and those that are ``ad hoc?''
Answer. Shared democratic values and traditions define the
Transatlantic relationship and underpin the free world. As EU High
Representative Josep Borrell wrote in a September 1 article, the EU's
``long, shared history and shared values with the United States bring
us closer to Washington than to Beijing.'' On the margins of the U.N.
General Assembly, the United States issued a Joint Statement, signed by
some European Allies and partners, which called on nations to recommit
themselves to the founding principles of the 1948 Universal Declaration
of Human Rights.
Regarding the matter of potential distinctions among rights, the
commission drew attention to the difference it saw between unalienable
rights--that is, those pre-political rights inherent in all persons at
all times, which may not be forfeited or transferred--and those rights
created by positive law by different nations and sub-national entities.
That such a distinction exists reinforces the essential commitment all
freedom-loving nations must make to the unalienable rights in the
Universal Declaration of Human Rights that comprise our shared values.
______
Responses of Assistant Secretary David R. Stilwell to Questions
Submitted by Senator Ted Cruz
In 2015, the Obama-Biden State Department issued ``Guidelines on
Relations with Taiwan,'' which prohibited our Taiwanese allies from
displaying their flags and other symbols of their sovereignty in
official capacities or at official U.S. functions. I have filed
legislation, the Taiwan Symbols of Sovereignty (SOS) Act, S. 3310,
mandating the reversal of that prohibition, and have in the meantime
urged the Trump administration to do so in the absence of a
Congressional mandate. On Sept 17 you testified to the Senate Foreign
Relations Committee (SFRC) that the prohibition is either required by
or aligns with the Taiwan Relations Act (TRA), and more specifically
that ``the Guidelines follow from'' the TRA. Elsewhere in your
testimony, you suggested the TRA is the basis for a policy of strategic
ambiguity in which the U.S. does not take a stance on Taiwanese
sovereignty, which in turn justifies the prohibition.
Please answer the following three questions.
Question. What is the language in the TRA that is the basis for the
prohibition on our Taiwanese allies displaying symbols of their
sovereignty? In answering this question please quote the language from
the TRA directly and identify the sections, paragraphs, and as relevant
subparagraphs where that language is located.
Answer. The United States recognizes the People's Republic of China
as the sole legal government of China, and, within this context, has
maintained unofficial ``commercial, cultural, and other relations''
with Taiwan, as further memorialized and facilitated by the Taiwan
Relations Act (TRA). Across multiple Presidential administrations, U.S.
guidance to Executive Branch agencies is premised on this unique
unofficial relationship and the President's constitutional authorities
relating to issues of recognition and to the conduct of U.S. foreign
relations. The TRA provides additional support for and acknowledges the
Executive Branch's discretion in the conduct of the relationship with
Taiwan.
Question. Was the U.S. policy before the ``Guidelines'' were issued
in 2015 consistent with the TRA? If not, please quote the language from
the TRA with which it was inconsistent directly and identify the
sections, paragraphs, and as relevant subparagraphs where that language
is located.
Answer. The U.S. one China policy is guided by the Taiwan Relations
Act (TRA), the three Joint Communiques and the Six Assurances. The
United States recognizes the People's Republic of China as the sole
legal government of China, and, within this context, has maintained
unofficial ``commercial, cultural, and other relations'' with Taiwan,
as further memorialized and facilitated by the TRA. Across multiple
Presidential administrations, U.S. guidance to Executive Branch
agencies is premised on this unique unofficial relationship and the
President's constitutional authorities relating to issues of
recognition and to the conduct of U.S. foreign relations.
Question. In what sense does a policy of ambiguity align with the
active prohibition set out in the 2015 ``Guidelines,'' as opposed to a
policy in which the U.S. maintains ambiguity about the Taiwanese
displaying symbols of their sovereignty, which was the pre-
``Guidelines'' status quo?
Answer. The description of U.S.-Taiwan policy in this question is
not accurate. Our Guidelines are instructions on how to engage Taiwan
within the parameters of our long-standing one-China policy, which is
guided by the Three Communiques, the Taiwan Relations Act, and the Six
Assurances. As such, the 2015 State Department-issued Guidelines did
not represent a change in U.S. policy.
______
Responses of Assistant Secretary David R. Stilwell to Questions
Submitted by Senator Cory Booker
Question. China's Support for Multilateralism and ``Vaccine
Nationalism'': Since the Trump administration withdrew from UNESCO and
the U.N. Human Rights Council, China announced itself as the ``champion
of multilateralism,'' filling the void left by the United States.
China appears to have worked hard to present the Trump
administration as ``unilateralist'' and China, in contrast, as
committed to multilateralism and support for global institutions such
as the World Health Organization:
How, if at all, is the Administration responding?
Answer. The United States remains an indispensable, committed
partner of the international community, including at the U.N. and its
specialized agencies and related organizations, and continues to be the
largest funder of international organizations, providing over $12.2
billion in fiscal year 2019. This Administration will continue working
to ensure that respect for human rights, the dignity and worth of
individuals, peaceful resolution of conflict, sustainable economic
prosperity, national sovereignty, transparency, good governance, and
the rule of law remain priorities at the U.N. and its specialized
agencies and related organizations.
The People's Republic of China has expanded its malign influence
throughout the multilateral system, including the World Health
Organization, to advance its own narrow foreign policy interests, often
at the expense of the health and safety of the global community. The
Department has been working diligently to push back against the PRC's
problematic behavior and authoritarian ideology within the U.N. and its
specialized agencies and related organizations and to strengthen the
institutional integrity of these organizations by improving their
transparency, accountability, and effectiveness.
Question. Is the Administration's position that it will not
participate in COVAX, the global partnership of 172 countries that will
develop and share access to a vaccine, because it is loosely associated
with China?
Answer. The United States has invested more than $10 billion to
rapidly develop COVID-19 vaccines, therapeutics, and diagnostics and to
expand domestic manufacturing capacity. These efforts will benefit the
global community by bringing safe and effective medical countermeasures
to market faster. The Administration's decision not to participate in
multilateral initiatives such as the Access to COVID-19 Tools
Accelerator (ACT) or the COVAX facility was based on several factors.
The Department of Health and Human Services and USAID are engaged in
technical conversations with the Coalition for Epidemic Preparedness,
Gavi (both of which are public-private global health partnerships), and
other partners to advance global efforts to develop and deploy life-
saving vaccines and therapeutics as quickly, and as broadly as
possible.
Question. Does the Administration believe it can compete with China
by gambling the lives of Americans with only American vaccine
candidates, and cutting off access to vaccine candidates that a
majority of countries in the world will be able to access?
Answer. The United States Government remains committed to ensuring
Americans have access to a safe and effective COVID-19 vaccine. The
United States Government has invested more than $10 billion to
accelerate the research, development, and manufacture of COVID-19
vaccines, therapies, and diagnostics, including supporting
international vaccine candidates developed by global pharmaceutical
companies. As President Trump has said, the United States is ``willing
to work with anybody that's going to get us a good result.''
Question. What if one of the U.S. vaccine candidates does not prove
safe or effective or takes longer to be approved, while a COVAX vaccine
proves to be more effective--is the Trump administration prepared to
answer why Americans could be at the back of the line for doses to a
vaccine?
Answer. The Department continues to engage with international
partners to exchange information and best practices on vaccines,
therapeutics, and other measures to combat COVID-19 and to build global
capacities necessary to prevent the next pandemic. In response to the
pandemic, the Department has worked closely with FEMA and other federal
agencies to secure medical supplies for domestic needs, and the
Department remains poised to support ongoing Administration response
efforts. Through decades of scientific collaboration and investments in
global health security, the United States has built a network of
international partners that we will continue to leverage to enhance
domestic and global health security.
Question. How is the Administration holding the CCP accountable for
its human rights abuses? What actions are being taken to help prevent a
further worsening crackdown in Inner Mongolia?
Answer. The State Department is outraged by the People's Republic
of China's (PRC) ongoing targeting and abuse of human rights activists
and members of ethnic and religious minority groups. The U.S.
Government has taken concrete action to respond to the human rights
crisis in the People's Republic of China, to include visa restrictions,
export restrictions, import restrictions, financial sanctions, and
multilateral initiatives.
Following decades-long oppression in Tibet and a devastating
campaign of repression in Xinjiang, the Chinese Communist Party seeks
to erode the unique culture of ethnic Mongols in Inner Mongolia as well
by, for example, replacing Mongolian with Mandarin Chinese as the
language of instruction in schools.
The United States seeks to preserve the distinct religious,
linguistic, and cultural identity of the PRC's ethnic Mongolian
population. We will continue to promote accountability for those who
commit human rights abuses, and to impose costs on the individuals and
entities that carry out or enable abuses. We also encourage other
members of the international community to take similar steps.
Question. Suppression of Journalists/Human Rights Abuses: The
Chinese Communist Party's (CCP) reflexive repression has already
resulted in horrific consequences for minority groups in Xinjiang and
Tibet, in addition to human rights activists throughout China.
Unfortunately, the CCP's campaign continues to broaden, most recently
in Inner Mongolia where authorities are targeting ethnic minority
Mongols:
What have you conveyed to Chinese government authorities regarding
this outrageous behavior targeting this accredited Los Angeles Times
journalist? How should the U.S. respond to deter this type of behavior?
Answer. The United States condemns the PRC's detention and physical
harassment of Alice Su, a reporter for the Los Angeles Times, who was
in Inner Mongolia covering protests against a new PRC policy reducing
the use of the Mongolian language in education. Independent journalists
play a vital role in transparency in China, and the world saw firsthand
the negative implications of censorship when COVID-19 broke out in
Wuhan. Independent journalism is also critical to shedding light on the
PRC's efforts to Sinicize its ethnic minorities in Xinjiang, Tibet, and
Inner Mongolia. It is reprehensible that the PRC has suppressed
protests by ethnic Mongolians seeking to express their legitimate
concerns and protect their mother tongue against discriminatory
measures, just as it has suppressed similar protests in Tibet and
Xinjiang.
Question. What is the State Department doing to change the
perception that we have forgotten Africa?
Answer. Secretary Pompeo and Under Secretary Hale both traveled to
Africa this year to underscore our long-standing commitment to our
partnership, strengthen economic ties, and support the next generation
of Africans. The Administration's new Prosper Africa initiative is
bringing together U.S. Government resources to two-way expand trade and
investment. For the past decade, the Young African Leaders Initiative
(YALI) has promoted leadership, entrepreneurship, effective public
administration, and strengthening of civil society. These initiatives
will continue to provide critical opportunities to African youth, who
are the future leaders of their communities.
Question. What lines of effort exist to promote the assistance we
are providing and the longstanding partnerships we have with African
institutions?
Answer. The U.S. advances peace and security by strengthening our
defense and development partnerships with African governments, Regional
Economic Communities, and the African Union to reinforce democracy,
human rights, and rule of law. We help partners counter malign actors
by harnessing the power of markets, promoting good governance, and
strengthening institutional capacities, including in health. Over the
past decade, we provided over $100 billion in global health funding and
nearly $70 billion in overseas humanitarian assistance. To develop
Africa's future workforce, we also provide critical education,
especially for women and youth.
Question. It has been nearly a year since the State Department
unveiled its Indo-Pacific Strategy. What success has the strategy had
in countering this Chinese initiative so far?
Answer. Through the Indo-Pacific Strategy, the United States works
with allies and partners to advance open investment environments; free,
fair, and reciprocal trade; good governance; and freedom of the seas.
Since 2017, this strategy has helped the U.S. and our partners in
countering Beijing's malign actions, which threaten the peace and
security of the Indo-Pacific region. The United States and a diverse
chorus of partners now speak in terms of the Indo-Pacific with a shared
vision and vocabulary, as seen in ASEAN's Outlook on the Indo-Pacific.
Under the Indo-Pacific Strategy, the United States has elevated
commercial diplomacy tools, sharpened transparency and governance tools
under the Indo-Pacific Transparency Initiative, and expanded security
partnerships with Indo-Pacific partners. Alongside our likeminded
allies in this effort, we can prevail against Beijing's malign behavior
and strategic competition.
Question. What are some examples the Department can point to where
U.S. Government efforts have either repelled Chinese attempts to gain
influence or otherwise increased our own standing in the region?
Answer. The Administration's Prosper Africa program is intended to
significantly increase two-way trade and investment. We actively
promote U.S. firms and solutions. For example, the U.S. Export-Import
Bank recently financed $5 billion for U.S. exports to Mozambique.
Chicago's Weldy Lamont won a $100 million grid-extension contract to
increase energy access in Senegal, beating out a Chinese competitor.
Botswana's recent termination of Beijing's faulty roadway projects
underscores the importance of our quality-driven, long-term investment
model.
Question. Aggressive Chinese Diplomacy: In recent years, the
Chinese foreign ministry appears to have instructed its embassies
overseas to adopt a more aggressive tone against the United States and
our allies. Called ``wolf-warrior diplomacy,'' this approach seems to
represent a transition in Chinese diplomacy from conservative, passive,
and low-key to assertive, proactive, and high-profile--and to reflect a
sense of increasing nationalism within China. We have seen an increased
willingness among Chinese ambassadors to engage in public speaking and
publish op-eds in an effort to push significant disinformation
campaigns that attack the West and promote a version of Chinese
economic, political, and diplomatic engagement that is disconnected
from reality:
What is the Department's observation about the effectiveness of
this Chinese campaign?
Answer. Chinese diplomats have indeed grown more strident and
aggressive in their public and private remarks, both at home and in
third countries. The German Marshall Fund has found that, since the
first Hong Kong protests erupted in March 2019, Twitter accounts
connected to PRC Embassies, Consulates, and Ambassadors have increased
250 percent. This is in stark contrast to the PRC's censorship of
social media at home, including outright blocking of platforms like
Twitter and Facebook. This newfound aggression in seeking to control
the information narrative has been matched by diplomatic aggression--to
include outright threats against third counties' sovereignty, security,
and economic well-being. However, in most cases these attempts have not
resulted in the cowing of foreign leaders or publics.
To the contrary, this belligerence has revealed CCP malign intent
more clearly to a global audience, and most countries have responded by
publicly rejecting Beijing's increasingly threatening approach. In
addition to not bowing to Beijing's demands, public opinion polls
reveal a souring of views of the Chinese government's tone and behavior
in more and more countries. In particular, countries' rejection of the
PRC's cover-up of COVID-19, disinformation efforts around its origins
and spread, and transactional approach to medical supplies, have
further exposed the limits of Beijing's aggressive diplomatic efforts.
Question. What is the State Department's strategy for counteracting
wolf-warrior diplomacy?
Answer. The Department's tracking of Beijing's so-called ``wolf-
warrior'' diplomacy has shown this strategy often backfires, angering
the very audiences Beijing hopes to influence. For example, Global
Engagement Center analysis of Foreign Minister Wang Yi's recent trip to
Europe showed that digital and social media conversations in Europe
about the visit were predominately negative.
The Department, however, is not just monitoring CCP attempts to
influence global conversations. Across the Department and at our posts
around the world, our teams are focused on sharing accurate information
about the United States, our policies, and values while building
resiliency to CCP propaganda and disinformation. Public Affairs
Officers at U.S. embassies and consulates, working with their local
staff, use their own media platforms, local contacts, speaker and grant
programs, and a variety of other tools to ensure that local governments
and publics see PRC aggression clearly. Beijing's ``wolf-warrior''
efforts work against Beijing--their threats against local leaders,
companies, and publics almost always result in a strong and negative
response in these countries, further raising collective alarm about
Beijing's malign activities abroad.
Question. What is the Department doing to lift the curtain on
China's anti-democratic, neocolonialist diplomatic and economic
engagement?
Answer. We are working every day to raise awareness of the PRC's
malign activities around the world. As mentioned in my testimony, the
Department has reorganized and retooled to confront the global threat
from the CCP in recent years, and every office and bureau is focused on
this global foreign policy challenge. We recognize that messaging is a
critical component of our campaign to reveal the PRC's malign
activities abroad; this includes both private messaging to local
governments as well as public messaging efforts.
All of our diplomats in the field are empowered to speak on China
issues, and are raising awareness of PRC malign intentions every day.
The greatest tool in this effort is transparency: exposing PRC malign
actions helps foreign audiences understand the threat Beijing poses to
their country's own national interests and well-being. We are also
eager to use the new Counter China Influence Fund (CCIF) to support our
posts in their programmatic and messaging efforts to expose PRC malign
influence. On the economic front, our posts are taking advantage of the
many new tools at their disposal to provide alternatives to Beijing's
predatory lending, including the Development Finance Corporation (DFC),
which helps meet local development needs without resorting to Beijing's
unsustainable lending.
Question. In the year that has passed since the signing of this
joint statement, what areas has the State Department identified as
being ripe for cooperation, technical assistance, and capacity
building? Are any programs yet underway?
Answer. The Department of State deepened cooperation with the
African Union Commission (AUC) by increasing technical assistance in
support of African Continental Free Trade Area (AfCFTA) negotiations to
assure a level playing field for U.S. business. Capacity building
programs have included: Department-funded U.S. exchange programs for 13
AUC trade officials on trade, digital trade and intellectual property
rights; a USDA-funded policy workshop to draft the AfCFTA Sanitary and
Phytosanitary annex; a training seminar for 30 AfCFTA negotiators on
IPR coordinated by the Department with support from USTR, USPTO, and
the U.S. Copyright office; and USAID-funded advisors on technical
barriers to trade and digital trade.
chinese use of technology for malign intent
In August 2019, the Wall Street Journal reported that Huawei
technicians helped the governments of Uganda and Zambia spy on
political opponents by intercepting their encrypted communications and
social media, and by using cell data to track their movements. Just
last month, researchers at a UK mobile security company discovered
malware pre-installed on new smartphones marketed in Africa, made by
the Chinese manufacturer Transsion.
Transsion is the fourth largest mobile handset maker (by sales) in
the world, behind Apple, Samsung, and Huawei, and the leading seller of
mobile phones in Africa. The affected devices are Transsion's low-cost
``Tecno W2'' Android phone models. Researchers observed 95 percent of
the affected devices operating in Cameroon, Cote D'Ivoire, Democratic
Republic of the Congo, Egypt, Ethiopia, Ghana, and South Africa.
Compromised mobile devices could enable malicious activity, such as
credential stealing or espionage, placing users' personal information
and data at risk of monitoring or interception. Furthermore,
communicating with users of these devices, including third parties and
partner organizations, could result in the compromise of shared
information:
Question. What kinds of specific initiatives or lines of effort
does the State Department have in place to counteract this type of
malicious activity?
Answer. The Department's efforts seek to promote an open,
interoperable, secure, and reliable Internet and promote best practices
for cybersecurity. Allowing untrusted, high-risk vendors, such as
Huawei, into any part of 5G networks makes critical systems vulnerable
to disruption, manipulation, and espionage, and puts sensitive
government, commercial, and personal information at risk. To counter
this threat, the Department has led an international campaign to
convince our partners and allies to exclude untrusted vendors from
their information and communications technology networks and services.
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