[Senate Prints 116-46]
[From the U.S. Government Publishing Office]



116th Congress}                                            { S. Prt.                                 
 2d Session   }              COMMITTEE PRINT		   { 116-46

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

                     THE UNITED STATES AND EUROPE:

                         A CONCRETE AGENDA FOR

                       TRANSATLANTIC COOPERATION

                                ON CHINA

                               __________

                           A MAJORITY REPORT

                      PREPARED FOR THE USE OF THE

                     COMMITTEE ON FOREIGN RELATIONS

                          UNITED STATES SENATE

                     One Hundred Sixteenth Congress

                             SECOND SESSION

                           November 18, 2020

                                     
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                              __________
               
               
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
42-155 PDF                 WASHINGTON : 2020                     
          
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                 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

LETTER OF TRANSMITTAL............................................   vii

EXECUTIVE SUMMARY................................................     1

INTRODUCTION.....................................................     5

CHAPTER ONE--POLITICAL AND CULTURAL INFLUENCE....................     9

Introduction.....................................................     9

The Challenge to Academic Freedom................................    10

Media and Film...................................................    14

The Chinese Communist Party and Political Influence..............    18

    Local and National Leaders...................................    18

    Rewarding Friends............................................    20

    Punishing Enemies............................................    22

Democracies Respond..............................................    24

Conclusion.......................................................    29

CHAPTER TWO--INTERNATIONAL ORGANIZATIONS.........................    31

Introduction.....................................................    31

History of China at the United Nations...........................    32

China: Shaping the United Nations in Its Own Image...............    32

China Weakens Human Rights At the United Nations.................    34

Checkbook Diplomacy..............................................    36

Personnel at United Nations Agencies.............................    37

Contributions to the United Nations..............................    38

The Need for Transatlantic Cooperation...........................    41

Conclusion.......................................................    42

CHAPTER THREE--TRADE, INVESTMENT, AND ECONOMIC STATECRAFT........    43

Introduction.....................................................    43

China's Discriminatory Practices.................................    45

    The Power of the State.......................................    45

    Forced Technology Transfer...................................    47

    State-Sponsored Industrial Espionage.........................    48

    State Subsidies and Other State Support......................    52

    Restricted Market Access.....................................    53

    Trade Retaliation............................................    54

Conclusion.......................................................    56



                             (iii)        

CHAPTER FOUR--TECHNOLOGY.........................................    59

Introduction.....................................................    59

The China Challenge..............................................    60

Mapping the Emerging Technology and Digital Landscapes in Europe 
  and the United States..........................................    62

    Research and Development.....................................    63

    Data and Digitalization......................................    65

    Standards Setting............................................    68

Transatlantic Cooperation........................................    69

Conclusion.......................................................    71

CHAPTER FIVE--OVERSEAS COMMERCIAL ACTIVITY.......................    73

Introduction.....................................................    73

Energy...........................................................    74

    Overview.....................................................    74

    Power Grids, Nuclear Energy, and Coal Plants.................    75

    Illegal Trade Practices and Standards Setting................    79

    Security and Political Leverage..............................    80

    Confronting These Challenges.................................    82

Ports and Shipping...............................................    83

    Overview.....................................................    83

    Economic Challenges..........................................    84

    Security Risks...............................................    85

    Implications for the United States and Europe................    88

Undersea Cables..................................................    90

    Overview.....................................................    90

    Undersea Cables and the Digital Silk Road....................    90

    PRC Cable Projects...........................................    91

Conclusion.......................................................    96

CHAPTER SIX--THE TRANSATLANTIC ALLIANCE AND AFRICA...............    99

Introduction.....................................................    99

Africa Matters...................................................    99

The China Factor.................................................   101

Transatlantic Cooperation in Sub-Saharan Africa..................   104

    Trade, Jobs, and Growth......................................   105

    Security.....................................................   105

    Development and Civil Society................................   106

Conclusion.......................................................   107

CHAPTER SEVEN--THE TRANSATLANTIC ALLIANCE AND THE INDO-PACIFIC...   109

Introduction.....................................................   109

Areas of Potential Cooperation...................................   111

    Private Sector-Led Investment................................   111

    Maritime Security............................................   114

    Good Governance and Human Rights.............................   116

    Environment..................................................   116

Conclusion.......................................................   119
CONCLUSION AND RECOMMENDATIONS...................................   121

Safeguarding Our Open Societies..................................   121

Protecting the Integrity of International Organizations..........   123

Defending the International Trading System.......................   124

Shaping the Future of Technology.................................   126

Addressing the Implications of China's Strategic Investments.....   127

Growing U.S.-Europe Cooperation in Africa and the Indo-Pacific...   129

    Both Regions.................................................   129

    Africa.......................................................   129

    Indo-Pacific.................................................   131

ABBREVIATIONS AND ACRONYMS.......................................   133

 

                         LETTER OF TRANSMITTAL

                              ----------                              

                              United States Senate,
                            Committee on Foreign Relations,
                                 Washington, DC, November 18, 2020.



    Dear Colleagues: Since the end of the Cold War, the 
international community has experienced enormous economic 
prosperity and a period of sustained stability. However, as 
nations with authoritarian ideologies and imperial tendencies 
increasingly look to grow their power and influence on the 
world stage, the United States must remain committed to 
safeguarding freedom and defending the principles of democracy 
and the rule of law.
    In particular, we must be prepared to work with our trusted 
allies and partners to counter an increasingly confrontational 
China that attempts to undermine prosperity, security, and good 
governance in every region of the globe. I consider this 
foreign policy issue to be the most important of our time, and 
I have pursued it at length during my time in the U.S. Senate 
and especially since becoming chairman of the Senate Foreign 
Relations Committee.
    In the past, the United States and Europe have worked 
together to help create an open system of rules, norms, and 
institutions that uphold individual rights and freedoms, 
advance market-based economic prosperity, and safeguard shared 
security interests. The United States and Europe must work 
together once again to defend these principles and confront 
China's attempts to undermine the rule of law.
    In this report, I lay out a number of areas in which the 
United States should collaborate with our European colleagues 
on the challenges posed by China. Transatlantic security and 
prosperity require that we continuously renew our commitment to 
each other and pledge to use all of our combined tools to 
succeed. I am confident that by engaging with the forthcoming 
recommendations in this report, the United States and Europe 
will be able to find a shared vision to defend the system we 
built together.



    Sincerely,


                                             James E. Risch
                                                          Chairman.




                                 (vii)

                           EXECUTIVE SUMMARY

                              ----------                              

Introduction
    The United States and Europe increasingly agree that the 
People's Republic of China (PRC) poses significant political, 
economic, and even security challenges. Legislators and 
parliamentarians on both sides of the Atlantic have played an 
active and leading role in shifting approaches to meet these 
challenges. The next step is to turn this growing agreement 
into a constructive and concrete transatlantic agenda to defend 
shared interests and values. This report puts forward concrete 
ideas for collaboration in six key areas:


   Fending off malign political influence,

   Protecting the integrity of international organizations,

   Addressing anti-competitive trade and economic practices,

   Investing in future technologies and shaping how they are 
        used,

   Confronting the security implications of the PRC's 
        strategic investments in energy, transport, and digital 
        infrastructure through ``One Belt, One Road'' (OBOR), 
        and

   Invigorating partnerships in Africa and the Indo-Pacific.
Political and Cultural Influence
    Since Xi Jinping took over as General Secretary of the 
Chinese Communist Party (CCP) in 2012, the PRC has undertaken 
extensive operations to manipulate the information space to its 
advantage and legitimize the Party's authority on the global 
stage. The PRC, alongside its affiliated entities, leverages 
its vast economic resources to coerce universities, think 
tanks, the media, and local and national politicians to accept 
the CCP's narrative by punishing criticism and rewarding 
support. Democracies have begun to realize the threat this 
coercive influence poses to free and open societies and have 
taken actions to protect themselves. However, there is much 
more the community of democracies should do to push back on the 
PRC's malign influence. This includes:


   Combating disinformation,

   Strengthening transparency structures,

   Developing independent expertise on China, and

   Establishing codes of conduct to inoculate institutions 
        from all malign influences, including from the PRC.
International Organizations
    The principal reason for the formation of international 
organizations, including the United Nations (UN), was to uphold 
and promote an international system characterized by liberal 
principles and to play a decisive role in maintaining 
international security. However, a major goal of the PRC's 
foreign policy is to re-shape global governance such that the 
international system defers to CCP interests, specifically 
garnering credibility for its regime and for norms and 
standards compatible with authoritarianism. To do so, it 
inserts CCP language into UN documents, leverages OBOR-
compatible UN funds to support CCP goals, whips UN votes to 
shield itself from criticism, and orchestrates the election of 
Chinese diplomats to head UN agencies. Moreover, the PRC uses 
its financial contributions and peacekeeping personnel to 
advance its own global agenda. To push back on PRC attempts to 
undermine the system and encourage good governance at the UN, 
the United States and Europe should:


   Adopt a holistic approach to coordination that spans the 
        entire UN system,

   Work together on reforming specific agencies,

   Combine support for UN officials that will uphold the UN 
        Charter, and

   Protect the norms and practices that have served the 
        international system well.
Trade, Investment, and Economic Statecraft
    After several decades in the international trade and 
economic system, it is clear the PRC has no intent to 
liberalize and adopt free market principles. Instead, China has 
continued to advance an ecosystem of anti-competitive economic 
and industrial policies that use discriminatory practices and 
coercion to further its strategic goals. Such actions hamper 
legitimate private enterprise and present an unprecedented 
challenge to the international trading system. If the United 
States and Europe hope to preserve the role of free markets, 
then they must find areas for cooperation that strengthen the 
system itself and push back on specific PRC behavior. This 
includes:


   Advancing shared interests in the World Trade Organization,

   Revitalizing transatlantic trade negotiations,

   Fixing current points of conflict such as the Boeing/Airbus 
        disputes,

   Coordinating on export controls with respect to China, and

   Strengthening supply chain resilience.
Technology
    China's massive market, as well as the political focus and 
economic resources directed towards the development, 
manufacturing, and regulation of emergent technologies, means 
that the United States and Europe are at risk of being 
subjected to PRC technological infrastructure and the intrusive 
way the CCP uses such technologies. This threat is particularly 
acute in areas such as research and development, data and 
digitization, and standards setting. Losing their technological 
advantage would present severe challenges to U.S. and European 
economies, militaries, and shared values such as individual 
freedom and privacy. The United States and Europe should thus:


   Prioritize areas where there are little to no regulatory 
        obstacles for increased transatlantic cooperation on 
        technology development,

   Create a technology coalition of advanced democracies,

   Seek to harmonize regulatory practices in key areas, and

   Take other steps to regain a competitive stance in the 
        global technology race.
Overseas Commercial Activity
    China's most visible foreign policy priority is the OBOR 
initiative. This project is a means by which to increase the 
economic influence of state-owned Chinese firms in global 
markets, engender undue PRC political leverage with governments 
around the world, create a China-centric technology regime, and 
provide greater access to strategic nodes for the People's 
Liberation Army. There is a growing transatlantic realization 
of the inherent economic and security risks of PRC acquisitions 
and investments. Three areas where the United States and Europe 
must address these risks are in power grids and energy 
infrastructure, ports and shipping, and undersea cables. 
Initial measures to address these issues include:


   Coordinating between relevant U.S. and European agencies on 
        priority sectors where shared vulnerabilities could 
        have long-term ramifications,

   Examining the security of U.S. and European power grids and 
        establishing fail-safe measures to protect increasingly 
        connected grids,

   Holding China accountable for environmental harm resulting 
        from its energy investments,

   Conducting a thorough review of the implications of PRC 
        port investments for the North Atlantic Treaty 
        Organization (NATO), and for U.S. and European 
        engagement in Africa and the Indo-Pacific, and

   Initiating discussions on the risks posed to NATO by PRC 
        undersea cable investment.
The Transatlantic Alliance and Africa
    Enormous demographic and economic shifts underway across 
the African continent will elevate Africa's role in global 
affairs. This requires the transatlantic alliance, along with 
its African partners, to collaborate on managing these shifts, 
countering malign influence, and promoting the growth of 
healthier, more stable, democratic societies that share our 
values and interests. Through bilateral investment and loans, 
infrastructure projects, and technological partnerships, China 
is increasingly invested in and becoming tied to Africa's 
destiny. The United States and Europe must recognize the 
importance Africa plays in the world and strengthen their 
partnerships with the continent on trade, security, 
development, and governance. This includes steps such as:


   Reframing the ``transatlantic relationship'' to include 
        African partners,

   Codifying the Prosper Africa initiative in the United 
        States, and considering an intercontinental Prosper 
        Africa initiative together with Europe, and

   Expanding assistance that promotes democracy, increases 
        government accountability, and fights corruption.
The Transatlantic Alliance and the Indo-Pacific
    Currently, the Indo-Pacific is the world's economic center 
of gravity and home to many key democratic allies. Moreover, 
China has become much more aggressive economically and 
militarily in this region. China's ability to project power 
worldwide will be determined by how large a foothold China can 
gain in this region. Both the United States and Europe have 
recognized the importance of the Indo-Pacific for its own sake, 
with countries on both sides of the Atlantic issuing Indo-
Pacific strategies. There are important opportunities to avoid 
duplication and build on this through more concrete 
cooperation, such as:


   Encouraging private sector-led growth, including through 
        greater cooperation between development finance 
        institutions,

   Partnering to develop human capital in the Indo-Pacific 
        through technical assistance and training,

   Strengthening collaboration on maritime security, and

   Pursuing joint efforts to safeguard the environment and 
        bolster natural resource governance.
Conclusion and Recommendations
    Neither side of the Atlantic can respond to the China 
challenge alone. The only successful path forward is to work 
together. Transatlantic security and prosperity requires that 
the United States and Europe renew our commitment to each other 
and pledge to use all of our combined tools to succeed. The 
recommendations offered are a starting point from which we can 
build upon our shared assessments of the challenges the PRC 
poses, and begin to address the issues that will define the 
decades to come. If we do not, then we risk:


   Losing the fundamental principles of open societies,

   Undermining the prosperous free-market and global trading 
        system,

   Weakening the integrity of international organizations,

   Falling behind in the global technology race,

   Harming shared security interests, and

   Losing an opportunity to engage with increasingly important 
        partners in Africa and the Indo-Pacific.


                              INTRODUCTION

                              ----------                              

        Given everything that's happening in the world and the 
        rise in authoritarian powers, it is important to have 
        strong cooperation with like-minded democracies. The EU 
        and U.S. should be at the heart of this effort, but we 
        should also be working closely with Japan, India, South 
        Korea, Australia, New Zealand, Canada and others.\1\
---------------------------------------------------------------------------
    \1\ Borrell, Josep Fontelles. ``China, the United States and us.'' 
European Union External Action Service, 31 Jul. 2020, https://
eeas.europa.eu/headquarters/headquarters-homepage/83644/china-united-
states-and-us--en.


        --Josep Fontelles Borrell, High Representative of the 
---------------------------------------------------------------------------
        European Union for Foreign Affairs and Security Policy




    Transatlantic conversations on the People's Republic of 
China (PRC) often include the following statement: we share 
your assessment of the problem. Indeed, the United States and 
Europe increasingly agree that China poses significant 
political, economic, and even security challenges.\2\ The 
United States views the PRC as its top strategic competitor, 
even though it continues to seek out avenues of cooperation.\3\ 
The European Union identifies China as a ``cooperation 
partner'' in certain areas, but also recognizes it as an 
``economic competitor'' and a ``systemic rival.'' \4\ Recent 
surveys by the European Council on Foreign Relations (ECFR) 
point to ``an emerging consensus'' within the European Union on 
China that is characterized by a ``shared sense of economic 
imbalance, disappointment, and unease.'' \5\ The ECFR survey 
also shows broad alignment across political parties in Europe, 
similar to the general agreement between Republicans and 
Democrats in the United States on China.\6\ The PRC's lack of 
transparency and use of disinformation during the COVID-19 
pandemic, bullying behavior in its own neighborhood as well as 
in Europe, and serious violations of its international 
obligations in Hong Kong and the South China Sea has only 
further hardened attitudes in the United States and Europe.\7\
---------------------------------------------------------------------------
    \2\ In this report, the People's Republic of China will be referred 
to interchangeably as ``PRC'' and ``China.''
    \3\ United States Strategic Approach to the People's Republic of 
China. The White House, 20 May 2020, https://www.whitehouse.gov/wp-
content/uploads/2020/05/U.S.-Strategic-Approach-to-The-Peoples-
Republic-of-China-Report-5.20.20.pdf.
    \4\ ``Joint Communication to the European Parliament, the European 
Council and the Council: EU-China--A strategic outlook.'' European 
Commission High Representative of the Union for Foreign Affairs and 
Security Policy, 12 Mar. 2019, p. 1, https://bit.ly/38jcldB.
    \5\ Oertel, Janka. ``The new China consensus: How Europe is growing 
wary of Beijing.'' European Council on Foreign Relations, 07 Sep. 2020, 
p. 7, https://bit.ly/3p7lefY.
    \6\ Oertel, Janka. ``The new China consensus: How Europe is growing 
wary of Beijing.'' European Council on Foreign Relations, 07 Sep. 2020, 
p. 5, https://bit.ly/3p7lefY.
    \7\ For the purposes of this report, Europe is considered to be the 
27 members of the EU, plus Iceland, the United Kingdom and all 
continental European nations up to the Russian and Turkish borders.
---------------------------------------------------------------------------
    Legislators and parliamentarians on both sides of the 
Atlantic have played an active role in shifting to a new 
approach on China and promoting policy changes in a variety of 
areas. The United States Congress has come together to enact 
legislation on the PRC's human rights abuses in Hong Kong\8\ 
and the Xinjiang Uyghur Autonomous Region,\9\ as well as 
investment screening and export controls.\10\ By similarly 
shining a spotlight on human rights and other issues, the EU 
Parliament is playing the role of ``path breaker'' on Europe's 
China policy, as Green Party parliamentarian Reinhard Butikofer 
has put it.\11\ Conservative Party parliamentarians in the 
United Kingdom have formed the China Research Group.\12\ German 
Parliamentarians have been immensely vocal in influencing their 
nation's 5G decisions.\13\ The Dutch Parliament hosted a robust 
debate in September 2019 on Prime Minister Mark Rutte's China 
strategy.\14\ Czech lawmakers are standing up to the PRC's 
bullying over Taiwan.\15\ Finally, a diverse group of 
legislators from the United States, Europe, Australia, Japan, 
and elsewhere, formed the Inter-Parliamentary Alliance on 
China, an unofficial group ``working towards reform on how 
democratic countries approach China.'' \16\
---------------------------------------------------------------------------
    \8\ United States, Congress, Senate, Committee on Foreign 
Relations. Hong Kong Human Rights and Democracy Act of 2019. 
Congress.gov. 116th Congress, 2nd Session, Senate Resolution 1838, 
passed 19 Nov. 2019, https://www.congress.gov/bill/116th-congress/
senate-bill/1838/text.
    \9\ United States, Congress, Senate, Committee on Foreign 
Relations. Uyghur Human Rights Policy Act of 2020. Congress.gov, 116th 
Congress, 2nd Session, Senate Resolution 3744, passed 17 Jun. 2020, 
https://www.congress.gov/bill/116th-congress/senate-bill/3744.
    \10\ United States, Congress, House, Committee on Armed Services. 
``Foreign Investment Risk Review Modernization Act of 2018.'' John S. 
McCain National Defense Authorization Act for Fiscal Year 2019, 
Congress.gov, 115th Congress, 2nd Session, House Resolution 5515, Title 
XVII, passed 13 Aug. 2020, https://www.congress.gov/bill/115th-
congress/house-bill/5515.
    \11\ Timsit, Annabelle. ``Parliaments are on the frontlines of 
Europe's face-off with China.'' Quartz, 19 Jun. 2020, https://bit.ly/
38jcldB.
    \12\ China Research Group News. China Research Group. https://
chinaresearch-group.substack.com.
    \13\ von der Burchard, Hans and Joshua Posaner. ``German MPs urge 
Merkel to keep Huawei out of 5G network.'' Politico Europe, 22 Oct. 
2019, https://www.politico.eu/article/german-mps-huawei-5g-network-
germany-angela-merkel.
    \14\ The Netherlands and China: a new balance. Ministry of Foreign 
Affairs of the Netherlands, 15 May 2019, https://www.government.nl/
documents/policy-notes/2019/05/15/china-strategy-the-netherlands--
china-a-new-balance.
    \15\ Aspinwall, Nick. ``Czech Delegation Pledges Support for 
Taiwan, Vows Not to Bow to Chinese Threats''. The Diplomat, 05 Sep. 
2020, https://thediplomat.com/2020/09/czech-delegation-pledges-support-
for-taiwan-vows-not-to-bow-to-chinese-threats/.
    \16\ Inter-Parliamentary Alliance on China. https://ipac.global/.
---------------------------------------------------------------------------
    The next step is to turn this growing agreement on China 
into a constructive and concrete agenda to defend shared 
transatlantic interests. This important work has already 
started. We have implemented investment screening mechanisms to 
safeguard critical assets and technologies from state-directed 
investment or acquisition, come together at the United Nations 
to stand up for the rights of the Chinese people, and advanced 
shared principles on secure future telecommunications networks. 
The EU-U.S. Dialogue on China proposed in June 2020 by High 
Representative of the European Union for Foreign Affairs and 
Security Policy Josep Borrell provides a new and important 
forum to discuss shared challenges more comprehensively and 
hopefully to coordinate on tangible actions.\17\
---------------------------------------------------------------------------
    \17\ Borrell, Josep Fontelles. Video conference of Foreign Affairs 
Ministers: Remarks by High Representative/Vice-President Josep Borrell 
at the press conference. European External Action Service, 15 Jun. 
2020, https://bit.ly/36g703S. And Pompeo, Michael R. ``A New 
Transatlantic Dialogue.'' Brussels Forum, German Marshall Fund of the 
United States, 25 Jun. 2020, https://www.state.gov/a-new-transatlantic-
dialogue/.
---------------------------------------------------------------------------
    We must advance new and creative thinking about how the 
transatlantic alliance can pursue a more coordinated approach 
to the various problems that China poses to the international 
system that we've built over the decades. This report aims to 
contribute to this important endeavor by examining and 
proposing concrete ideas in six key areas: fending off malign 
political influence; protecting the integrity of multilateral 
organizations; addressing anti-competitive trade and economic 
practices; investing in future technologies and shaping how 
they are used; contending with the implications of the PRC's 
strategic investments in energy, transport, and digital 
infrastructure through ``One Belt, One Road''; and invigorating 
our partnerships in Africa and the Indo-Pacific. In all these 
areas, there is already strong agreement on shared principles 
and a foundation for future collaboration, but each area also 
highlights future challenges that the United States and Europe 
must begin to grapple with now. These issues also encourage 
both sides of the Atlantic to view the China challenge through 
a global lens.
    Tackling this challenge will require a shared and sustained 
commitment not only to prioritizing China as a major issue in 
our respective foreign and economic policies, but also to 
partnering with each other, even as differences arise. 
Alongside the irritants that sometimes emerge in the 
transatlantic relationship, the United States and Europe will 
continue to have differences on how to approach the PRC. It is 
imperative that we overcome and work through these differences 
and find a shared vision to defend the system we built 
together. Europe and the United States, as well as our 
democratic allies, have much to lose in this changing world, 
but there is also much to gain through cooperation. The Senate 
Foreign Relations Committee is deeply interested in partnering 
with Europe on this important challenge, and offers this report 
as a starting point.



                      CHAPTER ONE--POLITICAL AND 
                           CULTURAL INFLUENCE

                              ----------                              

        My view is that if we focus on money, we will lose our 
        values and the money, too.\18\
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    \18\ ``Czech Senate President Defends Taiwan Trip as Based on 
`values'.'' Focus Taiwan, 08 Aug. 2020, https://focustaiwan.tw/
politics/202008080002.

        --Milos Vystrcil, President, Senate of the Parliament 
        of the Czech Republic
Introduction
    Since Xi Jinping's appointment as General Secretary of the 
Chinese Communist Party (CCP) in 2012, the People's Republic of 
China (PRC) has sought to increase Chinese influence in the 
world and expand the authority of the CCP domestically and 
abroad.\19\ From influence operations around the globe to the 
manipulation of global media and information in order to 
legitimize the Party's authority in the eyes of international 
observers,\20\ Beijing's methods are a sharp contrast to the 
public diplomacy conducted by other nations. As former 
Australian Prime Minister Malcolm Turnbull noted, these 
influence activities are ``covert, coercive or corrupt.'' He 
added, ``that is the line that separates legitimate influence 
from unacceptable interference.'' \21\ The United States, 
Europe, and our democratic allies all enjoy open societies, but 
without an appropriate awareness of outside attempts to 
undermine it, our openness leaves us vulnerable to 
exploitation.
---------------------------------------------------------------------------
    \19\ Economy, Elizabeth. ``China's New Revolution.'' Foreign 
Affairs, May/June 2018, www.foreignaffairs.com/articles/china/2018-04-
17/chinas-new-revolution.
    \20\ Shulman, David. ``Protect the Party: China's Growing Influence 
in the Developing World.'' 22 Jan. 2019. The Brookings Institution, 
www.brookings.edu/articles/protect-the-party-chinas-growing-influence-
in-the-developing-world.
    \21\ ``Speech Introducing the National Security Legislation 
Amendment (Espionage and Foreign Interference) Bill 2017.'' Malcolm 
Turnbull, 07 Dec. 2017, https://bit.ly/2U0dLRV.
---------------------------------------------------------------------------
    The CCP's unacceptable interference in our open societies 
stems from a governance structure in China in which every 
person, business, and organization is subservient to the CCP. 
In 2017, this subservience was enshrined in the CCP 
Constitution: ``Party, government, army, society and 
education--east and west, south and north, the party leads on 
everything.'' \22\ In its effort to preserve its leadership 
through total control, the CCP has created a network of 
interlinked government, quasi-government, and ostensibly 
private entities to conduct internal and external influence 
operations.\23\ Many of these organizations are part of the 
United Front Work Department,\24\ the primary government agency 
charged with influence operations, which includes the China 
Council for the Promotion of Peaceful National Reunification 
and the Overseas Chinese Affairs Office of the State Council. A 
recent report estimates that the United Front system spends at 
least $1.4 billion annually on its influence efforts.\25\ Other 
influence operations are also conducted by China's People's 
Liberation Army (PLA) through the China Association for 
International Friendly Contact,\26\ the International 
Department of the Communist Party of China,\27\ and the Chinese 
Ministry of Education through Confucius Institutes.
---------------------------------------------------------------------------
    \22\ ``Shouquian fabu: Zhongguo gongchandang zhangcheng--Xinhua 
wang.'' [Authorized Version: The Chinese Constitution--Xinhua]. 
Xinhuanet, 28 Oct. 2017, www.xinhuanet.com/2017-10/28/c--
1121870794.htm. An English version can be found at: ``Constitution of 
the Communist Party of China.'' Xinhuanet, 19th Congress of the 
Communist Party of China, 24 Oct. 2017, https://bit.ly/2I3cGq8.
    \23\ Grunberg, Nis and Katja Drinhausen. ``The Party Leads on 
Everything.'' Mercator Institute for China Studies, 24 Sep. 2019, 
https://merics.org/en/report/party-leads-everything. And Bowe, 
Alexander. China's Overseas United Front Work: Background and 
Implications for the United States. U.S.-China Economic and Security 
Review Commission, 24 Aug. 2018, https://bit.ly/3p48TcG.
    \24\ Bowe, Alexander. China's Overseas United Front Work Background 
and Implications for the United States. U.S.-China Economic and 
Security Review Commission, 24 Aug. 2018, https://bit.ly/3p48TcG.
    \25\ Fedasiuk, Ryan. Putting Money in the Party's Mouth: How China 
Mobilizes Funding for United Front Work. The Jamestown Foundation, vol. 
20, no. 16, 16 Sep. 2020, https://bit.ly/38hRAPp.
    \26\ Lulu, Jichang. ``Decoding united front work from Australia to 
Europe.'' Sinopsis, 15 Jun. 2020, https://sinopsis.cz/en/joske-uf-
system/.
    \27\ Hackenesch, Christine, and Julia Bader. ``The Struggle for 
Minds and Influence: The Chinese Communist Party's Global Outreach.'' 
Oxford Academic International Studies Quarterly, vol. 64, Issue. 3, 09 
Jun. 2020, p. 723-733, https://academic.oup.com/isq/article/64/3/723/
5855278.
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    The United States, Europe, and other countries have only 
recently started to realize the challenges posed by the CCP and 
its influence. For example, the Dutch Government concluded 
that, ``China has a variety of means at its disposal to achieve 
its strategic goals. Its pursuit of these goals could impact 
our own security.'' \28\ The EU High Representative Josep 
Borrell has echoed these concerns about a China that 
``safeguard[s] its main interests in an unambiguous and 
unconditional manner.'' \29\ These realizations echo those in 
the United States: ``We opened our arms to Chinese citizens, 
only to see the Chinese Communist Party exploit our free and 
open society.'' \30\ The threat posed by Beijing's influence 
operations is the slow and insidious corruption of our shared 
cultural, political, and economic institutions. We cannot 
tackle this threat individually. The Chinese government uses 
these operations to divide us internally and externally in an 
effort to prevent a cohesive response to its attempts to shape 
a more compliant international system favorable to the CCP. It 
is undeniable that the transatlantic relationship itself 
currently faces difficulties. But only together can free, open, 
and democratic nations protect ourselves and our alliance of 
democracies.
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    \28\ The Netherlands and China: a new balance. Government of the 
Netherlands Ministry of Foreign Affairs, 15 May 2019, https://bit.ly/
2Icsarv.
    \29\ Borrell, Josep Fontelles. The Sinatra Doctrine. How the EU 
Should Deal with the US-China Competition. Istituto Affari 
Internazionali, 24 Sep. 2020, https://bit.ly/2TYqzYO.
    \30\ Pompeo, Michael R., Communist China and the Free World's 
Future. U.S. Department of State, 23 Jul. 2020, https://www.state.gov/
communist-china-and-the-free-worlds-future/.
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The Challenge to Academic Freedom
    Academic freedom, diverse cultural and political thought, 
and encouragement of invention and creativity in the United 
States and Europe have driven a plethora of technological and 
scientific innovations throughout history. That the CCP has 
identified the educational institutions that foster these 
values as a target for influence and corruption should come as 
no surprise. China appears to have two central goals when 
attempting to influence academic institutions in other 
countries: first, to gain technological knowhow, either by 
participation or theft, and second, to suppress unwelcome 
criticism.
    Several recent high-profile cases at universities and 
research institutions in both the United States and Europe have 
brought to the fore Beijing's use of Chinese and foreign 
scholars and researchers as instruments of espionage and 
influence. Last year, a Chinese professor at the Vrije 
Universiteit Brussel in Belgium was accused of supporting 
Chinese intelligence in Brussels. This professor served as the 
head of the school's Confucius Institute, educational centers 
that teach Chinese language and history run by a branch of the 
PRC Ministry of Education called Hanban.\31\ Reports indicate 
that the university initially ignored the Belgian state 
security services' warnings of the security risk, but the 
university eventually closed the Confucius Institute.\32\ In 
the United States, the Trump Administration closed the Chinese 
consulate in Houston, Texas, over concerns about espionage of 
key biomedical research from a local research institution and 
other technologies.\33\ Moreover, the U.S. Justice Department 
exposed a network of researchers that had applied for U.S. 
visas without disclosing their ties to the PLA.\34\ While we 
should not assume that all Chinese students and researchers are 
spying for Beijing, we must also acknowledge that such 
activities are more pervasive than previously thought. Our 
academic institutions should remain open and free, but they 
must also remain vigilant against efforts to exploit them by 
foreign militaries and intelligence agencies.
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    \31\ Benner, Thorsten, et al. Authoritarian Advance: Responding to 
China's Growing Political Influence in Europe. Global Public Policy 
Institute/Mercator Institute for China Studies, Feb. 2018, https://
bit.ly/38e3VUK. And Epstein, Ethan. ``How China Infiltrated U.S. 
Classrooms.'' Politico Magazine, 17 Jan. 2018, https://
www.politico.com/magazine/story/2018/01/16/how-china-infiltrated-us-
classrooms-216327.
    \32\ Galindo, Gabriela. ``Brussels University to Close Chinese-
Funded Institute after Espionage Accusations.'' Brussels Times, 11 Dec. 
2019, www.brusselstimes.com/belgium/83195/brussels-university-to-close-
chinese-funded-institute-after-espionage-accusations-vub-confucius-
institute/. And Follorou, Jacques. ``La Belgique Se Rebiffe Face Aux 
Espions Chinois.'' Le Monde, 15 May 2020, https://bit.ly/38jmpmT.
    \33\ Briefing With Senior U.S. Government Officials On the Closure 
of the Chinese Consulate in Houston, Texas. U.S. Department of State, 
24 Jul. 2020, https://bit.ly/2IkrEIg. And Brunnstrom, David, and Daphne 
Psaledakis. ``Houston Consulate One of Worst Offenders in Chinese 
Espionage, Say U.S. Officials.'' Reuters, 24 Jul. 2020, 
www.reuters.com/article/us-usa-china-consulate-houston/houston-
consulate-one-of-worst-offenders-in-chinese-espionage-say-u-s-
officials-idUSKCN24P1XT. And Chinese Attempts to Illegally Transfer 
U.S. Technologies - Syntactic Foam Case Study. U.S. Department of 
Justice, 2020, p. 1-4, https://bit.ly/3lgxTuY.
    \34\ ``Researchers Charged with Visa Fraud After Lying About Their 
Work for China's People's Liberation Army.'' U.S. Department of Justice 
Office of Public Affairs, 23 Jul. 2020, https://bit.ly/3k1kq8J.
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    Through attempts to exercise financial leverage over 
academic intuitions that accept PRC funds and host Confucius 
Institutes and student associations, the CCP seeks to curtail 
academic freedom and push CCP propaganda. Substantial tuition 
payments from PRC students are a point of leverage that has 
been used to pressure universities.\35\ Donations from the PRC 
government and PRC companies to academic institutions are 
rightfully facing increased scrutiny. Cambridge University's 
Jesus College came under heavy criticism in 2020 after a 
freedom-of-information request revealed it had accepted a 
155,000 donation from Huawei and a 
200,000 donation from the PRC government. Observers 
noted that a later study by the college on global 
communications reforms treated the Chinese telecoms giant 
favorably.\36\ A 2019 report by the Permanent Subcommittee on 
Investigations of the Senate Committee on Homeland Security and 
Governmental Affairs found that the Office of Chinese Language 
Council International (known as Hanban) of the PRC Ministry of 
Education contributed more than $113 million to 100 American 
schools that hosted Confucius Institutes at some point between 
2012 and 2018, more than seven times the amount the schools 
reported to the government.\37\ Citing this Senate report, the 
U.S. Department of Education launched an investigation in 2020 
into donations to Harvard and Yale by foreign entities.\38\
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    \35\ In 2014, Chinese students contributed about one-third of the 
tuition, fees, and living expenses of U.S. universities' international 
student population. According to the Institute of International 
Education, in the 2018/2019 academic year, China sent the most 
international students to the U.S. for the 10th straight year with 
369,548 students. Barta, Patrick, et al. ``How International Students 
Are Changing U.S. Colleges.'' Wall Street Journal, https://bit.ly/
3526CGR. And ``Number of International Students in the United States 
Hits All-Time High.'' Institute of International Education, 18 Nov. 
2019, https://bit.ly/2U3tfEI. For a more detailed discussion of the use 
of tuition as a point of leverage, see: Lloyd-Damnjanovis, Anastasya. A 
Preliminary Study of PRC Political Influence and Interference 
Activities in American Higher Education. Wilson Center Kissinger 
Institute on China and the United States, Aug. 2018, https://bit.ly/
2I8Z4cy.
    \36\ Fisher, Lucy. ``Jesus college accepted 155,000 
contribution from Huawei.'' The Times, 10 Jul. 2020, https://
www.thetimes.co.uk/article/jesus-college-accepted-155-000-contribution-
from-huawei-53rr7qmcf. And Holl-Allen, Genevieve, 10 Jul. 2020. ``Jesus 
College under fire for accepting donations from Huawei.'' Cambridge 
Tab, https://thetab.com/uk/cambridge/2020/07/10/jesus-college-under-
fire-for-accepting-donations-from-huawei-139444.
    \37\ China's Impact on the U.S. Education System. U.S. Senate 
Committee on Homeland Security and Governmental Affairs Permanent 
Subcommittee on Investigations, 28 Feb. 2019, https://bit.ly/3l1fZfw.
    \38\ ``U.S. Department of Education Launches Investigation into 
Foreign Gifts Reporting at Ivy League Universities.'' U.S. Department 
of Education, 12 Feb. 2020, https://bit.ly/3l7eWL1.
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    Confucius Institutes have awakened U.S. and European 
governments and universities to the potential for campus 
organizations to curtail academic freedom and disseminate CCP 
propaganda. Many Confucius Institutes use opaque contracts and 
hiring policies with host institutions, maintain requirements 
to promote CCP propaganda, and include prohibitions on 
violating Chinese law.\39\ Topics deemed sensitive by the CCP 
are targeted with censorship and controls, including Tibet, 
Tiananmen Square, and Falun Gong.\40\ Even the North Atlantic 
Treaty Organization (NATO) has warned of Confucius Institutes' 
potential effect on ``the sovereignty of foreign policy making, 
including public opinion and academic thinking that could 
influence policy making in favour of the PRC.'' \41\ Realizing 
the risks to academic freedom posed by Confucius Institutes, 
many universities have begun to reconsider these arrangements. 
Sweden recently closed all Confucius Institutes,\42\ and 54 
U.S.-based Confucius Institutes have closed or are planning to 
do so.\43\
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    \39\ Diamond, Larry and Orville Schell. Chinese Influence and 
American Interests Promoting Constructive Vigilance. The Hoover 
Institution, 24 Oct. 2018, https://hvr.co/352CKu6. And Schrader, Matt. 
Friends and Enemies: A Framework for Understanding Chinese Political 
Interference in Democratic Countries. German Marshall Fund Alliance for 
Securing Democracy, 22 Apr. 2020, https://bit.ly/3p1viHw.
    \40\ Sahlins, Marshall. ``China U.'' The Nation, 30 Oct. 2013, 
https://bit.ly/3p0tj6t.
    \41\ Hybrid Threats: Confucius Institutes. NATO Stratcom Centre of 
Excellence, https://www.stratcomcoe.org/hybrid-threats-confucius-
institutes.
    \42\ Flittner, Sofia. ``Sweden has closed all Confucius Institutes 
and Classrooms.'' ScandAsia, 20 May 2020, https://scandasia.com/sweden-
has-closed-all-confucius-institutes-and-classrooms/.
    \43\ ``How Many Confucius Institutes Are in the United States?'' 
National Association of Scholars, 08 Sep. 2020, https://bit.ly/355n3SX.
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    Chinese Students and Scholars Associations (CSSAs) provide 
another important avenue for PRC influence on university 
campuses. CSSA exploitation of Chinese students abroad is 
particularly disturbing. The Chinese government forces students 
into advancing its agenda through pressure, monitoring, and 
persecution of their families back in China.\44\ CSSAs receive 
guidance from PRC embassies and consulates which, in turn, 
report to the Ministry of Foreign Affairs.\45\ In 2018, at 
least 142 CSSAs chapters were operating in the United 
States.\46\ In 2011, the Georgetown University CSSA revealed 
that it received approximately half of its budget from the 
Chinese government;\47\ it is likely many other CSSAs have a 
similar arrangement. These CSSAs often work to suppress speech 
viewed as anti-China. At the U.K.'s Durham University, the CSSA 
lodged a complaint against the debate society for inviting a 
Falun Gong practitioner to speak at an event.\48\ At the 
University of California San Diego, the CSSA protested the 
university's invitation to the Dalai Lama to speak at its 
commencement and publicly disclosed its coordination on the 
matter with the Chinese consulate in Los Angeles.\49\
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    \44\ Saul, Stephanie. ``On Campuses Far From China, Still Under 
Beijing's Watchful Eye.'' New York Times, 04 May 2017, https://nyti.ms/
2U3cAAU. And Craymer, Lucy. ``China's National-Security Law Reaches 
Into Harvard, Princeton Classrooms.'' Wall Street Journal, 19 Aug. 
2020, https://on.wsj.com/32jBrVV.
    \45\ China's Overseas United Front Work: Background and 
Implications for the United States. U.S.-China Economic and Security 
Review Commission, 24 Aug. 2018, https://bit.ly/3l1feDf.
    \46\ Ibid.
    \47\ Allen-Ebrahimian, Bethany. ``Chinese Government Gave Money to 
Georgetown Chinese Student Group.'' Foreign Policy, 14 Feb. 2018, 
https://foreignpolicy.com/2018/02/14/exclusive-chinese-government-gave-
money-to-georgetown-chinese-student-group-washington-china-communist-
party-influence/.
    \48\ Benner, Thorsten, et al. Authoritarian Advance: Responding to 
China's Growing Political Influence in Europe. Global Public Policy 
Institute/Mercator Institute for China Studies, Feb. 2018, https://
bit.ly/38e3VUK.
    \49\ ``Chinese student organizations denounce Dalai Lama as 
commencement speaker.'' Triton, 03 Feb. 2017, https://triton.news/2017/
02/chinese-student-organizations-denounce-dalai-lama-commencement-
speaker/. And Redden, Elizabeth. ``Chinese Students vs. Dalai Lama.'' 
Inside Higher Ed, 16 Feb. 2017, https://bit.ly/32iDx8c.
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    Moreover, students with PRC citizenship attending foreign 
universities are often nervous or unwilling to participate in 
activities that could be interpreted as critical of the CCP for 
fear of the PRC's extraterritorial system of surveillance and 
harassment. A Chinese student studying at the University of 
Minnesota refused to comment on a movie critical of the PRC 
``because we don't know who might be listening to us.'' \50\ 
Not only does the PRC keep tabs on Chinese students at foreign 
universities, but it harasses and surveils their families back 
in China.\51\ The family of a Chinese student studying in 
Australia, who controls a CCP-critical Twitter account, was 
summoned by PRC police for questioning on multiple occasions in 
an attempt to coerce the student's compliance.\52\
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    \50\ Lloyd-Damnjanovis, Anastasya. A Preliminary Study of PRC 
Political Influence and Interference Activities in American Higher 
Education. Wilson Center Kissinger Institute on China and the United 
States, Aug. 2018, https://bit.ly/2I8Z4cy.
    \51\ Ibid.
    \52\ Chou, Shih-Wei and Xiao Yu. ``China Tries to Muffle Those 
Living Abroad by Intimidating their Families.'' Voice of America, 09 
Jul. 2020, https://www.voanews.com/east-asia-pacific/china-tries-
muffle-those-living-abroad-intimidating-their-families.
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    The harm to academic freedom presented by such systematic 
efforts by the CCP to restrict free and open expression is 
extensive. The Netherlands' Clingendael Institute found that:


        China's political influence in higher education and 
        science in the Netherlands has two broad consequences: 
        it negatively affects China knowledge in the 
        Netherlands, and it negatively influences the quality 
        of China research, as well as research in other areas 
        that is (partly) conducted in or with China.\53\ 
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    \53\ (quote translated) d'Hooghe, Ingrid, and Brigitte Dekker. 
``China's invloed op onderwijs in Nederland.'' Clingendael Magazine, 03 
Jul. 2020, https://www.clingendael.org/publication/chinas-invloed-op-
onderwijs-nederland.


    In some cases, the universities themselves may be 
facilitating censorship on their own campuses.\54\ Schools and 
universities struggling with funding are particularly 
vulnerable, including those in Central and Eastern Europe.\55\ 
Individual institutions, states, national governments, and the 
transatlantic community must work together to combat these 
attempts by the PRC to influence our education systems to 
promote its political objectives.
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    \54\ Wilby, Peter. ``Academic freedom is precious--so why have UK 
universities sold out to China?'' The Guardian, 11 Aug. 2020, https://
bit.ly/3exbYgq. And Lloyd-Damnjanovis, Anastasya. A Preliminary Study 
of PRC Political Influence and Interference Activities in American 
Higher Education. Wilson Center Kissinger Institute on China and the 
United States, Aug. 2018, https://www.wilsoncenter.org/sites/default/
files/media/documents/publication/prc--political--influence--full--
report.pdf.
    \55\ Karaskova, Ivana. ``Countering China's Influence Campaigns at 
European Universities.'' The Diplomat, 22 Feb. 2020, https://bit.ly/
2I8Z4cy.
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Media and Film
    At the National Meeting on Ideology and Propaganda in 2018, 
General Secretary Xi said, ``We will improve our ability to 
engage in international communication so as to tell China's 
stories well, make the voice of China heard, and present a 
true, multi-dimensional, and panoramic view of China to the 
world.'' \56\ In Xi's China, only the Party decides if a story 
is told ``well'' and ``true.'' For that, Beijing needs a 
supportive and compliant media atmosphere, rather than the 
democratic model of independent, watchdog journalism and a 
culture of free and open expression. As China's Ambassador to 
Sweden, Gui Congyou put it, ``the role of the media is to play 
a positive part...they should spread friendship, kindness, 
solidarity, and cooperation, instead of inciting hostility or 
hatred.'' \57\ To the PRC, ``spreading friendship, kindness, 
and solidarity'' allows for no discussion, dissent, or 
criticism of the Party or of Chinese history. To put this into 
practice, Beijing deploys an ever-expanding PRC state media 
system around the globe, leverages its financial power to coopt 
Western media, conducts aggressive diplomacy through social 
media outlets banned in China, and spreads disinformation to 
deflect and manipulate the truth.
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    \56\ Bo, Xiang. ``Xi calls for better fulfilling missions of 
publicity work.'' Xinhua News, 22 Aug. 2018, https://bit.ly/366yNUs.
    \57\ Ambassador Gui Congyou Gives Interview with SVT on the Role of 
Media and Swedish Media's Reporting on China. Embassy of the People's 
Republic of China in Sweden, 17 Jan. 2020, http://www.chinaembassy.se/
eng/sgxw/t1733543.htm.
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    Chinese state media entities span radio, television, social 
media, and print journalism, and have increasingly become a 
part of the Western media ecosystem. As an example of the 
breadth of this expansion, between 2009 and 2018, state-
directed newspaper Xinhua News expanded from 120 to 200 bureaus 
worldwide reporting in seven languages.\58\ China Global 
Television Network (CGTN) opened a London office in 2019,\59\ 
but it already faces a possible ban on U.K. airwaves for airing 
forced confessions.\60\ CGTN is reportedly considering opening 
a Brussels headquarters, as well.\61\ PRC state-run news 
outlets advance PRC government messages through paid inserts in 
newspapers and magazines that are hard to distinguish from 
legitimate news publications. China Daily is, or has been, 
distributed inside The Washington Post, The Wall Street 
Journal, and the Des Moines Register, as well as European 
outlets like the U.K.'s Telegraph and Spain's El Pais.\62\ Not 
only does this mislead news consumers, but the enormous revenue 
injections could provide the CCP with future leverage over 
outlets that become reliant on such payments. Some, like the 
Daily Telegraph, stopped publishing CCP-paid content, but in a 
difficult media environment, many outlets are unable to refuse 
the revenue.\63\
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    \58\ Diamond, Larry and Orville Schell. Chinese Influence and 
American Interests Promoting Constructive Vigilance. The Hoover 
Institution, 24 Oct. 2018, https://hvr.co/352CKu6. And Stone Fish, 
Isaac. ``Is China's Xinhua the Future of Journalism?'' Newsweek, 03 
Sep. 2010, https://www.newsweek.com/chinas-xinhua-future-journalism-
71961.
    \59\ Nilsson, Patricia. ``China's state broadcaster set for UK 
launch.'' Financial Times, 28 Aug. 2019, https://www.ft.com/content/
71d0e972-c998-11e9-a1f4-3669401ba76f.
    \60\ Hern, Alex. ``UK-based Chinese news network CGTN faces 
possible ban.'' The Guardian, 06 Jul. 2020, https://
www.theguardian.com/media/2020/jul/06/uk-based-chinese-news-network-
cgtn-faces-possible-ban.
    \61\ Parrock, Jack. ``Voice of China's European ambitions.'' 
Politico, 08 Sep. 2020, https://www.politico.eu/article/china-europe-
media-voice-ambitions-global-television-news-cgtn-global-television-
news/.
    \62\ Diamond, Larry and Orville Schell. Chinese Influence and 
American Interests Promoting Constructive Vigilance. The Hoover 
Institution, 24 Oct. 2018, https://hvr.co/352CKu6. And Benner, 
Thorsten, et al. Authoritarian Advance: Responding to China's Growing 
Political Influence in Europe. Global Public Policy Institute/Mercator 
Institute for China Studies, Feb. 2018, https://bit.ly/38e3VUK.
    \63\ Waterson, Jim and Dean Sterling Jones. ``Daily Telegraph stops 
publishing section paid for by China.'' The Guardian, 14 Apr. 2020, 
https://www.theguardian.com/media/2020/apr/14/daily-telegraph-stops-
publishing-section-paid-for-by-china.
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    Moreover, unlike the nearly unfettered access granted to 
PRC media in the United States, Europe, and elsewhere, the 
PRC's media environment is highly restrictive. According to the 
Foreign Correspondents' Club of China, the New York Times, 
Reuters, The Wall Street Journal, Le Monde, Der Spiegel, BBC, 
and The Economist, among many others, are blocked in China.\64\ 
In September 2020, the U.S. Department of State released a 
scathing statement on this inequity, after The People's Daily 
refused to publish an op-ed by U.S. Ambassador to China Terry 
Branstad, despite the Chinese Ambassador to the United States 
Cui Tiankai having published five op-eds in American outlets in 
2020.\65\
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    \64\ ``FCCC Statement on the Blocking of Foreign News Websites in 
China.'' Foreign Correspondents' Club of China, 22 Oct. 2019, https://
bit.ly/2JKU4vp.
    \65\ Pompeo, Michael R. The Hypocrisy of the PRC's Propaganda 
System. U.S. Department of State, 09 Sep. 2020, https://www.state.gov/
the-hypocrisy-of-the-prcs-propaganda-system/.
---------------------------------------------------------------------------
    Finally, PRC authorities' use of visa renewals, denials, 
and travel restrictions within China to punish negative media 
coverage and curtail journalists' freedom of movement is long-
standing.\66\ In 2015, a China-based French journalist for 
L'Obs was refused a visa renewal after she published an article 
questioning whether China's expression of solidarity with 
France after the Paris terrorist attacks was a way to gain 
international sympathy for the CCP's campaign against Uyghurs 
on terrorist grounds.\67\
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    \66\ ``China Delays Approving Press Credentials for Foreign 
Reporters in Media Standoff.'' Wall Street Journal, 07 Sep. 2020, 
www.wsj.com/articles/china-delays-approving-press-credentials-for-
foreign-reporters-in-media-standoff-11599401714.
    \67\ Darkened Screen: Constraints on Foreign Journalists in China. 
PEN America, 22 Sep. 2016, https://bit.ly/3ezQsaR.
---------------------------------------------------------------------------
    PRC government officials have also become more aggressive 
in their use of social media through ``wolf warrior'' diplomacy 
and global disinformation campaigns during the COVID-19 
pandemic.\68\ Coined by Chinese state media and named for two 
action movies in which the Chinese military conquers American 
forces, ``wolf warrior'' diplomacy describes the new ethos of 
Chinese diplomats, a more aggressive push of CCP messaging 
through various mediums.\69\ PRC government officials use 
social media like Twitter and Facebook--still blocked in 
China--to suppress the undesirable, amplify the positive, and 
spread disinformation.\70\ PRC diplomats' Twitter use 
dramatically increased in response to the COVID-19 crisis to 
amplify its ``mask diplomacy'' charm offensive,\71\ flood the 
internet with the disinformation about the virus' origin,\72\ 
and rebut any criticism of how the CCP's handling of the 
outbreak harmed the global response. Moreover, PRC diplomats 
engaged in a reportedly successful pressure campaign to force 
the European Union to water down its finding about the PRC's 
peddling of COVID-19 disinformation.\73\ However, the 
production and issuance of a joint communication on tackling 
COVID-19 disinformation did signify progress, representing the 
first time that the European Commission publically accused 
China of spreading disinformation.\74\
---------------------------------------------------------------------------
    \68\ ``China's `Wolf Warrior' diplomacy gamble.'' The Economist, 28 
May 2020, https://www.economist.com/china/2020/05/28/chinas-wolf-
warrior-diplomacy-gamble. And Palmer, James. ``Why Chinese Embassies 
Have Embraced Aggressive Diplomacy.'' Foreign Policy, 15 Apr. 2020, 
https://foreignpolicy.com/2020/04/15/chinese-embassies-embrace-
aggressive-diplomacy-coronavirus-pandemic-misinformation/.
    \69\ Wong, Chun Han and Chao Deng. ``China's `Wolf Warrior' 
Diplomats Are Ready to Fight.'' Wall Street Journal, 19 May 2020, 
https://www.wsj.com/articles/chinas-wolf-warrior-diplomats-are-ready-
to-fight-11589896722. And Dettmer, Jamie. ``China's 'Wolf Warrior' 
Diplomacy Prompts International Backlash.'' Voice of America, 06 May 
2020, https://bit.ly/3mZRfor.
    \70\ ``Propaganda beyond the Great Firewall.'' Mercator Institute 
for China Studies, 05 Dec. 2019, https://merics.org/en/graphic/
propaganda-beyond-great-firewall. And Feng, Zhaoyin. ``China and 
Twitter: The year China got louder on social media.'' BBC News, 29 Dec. 
2019, https://www.bbc.com/news/world-asia-china-50832915. And Scott, 
Mark. ``Chinese diplomacy ramps up social media offensive in COVID-19 
info war.'' Politico, 29 Apr. 2020, https://www.politico.eu/article/
china-disinformation-covid19-coronavirus/.
    \71\ ``Mask diplomacy'' is the PRC's effort to deflect from its 
poor handling of the COVID-19 outbreak in Wuhan, China through Chinese 
medical aid sent to suffering countries, some donated and some sold, 
followed by amplification of the generosity of these shipments in 
traditional and social media. For more information, see: Soula, 
Etienne, et al. Masks Off: Chinese Coronavirus Assistance in Europe. 
German Marshall Fund, 02 Jul. 2020, https://bit.ly/3k7hrvu. And 
Hornung, Jeffrey W. ``Don't Be Fooled by China's Mask Diplomacy.'' RAND 
Blog, RAND Corporation, 05 May 2020, https://www.rand.org/blog/2020/05/
dont-be-fooled-by-chinas-mask-diplomacy.html.
    \72\ Gilbert, David. ``China's Been Flooding Facebook With Shady 
Ads Blaming Trump for the Coronavirus Crisis.'' Vice News, 06 Apr. 
2020, https://bit.ly/3l5NY6L.
    \73\ Peel, Michael, and Tom Mitchell. ``China warned EU 3 times 
over virus propaganda report.'' Financial Times, 26 Apr. 2020, https://
www.ft.com/content/a2f66f6a-50cb-46fe-a160-3854e4702f1c. And Van Dorpe, 
Simon, et al. ``China put pressure on EU to soften coronavirus 
disinformation report.'' Politico, 25 Apr. 2020, https://
www.politico.eu/article/china-put-pressure-on-eu-to-soften-coronavirus-
disinformation-report/. And ``EEAS Special Report Update: Short 
Assessment of Narratives and Disinformation Around the COVID-19 
Pandemic (Update 2-22 April).'' EU vs Disinfo, 24 Apr. 2020, https://
euvsdisinfo.eu/eeas-special-report-update-2-22-april/
    \74\ ``Joint Communication To The European Parliament, The European 
Council, The Council, The European Economic And Social Committee And 
The Committee Of The Regions: Tackling COVID-19 disinformation - 
Getting the facts right.'' European Commission, 06 Oct. 2020, https://
eur-lex.europa.eu/legal-content/EN/TXT/HTML/
?uri=CELEX:52020JC0008&from=EN. And Scott, Mark, et al. ``European 
Commission accuses China of peddling disinformation.'' Politico, 10 
Jun. 2020, https://www.politico.eu/article/european-commission-
disinformation-china-coronavirus/.
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    These aggressive ``wolf warrior'' tactics appear to have 
largely backfired.\75\ For instance, the French Foreign 
Ministry summoned the Chinese Ambassador after Chinese 
diplomats claimed France negligently allowed its elderly to die 
of COVID-19.\76\ European public attitudes toward China are 
hardening,\77\ and the EU approach toward China is 
stiffening.\78\ Negative views of China reached historic highs 
in Australia, Canada, Germany, the Netherlands, South Korea, 
Spain, Sweden, the United Kingdom, and the United States, 
according to recent Pew polling.\79\ COVID-19 is not the only 
cause of this shift, but it certainly is an accelerant.
---------------------------------------------------------------------------
    \75\ Myers, Steven Lee. ``China's Aggressive Diplomacy Weakens Xi 
Jinping's Global Standing.'' New York Times, 17 Apr. 2020, https://
www.nytimes.com/2020/04/17/world/asia/coronavirus-china-xi-
jinping.html. And Shih, Gerry. ``China's bid to repair its coronavirus-
hit image is backfiring in the West.'' Washington Post, 14 Apr. 2020, 
https://wapo.st/32kK3eC.
    \76\ Wintour, Patrick. ``France summons Chinese envoy after 
coronavirus `slur'.'' The Guardian, 15 Apr. 2020, https://
www.theguardian.com/world/2020/apr/15/france-summons-chinese-envoy-
after-coronavirus-slur.
    \77\ Oertel, Janka. ``China, Europe, and covid-19 headwinds.'' 
European Council on Foreign Relations, 20 Jul. 2020, https://bit.ly/
3mTsbiW. And Silver, Laura, et al. ``People around the globe are 
divided in their opinions of China.'' FactTank, Pew Research Center, 05 
Dec. 2019, https://pewrsr.ch/2I5usZQ.
    \78\ Oertel, Janka. ``The new China consensus: How Europe is 
growing wary of Beijing.'' European Council on Foreign Relations, 07 
Sep. 2020, https://bit.ly/3p7lefY.
    \79\ Silver, Laura, et al. Unfavorable Views of China Reach 
Historic Highs in Many Countries. Pew Research Center, 06 Oct. 2020, 
https://www.pewresearch.org/global/2020/10/06/unfavorable-views-of-
china-reach-historic-highs-in-many-countries/.
---------------------------------------------------------------------------
    Finally, there is increasing concern over PRC-directed 
control and censorship of the film industry, executed through 
editorial changes demanded by the CCP, purchases of theater and 
production companies by PRC companies, and visa denials to 
directors, actors, and others critical of PRC policies.\80\ 
Free-speech watchdog PEN America released a report entitled 
``Made in Hollywood, Censored by Beijing,'' in which it 
describes how Hollywood has almost completely acquiesced to the 
CCP's censorship demands, through production modifications or 
anticipatory self-censorship.\81\ In a particularly egregious 
example, the 2013 film World War Z, originally a novel about a 
zombie outbreak caused by a virus released in China, was 
deliberately changed from the original plotline so that the 
virus originated elsewhere.\82\ The French and British film 
industries experience similar censorship demands.\83\ The live-
action remake of Disney's Mulan received widespread criticism 
after it was revealed that Disney filmed part of the movie in 
Xinjiang province, the location of Uyghur reeducation camps, 
and thanked CCP propaganda and security departments for their 
assistance.\84\ Of course, media coverage of this controversy 
was censored within China.\85\
---------------------------------------------------------------------------
    \80\ Forsythe, Michael. ``Dalian Wanda of China Buys Legendary 
Entertainment for Up to $3.5 Billion.'' New York Times, 12 Jan. 2016, 
https://nyti.ms/38hX9xh. And Schwartzel, Erich. ``Wanda's AMC to Buy 
European Theater Chain.'' Wall Street Journal, 12 Jul. 2016, https://
on.wsj.com/32nrUgi. And ``China's Dalian Wanda buys Australian cinema 
chain Hoyts.'' Reuters, 02 Jun. 2015, https://reut.rs/2GByQyX.
    \81\ Tager, James. ``Made in Hollywood, Censored by Beijing.'' PEN 
America, https://pen.org/report/made-in-hollywood-censored-by-beijing/.
    \82\ Ibid.
    \83\ Tsui, Clarence. ``In search of Chinese box office success, 
French filmmakers face censorship and erratic regulation.'' South China 
Morning Post, 29 Mar. 2018, https://bit.ly/3p3quBx. And Chan, Hiu Man. 
``A New Era of Sino-British Film Collaboration.'' ChinaFilmInsider, 14 
Jan. 2019, http://chinafilminsider.com/a-new-era-of-sino-british-film-
collaboration/.
    \84\ Dou, Eva. ``Disney's `Mulan' faces criticism for filming in 
China's Xinjiang region.'' Washington Post, 08 Sep. 2020, https://
wapo.st/36cNLYV.
    \85\ ``Exclusive: China bars media coverage of Disney's `Mulan' 
after Xinjiang backlash--sources.'' Reuters, 10 Sep. 2020, https://
reut.rs/3mX6HSk.
---------------------------------------------------------------------------
    CCP censorship of the film industry not only prevents 
Chinese people from seeing diverse stories and ideas, but often 
imposes censorship on the rest of the world. Hollywood 
sometimes makes a PRC-approved version or simply declines to 
move forward with films that might run afoul of CCP 
censorship.\86\ Just as in the film and media industries, the 
PRC uses its massive market to coerce compliance with 
censorship and surveillance requirements from foreign 
artists.\87\ One well known Hollywood director, Judd Apatow, 
summed up this phenomenon succinctly, ``Instead of us doing 
business with China and that leading to China becoming more 
free, what has happened is a place like China has bought our 
silence with their money.'' \88\
---------------------------------------------------------------------------
    \86\ Tager, James. ``Made in Hollywood, Censored by Beijing.'' PEN 
America, https://pen.org/report/made-in-hollywood-censored-by-beijing/.
    \87\ Cutchin, James. ``How U.S. video game companies are building 
tools for China's surveillance state.'' Los Angeles Times, 22 Jul. 
2019, https://lat.ms/3l5Ggcx. And Olesen, Alexa. Censorship and 
Conscience: Foreign Authors and the Challenge of Chinese Censorship. 
PEN America Center, 20 May 2015, https://bit.ly/3mXufXi.
    \88\ Feldman, Josh. ``Judd Apatow Calls Out `Chilling' Hollywood 
Censorship: `China Has Bought Our Silence'.'' Mediaite, 14 Sep. 2020, 
https://www.mediaite.com/tv/judd-apatow-calls-out-chilling-hollywood-
censorship-china-has-bought-our-silence/.
---------------------------------------------------------------------------
    The EU-China 2020 Strategic Agenda for Cooperation aims to 
``promote exchanges and cooperation between the European Union 
and China in the fields of press, publication, radio, film and 
television.'' \89\ Yet it is clear, China's authoritarian 
system uses the media to promote propaganda and disinformation, 
as well as to enforce censorship and deny reciprocity. 
Democratic societies that value free and independent media and 
journalism as a pillar of democracy must proceed cautiously and 
stand together in combatting the CCP's media strategy to ensure 
our citizens' ability to obtain information in a free and 
transparent manner.
---------------------------------------------------------------------------
    \89\ EU-China 2020 Strategic Agenda for Cooperation. European 
External Action Service, 2020, https://bit.ly/3evEM9a.
---------------------------------------------------------------------------
Chinese Communist Party and Political Influence
    China's expansive network of organizations built to 
influence Western politicians and thought leaders at the local 
and national level has significant consequences for U.S. and 
European foreign policy. The goal of this influence is 
threefold: maintain and grow its economic advantage, control 
the narrative on PRC policies, and reshape the international 
system so that it accedes to China's authoritarian model.
Local and National Leaders
    The CCP has realized that to reach its goals it must 
influence past, current, and future leaders. Party-to-party 
engagement between foreign political parties and the 
International Department of the Communist Party of China (ID-
CPC) seeks to create links and relationships between the CCP 
and lawmakers outside traditional channels.\90\ The ID-CPC has 
focused on Asia, Europe, and Africa, pushes positive messages 
of China, and exports its authoritarian model to foreign 
political leaders.\91\ To influence the U.S. Congress, the PRC 
funds trips for approximately 200 Congressional staff per year 
under the Mutual Educational and Cultural Exchange Act.\92\ 
While many foreign governments conduct similar trips, the scale 
of these trips and the network of PRC-funded organizations that 
conduct them is far beyond any other country. In addition, the 
PRC has increased embassy personnel charged with legislative 
affairs to help manage its image and lobby against legislation 
that criticizes the CCP.\93\
---------------------------------------------------------------------------
    \90\ Hackenesch, Christine and Julia Bader. ``The Struggle for 
Minds and Influence: The Chinese Communist Party's Global Outreach.'' 
International Studies Quarterly, vol. 64, no. 3, 2020, p. 723-733, 
https://bit.ly/2UeOAv3.
    \91\ Ibid.
    \92\ Congressional Research Service.
    \93\ Diamond, Larry and Orville Schell. Chinese Influence and 
American Interests Promoting Constructive Vigilance. The Hoover 
Institution, 24 Oct. 2018, https://hvr.co/352CKu6.
---------------------------------------------------------------------------
    At the local level, the PRC emphasizes the Sister Cities 
program, most recently to support its ``One Belt, One Road'' 
(OBOR) initiative.\94\ According to China Daily, the number of 
U.S.-China sister cities nearly doubled between 2005 and 2015, 
from 88 to 164,\95\ and in 2019 China had sister city 
relationships with 2,629 cities around the world.\96\ Research 
has found that ``city twinning'' had an impact on 
entrepreneurial collaborations between U.K. and Chinese cities, 
with data showing increased exports from China to the United 
Kingdom.\97\ The CCP uses these arrangements as a mechanism to 
increase adherence by local governments to the CCP's ``One-
China Principle'' and preclude these cities from engaging with 
Taiwan.\98\ \99\ Shanghai canceled its sister city agreement 
with the Czech capital of Prague after the Prague City Council 
supported a sister city agreement with Taipei, Taiwan.\100\
---------------------------------------------------------------------------
    \94\ Timsit, Annabelle. ``The surprisingly vital role sister cities 
play in Chinese diplomacy.'' Quartz, 01 May 2020, https://qz.com/
1846303/sister-cities-play-surprisingly-vital-role-in-eu-chinese-
relations/. And Li Jing. ``Sister city relations promote cooperation.'' 
China Daily, 26 Apr. 2019, https://bit.ly/38mMWQ2.
    \95\ ``Sister Cities: Siblings' relations are changing.'' China 
Daily, 06 Nov. 2015, https://bit.ly/32kBD7c.
    \96\ Li, Jing. ``Sister city relations promote cooperation.'' China 
Daily, 26 Apr. 2019, https://bit.ly/38mMWQ2.
    \97\ Acuto, Michele, et al. `City Diplomacy' and Twinning: Lessons 
from the UK, China and Globally. Government of the UK Office for 
Science, 2016, https://assets.publishing.service.gov.uk/government/
uploads/system/uploads/attachment--data/file/545780/gs-16-13-future-of-
cities-diplomacy-uk-china-twinning.pdf.
    \98\ The ``One-China Principle'' is the policy of the Government of 
the People's Republic of China (PRC) which states that ``Taiwan is an 
alienable part of China.'' This is separate and distinct from the 
United States ``One China Policy,'' which recognizes ``the Government 
of the People's Republic of China as the sole legal government of 
China, acknowledging the Chinese position that there is but one China 
and Taiwan is part of China.'' Despite this acknowledgement of the 
PRC's position, the United States does not assert, as the PRC does, 
that the PRC has sovereignty over Taiwan. See ``White Paper--The One-
China Principle and the Taiwan Issue.'' The Taiwan Affairs Office and 
The Information Office of the State Council, 21 Feb. 2000, https://
www.fmprc.gov.cn/ce/ceno/eng/ztxw/twwt/t110655.htm. And ``U.S. 
Relations With Taiwan Bilateral Relations Fact Sheet.'' U.S. Department 
of State, 31 Aug. 2018, https://www.state.gov/u-s-relations-with-
taiwan/.
    \99\ Diamond, Larry and Orville Schell. Chinese Influence and 
American Interests Promoting Constructive Vigilance. The Hoover 
Institution, 24 Oct. 2018, https://hvr.co/352CKu6.
    \100\ Simalcik, Matej and Adam Kalivoda. ``Sister-City Relations 
and Identity Politics: The Case of Prague, Beijing, Taipei, and 
Shanghai.'' China Observers in Central and Eastern Europe, 03 Mar. 
2020, https://chinaobservers.eu/sister-city-relations-and-identity-
politics-the-case-of-prague-beijing-taipei-and-shanghai/.
---------------------------------------------------------------------------
    Beijing also enlists former politicians and the business 
community as agents of influence. Two former British Prime 
Ministers, a former German Vice Chancellor, and former French 
Prime Minister now hold senior positions at PRC companies and 
foundations.\101\ One former British Prime Minister's position 
with the U.K.-China Fund, an investment fund supporting OBOR, 
has raised concerns that China is using him to gain access to 
U.K. expertise and financial markets.\102\ In the United 
States, the Trump Administration's ban on Chinese 
telecommunications firm ZTE was lifted after the company spent 
millions on lobbyists, including notable former U.S. senators 
with substantial national security experience and two former 
Trump campaign officials.\103\ PRC tech giant Tencent recently 
hired as a lobbyist the former chairman of the U.S. House 
Foreign Affairs Committee, who previously authored several 
pieces of legislation aimed at pushing back on China.\104\ In 
addition to paying for direct lobbying, Beijing uses business 
groups to connect with and influence politicians. In Europe, 
Luigi Gambardella, the founder of the China-EU Business 
Association, has been called ``Brussels' biggest Beijing 
booster.'' \105\ In 2015, he escorted Lu Wei, the architect of 
the Chinese government's censorship crackdown, around Brussels, 
arranging a meeting with the EU's digital commissioner who 
tweeted afterward that the two had agreed to deepen digital 
policy collaboration.\106\
---------------------------------------------------------------------------
    \101\ Benner, Thorsten, et al. Authoritarian Advance: Responding to 
China's Growing Political Influence in Europe. Global Public Policy 
Institute/Mercator Institute for China Studies, Feb. 2018, https://
bit.ly/38e3VUK.
    \102\ Pickard, Jim, and Sebastian Payne. ``David Cameron pushes 
ahead with troubled $1bn China fund.'' Financial Times, 15 Jun. 2020, 
https://www.ft.com/content/a0b3858e-4e92-4db2- 83fd-a6550d0b1427. And 
Macaes, Bruno. ``David Cameron Didn't Just Sell Out to China.'' Foreign 
Policy, 20 Dec. 2017, https://foreignpolicy.com/2017/12/20/david- 
cameron-didnt-just-sell-out-to-china/.
    \103\ Meyer, Theodoric. ``Chinese companies spend big to fend off 
Trump.'' Politico, 20 Jun. 2019, https://politi.co/2U3EkFz.
    \104\ Allen-Ebrahimian, Bethany. ``Ed Royce, once an outspoken 
critic of Vietnam's Communist Party, now lobbying for Tencent.'' Axios, 
15 Sep. 2020, https://bit.ly/3n4BsoB.
    \105\ ``Follow the New Silk Road: China's growing trail of think 
tanks and lobbyists in Europe.'' Corporate Europe Observatory, 08 Apr. 
2019, https://corporateeurope.org/en/2019/04/follow-new- silk-road-
chinas-growing-trail-think-tanks-and-lobbyists-europe.
    \106\ Hirst, Nicholas. ``Europe's Mr. China.'' Politico, 31 May 
2017, https://www.politico.eu/article/gambardella-is-radio-beijing/. 
And Liu Jia, and Gao Shuang. ``Digital Silk Road to span Eurasia.'' 
ChinaEU, 10 Jul. 2015, https://www.chinaeu.eu/digital-silk-road-to-
span-eurasia/.
---------------------------------------------------------------------------
    The CCP has also turned to think tanks to deepen its 
influence in the United States and Europe.\107\ The Chinese-
U.S. Exchange Foundation, which is tied to the PRC government, 
provides grants to prominent American think tanks, such as 
Brookings, the Carnegie Endowment for International Peace, and 
the Asia Society.\108\ The PRC has also created networking 
arrangements in Europe, such as the ``16+1 think tank network'' 
and eSilks, a think tank network aligned with OBOR.\109\ In 
2017, the Chinese Academy of Social Sciences, a government 
think tank, opened a branch in Budapest presumably as a reward 
for Hungary's political cooperation and to influence future 
European debate on cooperation with China.\110\ As a result of 
their connections to the Chinese government, think tanks may be 
significantly undermining their credibility as centers of 
independent expertise on China.\111\
---------------------------------------------------------------------------
    \107\ Benner, Thorsten, et al. Authoritarian Advance: Responding to 
China's Growing Political Influence in Europe. Global Public Policy 
Institute/Mercator Institute for China Studies, Feb. 2018, https://
bit.ly/38e3VUK. And ``Follow the New Silk Road: China's growing trail 
of think tanks and lobbyists in Europe.'' Corporate Europe Observatory, 
08 Apr. 2019, https://bit.ly/2IgdQOM.
    \108\ Diamond, Larry and Orville Schell. Chinese Influence and 
American Interests Promoting Constructive Vigilance. The Hoover 
Institution, 24 Oct. 2018, https://hvr.co/352CKu6. And Allen-
Ebrahimian, Bethany. ``This Beijing-Linked Billionaire Is Funding 
Policy Research at Washington's Most Influential Institutions.'' 
Foreign Policy, 28 Nov. 2017, https://bit.ly/3k5tud0.
    \109\ Ha?la, Martin. ``A New Invisible Hand: Authoritarian 
Corrosive Capital and the Repurposing of Democracy.'' Sharp Power and 
Democratic Resilience Series, National Endowment for Democracy 
International Forum for Democratic Studies, Mar. 2020, https://bit.ly/
32uisYR.
    \110\ ``China launches `China-CEE Institute' think tank in 
Hungary.'' Xinhua, 25 Apr. 2017, https://bit.ly/3k31kz7.
    \111\ Ibid.
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Rewarding Friends

    Government-directed economic and cultural investments have 
produced positive political results for Beijing. In this 
regard, support from Greece and Hungary for PRC foreign policy 
objectives are well known and prominent examples. In one 
example, the year after the Chinese shipping giant COSCO bought 
a majority stake in Greece's largest port, Piraeus, Greece 
vetoed the European Union's statement at the UN condemning PRC 
human rights violations.\112\ The year before, Greece was 
joined by Hungary, the first European country to participate in 
China's OBOR initiative, in insisting that the European Union 
water down its statement on the illegality of China's claims in 
the South China Sea.\113\
---------------------------------------------------------------------------
    \112\ Emmot, Robin, and Angeliki Koutantou. ``Greece blocks EU 
statement on China human rights at U.N.'' Reuters, 18 Jun. 2017, 
https://www.reuters.com/article/us-eu-un-rights/greece-blocks-eu-
statement-on-china-human-rights-at-u-n-idUSKBN1990FP.
    \113\ Chung, Lawrence. ``Hungary is first in Europe to sign up for 
China's New Silk Road plan.'' South China Morning Post, 07 Jun. 2015, 
https://bit.ly/3k7f8c3. And Norman, Laurence. ``EU Issues South China 
Sea Statement Ending Discord Within Bloc.'' Wall Street Journal, 17 
Jul. 2016, .
---------------------------------------------------------------------------
    More attention is also being paid to the growing economic 
and political ties between Serbia and China over the past 
decade.\114\ With the support of Serbian President Aleksander 
Vucic, Serbia has opened its doors to Chinese investment, 
including infrastructure, steel, and telecommunications.\115\ 
In a 2016-2017 survey, Serbians ranked China second to Germany 
as ``credible investors'' in Serbia.\116\ In a survey conducted 
during the COVID-19 pandemic, 40 percent of Serbians thought 
China was their country's largest donor,\117\ when in fact the 
European Union is the largest, and China ranks fifteenth.\118\ 
China has rewarded Serbia with investments in its economy and 
culture. The Basketball Federation of Serbia signed a 
cooperation agreement with the Chinese Basketball Association 
to develop basketball in China,\119\ and 8,000 Chinese citizens 
virtually ran the Belgrade marathon ``as a sign of 
friendship.'' \120\ China is even planning to remake classic 
films from the Balkan region as a diplomatic nicety.\121\
---------------------------------------------------------------------------
    \114\ Conley, Heather A. et al. Becoming a Chinese Client State: 
The Case of Serbia. Center for Strategic and International Studies, 
Sep. 2020, https://bit.ly/3l75RSB.
    \115\ Le Corre, Philippe, and Vuk Vuksanovic. ``Serbia: China's 
Open Door to the Balkans.'' The Diplomat, 01 Jan. 2019, https://
thediplomat.com/2019/01/serbia-chinas-open-door-to-the-balkans/
    \116\ Ibid.
    \117\ Velebit, Vuk. ``China Has Overtaken Russia as Serbia's Great 
Ally.'' Balkan Insight, BIRN, 08 Jul. 2020, https://bit.ly/355hLqD.
    \118\ ``Weekly: EU largest donor to Serbia, China holds 15th place, 
Russia below.'' N1, 27 Mar. 2020, http://rs.n1info.com/English/NEWS/
a582483/EU-largest-donor-to-Serbia.html. And EU Assistance to Serbia. 
Delegation of the European Union to the Republic of Serbia, 2020, 
https://bit.ly/3l7RiOq.
    \119\ Tan, Kelvin. ``Chinese and Serbian federations to sign 
basketball development MoU.'' SportBusiness, 14 Jan. 2020, .
    \120\ Todic, Maja. ``Chinese run Belgrade virtual marathon.'' N1, 
21 Apr. 2020, http://rs.n1info.com/English/NEWS/a593616/Some-8-000-
Chinese-run-Belgrade-virtual-marathon.html.
    \121\ Davis, Rebecca. ``China to Remake Classic Balkan Films as 
Part of Diplomatic Charm Offensive.'' Variety, 09 May 2019, https://
variety.com/2019/film/news/china-serbia-bosnia-bridge-sarajevo-
1203209766/.
---------------------------------------------------------------------------
    In the EU-China Strategic Agenda for Cooperation, both 
parties agreed ``to establish cultural centres'' and to ``boost 
long-term and stable cooperation between major cultural 
institutions and between important art festivals.'' \122\ The 
PRC is establishing these culture centers around the globe, 
including in Sofia, Bulgaria,\123\ Brussels, Belgium,\124\ and 
Ames, Iowa,\125\ with the motivation of bringing CCP messaging 
to local populations. However, the CCP recently blocked U.S. 
Ambassador Branstad from visiting an American culture center in 
China, which indicates that this cooperation is and will be far 
from reciprocal.\126\
---------------------------------------------------------------------------
    \122\ EU-China 2020 Strategic Agenda for Cooperation. European 
External Action Service, 2020, https://bit.ly/3evEM9a.
    \123\ ``Largest Chinese cultural centre in Central and South-
Eastern Europe opens in Bulgarian capital Sofia.'' The Sofia Globe, 23 
Nov. 2017, https://sofiaglobe.com/2017/11/23/largest-chinese-cultural-
centre-in-central-and-south-eastern-europe-opens-in-bulgarian-capital-
sofia2/.
    \124\ ``Chinese cultural exhibitions held for two weeks in 
Brussels.'' China Daily, 16 May 2019, http://www.chinadaily.com.cn/a/
201905/16/WS5cdcfbc2a3104842260bc083.html.
    \125\ ``In Memory of Governor Bobert D. Ray 1928-2018.'' Chinese 
Cultural Center of America, http://www.cccaiowa.org/default.htm.
    \126\ Perlez, Jane and Luz Ding. ``China Thwarts U.S. Effort to 
Promote American Culture on Campuses.'' New York Times, 30 Dec. 2018, 
https://nyti.ms/32ngE3L.
---------------------------------------------------------------------------

Punishing Enemies

    ``We treat our friends with fine wine, but for our enemies 
we got shotguns,'' was the threat from Chinese Ambassador to 
Sweden Gui Congyou during recent tensions between the two 
countries.\127\ Beijing has no qualms about pulling that 
``shotgun'' on its enemies to chastise offending nations and 
deter others from making similar ``mistakes.'' The ``shotgun'' 
comes in the form of economic, diplomatic, or cultural 
intimidation, and often all three. The German Federal Ministry 
of the Interior, Building and Community acknowledged this in 
its 2019 Report on the Protection of the Constitution (Facts 
and Trends):
---------------------------------------------------------------------------
    \127\ ``How Sweden copes with Chinese bullying.'' The Economist, 20 
Feb. 2020, https://www.economist.com/europe/2020/02/20/how-sweden-
copes-with-chinese-bullying.


        Governmental, semi-governmental and private actors use 
        well-connected German decision-makers and multipliers 
        to lobby on behalf of Chinese interests. Chinese 
        investment in Germany also creates economic 
        dependencies that China can use as leverage to gain 
        political concessions if necessary.\128\
---------------------------------------------------------------------------
    \128\ 2019 Annual Report on the Protection of the Constitution 
(Facts and Trends). Federal Republic of Germany Ministry of the 
Interior, Building and Community, Bundesamt fur Verfassungsschutz, Jul. 
2020, https://bit.ly/2U83EKx.


    Over the past decade, the world has come to understand the 
reality of the PRC's use of coercion to gain political 
concessions. Norway, Australia, and the Czech Republic have 
been particular targets of this coercion.\129\ In the Czech 
Republic, Chinese investors stopped financing the Slavia Praha 
soccer team after Prague cancelled its sister city agreement 
over Beijing's refusal to remove the ``One-China Principle.'' 
\130\
---------------------------------------------------------------------------
    \129\ Propper, Eyal. When Beijing Is Angry: China's Punitive 
Reprisals when Its Interests are Harmed. INSS Insight, no. 1377, The 
Institute for National Security Studies, 27 Aug. 2020, https://
www.inss.org.il/publication/china-punishments/. And Kolstad, Ivar. 
``Too big to fault? Effects of the 2010 Nobel Peace Prize on Norwegian 
exports to China and foreign policy.'' International Political Science 
Review, vol. 41(2), 2020, p. 207-223, https://www.cmi.no/publications/
6354-too-big-to-fault. And Pannett, Rachel. ``Australia Worries Coal Is 
China's Next Target as Ties Fray.'' Wall Street Journal, 14 Oct. 2020, 
https://bit.ly/3k7gun9.
    \130\ ``China to stop financing Slavia Praha football club in the 
wake of Prague-Beijing dispute, says Czech President.'' CTK, expast.cz, 
11 Oct. 2019, https://bit.ly/3k6knIP.
---------------------------------------------------------------------------
    The very real threat of being frozen out of the PRC market 
is enough to force even the biggest companies to 
acquiesce.\131\ In recent years, Marriott, Mercedes-Benz, Gap, 
Mattel, Apple, Delta Airlines, Versace, and many more companies 
have been forced to walk back or apologize for running afoul of 
the CCP orthodoxy.\132\ Recent high profile examples from the 
sports industry resonate broadly with the general population on 
both sides of the Atlantic, and demonstrate the PRC's leverage 
over important cultural institutions. In 2019, the general 
manager of the National Basketball Association's (NBA) Houston 
Rockets, Daryl Morey, tweeted support for Hong Kong democracy 
advocates, leading the PRC to suspend broadcasts of Rockets 
games immediately and Chinese companies to cancel endorsement 
deals.\133\ Within days, Morey apologized,\134\ the NBA 
commissioner issued a lukewarm statement,\135\ and NBA 
superstar LeBron James lamented publicly that Morey ``was not 
educated on the situation at hand.'' \136\ The NBA is likely to 
lose hundreds of millions of dollars as a result of this 
situation.\137\ That an organization like the NBA and its 
individual players, who openly advocate for free speech in the 
United States, would so quickly betray their principles to 
appease the CCP astounded many.\138\
---------------------------------------------------------------------------
    \131\ Spector, Mike, and Wayne Ma. ``If You Want to Do Business in 
China, Mind Your T's: Taiwan and Tibet.'' Wall Street Journal, 03 Jun. 
2018, https://www.wsj.com/articles/if-you-want-to-do-business-in-china-
mind-your-ts-taiwan-and-tibet-1527937201.
    \132\ Ma, Wayne. ``Gap Irks China With Map on Shirt, Quickly 
Apologizes.'' Wall Street Journal, 15 May 2018, https://on.wsj.com/
2Ic3pMl. And Casey, Nicholas. ``Mattel Seeks to Placate China With 
Apology.'' Wall Street Journal, 22 Sep. 2007, https://www.wsj.com/
articles/SB119037171135935172. And ``Delta Air Lines apologizes after 
listing Taiwan, Tibet as countries on website.'' Reuters, 12 Jun. 2018, 
https://reut.rs/3pfrl25. And Wernau, Julie. ``Geopolitical Faux Pas 
Prompts Foreign Brands to Apologize to China Consumers.'' Wall Street 
Journal, 13 Aug. 2019, https://on.wsj.com/3p44vKy. And ``Statement from 
Arne Sorenson, President and CEO, Marriott International, Inc.'' News 
Center, Mariott International, 11 Jan. 2018, https://bit.ly/38qMjVw. 
And ``Germany's Daimler issues 'full apology' to China over Dalai 
Lama.'' BBC, 08 Feb. 2018, https://www.bbc.com/news/world-asia-china-
42986679.
    \133\ ``A Timeline of the Complicated Controversy Between the NBA 
and China.'' Complex, 14 Oct. 2019, https://bit.ly/2TZMf6K.
    \134\ Morey, Daryl (dmorey). ``1/ I did not intend my tweet to 
cause any offense to Rockets fans and friends of mine in China. I was 
merely voicing one thought, based on one interpretation, of one 
complicated event. I have had a lot of opportunity since that tweet to 
hear and consider other perspectives.'' 06 Oct. 2019, 8:18 PM. Tweet. 
https://bit.ly/2IceZqO.
    \135\ Charania, Shams (ShamsCharania). ``Adam Silver has released 
statement on league's relationship status with China, reading in part: 
``The NBA will not put itself in a position of regulating what players, 
employees and team owners say or will not say on these issues. We 
simply could not operate that way.'''' 08 Oct. 2019, 5:13 AM. Tweet. 
https://bit.ly/3ey67Yh.
    \136\ Golliver, Ben (BenGolliver). ``Lakers' LeBron James on NBA's 
China controversy: ``I don't want to get into a ... feud with Daryl 
Morey but I believe he wasn't educated on the situation at hand and he 
spoke.'''' 14 Oct. 2019, 9:29 PM. Tweet. https://bit.ly/2GBDKfl.
    \137\ Young, Jabari. ``NBA will lose hundreds of millions of 
dollars due to rift with China, commissioner says.'' CNBC, 16 Feb. 
2020, https://www.cnbc.com/2020/02/16/nba-will-lose-hundreds-of- 
millions-of-dollars-due-to-rift-with-china-commissioner-says.html.
    \138\ Golliver, Ben. ``NBA under fire from all directions after 
response to Rockets-China incident.'' Washington Post, 08 Oct. 2019, 
https://www.washingtonpost.com/sports/2019/10/07/nba-under-fire-all-
directions- after-response-rockets-china-incident/. And Weiss, Bari. 
``The World's Wokest Sports League Bows to China.'' New York Times, 07 
Oct. 2019, https://nyti.ms/3k7a5Z8.
---------------------------------------------------------------------------
    Just two months later in the United Kingdom, Arsenal soccer 
star Mesut Ozil posted on social media about the horrific 
treatment of the Uyghurs by the CCP in Xinjiang.\139\ In 
response, China pulled down TV coverage of the upcoming Arsenal 
game,\140\ prompting the team to issue a statement on Chinese 
social media platform Weibo about ``not involving itself in 
politics.'' \141\ China is also punishing the Premier League 
over the U.K.'s support for Hong Kong and its decision to ban 
Huawei equipment from its telecommunications network.\142\
---------------------------------------------------------------------------
    \139\ Ozil, Mesut (MesuzOzil1088). ``#HayirliCumalarDoguTurkistan . 
. . .'' 13 Dec. 2019, 5:50 AM. Tweet. https://twitter.com/
mesutozil1088/status/1205439723302469632?lang=en.
    \140\ CNN, John Sinnott. ``Chinese State Media Pulls TV Coverage of 
Arsenal Game after Mesut Ozil Shows Uyghur Support.'' CNN, 16 Dec. 
2019, https://cnn.it/2TYCaHk.
    \141\ Ames, Nick. ``Arsenal Distance Themselves from Mesut Ozil 
Comments on Uighurs' Plight.'' The Guardian, 13 Dec. 2019, https://
bit.ly/2TY9LRT.
    \142\ ``China's State TV Demotes English Soccer Amid Spat With 
U.K.'' Bloomberg, 23 Jul. 2020, www.bloomberg.com/news/articles/2020-
07-23/china-state-tv-blacks-out-english-soccer-amid-spat-with-u-k. And 
``CCTV's Premier League Broadcasts `Demoted' amid Diplomatic Tension.'' 
SportBusiness, 23 Jul. 2020, www.sportbusiness.com/news/cctv-cuts-
premier-league-broadcasts-amid-diplomatic-tension/.
---------------------------------------------------------------------------
    The most disturbing form of PRC coercion is not economic in 
nature, but rather ``hostage diplomacy,'' or the targeting of 
citizens of other countries in retaliation against their 
governments.\143\ In 2018, the PRC detained and imprisoned two 
innocent Canadian citizens and later indicted them for 
espionage, all in retaliation for Canada's arrest of Huawei's 
Chief Financial Officer in response to a lawful U.S. 
extradition request.\144\ China likewise arrested two prominent 
Australians in 2020 as relations soured between the two 
countries.\145\ The United Kingdom, United States, and 
Australia have recently issued travel advice to their citizens 
warning of possible arbitrary detentions in China.\146\
---------------------------------------------------------------------------
    \143\ Bolton, John. ``China's Hostage Diplomacy.'' Wall Street 
Journal, 07 Jul. 2020, www.wsj.com/articles/chinas-hostage-diplomacy-
11594140841.
    \144\ ``Michael Kovrig and Michael Spavor: China charges Canadians 
with spying.'' BBC, 19 Jun. 2020, https://www.bbc.com/news/world-asia-
china-53104303. Vikander, Tessa. ``Canada Refuses to Release Emails 
with U.S. over Huawei Exec's Arrest.'' Reuters, 18 Aug. 2020, 
www.reuters.com/article/us-usa-huawei-tech-canada/canada-refuses-to-
release-emails-with-u-s-over-huawei-execs-arrest-idUSKCN25D13X.
    \145\ Smyth, Jamie and Christian Shepherd. ``Beijing detains 
Australian TV anchor working for Chinese state media.'' Financial 
Times, 31 Aug. 2020, https://on.ft.com/2TZjIOH.
    \146\ ``Britain Warns It Citizens of Risk of Arbitrary Detention in 
China.'' Reuters, 15 Sep. 2020, https://reut.rs/38gyyZG. And ``US 
follows Australia and United Kingdom, issuing updated travel warning to 
citizens about travel to China.'' Australian Broadcasting Corporation 
News, 16 Sep. 2020, https://www.abc.net.au/news/2020-09-16/us-issues-
china- travel-warns-citizens-of-arbitrary-detention/12667150. And 
O'Keefe, Kate and Aruna Viswanatha. ``China Warns U.S. It May Detain 
Americans in Response to Prosecutions of Chinese Scholars.'' Wall 
Street Journal, 17 Oct. 2020, https://www.wsj.com/articles/china-warns-
u-s-it-may- detain-americans-in-response-to-prosecutions-of-chinese-
scholars-11602960959.
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Democracies Respond

    The CCP's use of influence operations, as well as 
inducement and punishment of politicians, businesses, thought 
leaders, and citizens, makes clear its motivation to subvert 
the freedom and openness of democratic societies and silence 
critics who stand in its path. A former Australian Defence 
Department official described the consequences of the CCP's 
insidious behavior this way:


        The point for Australia is simply that, short of 
        complete capitulation of our interests and values, 
        there is nothing Canberra can do or say that will avoid 
        China's criticism . . . The lesson for Australia, and 
        all democracies, is that making concessions to 
        Beijing's wolf warrior behaviours will only encourage 
        more coercion.\147\
---------------------------------------------------------------------------
    \147\ Jennings, Peter. ``China turns into wolf warrior at the 
world's door under Xi Jinping.'' The Australian, 12 Sep. 2020, https://
bit.ly/38ntGBZ.


    These influence operations blatantly undermine the 
principles of freedom of speech and the rule of law that are 
foundational to the world's democracies. Unfortunately, it has 
also created a system that incentivizes Westerners to favor 
short-term profits over long-term security and prosperity. 
However, democratic governments and politicians are beginning 
---------------------------------------------------------------------------
to stand up to PRC bullying and coercion.


   In the United States, senior administration officials have 
        delivered a series of speeches on the threat of the 
        CCP, including on forms of undue PRC influence that 
        have gained little attention.\148\ For example, 
        Secretary Pompeo delivered an address to the National 
        Governors' Association in an effort to underscore the 
        importance of coordinating U.S. strategy between the 
        federal and subnational levels.\149\
---------------------------------------------------------------------------
    \148\ Wray, Christopher. The Threat Posed by the Chinese Government 
and the Chinese Communist Party to the Economic and National Security 
of the United States. U.S. Department of Justice Federal Bureau of 
Investigation, 07 Jul. 2020, https://bit.ly/32kGo0y. And Barr, William 
P. Attorney General William P. Barr Delivers Remarks on China Policy at 
the Gerald R. Ford Presidential Museum. U.S. Department of Justice, 16 
Jul. 2020, https://bit.ly/2IfGgIX. And O'Brien, Robert C. The Chinese 
Communist Party's Ideology and Global Ambitions. U.S. National Security 
Council, 24 Jun. 2020, https://bit.ly/2JNqVQp.
    \149\ Pompeo, Michael R. ``U.S. States and the China Competition.'' 
National Governors Association Meeting, 08 Feb. 2020, www.state.gov/u-
s-states-and-the-china-competition/.

   During a recent visit to Germany by Chinese Foreign 
        Minister Wang Yi, German Foreign Minister Heiko Maas 
        called for China to adhere to ``One Country, Two 
        Systems'' in Hong Kong and to allow an independent 
        observer mission into Xinjiang.\150\
---------------------------------------------------------------------------
    \150\ ``Germany's Maas Calls for Withdrawal of Hong Kong Security 
Law.'' Deutsche Welle, 09 Sep. 2020, www.dw.com/en/germanys-maas-calls-
for-withdrawal-of-hong-kong- security-law/a-54781315.

   Czech Senate President Vystrcil traveled to Taiwan this 
        summer and announced ``I am Taiwanese'' to the 
        Taiwanese Parliament, echoing President John Kennedy's 
        1963 speech ``Ich bin ein Berliner.'' \151\ 
        Additionally, the Mayor of Prague, Zdenek Hrib, refused 
        to acquiesce to Beijing's demands to disinvite 
        Taiwanese diplomats to a gathering.\152\
---------------------------------------------------------------------------
    \151\ Hille, Katherin. `` `I am a Taiwanese': Czech Senate 
president addresses parliament in Taipei.'' Financial Times, 01 Sep. 
2020, https://www.ft.com/content/fb018ddd-2591-4355-94b1-602ff2b025af.
    \152\ Tait, Robert. ``Zdenek Hrib: The Czech Mayor Who Defied 
China.'' The Guardian, 3 Jul. 2019, https://bit.ly/3p4krwy.

   The European Commission under President Ursula von der 
        Leyen upheld the EU's determination of China as a 
        ``systemic rival.'' \153\ The EU High Representative 
        for Foreign Policy Josep Borrell joined the Group of 
        Seven (G7) countries in condemning China's imposition 
        of its national security law on Hong Kong in June.\154\ 
        The European Commission has also launched a Democracy 
        Action Plan to bolster the EU's resilience to foreign 
        interference in European democracies.\155\
---------------------------------------------------------------------------
    \153\ Von der Leyen, Ursula. ``State of the Union Address by 
President von der Leyen at the European Parliament Plenary.'' European 
Commission, 16 Sep. 2020, https://bit.ly/3mXciIk.
    \154\ ``G7 Foreign Ministers Statement on Hong Kong.'' European 
External Action Service, 17 Jun. 2020, https://eeas.europa.eu/
headquarters/headquarters-homepage/81075/g7-foreign-ministers%E2%80%99-
statement-hong-kong--en.
    \155\ ``Public consultation: Commission seeks citizens' views in 
preparation of new European Democracy Action Plan.'' European 
Commission, 15 Jul. 2020, https://bit.ly/36aGB7M.


    Transatlantic legislative bodies are also leading the 
charge on various aspects of China policy, informing the public 
and creating pressure on executive branches to take more 
---------------------------------------------------------------------------
decisive actions.


   The U.S. Congress hosts the Congressional Executive 
        Commission on China\156\ and the U.S.-China Economic 
        and Security Review Commission, which provide 
        independent assessments and recommendations on China 
        policy.\157\
---------------------------------------------------------------------------
    \156\ Congressional-Executive Commission on China. www.cecc.gov/.
    \157\ Charter. United States-China Economic and Security Review 
Commission, https://bit.ly/2U0rqZd.

   The U.K. Parliament's Foreign Affairs Committee published a 
        report entitled ``China and the Rules-Based 
        International System,'' \158\ and a group of Tory 
        Parliamentarians founded the China Research Group to 
        push a tougher stance.\159\
---------------------------------------------------------------------------
    \158\ United Kingdom, Parliament, House of Commons, Foreign Affairs 
Committee. China and the Rules-Based International. 04 Apr. 2019, 
https://bit.ly/3eyYnVM.
    \159\ Payne, Sebastian. ``Senior Tories launch ERG-style group to 
shape policy on China.'' Financial Times, 24 Apr. 2020, www.ft.com/
content/b354c58b-06fc- 4848-a823-584bcc0c3869.

   A cross-party, multinational group of parliamentarians 
        founded the International Parliamentary Alliance on 
        China in 2020 to reform how democracies deal with 
        China.\160\
---------------------------------------------------------------------------
    \160\ Inter-Parliamentary Alliance on China. https://ipac.global/.

   In 2020, the European Parliament created the Special 
        Committee on Foreign Interference in all Democratic 
        Processes in the European Union to analyze the risks 
        and identify solutions.\161\ The European Think Tank 
        Network on China commended the European Parliament for 
        taking ``the most principled stance of all the EU 
        institutions and serves an important watchdog 
        function'' given the parliament's advocacy for human 
        rights in China.\162\
---------------------------------------------------------------------------
    \161\ ``Parliament Sets up Special Committees and a Permanent 
Subcommittee.'' European Parliament, 19 Jun. 2020, 
www.europarl.europa.eu/news/en/press-room/20200615IPR81228/ parliament-
sets-up-special-committees-and-a-permanent-subcommittee.
    \162\ Ruhlig, Tim Nicholas, et al. Political values in Europe-China 
relations. European Think-tank Network on China, Dec. 2018, https://
bit.ly/2I7FYU2.


    European governments are making it more difficult for the 
PRC and other malign actors to exert undue influence by 
implementing lobbying registration regimes with similarities to 
---------------------------------------------------------------------------
the U.S. Foreign Agents Registration Act.


   In 2011, the European Commission and the European 
        Parliament created the joint Transparency 
        Register,\163\ which incentivizes entities that lobby 
        these two EU institutions to declare those activities 
        voluntarily.\164\ Negotiations are currently underway 
        among the European Commission, Council, and Parliament 
        to create a joint register for all three 
        institutions.\165\
---------------------------------------------------------------------------
    \163\ Transparency and the EU. European Commission, https://
ec.europa.eu/transparencyregister /public/homePage.do.
    \164\ ``Public consultation: Commission seeks citizens' views in 
preparation of new European Democracy Action Plan.'' European 
Commission, 15 Jul. 2020, https://bit.ly/36aGB7M. And 
Interinstitutional Agreement on a Common Transparency Register between 
the Parliament and the Commission. European Parliament, 11 May 2011, 
https://bit.ly/3p4kMiO.
    \165\ Inter-institutional negotiations on the Transparency 
Register. European Parliament, 2020. https://www.europarl.europa.eu/tr-
negotiations/en/home/welcome-page.html.

   In 2014, the United Kingdom enacted a law requiring 
        consultant lobbyists to publically register.\166\
---------------------------------------------------------------------------
    \166\ Feikert-Ahalt, Clare. ``Lobbying Disclosure Laws.'' 
Www.Loc.Gov, 01 Mar 2017, www.loc.gov/law/help/lobbying-disclosure/
unitedkingdom.php. And ``Bill Documents--Transparency of Lobbying, Non-
Party Campaigning and Trade Union Administration Act 2014.'' Parliament 
UK, 02 May 2014, https://bit.ly/38efnzI.

   employee, or member whose primary activities are to 
        influence the French government.\167\
---------------------------------------------------------------------------
    \167\ Boring, Nicolas. ``Lobbying Disclosure Laws: France.'' 
Library of Congress, 01 Mar. 2017, www.loc.gov/law/help/lobbying-
disclosure/france.php.

   In July 2020, the German governing coalition agreed to 
        implement a mandatory transparency register for members 
        of the Bundestag.\168\
---------------------------------------------------------------------------
    \168\ Posaner, Joshua. ``Germany to Introduce Lobbying Register for 
MPs.'' Politico Europe, 03 Jul. 2020, www.politico.eu/article/germany-
lobbying-register/.

   Austria, Ireland, Lithuania, Poland, and Slovenia have also 
        instituted mandatory lobbying registry and transparency 
        requirements.\169\
---------------------------------------------------------------------------
    \169\ Bauer, Elisabeth, et al. ``Transparency of lobbying in Member 
States.'' Transparency Unit, DG Presidency, European Parliamentary 
Research Service, Nov. 2019, https://www.europarl.europa.eu/EPRS/
Lobbying-transparency-comparative-analysis.pdf.


    In education, governments are pushing for greater 
transparency, and universities are moving to protect their 
---------------------------------------------------------------------------
students.


   In February 2020, the European Commission published a draft 
        ``Concept Note On Tackling Foreign Interference In 
        Higher Education Institutions And Research 
        Organisations'' to begin discussions at the EU-level on 
        effective responses that will ``protect . . . academic 
        freedom, integrity and institutional autonomy . . . 
        [and] key research findings and intellectual assets.'' 
        \170\
---------------------------------------------------------------------------
    \170\ 170 ``Concept Note on Tackling Foreign Interference in Higher 
Education Institutions and Research Organizations.'' European 
Commission, 20 Feb. 2020, https://bit.ly/3kabf62.

   The U.S. Government has engaged, warned, and investigated 
        American universities regarding their ties to the 
        CCP.\171\ Included in this is the designation of the 
        ``Confucius Institute U.S. Center'' as a foreign 
        mission of the PRC.\172\
---------------------------------------------------------------------------
    \171\ Krach, Keith. ``Letter From Under Secretary Keith Krach to 
the Governing Boards of American Universities.'' U.S. Department of 
State, 18 Aug. 2020, www.state.gov/letter-from-under-secretary-keith-
krach-to-the-governing-boards-of-american-universities/. And ``U.S. 
Department of Education Launches Investigation into Foreign Gifts 
Reporting at Ivy League Universities.'' U.S. Department of Education, 
12 Feb. 2020, www.ed.gov/news/press-releases/test-0. And DeVos, Betsy, 
and Michael R. Pompeo. ``Joint Letter to Chief State School Officers.'' 
U.S. Department of Education and U.S. Department of State, 09 Oct. 
2020, https://bit.ly/3l6PoOg. And DeVos, Betsy, and Michael R. Pompeo. 
``Letter to the Presidents of American Institutions of Higher Education 
and Affiliates.'' U.S. Department of Education and U.S. Department of 
State, 09 Oct. 2020, https://bit.ly/2GAoUpg.
    \172\ Pompeo, Michael R. ``Designation of the Confucius Institute 
U.S. Center as a Foreign Mission of the PRC.'' U.S. Department of 
State, 13 Aug. 2020, https://bit.ly/3kcQtmw.

   In a 2019 government communication, Sweden proposed the 
        establishment of a national knowledge center on China, 
        to strengthen Swedish proficiency and address knowledge 
        gaps on China.\173\ Sweden has also closed all of the 
        Confucius Institutes and Confucius classrooms.\174\
---------------------------------------------------------------------------
    \173\ Lofven, Stefan. ``Approach to matters relating to China'', 
Ministry for Foreign Affairs of Sweden, 26 Sep. 2019, https://bit.ly/
3k57izu.
    \174\ Flittner, Sofia. ``Sweden Has Closed All Confucius Institutes 
and Classrooms.'' ScandAsia, 19 May 2020, https://scandasia.com/sweden-
has-closed-all- confucius-institutes-and-classrooms/.

   In September 2020, to prevent intellectual property theft 
        by Chinese students, the United Kingdom added Advanced 
        Conventional Military Technology to the list of 
        sensitive subjects that require certain foreign 
        students to obtain U.K. government certification to 
        study under its Academic Technology Approval 
        Scheme.\175\
---------------------------------------------------------------------------
    \175\ Academic Technology Approval Scheme (ATAS). UK Foreign, 
Commonwealth & Development Office, 06 Oct. 2020, https://www.gov.uk/
guidance/academic-technology-approval-scheme. And Fisher, Lucy. 
``Chinese students face ban amid security fears.'' Times UK, 01 Oct. 
2020, https://bit.ly/3p7BTA7.

   Harvard, Princeton, and Oxford are altering their teaching 
        methods to protect students at risk of PRC 
        extraterritorial coercion, including through anonymous 
        assignment submissions and the use of codes to identify 
        students.\176\
---------------------------------------------------------------------------
    \176\ Craymer, Lucy. ``China's National-Security Law Reaches Into 
Harvard, Princeton Classrooms.'' Wall Street Journal, 19 Aug. 2020, 
www.wsj.com/articles/chinas-national-security-law-reaches-into-harvard-
princeton-classrooms-11597829402. Wintour, Patrick. ``Oxford moves to 
protect students from China's Hong Kong security law.'' The Guardian, 
28 Sep. 2020, https://www.theguardian.com/education/2020/sep/28/oxford-
moves-to-protect-students-from-chinas-hong-kong-security-
law#::text=Students%20at%20Oxford%20University 
%20specialising,months%20ago%20in%20Hong%20Kong.


    Social media companies are starting to curb covert 
influence on their platforms, albeit under intense consumer and 
---------------------------------------------------------------------------
political pressure.


   Similar to the Daily Telegraph's decision mentioned above, 
        Twitter banned advertisements by state-controlled media 
        following reports that the platform had promoted CCP 
        disinformation on the plight of the Uyghurs.\177\
---------------------------------------------------------------------------
    \177\ ``Updating Our Advertising Policies on State Media.'' Company 
Blog, Twitter Inc., 19 Aug. 2019, https://bit.ly/36cUKkB. And 
Gallagher, Ryan. ``Twitter Helped Chinese Government Promote 
Disinformation on Repression of Uighurs.'' The Intercept, 19 Aug. 2019, 
https://bit.ly/36a3QP7.

   Twitter, Facebook, and Instagram now designate accounts 
        from state-sponsored media, which include Xinhua and 
        The People's Daily.\178\
---------------------------------------------------------------------------
    \178\ ``New labels for government and state-affiliated media 
accounts.'' Company Blog, Twitter Inc., 06 Aug. 2020, https://bit.ly/
3eGFxfK. And ``Facebook Starts Labeling Russian, Chinese, Iranian State 
Media.'' VOA News, RFE/RL, 05 Jun. 2020, https://bit.ly/32l6pwW. And 
Bonifacic, Igor. ``Instagram starts labeling `state controlled media' 
accounts and posts.'' Engadget, 05 Oct. 2020. https://www.engadget.com/
instagram-state-controlled-media-application-
220248779.html?guccounter=1.

   Google was forced to terminate a project to create a 
        censored search engine in China following outrage from 
        its own employees.\179\
---------------------------------------------------------------------------
    \179\ Su, Jeb. ``Confirmed: Google Terminated Project Dragonfly, 
Its Censored Chinese Search Engine.'' Forbes, 19 Jul. 2019, 
www.forbes.com/sites/jeanbaptiste/2019/07/19/confirmed-google-
terminated-project-dragonfly-its-censored-chinese-search-engine/
#755be97e7e84. And Gallagher, Ryan. ``Google Shut Out Privacy and 
Security Teams From Secret China Project.'' The Intercept, 29 Nov. 
2018, https://theintercept.com/2018/11/29/google-china-censored-
search/.

   Presidential election.\180\
---------------------------------------------------------------------------
    \180\ Goldman, Adam. ``Facebook Takes Down Fake Pages Created in 
China Aimed at Influencing U.S. Election.'' New York Times, 23 Sept. 
2020, https://nyti.ms/2IgkRPC.


    Additionally, a growing number of governments and 
multilateral organizations are countering disinformation from 
---------------------------------------------------------------------------
authoritarian nations, including the PRC.


   In 2014, seven NATO allies created the NATO Strategic 
        Communications Center of Excellence to contribute to 
        NATO allies and partners' strategic communications 
        capabilities.\181\
---------------------------------------------------------------------------
    \181\ ``About Us'' NATO Stratcom Centre of Excellence, 
www.stratcomcoe.org/about-us. And ``Seven Allies Establish NATO's 
Strategic Communications Center of Excellence in Latvia.'' Atlantic 
Council, 07 Jul. 2014, www.atlanticcouncil.org/blogs/natosource/seven-
allies-establish-nato-s-strategic-communications-center-of-excellence-
in-latvia/.

   In December 2016, the U.S. Congress authorized the Global 
        Engagement Center within the State Department to combat 
        foreign propaganda and disinformation.\182\
---------------------------------------------------------------------------
    \182\ Global Engagement Center. U.S. Department of State, https://
nyti.ms/2IgkRPC.

   In 2018, G7 leaders announced the creation of the G7 Rapid 
        Response Mechanism, led by Canada, ``to respond to 
        efforts of foreign actors seeking to `undermine our 
        democratic societies and institutions, our electoral 
        processes, our sovereignty and our security.' '' \183\
---------------------------------------------------------------------------
    \183\ Rapid Response Mechanism Canada--Protecting Democracy. 
Government of Canada, 06 Sep. 2019, https://bit.ly/2U3GG7C.

   In 2018, the European Union debuted a disinformation action 
        plan and created a strategic communication task force 
        within the European External Action Service.\184\ In 
        its effort to tackle COVID-19 disinformation, the 
        European Union named China as a source.\185\
---------------------------------------------------------------------------
    \184\ ``Joint Communication to the European Parliament, The 
European Council, The Council, The European Economic and Social 
Committee and the Committee of the Regions: Action Plan against 
Disinformation.'' European Commission High Representative of the 
European Union for Foreign Affairs and Security Policy, JOIN(2018) 36 
final, 12 May 2018, https://bit.ly/2JKLWLq.
    \185\ ``Joint Communication to the European Parliament, The 
European Council, The Council, The European Economic and Social 
Committee and the Committee of the Regions: Tackling COVID-19 
disinformation - Getting the facts right.'', European Commission High 
Representative of the Union for Foreign Affairs and Security Policy, 10 
Jun. 2020, https://bit.ly/3n1vuEY. And ``European Commission Accuses 
China of Peddling Disinformation.'' Politico Europe, 10 Jun. 2020, 
www.politico.eu/article/european-commission-disinformation-china-
coronavirus/.

   In 2020, the U.S. Department of State designated as foreign 
        missions fifteen PRC state-run media outlets, including 
        The People's Daily, Xinhua News Agency, and CGTN.\186\
---------------------------------------------------------------------------
    \186\ Ortagus, Morgan. ``Designation of Additional Chinese Media 
Entities as Foreign Missions.'' U.S. Department of State, 22 Jun. 2020, 
www.state.gov/designation-of-additional-chinese-media-entities-as-
foreign-missions/.

   As free and independent media has eroded in parts of 
        Central and Eastern Europe as a result of foreign and 
        domestic influences, the United States' Radio Free 
        Europe/Radio Liberty reinstated services in Hungary, 
        Bulgaria, and Romania, to help inoculate these 
        societies from influence attempts, including by the 
        PRC.\187\
---------------------------------------------------------------------------
    \187\ ``RFE/RL Expands To Bulgaria, Romania.'' RFE/RL, 18 Jul. 
2018, https://bit.ly/3p7CIcb. And ``RFE/RL Relaunches Operations In 
Hungary Amid Drop In Media Freedom.'' RFE/RL Hungarian Service, 08 Sep. 
2020, https://bit.ly/3n1vEMA. And Karaskova, Ivana. ``China has 
successfully planted its narratives on topics like the Hong Kong 
protests into major news outlets across Central and Eastern Europe.'' 
The Diplomat, 19 Nov. 2019, https://thediplomat.com/2019/11/how-china-
influences-media-in-central-and-eastern-europe/. And ``About the 
Project'' ChinfluenCE, 2020, https://bit.ly/2Gz8Vrs.


    Finally, and perhaps most importantly, citizens and publics 
are beginning to take notice of the efforts of PRC influence, 
---------------------------------------------------------------------------
particularly censorship and human rights abuses.


   In 2019, a German newspaper issued a poll asking for names 
        for the Berlin Zoo's two new panda cubs. ``Hong'' and 
        ``Kong'' won the poll.\188\
---------------------------------------------------------------------------
    \188\ Staudenmaier, Rebecca. ``German Media Call to Name Berlin's 
New Pandas Hong and Kong.'' Deutsche Welle, 6 Sep. 2019, www.dw.com/en/
german-media-call-to-name-berlins-new-pandas-hong-and-kong/a-50321006.

   In September 2020, #BoycottMulan became a prominent social 
        media hashtag after viewers discovered that Disney 
        filmed portions of the movie in Xinjiang.\189\
---------------------------------------------------------------------------
    \189\ Chow, Andrew. ``Here's What to Know About the Mulan 
Boycott.'' TIME, 02 Mar. 2020, https://time.com/5653973/mulan-boycott-
liu%20yifei/.
---------------------------------------------------------------------------

Conclusion

    The depth and breadth of CCP influence operations, 
disinformation, and coercion underscores its insidiousness and 
the urgency with which the community of democracies must tackle 
these problems. The founding documents of our democratic 
institutions leave no question as to what should be our path 
forward. The U.S. Constitution enshrines ``the freedom of 
speech, of the press, and the right of the people to peaceably 
assemble,'' and the Fourth Amendment guarantees ``the right of 
the people to be secure in their persons, houses, papers, and 
effects.'' \190\ Similarly, the EU's Lisbon Treaty mandates 
that the Union ``shall contribute to . . . the protection of 
human rights . . . as well as to the strict observance and the 
development of international law, including respect for the 
principles of the United Nations Charter.'' \191\ NATO's 
Washington Treaty unambiguously stipulates that its members 
``are determined to safeguard the freedom, common heritage and 
civilisation of their peoples, founded on the principles of 
democracy, individual liberty and the rule of law.'' \192\
---------------------------------------------------------------------------
    \190\ U.S. Constitution. Amend. I, https://bit.ly/3559X8d. And U.S. 
Constitution. Amend. IV, https://bit.ly/3kdg925.
    \191\ ``Consolidated Versions of the Treaty on the Functioning of 
the European Union.'' Official Journal of the European Union, 07 Jun. 
2016, https://bit.ly/3kcS3os.
    \192\ ``The North Atlantic Treaty.'' North Atlantic Treaty 
Organization, 04 Apr. 1949, https://bit.ly/3eCIA8K.
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    The world's democracies have a responsibility and mandate 
to ensure the posterity of these rights. As the United States 
and Europe begin to combat and buffer our societies against 
malign CCP influence, there is much more we can and should do 
together. The EU-U.S. Dialogue on China is a strong start and 
will hopefully engender constructive dialogue on Chinese 
influence operations, as well as other critical issues. Through 
greater cooperation, we can prevent the CCP from sowing dissent 
within and between our societies, and maintain our freedom and 
prosperity.


                CHAPTER TWO--INTERNATIONAL ORGANIZATIONS

                              ----------                              

        Authoritarian actors have long recognized the power of 
        multilateral bodies and have used them to advance their 
        interests and limit the freedom of their own citizens. 
        If the United States cedes leadership of these bodies 
        to adversaries, opportunities to shape developments 
        that are positive for the United States will be 
        lost.\193\
---------------------------------------------------------------------------
    \193\ National Security Strategy of the United States of America, 
The White House, Dec. 2017, p. 40, https://www.whitehouse.gov/wp-
content/uploads/2017/12/NSS-Final-12-18-2017-0905.pdf

        --2017 U.S. National Security Strategy
Introduction
    International organizations (IOs) play an important role in 
shaping the international system. In a world of almost 200 
countries, each with its own national interests and agenda, IOs 
provide a framework for collective action and shared 
responsibility in matters of global consequence. This includes 
everything from responding to humanitarian crises and 
vaccinating children, to exposing human rights abuses and 
holding malign actors accountable. As stated in the United 
Nations (UN) Charter, the purpose of the institution is to 
maintain international peace and security, promote friendly 
relations among nations, foster cooperation to address 
international problems of an economic, social, cultural, or 
humanitarian character, and promote and encourage respect for 
human rights and fundamental freedoms.\194\ As the UN 
celebrated its 75th anniversary in 2020, all member countries 
signed a declaration acknowledging its accomplishments, 
including saving hundreds of thousands of lives, providing 
education around the world, and safeguarding public 
health.\195\
---------------------------------------------------------------------------
    \194\ Charter of the United Nations and Statute of the 
International Court of Justice. United Nations, 1945, https://
treaties.un.org/doc/publication/ctc/uncharter.pdf.
    \195\ ``Strengthening of the United Nations system'', 75th Session 
of the United Nations General Assembly, United Nations, 16 Sep. 2020, 
https://undocs.org/A/75/L.1.
---------------------------------------------------------------------------
    While far from perfect in practice, the principal reason 
for the formation of IOs, including the UN, was to uphold and 
promote an international system characterized by liberal 
principles, including respect for freedom and human rights, and 
to play a decisive role in the maintenance of international 
security. The United States and Europe, who led the effort to 
establish the international system, recognize the importance of 
these foundational principles and cooperate accordingly, 
despite periodic disagreements and differing approaches. Today, 
however, the nations committed to upholding liberal principles 
face an immense challenge, as countries like China seek to 
subvert IOs to serve their own interests.
History of China at the United Nations
    China's relationship with IOs, and the UN in particular, 
has a complicated history. While China was a founding member of 
the UN, along with 50 other nations, it was represented by the 
Republic of China (now known as Taiwan) from 1945 until 
1971.\196\ The UN General Assembly (UNGA) voted to recognize 
the People's Republic of China (PRC) as the legitimate 
representative of China to the UN in Resolution 2758 on October 
25, 1971.\197\ The PRC thereafter represented China in the 
UNGA, the UN Security Council (UNSC), and all other UN-related 
organizations.
---------------------------------------------------------------------------
    \196\ Han, Cheung. ``The day China joined the UN: UN Resolution 
2758, passed in 1971, still carries ramifications for Taiwan today.'' 
18 Oct. 2015. Taipei Times, https://www.taipeitimes.com/News/feat/
archives/2015/10/18/2003630319.
    \197\ Ibid.
---------------------------------------------------------------------------
    Unlike the PRC, the United States is a founding member of 
the UN and signed the UN Charter in 1945. Of the 51 UN 
founders, 14 were European: Belarus, Belgium, Czechoslovakia, 
Denmark, France, Greece, Luxembourg, the Netherlands, Norway, 
Poland, Turkey, Ukraine, the United Kingdom, and 
Yugoslavia.\198\ As original members of the UN, the United 
States and European allies have a long-term vested interest in 
the institution and its work.
---------------------------------------------------------------------------
    \198\ Charter of the United Nations and Statute of the 
International Court of Justice. United Nations, 1945, https://
treaties.un.org/doc/publication/ctc/uncharter.pdf.
---------------------------------------------------------------------------
China: Shaping the United Nations in Its Own Image
    Although the PRC has been present in the UN since 1971, it 
was not until the 2000s that it began to employ a concerted 
effort to exhort its influence on the UN. This effort 
contributes to a major goal of the PRC's foreign policy--to 
``reform global governance'' such that the international system 
is more conducive to Chinese Communist Party (CCP) 
interests.\199\ The PRC strategy to reshape the international 
system uses China's economic and military strength as 
justification for increasing its influence in international 
organizations. At the 75th anniversary of the UN in September 
2020, CCP General Secretary Xi Jinping said that the ``global 
governance system needs to reflect this reality of 
international politics and the process of multi-polarization.'' 
\200\ Yet evidence shows that Chinese influence in IOs does not 
merely advocate for a greater PRC role, but actively works to 
reshape international norms and institutions in favor of CCP 
ideology and objectives. By reshaping institutions along these 
lines, the CCP strives to provide a circular guarantee for its 
own longevity.\201\
---------------------------------------------------------------------------
    \199\ Tobin, Liza. ``Xi's Vision for Transforming Global 
Governance: A Strategic Challenge for Washington and Its Allies.'' The 
Strategist, vol. 2, no. 1, Texas National Security Review, 12 Nov. 
2018, http://dx.doi.org/10.26153/tsw/863.
    \200\ Xi, Jinping. ``Full text: Xi Jinping's speech at high-level 
meeting to mark UN's 75th anniversary'' CGTN. 22 Sep. 2020. https://
bit.ly/38i59yj.
    \201\ Weiss, Jessica. ``A World Safe for Autocracy? China's Rise 
and the Future of Global Politics.'' Foreign Affairs, Jul./Aug. 2019, 
https://fam.ag/2GBnevP. and Chu, Yun-han. ``Sources of Regime 
Legitimacy and the Debate over the Chinese Model.'' The China Review, 
vol. 13, no. 1, Chinese University of Hong Kong Press, Spring 2013, 
https://www.jstor.org/stable/23462227?seq=1.
---------------------------------------------------------------------------
    In June 2018, the CCP inserted Xi Jinping Thought, which 
ensures CCP leadership over all forms of policy work in China, 
into its global diplomacy. At the Central Conference on Work 
Relating to Foreign Affairs, Xi urged China's foreign affairs 
apparatus to ``take an active part in leading the reform of the 
global governance system, and build a more complete network of 
global partnerships, so that new advances will be made in major 
country diplomacy with Chinese characteristics to create a 
favorable environment for . . . building . . . a great modern 
socialist country in all aspects.'' \202\ During Xi's speech on 
the occasion of the 40th anniversary of China's economic 
reforms in December 2018, he reiterated that China must ``play 
the role of a responsible big country . . . and actively 
participate in the global governance system reform and 
construction.'' \203\
---------------------------------------------------------------------------
    \202\ ``Xi urges breaking new ground in major country diplomacy 
with Chinese characteristics.'' XinhuaNet, 23 Jun. 2018, https://
bit.ly/2JL5VJZ.
    \203\ ``Xi Jinping's Speech on 40th Anniversary of China's Reforms, 
Opening Up--Full Text.'' ranscend Media Service, 18 Dec. 2018, https://
www.transcend.org/tms/2018/12/xi-jinpings-speech-on-40th-anniversary-
of-chinas-reforms-opening-up-full-text/.
---------------------------------------------------------------------------
    The PRC's vision of a ``reformed'' global governance system 
starkly contrasts with the current international system that 
recognizes limits to state authority under the UN Charter, and 
which charges the UN to encourage and promote fundamental 
freedoms, self-determination of peoples, and universal human 
rights. China's actions indicate a CCP vision for a global 
governance system based on authoritarian principles instead of 
following common rules and standards.\204\
---------------------------------------------------------------------------
    \204\ Hart, Melanie and Blaine Johnson. Mapping China's Global 
Governance Ambitions: Democracies Still Have Leverage to Shape 
Beijing's Reform Agenda. Center for American Progress, 28 Feb. 2019, 
https://www.americanprogress.org/issues/security/reports/2019/02/28/
466768/mapping-chinas-global-governance-ambitions/. and Ikenberry, G. 
John and Darren J. Lim. China's emerging institutional statecraft: The 
Asian Infrastructure Investment Bank and the prospects for counter-
hegemony. Project on International Order and Strategy, Brookings 
Institution, Apr. 2017, https://www.brookings.edu/research/chinas-
emerging-institutional-statecraft/. And Goldberg, Richard. ``Trump's 
New China Strategy Must Focus on International Organizations.'' 
Foundation for Defense of Democracies, 02 Jun. 2020, https://
www.fdd.org/analysis/2020/06/02/trump-china-strategy-focus/.
---------------------------------------------------------------------------
    The CCP has become adept at finding new points of leverage 
to build its influence within the UN. These efforts include, 
but are not limited to: blocking humanitarian efforts in Syria, 
gaining credibility for its views and policies by inserting 
signature CCP language into key UN documents and initiatives, 
blocking non-governmental organizations critical of China from 
participating at the UN, creating new UN funds and then 
stacking the boards of those funds, and offering debt relief, 
investments, and job opportunities in exchange for votes in UN 
bodies.\205\
---------------------------------------------------------------------------
    \205\ Fung, Courtney and Shing-Hon Lam. ``China already leads 4 of 
the 15 U.N. specialized agencies--and is aiming for a 5th.'' Washington 
Post, 03 Mar. 2020, https://www.washingtonpost.com/politics/2020/03/03/
china-already-leads-4-15-un-specialized-agencies-is-aiming-5th/. And 
Lee, Kristine. ``It's Not Just the WHO: How China is Moving on the 
Whole U.N.'' Politico, 15 Apr. 2020, https://www.politico.com/news/
magazine/2020/04/15/its-not-just-the-who-how-china-is-moving-on-the-
whole-un-189029.
---------------------------------------------------------------------------
    As a permanent UNSC member, China is supposed to support 
international peace and security. However, China has instead 
used its position to do the opposite, using its veto power 
eight times since 2011 to block UNSC resolutions on the Syrian 
conflict.\206\ The most recent veto in July 2020 resulted in 
the closing of a six-year-old border crossing that facilitated 
the flow of humanitarian aid to millions of civilians inside of 
Syria. The vote result was 13-2, with the rest of the UNSC, 
except for Russia, supporting the assistance.\207\ While China 
has no visible interest in the Syrian conflict, it has decided, 
with the assistance of Russia, that humanitarian assistance 
should not be provided to Syrians. China's unwillingness to 
shine light on the abuses of the Syrian regime demonstrate its 
concern that the same light may next focus on the PRC's own 
abuses against Uyghurs and Tibetans. The PRC continues to block 
not only resolutions, but also discussions at the UNSC on 
issues where it believes it could become a target of criticism.
---------------------------------------------------------------------------
    \206\ ``UN Security Council Working Methods: The Veto.'' Security 
Council Report, United Nations, 03 Sep. 2020, https://
www.securitycouncilreport.org/un-security-council-working-methods/the-
veto.php.
    \207\ DeYoung, Karen and Sarah Dadouch. ``Humanitarian aid to 
Syrians threatened as Russia and China veto proposals at U.N.'' 
Washington Post, 10 Jul. 2020, https://wapo.st/3ewZyoX.
---------------------------------------------------------------------------
China Weakens Human Rights At the United Nations
    Further, China sits on the UN Human Rights Council (UNHRC), 
despite being one of the world's worst abusers of human rights. 
In 2018, China was successful in passing a resolution through 
the UNHRC that included language on ``universality'' and 
``constructive international dialogue.'' These terms are used 
by those nations seeking to water down the international 
consensus on basic human rights. ``Universality'' is frequently 
used to promote the lowest common denominator in defining human 
rights, and is significantly weaker than what is enshrined in 
the Universal Declaration of Human Rights and other human 
rights treaties. ``Constructive international dialogue'' is 
used to promote non-interference in a nation's treatment of its 
own people, and calls for dialogue and a nebulous concept of 
cooperation instead of the investigation of serious human 
rights abuses.\208\
---------------------------------------------------------------------------
    \208\ Fisher, John. ``China's `Win-Win' Resolution Is Anything 
But.'' Human Rights Watch, 05 Mar. 2018, https://www.hrw.org/news/2018/
03/05/chinas-win-win-resolution-anything; And Piccone, Ted. ``China's 
Long Game on Human Rights at the United Nations.'' Brookings 
Institution, Sep. 2018, https://brook.gs/32jLudB.
---------------------------------------------------------------------------
    In addition to these terms, the PRC also successfully 
inserted the phrase ``community of shared future for human 
beings'' that is synonymous to wording in its own constitution, 
an example of garnering international acceptance for CCP 
language.\209\ Of the UNHRC's 47 members, only the United 
States voted against this resolution, while 17 other 
delegations, including many European nations, abstained.\210\ 
This resolution was only the second that China has ever 
sponsored in its 12-year history on the UNHRC. While this 
victory may seem small, it supports China's claim that it 
offers a superior definition of and approach to human rights, 
and internationalizes terms that the CCP uses to describe how 
it will advance its own interests. Further, the UN often refers 
back to language from previous resolutions, giving this CCP 
language legitimacy in the UN lexicon that the PRC can now use 
as a basis for expanding its views on human rights issues 
across the UN system.
---------------------------------------------------------------------------
    \209\ Tobin, Liza. ``Xi's Vision for Transforming Global 
Governance: A Strategic Challenge for Washington and Its Allies.'' The 
Strategist, vol. 2, no. 1, Texas National Security Review, 12 Nov. 
2018, p. 155-156, http://dx.doi.org/10.26153/tsw/863.
    \210\ Nebehay, Stephanie. ``U.S. and China clash at U.N. rights 
forum on Beijing text.'' Reuters, 23 Mar. 2018, https://
www.reuters.com/article/us-china-rights-un-usa/u-s-and-china-clash-at-
u-n-rights-forum-on-beijing-text-idUSKBN1GZ1D0.
---------------------------------------------------------------------------
    China responds to criticism of its human rights record not 
with action to address the concerns, but with an alternative 
false narrative. In 2019, 50 nations, led by the Chinese 
government, signed a letter calling allegations of gross 
violations of human rights by the CCP in Xinjiang unfounded. 
This was more than double the number of nations who condemned 
these abuses in an earlier letter.\211\ Given China's push to 
alter views on human rights matters and the CCP's efforts to 
control votes, the challenge to remove or stop such language 
from becoming an entrenched norm will require greater alignment 
between the United States and Europe going forward.
---------------------------------------------------------------------------
    \211\ Yellinek, Roie and Elizabeth Chen. ``The `22 vs. 50' 
Diplomatic Split Between the West and China Over Xinjiang and Human 
Rights.'' China Brief, The Jamestown Foundation, 31 Dec. 2019, https://
jamestown.org/program/the-22-vs-50-diplomatic-split-between-the-west-
and-china-over-xinjiang-and-human-rights/.
---------------------------------------------------------------------------
    China's political influence in countries like Greece and 
Hungary has also succeeded in frustrating EU consensus at the 
UN on human rights issues. In March 2017, Hungary prevented the 
European Union from joining a letter expressing concern over 
lawyers being tortured in detention. Hungary is a large 
recipient of Chinese investment and was the first EU nation to 
sign up for China's ``One Belt, One Road'' (OBOR) 
initiative.\212\ In June 2017, Greece, another large recipient 
of Chinese investment in Europe, blocked the European Union 
from making a statement at the UNHRC that was critical of 
China's crackdown on activists and dissidents. The Greek 
government indicated that the proposed statement was an 
``unconstructive criticism of China'' and preferred that the 
European Union raise this issue outside of the UN.\213\
---------------------------------------------------------------------------
    \212\ Denyer, Simon. ``Europe divided, China gratified as Greece 
blocks E.U. statement over human rights.'' 19 June 2017. The Washington 
Post, https://wapo.st/2GEjVnC.
    \213\ Emmott, Robin, and Angeliki Koutantou. ``Greece blocks EU 
statement on China human rights at UN.'' 18 June 2018. Reuters, https:/
/www.reuters.com/article/us-eu-un-rights/greece-blocks-eu-statement-on-
china-human-rights-at-u-n-idUSKBN1990FP
---------------------------------------------------------------------------
    China undertakes significant efforts to minimize criticism 
of its human rights record within the UN system. China sits on 
the UN's Economic and Social Council's (ECOSOC) Non-
Governmental Organizations committee. This 19-member committee 
decides which non-governmental organizations (NGOs) will 
receive consultative status with the ECOSOC, a prestigious 
status that provides the organizations with access to many UN 
bodies and human rights mechanisms, as well as physical access 
to UN facilities. China uses this perch to not only block NGOs 
critical of China, but to approve organizations that are 
closely aligned with the CCP.\214\ \215\ One such CCP-backed 
NGO is the ``China Association for Preservation and Development 
of Tibetan Culture'' (CAPDTC). CAPDTC has been accredited since 
2007 and, on multiple occasions, has parroted the CCP's 
position on Tibetan issues.\216\
---------------------------------------------------------------------------
    \214\ Lee, Kristine and Alexander Sullivan. ``People's Republic of 
the United Nations: China's Emerging Revisionism in International 
Organizations.'' Asia-Pacific Security Program, Center for New American 
Security, May 2019, https://bit.ly/36gmdlu.
    \215\ Lieberman, Amy. ``For many human rights NGOs, UN access 
remains out of reach.'' Devex, 06 Feb. 2020, https://www.devex.com/
news/for-many-human-rights-ngos-un-access-remains-out-of-reach-96516.
    \216\ Lee, Kristine and Alexander Sullivan. ``People's Republic of 
the United Nations: China's Emerging Revisionism in International 
Organizations.'' Asia-Pacific Security Program, Center for New American 
Security, May 2019, https://bit.ly/36gmdlu.
---------------------------------------------------------------------------
    This also occurs at the UNHRC. Of the 47 NGOs based in 
China, Hong Kong, or Macau with access to the UNHRC, 34 are 
government-organized NGOs controlled by the CCP or a PRC 
government agency, or headed by retired CCP or government 
officials.\217\ China also harasses and intimidates Chinese 
dissidents who testify before UN bodies or participate in other 
UN activities, and frequently intervenes to prevent citizens 
from leaving China for these purposes.\218\ In 2013, human 
rights activist Cao Shunli was detained at the Beijing airport 
on her way to Geneva. She later died in prison after being 
denied medical care for liver disease and tuberculosis.\219\
---------------------------------------------------------------------------
    \217\ Wee, Sui-Lee and Stephanie Nebehay. ``At U.N., China uses 
intimidation tactics to silence its critics.'' Reuters Investigates, 06 
Oct. 2015, https://www.reuters.com/investigates/special-report/china-
softpower-rights/.
    \218\ Ibid.
    \219\ Ibid.
---------------------------------------------------------------------------
Checkbook Diplomacy
    ``Checkbook diplomacy,'' or offering substantial loans, 
grants, or other funding to advance a Chinese objective has 
also become a hallmark of the CCP's activity at the UN. In 
2015, during Xi Jinping's first speech to the UNGA, he made 
clear that the PRC's activities at the UN would no longer be 
limited to ``development'' issues, but would now expand to 
matters of peace and security. In this speech, Xi promised a $1 
billion fund for peace and development.\220\ China's decision 
to make this unrequested donation begs the question of whether 
these funds are, in fact, intended to promote sustainability, 
development, peace, and security worldwide, or rather to 
solidify a connection between the UN and China's OBOR 
initiative.
---------------------------------------------------------------------------
    \220\ Feltman, Jeffrey. ``China's Expanding Influence at the United 
Nations--And How The United States Should React.'' Global China, 
Brookings Institution, Sep. 2020, https://brook.gs/3mTBe3o.
---------------------------------------------------------------------------
    The answer is simple. China created a fund outside normal 
UN processes and organizations in order to facilitate OBOR as a 
preferred instrument of the UN. After this speech, a variety of 
UN officials, including the UN Secretary General Antonio 
Guterres, began a campaign to legitimize OBOR within UN systems 
and around the world, particularly in developing nations. 
Interestingly, in May 2016, Beijing and the UN signed a decade-
long agreement to allocate $20 million a year into a ``UN Peace 
and Development Trust Fund,'' which is directed by a steering 
committee of three current Chinese government officials, in 
addition to China's former Vice Minister of Foreign Affairs Liu 
Zhenmin.\221\ Liu currently leads the UN's Department of 
Economic and Social Affairs (DESA), a position that has been 
filled by a PRC national since 2007. This fund, according to 
the UN website, has a mandate of ``proposing cost and action 
plan[s] and identifying priorities of the Fund; prioritizing 
among projects and activities to be funded.'' \222\ This board, 
by design, advises the UN secretary general on development 
projects around the globe.
---------------------------------------------------------------------------
    \221\ Lynch, Colum. ``China Enlists U.N. to Promote Its Belt and 
Road Project.'' Foreign Policy, 10 May 2018, https://bit.ly/32nHhW9.
    \222\ ``Steering Committee.'' United Nations Peace and Development 
Trust Fund, https://www.un.org/en/unpdf/about.shtml.
---------------------------------------------------------------------------
    Shortly after its conception, China's State Information 
Center asked DESA to conduct a study to examine how the 
Development Fund could aid the UN in meeting its sustainable 
development goals. In summer 2016, one of DESA's top 
economists, also a Chinese national, determined that OBOR was 
``in line'' with UN goals and policies to tackle global poverty 
by 2030.\223\ The marriage of this fund, DESA, and OBOR, 
provides Beijing not only with insight into every UN 
development project in the world, but also political and 
investment opportunities. If the PRC sincerely wanted to 
contribute to peace and security, it could have easily provided 
funds within the existing system, but chose instead to operate 
outside of it.
---------------------------------------------------------------------------
    \223\ Lynch, Colum. ``China Enlists U.N. to Promote Its Belt and 
Road Project.'' Foreign Policy, 10 May 2018, https://bit.ly/32nHhW9.
---------------------------------------------------------------------------
    Finally, China uses its influence in IOs to further its 
agenda on Taiwan, in particular its view that Taiwan is a part 
of the PRC and therefore should not participate in the 
international system. Several UN members in Latin America, the 
Pacific Islands, and Africa still recognize Taiwan 
diplomatically, and therefore it is not the consensus view 
within the UN system that Taiwan is part of China. Taiwan has 
applied for UN membership numerous times, only to be blocked by 
the PRC. Even in IOs where UN membership is not a requirement, 
China blocks Taiwanese participation.\224\ By contrast, the 
Palestinian Authority has been able to achieve observer status 
over the objection of UN member countries. China also goes to 
great lengths to prohibit Taiwanese citizens from even being 
able to tour the UN headquarters building in New York by 
pressuring the UN to reject Taiwanese passports as an official 
form of identification.\225\
---------------------------------------------------------------------------
    \224\ Winkler, Sigrid. ``Taiwan's UN Dilemma: To be or Not to be'', 
Brookings Institution, 20 Jun. 2012, https://www.brookings.edu/
opinions/taiwans-un-dilemma-to-be-or-not-to-be/.
    \225\ Horton, Chris. ``As U.N. Gathers, Taiwan, Frozen Out, 
Struggles to Get Noticed.'' New York Times, 21 Sep. 2018, https://
nyti.ms/3557r1G.
---------------------------------------------------------------------------

Personnel at United Nations Agencies

    Beyond China's influence over policy matters, the true key 
to the CCP's strategy to reshape the UN according to its own 
agenda is orchestrating the election of its top diplomats as 
the heads of UN agencies--a strategy that has enjoyed 
significant success in recent years. As of October 2020, China 
leads four of the fifteen specialized UN agencies: the 
International Civil Aviation Organization (ICAO); the 
International Telecommunication Union (ITU); the Food and 
Agriculture Organization (FAO); and the UN Industrial 
Development Organization.\226\ No other country leads more than 
one specialized agency. (The United States leads two other UN 
entities outside of the specialized group, and EU members lead 
more than ten.)\227\ China's bid to lead a fifth specialized 
agency, the World Intellectual Property Organization, failed in 
March 2020, after Europeans and Americans made clear their 
concern that a PRC citizen in the position would exacerbate 
already huge economic and security challenges associated with 
China's state-sponsored intellectual property theft.\228\ It is 
notable that while China is eager to put up candidates to lead 
UN specialized agencies that develop norms or set standards, it 
does not compete to lead UN funds and programs focused on 
humanitarian and development work.
---------------------------------------------------------------------------
    \226\ Fung, Courtney, and Shing-Hon Lam. ``China already leads 4 of 
the 15 U.N. specialized agencies--and is aiming for a 5th.'' 03 Mar. 
2020. Washington Post, https://www.washingtonpost.com/politics/2020/03/
03/china- already-leads-4-15-un-specialized-agencies-is-aiming-5th/.
    \227\ Schaefer, Brett. ``How the U.S. Should Address Rising Chinese 
Influence at the United Nations.'' Backgrounder, no. 3431, 20 Aug. 
2019. Margaret Thatcher Center for Freedom, The Heritage Foundation, 
https://herit.ag/2JL6Xpl.
    \228\ Runde, Daniel F. ``Trump Administration wins big with WIPO 
election'', The Hill, 09 Mar. 2020. https://bit.ly/3l6SrGc.
---------------------------------------------------------------------------
    Although UN employees are required to represent the 
interests of all member states over those of their own 
respective countries, many PRC nationals behave in precisely 
the opposite manner. One example, as illustrated by Brett 
Schaefer of the Heritage Foundation, is the case of Zhao Houlin 
as the head of the ITU. The ITU is responsible for policies and 
standards-setting for information and communication 
technologies. Zhao has sought not only to promote Chinese 
technology companies, but also to encourage Chinese companies 
and internet service providers to circumvent the process set 
forth by the Internet Corporation for the Assignment of Names 
and Numbers, and instead go solely through Beijing's National 
Internet Registry. Zhao has publicly spoken out against U.S. 
criticism of the use of Huawei in the UN and promoted OBOR as a 
model for development, even though it is China's own signature 
foreign policy initiative rather than a multilateral strategy. 
Zhao's lack of neutrality as an international civil servant 
makes clear China's view that international fora exist to suit 
Beijing's ends, often to the detriment of other members.\229\
---------------------------------------------------------------------------
    \229\ Schaefer, Brett, Dean Cheng, and Klon Kitchen. ``Chinese 
Leadership Corrupts Another U.N. Organization.'' The Heritage 
Foundation, 11 May 2020, https://on.wsj.com/2I9W27J.
---------------------------------------------------------------------------
    In addition to these top jobs, PRC nationals are in 
numerous subsidiary positions that influence decision-making 
across the UN system. For example, China is successfully 
placing its nationals within UN agencies through the Junior 
Professional Officer (JPO) program. The JPO program allows a UN 
member country to sponsor its nationals to work at IOs at the 
member government's expense.\230\ Once placed, they are likely 
to parlay their experience in the JPO program into a permanent 
placement within the UN system, and thereby exert influence at 
higher levels. The United States and Europe have both welcomed 
the recruitment of experts from around the world to serve 
within the UN system. However, given the record of the PRC 
government in leveraging these positions to advance its own 
interests and the control it often seeks to exert over its 
citizens, the growing number of junior officers who may be 
positioned to reshape organizations in China's favor should be 
a cause for concern.
---------------------------------------------------------------------------
    \230\ ``Junior Professional Officer Programs.'' International 
Organization Careers, https://iocareers.state.gov/Main/Content/Page/
junior-professional-officer-programs.
---------------------------------------------------------------------------

Contributions to the United Nations

    In addition to personnel, member states can influence the 
UN system through contributions ranging from financial 
contributions to the deployment of peacekeeping personnel. The 
United States and its European allies historically have 
provided the bulk of UN funding over the years. China, as its 
economy has grown, is now paying an increasing share of 
assessed contributions (often referred to as ``UN dues''), and 
currently trails only the United States in its rate of 
assessment. While this improved burden-sharing arrangement is 
welcome and long overdue, China must not be empowered to 
leverage its contributions to twist the UN to fit its own 
agenda, rather than promote the goals of the UN Charter.
    After years of claiming ``developing country status'' and 
thereby artificially reducing its assessment rate, the PRC is 
now the second largest financial contributor to the UN regular 
budget, surpassing Japan in 2018. That same year, the UNGA 
passed a resolution cementing China's assessment for the 
regular budget at 12.005 percent for 2019 to 2021, up from 
7.921 percent for 2016 to 2018.\231\ (In 1995, China paid only 
0.72 percent of the UN regular budget.)\232\ The United States 
currently pays 22 percent of the UN regular budget, the maximum 
amount that any country may be assessed for support.\233\
---------------------------------------------------------------------------
    \231\ ``China passes Japan to become UN's No. 2 contributor.'' 
Nikkei Asian Review, 24 Dec. 2018, https://asia.nikkei.com/Politics/
International-relations/China-passes-Japan-to-become-UN-s-No.-2-
contributor.
    \232\ ``Status of Contributions as at 31 December 1975.'' United 
Nations, 22 Jan. 1976, http://undocs.org/en/ST/ADM/SER.B/224.
    \233\ ``Resolutions adopted by the General Assembly'', 55th Session 
of the United Nations General Assembly, 22 Jan. 2001, https://
undocs.org/A/RES/55/5b-f.
---------------------------------------------------------------------------
    China now is also the second largest contributor to the UN 
peacekeeping budget, and provides more personnel to 
peacekeeping missions than any other permanent UNSC 
member.\234\ With an assessed peacekeeping budget of $6.5 
billion from 2019 to 2020, the top contributors based on 
assessed contributions for 2019 were: the United States (27.89 
percent), China (15.21 percent), Japan (8.56 percent), Germany 
(6.09 percent), the United Kingdom (5.79 percent), France (5.61 
percent), and Italy (3.30 percent).\235\
---------------------------------------------------------------------------
    \234\ Lee, Kristine and Alexander Sullivan. ``People's Republic of 
the United Nations: China's Emerging Revisionism in International 
Organizations.'' Asia-Pacific Security Program, Center for New American 
Security, May 2019, https://bit.ly/36gmdlu.
    \235\ While the United States has been assessed at a rate of 27.89% 
since 2017, the United States has been paying at a rate of 25%, 
consistent with current law. See: ``How We Are Funded.'' United Nations 
Peacekeeping, 2020, https://peacekeeping.un.org/en/how-we-are-funded.
---------------------------------------------------------------------------
    Beyond these required UN dues, the UN and its affiliated 
organizations are also funded by voluntary contributions. 
Though China's required contributions to the UN have been 
increasing, it has only marginally increased its voluntary 
contributions. The United States and European allies remain, by 
far, the largest voluntary contributors to the UN and its 
affiliated agencies, with the majority of their contributions 
going to humanitarian operations.\236\ In 2018, China's 
voluntary contributions to the UN were only $580 million, in 
stark contrast to nearly $8 billion voluntarily contributed by 
the United States.\237\
---------------------------------------------------------------------------
    \236\ Schaefer, Brett. ``How the U.S. Should Address Rising Chinese 
Influence at the United Nations.'' Backgrounder, no. 3431, Margaret 
Thatcher Center for Freedom, The Heritage Foundation, 20 Aug. 2019, 
https://herit.ag/2JL6Xpl.
    \237\ ``Statistics'', United Nations System Chief Executives Board 
for Coordination, 2016, https://www.unsystem.org/content/statistics.

Three examples are illustrative: 

   In 2019, the largest donors to the UN Office of 
        Humanitarian Affairs were the United States ($55.1 
        million), Sweden ($34.6 million), and the United 
        Kingdom ($30 million). China provided a paltry 
        $30,000.\238\
---------------------------------------------------------------------------
    \238\ Annual Report 2019. United Nations Office for the 
Coordination of Humanitarian Affairs, https://www.unocha.org/sites/
unocha/files/2019OCHAannualreport.pdf.

   The UN Refugee Agency's top donors in 2019 were the United 
        States ($1.7 billion), the European Union ($473 
        million), and Germany ($391 million). China donated 
        just $1.9 million.\239\
---------------------------------------------------------------------------
    \239\ Funding Update 2019: Global Overview. United Nations High 
Commissioner for Refugees, https://www.unhcr.org/5eddeb394.

   The World Food Program's top donors were the United States 
        ($3.4 billion), Germany ($887 million), and the United 
        Kingdom ($698 million). China contributed $30 million. 
        At a time when more than 20 million refugees and 47.5 
        million internally displaced persons have been forced 
        from their homes, and 135 million people in 55 
        countries are facing starvation--the highest levels of 
        human displacement and humanitarian need in recorded 
        history--China has shirked its humanitarian 
        responsibilities and instead provided the bare 
        minimum.\240\
---------------------------------------------------------------------------
    \240\ ``Figures at a Glance.'' United Nations High Commissioner for 
Refugees, 18 Jun. 2020, https://www.unhcr.org/en-us/figures-at-a-
glance.html. And ``Fact Sheet: Hunger and Conflict.'' World Food 
Program, Oct. 2020, https://docs.wfp.org/api/documents/WFP-0000119678/
download/?--ga=2.173870179.1360960934.1602808352-1420031420.1602808352.


    Rather than stepping-up voluntary contributions to the UN 
humanitarian organizations it does not control, China has since 
2015 sought to raise its international profile and advance its 
political, economic, and military interests by dramatically 
increasing the number and types of troops it contributes to UN 
peacekeeping operations. According to the Council on Foreign 
Relations (CFR), in 1990, ``China provided only five personnel 
to all total peacekeeping operations.'' \241\ Today, China 
deploys 2,531 peacekeeping personnel (as of August 2020), more 
than all other permanent UNSC members combined.\242\
---------------------------------------------------------------------------
    \241\ Best, Lucy. ``What Motivates Chinese Peacekeeping?'' Asia 
Unbound, The Council on Foreign Relations, 07 Jan. 2020, https://
www.cfr.org/blog/what-motivates-chinese-peacekeeping.
    \242\ Schaefer, Brett. ``How the U.S. Should Address Rising Chinese 
Influence at the United Nations.'' Backgrounder, no. 3431, The Heritage 
Foundation, 20 Aug. 2019, https://herit.ag/2JL6Xpl.
---------------------------------------------------------------------------
    The UN's troop contributing countries (TCCs) receive 
reimbursements and training made available through the assessed 
peacekeeping budget.\243\ Notably, some TCCs are more motivated 
by the operational experience and financial incentives gained 
through participation than by the overall objectives of such 
missions. Moreover, TCCs are able to negotiate memorandums of 
understanding that cover when, where, how, and what types of 
troops are deployed. This presents a clear opportunity for 
China to expand its military-to-military contacts and ensure 
its personnel serve only in areas where it has other interests. 
CFR research makes this clear: over the last six years, Chinese 
peacekeeping personnel appeared in countries with significant 
Chinese financial investment in the years prior. For example, 
China has contributed specialized peacekeeping forces to 
multiple missions where it has significant interest in securing 
access to natural resources, including Western Sahara; Darfur, 
Sudan; South Sudan; and the Democratic Republic of Congo.
---------------------------------------------------------------------------
    \243\ ``Deployment and Reimbursement.'' United Nations 
Peacekeeping, https://bit.ly/32nhWLZ.
---------------------------------------------------------------------------
    China only pays its required share of peacekeeping 
contributions. Its People's Liberation Army personnel deployed 
to UN missions are paid for by dues collected from all UN 
member states. The United States and the European Union 
consistently provide the voluntary financial, political, and 
enabling contributions upon which all successful peacekeeping 
operations depend. As of August 2020, 27 EU member states 
contributed 5,145 staff to peacekeeping missions around the 
globe.\244\ Moreover, despite being slightly risk-averse to 
deploying troops to high conflict areas, the European Union 
maintains numerous technical, diplomatic, and specialized 
training programs--to include counter-improvised explosive 
device programs provided through the UN Mine Action Service and 
the EU Military Advisory Mission, including the successor EU 
Training Mission in the Central African Republic. Both of these 
missions are outside of the traditional UN peacekeeping 
contributions.
---------------------------------------------------------------------------
    \244\ ``Troop and Police Contributions.'' United Nations 
Peacekeeping, https://bit.ly/2GF9oZo.
---------------------------------------------------------------------------
    Similarly, the United States provides vital training and 
equipment to support UN peacekeeping forces through various 
programs and initiatives, including the U.S. Department of 
State's Global Peace Operations Initiative (GPOI) and the 
complementary African Peacekeeping Rapid Response Partnership. 
Through GPOI, the United States has contributed nearly $1.3 
billion in assistance to help TCCs build critical enabling 
peacekeeping capabilities, enhance readiness, support rapid 
deployment, increase the participation of women, and become 
self-sufficient. GPOI partners have increased their military 
deployment rates to the UN and African Union operations by 150 
percent overall; the number of females deployed has increased 
by 114 percent since April 2010 alone.\245\
---------------------------------------------------------------------------
    \245\ ``Key Topics--Office of Global Programs and Initiatives.'' 
U.S. Department of State Bureau of Political-Military Affairs, https://
bit.ly/36eIjon.
---------------------------------------------------------------------------
    The transatlantic alliance provides not only the political 
leadership but also technical assistance, training, and 
enabling capabilities that advance international peace and 
security. In stark contrast to the PRC, these efforts extend 
well beyond assessed contributions and economically motivated 
troop deployments.

The Need for Transatlantic Cooperation

    There is huge potential for the United States and Europe to 
build greater diplomatic momentum to encourage impartiality and 
good governance at the UN. One example is in the area of global 
health. In response to the CCP's efforts to hide the nature and 
scope of the COVID-19 outbreak that originated in Wuhan--
including by delaying the entry of the World Health 
Organization's (WHO) investigative team into China and 
launching a massive disinformation campaign--the United States 
and the European Union began discussions about how to rebuild 
the WHO as an independent institution inoculated against the 
outsized and undue influence of the Chinese government. 
Notably, the Chinese government paid only 0.2 percent of the 
WHO's budget from 2018-2019, while the European Union funded 
nearly 11 percent and the United States funded 15 percent.\246\ 
Similar to the current U.S. position on the imperative of WHO 
reform, in the summer of 2020, EU health ministers stated that 
``an evaluation and reform of the WHO was needed.'' Germany, 
which began its six-month EU presidency in July 2020, put WHO 
reform on its agenda.\247\ Despite European Union concerns 
about the U.S. decision to withdraw from an unreformed WHO, the 
opportunity to work collaboratively towards our mutual 
objective is apparent, and should be explored at other 
specialized agencies.
---------------------------------------------------------------------------
    \246\ ``Europeans Working with US to Restructure WHO, Top Official 
Says.'' 19 Jun. 2020. Voice of America, https://bit.ly/3l6eTPJ.
    \247\ Ibid..
---------------------------------------------------------------------------
    Another area where the United States and Europe can 
cooperate is in the election of top UN officials. A recent 
example was the successful joint effort to elect a Singaporean 
national to lead WIPO. This should not be a one-time success. 
The United States and European partners should reflect on the 
lessons from both the successful WIPO election and previously 
failed FAO election and work together to produce future 
positive outcomes.
    Equally important to note, though not all UN agencies and 
programs rise to the same level of importance, supporting 
qualified and independent candidates to lead these agencies and 
programs can bolster our current diplomatic ties, as well as 
those with our allies outside the transatlantic relationship. 
By focusing on maintaining consistent, early diplomatic 
engagement coupled with high-level discussions, the United 
States and Europe can sustain the hard-fought efforts to 
champion impartiality and good governance across the UN system. 
Future elections depend on the critical bond between the United 
States and Europe. Upcoming elections for leadership of the 
Organization for Economic Cooperation and Development, 
Universal Postal Union, World Trade Organization, and the ICAO 
provide opportunities to achieve success that serves the shared 
transatlantic interest in an international system characterized 
by liberal principles and commitment to the UN Charter.
    Working together, the United States and Europe can also 
make meaningful reforms to the UN and restore the organization 
as a model of transparency and good governance. The 
transatlantic alliance should continue to push for transparency 
throughout the UN system. In a recent example, the European 
Union and United States supported a resolution led by Chile, 
Mexico, and Uruguay that resulted in the webcasting of ECOSOC's 
NGO committee for the first time.\248\ Prior to this successful 
resolution in 2017, those committee meetings were held in 
private.
---------------------------------------------------------------------------
    \248\ Amadeo, Stefanie. ``Remarks at the Economic and Social 
Council Meeting on Non-Governmental Organizations.'' U.S. Mission to 
the United Nations, 19 Apr. 2017, https://bit.ly/38gCObC.
---------------------------------------------------------------------------

Conclusion

    China is clear about its intentions to disregard the rules-
based international system that the UN was founded upon, and to 
instead slowly chip away and reshape the UN system to fit the 
CCP's agenda. While the PRC only joined the UN in 1971, it has 
made up for lost time by pushing its influence across the UN 
system, from heading UN specialized agencies to increasing its 
number of peacekeepers. It is unrealistic to presume that China 
will not use its influence to shape the international system. 
Indeed, the United States and its European allies must expect 
them to do so and respond by using their own influence to 
protect the norms and practices that have served the 
international system so well. Finally, despite China's 
increasing monetary contributions, the reality is that the 
United States, Europe, and other advanced democracies continue 
to provide the lion's share of financial support to the UN and 
other IOs. Both sides of the Atlantic must be steadfast in 
insisting that their contributions not subsidize goals that 
undermine the system that they have founded and continue to 
value.


                   CHAPTER THREE--TRADE, INVESTMENT, 
                        AND ECONOMIC STATECRAFT

                              ----------                              

        With the US--and with other democracies--we do share a 
        number of deep concerns on the substance of Chinese 
        behaviour that must be addressed: the persistent lack 
        of a level-playing field in the economic area; the 
        distorting effects of industrial subsidies; the absence 
        of reciprocity in procurement rules. The list is quite 
        long. And our impatience is growing that despite 
        Chinese commitments to address these concerns, there is 
        insufficient follow through in terms of actual 
        reforms.\249\
---------------------------------------------------------------------------
    \249\ Borrell, Josep Fontelles. ``China, the United States and 
us.'' European External Action Service, 31 Jul. 2020, https://
eeas.europa.eu/headquarters/headquarters-homepage/83644/china-united-
states-and-us--en.


        --Josep Fontelles Borrell, High Representative of the 
        European Union for Foreign Affairs and Security Policy
Introduction
    U.S. and European governments and companies' earlier 
optimism\250\ about China's commitment to economic reform and 
liberalization consistent with free and private markets has 
been replaced with growing frustration. The People's Republic 
of China's (PRC) continued advancement of an ecosystem of anti-
competitive economic and industrial policies that further its 
strategic goals and hamper legitimate private enterprise 
presents an unprecedented challenge to the international 
trading system and to all other participants in international 
commerce. The most damaging PRC policies include:
---------------------------------------------------------------------------
    \250\ Kartnitschnig, Matthew. ``How Germany opened the door to 
China--and threw away the key.'' Politico Europe, 10 Sep. 2020, https:/
/politi.co/3keycVX


---------------------------------------------------------------------------
   Selective and policy-driven market access restrictions;

   Government-sanctioned (or -tolerated) intellectual property 
        (IP) theft;

   Endorsement of forced technology transfers;

   Trade retaliation or the threat thereof for political 
        decisions;

   Support to Chinese state-owned enterprises (SOEs) that 
        heavily underbid on international contracts; and

   Use of state subsidies (many of dubious consistency with 
        China's obligations under various trade commitments) 
        for research and development in certain lucrative 
        sectors.


    While China's accession to the World Trade Organization 
(WTO) did lead to some openness and greater opportunities for 
foreign firms, progress in establishing a non-discriminatory, 
free, and open market in the PRC has long since stalled. It has 
become clear that the PRC government intends to pursue an 
economic model that couples the nearly limitless resources and 
power of the state with subservient economic actors in a bid to 
expand their footprints and revenues. It does so at the expense 
of public and private foreign companies seeking to compete 
according to longstanding market principles and rules.
    Given the immense size of the PRC market and its global 
reach today, China's practices have the potential to upend a 
global economic community previously characterized by open 
markets and trade liberalization. The PRC government, newly 
enriched through the benefits of participation in the free 
market trade liberalization system established under the 
General Agreement on Tariffs and Trade (GATT), WTO, and related 
agreements, now seeks to undermine and potentially displace 
that system by advancing a CCP-centric agenda that exploits 
gaps in that system and which furthers China's national goals 
at the expense of all other participants. For instance, despite 
being the world's second largest economy, the PRC continues to 
insist that it is a ``developing nation'' under WTO rules and 
takes resources and advantages truly needed by much poorer 
nations while competing unfairly with richer ones. The PRC 
government is pursuing a neo-mercantilist policy of placing the 
power and resources of the state at the disposal of supposedly 
private Chinese economic actors in a bid to distort markets to 
advance and promote Chinese political ends, displace non-
Chinese competitors, and dominate Chinese-favored sectors 
globally.
    Both U.S. and European companies face this threat. In the 
European Union, surveys reveal that, ``Member states are 
increasingly dissatisfied with the [PRC's] unwillingness to 
reciprocate the openness of the EU market.'' \251\ For their 
part, American businesses working in China see ``advocat[ing] 
more strongly for a level playing field for U.S. business in 
China'' as the best thing the U.S. government could do to 
``help foreign businesses in China.'' \252\
---------------------------------------------------------------------------
    \251\ Oertel, Janka. ``The new China Consensus: How Europe is 
growing wary of Beijing.'' European Council on Foreign Relations, 07 
Sep. 2020, https://bit.ly/3kaiBq1.
    \252\ 2020 China Business Climate Survey Report. American Chamber 
of Commerce in the People's Republic of China, Mar. 2020, https://
bit.ly/2GyZEj8.
---------------------------------------------------------------------------
    If the United States and Europe hope to preserve the vision 
of free markets that provide non-discriminatory benefits 
equally to all, this challenge cannot go unmet. The United 
States and Europe created the modern free market system in 
response to the horrors of the early 20th century wars. For 
seven decades, this system has helped to realize the 
aspirations of billions of people using their individual 
talents to advance their personal economic interests, cutting 
global poverty by two-thirds since 1995 alone.\253\ That system 
is now under assault. The United States and Europe have a 
shared interest in protecting, strengthening, and advancing the 
free market on behalf of and at the direction of their 
citizens.
---------------------------------------------------------------------------
    \253\ See 2020 Index of Economic Freedom. The Heritage Foundation, 
May 2020, https://www.heritage.org/index/. And Kim, Anthony and Patrick 
Tyrrell. ``Economic Freedom Enables Great Escape from Poverty.'' The 
Heritage Foundation, 13 Feb. 2018, https://herit.ag/2I5uIYO .
---------------------------------------------------------------------------
    The transatlantic community shares many concerns with 
Chinese practices and tends to agree on the scope and nature of 
the problems we face in the trade sphere. The next step, and 
best path forward, is to find potential areas for cooperation 
that strengthen the system itself and push back on specific PRC 
behavior. Such cooperation should be grounded by our shared 
beliefs in preserving and promoting an open and non-
discriminatory free market environment, while upholding the 
legitimate interest of the state in establishing appropriate 
rules that protect consumers and investors, and protecting 
individuals and private property from undue foreign coercion 
and theft, particularly the IP rights that are foundational to 
U.S. and European prosperity. The United States and Europe must 
rise to the challenge and boldly and openly reaffirm these 
principles together.
China's Discriminatory Practices
The Power of the State
    As China's market has become more saturated and advanced, 
the large revenue gains previously realized by Western 
companies are increasingly difficult to achieve. And 
technologically, China is catching up quickly and moving into 
more advanced manufacturing sectors. For instance, German 
technology and machinery, long seen as the world's most 
advanced, is no longer so confident in its technological 
advantage.\254\ Another expert notes:
---------------------------------------------------------------------------
    \254\ Staff discussions with a European energy expert.


        In the past, German industrial companies combatted 
        China's attempts to steal their technology by holding 
        back their latest innovations from the Chinese market. 
        In most cases, even if the gear they sold to China 
        wasn't state-of-the-art, it was generally superior to 
        what Chinese suppliers could offer. That strategy has 
        become increasingly difficult as Chinese rivals have 
        become more sophisticated, forcing German companies to 
        put their top-shelf offerings on the Chinese 
        market.\255\
---------------------------------------------------------------------------
    \255\ Kartnitschnig, Matthew. ``How Germany opened the door to 
China--and threw away the key.'' Politico Europe, 10 Sep. 2020, https:/
/politi.co/32lMuOf.


    Market economy states have also grown increasingly 
concerned about PRC-directed and controlled investments in 
strategic sectors, as well as acquisitions of key technology 
companies by firms with government ties. An examination of 
Chinese acquisitions in Sweden by the Swedish Defense Research 
Agency highlights the concentration of these purchases in 
smaller companies that work in industrial products and 
machinery, biotechnology, information and communications 
technology, electronics, and the automotive sector. The report 
further notes that around half of these Chinese acquisitions 
align with priorities set by the Chinese government in its Made 
in China 2025 plan.\256\
---------------------------------------------------------------------------
    \256\ Hellstrom, Jerker, Oscar Almen and Johan Eglund. ``Kinesiska 
bolagsforvarv i Sverige: en kartlaggning.'' Swedish Defense Research 
Agency (FOI), 29 Nov. 2019, https://bit.ly/3p9Fqy8.


---------------------------------------------------------------------------


    Made in China 2025 is designed to marshal the Chinese 
economy to make huge strides in certain industrial areas that 
the state considers to be of great strategic importance.\257\ 
Not surprisingly, the 10 areas highlighted by the program have 
also been the targets of many of China's most malign trade 
practices. These sectors are: new generation information 
technology; new energy and energy-saving vehicles; high-end 
computerized machines and robots; energy equipment; aerospace; 
agricultural machines; maritime equipment and high-tech ships; 
new materials; advanced railway transport equipment; and 
biopharma and high-tech medical devices. And while the PRC 
government has certainly focused on bolstering the role of SOEs 
in these sectors, private Chinese companies have also recently 
been commanded to ``organize and mobilize private economic 
professionals to devote themselves to major national strategies 
such as innovation-driven development strategies.'' \258\
---------------------------------------------------------------------------
    \257\ Sutter, Karen. Made in China 2025 Industrial Policies: Issues 
for Congress. Congressional Research Service, 11 Aug. 2020, https://
fas.org/sgp/crs/row/IF10964.pdf.
    \258\ ``Zhonggong zhongyang bangong tin yinfa ``guanyu jiaqiang xin 
shidai minying jingji tongzhan gongzuo de yijian''.'' [The General 
Office of the CPC Central Committee issued the ``Opinions on 
Strengthening the United Front Work of Private Economy in the New 
Era'']. Xinhua, 15 Sep. 2020, https://bit.ly/2IbEUOW.
---------------------------------------------------------------------------
    The Chinese Communist Party (CCP) has increasingly 
mobilized its power to quickly achieve these goals. As Martin 
Hala of Charles University writes, ``The CCP sets the rules and 
can determine the success or failure of `private' ventures by 
controlling access to capital from state and policy banks, by 
offering and withdrawing licenses and permits, and ultimately 
through direct administrative intervention. . . . It can allow 
billion-dollar companies to spring up overnight and then 
dissolve them by fiat and redirect the flow of capital to other 
players.'' \259\
---------------------------------------------------------------------------
    \259\ Hala, Martin. ``A New Invisible Hand: authoritarian Corrosive 
Capital and the Repurposing of Democracy.'' Sharp Power and Democratic 
Resilience Series, National Endowment for Democracy's International 
Forum for Democratic Studies, Mar. 2020, https://www.ned.org/wp-
content/uploads/2020/03/New-Invisible-Hand-Authoritarian-Corrosive-
Capital-Repurposing-Democracy-Hala.pdf.
---------------------------------------------------------------------------
Forced Technology Transfer
    Forced technology transfer is among the most ``unreasonable 
and discriminatory'' practices that the PRC imposes, strongly 
encourages, or supports through administrative action on 
foreign companies seeking market access in China.\260\ In 2020, 
13 percent of American companies\261\ and 16 percent of 
European companies operating in China reported being asked to 
transfer their technology.\262\ More worrisome is analysis from 
the EU Chamber of Commerce in China which reveals, ``In 
industries like medical devices, aerospace and aviation, and 
environment--the crown jewels of European innovation--nearly a 
third of members report having been compelled to transfer 
technology in order to maintain market access.'' \263\ These 
targeted sectors correspond with the priority areas laid out in 
Made in China 2025.
---------------------------------------------------------------------------
    \260\ ``Findings of the Investigation Into China's Acts, Polices, 
and Practices Related to Technology Transfer, Intellectual Property, 
and Innovation Under Section 301 of the Trade Act of 1974.'' Office of 
the United States Trade Representative, 22 Mar. 2018, p. 11-12, https:/
/bit.ly/369oAGM .
    \261\ 2020 Member Survey. The U.S.-China Business Council, p. 13, 
https://bit.ly/3540YUx.
    \262\ European Business In China: Business Confidence Survey 2020. 
European Union Chamber of Commerce in China, Jun. 2020, p. 43, https://
bit.ly/3mUTidm.
    \263\ Ibid, p. 43-44.
---------------------------------------------------------------------------
    Joint venture requirements with Chinese companies are a key 
vector for the transfer of proprietary IP and technology. These 
joint ventures often include requirements that the Chinese 
partner be provided access to the foreign investor's core 
technologies. The U.S. Trade Representative explains that the 
goal behind this requirement is made clear in the PRC's trade 
strategies, which ``articulate the concept of Introducing, 
Digesting, Absorbing, and Reinnovating foreign intellectual 
property and technology (IDAR).'' \264\
---------------------------------------------------------------------------
    \264\ ``Findings of the Investigation Into China's Acts, Polices, 
and Practices Related to Technology Transfer, Intellectual Property, 
and Innovation Under Section 301 of the Trade Act of 1974.'' Office of 
the United States Trade Representative, 22 Mar. 2018, p. 11-12, https:/
/bit.ly/369oAGM.
---------------------------------------------------------------------------
    This practice has been visible for some time, but its true 
effects are only now being felt and understood. Siemens, in 
order to tap the potentially lucrative market for high-speed 
trains in China, signed a technology transfer agreement with 
its Chinese partner; China's high-speed train companies have 
now used that technology to become a competitor to 
Siemens.\265\ German industry group BDI notes that Chinese 
companies are often rewarded and incentivized by the PRC 
government with tax exemptions for creating technology 
transfer.\266\
---------------------------------------------------------------------------
    \265\ ``The importance of China's high-speed tech transfer 
policy.'' Railway Technology, 1 Mar. 2017, https://www.railway-
technology.com/features/featurethe-importance-of-chinas-high-speed-
tech-transfer-policy-5748075/ .
    \266\ ``Partners and Systemic Competitor--How Do We Deal With 
China's State-Controlled Economy?'' Jan. 2019. Federation of German 
Industries (BDI), Jan. 2019, p. 7, https://english.bdi.eu/media/
publications/?publicationtype=Positions#/publication/news/china-
partner-and-systemic-competitor/.
---------------------------------------------------------------------------
    Spain's Gamesa, a producer of wind turbines, has 
experienced these IDAR strategies firsthand.\267\ To enter the 
Chinese market in the 2000s, Gamesa followed local content 
rules that compelled them to make 70 percent of their parts 
inside China. Gamesa-trained local suppliers then began to sell 
the same parts to Gamesa's PRC competitors, who also benefited 
from low-interest state loans and access to cheap land for 
factories and wind farms.\268\ Other sectors, including solar 
energy, have had nearly identical experiences.\269\ This type 
of manipulated or forced transfer of expertise is now simply 
seen as a cost of doing business. Gamesa remains a leader in 
the field, but companies that benefited from its technology are 
gaining ground. In 2005, not one PRC company was in the top ten 
manufacturers of wind turbines.\270\ In 2019, five of the top 
ten producers were from China, though most of their sales were 
inside the PRC.\271\ The Chinese government has continuously 
promised to end the practice of forced technology transfer, but 
has not done so.\272\
---------------------------------------------------------------------------
    \267\ Gamesa is now known as Siemens Gamesa. It merged with Siemens 
Wind Power in 2017.
    \268\ Bradsher, Keith. ``To Conquer Wind Power, China Writes the 
Rules.'' New York Times, 14 Dec. 2010.
    https://www.nytimes.com/2010/12/15/business/global/
15chinawind.html.
    \269\ Bradsher, Keith. ``China Racing Ahead of U.S. in the Drive to 
Go Solar.'' New York Times, 24 Aug. 2009, nyti.ms/2IgTcO8.
    \270\ Schmitz, Hubert and Lena, Rasmus Lema. ``The Global Green 
Economy: Competition or Cooperation Between Europe and China.'' In The 
Triple Challenge for Europe: Economic Development, Climate Change, and 
Governance, Fegerberg, Jan et al., editors, Oxford UP, 2015, p.119-41. 
Publisher: Oxford University Press Editors: Jan Fagerberg, Steffan 
Laestadius, Ben Martin. 2015.
    \271\ Stromsta, Karl-Erik. ``WoodMac: Vestas Tops Global Wind 
Turbine Supplier Rankings in 2019.'' Green Tech Media, 11 May 2020, 
https://www.greentechmedia.com/articles/read/woodmac-vestas-tops-
ranking-of-global-wind-turbine-suppliers-in-2019.
    \272\ ``Findings of the Investigation Into China's Acts, Polices, 
and Practices Related to Technology Transfer, Intellectual Property, 
and Innovation Under Section 301 of the Trade Act of 1974.'' Office of 
the United States Trade Representative, 22 Mar. 2018, p. 6-8, Office of 
the United States Trade Representative.
    https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF.
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State-Sponsored Industrial Espionage
    State-sanctioned IP theft by PRC actors continues unabated, 
in contravention of established norms against economic 
espionage and despite prior commitments by the Chinese 
government. U.S. President Barack Obama and PRC General 
Secretary Xi Jinping signed an agreement in 2015 that ``neither 
government will conduct or knowingly support cyber-enabled 
theft of intellectual property, including trade secrets or 
other confidential business information, with the intent of 
providing competitive advantages to companies or commercial 
sectors.'' \273\ However, a 2019 survey of the 23 companies on 
the CNBC Global CFO Council revealed that 20 percent of them 
had IP stolen by China during the prior year.\274\ A November 
2019 investigation by the U.S. Senate Homeland Security and 
Governmental Affairs Committee found that the U.S. government 
``has failed to stop China from acquiring knowledge and 
intellectual property from U.S. taxpayer funded researchers and 
scientists'' and lacked ``a comprehensive strategy to combat 
this threat.'' \275\
---------------------------------------------------------------------------
    \273\ ``FACT SHEET: President Xi Jinping's State Visit to the 
United States.'' White House Office of the Press Secretary, 25 Sep. 
2015, https://obamawhitehouse.archives.gov/the-press-office/2015/09/25/
fact-sheet-president-xi-jinpings-state-visit-united-states. 25 Sept. 
2015. https://bit.ly/3l65qb9.
    \274\ Rosenbaum, Eric. ``1 in 5 corporations say China has stolen 
their IP within the last year: CNBC CFO survey.'' 01 Mar. 2019, 
CNBC,com. https://cnb.cx/3p1YFtb.
    \275\ ``Threats to the U.S. Research Enterprise: China's Talent 
Recruitment Plans.'' United States Senate Committee on Homeland 
Security and Governmental Affairs Permanent Subcommittee on 
Investigations, 18 Nov. 2019, https://bit.ly/3k7TJ2l.
---------------------------------------------------------------------------
    This rampant IP theft is in large measure directed and 
supported by Chinese government entities to systematically 
acquire foreign technology in violation of clear commitments by 
the PRC government. The most well-known of these programs is 
the Thousand Talents Program, which states its goal as ``to 
follow the unified deployment of the Central Coordinating Group 
on Talent and focus on the needs of China's economic and social 
development in key industries and key areas, recruiting 50-100 
foreign experts each year over about 10 years so as to recruit 
500-1,000 high-level foreign experts.'' \276\
---------------------------------------------------------------------------
    \276\ ``Detailed Rules for the `Thousand Talents Program' High-
Level Foreign Expert Project.'' SeBeijing Institute of Technology Human 
Resources Department Webpage, translated by Etcetera Language Group. 
Communist Party of China Central Organization Department, 2011, https:/
/cset.georgetown.edu/research/detailed-rules-for-the-thousand-talents-
program-high-level-foreign-expert-project/.
---------------------------------------------------------------------------
    PRC-sponsored professional associations that openly 
announce their intent to transfer technology (often acquired in 
violation of national laws) back to China have been established 
in Europe, North America, and Australia. Take, for example, the 
Federation of Chinese Professional Associations in Europe. This 
umbrella organization for more than 60 professional guilds has 
established two ``innovation bases'' in Europe. The base in 
Belgium openly advertises that it ``symbolizes how Chinese 
companies can directly make use of Europe's technological 
resources and its strong research.'' \277\ One of the 
individual members, the China-Sweden Life Science Association, 
says its ``purpose is to promote knowledge exchange'' \278\ and 
boasts of its connection to BGI Genomics, a rising giant that 
combines big data with genetics and has been implicated in 
human rights violations in Xinjiang.\279\
---------------------------------------------------------------------------
    \277\ Tatlow, Didi Kirsten, Hinnerk Feldwisch-Drentrup and Ryan 
Fedasiuk. ``Europe: A technology transfer mosaic.'' China's Quest for 
Foreign Technology: Beyond Espionage, Hannas, William D. and Didi 
Kirsten Tatlow, editors, Routledge, 2020, https://www.routledge.com/
Chinas-Quest-for-Foreign-Technology-Beyond-Espionage/Hannas-Tatlow/p/
book/9780367473570.
    \278\ China-Sweden Life Science Association, https://bit.ly/
2UeP6sZ.
    \279\ Needham, Kirsty. ``Special Report: COVID opens new doors for 
China's gene giant.'' Reuters, 05 Aug. 2020, https://www.reuters.com/
article/us-health-coronavirus-bgi-specialreport/special-report-covid-
opens-new-doors-for-chinas-gene-giant-idUSKCN2511CE.
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    Democratic governments, including the United States, 
Australia, and New Zealand, are beginning to investigate and 
prosecute legal violations connected with these kinds of 
programs. A recent and very public case is that of Harvard 
Professor Charles Lieber, chair of the Department of Chemistry 
and Chemical Biology, who is charged by the U.S. Department of 
Justice with failing to disclose his affiliation with and 
income from the Thousand Talents Program.\280\ Turab Lookman, 
formerly a scientist at Los Alamos National Laboratory, pled 
guilty when charged with lying to a federal investigator about 
his involvement in the Thousand Talents Program.\281\
---------------------------------------------------------------------------
    \280\ ``Harvard University Professor and Two Chinese Nationals 
Charged in Three Separate China Related Cases.'' U.S. Department of 
Justice Office of Public Affairs, 28 Jan. 2020, https://
www.justice.gov/opa/pr/harvard-university-professor-and-two-chinese-
nationals-charged-three-separate-china-related.
    \281\ ``Former scientist from Los Alamos National Laboratory pleads 
guilty in federal court to making false statement about involvement 
with Chinese government technology program.'' U.S. Department of 
Justice U.S. Attorney's Office District of New Mexico, 24 Jan. 2020, 
https://www.justice.gov/usao-nm/pr/former-scientist-los-alamos-
national-laboratory-pleads-guilty-federal-court-making-false.
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    In the medical field, the U.S. National Institutes of 
Health and Federal Bureau of Investigation (FBI) are cracking 
down on research stolen by the PRC government. In one of many 
such cases, Wang Xin, a visiting medical researcher at the 
University of California at San Francisco (UCSF) and also a 
member of the People's Liberation Army, told investigators that 
he had sent research back to his lab in China and had been 
instructed to ``observe the layout of the UCSF lab and bring 
back information on how to replicate it in China.'' \282\ 
Another case involved Dr. Alan List, Thomas Sellers, and four 
researchers at Florida's H. Lee Moffitt Cancer Center & 
Research Institute. They all resigned after their involvement 
in Thousand Talents came under scrutiny.\283\ The U.S. Justice 
Department also alleges that the medical industry was recently 
targeted by two PRC hackers working with China's Ministry of 
State Security.\284\ Companies victimized by these hackers are 
located not only in the United States, but also Australia, 
Belgium, Germany, Japan, Lithuania, the Netherlands, South 
Korea, Spain, Sweden, and the United Kingdom.\285\
---------------------------------------------------------------------------
    \282\ ``Officer of China's People's Liberation Army Arrested At Los 
Angeles International Airport.'' U.S. Department of Justice U.S. 
Attorney's Office Northern District of California, 11 Jun. 2020, 
https://www.justice.gov/usao-ndca/pr/officer-china-s-people-s-
liberation-army-arrested-los-angeles-international-airport.
    \283\ Griffin, Justine. ``Moffitt Cancer Center shakeup: CEO and 
others resign over China ties.'' Tampa Bay Times, 18 Dec. 2019, https:/
/bit.ly/3mTu9zQ.
    \284\ ``Two Chinese Hackers Working with the Ministry of State 
Security Charged with Global Computer Intrusion Campaign Targeting 
Intellectual Property and Confidential Business Information, Including 
COVID-19 Research.'' U.S. Department of Justice Office of Public 
Affairs, 21 Jul. 2020, https://www.justice.gov/opa/pr/two-chinese-
hackers-working-ministry-state-security-charged-global-computer-
intrusion.
    \285\ United States, District Court for the Eastern District of 
Washington. United States of America v. Li and Dong. Docket no. 4:20-
CR-6019-SMJ, 07 Jul. 2020, https://www.justice.gov/opa/press-release/
file/1295981/download.
---------------------------------------------------------------------------
    Indeed, much of China's industrial espionage takes place 
under the guise of academia. In 2018, Belgium extradited to the 
United States an alleged Chinese spy, Xu Yanjun, who according 
to prosecutors, often presented himself as affiliated with the 
Jiangsu Science and Technology Promotion Association to get 
close to and obtain proprietary information from aviation 
experts working for U.S. companies like GE Aviation. The 
criminal complaint alleges that Mr. Xu was in close contact 
with the Nanjing University of Aeronautics and Astronomics, 
which is a regular collaborator with Commercial Aircraft 
Corporation of China (COMAC) and Aviation Industries of 
China.\286\ As alleged in the criminal complaint, ``Xu sent a 
document to an individual believed to be associated with a 
Chinese company that . . . pertain[ed] to a specific technology 
related to diesel engine variable nozzle turbocharging 
technology.'' \287\ As part of Made in China 2025 and 
extensively detailed in the 13th Five-Year Plan for the 
Development of Strategic Emerging Industries,\288\ COMAC is 
developing a new large-size airliner that would compete with 
Airbus and Boeing--the two companies that dominate the market 
for large passenger airliners--but has run into technical 
difficulties and is looking for solutions.\289\ This COMAC 
project was also the likely destination for IP that another FBI 
investigation alleges was stolen from an unnamed French 
aerospace company with an office in Suzhou, China. The FBI 
charges that Chinese intelligence used two local employees to 
hack that company to steal trade secrets and then used that 
route to make ``further computer intrusions'' into thirteen 
other American, Australian, British, and French aerospace 
companies, to obtain information about ``a turbofan engine used 
in commercial jetliners.'' \290\ Says the indictment: ``At the 
time of the intrusions, a Chinese state-owned aerospace company 
was working to develop a comparable engine for use in 
commercial aircraft manufactured in China and elsewhere.'' 
\291\
---------------------------------------------------------------------------
    \286\ United States, District Court for the Southern District of 
Ohio. United States of America v. Xu. Docket no. 1 18MJ-190, 21 Mar. 
2018, p. 5, https://bit.ly/36cPddP.
    \287\ Ibid p. 13.
    \288\ 289. ``Circular of the State Council on Issuing the National 
13th Five-Year Plan for the Development of Strategic Emerging 
Industries.'' Translated by Etcetera Language Group, Ben Murphy, 
editor, The State Council of the People's Republic of China, 09 Dec. 
2019, https://cset.georgetown.edu/research/national-13th-five-year-
plan-for-the-development-of-strategic-emerging-industries/.
    \289\ Qiu, Stella and Tim Hepher. ``China's bid to challenge Boeing 
and Airbus falters.'' Reuters, 09 Jan. 2020, https://www.reuters.com/
article/us-china-aviation-comac-insight/chinas-bid-to-challenge-boeing-
and-airbus-falters-idUSKBN1Z905N.
    \290\ ``Chinese Intelligence Officers and Their Recruited Hackers 
and Insiders Conspired to Steal Sensitive Commercial Aviation and 
Technological Data for Years.'' U.S. Department of Justice Office of 
Public Affairs, 30 Oct. 2018, https://www.justice.gov/opa/pr/chinese-
intelligence-officers-and-their-recruited-hackers-and-insiders-
conspired-steal.
    \291\ United States, District Court for the Eastern District of 
Washington. United States of America v. Li and Dong. Docket no. 4:20-
CR-6019-SMJ, 07 Jul. 2020, https://bit.ly/32guJjp.
---------------------------------------------------------------------------
    Despite this shared grave threat and the need to take 
immediate action to protect highly advanced and valuable IP 
from what appears to be a coordinated Chinese government plan 
to steal it, both Boeing and Airbus remain far more focused on 
the short-term challenge of competition with each other, 
including by lodging WTO complaints. Some, however, are 
starting to highlight the emerging threat. As EU High 
Representative for Foreign Affairs and Security Policy Josep 
Borrell noted, ``while the U.S. is punishing Airbus and we 
prepare measures on Boeing, China is fully subsidising wide-
body aircrafts which they will sell everywhere in the world, 
including to our own private companies.'' \292\
---------------------------------------------------------------------------
    \292\ Borrell, Josep Fontelles. ``China, the United States and 
us.'' European External Action Service, 31 Jul. 2020, https://
eeas.europa.eu/headquarters/headquarters-homepage/83644/china-united-
states-and-us--en.
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    There are many further examples of the Chinese state either 
sanctioning IP theft outright or demonstrating complicity 
through gross negligence or failure to take action. For every 
company that decides to publicize China's aggressive theft, 
dozens of others remain quiet to safeguard their market access 
and avoid reprisals by the Chinese government.
State Subsidies and Other State Support
    The global reach of China's state-owned and ostensibly 
private firms appears to be underpinned by a vast array of 
declared and undeclared subsidies and other support designed to 
further the industrial objectives of Made in China 2025 and 
other economic and industrial policies. The PRC government, at 
the national and subnational levels, grants special privileges 
or statuses to Chinese firms or provides less transparent (but 
no less effective and market distorting) signaling of official 
state favor in designated strategic sectors. Enterprises 
receive these preferences in the form of favorable loans, tax 
exemptions, and preferential land access, among others. 
Further, as Germany's BDI notes, ``politically mandated large-
scale mergers create national champions'' that can out-muscle 
Western firms operating under normal market conditions.\293\ In 
July 2020, the Central Comprehensively Deepening Reforms 
Commission chaired by General Secretary Xi approved a three-
year plan to further augment the support given to SOEs.\294\
---------------------------------------------------------------------------
    \293\ Partners and Systemic Competitor--How Do We Deal with China's 
State-Controlled Economy? The Federation of German Industries (BDI), 
Jan. 2019, p. 3, https://bit.ly/2TYdiQ6.
    \294\ Tang, Frank. ``China approves plan to boost prominence of 
state firms, despite complaints from trade partners.'' South China 
Morning Post, 08 Jul. 2020, https://bit.ly/2IczrHP.
---------------------------------------------------------------------------
    State subsidization enables PRC companies to sell goods 
below market prices, allowing them to outbid and crowd out 
market-based competitors and thereby pursue global dominance of 
key sectors. Such government support distorts the global market 
economy by undermining longstanding and generally accepted 
market-based principles of fair competition, leading to 
barriers to entry and forced exit from the market for foreign 
or private firms, not only in the PRC but in markets around the 
world. Further, such subsidies create government-sponsored or 
supported de facto monopolies, cartels, and other anti-market 
arrangements in key sectors, limiting or removing opportunities 
for other firms.
    Subsidies are concentrated in specific areas identified as 
``Major Special Projects'' in the State Council's 2006-2020 
National Medium- and Long-Term Program for Science and 
Technology Development. These align with the ten Made in China 
2025 sectors mentioned earlier and include: core electronic 
devices; high-end generic chips and basic software; super 
large-scale integrated circuit manufacturing technology and 
techniques; next generation broadband mobile communication; 
machine tools and basic manufacturing technology; large oil-gas 
fields and coal-bed methane; high temperature gas-coolant 
reactor nuclear power stations; major new drugs; large 
passenger aircraft; and high resolution earth observation 
systems, among others.\295\ Areas termed ``Frontier 
Technologies,'' like facial and gait identification, 
information technology, advanced materials, and advanced energy 
technology are also heavily promoted.\296\
---------------------------------------------------------------------------
    \295\ The National Medium- and Long-Term Program for Science and 
Technology Development (2006-2020): An Outline. The State Council of 
the People's Republic of China, https://bit.ly/2I9NwFN.
    \296\ Ibid.
---------------------------------------------------------------------------
    The PRC's push into artificial intelligence (AI) and 
technology-based security represents one example illustrative 
of its subsidization practices. PRC developers, including 
facial recognition start-up SenseTime, are backed by access to 
government data to help them build their product,\297\ large 
purchases of surveillance software for use in China,\298\ and 
what China Daily calls ``special programs for top AI companies 
and startups that include perks like free rent, subsidies for 
hiring locals and housing benefits.'' \299\ Partnerships with 
government agencies, like SenseTime's project with the People's 
Bank of China to integrate AI and digital currencies, further 
help companies develop the products they need to become key 
players on the international market.\300\ Companies are then 
able to further boost their resources by raising capital in 
foreign markets. After two initial funding rounds in 2017 and 
2018 that drew most of their support from PRC entities 
including Alibaba and state-backed Sailing Capital,\301\ 
SenseTime was able to raise $620 million in 2018 from Western 
investors, including U.S. firms like Fidelity International and 
Silver Lake.\302\ Thus, enterprises, with credit, resources, 
and the backing of the Chinese government, are positioned to 
exploit foreign capital markets established on presumptions of 
free markets.\303\
---------------------------------------------------------------------------
    \297\ Bergen, Mark and David Ramli. ``China's Plan for World 
Domination in AI Isn't So Crazy After All.'' Bloomberg, 14 Aug. 2017, 
https://www.bloomberg.com/news/articles/2017-08-14/china-s-plan-for-
world-domination-in-ai-isn-t-so-crazy-after-all.
    \298\ Mozur, Paul. ``One Month, 500,000 Face Scans: How China Is 
Using A.I. to Profile a Minority.'' New York Times, 14 Apr. 2019, 
https://nyti.ms/366BEwE.
    \299\ He, Wei. ``A budding highland for innovations.'' China Daily, 
10 Oct. 2018, https://bit.ly/3mYzPsh.
    \300\ Dai, Sarah. ``National AI champion SenseTime enters pact with 
China's central bank amid digital currency trials.'' South China 
Morning Post, 27 Apr. 2020, https://bit.ly/369RmqR.
    \301\ Jiang, Sijia and Julie Zhu. ``China's SenseTime valued at 
$4.5 billion after Alibaba-led funding: sources.'' Reuters, 08 Apr. 
2018, https://reut.rs/3n3chCy.
    \302\ Ibid.
    \303\ Ryan, Fergus, Danielle Cave, and Vicky Xiuzhong Xu. Mapping 
more of China's technology giants. No. 24/2019, Australian Strategic 
Policy Institute, 28 Nov. 2019, p. 17, https://www.aspi.org.au/report/
mapping-more-chinas-tech-giants.
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Restricted Market Access
    Both the United States and Europe continue to experience 
unfair market access restrictions in spite of years of promises 
by the Chinese government to open and liberalize, per its 
commitments under its WTO accession in 2001. China continues to 
create barriers, both formal and informal, to foreign 
competition and, when pressed, has only grudgingly removed 
minimal barriers to entry in recent years. These small measures 
of public action deflect inquiry into and provide cover for 
ignoring more extensive and pervasive market barriers. As the 
European Chamber of Commerce in China reports:
    ``In 2019, 41% of companies reported at least some market 
opening. However, most advances were related to the fixing of 
minor irritants, such as improved bureaucratic procedures, 
rather than the deep and substantial reforms needed to create a 
truly open, fair and competitive playing field. Almost half of 
respondents continue to face market access barriers.'' \304\
---------------------------------------------------------------------------
    \304\ European Business In China: Business Confidence Survey 2020. 
European Union Chamber of Commerce in China, Jun. 2020, https://bit.ly/
3mUTidm.
---------------------------------------------------------------------------
    Indeed, U.S. and European companies are very familiar with 
these challenges. Although the number of restricted sectors on 
China's National Negative List has decreased over time, 69 
percent of U.S. companies operating in the PRC in 2019 told the 
American Chamber of Commerce in China that a ``lack of market 
access [inhibited their] operations in China.'' \305\ 
Similarly, 44 percent of EU companies operating in China 
reported some kind of restricted access to the market, whether 
direct or indirect.\306\ For these companies, increased market 
access is cited as the most important deliverable out of the 
potential EU-China Comprehensive Agreement on Investment, 
followed closely by a push for non-discrimination between 
Chinese SOEs and other companies.\307\
---------------------------------------------------------------------------
    \305\ ``Waishang touzi zhun ru tebie guanli cuoshi (fumian qingdan) 
(2020 nian)'' [Special Administrative Measures for Foreign Investment 
Access (Negative List) (Year 2020)], The State Council of the People's 
Republic of China, 23 Jun. 2020, https://bit.ly/3n2AmtA.
    \306\ European Business In China: Business Confidence Survey 2020. 
European Union Chamber of Commerce in China, Jun. 2020, https://bit.ly/
3mUTidm.
    \307\ Ibid.
---------------------------------------------------------------------------
    Instead of committing to opening its market to foreign 
competition in a non-discriminatory manner, as envisaged by 
long-standing GATT principles that would foster a healthy 
market environment under which the nation's citizens can 
benefit from innovation and competition, the PRC government 
instead carefully stages any openings so as to benefit its own 
favored companies over foreign competition. China will 
frequently only start to open up certain sectors after domestic 
firms have already secured a dominant market position. As the 
European Chamber noted, ``Financial services opening, for 
example, only took place after the entire market was saturated 
with Chinese SOEs, leaving only niche, albeit profitable, roles 
to the few European players that were able to obtain the 
necessary operating licenses.'' \308\
---------------------------------------------------------------------------
    \308\ Ibid.
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Trade Retaliation
    After World War II, the United States, Europe, and other 
nations established more rigorous and predictable rules to cope 
with the unilateral trade protectionism and retaliatory 
practices that contributed to the Great Depression. A work in 
progress even today, the procedures established through GATT 
and the WTO have provided a formal process for determining 
whether a country has violated or ignored its trade 
obligations. This system allows, under appropriate 
circumstances, WTO member countries to withdraw benefits from 
an offending trading partner that has been found to have 
violated agreed upon trading rules and caused economic harm. 
While this process can often be slow and cumbersome, its core 
objective is to consider trade disputes on their merits and 
resolve legitimate differences on the basis of free market 
principles and not on the basis of unrelated political 
objectives.
    CCP leadership, however, has blurred the lines between 
politics and economics, increasingly operating outside this 
system by taking unilateral and punitive trade actions to 
punish countries economically for espousing positions contrary 
to CCP political orthodoxy and objectives. The impact of these 
practices extend beyond economic harm. The PRC is interfering 
in the sovereign affairs and decisions of free and democratic 
nations and, in effect, seeking to turn them into co-
conspirators by coercing from them their acceptance of CCP 
political positions.
    One early such instance was the PRC's imposition of harsh 
import controls on Norway's second largest export--salmon--
following the awarding of the Nobel Peace Prize to Chinese 
democracy advocate Liu Xiaobo.\309\ Norwegian academic Ivar 
Kolstad recently found that Norway lost between US$780 million 
and $1.3 billion in direct total exports to China in the 
following three years, and subsequently aligned its votes on 
human rights issues in the UN more closely with China's.\310\ 
Since then, China has imposed tighter restrictions on the 
import of Philippine bananas amidst a dispute in the South 
China Sea in 2012, and blocked canola (rapeseed),\311\ 
soybean,\312\ and pork imports after Canada arrested Huawei 
executive Meng Wanzhou.\313\ Most recently, the PRC followed 
through on threats to punish Australia for demanding an 
independent international investigation into the origins of the 
COVID-19 pandemic. China conjured up dubious technical excuses 
to place import duties of 80.5 percent on Australian 
barley,\314\ suspended some beef imports,\315\ and opened an 
investigation into Australian wine imports.\316\
---------------------------------------------------------------------------
    \309\ Lewis, Mark. ``Norway's salmon rot as China takes revenge for 
dissident's Nobel Prize.'' The Independent, 06 Oct. 2011, https://
www.independent.co.uk/news/world/europe/norways-salmon-rot-as-china-
takes-revenge-for-dissidents-nobel-prize-2366167.html.
    \310\ Kolstad, Ivar. ``Too big to fault? Effects of the 2010 Nobel 
Peace Prize on Norwegian exports to China and foreign policy.'' 
International Political Science Review, vol. 41(2), 10 Jan. 2020, p. 
207-223, https://www.cmi.no/publications/6354-too-big-to-fault.
    \311\ Nickel, Rod, and Hallie Gu. ``'Like gold': Canadian canola 
prices spike as shippers find back door to China.'' Reuters, 09 Aug. 
2020, https://reut.rs/3590jkQ. For more, see World Trade Organization. 
China--Measures Concerning the Importation of Canola Seed from Canada. 
DS589, 09 Sep. 2019, https://bit.ly/36f4RFL.
    \312\ Powell, Naomi. ``Canadian soybean exports to China plunge 95% 
after hitting record high, as diplomatic dispute continues.'' Financial 
Post, 17 May 2019, https://bit.ly/2GzD6Ph.
    \313\ Chase, Steven. ``China says lifting of ban on meat imports 
not a sign of better relations with Canada.'' Globe and Mail, 07 Nov. 
2019, https://tgam.ca/35aaRAd.
    \314\ Packham, Colin and Jonathan Barrett. ``Australia appeals 
China's barley import tariff as trade tensions worsen.'' Reuters, 18 
Aug. 2020, https://reut.rs/2I9j9PZ.
    \315\ Foley, Mike and Eryk Bagshaw. ``China suspends Australian 
beef imports from four abattoirs.'' Sydney Morning Herald, 12 May 2020, 
https://www.smh.com.au/politics/federal/china-suspends-australian-beef-
imports-from-four-abattoirs-20200512-p54s4k.html.
    \316\ ``China launches second Australian wine probe amid 
tensions.'' BBC, 31 Aug. 2020, https://www.bbc.com/news/world-
australia-53970006.
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    Three trends in trade retaliation by the PRC should alarm 
both U.S. and EU policy makers. First, China's perceived 
successes in coercing smaller nations has given it confidence 
to target larger economies like Canada and Australia. These 
examples must serve as a warning to the United States, the 
United Kingdom, and larger EU economies, especially given the 
PRC's likely use of these tools if both sides of the Atlantic 
increase their focus on its violations of human rights and 
international law, or take stronger actions to confront its 
unfair trade and economic practices.
    Second, China has proven adept at limiting its retaliation 
to sectors and products that harm the other country but not 
itself. For example, in Australia's case, China has not 
targeted iron ore--the Australian export that is key to 
building the PRC's infrastructure and economy. More than 60 
percent of China's iron ore comes from Australia. China has not 
targeted its sizeable liquefied natural gas imports from 
Australia,\317\ but has recently banned some imports of 
Australian coal, one of the commodities for which it is less 
reliant.\318\ Likewise in the 2012 dispute with the 
Philippines, China did not target electronic products and metal 
components, the largest category of Philippine exports to 
China.\319\ In the 2010 Norwegian case, China did not retaliate 
against the Norwegian exports it needed most--machinery and 
electrical equipment or raw materials.\320\
---------------------------------------------------------------------------
    \317\ Tan, Huileng. ``China may punish Australia with trade curbs--
but it can't stop buying iron ore from Down Under.'' CNBC, 11 Jun. 
2020, https://cnb.cx/3k5bf7r.
    \318\ Tan, Su-Lin. ``China's ban on Australian coal could be 
`indefinite' amid heightened political tensions.'' South China Morning 
Post, 13 Oct. 2020, https://bit.ly/3mWAniz.
    \319\ Foreign Trade Statistics of the Philippines: 2012. Philippine 
Statistics Authority, 07 Nov. 2013, https://bit.ly/32wWQef.
    \320\ ``Product Exports by Norway to China 2010.'' The World Bank 
World Integrated Trade Solution, https://bit.ly/3n4NTAC.
---------------------------------------------------------------------------
    Finally, in a novel development, China is exploring the use 
of export restrictions as punishments. In response to the 
recent U.S. decision to sell Patriot missiles to Taiwan, China 
announced that it would cut off Lockheed Martin's access to 
China's rare earth minerals, contrary to its WTO 
commitments.\321\ Japan has also experienced a PRC government-
directed rare earths cut-off.\322\ During the COVID-19 crisis, 
export controls imposed by the PRC on medical supplies led to 
shortages of personal protective equipment around the 
world.\323\ Such tactics may come into greater use as China 
considers passing legislation on broader export restrictions. 
Current proposals raise questions of consistency with the WTO 
and GATT. Moreover, this trend may force governments and 
companies alike to reconsider current dependency on an 
unpredictable PRC market for the commodities upon which stable 
supply chains depend.\324\ If the PRC's behavior continues, the 
United States and Europe must seriously consider taking 
measures to ensure that the supply chains for advanced 
manufacturing and global health commodities, including for 
active pharmacological ingredients and personal protective 
equipment, is diverse enough to deny China's ability to 
manipulate markets.
---------------------------------------------------------------------------
    \321\ Liu, Xuanzun, Chu, Daye and Tu, Lei ``Lockheed Martin faces 
China's sanctions over Taiwan deal.'' Global Times, 14 Jul. 2020, 
http://www.globaltimes.cn/content/1194528.shtml.
    \322\ Harrell, Peter, Elizabeth Rosenberg and Edoardo Saravalle. 
China's Use of Coercive Economic Measures. Center for a New American 
Security Energy, Economics, and Security Program, 11 Jun. 2018, p. 42, 
https://bit.ly/3mWAniz.
    \323\ O'Keeffe, Kate, Liza Lin, and Eva Xiao. ``China's Export 
Restrictions Strand Medical Goods U.S. Needs to Fight Coronavirus, 
State Department Says.'' Wall Street Journal, 16 Apr. 2020, https://
www.wsj.com/articles/chinas-export-restrictions-strand-medical-goods-u-
s-needs-to-fight-coronavirus-state-department-says-11587031203.
    \324\ Zhang, Jing, Tamer A. Soliman and Yoshihide Ito. ``Key 
Changes in the Jul. 3, 2020, Draft of China's Export Control Law.'' 
Mayer Brown, 09 July 2020, https://bit.ly/32mzwjk.
---------------------------------------------------------------------------
Conclusion
    While some companies only experience some of these 
detrimental PRC practices, some like U.S. semiconductor 
manufacturer Micron have run the full gamut of trade abuses. 
Made in China 2025 details the PRC's push to make most of 
China's semiconductors in-country.\325\ In pursuit of that 
goal, the PRC founded and heavily subsidized Fujian Jinhua 
Integrated Circuit.\326\ Wired Magazine explains that the head 
of Micron's Taiwan subsidiary then ``quit and moved to UMC 
[United Microelectronics Corporation], set up a $700 million 
joint agreement with Jinhua (owned by the Chinese government), 
and then hired two more MMT employees, who starting in roughly 
2016 began to bring over Micron trade secrets.'' \327\ The U.S. 
indictment of both companies and the individuals in question 
highlighted that prior to these events, ``the PRC did not 
possess DRAM technology,'' a cutting-edge device used in memory 
storage.\328\
---------------------------------------------------------------------------
    \325\ Ye, Josh. ``China to fall short of Made in China 2025 
localisation target for integrated circuits, says US research firm,'' 
South China Morning Post, 22 May 2020, https://bit.ly/357tl4x.
    \326\ U. S. District Court, Northern District of California, U.S. 
Department of Justice. United States v. United Microelectronics 
Corporation, et al.: Indictment. 27 Sep. 2018, https://www.justice.gov/
usao-ndca/press-release/file/1107341/download.
    \327\ Rogers, Adam. ``US Accuses Chinese Company of Stealing Micron 
Trade Secrets.'' Wired Magazine, 01 Nov. 2018, https://bit.ly/32hvicv.
    \328\ ``PRC State-Owned Company, Taiwan Company, And Three 
Individuals Charged With Economic Espionage.'' U.S. Department of 
Justice--U.S. Attorney's Office, Northern District of California, 01 
Nov. 2018, https://www.justice.gov/usao-ndca/pr/prc-state-owned-
company-taiwan-company-and-three-individuals-charged-economic-
espionage.
---------------------------------------------------------------------------
    The PRC's continued use of anti-competitive regulations, 
policies, and practices, if allowed to progress unchecked, will 
have detrimental effects not only for transatlantic economies, 
but for the global international trading system and free market 
economies. Despite U.S. and EU efforts to push for changes 
through good faith trade negotiations with the PRC, little 
progress, even after repeated promises by the PRC, has been 
forthcoming.\329\ Despite the continued complaints from foreign 
investors and companies, China is betting that foreign 
companies will continue to see opportunities in China and are 
therefore willing to contend with persistent trade barriers and 
government discrimination.
---------------------------------------------------------------------------
    \329\ ``Economic And Trade Agreement Between The United States of 
America and The People's Republic of China--Fact Sheet.'' U.S. Trade 
Representative, 15 Jan. 2020, https://bit.ly/2I9OJgj. And Timsit, 
Annabelle. ``Why the EU-China economic agreement seems to be going 
nowhere.'' Quartz, 02 Oct. 2020, https://qz.com/1906588/why-the-eu-
china-economic-agreement-seems-to-be-going-nowhere/.
---------------------------------------------------------------------------
    Both sides of the Atlantic, inside or outside of the 
European Union, should work together to present an increasingly 
united front against the practices highlighted above. The 
decision by the United States, Japan, and Taiwan to join the 
EU's WTO complaint against the PRC for violations related to 
forced technology transfer is a good place to start.\330\ The 
European Union, Japan, and the United States have also worked 
together to build a new trilateral proposal to the WTO that 
would put further strictures on state subsidies.\331\ 
Presenting a united front also means fixing some current issues 
in transatlantic economic relationship--like the continued 
sparring between Boeing and Airbus--so the United States and 
Europe can redirect our attention to the larger challenge. 
Finally, in light of the increased use of trade retaliation, 
the United States and Europe should remain in close discussions 
on re-evaluating areas of supply chain reliance on China and 
how to support friends and allies subjected to such coercion. 
These are just a few of the initial steps both sides of the 
Atlantic can start taking to ensure the international trading 
system does not regress into a might-makes-right paradigm.
---------------------------------------------------------------------------
    \330\ World Trade Organization. China--Certain Measures on the 
Transfer of Technology. DS549, 01 Jun. 2018, https://bit.ly/3k6jjVs.
    \331\ Wu, Wendy. ``US, EU and Japan take aim at China with proposed 
WTO rules targeting state subsidies.'' South China Morning Post, 15 
Jan. 2020, https://bit.ly/38qKYxY.


                        CHAPTER FOUR--TECHNOLOGY

                              ----------                              

        [China] is a key global actor and leading technological 
        power. Its increasing presence in the world, including 
        in Europe, should be accompanied by greater 
        responsibilities for upholding the rules-based 
        international order, as well as greater reciprocity, 
        non-discrimination, and openness of its system.


        --EU-China: A Strategic Outlook (2019)

Introduction
    The nature of modern and emerging technologies necessarily 
expands beyond national borders. The critical civilian and 
military technologies of the coming decades will require 
hardware, software, and supply chains that span across country 
borders and company lines. Countries and companies that are 
able to capitalize upon, set standards for, and manufacture 
these technologies will have an unparalleled advantage in 
shaping the structures of the world's cities, military 
operations, and even individual behavior of the future.
    Due to its sheer size, the People's Republic of China (PRC) 
already has an inherent edge in developing these technologies. 
The PRC is the second largest economy by nominal gross domestic 
product (GDP) (first by purchasing power parity), and as of 
2019, has the world's largest labor force--although it is not 
as large as many may assume.\332\ In 2020, China is predicted 
to surpass the United States as the world's biggest consumer 
market.\333\ Moreover, the Chinese Communist Party (CCP) has 
made it a priority to invest in, shape the rules for, and 
dominate critical technology sectors largely by employing a 
vast suite of ``mercantilist'' and unfair policies favoring PRC 
firms at the expense of foreign companies. At the 19th Party 
Congress, General Secretary Xi called upon China to ``aim for 
the frontiers of science and technology, strengthen basic 
research, and make major breakthroughs in pioneering basic 
research and groundbreaking and original innovations . . . [as 
well as] strengthen basic research in applied sciences, launch 
major national science and technology projects, and prioritize 
innovation in key generic technologies, cutting-edge frontier 
technologies, modern engineering technologies, and disruptive 
technologies.'' \334\ The CCP's goal to become a technological 
and manufacturing superpower and achieve technological 
superiority, while weakening other nations' technological 
competitiveness, is critical to advancing the CCP's political 
goals of shaping the international landscape into one that is 
safe for an authoritarian China to grow and dominate.
---------------------------------------------------------------------------
    \332\ ``Labor Force, Total--China.'' The World Bank, 21 Jun. 2020, 
https://bit.ly/2JJ5T5k.
    \333\ Sun, Nikki. ``China to Surpass US as World's Biggest Consumer 
Market This Year.'' Nikkei Asia, 24 Jan. 2019, s.nikkei.com/3k5bShj.
    \334\ Xi, Jinping. ``Secure a Decisive Victory in Building a 
Moderately Prosperous Society in All Respects and Strive for the Great 
Success of Socialism with Chinese Characteristics for a New Era.'' 19th 
National Congress of the Communist Party of China, Xinhua, 18 Oct. 
2017, https://bit.ly/2U44FDD.
---------------------------------------------------------------------------
    While the United States and EU member states, along with 
Japan, South Korea, and Taiwan, remain important leaders in 
technological development, they will find it increasingly 
difficult to compete with the PRC's massive market, systemic 
``innovation mercantilist'' government focus, and resources for 
emerging technology.\335\ Says Stanford University's Anja 
Manuel, ``[Chinese] initiatives . . . aim to end the 
technological lead of the west and its allies by dominating 
market share, controlling international standards, and 
hollowing out industrial capacity. It is time for like-minded 
allies to unite.'' \336\ If the United States and Europe are 
not aligned, then there is a risk of a `tri-polar world'--with 
the United States, China, and Europe all acting as `technology 
leaders', but with Europe as the weakest pole and the United 
States struggling to keep up with the PRC.\337\ If the United 
States and Europe work together, however, governments and 
businesses alike will be in a much stronger position to 
properly manage the PRC as a systemic rival and shape the 
future of technological development, including the 
international regulatory environment surrounding the use of 
emerging technology.
---------------------------------------------------------------------------
    \335\ Atkinson, Rob. ``How China's mercantilist policies have 
undermined global innovation in the telecom equipment industry,'' ITIF, 
22 Jun. 2020, https://bit.ly/369r73K
    \336\ Manuel, Anja. ``US, Europe, and UK must unite to keep Chinese 
tech at bay,'' Financial Times, 05 Oct. 2020, https://www.ft.com/
content/bc7abf86-f13e-4025-a120-004361aef21a.
    \337\ Zillner, Michael. ``Why is Europe Lagging Behind in the Tech 
Race?'' European Generation, 14 Feb. 2019, https://
www.europeangeneration.eu/single-post/2019/02/14/Why-is-Europe-Lagging-
Behind-in-the-Tech-Race. And staff discussion with ex-U.S. government 
official.
---------------------------------------------------------------------------
The China Challenge
    The CCP has made technological superiority a priority in 
its developmental and political goals. At the 19th Party 
Congress in 2017, Xi Jinping congratulated the Party for 
``propelling China into a leading position in terms of economic 
and technological strength'' and declared that by 2035, China 
will become a ``global leader in innovation.'' \338\ The Party 
is mobilizing all aspects of national power for science and 
technology--from labs, to universities, to private companies, 
to the military--in support of these national goals. At the 
July 2020 Symposium of Entrepreneurs, Xi noted that 
``enterprise marketing knows no borders [but] entrepreneurs 
have a motherland'' and that ``patriotism is the glorious 
tradition of [China's] outstanding entrepreneurs in modern 
times.'' \339\ The CCP's military-civilian fusion strategy, 
which effectively eliminates the barriers between China's 
civilian research and commercial sectors and its military and 
defense industrial sectors by giving the CCP legal authority to 
co-opt civilian manufacturing for defense purposes, only 
further demonstrates how the CCP is mobilizing both the 
civilian and defense sectors to support Party goals.\340\
---------------------------------------------------------------------------
    \338\ Xi, Jinping. ``Secure a Decisive Victory in Building a 
Moderately Prosperous Society in All Respects and Strive for the Great 
Success of Socialism with Chinese Characteristics for a New Era.'' 19th 
National Congress of the Communist Party of China, Xinhua, 18 Oct. 
2017, https://bit.ly/2U44FDD.
    \339\ Xi, Jinping. ``Xi Jinping: Speech at the Symposium of 
Entrepreneurs.'' Teller Report, 21 Jul. 2020, https://bit.ly/38sdyzc.
    \340\ ``Military-Civil Fusion and the People's Republic of China.'' 
U.S. Department of State Bureau of International Security and 
Nonproliferation, 28 May 2020, https://bit.ly/32r90W7.
---------------------------------------------------------------------------
    The CCP is not only dedicating mass amounts of political 
will to advance this goal, but is investing heavily in 
infrastructure, research and development (R&D), and industrial 
subsidies needed to achieve it. For example, in 2020, the 
National People's Congress unveiled another five-year plan 
under which municipalities, provinces, and companies will 
invest close to $2.4 trillion in building ``new 
infrastructure'' through artificial intelligence (AI), data 
centers, 5G, the Industrial Internet, and more.\341\
---------------------------------------------------------------------------
    \341\ Lin, Liza. ``China's Trillion-Dollar Campaign Fuels a Tech 
Race With the U.S.'' Wall Street Journal, 11 Jun. 2020, https://
www.wsj.com/articles/chinas-trillion-dollar-campaign-fuels-a-tech-race-
with-the-u-s-11591892854?mod=hp--listb--pos3.
---------------------------------------------------------------------------
    Yet despite this massive national effort to become a 
technological superpower, Chinese development is still highly 
reliant upon global trade, acquiring both innovation and 
investment from abroad.\342\ More than half of the suppliers to 
China's tech-intensive sectors are foreign-based.\343\ As the 
strategic competition between the United States and China 
intensifies, the PRC has pushed to become more self-sufficient 
in technologies for which it currently relies upon foreign 
companies. For example, to avoid U.S. sanctions, Huawei has 
pledged to invest $1 billion to attract developers to an open-
source replacement for Google Mobile Services.\344\ Another 
example is the $29 billion semiconductor fund Chinese officials 
announced in October 2019, designed to fund the research 
necessary to reduce its reliance on U.S. semiconductors.\345\
---------------------------------------------------------------------------
    \342\ ``Chapter 4--China.'' S&T Strategies of Six Countries: 
Implications for the United States, National Academic Press, 21 Jan. 
2010, p. 22-34, https://www.nap.edu/read/12920/chapter/6#23.
    \343\ Wernau, Julie. ``Forced Tech Transfers Are on the Rise in 
China, European Firms Say.'' Wall Street Journal, 20 May 2019, https://
www.wsj.com/articles/forced-tech-transfers-are-on-the-rise-in-china-
european-firms-say-11558344240.
    \344\ Cheng Ting-Fang and Lauly Li. ``Huawei to replace Google on 
smartphones as it faces US threat.'' Nikkei Asia Review, 10 Sep. 2020, 
https://s.nikkei.com/2Uc94o5.
    \345\ Segal, Adam. ``The Coming Tech Cold War With China Beijing Is 
Already Countering Washington's Policy.'' Foreign Affairs, 09 Sep. 
2020, https://fam.ag/32kC01G.
---------------------------------------------------------------------------
    The CCP has also been particularly active in setting 
standards and regulations for the use of these technologies and 
the data that accompanies them. China is ``attempting to 
develop national technology and industry standards, which are 
intended to promote home-grown technologies that can serve as 
regional and global standards.'' \346\ This year, the CCP is 
expected to release China Standards 2035, a 15-year ``standards 
plan'' that includes goals such as increasing the number of 
Chinese standards adopted as international standards and 
influencing international standards setting bodies.\347\ The 
plan lays out standards for new technologies that currently 
lack adopted- or agreed-upon international standards, such as 
5G internet, the Internet of Things, and AI.
---------------------------------------------------------------------------
    \346\ ``Chapter 4--China.'' S&T Strategies of Six Countries: 
Implications for the United States, National Academic Press, 21 Jan. 
2010, p. 22-34, https://www.nap.edu/read/12920/chapter/6#23.
    \347\ Koty, Alexander Chipman. ``What is the China Standards 2035 
Plan and How Will it Impact Emerging Industries?'' China Briefing, 
Dezan Shira & Associates, 02 Jul. 2020, https://www.china-briefing.com/
news/what-is-china-standards-2035-plan-how-will-it-impact-emerging-
technologies-what-is-link-made-in-china-2025-goals/.
---------------------------------------------------------------------------
    The CCP's political will, investments, and regulatory 
support towards technology development and innovation are 
concerning not only because they put the PRC on track to 
outpace the United States and Europe, but because such 
technologies can be utilized by the Party and the government 
when necessary. Despite repeated assurances by the Chinese 
government that its technology companies are separate from the 
state, the CCP has directed ``approaches for the Party to 
improve its influence over the private sector, including 
strengthening ideological and political guidance for 
entrepreneurs . . . to be `politically sensible' '' that the 
Party can rely on at ``critical moments.'' \348\ The decree 
also calls upon the Party to strengthen control over the 
private sector since the private economy is ``an important part 
of the development of socialism with Chinese characteristics.'' 
\349\ In other words, to the CCP, all technological innovation, 
production, and creations by Chinese nationals or creations in 
China belong to the CCP and can be utilized to achieve 
(sometimes predatory and nefarious) CCP goals.
---------------------------------------------------------------------------
    \348\ Li, Jane. ``Beijing is publicizing its philosophy of how tech 
firms like TikTok must aid China's rise.'' Quartz, 16 Sep. 2020, 
https://qz.com/1904063/china-issues-decree-to-enhance- control-of-
firms-like-bytedance/.
    \349\ ``Zhonggong zhongyang bangong ting yinfa ``guanyu jiaqiang 
xin shidai minying jingji tongzhan gongzuo de yijian.'' The State 
Council of the People's Republic of China, 15 Sep. 2020, https://
bit.ly/2IbEUOW. Staff translation.
---------------------------------------------------------------------------
Mapping the Emerging Technology and Digital Landscapes in Europe and 
        the United States
    Across the continent, Europe has been particularly strong 
in technology sectors such as aerospace, machinery, 
telecommunications equipment, and pharmaceuticals and 
biotechnology.\350\ Within Europe, certain countries have 
carved out competitive advantages in several niche technology 
markets. For example, Finland's great strides in autonomous 
transport technology and application development have allowed 
Finnish technology companies to constitute more than 50 percent 
of the country's total exports.\351\ Yet as a whole, Europe 
still has room for improvement on several technologies related 
to information technology (IT) including AI and mass data 
storage infrastructure.
---------------------------------------------------------------------------
    \350\ The State of European Tech 2017, Atomico, https://bit.ly/
2U0TN9v. And ``Europe first: the EU's digital industrialisation 
challenge.'' Financial Times, https://www.ft.com/ content/73213036-
1dd8-11ea-97df-cc63de1d73f4.
    \351\ ``Technology Finland.'' Technology Industries, 16 Apr. 2020, 
https://bit.ly/3k3EjMn.
---------------------------------------------------------------------------
    Meanwhile, the United States still leads the world in 
technology development and global R&D. Holding this leadership 
position is critical to maintaining the U.S. economic strength 
and military advantage upon which many countries around the 
world rely. The U.S. technology sector accounts for $1.9 
trillion--or approximately 10 percent of the total U.S. 
economy. It is the third largest sector in the U.S. economy, 
behind more traditional manufacturing and government.\352\ In 
defense, the U.S. military relies heavily on new and emerging 
technologies to maintain readiness, seek operational advantages 
against potential adversaries, and modernize its fighting force 
to deter aggression in new domains, such as cyber and 
space.\353\
---------------------------------------------------------------------------
    \352\ CompTIA. ``US Tech Employment Surpasses 12 Million Workers, 
Accounts for 10% of Nation's Economy.'' CISION PR Newswire, 21 Apr. 
2020, https://prn.to/3p2fYdH.
    \353\ Science and Technology Strategy. U.S. Air Force, Apr. 2019, 
https://bit.ly/3nkgLoT. And McGrath, Beth, Joe Mariani and Akash Keyal. 
``Military technology advances enable ``ready anywhere'' mentality.'' 
Deloitte Insights, Deloitte, 02 Aug. 2019, https://bit.ly/32s5FG1; and 
Flournoy, Michele and Gabrielle Chefitz. Sharpening the U.S. Military's 
Edge: Critical Steps for the Next Administration. Center for a New 
American Security, 13 Jul. 2020, https://bit.ly/35fnYAm.
---------------------------------------------------------------------------
    Yet the PRC is making inroads in areas where Europe has 
less technological development capability and investing heavily 
to overtake the United States as the world's technology leader. 
As such, the United States and Europe face individual as well 
as joint challenges from the PRC regarding technology. Some of 
these individual challenges are structural. For example, Europe 
will struggle to compete because it lacks a single market for 
many goods, including digital goods. While the United States 
does have a single market, its fragmented regulatory structure 
makes it difficult to set standards for emerging technology. 
Other individual challenges stem from specific policies and 
ideologies, for example differing American and European views 
on how to regulate data collection, storage, and usage and how 
to approach antitrust for innovation-based industries.
    Despite these differences, the United States and Europe 
have a lot of shared concerns when it comes to PRC 
technological encroachment and predation. One major issue that 
both Europe and the United States face is the PRC's leveraging 
of its massive market to force technology transfers from our 
respective companies. Moreover, through foreign direct 
investment, government-backed venture capital investments, 
mandatory joint ventures, cyber espionage, licensing 
agreements, and talent acquisition, PRC companies regularly 
acquire U.S. and European intellectual property and 
knowhow.\354\ In a 2020 annual survey by the EU Chamber of 
Commerce in China, 20 percent of participants said they felt 
compelled to transfer technology to maintain market access--up 
from 10 percent in 2017.\355\ Likewise, the U.S.-China trade 
deal emphasized intellectual property enforcement, and early 
drafts include provisions on clearer rules on forced technology 
transfers.\356\
---------------------------------------------------------------------------
    \354\ O'Connor, Sean. How Chinese Companies Facilitate Technology 
Transfer from the United States. U.S.-China Economic and Security 
Review Commission, 06 May 2019, https://bit.ly/2U2DQ2w.
    \355\ Wernau, Julie. ``Forced Tech Transfers Are on the Rise in 
China, European Firms Say.'' Wall Street Journal, 20 May 2019, https://
on.wsj.com/2JJJq8d.
    \356\ Lester, Simon and Huan Zhu. ``What Will the US??China Deal 
Accomplish on Tech Transfer, IP Protection and Innovation?'' Cato 
Institute, 14 Feb. 2020, https://www.cato.org/blog/what-will-us- china-
deal-accomplish-tech- transfer-ip-protection-innovation.
---------------------------------------------------------------------------
    The United States and European nations recognize 
increasingly problematic PRC efforts to shape and dominate 
certain technology spheres, and both face different but crucial 
obstacles to competing with the PRC on their own. This is 
evident in three key areas necessary for emerging technology: 
R&D data and digitalization; and standards setting. As such, 
joint efforts by the United States and European nations are key 
to maintaining the lead in technology and ensuring the use of 
critical technology does not infringe upon our shared values of 
freedom, transparency, and human rights.
Research and Development
    While the United States and Europe still lead in R&D 
investment, the PRC is quickly catching up. Of the 2,500 
largest R&D investors worldwide, which account for 
approximately 90 percent of total global R&D, 769 were 
American, 551 were EU-based, and 507 were Chinese.\357\ Given 
how quickly the PRC is increasing its year-to-year investments 
in R&D, there may soon be far more contributing Chinese 
companies than European ones. According to the European 
Commission's 2019 Industrial R&D Investment Scoreboard, between 
2018 and 2019, Europe increased its R&D investment by 4.7 
percent, with most R&D growth coming from Europe's automotive 
companies. Comparatively, the United States and China increased 
their investment by 10.3 percent and 26.7 percent, 
respectively, largely driven by the information communications 
technology sectors.\358\
---------------------------------------------------------------------------
    \357\ Joint Research Centre. ``The 2019 EU Industrial R&D 
Investment Scoreboard.'' Publications Office of the European Union, 19 
Dec. 2019, https://bit.ly/3lb1xSg.
    \358\ Ibid.
---------------------------------------------------------------------------
    Moreover, European firms are not entering the market as 
quickly as their U.S. and PRC counterparts. Among the top 2,500 
firms, the United States and China represent 37 percent and 25 
percent, respectively, of new entrants. The European Union 
captured only 13 percent.\359\ Lastly, the share of R&D 
investment by the business sector is lower in the European 
Union than in the United States, China, and South Korea.\360\ 
The share of business R&D within total R&D expenditures is 
substantially lower in the European Union (at 64 percent) than 
in the United States (72 percent), or China, Japan, and South 
Korea combined (almost 80 percent).\361\ In the PRC especially, 
the business sector is the largest share and driver of the 
rapid increase in R&D expenditure--although in the PRC this 
``business-driven'' expenditure is supported and subsidized by 
the government.\362\
---------------------------------------------------------------------------
    \359\ Ballard, Barclay. ``Behind the Curve: Why Europe Is 
Stuttering in the Global Tech Race.'' European CEO, 17 Jun. 2019, 
https://bit.ly/3ka84LE.
    \360\ Ibid.
    \361\ Total R&D expenditures is the aggregation of all sectors 
carrying out R&D activities: the business sector, government, higher 
education, and private non-profit institutions. Ballard, Barclay. 
``Behind the Curve: Why Europe Is Stuttering in the Global Tech Race.'' 
European CEO, 17 Jun. 2019, https://bit.ly/3ka84LE.
    \362\ Ruirui Wu et al. ``Effect of government R&D subsidies on 
firms' innovation in China.'' Asian Journal of Technology Innovation, 
vol. 28, no.1, Korean Society for Innovation Management and Economics, 
19 Nov. 2019, p. 42-59, DOI: 10.1080/19761597.2019.1693901.
---------------------------------------------------------------------------
    Though the United States today is in a better position than 
the European Union on overall R&D, the PRC is projected to 
overtake U.S. spending by 2030.\363\ The Information Technology 
& Innovation Foundation (ITIF) catalogues 36 indicators of 
China's scientific and technological progress compared to the 
United States, particularly in innovation.\364\ The United 
States also struggles with diminishing federal support for 
investment in R&D. According to ITIF, in ``21 of the 27 years 
following 1990, federal R&D spending has made up a smaller 
share of GDP than the year before . . .. [which] has resulted 
in stagnant productivity growth, lagging competitiveness, and 
reduced innovation.'' \365\
---------------------------------------------------------------------------
    \363\ ``2018 Global R&D Funding Forecast Snapshot - Research & 
Development World.'' Research & Development World, 12 Mar. 2018, 
https://bit.ly/38l7qJ8.
    \364\ Atkinson, Robert D. and Caleb Foote. Is China Catching up to 
the United States in Innovation? Information Technology and Innovation 
Foundation, 08 Apr. 2019, https://bit.ly/36fYXnE.
    \365\ Foote, Caleb and Robert D. Atkinson. Dwindling Federal 
Support for R&D Is a Recipe for Economic and Strategic Decline. 
Information Technology and Innovation Foundation, 14 Dec. 2018, https:/
/bit.ly/3lhS7Es.
---------------------------------------------------------------------------
    That the United States lacks federal support on the issue 
of emerging technology is even evident in one of its strongest 
technology sectors: AI.\366\ The United States was named the 
``undisputed leader'' in AI according to the 2019 Global AI 
Index, which is the first index to ``benchmark nations on their 
level of investment, innovation, and implementation of AI.'' 
\367\ The United States received more than 80 percent in all 
categories of the index--talent, infrastructure, operating 
environment, R&D, and commercial investment.\368\ Yet U.S. 
government strategy received only 68.5 percent, which was 
significantly lower than the government strategy ranking for 
all other top five leaders in AI.\369\ The PRC, on the other 
hand, came in second with a 58.3 percent total score, but its 
government strategy was rated at 100 percent.\370\ This is just 
one statistic that demonstrates the need for the U.S. 
government to take stronger action on developing a strategy to 
manage, encourage, and protect emerging technological needs.
---------------------------------------------------------------------------
    \366\ Castro, Daniel, Michael McLaughlin, and Eline Chivot. ``Who 
is Winning the AI Race: China, the EU or the United States? '' Center 
for Data Innovation, 19 Aug. 2019, https://www.datainnovation.org/2019/
08/who-is-winning-the- ai-race-china-the-eu-or-the-united-states/.
    \367\ The Global AI Index. Tortoise Media, https://
www.tortoisemedia.com/intelligence/ai/.
    \368\ Ibid.
    \369\ Ibid.
    \370\ Ibid.
---------------------------------------------------------------------------
    Comparatively, in an indication of the Chinese government's 
focus on emerging technologies, the PRC currently has 15 times 
the number of deployed 5G base stations as the United States, 
and has almost twice as many supercomputers.\371\ As the chair 
of the Defense Innovation Advisory Board at the U.S. Department 
of Defense testified to the House Committee on Science, Space, 
and Technology in January 2020, the United States may be soon 
``competing with a country that has a bigger economy, more R&D 
investments, better quality research, wider application of new 
technologies, and stronger computing infrastructure.'' \372\
---------------------------------------------------------------------------
    \371\ Woo, Stu. ``In the Race to Dominate 5G, China Sprints 
Ahead.'' Wall Street Journal, 07 Sep. 2019, https://on.wsj.com/2Ip6Mz2.
    \372\ Schmidt, Eric. ``Testimony'', Hearing on Losing Ground: U.S. 
Competitiveness in Critical Technologies, U.S. House of Representatives 
Committee on Science, Space and Technology, 29 Jan. 2020, https://
science.house.gov/imo/media/doc/Schmidt%20Testimony.pdf. Witness 
testimony.
---------------------------------------------------------------------------
Data and Digitalization
    Data and digitalization are crucial to the future of 
civilian and military technology, as digital transformations 
will disrupt nearly all processes, practices, and industries in 
high capital markets.\373\ Europe lags behind the United States 
and the PRC in data and digitalization. Of the world's 15 
largest digital firms, not one is European.\374\ However, 
digitization has been a particular focus of the European 
Commission over the past few years. In February 2020, European 
Commission President Ursula von der Leyen wrote that ``the 
digital transformation could not be left to chance.'' \375\ The 
European Data Strategy recognizes this need and attempts to set 
a general framework for the future of European data and data 
industries.\376\ Europe also established the General Data 
Protection Regulation (GDPR), although the standards in these 
regulations differ from those in the United States and have 
caused what the U.S. government has called ``disproportionate 
barriers'' to effective digital trade.\377\ Finally, several 
European states and the European Union have taken deliberate 
steps to focus on production of new technologies in this 
sphere, including large infrastructure projects like the 
European Commission's ``smart cities'' initiative, which will 
create demand for a larger ecosystem of digitization, data, and 
integrated software.\378\
---------------------------------------------------------------------------
    \373\ Llewellyn, Alicia. ``Digitalization--Future of Work.'' NASA 
Blogs, NASA, 15 Apr. 2019, https://blogs.nasa.gov/futureofwork/tag/
digitalization.
    \374\ Tsanova, Iliyana and Roger Havenith. ``Europe Is No Longer an 
Innovation Leader. Here's How It Can Get Ahead.'' World Economic Forum, 
14 Mar. 2019, https://bit.ly/38poZb3.
    \375\ von der Leyen, Ursula. ``Shaping Europe's Digital Future.'' 
European Commission, 19 Feb. 2020, https://bit.ly/3p4SGnt.
    \376\ ``European Data Strategy.'' European Commission, https://
bit.ly/32sBKOi.
    \377\ 2020 National Trade Estimate Report on Foreign Trade 
Barriers. United States Trade Representative, 31 Mar. 2020, https://
bit.ly/35ex0NQ.
    \378\ ``Smart Cities.'' European Commission, https://bit.ly/
3evIJuw.
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    Meanwhile, U.S. regulations on data issues focus on sector-
specific rules and state laws.\379\ This fragmented regulatory 
environment makes creating standards regarding data 
particularly difficult. The United States continues to make 
efforts to bring together these domestic regulations in a way 
that provides mechanisms to comply with EU data protection 
requirements, such as in the case of the EU-U.S. Privacy Shield 
Framework.\380\ In addition, there is a bipartisan interest in 
advancing national privacy legislation. However, there is still 
much debate in the United States and Europe among academics, 
policymakers, and businesses about who can own data, where data 
can be stored, how data can be used, and what obligations 
providers have to protect data.\381\ To properly facilitate 
data transfers and support transatlantic commerce, it is 
imperative that the United States and the European Union find 
ways to answer these questions together.
---------------------------------------------------------------------------
    \379\ ``The Future of Regulation.'' Deloitte Insights, Deloitte, 19 
Jun. 2018, https://bit.ly/36bD6hh.
    \380\ ``2020 National Trade Estimate Report on Foreign Trade 
Barriers,'' United States Trade Representative, 31 Mar. 2020, https://
bit.ly/3l8JxI9.
    \381\ ``The Future of Regulation.'' Deloitte Insights, Deloitte, 19 
Jun. 2018, https://bit.ly/36bD6hh.
---------------------------------------------------------------------------
    However, efforts to reach agreement on these questions will 
be for nothing if such data goes through infrastructure 
produced in part or in whole by countries without such data 
protections. Without transatlantic collaboration on proper IT 
development, digitization, and mass data storage 
infrastructure, the United States and Europe will still face 
severe economic, personal privacy, and national security 
challenges.
    Unfortunately, development of this type of infrastructure 
in Europe is largely hindered by the lack of a common market 
for services and the digital economy. For example, the EU's 
common market for physical goods allowed a few European mobile 
phone companies, such as Nokia and Ericsson, to take advantage 
of the full European market. Yet, there is no corresponding 
market for software and digital platforms. Such technology 
companies are often met with differing national regulations and 
market considerations, limiting their overall growth potential 
and creating barriers to capturing market share large enough to 
compete with global technology companies. Software or digital 
platform companies in the United States and China, by 
comparison, can ``capture a significant chunk of the U.S.' 327 
million customers with a relatively homogenous business 
strategy . . . [and] can do likewise when targeting a [Chinese] 
population of 1.4 billion.'' \382\ Any European company, on the 
other hand, would need to customize its digital product and 
create country-specific business strategies in order to fully 
capture Europe's 500 million inhabitants. It is unlikely that 
European technology companies will be able to gain an effective 
market share to compete with Chinese companies internationally.
---------------------------------------------------------------------------
    \382\ Ballard, Barclay. ``Behind the Curve: Why Europe Is 
Stuttering in the Global Tech Race.'' European CEO, 17 Jun. 2019, 
https://bit.ly/3ka84LE.
---------------------------------------------------------------------------
    This is evident in Europe's `smart city' initiative. The 
sectors that support smart city initiatives are all sectors in 
which Europe is currently highly reliant upon foreign 
companies, particularly Chinese companies.\383\ According to 
the Australian Strategic Policy Institute, European countries 
currently have 22 cooperative agreements with Chinese companies 
for technologies such as surveillance equipment for various 
`smart cities' across France, Belgium, the Netherlands, Spain, 
and Romania, as well as five signed memorandums of 
understanding (MOUs) between European cities and Chinese 
companies for further cooperation and potential 
development.\384\ All parties contracting with the PRC on smart 
cities must be made aware of the risks inherent in these 
agreements and MOUs, particularly given how the PRC employs and 
uses `smart city' technologies domestically to monitor its 
citizens and suppress dissent. Moreover, the PRC's 2017 
cybersecurity law requires all Chinese companies to provide 
data and information to the Chinese government when asked, so 
European cities risk losing control of the data they collect 
through their smart cities programs. This raises massive 
concerns surrounding data privacy, surveillance, and economic 
coercion. Such risks should concern any country that values 
liberal, open, democratic societies, as the United States and 
Europe both do. European decisions on data issues could 
simultaneously undermine Europe's active leadership in 
protecting its citizens' data and privacy rights and support 
the CCP's political goals at home and abroad.
---------------------------------------------------------------------------
    \383\ ``Cities of Tomorrow: Safety, Smarts, and Surveillance.'' 
Center for Strategic and International Studies, 23 Jan. 2020, https://
bit.ly/3ljMRk1. Panel discussion.
    \384\ Cave, Danielle et al. Mapping China's Tech Giants. Australian 
Strategic Policy Institute, https://chinatechmap.aspi.org.au/#/map/f5-
Smart% 20City-Public%20Security%20project. Database.
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    The United States faces similar concerns, as the PRC is 
quickly surpassing it in creating, replicating, and storing 
data. By 2025, it is projected that the PRC will be responsible 
for storing 27.8 percent of total global online data, while the 
United States will store approximately 17.5 percent.\385\ Such 
shifts in the utilization and storage of global internet data 
have huge implications, especially for the future of Chinese AI 
and machine learning development, as well as the PRC's ability 
to undermine global data privacy, surveil citizens around the 
world, and use such data to leverage its economic might against 
countries and individuals to coerce them into conforming with 
CCP goals. Some of this shift can be attributed to the sheer 
size of the PRC. As a large market with more than four times 
the population of the United States, the PRC naturally has far 
more opportunities for data collection, even with its lower 
internet penetration rate.\386\ Yet this disparity is also 
partially because of slow U.S. government responses to the 
unique needs of emerging technologies and the changes necessary 
to protect and encourage such innovation. For example, the 
United States has been slow to adopt proactive policies to 
support the Internet of Things, AI, facial recognition, smart 
cities, smart health, and other digital policy areas. If the 
PRC will soon control much of the world's data, it is that much 
more important for the United States and Europe, along with 
other advanced democracies, to combine their data markets of 
scale and set global standards for how such data is collected, 
stored, utilized, and protected.
---------------------------------------------------------------------------
    \385\ Reinsel, David, John Gants and John Rydning. DataAge 2025--
The Digitalization of the World From Edge to Core. International Data 
Corporation, May 2020, https://bit.ly/3eCDMAe.
    \386\ Thomala, Lai Lin. ``Penetration rate of internet users in 
China from December 2008 to March 2020.'' Statista, 30 Apr. 2020, 
https://bit.ly/36e70RY.
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Standards Setting
    Much like with data collection, the PRC's vast market and 
manufacturing capability gives it a natural advantage when 
competing with European- or U.S.-set standards. The PRC also 
builds on that advantage by subsidizing Chinese firms to 
participate in international standards setting bodies and 
pressuring Chinese companies to toe the line on CCP standards 
decisions.\387\ To mitigate this advantage, the United States 
and the European Union have taken a few steps to better 
harmonize their technical and emerging technology usage 
standards. The United States has proposed legislation to reduce 
barriers to joint-technical development with trusted allies and 
partners and expand participation and leadership in 
international standards-setting bodies.\388\ Meanwhile, the 
European Union set out a process for ``harmonization 
regulation,'' which defines the essential requirements a 
product or service has to comply with and creates a presumption 
of conformity for standards.\389\
---------------------------------------------------------------------------
    \387\ Haley, Usha C.V. and George T. Haley, ``How Chinese subsidies 
changed the world,'' Harvard Business Review, 25 Apr. 2013, https://
hbr.org/2013/04/how-chinese-subsidies-changed.
    \388\ United States, Congress, Senate, Risch, James E. STRATEGIC 
Act. Congress.gov, 116th Congress, 2nd Session, Senate Bill 4272, 
introduced 22 Jul. 2020, https://bit.ly/3mY5Roq.
    \389\ Staff interviews.
---------------------------------------------------------------------------
    But by the nature of the process, even established 
international standards do not necessarily mean that all 
countries and companies around the world are required to abide 
by them. Rather, international standards for technologies give 
companies the option to choose to conform new technologies to 
such standards to facilitate interoperability, but they don't 
have to.\390\ Therefore, any country that is able to secure a 
foothold in creating a large market of goods with the same 
standards can direct the development of complementary 
technologies around the world and will have a large comparative 
advantage when fighting for such technology markets.\391\ 
Because new technologies such as 5G and Internet of Things 
naturally cross multiple sub-sectors of technology, there may 
be a larger need to ensure more standardization for these 
technologies across the hard and soft infrastructure. If 
markets are not big enough such efforts are likely to backfire, 
leading to a ``Galapagos Island'' effect in which countries' 
indigenous technologies are isolated from global 
standards.\392\ This is why standards cooperation between the 
European Union and United States is critical to ensuring that 
any PRC standard is limited.
---------------------------------------------------------------------------
    \390\ Wilson, Naomi. ``China Standards 2035 and the Plan for World 
Domination--Don't Believe China's Hype.'' Council on Foreign Relations, 
03 Jun. 2020, https://on.cfr.org/32lmthW.
    \391\ O'Sullivan, Eoin and Laure Brevignon-Dodin. Role of 
Standardisation in support of Emerging Technologies A Study for the 
Department of Business, Innovation & Skills (BIS) and the British 
Standards Institution (BSI). Institute for Manufacturing, Jun. 2012, 
https://bit.ly/2IgX0io.
    \392\ Ezell, Stephen J. and Robert D. Atkinson. ``The Middle 
Kingdom Galapagos Island Syndrome: The Cul-De-Sac of Chinese Technology 
Standards.'' The Information Technology and Innovation Foundation, Dec. 
2014, https://bit.ly/3ljNaLH.
---------------------------------------------------------------------------
    Take, for example, the PRC's substantial share of the 
lithium battery market. As global demand for rechargeable 
batteries grew through the rise of electric vehicles and other 
green technologies, the Chinese government recognized trend 
lines early on and heavily subsidized its rechargeable battery 
production industry. As of 2019, China controlled about two-
thirds of global lithium production capacity, as compared to 
the 13 percent of global capacity the United States 
controls.\393\ Since the PRC was able to capture such a large 
market share, the standard for rechargeable batteries in any 
type of electronic vehicle is now lithium-ion.\394\ Other 
smaller producers can neither gain a foothold in the global 
battery industry, nor are their new, often cleaner and more 
efficient battery formulas as marketable.\395\ For both 
economic as well as security reasons, it is imperative that the 
United States and Europe do not allow the PRC to gain this 
advantage in other sectors, particularly given how the 
technology and data that flow through PRC-based or PRC-made 
systems is subject to control and usage by the CCP.
---------------------------------------------------------------------------
    \393\ Mai, HJ. ``To compete in the global battery arms race, the US 
must spur its domestic market, analysts say.'' Utility Dive, 24 Jun. 
2019, https://bit.ly/2I5zMMO.
    \394\ Rapier, Robert. ``Why China is dominating lithium-ion battery 
production.'' Forbes, 04 Aug. 2019, https://bit.ly/3oYp5vU.
    \395\ Austin, Robert. ``Lithium-ion is a pawn in economic 
domination.'' CIO, International Data Group, 02 May 2019. https://
bit.ly/3p6gTJZ.
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Transatlantic Cooperation
    The United States and Europe may have different policy 
positions and different market environments, but they share 
many similar interests and challenges. Alone, the United States 
and Europe cannot compete with China's massive market and the 
large state resources the PRC is pouring into emerging 
technology. Both are struggling with the lack of national 
strategy on key sectors such as AI, database management, and 
data storage, sharing, and usage. Neither can either afford to 
waste any time in developing new technologies and corresponding 
regulations alone, while China develops the same with no regard 
for the challenges to data privacy and individual freedoms. The 
combined economies of scale of the United States and European 
Union put the two regions in a much stronger position to 
compete against China's immense market power on issues such as 
technology standardization and production.
    There are many areas in which U.S. and European interests 
do align, and in which there are little to no regulatory 
barriers to cooperation. First, there are opportunities for 
more cooperation in developing and regulating AI-enabled 
manufacturing. Both the European Union and the United States 
are in the process of developing standards for trustworthy AI, 
so there's an opportunity to coalesce around good ongoing 
work.\396\ The United States and European nations can also 
discuss ways to manage the potential social implications of 
this shift, as well as work together to support the network 
processes in AI-enabled manufacturing. The United States and 
Europe should seek opportunities to work together to become the 
world leaders in these and other new technologies.
---------------------------------------------------------------------------
    \396\ Staff interviews.
---------------------------------------------------------------------------
    Second, both the United States and the European Union will 
need to tackle the challenges that arise from massive database 
storage, protection, and development. A regular dialogue to 
discuss best practices and challenges to digital trade from 
legislation such as the GDPR, the path to digitalization for 
Europe, and database storage practices would be a very positive 
development. The U.S.-U.K. Special Relationship Economic 
Working Group Meeting is one good example of such a dialogue 
that looks at these issues, as well as others surrounding 
emerging technology. Through sustained and targeted 
communication between the United States and the European Union, 
we can find common ground to create a framework of standards on 
how cyber-enabled technology can be protected from 
cybersecurity threats, and use this to set the agenda at the 
multinational level for big data collection, storage, 
protection, and sharing. Discussing these technologies could 
serve joint security efforts as well, such as using the Common 
Identity Repository to track terrorist activity.
    Third, the United States and Europe can also cooperate on 
issues involving the environment. In 2019, green energy patents 
filed globally increased by 28 percent compared to 2018, 
demonstrating this growing and important market.\397\ As the 
number of green energy patent filings rapidly grows, the United 
States still holds the largest share, followed by Japan and 
Europe.\398\ There is a lot of U.S. and EU cooperation at the 
ministerial level on this issue, for example the Clean Energy 
Ministerial, Generation IV International Framework, and the 
U.S.-EU Energy Council.\399\ But the United States and Europe 
could work more closely together to encourage further 
scientific cooperation and standards setting for new, cleaner 
technologies.
---------------------------------------------------------------------------
    \397\ News Byte. ``Green energy patents filed globally jump 28% in 
a year.'' Science Business,, 28 Jan. 2020, https://bit.ly/3pd0EuU.
    \398\ ``Patenting of Sustainable Energy Technologies.'' Global 
Trends in Sustainable Energy Research and Technologies, National 
Science Board, 2018, https://bit.ly/32ni1PX.
    \399\ ``U.S.-EU Energy Council.'' U.S. Department of Energy Office 
of International Affairs, https://bit.ly/35bKI3V.
---------------------------------------------------------------------------
    Finally, the United States and European countries should 
work together to mobilize and create economies of scale with 
trusted democracies around the world in critical technology 
development. Creating supply chains for sensitive technologies 
in trusted countries would help promote this cooperation and 
provide the rest of the world with a reliable and safe 
alternative to the risks associated with Chinese technology. 
The general framework for this type of arrangement already 
exists. The United States and Japan have the legal and 
regulatory framework for science and technology cooperation 
through their defense relationship, such as the 1980 U.S.-Japan 
Systems and Technology Forum that boosted defense-applicable 
scientific cooperation between the two countries under the 
auspices of their mutual defense treaty.\400\ To a lesser 
extent, the European Union and Japan have also sought increased 
cooperation in science, technology, and innovation through the 
2011 Japan-EU Science and Technology Cooperation 
Agreement.\401\
---------------------------------------------------------------------------
    \400\ Schoff, James L. U.S.-Japan Technology Policy Coordination: 
Balancing Technonationalism With a Globalized World. Carnegie Endowment 
for International Peace, 29 Jun. 2020, https://bit.ly/2U9s86f6.
    \401\ ``EU and Japan step up cooperation in science, technology and 
innovation.'' European Commission, 26 May 2020, https://bit.ly/32lgHwU.
---------------------------------------------------------------------------
    Yet these are just the general frameworks that show intent 
and interest to cooperate, and much more needs to be done. The 
United States, the United Kingdom, and the European Union could 
explore avenues for more tangible cooperation; on the defense 
side, the United States and North Atlantic Treaty Organization 
countries could do likewise. The United States and Europe could 
combine these efforts where there is overlap to further 
trilateral cooperation with Japan. Expanding such agreements to 
include other allies like Australia, New Zealand, Canada, and 
Japan would help leverage all of our complementary strengths to 
protect the basic common interests that we all share--
protecting individual freedoms and rights, safeguarding the 
environment, and avoiding PRC monopolization of critical 
technologies.\402\ \403\
---------------------------------------------------------------------------
    \402\ Staff discussions.
    \403\ United States, Congress, Senate, Risch, James E. STRATEGIC 
Act. Congress.gov, 116th Congress, 2nd Session, Senate Bill 4272, 
introduced 22 Jul. 2020, https://bit.ly/32lgHwU.
---------------------------------------------------------------------------
Conclusion
    Cooperation in these areas will only occur if both the 
United States and Europe have the sustained political will to 
align agendas and continue regular dialogue on technology 
cooperation specifically. All areas in which the United States 
and Europe struggle--from mobilizing manufacturing and 
dwindling R&D investment to fractured markets and regulatory 
environments--are areas where the PRC either does not face the 
same structural problems or can subsidize to compensate for 
these shortfalls.
    Eventually, the United States, Europe, and other democratic 
allies will need to find avenues to work together to maintain a 
competitive position against the PRC's massive scale and 
resources dedicated to its emerging technology market. The 
United States and Europe in particular should seek in the 
short-term to bolster areas within our domestic markets that 
face little to no obstacles to cooperation and align our 
positions with those of our other democratic partners to regain 
a competitive stance in the global technology race. Such an 
agenda has the combined benefits of spurring domestic economic 
growth, improving our companies' competitiveness around the 
world, protecting the rights and security of our citizens, and 
strengthening our resilience to the threats posed by China. 
Without further transatlantic cooperation, both regions face a 
real risk of being left behind on global technology standards, 
production, and development.


                        CHAPTER FIVE--OVERSEAS 
                          COMMERCIAL ACTIVITY

                              ----------                              

        If a foreign, state-owned, company wants to purchase a 
        European harbour, part of our energy infrastructure or 
        a defence technology firm, this should only happen in 
        transparency, with scrutiny and debate. It is a 
        political responsibility to know what is going on in 
        our own backyard so that we can protect our collective 
        security if needed.


        --Jean-Claude Juncker, former President of the European 
        Commission\404\
---------------------------------------------------------------------------
    \404\ ``State of the Union 2017--Trade Package: European Commission 
proposes framework for screening of foreign direct investments.'' 
European Commission. 14 Sep. 2017, https://bit.ly/3l7U06y. Emphasis 
added.
---------------------------------------------------------------------------
Introduction
    In 2009, two Dutch scholars wrote an article in the 
Financial Times advocating for ``a transparent European review 
body'' to scrutinize growing investment from China. They argued 
that while Europe stood to benefit from this increased 
investment, Europe should also ``identify which entities are 
vital to European security, what level of Chinese investment 
constitutes an undesirable influence, and what the benefits of 
foreign investment are in relation to national security 
interests.'' \405\ Similarly, as Chinese investment in U.S. 
land, factories, and businesses began to grow, U.S. observers 
raised concerns. As one example, a 2013 report by the U.S.-
China Economic and Security Review Commission noted that, ``The 
possibility of government intent or coordinated strategy behind 
Chinese investments raises national security concerns.'' \406\ 
Today, stronger investment screening to protect national 
security stands out as among the greatest transatlantic 
achievements when it comes to the challenges posed by China.
---------------------------------------------------------------------------
    \405\ Okano-Heijmans, Maaike, and Frans-Paul van der Putten. 
``Europe Needs to Screen Chinese Investment.'' Financial Times, 11 Aug. 
2009, www.ft.com/content/8ba0192e-86b7-11de-9e8e-00144feabdc0.
    \406\ ``Executive Summary.'' 2013 Annual Report, United States 
Economic and Security Review Commission, 20 Nov. 2013, p. 2, https://
bit.ly/3ljNv0V.
---------------------------------------------------------------------------
    The People's Republic of China's (PRC) 1997 ``Going Out'' 
strategy marked the beginning of its drive to increase overseas 
investment, including through acquiring strategic assets and 
foreign technology.\407\ This policy has grown into today's 
``One Belt, One Road'' (OBOR) initiative--the most visible 
directive for these activities globally. The transatlantic 
community's approaches to OBOR and investment from the PRC are 
certainly not uniform. The U.S. government holds decidedly 
negative views of OBOR, which it sees as a means to increase 
the economic influence of state-owned Chinese firms in global 
markets, to engender undue PRC political leverage with 
governments around the world, and to provide greater access to 
strategic nodes that facilitate a global presence of the 
People's Liberation Army. Views among European governments are 
far more varied--17 EU member states have signed OBOR memoranda 
of understanding (MOU).\408\ French and German leaders have 
criticized the initiative publicly, but have in fact attracted 
more PRC investment than the Central and Eastern European 
states that officially endorsed OBOR.\409\ On both sides of the 
Atlantic, certain industries view OBOR as a significant 
opportunity. Large American and European banks, including 
Deutsche Bank, Standard Chartered Bank, and Citigroup, are very 
involved in the financing of OBOR projects.\410\ Other sectors, 
however, see OBOR challenging their own competitiveness, 
particularly in third country markets, where concessional 
lending by the PRC government, non-transparent procurement 
processes, and closed digital standards combine to cement 
greater reliance on PRC supply chains and technical 
standards.\411\
---------------------------------------------------------------------------
    \407\ Bhattacharya, Amar et al. China's Belt and Road: The new 
geopolitics of global infrastructure development. Brookings 
Institution, Apr. 2019, https://www.brookings.edu/research/chinas-belt-
and- road-the-new-geopolitics-of-global-infrastructure-development/.
    \408\ Sarsenbayev, Madi, and Nicolas Veron. ``European versus 
American Perspectives on the Belt and Road Initiative.'' China & World 
Economy, vol. 28, no. 2, Peterson Institute for International 
Economics, 2020, p. 88, www.piie.com/sites/default/files/documents/
sarsenbayev-veron2020-04.pdf.
    \409\ Duchatel, Mathieu and Alexandre Sheldon Duplaix. Blue China: 
Navigating the Maritime Silk Road to Europe. European Council on 
Foreign Relations, Apr. 2018, p. 5, https://bit.ly/354Elzk.
    \410\ Skala-Kuhmann, Astrid. ``European Responses to BRI: An 
Overdue Assessment'', Horizons Journal of International Relations and 
Sustainable Development, no. 14, Center for International Relations and 
Sustainable Development, Summer 2019, p. 144-155, https://bit.ly/
36cDPyH. And ``Citi's Strong Momentum Across Belt and Road Initiative 
Recognized by Asiamoney.'' Citigroup, 03 Oct. 2019, https://bit.ly/
36cDPyH.
    \411\ The Road Less Travelled: European Involvement in China's Belt 
and Road Initiative. European Union Chamber of Commerce in China, Jan. 
2020, https://bit.ly/2I462Qt.
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    Despite differing approaches, governments in the United 
States and Europe clearly recognize the inherent risks in 
certain PRC acquisitions and investments. Recent U.S.-Europe 
discussions on Chinese investment have focused intensely on 
Huawei's construction of 5G networks. There are, however, 
several other areas where PRC investments and acquisitions 
require further transatlantic attention. China's acquisition of 
major footholds in these three areas presents long-term 
economic and security implications for the United States and 
Europe:


   Energy infrastructure, particularly electrical grids;

   Ports and shipping; and

   Undersea cables.


    While not an exhaustive list, these examples are 
representative of increasingly concerning PRC activities in 
sensitive sectors. The United States and its European partners 
must align our policies and work together, including through 
the North Atlantic Treaty Organization (NATO), to safeguard our 
shared interests.
Energy
Overview
    China is extending its international reach in the realm of 
energy, setting as one of its primary goals the mastery of both 
old and new power sources. Increasingly, it is looking to exert 
greater influence and control over those resources abroad, 
including as part of OBOR. These developments pose several 
serious economic, security, and environmental challenges for 
the United States and Europe.
    As it has since the Industrial Revolution, the creation, 
control, and utilization of energy sources remains one of every 
nation's biggest challenges. Whether the British Imperial 
Navy's need for mid-Pacific coking stations, disputes over 
access to Middle Eastern oil fields, or more modern quests to 
develop energy sources not reliant on fossil fuels, securing an 
adequate supply of fuel for the modern means of production 
remains a prize. The past 10 years have seen a marked growth in 
international Chinese investment in energy installations of all 
kinds.\412\ China is the world's largest consumer and producer 
of energy, and its needs will only grow.\413\
---------------------------------------------------------------------------
    \412\ In much of the research available, these projects are 
variously described as ``energy'' or ``infrastructure and utilities.''
    \413\ ``China.'' U.S. Energy Information Administration, 14 May 
2015, https://bit.ly/38fSHiB.
---------------------------------------------------------------------------
    While Chinese investment in Europe has fallen rather 
dramatically from its heights in 2016 and 2017, investments in 
infrastructure to generate and provide energy continue to 
constitute a significant proportion of total investment.\414\ 
Examining the goal behind these investments, scholars have 
found that, ``Chinese penetration of the European energy sector 
serves both political and commercial purposes.'' Domestically, 
these investments ``address the need to balance supply chain 
security of fossil fuels,'' greener production techniques, and 
greater energy efficiency, while offering the ``opportunity to 
improve the market position and energy-industrial capabilities 
of Chinese energy companies.'' \415\ Internationally, they form 
a key part of OBOR and the basis for increased Chinese 
influence: energy and utility projects comprise 37 percent of 
all OBOR projects.\416\
---------------------------------------------------------------------------
    \414\ Kratz, Agatha, et al. ``Chinese FDI in Europe: 2019 Update.'' 
Rhodium Group/Mercator Institute for China Studies, Apr. 2020, https://
merics.org/en/report/chinese-fdi-europe-2019-update. Their evaluation 
of 2019 investment inflows noted that ``transport, utilities and 
infrastructure came fourth [in sectors of Chinese investment in the EU] 
with EUR 0.8 billion in investment.''
    \415\ Liedtke, Stephan. ``Chinese Energy Investments in Europe: An 
Analysis of Policy Drivers and Approaches.'' 22 Sept. 2017. Energy 
Policy, vol. 101, pp. 659-669., doi:10.1016/j.enpol.2016.09.037. 
https://bit.ly/38fSHiB.
    \416\ Committee calculations from China Global Investment Tracker. 
American Enterprise Institute/The Heritage Foundation. Full data set 
accessible here: https://bit.ly/355wlOQ.
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Power Grids, Nuclear Energy, and Coal Plants
    In the PRC's National Medium- and Long-Term Program for 
Science and Technology Development for 2006-2020, energy topped 
the list of China's many priorities. The program called for 
improved energy savings, increased energy supplies, promotion 
of more efficient use of coal, full absorption of ``imported 
energy technologies,'' mastery of equipment for coal and 
nuclear plants, and focused development of ``technologies to 
realize large volume, long distance, efficient power 
transmission.'' \417\ Energy equipment is also one of the PRC's 
priorities under Made in China 2025. Electrical power grids, 
nuclear plants, and coal-fired power plants are three major 
priorities in realizing the objectives of its economic and 
industrial plans.
---------------------------------------------------------------------------
    \417\ ``The National Medium- and Long-Term Program for Science and 
Technology Development (2006-2020).'' The State Council of the People's 
Republic of China, https://bit.ly/2I9NwFN.
---------------------------------------------------------------------------
    Created as a national energy transmission champion in 2002, 
State Grid Corporation of China (State Grid) is the world's 
largest utility and the third most profitable company in the 
Fortune 500 ranking.\418\ No longer content with the PRC 
market, State Grid has rapidly expanded its international 
holdings over the past 10 years, buying up the third-largest 
electricity players in both Chile and Brazil, taking a 40 
percent share in the Philippines' national electrical 
grid,\419\ and making huge inroads in Australia.\420\ In Europe 
since 2009, State Grid has purchased 35 percent of CDP Reti, 
the holding company that manages the Italian gas and 
electricity grid,\421\ 24 percent of Greek power grid operator 
ADMIE,\422\ and become the largest shareholder in the 
Portuguese electrical grid operator REN.\423\ State Grid 
publicly notes that its increased international activities are 
based around OBOR, and openly states that it has ``enhanced its 
. . . ability to serve national strategies'' and is ``boosting 
China's influence worldwide.'' \424\
---------------------------------------------------------------------------
    \418\ ``Global 500.'' Fortune, https://bit.ly/3l9SEsi. Accessed 25 
Aug. 2020. It is superseded only by Wal-Mart in first place and Sinopec 
in second.
    \419\ Ahmed, Sara. ``IEEFA update: China's state grid group 
triggers oversight controversy in the Philippines.'' Institute for 
Energy Economics and Financial Analysis, 18 Feb. 2020, https://bit.ly/
2TYadQ5.
    \420\ Wade, Geoffrey. ``The State Grid Corporation of China: Its 
Australian engagement and military links.'' Interpreter, The Lowy 
Institute, 17 Dec. 2015, https://www.lowyinstitute.org/the-interpreter/
state-grid-corporation-china-its-australian-engagement-and-military-
links.
    \421\ Pagni, Luca. ``Un alleato cinese per lo Stato italiano State 
Grid diventa socio di Snam e Terna.'' La Repubblica, 30 Jul. 2014, 
https://bit.ly/2JGduS1.
    \422\ Note: ADMIE is also known as IPTO, for the English 
translation of its name - Independent Power Transmission Operator. 
``State Grid Europe Limited.'' Independent Power Transmission Operator, 
www.admie.gr/en/company/participation/state-grid.
    \423\ ``Shareholder Structure.'' REN, https://bit.ly/3p230wt.
    \424\ ``International Cooperation Overview.'' State Grid 
Corporation of China, https://bit.ly/2IbEgRW.
---------------------------------------------------------------------------
    China Southern Power Grid Company, which covers the areas 
of China that State Grid does not, is also going abroad, moving 
into Laos, the Philippines,\425\ Vietnam,\426\ and 
Myanmar.\427\ In September 2020, the company signed a deal with 
Ee du Laos that will give China Southern majority shares in a 
new company that will control Laos' power grid and the rights 
to buy and sell power in the country.\428\
---------------------------------------------------------------------------
    \425\ ``MVIP in Full-scale Construction in the Philippines.'' China 
Southern Power Grid, 26 Nov. 2019, https://bit.ly/36b2XpE.
    \426\ ``Two units of Vinh Tan 1 Thermal Power Plant put into 
operation.'' State-owned Assets Supervision and Administration 
Commission of the State Council, 30 Nov. 2018, https://bit.ly/38jErFy.
    \427\ ``International Cooperation.'' China Southern Power Grid, 
http://eng.csg.cn/Cooperation/201603/t20160320--133961.html.
    \428\ ``Financially Strapped Laos Partners with Chinese Company to 
Manage Power Grid.'' Radio Free Asia, 10 Sep. 2020, https://
www.rfa.org/english/news/laos/grid-09102020153801.html.
---------------------------------------------------------------------------
    Another national energy champion, this time in the realm of 
nuclear energy, is China General Nuclear Power Corporation 
(CGNPC), China's largest domestic nuclear power operator. Like 
State Grid, CGNPC is looking to expand internationally. Through 
OBOR, China is reportedly looking to build more than 30 nuclear 
power plants outside of China.\429\ Three projects in the 
United Kingdom represent CGNPC's initial entry into the 
international market. At Hinkley Point C, which is currently 
under construction, CGNPC has a 33 percent stake and also has 
an option to acquire 20 percent of the potential Sizewell C 
plant. Should it go ahead despite mounting opposition, a second 
plant at Bradwell could be the first Chinese-built nuclear 
plant outside of China.\430\ Robert Davies, the Chief Operating 
Officer of CGNPC's U.K. presence said, ``For us, the U.K. is an 
important stepping stone into Europe. The Generic Design 
Assessment process [U.K. regulatory approval] is recognised in 
the nuclear world as having a lot of clout.'' \431\ The PRC has 
also worked to gain access to uranium deposits around the 
world,\432\ including one of the world's largest uranium mines 
in Namibia.\433\ The China National Nuclear Corporation has 
worked with Saudi Arabia to help that country discover its 
indigenous uranium reserves.\434\
---------------------------------------------------------------------------
    \429\ ``China could build 30 'Belt and Road' nuclear reactors by 
2030: official.'' Reuters, 20 Jun. 2020, https://reut.rs/3lsDRZX.
    \430\ Pratley, Nils. ``No business need at all now for a Chinese 
nuclear plant in the UK.'' The Guardian, 07 Jul. 2020, https://bit.ly/
2TYTuvZ.
    \431\ Vaughan, Adam, and Lily Kuo. ``China's Long Game to Dominate 
Nuclear Power Relies on the UK.'' The Guardian, 26 Jul. 2018, 
www.theguardian.com/environment/2018/jul/26/chinas-long-game-to-
dominate-nuclear-power-relies-on-the-uk.
    \432\ Zhang, Hui and Yunsheng Bai. ``China's Access to Uranium 
Resources.'' Project on Managing the Atom, Harvard Kennedy School 
Belfer Center for Science and International Affairs, May 2015,
    https://www.belfercenter.org/sites/default/files/legacy/files/
chinasaccesstouraniumresources.pdf.
    \433\ ``Husab Uranium Project, Namib Desert, Namibia.'' Mining 
Technology,  https://www.mining-technology.com/projects/husab-uranium-
project-namibia-swakop/.
    \434\ Graham-Harrison, Emma, Stephanie Kirschgaessner and Julian 
Borger. ``Revealed: Saudi Arabia may have enough uranium ore to produce 
nuclear fuel.'' The Guardian, 17 Sep. 2020, https://
amp.theguardian.com/world/2020/sep/17/revealed-saudi-arabia-may-have-
enough-uranium-ore-to-produce-nuclear-fuel.
---------------------------------------------------------------------------
    Finally, PRC companies are investing heavily in coal-fired 
power generation, despite the Chinese government presenting 
itself as a leader in fighting climate change and a champion of 
green energy. China is the world's largest investor in green 
energy,\435\ but only a very small percentage of its OBOR 
energy projects--around 2.8 percent--are in clean energy.\436\ 
China is also slowly decreasing the number of coal-fired power 
plants it builds within the PRC, but its manufacturing of the 
equipment used in these plants has not slowed down, leaving it 
with a stockpile of technology and anxious executives 
incentivized to sell it.\437\ China is, at competitive prices, 
creating the means to support coal burning plants abroad for 
the long life-cycles of these plants, not decreasing the use of 
coal abroad.
---------------------------------------------------------------------------
    \435\ ``How Is China's Energy Footprint Changing?'' China Power, 
Center for Strategic and International Studies. 15 Feb. 2016, https://
chinapower.csis.org/energy-footprint/.
    \436\ ``Clean energy'' is defined here as solar, wind, and other 
renewables. Author calculations based on data from China's Global 
Energy Finance. Boston University Global Development Policy Center, 
www.bu.edu/cgef/.
    \437\ Downs, Erica. China-Pakistan Economic Corridor Power 
Projects: Insights into Environmental and Debt Sustainability. Columbia 
University Center on Global Energy Policy, 03 Oct. 2019, https://
www.energypolicy.columbia.edu/research/report/china-pakistan-economic-
corridor-power-projects-insights-environmental-and-debt-sustainability.
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    The American Enterprise Institute's Chinese Investment 
Tracker lists 48 major Chinese investments in coal since 2007, 
the vast majority of them in South and Southeast-Asia.\438\ In 
Vietnam alone, China has built 15 coal power plants and is 
working on eight more.\439\ Since 2000, Chinese development 
banks have funded 21 coal-based projects in Indonesia, all of 
which are now touted as part of OBOR, even those constructed 
prior to the initiative's announcement in 2013.\440\ In Europe, 
81 percent of China's investment in energy between 2008 and 
2015 went into coal, gas, and oil.\441\ Most of these investors 
were Chinese state-owned companies.\442\ By contrast, the U.S. 
Development Finance Corporation operates under environmental 
rules that place restrictions on support for investment in 
projects, particularly energy projects, which might produce 
large greenhouse gas emissions.\443\ The European Investment 
Bank has begun to ``phase out support to energy projects 
reliant on unabated fossil fuels.'' \444\
---------------------------------------------------------------------------
    \438\ China Global Investment Tracker. American Enterprise 
Institute, https://bit.ly/3ewWsRR.
    \439\ Inskeep, Steve and Ashley Westerman. ``Why Is China Placing A 
Global Bet On Coal?'' NPR, 29 Apr. 2019, https://www.npr.org/2019/04/
29/716347646/why-is-china-placing-a-global-bet-on-coal.
    \440\ China's Global Energy Finance. Boston University Global 
Development Policy Center, www.bu.edu/cgef/.
    \441\ Liedtke, Stephan. ``Chinese Energy Investments in Europe: An 
Analysis of Policy Drivers and Approaches.'' Energy Policy, vol. 101, 
Elsevier, 14 Sep. 2016, p. 665, table 2, https://bit.ly/3eGDacQ.
    \442\ Ibid.
    \443\ ``Environmental and Social Policy and Procedures.'' U.S. 
Development Finance Corporation, Jan. 2020, https://bit.ly/3mWE5sv.
    \444\ ``EIB energy lending policy: Supporting the energy 
transformation'' European Investment Bank, 15 Nov. 2019, p. 4, https://
www.eib.org/en/publications/eib-energy-lending-policy.htm.
---------------------------------------------------------------------------
    A 2019 report from the Institute for Energy Economics and 
Financial Analysis explains that Chinese financing is often a 
last resort for those looking to fund a coal plant. Many more 
traditional financing sources--such as Standard Chartered U.K., 
Generali of Italy, and Nippon Life of Japan--have determined 
coal-fired power plants are no longer worth the 
investment.\445\ But as demand for coal persists, PRC companies 
are meeting it: more than 70 percent of coal plants currently 
under construction outside of China are being financed by PRC 
banks.\446\ Clearly, the Chinese government believes the 
political and financial benefits of these investments outweighs 
the political and market trends in the opposite direction, such 
as global efforts to reduce carbon emissions.
---------------------------------------------------------------------------
    \445\ Brown, Melissa, and Tim Buckley. ``IEEFA China: Lender of 
Last Resort for Coal Plants.'' Institute for Energy Economics & 
Financial Analysis, 22 Jan. 2019, https://bit.ly/32kEsVW.
    \446\ Numbers produced by data firm Refinitiv in ``The Belt and 
Road's Decarbonization Dilemma.'' Quartz. https://qz.com/1760615/china-
quits-coal-at-home-but-promotes-the-fossil-fuel-in-developing-
countries/.
---------------------------------------------------------------------------
    The lack of respect for the environmental regulations and 
guidelines of national governments is a growing concern related 
to PRC investment. For instance, as CEE Bankwatch warned in its 
examination of several state-owned enterprise (SOE)-funded 
southeastern-European projects, ``despite Chinese policy 
guidelines requiring compliance with host country legislation, 
most of the projects breach national and EU environmental, 
procurement and state aid law.'' \447\ In Serbia, the 
municipality of Bor has brought criminal charges against the 
managers of a Chinese copper smelting plant where excessive 
levels of sulfur dioxide have begun to choke the local 
population.\448\ China's purportedly greener power projects 
have also produced disastrous environmental outcomes elsewhere. 
In Ecuador, a Chinese-built hydroelectric dam has nearly 8,000 
cracks, but Ecuador is still repaying China for the dam with 
oil that Ecuador is moving further and further into the Amazon 
to extract.\449\ And China's extensive damming of the Mekong 
River within China is having disastrous consequences for those 
who live downstream in Thailand, Laos, Cambodia, and Vietnam. 
Water levels are falling precipitously, causing drought, lack 
of fresh drinking water, and decreasing numbers of the fish 
that locals rely on to feed their families.\450\
---------------------------------------------------------------------------
    \447\ ``EU-China leaders' meeting: EU must do more to tackle legal 
breaches by Chinese companies in Europe, say civil society 
organisations.'' CEE Bankwatch Network, 14 Sep. 2020, https://
bankwatch.org/press--release/eu-china-leaders-meeting-eu-must-do-more-
to-tackle-legal-breaches-by-chinese-companies-in-europe-say-civil-
society-organisations.
    \448\ ``Local authorities sue Chinese Zijin over pollution.'' N1, 
15 Sep. 2020, https://bit.ly/3ewk1dw.
    \449\ Casey, Nicholas and Clifford Krauss. ``It Doesn't Matter if 
Ecuador Can Afford This Dam. China Still Gets Paid.'' New York Times, 
24 Dec. 2018, https://nyti.ms/352Z1rG.
    \450\ Eyler, Brian. ``Science Shows Chinese Dams Are Devastating 
the Mekong.'' Foreign Policy, 22 Apr. 2020, https://bit.ly/35bUnaI. See 
also: Forsyth, Luc. ``China's Domestic Dams: Hydropower not only an 
export for world's biggest dam builder.'' Mongabay, 28 Feb. 2017, 
https://bit.ly/3eHWS7P.
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Illegal Trade Practices and Standards Setting
    The Chinese government directly supports PRC energy 
companies in making inroads into external markets through 
industrial espionage operations, massive state subsidies, and 
support for standards-setting campaigns. These well-
orchestrated campaigns by the PRC have harmful effects on, and 
strongly disadvantage, businesses that play by the established 
free trading rules and are not backed by the power of a unitary 
state.
    A key example is PRC state support to fund thousands of 
engineers and researchers, which has been instrumental in 
helping State Grid develop the Ultra-High Voltage (UHV) grid 
technology that it now sells and operates.\451\ When building 
out these UHV technologies, reports indicate that the Chinese 
government required 80 to 90 percent of the equipment be 
sourced locally, largely cutting out foreign competition.\452\ 
The PRC allows some foreign companies to participate in Chinese 
energy projects but only in limited ways and many have involved 
forced technology transfer. Xu Yi-chong writes that State 
Grid's ``collaboration with the multinationals was not always 
easy, as SGCC [State Grid] wanted to gain control of core 
technologies . . . and wanted to be in the driver's seat in 
collaboration, while the [multi-national corporations] refused 
to surrender their control.'' \453\ As in other sectors, PRC 
SOEs have also established research centers abroad that then 
work to transfer pertinent technology back to China. In 2011, 
State Grid founded the Global Energy Interconnection Research 
Institute,\454\ which now has branches in Santa Clara, 
California\455\ and Berlin, Germany.\456\
---------------------------------------------------------------------------
    \451\ Fairley, Peter. ``China's Ambitious Plan to Build the World's 
Biggest Supergrid.'' Technology, Engineering, and Science News, IEEE 
Spectrum, 21 Feb. 2019, https://bit.ly/2JzeQ0P.
    \452\ Fairley, Peter. ``China's Ambitious Plan to Build the World's 
Biggest Supergrid.'' Technology, Engineering, and Science News, IEEE 
Spectrum, 21 Feb. 2019, https://bit.ly/2U76nUO. And ``Power Play: 
China's Ultra-High Voltage Technology and Global Standards.'' Paulson 
Papers on Standards The Paulson Institute, Apr. 2015, https://bit.ly/
2If6ZVD.
    \453\ Xu, Yi-chong. ``The Search for High Power in China.'' Policy, 
Regulation, and Innovation in China's Electricity and Telecom 
Industries, Brandy, Loren and Thomas G. Rawski, editors, Cambridge UP, 
2019, p. 242.
    \454\ Ibid.
    \455\ `About GEIRI North America.'' GEIRINA, www.geirina.net/about.
    \456\ ``About GEIRI Europe.'' GEIRI Europe, www.geiri.eu/about-us/.
---------------------------------------------------------------------------
    The PRC's quest to master the nuclear fuel cycle has been 
facilitated in part by industrial espionage. In 2019, CGNPC was 
placed on the U.S. Entity List\457\ after a nuclear scientist 
employed there was convicted of ``enlisting U.S.-based nuclear 
experts to provide assistance in developing and producing 
special nuclear material in China for a Chinese state-owned 
nuclear power company.'' \458\ For nearly twenty years, he had 
worked to obtain ``technical assistance related to CGNPC's 
Small Modular Reactor Program; CGNPC's Advanced Fuel Assembly 
Program; CGNPC's Fixed In-Core Detector System; and 
verification and validation of nuclear reactor-related computer 
codes.'' \459\ Such state-sponsored industrial espionage has 
the potential to lead to disastrous outcomes, additional 
nuclear proliferation, and damage to the business prospects of 
responsible nuclear companies like Westinghouse and Areva.
---------------------------------------------------------------------------
    \457\ The entity list names entities that conduct activities 
contrary to U.S. national security interests and are thus subject to 
licensing requirements for the purposes of exports, re-exports, or in-
country transfers of specific goods. See: ``Entity List.'' U.S. 
Department of Commerce Bureau of Industry and Security, https://
www.bis.doc.gov/index.php/policy-guidance/lists-of-parties-of-concern/
entity-list. And ``Addition of Certain Entities to the Entity List, 
Revision of Entries on the Entity List, and Removal of Entities From 
the Entity List.'' Federal Register, U.S. Department of Commerce Bureau 
of Industry and Security, 14 Aug. 2019, https://
www.federalregister.gov/documents/2019/08/14/2019-17409/addition-of-
certain-entities-to-the-entity-list-revision-of-entries-on-the-entity-
list-and-removal.
    \458\ ``U.S. Nuclear Engineer Sentenced to 24 Months in Prison for 
Violating the Atomic Energy Act.'' U.S. Department of Justice, 31 Aug. 
2017, https://bit.ly/2U1oMlL.
    \459\ Ibid.
---------------------------------------------------------------------------
    The PRC has stated its ambitions to lead in ``the 
formulation of general energy internet standards, cross-
industry public standards and important technical standards 
that are coordinated with smart cities.'' \460\ State Grid has 
``attached great importance to the development of international 
standards and Chinese electric engineering technologies and 
standards to become international standards so as to improve[e] 
the influence and say of China.'' \461\ To that end, the former 
chairman of State Grid\462\ and current chairman of China 
Huaneng Group, \463\ one of China's largest electricity 
generating companies, Dr. Shu Yinbiao, was also installed as 
president of the International Electrotechnical Commission 
(IEC) in 2020.\464\ The IEC is ``the leading global 
organization that publishes consensus-based international 
standards and manages conformity assessment systems for 
electric and electronic products, systems and services.'' \465\
---------------------------------------------------------------------------
    \460\ ``News Release: Uphold Multilaterism and Jointly Build Human 
Community with Shared Future.'' Peoples Republic of China National 
Development and Reform Commission, 24 Sep. 2020, https://bit.ly/
2JL15ML.
    \461\ ``International Standards.'' State Grid Corporation of China, 
https://bit.ly/2I2TkkV.
    \462\ ``Shu Yinbiao.'' World Economic Forum, www.weforum.org/
people/shu-yinbiao.
    \463\ ``IEC Officers.'' International Electrotechnical Commission, 
www.iec.ch/about/profile/officers.htm.
    \464\ Note also that three of the IEC's eight ``ambassadors'' are 
representatives of major Chinese entities and their interests: Huawei, 
CHINT Group, and the China Information Security Certification Center. 
See: ``IEC Ambassadors.'' International Electrotechnical Commission, 
https://bit.ly/2GA5fpq.
    \465\ ``What we do.'' International Electrotechnical Commission, 
https://www.iec.ch/about/activities/?ref=menu.
---------------------------------------------------------------------------
    While still chairman of State Grid and then an IEC vice-
president, Dr. Shu stated that ``during the last ten years, 
along with the rapid development of Chinese technology, more 
and more of our technical standards have been adopted as IEC 
International Standards.'' \466\ Many of the new standards are 
in UHV transmission. The Argonne National Laboratory warns that 
``the potential internationalization of China's domestic UHV 
standards will almost certainly affect the global market share 
for both Chinese manufacturers and dominant multinational 
companies.'' \467\
---------------------------------------------------------------------------
    \466\ Shu, Yinbiao. ``IEC Global Visions - State Grid Corporation 
of China: Sharing Know-How--Advancing Progress.'' Global Visions, 
International Electrotechnical Commission, https://bit.ly/3n101T8.
    \467\ ``Power Play: China's Ultra-High Voltage Technology and 
Global Standards.'' Paulson Papers on Standards, The Paulson Institute, 
Apr. 2015, https://bit.ly/32kS5UO.
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Security and Political Leverage
    While Russian dominance of gas pipelines in Europe has long 
been a deep concern for many on both sides of the Atlantic, 
continent-wide electric power transmission, or supergrids, may 
soon be a real possibility and point of concern.\468\ Like oil 
and gas pipelines, the parties that control the energy and its 
transmission will be in a very powerful position. This requires 
substantial U.S. and European vigilance of PRC control in this 
area. Already, government reports in the Philippines have 
warned that their state electricity grid, which is partially 
run by State Grid, can be shut down on the Chinese government's 
orders and ``disrupt national power systems.'' \469\ The 
Brookings Institution's Tom Stefanick writes:
---------------------------------------------------------------------------
    \468\ ``What is a Supergrid?'' The Economist, 17 Jan. 2020, https:/
/econ.st/2U1hVsD.
    \469\ Griffiths, James. ``China can shut off the Philippines' power 
grid at any time, leaked report warns.'' CNN, 26 Nov. 2019, https://
www.cnn.com/2019/11/25/asia/philippines-china-power-grid-intl-hnk/
index.html.


        [O]perat[ion of] continental-scale power networks 
        requires tight integration of massive high-voltage 
        generators, transformers, and cables on the one hand, 
        and precision real-time sensing, synchronization, and 
        control on the other. Data networks are critical to 
        enabling human and automated control of power grids 
        through devices often referred to as supervisory 
        control and data acquisition (SCADA) systems.\470\
---------------------------------------------------------------------------
    \470\ Stefanick, Tom. ``Secure power: Gigawatts, Geopolitics, and 
China's Energy Internet.'' Global China, The Brookings Institution, 
Apr. 2020, https://brook.gs/3mXASZG.


    Indeed, the Cyberspace Administration of China's vision for 
a ``ubiquitous power Internet of Things'' as ``the application 
of modern information technologies such as mobile Internet and 
artificial intelligence to realize the interconnection of 
everything in the power system'' is representative of the 
policy guidance that directs and informs State Grid's endeavors 
to connect electrical grids to the Internet of Things.\471\ 
With this aim in mind, State Grid is now in the top twenty of 
companies filing artificial intelligence patents with the World 
Intellectual Property Organization, and is the clear leader in 
patent filings for ``energy management.'' \472\
---------------------------------------------------------------------------
    \471\ Rengong zhineng rang dianwang bian `` congming'' le'' 
[Artificial Intelligence Makes the Power Grid `Smart' ''], Cyberspace 
Administration of China, 26 Jul. 2019, https://bit.ly/3eASRCf.
    \472\ ``WIPO Technology Trends 2019: Artificial Intelligence.'' 
Technology Trends 2019, World Intellectual Property Organization, 2019, 
https://bit.ly/2Idw5Ec.
---------------------------------------------------------------------------
    Today's less advanced, but computer-run technologies have 
already shown themselves to be vulnerable to state-sponsored 
infiltration or shutdown. Russian attacks temporarily took down 
parts of Ukraine's transmission grid in 2015 and 2016 and were 
only saved from serious damage by manual backups and analog 
relays.\473\ Should State Grid--or another state-controlled 
actor like it--come to control large swathes of international 
power grids, the geopolitical consequences could be severe. In 
the internet-powered supergrids of the future, argues Phillip 
Cornell, ``even if local grids are independently operated, deep 
interconnection means that supply and demand will increasingly 
be matched across the super-grid, making them more 
interdependent.'' \474\
---------------------------------------------------------------------------
    \473\ Greenberg, Andy. ``How an Entire Nation Became Russia's Test 
Lab for Cyberwar.'' Wired, Conde Nast, 20 Jun. 2017, www.wired.com/
story/russian-hackers-attack-ukraine/.
    \474\ Cornell, Phillip. ``Energy Governance and China's Bid for 
Global Grid Integration.'' EnergySource, Atlantic Council, 05 Sept. 
2019, https://bit.ly/3p24Ayp.
---------------------------------------------------------------------------
    While the rules contained in the EU's Third Energy 
Package\475\ may provide some protection in Europe, and 
investment screening rules in both the United States and 
European nations may prove effective, a growing Chinese-
controlled UHV grid is a distinct possibility. The Global 
Energy Interconnection Development and Cooperation 
Organization, established by State Grid, states its goal is to 
see the construction of power grid interconnection between Asia 
and Europe\476\ and envisions at least four projects touching 
Europe by 2035.\477\ Control over international power grids may 
begin to affect the political choices of nations that become 
dependent on the PRC or State Grid for their energy needs. More 
worrisome, said Yobun Inoue of Japan's Institute of Energy 
Economics, ``Getting hold of power grids gives [State Grid] a 
lot of information about a country's energy supply and 
demand.'' \478\ PRC access to such information could inform 
China's energy investment decisions.
---------------------------------------------------------------------------
    \475\ ``Third Energy Package - Energy European Commission.'' 
Energy, European Commission, 16 Mar. 2020, https://ec.europa.eu/energy/
topics/markets-and-consumers/market-legislation/third-energy-package--
en.
    \476\ Research Report on the Belt and Road Energy Interconnection. 
Global Energy Interconnection Development and Cooperation Organizations 
(GEIDCO), Apr. 2019, https://bit.ly/2Ickbuw. Powerpoint Presentation.
    \477\ Ibid, slide 18.
    \478\ Okutsu, Akane and Cliff Venzon and CK Tan. "China's Belt and 
Road power grids keep security critics awake." Nikkei Asia, 03 Mar. 
2020, https://asia.nikkei.com/Spotlight/Asia-Insight/China-s-Belt-and-
Road-power-grids-keep-security-critics-awake.
---------------------------------------------------------------------------
    In the nuclear arena, as in other areas, the PRC is likely 
to take a page from the Russian textbook and its state-owned 
nuclear firm RosAtom, and begin building nuclear plants as part 
of larger coercive diplomatic packages.\479\ Unlike private 
companies, PRC SOEs can afford to bankroll civil nuclear 
projects that might not be profitable for private companies and 
can provide further sweeteners to close deals. As China is not 
a member of the Organization for Economic Cooperation and 
Development, PRC companies are also not held to the agreed 
rules on chargeable interest rates and loan tenor.\480\
---------------------------------------------------------------------------
    \479\ Thoburn, Hannah. ``Russia building nuclear reactors - and 
influence - around the globe.'' Reuters, 05 May 2015, https://
www.reuters.com/article/thoburn-rosatom/column-russia-building-nuclear-
reactors-and-influence-around-the-globe-idUSL1N0XW1U320150505.
    \480\ ``Trade And Agriculture Directorate Participants To The 
Arrangement On Officially Supported Export Credits.'' Organisation for 
Economic Co-Operation and Development, 15 Jan. 2020, p. 1-15,https://
bit.ly/2GBiWo5.
---------------------------------------------------------------------------
Confronting These Challenges
    Recognizing these dangers, the German government in 2018 
acted in extraordinary circumstances to prevent State Grid from 
purchasing 20 percent of 50Hertz, a large utility in 
Germany.\481\ Although the percentage of potential purchase was 
below the 25 percent threshold then needed to trigger 
investment screening procedures, the German government utilized 
its state investment bank KfW to purchase the shares and keep 
them out of PRC hands.\482\ But this scenario has been--until 
now--relatively rare. Sellers tend to take the best offer, and 
often, that comes from China and state-backed companies. As the 
United States and Europe have not traditionally engaged in the 
kind of state-supported enterprise purchases that Beijing 
supports, we must develop a joint strategy for how to contend 
with the risks of purchases of key utilities or industries. 
Market decisions now have to be calculated with a political 
risk factor that was once not necessary.
---------------------------------------------------------------------------
    \481\ Braw, Elisabeth. ``Chinese Acquisitions of Western Firms 
Threaten National Security.'' Foreign Policy, 24 Aug. 2020, https://
foreignpolicy.com/2020/08/24/chinese-acquisitions-of-western-firms-
threaten-national-security/.
    \482\ ``KfW acquires temporary stake in German TSO 50Hertz on 
behalf of the Federation.'' The Federal Government of Germany Federal 
Ministry of Finance, 27 Jul. 2018, https://
www.bundesfinanzministerium.de/Content/EN/Pressemitteilungen/2018/2018-
07-27-50-Hertz.html.
---------------------------------------------------------------------------
    Awareness of the dangers inherent in super-connected power 
grids is also growing. A recently-passed law in the United 
States takes the first steps towards protecting the American 
electric grid from cyber-attacks. The law mandates a study, 
currently underway, on the efficacy of replacing some key 
points of digital infrastructure with physical, unhackable 
infrastructure.\483\ A new approach pioneered by Idaho National 
Labs, called the ``consequence-driven, cyber-informed 
engineering methodology,'' requires utility operators to 
``identif[y] the most essential processes and functions and 
then reduc[e] or eliminate[e] the digital pathways attackers 
could use to reach them.'' \484\ Creating these ``gaps'' in the 
grid can either buy time to stop a hack or diminish the 
severity of one. The United States has also banned the further 
use and import of ``bulk-power system electrical equipment'' 
with ties to ``a foreign adversary.'' \485\ As grids around the 
world grow more interconnected and more tied to the internet, 
the European Union and individual nations should examine 
similar steps.
---------------------------------------------------------------------------
    \483\ ``Risch, King Bill Protecting Energy Grid from Cyberattacks 
Becomes Law.'' Office of Senator James Risch, 23 Dec. 2019, https://
bit.ly/3lcxXvS.
    \484\ Bochman, Andy. ``Internet Insecurity.'' The End of 
Cybersecurity, Harvard Business Review, Harvard Business Publishing, 
May 2018, https://hbr.org/cover-story/2018/05/internet-insecurity.
    \485\ ``Executive Order 13920: Securing the United States Bulk-
Power System.'' Federal Register, Executive Office of the President, 01 
May 2020, https://bit.ly/2TZmcN1.
---------------------------------------------------------------------------
Ports and Shipping
Overview
    China's port investments--though extending back several 
decades--have taken on a new significance as a critical element 
of the Maritime Silk Road, the maritime part of OBOR.\486\ 
Ports are, in effect, the first stepping stone to the rest of 
OBOR, linking PRC companies, goods, and services to other forms 
of transport infrastructure. This provides overseas markets to 
the PRC and economic opportunities for host countries. However, 
port investments also serve clear strategic purposes that 
should cause concern for the United States and Europe. Ports 
provide PRC access to strategic locations, thereby helping the 
People's Liberation Army Navy (PLAN) project power further 
afield and increase PRC influence globally. Alongside PRC 
consideration of establishing overt military bases, commercial 
port investments present a significant challenge for the U.S. 
military today, could have a greater impact on NATO access and 
planning in the future, and could complicate efforts by the 
United States and Europe seeking to deepen engagement in Africa 
and the Indo-Pacific. A second and more immediate challenge is 
the use of untrusted technology in this highly sensitive 
sector, aiding intelligence gathering opportunities and 
potentially providing access to commercially sensitive 
information as well.
---------------------------------------------------------------------------
    \486\ Thorne, Devin and Ben Spevack. Harbored Ambitions: How 
China's Port Investments are Strategically Reshaping the Indo-Pacific. 
C4ADS, 2018, p. 10, https://bit.ly/355puEX.
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    Addressing these challenges will require long-term 
cooperation between the United States and Europe. This is 
particularly true now that PRC port investments are a global 
enterprise. In the Indo-Pacific region, PRC companies have 
markedly stepped up investments along strategic sea routes in 
places like Cambodia, Myanmar, Malaysia, Indonesia, and Sri 
Lanka.\487\ In sub-Saharan Africa, PRC companies are involved 
in 46 ports, operating 11 of them.\488\ PRC companies have 
stakes in five of the top 10 European ports by container 
volume.\489\ In the United States, PRC state-owned enterprises 
have stakes in ports at Los Angeles and Seattle.\490\ A COSCO 
Shipping Corporation Limited (COSCO) subsidiary recently sold 
its stake in the Port of Long Beach, California, as part of a 
deal with the Departments of Homeland Security and Justice, 
which both raised security concerns about the investment.\491\
---------------------------------------------------------------------------
    \487\ Ibid.
    \488\ Devermont, Judd. ``Assessing the Risks of Chinese Investments 
in Sub-Saharan African Ports.'' Center for Strategic and International 
Studies, 04 Jun. 2019, https://www.csis.org/analysis/assessing-risks-
chinese-investments-sub-saharan-african-ports.
    \489\ Petkova, Mirela and Frans-Paul Van der Putten. ``Building the 
`Belt and Road' in Europe? Chinese construction companies and transport 
infrastructure in the European Union.'' Clingendael Institute, Apr. 
2020, p. 3-4, https://bit.ly/355yyK8.
    \490\ Haire, Chris. ``Chinese company to sell Long Beach Container 
Terminal for $1.78 billion.'' Long Beach Press-Telegram, 01 May 2019, 
https://www.presstelegram.com/2019/04/30/chinese-company-to-sell-long-
beach-container-terminal-for-1-78-billion/; And Gallagher, John. 
``Experts warn of China's influence at U.S. ports.'' Freight Waves, 22 
Oct. 2019, https://www.freightwaves.com/news/experts-warn-of-chinas-
influence-at-us-ports.
    \491\ Yiu, Enoch. ``US Security Concerns Force Cosco-Owned Orient 
Overseas to Sell Long Beach Port in California.'' South China Morning 
Post, 01 May 2019, https://bit.ly/369WNWN.
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Economic Challenges
    PRC port investment has resulted in economic benefits. For 
example, the throughput at the Port of Piraeus increased 200 
percent from 2007 to 2017 under the management of COSCO, 
benefitting the port and certainly benefitting COSCO 
itself.\492\ However, European observers have pointed to long-
term economic detriments, as well. In its January 2020 report 
on the economic challenges OBOR presents to European companies, 
the EU Chamber of Commerce noted: ``[T]he greatest concern is 
the emergence of the still-growing SASAC [China's State-owned 
Assets Supervision and Administration Commission of the State 
Council] monopoly of the shipping sector's value chain, as it 
raises serious questions about how global competition can be 
maintained and casts the maritime aspect of the BRI [Belt and 
Road Initiative] in a grim light.'' \493\ European shipping 
giants are not competing against individual SOEs but rather 
against SASAC, which is overseeing industry consolidation 
across the maritime value chain, as well as a variety of 
government subsidies to help SOEs compete globally.\494\
---------------------------------------------------------------------------
    \492\ Van der Putten, Frans-Paul. ``European seaports and Chinese 
strategic influence: The relevance of the Maritime Silk Road for the 
Netherlands.'' Clingendael Institute, Dec. 2010, p. 14-15, https://
www.clingendael.org/publication/european-seaports-and-chinese-
strategic-influence-0.
    \493\ The Road Less Travelled: European Involvement in China's Belt 
and Road Initiative. European Union Chamber of Commerce in China, Jan. 
2020, p. 21, https://bit.ly/2I462Qt.
    \494\ Ibid, p. 21.
---------------------------------------------------------------------------
    Two of the largest state-owned firms involved in port 
investment, operation, and management are the aforementioned 
COSCO and China Merchants Port Holdings Co. (CMPort). As of 
2020, COSCO had an operating and management role at 36 ports 
worldwide, and CMPort's portfolio spans 41 ports in 25 
countries.\495\ Ports are simply one piece of COSCO and 
CMPort's expanding role across global maritime supply chains. 
CMPort's parent company is now the world's largest port and 
logistics company, and COSCO the world's third largest shipping 
firm.\496\
---------------------------------------------------------------------------
    \495\ ``About CSP Corporate Profile.'' COSCO Shipping Ports 
Limited, 2020, https://ports.coscoshipping.com/en/AboutCSP/
CorporateProfile/Overview/; ``Zhaoshang ju gangkou knoggu youxian 
gongsi'' ``[Company Profile],'' China Merchants Port Holdings Co. Ltd., 
23 Sep. 2020, www.cmport.com.hk/EN/about/Profile.aspx?from=2.
    \496\ Blanchette, Jude, et al. ``Hidden Harbors: China's State-
backed Shipping Industry.'' CSIS Briefs, Center for Strategic and 
International Studies, Jul. 2020, p. 1, https://bit.ly/2TYFa6y.
---------------------------------------------------------------------------
    SOEs are found throughout the maritime supply chain, and 
are receiving direct and indirect subsidies, state-backed 
financing, and other non-market forms of support.\497\ Analysis 
of the shipping and shipbuilding industries by the Center for 
Strategic and International Studies, for example, found that 
these companies received $127 billion in state-backed financing 
from 2010 to 2018, and about $5 billion in direct subsidies. 
The authors note that this is likely a ``conservative 
estimate,'' given the data does not include potential indirect 
subsidies, state-backed fundraising, preferential borrowing, 
barriers to foreign competitors in the PRC market, advantages 
garnered via SASAC's consolidation policies, and forced 
technology transfer and intellectual property theft.\498\
---------------------------------------------------------------------------
    \497\ The Road Less Travelled: European Involvement in China's Belt 
and Road Initiative. European Union Chamber of Commerce in China, Jan. 
2020, p. 21, https://bit.ly/2I462Qt
    \498\ Blanchette, Jude, et al. ``Hidden Harbors: China's State-
backed Shipping Industry.'' CSIS Briefs, Center for Strategic and 
International Studies, Jul. 2020, p. 6, https://bit.ly/2TYFa6y.
---------------------------------------------------------------------------
Security Risks
    The link between OBOR and the PRC's aspirations for its 
military is becoming more direct. Former CCP General Secretary 
Hu Jintao was the first to prioritize China becoming a ``strong 
maritime country,'' and current CCP General Secretary Xi 
Jinping was the first to connect China's overseas development 
and economic goals (particularly via OBOR) more explicitly to 
its security goals.\499\ In January 2019, Xi emphasized 
completing a ``security system'' for OBOR, so as to 
``strengthen protection of [China's] interests and ensure the 
security of major overseas projects.'' \500\
---------------------------------------------------------------------------
    \499\ Duchatel , Mathieu and Alexandre Sheldon Duplaix. ``Blue 
China: Navigating the Maritime Silk Road to Europe.'' Policy Brief, 
European Council on Foreign Relations, Apr. 2018, p. 3, https://bit.ly/
354Elzk.
    \500\ As quoted in Sbragia, Chad. ``Statement.'' Hearing on China's 
Maritime Silk Road Initiative, U.S. House Committee on Transportation 
and Infrastructure Subcommittee On Coast Guard And Maritime 
Transportation, 17 Oct. 2019, p. 4, https://bit.ly/3eGFMYc.
---------------------------------------------------------------------------
    China's definition of a ``strong maritime country'' 
includes a ``powerful navy,'' and the desired posture for its 
navy has also evolved significantly in the last decade.\501\ 
While it formerly emphasized a focus on ``offshore defense,'' 
it has now expanded to stress the importance of ``far seas 
protection,'' in part to safeguard China's overseas 
interests.\502\ As China's 2019 defense white paper states, 
China is ``build[ing] far seas forces,'' ``develop[ing] 
overseas logistical facilities,'' ``conduct[ing] vessel 
protection operations,'' and ``maintain[ing] the security of 
strategic SLOCs [sea lines of communication],'' among other 
tasks.\503\ Various PRC publications, including the 2013 
Science of Military Strategy, note the importance of 
``strategic strong points,'' a term that has been used to mean 
construction of overseas ports in strategic locations or places 
that can support military bases.\504\
---------------------------------------------------------------------------
    \501\ Duchatel , Mathieu and Alexandre Sheldon Duplaix. ``Blue 
China: Navigating the Maritime Silk Road to Europe.'' Policy Brief, 
European Council on Foreign Relations, Apr. 2018, p. 8, https://bit.ly/
354Elzk.
    \502\ Ibid, p. 28.
    \503\ Erickson, Andrew S. Full Text of 2019 Defense White Paper: 
`China's National Defense in the New Era'. The State Council 
Information Office of the People's Republic of China, 24 Jul. 2019, 
www.andrewerickson.com/2019/07/full-text-of-defense-white-paper-chinas-
national-defense-in-the-new-era-english-chinese-versions.
    \504\ Kennedy, Conor. ``Strategic Strong Points and Chinese Naval 
Strategy.'' China Brief, vol. 19, no. 6, 22 Mar. 2019. Jamestown 
Foundation, https://jamestown.org/program/strategic-strong-points-and-
chinese-naval-strategy.
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    The need for a greater naval presence to defend overseas 
interests--and to construct logistics and support nodes for the 
military--is a noticeable theme in the writings of Chinese 
security researchers.\505\ As researchers from Institut 
Montaigne--referring to China's new military base in Djibouti--
note, ``Since Djibouti, the Chinese strategic community takes 
for granted that the People's Liberation Army (PLA)--and 
especially the navy--is building a logistical support network 
to ensure the success of future operations to protect Chinese 
overseas interests.'' \506\ For example, they cite PRC scholars 
who, concerned by growing U.S.-India ties, recommend ``the 
construction of multi-level shipping supply bases along the 
Indian Ocean coast'' to protect overseas interests, including 
supplying a navy to undertake operations further afield.\507\
---------------------------------------------------------------------------
    \505\ Xue, Guifang (Julia). ``The Potential Dual Use of Support 
Facilities in the Belt and Road Initiative.'' Securing the Belt and 
Road Initiative: China's Evolving Military Engagement Along the Silk 
Roads, special report no. 80, National Bureau of Asian Research, Sep. 
2019, p. 54, https://www.nbr.org/product/special-report-no-80-securing-
the-belt-and-road-initiative-chinas-evolving-military-engagement-along-
the-silk-roads/.
    \506\ Duchatel, Mathieu. ``Introduction.'' China's Port Investment: 
The Flag Behind the Trade, China Trends, Institut Montaigne, Jun. 2019, 
p. 1, https://bit.ly/2GBkPBb. See also: Kennedy, Conor. ``Strategic 
Strong Points and Chinese Naval Strategy.'' China Brief, vol. 19, no. 
6, 22 Mar. 2019. Jamestown Foundation, https://jamestown.org/program/
strategic-strong-points-and-chinese-naval-strategy.
    \507\ Stanzel, Angela. ``China's String of Ports in the Indian 
Ocean.'' China's Port Investment: The Flag Behind the Trade, China 
Trends, Institut Montaigne, Jun. 2019, p. 4, https://
www.institutmontaigne.org/documents/china-trends/China-trends-2-print-
web.pdf.
---------------------------------------------------------------------------
    China is likely to pursue a mix of overseas bases and dual-
use support facilities, with commercial ports serving as a key 
enabler for the latter. Rather than military-only facilities, 
Shanghai-based scholar Xue Guifang notes that China ``favors 
the commercial model (the development of ports purely for 
commercial use) and the dual-use model (the development of 
commercial ports with the potential to serve military 
functions).'' \508\ In particular, ``where it enjoys close ties 
to the host country, China may gradually select some overseas 
commercial ports for dual use to project power.'' \509\ A new 
report co-authored by former U.S. Assistant Secretary of State 
Daniel Russel cautions that ``Beijing appears to seek ports 
with terminals capable of supporting various types of PLA 
military operations. This includes high-standard Ro-Ro [roll-
on/roll-off] features to unload heavier than normal cargo (e.g. 
armored vehicles), berth depths that are at least 10 meters (to 
accommodate warships), cold storage facilities, assembly sites, 
and heavy-duty reinforced access roads.'' \510\
---------------------------------------------------------------------------
    \508\ Xue, Guifang (Julia). ``The Potential Dual Use of Support 
Facilities in the Belt and Road Initiative.'' Securing the Belt and 
Road Initiative: China's Evolving Military Engagement Along the Silk 
Roads, special report no. 80, National Bureau of Asian Research, Sep. 
2019, p. 53-54, https://www.nbr.org/product/special-report-no-80-
securing-the-belt-and-road-initiative-chinas-evolving-military-
engagement-along-the-silk-roads/.
    \509\ Ibid, p. 54.
    \510\ Russel, Daniel R., and Blake H. Berger. Weaponizing the Belt 
and Road Initiative. Asia Society Policy Institute, Sep. 2020, p. 19, 
https://bit.ly/2I2tUE3.
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    The same PRC SOEs involved in port operation and shipping 
already provide logistics support to the PLA. That role could 
grow as China's overseas interests increase and the PLA expands 
its operations further afield. COSCO, CMPort, and their 
subsidiaries have supported the PLA in recent years through 
transport missions, underway fuel replenishment, and 
participation in exercises to move entire combat units (both 
troops and equipment).\511\
---------------------------------------------------------------------------
    \511\ Kennedy, Conor. ``Civil Transport in PLA Power Projection.'' 
China Maritime Report, no. 4, U.S. Naval War College, p. 9, 11, 12, 
https://bit.ly/32mFb94. And Peltier, Chad. ``China's Logistics 
Capabilities for Expeditionary Operations.'' Jane's, 2019, p. 51, 
https://bit.ly/3p9Fqy8.
---------------------------------------------------------------------------
    This support is in fact required by law. China's 2010 
National Defense Mobilization Law calls for ``combining 
peacetime production with wartime production'' and mandates 
that ``any organization or individual has the obligation to 
accept the expropriation of civil resources in accordance with 
the law.'' \512\ Key objectives of the 2017 Law of the People's 
Republic of China on National Defense Transportation include 
``promoting the development of military and civilian 
integration in the transportation field'' and ``guaranteeing 
smooth progress for national defense activities.'' \513\ It 
allows the PRC government to ``expropriate'' civilian transport 
resources for national purposes.\514\ China also instituted 
``Technical Standards for New Civilian Ships to Implement 
National Defense Requirements'' in 2015, for vessels to ``serve 
national defense needs if they are mobilized.'' \515\
---------------------------------------------------------------------------
    \512\ ``Zhonghua renmin gongheguo guofang dongyuan fa: yu di shiyi 
jie quanguo renmin daibiao dahui changwu weiyuanhui di shisan ci huiyi 
tongguo'' [The National Defense Mobilization Law of the People's 
Republic of China: Adopted at the 13th Meeting of the Standing 
Committee of the 11th National People's Congress],'' 26 Feb. 2010 
https://bit.ly/36h5Vc1, as quoted in: Russel, Daniel R., and Blake H. 
Berger. Weaponizing the Belt and Road Initiative. Asia Society Policy 
Institute, Sep. 2020, p. 18, https://bit.ly/2I2tUE3.
    \513\ Law of the Peoples Republic of China on National Defense 
Transportation. Panyue, Huang, editor, Chinese Ministry of National 
Defense, 03 Mar. 2017, https://bit.ly/3kadiXM.
    \514\ Ibid.
    \515\ Thorne, Devin and Ben Spevack. Harbored Ambitions: How 
China's Port Investments are Strategically Reshaping the Indo-Pacific. 
C4ADS, 2018, p. 23, https://bit.ly/3p5svNG. And Zhao Lei. ``New rules 
mean ships can be used by military.'' China Daily, 18 Jun. 2015, 
https://bit.ly/3mXf7Jq.
---------------------------------------------------------------------------
    The extent to which China can leverage its port investments 
and its global shipping assets for military purposes depends on 
several factors. First is China's relationship with the host 
government, and the extent to which China has leverage over 
that government. In this context, China's port investments in 
the Indo-Pacific and Africa are of far greater concern than its 
European investments. Second, the degree of operational control 
over a given port is also important. As military analyst Isaac 
Kardon puts it, ``Majority or sole ownership of the port 
operator is the condition that best positions a firm to 
guarantee logistical support for naval operations.'' \516\ 
Where PRC firms do hold operational control in Europe, this 
could present a more immediate risk to core transatlantic 
interests than ports in other regions. Third are potential 
logistical impediments to the ability of the PLA to use ports, 
such as commercial firms not yet properly trained and equipped 
to support the PLA effectively, ports not being built to 
military specifications despite existing regulations, and 
difficulties for commercial ports to procure materials the PLA 
might need.\517\
---------------------------------------------------------------------------
    \516\ Kardon, Isaac B. ``Panel II: China's Development of 
Expeditionary Capabilities: ``Bases and Access Points.'' Chinese 
Military Power Projection and U.S. National Interests, U.S.-China 
Economic and Security Review Commission, 20 Feb. 2020, p. 3, https://
bit.ly/38wC1DJ.
    \517\ Ibid, p. 7-8.
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Implications for the United States and Europe
    The United States and Europe should be concerned about 
China's port investments for several reasons. First, ports 
where PRC companies have ownership, a managerial role, or 
physical presence could be exploited by the PRC government to 
conduct intelligence gathering activities. Access to data 
tracking movement of goods and ships could provide immense 
commercial advantages, and ports can become a platform for 
observing the U.S. and other militaries.\518\ In particular, 
the PRC's development of `smart ports' is ushering in the use 
of untrusted vendors for the technological components of port 
operation, which present cyber and data security risks.\519\ As 
one example, PRC company Nuctech increasingly supplies critical 
equipment necessary for efficient port operations, such as 
cargo scanners and data integration tools. Nuctech technology 
is also present in airports across Europe and is used by 
customs and police around the world.\520\ Nuctech has grabbed 
large chunks of market share in Europe through unfair economic 
practices. According to research in a new edited volume by Didi 
Kirsten Tatlow and William D. Hannas, the company's success is 
underpinned by a state-supported effort to acquire cargo 
container screening technologies from European companies in 
1980s and 1990s. After the project was prioritized in China's 
8th Five Year Plan, Tsinghua University was tasked with 
conducting the necessary research to copy the technology.\521\ 
Today, Nuctech underbids its competitors across Europe and 
donates products to key OBOR countries, including in Eastern 
Europe.\522\
---------------------------------------------------------------------------
    \518\ Russel, Daniel R., and Blake H. Berger. Weaponizing the Belt 
and Road Initiative. Asia Society Policy Institute, Sep. 2020, p. 35, 
https://bit.ly/38jH5Lu.
    \519\ Ibid.
    \520\ Cerulus, Laruens. ``Meet the Huawei of airport security.'' 
Politico Europe, 11 Feb. 2020, https://www.politico.eu/article/beijing-
scanners-europe-nuctech/. And Ren Xiaojin. ``China's 'Silicon Valley' 
applies tech prowess to Belt and Road.'' China Daily, 17 May 2017, 
https://bit.ly/32lUKhd
    \521\ Tatlow, Didi Kirsten, Hinnerk Feldwisch-Drentrup and Ryan 
Fedasiuk. ``Europe: A technology transfer mosaic.'' China's Quest for 
Foreign Technology: Beyond Espionage, Hannas, William D. and Didi 
Kirsten Tatlow, editors, Routledge, 2020, p. 213-214, https://bit.ly/
32m8qsr.
    \522\ ``Zhongguo yuanzhu a'er baniya haiguan jiance shebei jiaojie 
yishi zai du la si gangkou juxing'' [``Handover ceremony of China-
bought Albanian customs monitoring equipment held at Port of Durres'']. 
Embassy of the People's Republic of China in the Republic of Albania, 
15 Apr. 2008, http://al.china-embassy.org/chn/zagx/zajw/t514030.htm. 
And ``Belarus' Customs gets technical aid from China.'' Belarusian 
Telegraph Agency, 16 May 2019, https://bit.ly/38jmpTN.
---------------------------------------------------------------------------
    Nuctech's parent company Tsinghua Tongfang has ties to the 
PLA. Company documents tout Tsinghua Tongfang's role in 
advancing ``the national strategy of military-civil fusion, 
encircling both the military and civilian markets,'' and its 
other portfolio holdings include a company that supplies 
command and control systems to the PLA.\523\ Tsinghua Tongfang 
itself is owned by state-owned China National Nuclear 
Corporation--a defense conglomerate also with significant ties 
to the PLA.\524\ Member of European Parliament Axel Voss has 
sounded the alarm on Nuctech's presence in European airports, 
and maritime ports should receive similar attention given U.S. 
and European economic dependence on maritime trade.\525\
---------------------------------------------------------------------------
    \523\ Tongfang report. 2018, http://pdf.dfcfw.com/pdf/H2--
AN201904251322616010--1.PDF, as cited in Tatlow, Didi Kirsten, Hinnerk 
Feldwisch-Drentrup and Ryan Fedasiuk. ``Europe: A technology transfer 
mosaic.'' China's Quest for Foreign Technology: Beyond Espionage, 
Hannas, William D. and Didi Kirsten Tatlow, editors, Routledge, 2020, p 
212, 215, https://bit.ly/32m8qsr.
    \524\ ``DOD Releases List of Additional Companies, in Accordance 
with Section 1237 of FY99 NDAA.'' U.S. Department of Defense, 28 Aug. 
2020, https://bit.ly/36rqwe7.
    \525\ Cerulus, Laurens. ``Meet the Huawei of airport security.'' 
Politico Europe, 11 Feb. 2020, https://www.politico.eu/article/beijing-
scanners-europe-nuctech/.
---------------------------------------------------------------------------
    Second, ports operated by PRC companies could lead to 
greater PLA access and facilitate the PLAN's power projection 
capabilities further afield. The Pentagon has noted that these 
ports could allow the PLA to ``pre-position the necessary 
logistics support to sustain naval deployments in waters as 
distant as the Indian Ocean, Mediterranean Sea, and Atlantic 
Ocean to protect its growing interests.'' \526\ As discussed 
above, the tight links between commercial shipping companies 
and the PLAN could provide the latter with access to onshore or 
open water refueling, resupply, and other forms of 
support.\527\ Greater PLA presence in and access to these 
waterways certainly concern the United States given its 
military presence in the Indo-Pacific region. However, European 
nations' growing interest in protecting freedom of navigation 
shows that these developments could have a more direct impact 
on European economic and security interests as well.\528\
---------------------------------------------------------------------------
    \526\ Military and Security Developments Involving the People's 
Republic of China 2020: Annual Report to Congress. Department of 
Defense, Sep. 2020, p. 128-129, https://bit.ly/3lajH6x.
    \527\ Russel, Daniel R., and Blake H. Berger. Weaponizing the Belt 
and Road Initiative. Asia Society Policy Institute, Sep. 2020, p. 23, 
https://bit.ly/2GLh8sU.
    \528\ French Strategy in the Indo-Pacific: ``For An Inclusive Indo-
Pacific'' Republic of France Ministry of Foreign Affairs, Aug. 2019, p. 
1, https://bit.ly/3n0WvbB. And Policy guidelines for the Indo-Pacific 
region: Germany--Europe--Asia: shaping the 21st century together. The 
Federal Government of Germany Federal Foreign Office, Sep. 2020, p. 8, 
https://bit.ly/35c2eW1. And ``Partnership Interoperability 
Initiative.'' North Atlantic Treaty Organization, 12 Jun. 2020, https:/
/bit.ly/2U5PdH5.
---------------------------------------------------------------------------
    A third and related concern is the potential thwarting or 
denial of U.S. or allied access to ports where PRC companies 
have operational control. Even absent an explicit denial, the 
United States and its allies could perceive that espionage or 
other risks are too high to utilize a specific port. Further, 
increasingly limited safe options for port access will 
complicate military planning and operations.\529\
---------------------------------------------------------------------------
    \529\ For further discussion, see Russel, Daniel R., and Blake H. 
Berger. Weaponizing the Belt and Road Initiative. Asia Society Policy 
Institute, Sep. 2020, p. 38-40, https://bit.ly/36em7uF.
---------------------------------------------------------------------------
    The transatlantic alliance via NATO and the European Union 
must work together to encourage significant caution surrounding 
PRC port investments, and seek to limit these investments 
(particularly at strategic locations) and evaluate the security 
implications of current PRC presence, especially where that 
confers operational and managerial control. NATO can start by 
identifying and prioritizing PRC presence in European ports 
that could increase operational risks and complicate military 
planning, as well as by conducting a deep assessment of the 
implications of untrusted technologies in ports. The latter 
issue will also require significant outreach to the private 
sector.
    The United States and European partners like the United 
Kingdom and France should also focus on PRC port investment in 
the Indo-Pacific and Africa, and its implications for deeper 
transatlantic engagement and security cooperation in both of 
these regions. U.S. scholars have pointed to numerous port 
projects in the Indo-Pacific--from Gwadar in Pakistan to Koh 
Kong in Cambodia--which could support the PLA's power 
projection in the Indo-Pacific and assist it in overcoming key 
military challenges like being boxed in by strategic 
chokepoints such as the Strait of Malacca.\530\ In the longer-
term, the United States and Europe should be watchful of the 
PRC establishing a more overt military presence in both of 
these regions. The U.S. Department of Defense assesses that the 
PLA has considered basing in a variety of African and Indo-
Pacific nations in which the U.S. and European nations have a 
strong interest, including Thailand, Singapore, Indonesia, Sri 
Lanka, Kenya, Seychelles, and Angola.\531\
---------------------------------------------------------------------------
    \530\ Thorne, Devin and Ben Spevack. Harbored Ambitions: How 
China's Port Investments are Strategically Reshaping the Indo-Pacific. 
C4ADS, 2018, https://bit.ly/32oYDlC.
    \531\ Military and Security Developments Involving the People's 
Republic of China 2020. Department of Defense, Sep. 2020, p. 129, 
bit.ly/3lajH6x.
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Undersea Cables
Overview
    Undersea fiber optic cables are a crucial and irreplaceable 
form of critical digital infrastructure. These cables carry $10 
trillion in global business transactions per day, and at least 
95 percent of total digital communications.\532\ With ever-
greater demand for more bandwidth-intensive online activities 
like video streaming, and the advent of cloud computing and the 
Internet of Things, the imperative for a reliable and redundant 
system of undersea cables will only continue to increase.\533\ 
In today's market, PRC company Hengtong Group is becoming a 
stronger competitor to traditional players, especially through 
its subsidiary Huawei Marine. A more dominant market position 
could create dependency on PRC-built undersea cables, posing a 
significant cyber and data security threat. In the longer-term, 
China could use these cables to advance undersea sensors and 
acoustic networks to track submarines and other targets. It is 
imperative that the United States and Europe--particularly 
through NATO--begin to focus on the implications of PRC 
investment in this critical technology.
---------------------------------------------------------------------------
    \532\ Sanger, David E. and Eric Schmitt. ``Russian Ships Near Data 
Cables Are Too Close for U.S. Comfort.'' New York Times, 25 Oct. 2015, 
https://nyti.ms/3p7R5xl. And Strategic Importance of, and dependence 
on, undersea cables. NATO Cooperative Cyber Defense Center of 
Excellence, Nov. 2019, https://bit.ly/38rPpbZ. And Knapp, Brandon. 
``How exposed deep-sea cables could leave the economy vulnerable to a 
Russian attack.'' DefenseNews, 01 Feb. 2018, https://bit.ly/356iUhw. 
And Birnbaum, Michael. ``Russian submarines are prowling around vital 
undersea cables. It's making NATO nervous.'' The Washington Post, 22 
Dec. 2017, https://wapo.st/3mztAeA.
    \533\ Dean, Benjamin C. Transatlantic Cyber-Insecurity and 
Cybercrime: Economic Impact and Future Prospects. European 
Parliamentary Research Service, Dec. 2017, p. 36, https://bit.ly/
35eGDwd.
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Undersea Cables and the Digital Silk Road
    Undersea cables are a core focus of the PRC's Digital Silk 
Road (DSR), which aims to advance ``China-centric'' digital 
transformation globally and facilitate the PRC's emergence as 
the global leader in information and communications technology 
by constructing and investing in digital infrastructure abroad, 
as well as promoting greater reliance on PRC technology 
companies.\534\ PRC strategic acquisitions and investments 
abroad will in turn help it to develop advanced technologies 
for its own global economic and military power--not only 
undersea cables, but also satellite-navigation systems, 
artificial intelligence, and quantum computing.\535\ Undersea 
cables--followed by construction of a data center and cloud 
infrastructure--are a vital first step for DSR implementation 
because they allow for greater ``interconnection and 
intercommunication with the national network infrastructures 
along OBOR.'' \536\
---------------------------------------------------------------------------
    \534\ The Digital Silk Road Initiative: Wiring Global IT and 
Telecommunications to Advance Beijing's Global Ambitions. Pointe Bello, 
Jan. 2019, p. 7-8, https://bit.ly/2TVa6o7 And Dekker, Brigitte, et al. 
Unpacking China's Digital Silk Road. Clingendael, 2020, https://bit.ly/
2IcKGQc. And Cheney, Clayton. ``China's Digital Silk Road: Strategic 
Technological Competition and Exporting Political Illiberalism.'' Net 
Politics. Council on Foreign Relations, 26 Sep. 2019, https://
on.cfr.org/3evKkjT
    \535\ Cheney, Clayton. ``China's Digital Silk Road: Strategic 
Technological Competition and Exporting Political Illiberalism.'' Net 
Politics, Council on Foreign Relations, 26 Sep. 2019, https://
www.cfr.org/blog/chinas-digital-silk-road-strategic-technological-
competition-and-exporting-political.
    \536\ ``Create `Online Silk Road' and Promote the Development of 
`One Belt, One Road'--Part Four of the Interpretation of `The National 
Informatization Plan of the 13th Five-Year Plan' '' Website of the 
China Academy of Information and Communications Technology (CAICT), 
Ministry of Industry and Information Technology (MIIT), 05 Jan. 2017, 
http://www.caict.ac.cn/kxyj/caictgd/201804/t20180428--159428.htm as 
quoted in The Digital Silk Road Initiative: Wiring Global IT and 
Telecommunications to Advance Beijing's Global Ambitions. Pointe Bello, 
2019, p. 19, https://a.storyblok.com/f/58650/x/0c5c298009/pointe-bello-
digital-silk-road-2019.pdf.
---------------------------------------------------------------------------
    State-owned telecommunications firms China Mobile, China 
Telecom, and China Unicom are major investors in fiber-optic 
cable consortiums.\537\ However, the bigger shift is that PRC 
firms are playing a greater role in the construction, 
ownership, and operation of subsea cables, gaining on the 
market's three established players: SubCom (U.S.), Alcatel 
Submarine Networks (EU), and NEC (Japan). The key PRC player is 
Hengtong Group and its subsidiaries, including Huawei Marine 
(purchased from Huawei last year) and Hengtong Marine.\538\ A 
minor player only a decade ago, Huawei Marine's market share 
was projected to grow to 20 percent by the end of 2019 (up from 
7 percent during 2012-2015).\539\ Its growth is further 
evidenced by its move into more complex and geographically 
disbursed cable projects. Competitors claim that this 
increasingly global reach is abetted by substantial subsidies 
from the PRC government.\540\ The European Commission in 
September 2020 opened an anti-dumping investigation into 
optical fiber cables from China, of which Hengtong is a major 
supplier.\541\
---------------------------------------------------------------------------
    \537\ The Digital Silk Road Initiative: Wiring Global IT and 
Telecommunications to Advance Beijing's Global Ambitions, Pointe Bello, 
2019, p. 22-23, https://a.storyblok.com/f/58650/x/0c5c298009/pointe-
bello-digital-silk-road-2019.pdf.
    \538\ ``Profile.'' Smart Ocean System, https://bit.ly/3l242WN.
    \539\ Huang, Eli. ``China's Cable Strategy: Exploring Global 
Undersea Dominance.'' RealClearDefense, 04 Dec. 2017, https://bit.ly/
34ZhqWc.
    \540\ Stavridis, James. ``China's Next Naval Target Is the 
Internet's Underwater Cables.'' Bloomberg, 08 Apr. 2019, https://
www.bloomberg.com/opinion/articles/2019-04-09/china-spying-the-
internet-s-underwater-cables-are-next.
    \541\ ``EU launches investigation into Chinese optical fibre cable 
imports.'' Reuters, 24 Sep. 2020, https://www.reuters.com/article/eu-
china-digital/eu-launches-investigation-into-chinese-optical-fibre-
cable-imports-idUSKCN26F2AB.
---------------------------------------------------------------------------
PRC Cable Projects
    When it comes to the integrity of undersea cables, the 
United States and Europe have traditionally been far more 
focused on the threat posed by Russia. Throughout the Cold War, 
and even in recent years, the United States and Europe have 
been alert to the risk of Russia's large submarine fleet 
tapping these cables, or seeking to locate vulnerable and hard-
to-reach stretches of cable to cut in the event of conflict. 
Russia remains a significant threat: in 2015, the New York 
Times reported sightings of a Russian surveillance ship 
equipped with deep water vehicles near a known cable route off 
the U.S. East Coast.\542\
---------------------------------------------------------------------------
    \542\ Sanger, David E. and Eric Schmitt. ``Russian Ships Near Data 
Cables Are Too Close for U.S. Comfort.'' New York Times, 25 Oct. 2015, 
https://nyti.ms/3l2N4b0.
---------------------------------------------------------------------------
    Russia has undertaken such operations for years. In 
reference to the Russian threat, former U.K. Chief of Defence 
Staff General Lord Nicholas Houghton said, ``[W]e should not 
fall victim of our own lack of imagination when assessing this 
threat.'' \543\ The United States and Europe should also not 
make this mistake when it comes to China. It is important that 
the transatlantic community get ahead of this issue, especially 
as Hengtong Group gains ground in the market. Rather than the 
threat of military sabotage familiar to NATO, this threat is 
driven by a potentially serious commercial competitor that--in 
gaining a greater market position--could impact the security of 
sensitive data and assist the PLA. This is a new challenge for 
NATO in the area of undersea cables.
---------------------------------------------------------------------------
    \543\ See the back cover of the following report: Sunak, Rishi. 
Undersea Cables: Indispensable, insecure. Policy Exchange, 2017, 
https://policyexchange.org.uk/wp-content/uploads/2017/11/Undersea-
Cables.pdf.
---------------------------------------------------------------------------
    Huawei Marine is exploring several major projects with 
touchpoints in Europe.\544\ However, none cover the geographic 
distance and number of important landing points of the Pakistan 
East Africa Connecting Europe (PEACE) Cable currently under 
construction. The PEACE Cable starts in Gwadar and Karachi, 
Pakistan, and transits through various sites in Africa to land 
in Marseilles, France.\545\ PEACE Cable International, owned by 
Hengtong Group, is leading the consortium for this cable, with 
Hengtong Marine and Huawei Marine supplying the cable's 
infrastructure. The cable is explicitly tied to OBOR. Sun 
Xiaohua, the Chief Operating Officer of PEACE Cable 
International said the project is intended ``to serve Chinese 
enterprises along on the ``One Belt, One Road'' initiative 
corridor as large scale Chinese investment in Africa, such as 
Djibouti [sic].'' \546\
---------------------------------------------------------------------------
    \544\ PEACE Cable, described in this chapter, is the most 
significant. One proposed project is Arctic Connect, spearheaded by 
Cinia, a state-owned Finnish cable owner and operator, with 
construction by Huawei Marine. Arctic Connect would link Northern 
Europe first to Russia and Asia via the Northern Sea Route, and aligns 
with China's interest in advancing a greater presence in the Arctic. 
For an overview of this case study, see: Juris, Frank. ``Handing over 
infrastructure for China's strategic objectives: `Arctic Connect' and 
the Digital Silk Road in the Arctic.'' Sinopsis, 03 Jul. 2020, https://
sinopsis.cz/en/arctic-digital-silk-road/.
    \545\ ``Projects.'' Smart Ocean System, http://
www.hengtongmarine.com/index.php/cases/cases.html.
    \546\ ``PEACE Cable, The Carrier's Cable.'' PEACE, 29 Nov. 2018, 
http://www.peacecable.net/news/Detail/16600.


                            HengTong Marine

    An overland cable from the PRC to Gwadar and Karachi in 
Pakistan--where PEACE Cable starts--became operational in July 
2020.\547\ This combination of land- and sea-based cables could 
provide direct connections for China to places like Gwadar 
(home to a PRC-owned port of potential dual-use) and Djibouti 
(which hosts its only overseas military base). Such connections 
could be useful to the PRC government even if the cable is not 
commercially successful.\548\ This cable also marks a huge 
transition for Hengtong and its subsidiaries into becoming 
truly global players. As Sun puts it, ``We see the PEACE 
project as a strategic pivot for the HENGTONG Group to further 
expand as a subsea cable investor and we look forward to 
identifying new investment opportunities in this market.'' 
\549\
---------------------------------------------------------------------------
    \547\ ``Pak-China fiber optic cable becomes operational: CEN.'' The 
Nation, 19 Jul. 2020, https://nation.com.pk/19-Jul-2020/pak-china-
fiber-optic-cable-becomes-operational-cen.
    \548\ Hillman, Jonathan. The Emperor's New Road: China and the 
Project of the Century, Yale University Press, 2020, p 175.
    \549\ ``PEACE heads to the south of Africa.'' PEACE, 22 Jan. 2020, 
http://peace-cable.com/News/Detail/16618.
---------------------------------------------------------------------------
    As with Huawei and 5G networks, the growing presence of PRC 
firms in undersea cables presents risks that the United States 
and Europe--particularly NATO allies--should not ignore. An 
immediate risk is to data and cybersecurity, and the use of 
cables for intelligence gathering. Cables can be tapped in 
order to monitor and intercept data, deny service, and other 
actions. U.S. and European intelligence services have engaged 
in these practices, such as a multi-year cable tapping 
operation by the United States targeting Soviet cables.\550\ In 
that case, the United States installed tapping equipment at sea 
with U.S. Navy divers, a very difficult undertaking.\551\ 
However, the role of PRC companies in cable construction and 
operation provides an opportunity to install equipment during 
the manufacturing or installation process that do not require 
later insertions.\552\ Though some industry experts have 
questioned the feasibility of gleaning data undetected, the 
U.S. Director of National Intelligence assesses that ``a well 
designed fiber network can experience a wide variety of 
anomalies with no data loss or network warnings detected in the 
network monitoring system.'' \553\
---------------------------------------------------------------------------
    \550\ Juris, Frank. ``Handing over infrastructure for China's 
strategic objectives: `Arctic Connect' and the Digital Silk Road in the 
Arctic.'' Sinopsis, AcaMedia z.--., 03 Jul. 2020, p. 8, https://
sinopsis.cz/en/arctic-digital-silk-road/.
    \551\ Ibid, 8.
    \552\ Schadlow and Helwig. And Page, Jeremy and Kate O'Keeffe. 
``America's Undersea Battle With China for Control of the Global 
Internet Grid.'' Wall Street Journal, 12 Mar. 2019, https://
www.wsj.com/articles/u-s-takes-on-chinas-huawei-in-undersea-battle-
over-the-global-internet-grid-11552407466.
    \553\ Page and O'Keeffe. And Threats to Undersea Cable 
Communications. Office of the Director of National Intelligence, 28 
Sept. 2017, p. 22, https://www.dni.gov/files/PE/Documents/1---2017-AEP-
Threats-to-Undersea-Cable-Communications.pdf. This same DNI report did 
note that cable system operators interviewed had ``not knowingly 
experienced cable system disruptions due to vendor selection, 
international supply chain issues, or cyber-related incidents.'' 
However, the industry participants all acknowledged ``the changes 
occurring in the industry and the potential for new and increasing 
threats.'' (p. 16)
---------------------------------------------------------------------------
    Indeed, Hengtong will have access to the entire cable 
network through its joint venture with Lighthash, which 
describes itself as a network and data center operator as well 
as a manager of cable spectrum and capacity services.\554\ As 
U.K. Parliamentarian Rishi Sunak (currently serving as the 
Chancellor of the Exchequer) writes, the ``network management 
systems (NMS) employed by cable operators'' is a key 
cybersecurity concern because it ``provide[s] centralised 
control over the physical components of cable networks.'' \555\ 
As the cable operator, Lighthash will oversee the physical and 
security management of the network, and is in a position to 
manage and redirect data flows traveling through the cable. In 
most cable projects, the owner and operator sells capacity to 
businesses that need it, such as data center operators or cloud 
providers. In this case, however, Lighthash itself is a data 
center operator and cloud service provider, making Hengtong not 
just the builder and operator, but also a key customer.\556\ 
This model is somewhat unique in the cable market. This 
arrangement begs the question of whether the cable will be 
commercially successful in the absence of other investors--and 
if not, what its purpose will be. Europe earlier confronted the 
geopolitically-motivated construction of gas pipelines with no 
market justification. We may now be entering a similar 
geopolitical dynamic with undersea cables.
---------------------------------------------------------------------------
    \554\ ``HENGTONG LightHash.'' LinkedIn, https://bit.ly/369vFHu.
    \555\ Sunak, Rishi, ``Undersea Cables: Indispensible, insecure.'' 
Policy Exchange, 2017, p. 26, https://policyexchange.org.uk/wp-content/
uploads/2017/11/Undersea-Cables.pdf.
    \556\ ``HENGTONG LightHash.'' LinkedIn, https://bit.ly/369vFHu. And 
``PEACE Cable System, Pakistan * East Africa Connecting Europe.'' 
HENGTONG LightHash, https://bit.ly/34Ymev5.
---------------------------------------------------------------------------
    While Hengtong Group does not dominate today's market for 
undersea cables, the company has made significant strides over 
the last decade to become the fourth largest player. If PEACE 
Cable indeed becomes a gateway to a global role for Hengtong 
and subsidiary Huawei Marine, the United States, Europe, and 
other allies could find themselves increasingly dependent on 
the company's undersea cables for transmitting valuable and 
sensitive data of all kinds. For the United States and Europe, 
the implications of PRC-built and operated cables landing in 
the territories of NATO allies should be an immediate focus. In 
the longer-term, and if Hengtong makes headway in places like 
Africa and Southeast Asia, the reliance of other security 
partners on PRC-built technology could have an impact on U.S. 
and European security.
    Another long-term concern is the potential use of undersea 
cables to deploy a network of underwater sensors and other 
observation devices for use by the PRC government and the PLA. 
Though these technologies have civilian purposes like 
environmental surveying and scientific research, they can also 
be used for military purposes--particularly for tracking and 
detection of targets like submarines. The PRC recognizes this, 
as it began deploying undersea acoustics systems near its own 
coastline in 2010 and at its nuclear submarine base.\557\ A 
2015 article published by the PRC's State Oceanic 
Administration articulated China's ambition to deploy undersea 
observation systems in ``the near seas, the depths of the far 
seas, and around islands bordering the far seas, as well as in 
strategic passages and such areas.'' \558\ State-owned 
enterprises like China State Shipbuilding Corporation (CSSC) 
and China Electronics Technology Corporation are involved in 
major initiatives to build these technologies.\559\ CSSC is 
reportedly spearheading a project known among analysts as the 
Great Undersea Wall--a constellation of subsea sensors, 
unmanned surface vehicles, unmanned underwater vehicles, and 
other components to detect and track underwater targets.\560\
---------------------------------------------------------------------------
    \557\ Goldstein, Lyle J. ``China Is Building a ``Undersea Great 
Wall'' To Take on America in a War.'' The National Interest, 27 Oct. 
2019, https://nationalinterest.org/blog/buzz/china- building-undersea-
great-wall-take-america-war-90601.
    \558\ Quoted in Goldstein, Lyle J. ``China Is Building a ``Undersea 
Great Wall'' To Take on America in a War.'' The National Interest, 27 
Oct. 2019, https://nationalinterest.org/blog/buzz/china-building -
undersea-great-wall-take-america-war-90601.
    \559\ Dahm, J. Michael. ``Exploring China's Unmanned Ocean 
Network.'' Asia Maritime Transparency Initiative,Center for Strategic & 
International Studies, 16 Jun. 2020, https://amti.csis.org/exploring-
chinas-unmanned-ocean-network/.
    \560\ Nurkin, Tate, et al. ``China's Advanced Weapons Systems.'' 
Jane's, IHS Markit, 2020, p. 175-176, https://bit.ly/2TUsRrU.
---------------------------------------------------------------------------
    Hengtong Group has demonstrable ties to the Chinese 
government and the PLA, and is involved in this type of 
research. Hengtong's founder and current chairman of the board 
served in the PLA, and since 2013 has served as a deputy to the 
National People's Congress.\561\ In 2016, Hengtong--along with 
the PLA Naval University of Engineering, Zhongtian Technology 
Submarine Cable Co., Ltd. (ZTT), and Beijing University of 
Posts and Telecommunications--formed the Underwater Optical 
Network Joint Laboratory to conduct research on undersea 
optical fibers and improve their domestic production.\562\ The 
PRC government has reportedly lauded Hengtong as an embodiment 
of ``civil-military integration,'' and partner ZTT is also 
active in advancing ``military-civil fusion.'' \563\ Multiple 
Hengtong subsidiaries have research initiatives with Tongji 
University in Shanghai on applying undersea observation 
networks to civilian and military uses.\564\ The U.S. 
Department of Commerce added Tongji University to its 
Unverified List in 2019 when it was unable to conduct end use 
controls for commercial exports.\565\
---------------------------------------------------------------------------
    \561\ Hillman, Jonathan. ``Sale of Huawei's underseas cables could 
leave risks unaddressed.'' Axios, 04 June 2020, https://www.axios.com/
sale-of-huaweis-underseas-cables-could-leave-risks-unaddressed-
388845c5-efa8-413d-95d2-06fe93de9c06.html. And ``Deputies interviewed 
before closing meeting of 2nd session of 13th NPC.'' Xinhua, 15 Mar. 
2019, http://english.www.gov.cn/news/photos/2019/03/15/content--
281476563391760.htm. And ``Functions and Powers of the NPC.'' The 
National People's Congress of the People's Republic of China, http://
www.npc.gov.cn/englishnpc/c2846/201903/
b149298c33b24f1e8aaa7b8b0e45fa77.shtml.
    \562\ 562 Hillman, Jonathan. ``Sale of Huawei's underseas cables 
could leave risks unaddressed.'' Axios, 04 June 2020, https://bit.ly/
3p0NH7n. And ``Beijing University of Posts and Telecommunications.'' 
China Defense Universities Tracker, Australian Strategic Policy 
Institute, 17 Nov. 2019, https://unitracker.aspi.org.au/universities/
beijing-university-of-posts-and-telecommunications/. And ``BRIEF-
Hengtong Optic-Electric unit to jointly set up underwater optical 
network joint laboratory.'' Reuters, 01 Nov. 2016, https://reut.rs/
32gUK1M.
    \563\ Hillman, Jonathan. ``Sale of Huawei's underseas cables could 
leave risks unaddressed.'' Axios, 04 June 2020, https://bit.ly/2ImNAlv. 
And The Digital Silk Road Initiative: Wiring Global IT and 
Telecommunications to Advance Beijing's Global Ambitions. Point Bello, 
2019, p. 23-25, https://bit.ly/3ld3620.
    \564\ Juris, Frank. ``Handing over infrastructure for China's 
strategic objectives: `Arctic Connect' and the Digital Silk Road in the 
Arctic.'' Sinopsis, AcaMedia z.--., 03 Jul. 2020, p. 15, https://
sinopsis.cz/en/arctic-digital-silk-road/.
    \565\ Ibid. And ``Revisions to the Unverified List (UVL).'' Federal 
Register, 11 Apr. 2019, https://www.federalregister.gov/documents/2019/
04/11/2019-07211/revisions-to-the-unverified-list-uvl.
---------------------------------------------------------------------------
    Fellow democracies Australia and Japan share these 
concerns. Australia will not allow cables built by untrusted 
vendors to land on its shores. It intervened several years ago 
to prevent Huawei Marine from supplying an undersea cable from 
the Solomon Islands to Australia, and supplied an 
alternative.\566\ In another example, the United States, Japan, 
and Australia made a counteroffer to convince Papua New Guinea 
to abandon an ongoing cable project with Huawei Marine, but 
Papua New Guinea turned it down.\567\ India is reportedly 
looking to phase Huawei out of its 5G networks following 
China's aggressive actions on the Sino-Indian border, and it 
likely is similarly unenthusiastic about Huawei Marine-supplied 
cables landing on its shores.\568\
---------------------------------------------------------------------------
    \566\ ``Solomon Islands drops Chinese tech giant Huawei for 
billion-dollar undersea cable, signs Australia.'' South China Morning 
Post, 12 Jun. 2018, https://bit.ly/3euPigG. And Packham, Colin. 
``Ousting Huawei, Australia finishes laying undersea internet cable for 
Pacific allies.'' Reuters, 27 Aug. 2019, https://www.reuters.com/
article/us-australia-pacific-cable/ousting-huawei-australia-finishes-
laying-undersea-internet-cable-for-pacific-allies-idUSKCN1VI08H.
    \567\ ``PNG resists pressure, sticks with Huawei.'' RNZ, 28 Nov. 
2018, https://bit.ly/32evLwo.
    \568\ Chen, Celia. ``India to slowly phase out Huawei and other 
Chinese vendors from its telecoms network, FT reports.'' South China 
Morning Post, 25 Aug. 2020, https://bit.ly/3p3DCX9.
---------------------------------------------------------------------------
    The United States and Europe should initiate discussions on 
undersea cables, including through NATO. These discussions 
should identify any existing vulnerabilities for NATO with 
respect to undersea cables (especially cables supplied by PRC 
firms) and discuss how to improve information and intelligence 
sharing on PRC involvement in undersea cables.\569\ NATO should 
conduct exercises on issues such as testing its preparedness to 
operate in an environment where an adversary has access to its 
vital data and determine the efficacy of mitigations.\570\ 
Finally, the United States, Europe, and other democratic allies 
(e.g. Australia, Japan, India) should start discussing ways to 
contend with potential security challenges arising from PRC 
cable builders and operators' growing presence in the market.
---------------------------------------------------------------------------
    \569\ Sunak, Rishi. Undersea Cables Indispensible, Insecure, Policy 
Exchange, 2017, p. 8, https://policyexchange.org.uk/wp-content/uploads/
2017/11/Undersea-Cables.pdf.
    \570\ Ibid, p. 8.
---------------------------------------------------------------------------
Conclusion
    To build upon recent steps to safeguard critical 
infrastructure and technologies, the United States, the 
European Union, and the United Kingdom should continue to work 
together on priority sectors and technologies where dependency 
or vulnerability on the PRC would have potentially far-reaching 
and long-term implications. Power grids and other forms of 
energy infrastructure, ports, and undersea cables are three of 
these, but other sectors of concern must also be examined. 
Coordination should aim to eliminate, limit, or mitigate the 
impacts of shared vulnerabilities. Already tighter U.S.-Europe 
linkages between agencies focused on investment screening can 
be leveraged to focus on these broader challenges. Lastly, NATO 
should play a primary role as it increases its attention on 
China.


                    CHAPTER SIX--THE TRANSATLANTIC 
                          ALLIANCE AND AFRICA

                              ----------                              

        We believe that every human being--African, European, 
        American, you name it--wants similar things. We want 
        basic security for our families. We want opportunity 
        and reward for the hard work that we invest in. And we 
        want the freedom to do whatever we want to do with our 
        own lives.\571\
---------------------------------------------------------------------------
    \571\ Pompeo, Michael R. ``Liberating Africa's Entrepreneurs.'' 
U.S. Department of State, 19 Feb. 2020, https://www.state.gov/
liberating-africas-entrepreneurs/.


        --Michael R. Pompeo, U.S. Secretary of State
Introduction
    At times, policymakers on both sides of the Atlantic have a 
tendency to view the transatlantic alliance in a narrow 
bilateral sense. However, the tectonic demographic, political, 
and economic shifts underway across the African continent mean 
that our alliance needs to think more broadly. This new reality 
has not escaped the attention of malign actors who seek to 
undermine Africa's fragile democracies, sow seeds of discord, 
and exploit markets to the detriment of the African people and 
the national security interests of the alliance. Though the 
United States and Europe may have vastly different histories, 
priorities, and strategies for engagement on the African 
continent, it is imperative that we work in close collaboration 
with African partners to help manage these tectonic shifts, 
counter malign influence, and promote the growth of healthier, 
more stable, democratic societies that share our values and 
interests.
Africa Matters
    While Asia's growth, in both demographic and economic 
terms, has dominated the first part of this century, the second 
half will be Africa's to claim.\572\ Over the next two decades, 
it is projected that Africa will account for nearly half of 
global population growth and, by mid-century, will be home to a 
quarter of the world's population.'' \573\ Sixty percent of 
Africa's population is currently under the age of 25 with an 
overall median age of 20, which stands in stark contrast with 
the Organisation for Economic Cooperation and Development's 
median age of 42 years.\574\ In 2019, six of the 10 fastest-
growing economies in the world were on the continent.\575\ This 
growth is expected to be further bolstered by a young and 
rapidly expanding workforce, which will be larger than that of 
China and India by 2034 \576\ and will surpass the rest of the 
world by 2050.\577\ It may further be driven by rapid 
urbanization which, if effectively managed, could deliver high 
concentrations of consumers and workers supporting key sectors 
and boosting the living standards for tens of millions of 
people.\578\
---------------------------------------------------------------------------
    \572\ ``Africa is changing so rapidly, it is becoming hard to 
ignore.'' The Economist, 26 Mar. 2020, https://www.economist.com/
special-report/2020/03/26/africa-is-changing-so-rapidly-it-is-becoming-
hard-to-ignore.
    \573\ Bello-Schunemann, Julia. ``Africa's population boom: burden 
or opportunity?'' ISS Today, Institute for Security Studies, https://
issafrica.org/amp/iss-today/africas-population-boom-burden-or-
opportunity.
    \574\ Dews, Fred. ``Charts of the Week: Africa's changing 
demographics.'' Brookings Now, Brookings Institution, 18 Jan. 2019, 
https://www.brookings.edu/blog/brookings-now/2019/01/18/charts-of-the-
week-africas-changing-demographics/amp.
    \575\ Signe, Landry, et al. ``Six of the world's 10 fastest-growing 
economies are in Africa,'' World Economic Forum, 06 Aug. 2019. https://
bit.ly/365tMLX.
    \576\ Leke, Acha, et al. ``These 6 Sectors of Africa's Economy Are 
Poised for Growth.'' Harvard Business Review, Harvard Business 
Publishing, 20 Sep. 2016, https://bit.ly/3esNqVZ.
    \577\ Altenburg, Tilman, et al. ``Foresight Africa: Top Priorities 
for the continent in 2019.'' Africa Growth Initiative, Brookings 
Institution, 11 Jan. 2019, https://www.brookings.edu/multi-chapter-
report/foresight-africa-top-priorities-for-the-continent-in-2019/.
    \578\ By 2050, the continent is expected to have 1.5 billion urban 
dwellers--nearly triple its current levels--though it will still be one 
of the world's least urbanized geographic regions. By contrast, Europe 
is expected to have the largest reduction in urban population, from 13 
percent in 2018 to nine percent by 2050. See ``World Urbanization 
Prospects: The 2018 Revision.'' United Nations Department of Economic 
and Social Affairs Population Division, 2019, https://bit.ly/32ht5xO.
---------------------------------------------------------------------------
    By all accounts, Africa's potential for continued and 
expanding economic growth is incredible but largely dependent 
upon its ability to harness the power of its growing population 
and young workforce. Despite decades of progress in reducing 
poverty rates, Africa's demographic shifts have increased the 
absolute number of people living in extreme poverty and placed 
enormous pressure upon African governments struggling to keep 
up with rising demand for social services, including for 
health, education and skills training, and to create jobs.\579\ 
An estimated one million Africans enter the job market each 
month, but many lack necessary skills and education to compete 
for the jobs that are available.\580\ Failure to foster 
inclusive economic growth and opportunity in Africa will likely 
serve as a catalyst for economic migration--a matter of 
particularly high consequence for EU member states.
---------------------------------------------------------------------------
    \579\ According to World Bank economist Luc Christiaensen, 
``Overall, the proportion of people in Africa living in monetary 
poverty has clearly declined, from 54% in 1990 to 41% in 2015.'' A 
quoted in: Wilhelm, Jan. ``Africa: More poverty despite economic 
growth.'' Deutsche Welle, 19 Mar. 2020, https://www.dw.com/en/africa-
more-poverty-despite-economic-growth/a-52840817. See also Hamel, 
Kristofer, et al. ``Poverty in Africa is Falling--But Not Fast 
Enough.'' 28 Mar. 2019, Brookings Institution.
    \580\ ``Africa is changing so rapidly, it is becoming hard to 
ignore.'' The Economist, 26 Mar. 2020, https://www.economist.com/
special-report/2020/03/26/africa-is-changing-so-rapidly-it-is-becoming-
hard-to-ignore.
---------------------------------------------------------------------------
    At the same time, realizing Africa's full potential will 
also be dependent upon its ability to resolve conflict and 
respond to crises--both natural and man-made--which, left 
unchecked, will continue to impose a shocking humanitarian toll 
and undermine peace, security, and growth throughout the 
region. The combination of poverty, hunger, and desperation has 
toppled governments, left Africa's young population more 
vulnerable to extremism, trafficking, and migration, given rise 
to exponentially increased demands for U.S. and European 
humanitarian assistance, and challenged the common values and 
interests upon which our international system was built.
    African nations will continue to become vital determinants 
of the world's economic, political, and security developments 
well into this century. It is imperative that the United States 
and Europe recognize this, reinvigorate their focus on the 
continent, and understand that China is already competing 
against us.
The China Factor
    As Africa undergoes its dramatic transformation, China has 
already begun investing in and becoming tied to Africa's 
destiny. While contemporary Sino-African relations date to the 
late 1950s, trade volumes between China and Africa expanded by 
700 percent in the 1990s.\581\ Chinese engagement has only 
continued its rapid acceleration. Between 2005 and 2018, China 
invested $300 billion on the continent, including $60 billion 
pledged by General Secretary Xi Jinping at the 2018 Forum on 
China-Africa Co-Operation (FOCAC) Summit.
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    \581\ Antwi-Boateng, Osman. ``New World Order Neo-Colonialism: A 
Contextual Comparison of Contemporary China and European Colonization 
in Africa.'' Journal of Pan African Studies, vol. 10, no. 2, Apr. 2017.
---------------------------------------------------------------------------
    The 2018 FOCAC Summit in Beijing, attended by 
representatives from all but one of Africa's 54 countries,\582\ 
highlighted the depth and breadth of the Sino-African 
relationship. It also served as a wake-up call for the United 
States and Europe: Chinese engagement on the continent extends 
well beyond the corrupt deals and debt-traps upon which much 
attention has been focused. China demonstrated that it is ready 
to strengthen relationships and deepen its engagement across a 
host of economic and development areas in Africa, to an extent 
and scale that neither the United States nor Europe has offered 
in decades, and has cast itself as a non-interventionist 
power.\583\
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    \582\ Sun, Yun. ``China's 2018 financial commitments to Africa: 
Adjustment and recalibration.'' Africa in Focus, Brookings Institution, 
05 Sep. 2018, https://www.brookings.edu/blog/africa-in-focus/2018/09/
05/chinas-2018-financial-commitments-to-africa-adjustment-and-
recalibration/.
    \583\ The ``five-no'' approach touted by President Xi Jinping at 
the Focac 2018 Summit in Beijing were: no interference in the 
development paths of individual countries; no interference in their 
internal affairs; no imposition of China's will; no attachment of 
political strings regarding assistance; and no seeking of selfish 
political gains in investment and financing cooperation. See: ``China's 
`five-no' approach demonstrates real friendship toward Africa: Kenyan 
analyst.'' Xinhua, 05 Sep. 2018, https://bit.ly/3excOJW.
---------------------------------------------------------------------------
    At the same time, it is important not to oversell Western 
and Chinese media portrayals of China's `dominant' presence in 
Africa. According to David Dollar at the Brookings Institution, 
``Chinese direct investment in Africa was $32 billion at the 
end of 2014 . . . representing less than 5 percent of the total 
stock of foreign investment on the continent.'' \584\ Further, 
the assumption that Africa is saturated with Chinese investment 
in infrastructure is ``overblown,'' with the misconception 
partly due to ``big but vague deals announced in the press.'' 
\585\ China will, however, continue to pursue expanded 
partnerships in infrastructure development and further support 
Africa's nascent industrialization, both of which fortify 
Beijing's ever-expanding ``One Belt, One Road'' (OBOR) 
initiative. The future of global manufacturing points toward 
Africa, with its large, low-wage workforce and increasing 
interest in pivoting away from traditional commodity export-
driven economic models. Manufacturing capacity, however, will 
require a significant boost in Africa's infrastructure 
spending. The People's Republic of China (PRC) and Chinese 
companies already are investing heavily in this area, and 
reportedly accounted for 62 percent of the market share of 
infrastructure construction in 2018.\586\
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    \584\ Dollar, David. China's Engagement with Africa: From Natural 
Resources to Human Resources. Brookings Institution John L. Thornton 
China Center, 2016, https://brook.gs/3l2390D.
    \585\ Dollar, David. China's Engagement with Africa: From Natural 
Resources to Human Resources. Brookings Institution John L. Thornton 
China Center, 2016, https://brook.gs/3l2390D.
    \586\ Moore, W. Gyude. ``A new Cold War is coming, Africa should 
not pick sides.'' Mail & Guardian (South Africa), 21 Aug. 2020, https:/
/bit.ly/353f2xU.
---------------------------------------------------------------------------
    Reports of China's volume of direct investment in Africa 
may be overblown, but the negative effects of its lending model 
are not. Under its `tied financing model,' the China 
Development Bank, or China Exim Bank, offers loan for 
infrastructure projects contingent upon agreement that 
construction will be done by pre-selected Chinese firms. This 
generally eliminates competitive procurement processes, limits 
the ability of U.S., European, or African firms to bid, 
undermines transparency, and denies job opportunities for 
African engineers and laborers.\587\ Further, because many 
Chinese firms working in Africa are state-owned enterprises 
(SOEs) or private firms over which the Chinese Communist Party 
(CCP) wields significant influence, it is highly likely that 
``Beijing directs, encourages, or tolerates their corrupt 
behavior, thereby perpetuating a system of corruption in Africa 
that harms ordinary Africans.'' \588\
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    \587\ Morris, Scott. ``China in Africa.'' Hearing on China's 
Strategic Aims in Africa, U.S.-China Economic and Security Review 
Commission, 08 May 2020, https://bit.ly/350UZA0.
    \588\ Meservey, Joshua. ``Chinese Corruption in Africa Undermines 
Beijing's Rhetoric about Friendship with the Continent.'' Issue Brief, 
no. 4895, The Heritage Foundation, 08 Aug. 2018, https://
www.heritage.org/global-politics/report/chinese-corruption-africa-
undermines-beijings-rhetoric-about-friendship-the.
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    PRC-financed and constructed infrastructure projects are 
not limited to bridges, roads, and railway systems. They also 
include sensitive government buildings, information technology 
networks, and systems critical to national security. ``China 
has constructed or renovated nearly 200 government buildings, 
gifted batches of computers to African governments, and built 
``secure'' telecommunications networks that give Beijing the 
opportunity for unprecedented surveillance on the continent.'' 
\589\ A report by the Heritage Foundation in May 2020 provided 
further insight into the breadth of China's potential 
surveillance reach, including through construction of sensitive 
infrastructure and technology systems in 40 of 54 African 
countries, arguing that this could pose a threat to the United 
States and other democratic countries. The nearly 200 African 
government buildings constructed or renovated by Chinese 
companies mentioned in the report included 24 presidential or 
prime ministerial buildings, 26 legislatures, 19 foreign 
ministry buildings, and 32 military or police buildings.\590\ 
Also of note was the construction of the African Union's (AU) 
headquarters in Ethiopia by state-owned China State 
Construction Engineering Corporation, followed by the 2018 
revelation that China had surveilled and hacked the AU 
building's data systems daily for five years.\591\ In addition 
to Chinese-built or gifted sensitive telecommunications 
networks and equipment to African governments, more than two-
thirds of the 4G networks on which these and wider commercial 
systems operate were developed by Chinese telecommunications 
giant Huawei.\592\
---------------------------------------------------------------------------
    \589\ Gramer, Robbie, et al. ``China's Building Projects in Africa 
Are a Spymaster's Dream.'' Foreign Policy, 21 May 2020, https://bit.ly/
2Icc5SI.
    \590\ Meservey, Joshua. ``Government Buildings in Africa Are a 
Likely Vector for Chinese Spying.'' Backgrounder, no. 3476, The 
Heritage Foundation Douglas and Sarah Allison Center for Foreign 
Policy, 20 May 2020, https://www.heritage.org/asia/report/government-
buildings-africa-are-likely-vector-chinese-spying.
    \591\ Aglionby, John, et al. ``African Union Accuses China of 
Hacking Headquarters.'' Financial Times,, 29 Jan. 2018, https://
www.ft.com/content/c26a9214-04f2-11e8-9650-9c0ad2d7c5b5.
    \592\ Gramer, Robbie, et al. ``China's Building Projects in Africa 
Are a Spymaster's Dream.'' Foreign Policy, 21 May 2020, https://bit.ly/
2Icc5SI.
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    PRC penetration into Africa's sensitive government, 
information, and communications technology infrastructure poses 
direct threats to both U.S. and European interests. It enables 
the CCP to launch influence operations; recruit intelligence 
assets at senior levels of African governments; gain insights 
into U.S. and European diplomatic strategies, counterterrorism 
operations, or joint military exercises; and disadvantage U.S. 
and European companies competing for economic opportunities in 
Africa.\593\
---------------------------------------------------------------------------
    \593\ Meservey, Joshua. ``Government Buildings in Africa Are a 
Likely Vector for Chinese Spying.'' Backgrounder, no. 3476, The 
Heritage Foundation Douglas and Sarah Allison Center for Foreign 
Policy, 20 May 2020, https://www.heritage.org/asia/report/government-
buildings-africa-are-likely-vector-chinese-spying.
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    In addition to threats against U.S. and European interests, 
Chinese technology is actively being used by some African 
governments to surveil their own citizens and stifle dissent. 
In March 2018, for example, the government of Zimbabwe 
partnered with CloudWalk Technology to ``begin a large-scale 
facial recognition program throughout the country'' that will 
be ``primarily used in security and law enforcement.'' The 
program is backed by the OBOR initiative.\594\ Technicians from 
Huawei ``have in at least two cases, personally helped African 
governments spy on their political opponents, including 
intercepting their encrypted communications and social media, 
and using cell data to track their whereabouts.'' \595\ While 
there was no direct evidence linking the Chinese government to 
the actions of Huawei employees in these instances, there is 
evidence that the Chinese technology giant's personnel made the 
surveillance possible. In at least one instance, a government 
security official ``said the operation would have been 
impossible without the skills of Huawei's technicians'' and 
that ``Huawei employees played a direct role in government 
efforts to intercept the private communications of opponents.'' 
\596\
---------------------------------------------------------------------------
    \594\ Chutel, Lynsey. ``China is Exporting Facial Recognition 
Software to Africa, Expanding its Vast Database.'' Quartz Africa, 25 
May 2018, https://qz.com/africa/1287675/china-is-exporting-facial-
recognition-to-africa-ensuring-ai-dominance-through-diversity.
    \595\ Parkinson, Joe, et al. ``Huawei Technicians Helped African 
Governments Spy on Political Opponents.'' Wall Street Journal, 15 Aug. 
2019, https://www.wsj.com/articles/huawei-technicians-helped-african-
governments-spy-on-political-opponents-11565793017.
    \596\ Ibid.
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    Chinese government officials have played a pivotal role in 
facilitating deals with Huawei by ``attending meetings and 
escorting African intelligence officials to the company's 
headquarters in Shenzhen.'' \597\ Beyond the obvious commercial 
interests at stake, PRC officials recognize the longer-term 
benefit of moving African governments closer toward their norms 
of governance, in which unfettered electronic surveillance of 
citizens is legal and pervasive. For Africa's autocratic 
leaders, and even democrats facing emboldened opponents, these 
tools are being deployed at an alarming rate.
---------------------------------------------------------------------------
    \597\ Parkinson, Joe, et al. ``Huawei Technicians Helped African 
Governments Spy on Political Opponents.'' Wall Street Journal, 15 Aug. 
2019, https://www.wsj.com/articles/huawei-technicians-helped-african-
governments-spy-on-political-opponents-11565793017.
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Transatlantic Cooperation in Sub-Saharan Africa \598\
---------------------------------------------------------------------------
    \598\ For the purposes of the remainder of this chapter, the use of 
``Africa'' refers to Sub-Saharan Africa only.
---------------------------------------------------------------------------
    During his opening remarks at a joint Europe-Africa 
investment forum in 2018, then-European Commission President 
Jean-Claude Juncker astutely noted that ``Africa's future is 
also our [European] future.'' \599\ Though U.S. and European 
relations with countries in Africa reflect a long and 
complicated history, this statement demonstrates notable 
progress in the much-needed reorientation of U.S. and European 
policy--away from paternalism and toward mutually-advantageous 
partnerships, including in areas of trade, development, and 
security. Moving forward, it is important that we continue to 
recognize Africans as essential partners in their own right, 
and to invest in the development of strong institutions that 
operate in accordance with the rule of law, accountability and 
transparency, and respect for individual freedoms and human 
rights.
---------------------------------------------------------------------------
    \599\ ``Jean-Claude Juncker: Africa's future will shape Europe's.'' 
Deutsche Welle, 18 Dec. 2018, https://www.dw.com/en/jean-claude-
juncker-africas-future-will-shape-europes/a-46788746.
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    In December 2018, in recognition of the increasing 
importance Africa plays on the world stage, then-National 
Security Advisor John Bolton put forward the Trump 
Administration's Africa Strategy.\600\ Ambassador Bolton's 
presentation highlighted ``three core U.S interests on the 
continent'': the advancement of mutually-beneficial trade and 
commercial ties based on the principle of reciprocity, 
countering threats to security posed by conflict and violent 
extremist organizations, and the use of targeted aid to advance 
U.S. interests and support African countries on their ``journey 
to self-reliance,'' a goal central to the U.S. Agency for 
International Development's policy framework.\601\ While the 
strategy lays specific markers for the U.S. approach to 
engagement with Africa, its implementation is, in effect, a 
combination of new bilateral and regional initiatives with the 
continuation of decades-old programs.
---------------------------------------------------------------------------
    \600\ ``Remarks by National Security Advisor Ambassador John R. 
Bolton on the Trump Administration's New Africa Strategy.'' The White 
House National Security Council, 13 Dec. 2018, https://
www.whitehouse.gov/briefings-statements/remarks-national-security-
advisor-ambassador-john-r-bolton-trump-administrations-new-africa-
strategy/.
    \601\ ``The Journey to Self-Reliance.'' U.S. Agency for 
International Development, https://www.usaid.gov/selfreliance.
---------------------------------------------------------------------------
    For the past 20 years in Europe, the Cotonou Agreement 
\602\ has framed the relationship between the European Union 
and Africa. In March 2020, the European Union issued a 
communication, ``Towards a Comprehensive Strategy with 
Africa,'' to frame a post-Cotonou partnership with Africa, 
focused on five areas: access to energy, digital 
transformation, sustainable growth and jobs, peace and 
governance, and migration and mobility.\603\ The EU 
communication has come under scrutiny however, for not 
adequately incorporating African priorities or joint AU-EU 
recommendations articulated previously through, for example, 
the 2017 Abidjan Declaration. Also at play is the manner in 
which the African Continental Free Trade Area will factor in 
discussions about trade between Africa and Europe, and how 
Europe will support intra-African trade. The new partnership 
will be the basis for discussion in the next EU-AU Summit.
---------------------------------------------------------------------------
    \602\ South Sudan, Africa's newest country, did not sign the 
Cotonou Agreement following its independence from Sudan in 2011, and is 
the only country that is not a signatory in Sub-Saharan Africa.
    \603\ ``Joint Communication to the European Parliament and the 
Council Towards a comprehensive strategy with Africa.'' European 
Commission High Representative of the Union for Foreign Affairs and 
Security Policy, 03 Sep. 2020, https://bit.ly/3l27xwp.
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Trade, Jobs, and Growth
    Both the U.S. and EU strategies prioritize advancing trade 
with Africa and using trade as a means to create jobs and 
stability on the continent. For example, a new U.S. initiative, 
Prosper Africa, is meant to complement and potentially outlive 
the African Growth and Opportunity Act (AGOA) as the core U.S. 
economic policy toward Africa. AGOA, authorized by Congress in 
2005, provides eligible countries duty-free access to U.S. 
markets for thousands of products.\604\ Participation in AGOA 
has effectively incentivized stronger adherence to the rules-
based system--to include respect for the rule of law and free 
market principles--that has helped lift hundreds of millions of 
people out of poverty over the past three decades. As the 
United States and Europe, through initiatives such as the EU's 
World Trade Organization-compatible Economic Partnership 
Agreements, pursue next generation trade deals and investment 
with African partners, it will be critical to uphold these 
principles, provide a counter-balance to China, and view each 
other as partners, rather than competitors.
---------------------------------------------------------------------------
    \604\ ``African Growth and Opportunity Act (AGOA).'' U.S. Trade 
Representative, https://bit.ly/2I5Idan.
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Security
    The United States and Europe have built a strong foundation 
for security cooperation in Africa. Today, U.S. and European 
partners work with African nations across the continent on 
everything from anti-piracy missions in Djibouti \605\ to 
combatting violent extremism in Niger, and training security 
forces in Kenya.\606\ Additional, sometimes coordinated, 
efforts by the United States and Europe in Africa include 
support to local security capacity building, and counter-
narcotics and maritime security cooperation. Further, the 
United States and Europe provide financial support for and 
high-level United Nations (UN) Security Council engagement on 
the seven UN peacekeeping missions active in Sub-Saharan 
Africa. Africa's growth and development will be dependent on 
managing the terror threat and resolving new and long-running 
armed conflicts. As the United States, Europe, and African 
partners bolster cooperation to combat growing threats, they 
must also address the conditions that enable China's predatory 
behavior in Africa and how China's increasing engagement in 
protection and security-focused activities should be channeled 
in a way that supports collective goals.
---------------------------------------------------------------------------
    \605\ Melvin, Neil. ``The Foreign Military Presence In the Horn of 
Africa Region.'' SIPRI Background Paper, Stockholm International Peace 
Research Institute, Apr. 2019, https://bit.ly/350vbUu.
    \606\ ``Deployments Africa: The British Army in Africa.'' The 
British Army, 2019, https://www.army.mod.uk/deployments/africa/.
---------------------------------------------------------------------------
    U.S. and European activities in this area provide short-
term security benefits, but should also be viewed with a long-
term perspective. As Africa rapidly grows in population and 
importance, it will be ever more critical that the United 
States and Europe invest in new and continuing partnerships. It 
is also important that we further provide security assistance 
to support our African partners in their ongoing efforts to 
combat extremism and manage conflict with professionalism and a 
respect for human rights. This is important for our 
relationship with our African counterparts. If we fail to do 
so, actors like China will be ``unencumbered by international 
norms and professional military standards,'' and ``leverage 
speed of action and access to economic and security arenas in 
many parts of the continent.'' Left unchecked, ``their coercive 
and exploitative activities undermine and threaten many African 
countries' stability.'' \607\
---------------------------------------------------------------------------
    \607\ Townsend, Stephen. ``A secure and stable Africa is an 
enduring American interest.'' Hearing to receive testimony on United 
States Africa Command and United States Southern Command in review of 
the Defense Authorization request for Fiscal Year 2021 and the Future 
Years Defense Program, U.S. Senate Committee on Armed Services, 30 Jan. 
2020, https://www.africom.mil/document/32925/2020-posture-statement-to-
congress.
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Development and Civil Society
    Both the United States and Europe have recognized the 
importance of tackling the challenge of illicit financial flows 
and trafficking in humans, weapons, and natural resources to 
address even greater threats, such as terrorism, transnational 
crime, and rampant corruption. Capacity building and other 
support to African law enforcement and financial and justice 
sectors is vital. However, neither existing cooperative efforts 
nor bilateral actions from the United States and the nations of 
Europe are sufficient to address the threats that take 
advantage of conflict, weak governance and corrupt systems, 
which exist in pockets across Africa. Additionally, 
``geopolitical competitors are deploying corruption as a hybrid 
weapon: China seeks to win influence in Africa and other parts 
of the world dealing with weak governance ... Globally, 
corruption-riddled governance drives . . . migration . . . and 
drug trafficking, while hindering the ability of . . . border 
officials . . . to enforce the law.'' \608\
---------------------------------------------------------------------------
    \608\ Bellows, Abigail. Regaining U.S. Global Leadership on 
Anticorruption. Carnegie Endowment for International Peace, 01 Jul. 
2020, https://carnegieendowment.org/2020/07/01/regaining-u.s.-global-
leadership-on-anticorruption-pub-82170.
---------------------------------------------------------------------------
    On development assistance, the European Union boasts that 
``together, the European Union and its member states are the 
biggest donor to the African continent,'' and the United States 
takes pride in being the single largest bilateral donor.\609\ 
While our rationales and strategies for providing assistance 
may come from different perspectives, the economic, social, and 
political development of Africa has been a centerpiece of U.S. 
and European relations with the continent.
---------------------------------------------------------------------------
    \609\ ``Overall European Union support to Africa.'' African Union/
European Union, https://africa-eu-partnership.org/en/about-us/
financing-partnership#.
---------------------------------------------------------------------------
    Democracy assistance has long been a pillar of U.S. foreign 
policy and foreign assistance. Today, the United States, 
alongside our European partners, continues to support the 
growth of strong, democratic institutions across the African 
continent. Examples include supporting democratic transitions 
in Ethiopia and Sudan, working with civil society to engage 
citizens ahead of elections in Nigeria, Uganda and Zambia, 
providing technical assistance to parliamentary and 
constitutional processes in the Gambia and Somalia, and 
supporting anti-corruption institutions in the Democratic 
Republic of the Congo and independent media in the Central 
African Republic.
    However, despite shared dedication to the ideals of 
democracy, levels of democracy and governance assistance from 
both the United States and Europe to Africa have fluctuated 
over the last two decades. This is due in part to changing 
priorities across administrations and the focus on addressing 
more pressing challenges, including those posed by terrorism or 
migration.\610\ The focus on addressing the symptoms of these 
challenges rather than structural and causal conditions only 
limits the development of political and economic systems 
conducive to strong and close relations among the United 
States, Europe, and our African counterparts. In the words of 
one observer, ``If the United States and the other major 
bilateral and multilateral donors were to move together toward 
a comprehensive strategy that affirms the close linkage between 
democracy, good governance, and sound economic management, they 
would generate powerful new pressures for countries to deliver 
on development as well as democratic freedoms.'' \611\  Such an 
effort would provide a solid counterweight to the consistent 
external challenges to the development of democracy in Africa, 
many perpetuated by malign actors like China and Russia.
---------------------------------------------------------------------------
    \610\ Godfrey, Ken and Richard Youngs. Toward a New EU Democracy 
Strategy. Carnegie Europe, 17 Sep. 2019, https://carnegieeurope.eu/
2019/09/17/toward-new-eu-democracy-strategy-pub-79844. Working paper.
    \611\ Ofusu Debrah, Isaac. ``Why Democracy Promoters Must Pay Close 
Attention to Ghana and Africa's Other Growing Democracies.'' The 
Southern Voices Network, no. 4, Wilson Center Africa Program, Nov. 
2015, https://bit.ly/3l3jhz1.
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Conclusion
    The effects of how the transatlantic community works 
together has far reaching implications for the rest of the 
world. This is particularly true in Africa, where China is 
aggressively working to undermine the principles of democracy, 
the rule of law, free trade, open competition, and human 
rights. It is in the economic, security and humanitarian 
interests of the United States and Europe to provide a 
counterbalance to China's malign activities in Africa as our 
partners work to manage the tectonic changes that confront 
them. There are numerous opportunities to deepen existing 
partnerships and open new areas for cooperation, including in 
the areas of trade, economic growth, security cooperation, and 
democracy and good governance. If the transatlantic alliance is 
committed to upholding the foundational principles upon which 
we built the international system, we must recognize that 
Africa truly does matter.


                   CHAPTER SEVEN--THE TRANSATLANTIC 
                     ALLIANCE AND THE INDO-PACIFIC

                              ----------                              

        Allies such as the United Kingdom, France, and Canada 
        play a critical role in maintaining a free and open 
        Indo-Pacific.\612\
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    \612\ --Indo-Pacific Strategy Report: Preparedness, Partnerships, 
and Promoting A Networked Region. U.S. Department of Defense, 01 June 
2019, p. 42, https://bit.ly/38eHrTv


        _Indo-Pacific Strategy Report, U.S. Department of 
        Defense, June 2019
Introduction
    Over the last 40 years, the Indo-Pacific has become the 
world's economic center of gravity. It is home to the two of 
the three largest economies (China and Japan), some of the 
world's fastest growing economies (especially in Southeast 
Asia), more than half the world's population, and some of the 
world's most crucial global supply and trade routes.\613\ The 
United States conducted $1.8 trillion in two-way trade with the 
region in 2018--more than it did with any other region in the 
world.\614\ For the European Union, the Association of 
Southeast Asian Nations (ASEAN) is its third largest trading 
partner outside of Europe, and U.K.-ASEAN trade flows are 
growing by double digits.\615\ This region is also home to 
advanced democracies like Japan, Australia, New Zealand, 
Taiwan, and India that will figure decisively in upholding a 
free, open, and rules-based international system. The Indo-
Pacific also features acute security challenges, particularly 
China's assertive and coercive actions to seek hegemony in the 
region. The degree to which China can dominate the Indo-Pacific 
will have a direct impact on its ability to project power 
globally.
---------------------------------------------------------------------------
    \613\ Brophy, Caitlin and Ferland, Colby. Asia Matters for America 
Matters for Asia. East West Center, 2018, https://bit.ly/351dwML.
    \614\ Ibid.
    \615\ Sotullo, Jorge. ``Fact Sheets on the European Union.'' 
European Parliament, Nov. 2019, https://www.europarl.europa.eu/
factsheets/en/sheet/183/southeast-asia. And ``UK-ASEAN Factsheet.'' 
Government of the United Kingdom Foreign, Commonwealth, and Development 
Office, 06 Jan. 2020, https://bit.ly/3euS4m6.
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    As a result of the region's growing economic and political 
weight, the opportunities presented by robust alliances and 
partnerships, and China's more assertive and coercive regional 
posture, the United States has determined that the Indo-Pacific 
is a top foreign policy priority.
    Over the last few years, Europeans too have realized that 
political, economic, and security developments in the Indo-
Pacific will have an increasingly greater bearing on their own 
interests and have more clearly defined their priorities in the 
region.
    In 2018, the European Union published a robust strategy for 
fostering principles-based economic connectivity between Europe 
and Asia, and followed that up with a new partnership on 
sustainable connectivity and quality infrastructure with 
Japan.\616\ In 2019, France published its own Indo-Pacific 
strategy, calling the region ``crucial for global peace and 
security, multilateralism, the preservation of global public 
goods, and world economic development and trade.'' \617\ With 
the publication of Germany's new Indo-Pacific strategy in 
September 2020, Foreign Minister Heiko Maas said, ``We are 
sending a clear message today: The Indo-Pacific is a priority 
of German foreign policy.'' \618\ The U.K.'s forthcoming 
Integrated Review on security, defense, development, and 
foreign policy is likely to focus significantly on the Indo-
Pacific as the country repositions itself post-Brexit. Other 
important European players, including Spain and Sweden, have 
also published their own regional strategies for the Asia-
Pacific.\619\
---------------------------------------------------------------------------
    \616\ ``Joint Communication to the European Parliament, the 
Council, and the European Economic and Social Committee, the Committee 
of the Regions and the European Investment Bank: Connecting Europe and 
Asia - Building blocks for an EU Strategy.'' European Commission High 
Representative of the Union for Foreign Affairs and Security Policy, 19 
Sep. 2018, https://bit.ly/3k1ORvF.And ``The Partnership on Sustainable 
Connectivity and Quality Infrastructure between Japan and the European 
Union.'' Japan Ministry of Foreign Affairs, 2018, https://
www.mofa.go.jp/files/000521432.pdf.
    \617\ French Strategy in the Indo-Pacific: ``For An Inclusive Indo-
Pacific,'' Republic of France Ministry of Foreign Affairs, Aug. 2019, 
p. 1, https://www.diplomatie.gouv.fr/en/country-files/asia-and-oceania/
the-indo-pacific-region-a-priority-for-france/
#::text=In%20an%20international%20context%20marked,the%20heart%20of%20th
is%20strategy.
    \618\ Riedel, Norbert. ``Why Germany is opening a new chapter in 
its tie with the Indo-Pacific.'' Straits Times, 19 Sep. 2020, https://
www.straitstimes.com/opinion/why-germany-is-opening-new-chapter-in-its-
ties-with-the-indo-pacific.
    \619\ Strategy for Sweden's regional development cooperation in 
Asia and the Pacific region, 2016-2021. Government of Sweden Ministry 
for Foreign Affairs. https://www.government.se/4a6b76/contentassets/
4be274e3951b4c269553956c442214db/strategy-for-swedens-regional-
development-cooperation-in-asia-and-the-pacific-region-20162021.pdf. 
And A Strategic Vision for Spain in Asia, 2018-2022. Government of 
Spain Ministry for Foreign Affairs, European Union, and Cooperation, 
Feb. 2018, https://bit.ly/3k18uUF.
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    The United States welcomes Europe's greater focus on the 
Indo-Pacific, and views Europe as a partner in upholding a free 
and open system based on clear and transparent rules. Key 
regional actors like Japan, Australia, India, and ASEAN have 
also demonstrated their interest in a larger European role and 
increasingly hope for, and even expect, greater European 
contributions to prosperity, security, and good governance in 
the Indo-Pacific.\620\
---------------------------------------------------------------------------
    \620\ For a useful discussion of this, see Mohan, Garima. A 
European Approach to the Indo-Pacific. Global Public Policy Institute, 
Dec. 2019, https://www.gppi.net/media/Mohan--2019--A--European--
Approach--To--The--Indo--Pacific--final.pdf.
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    As both the United States and Europe increasingly 
prioritize the Indo-Pacific, transatlantic cooperation is 
forming in the region, though much more nascent than in Africa. 
Currently, the United States and Europe coordinate diplomatic 
messaging, discuss the Indo-Pacific in various policy 
dialogues, participate in the region's key institutions, take 
separate but mutually supportive actions on important regional 
challenges (such as providing humanitarian assistance for 
Rohingya refugee camps in Bangladesh), and occasionally conduct 
joint military actions. Just one example of this would be the 
U.S.-U.K. freedom of navigation operation in the South China 
Sea.\621\
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    \621\ Reuters Staff, ``U.S., Britain conduct first joint drills in 
contested South China Sea,'' Reuters, 16 Jan. 2019, https://
www.reuters.com/article/us-usa-britain-southchinasea/u-s-britain-
conduct-first-joint-drills-in-contested-south-china-sea-idUSKCN1PA0PV
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    Increased coordination is especially important given the 
growing dominance of the People's Republic of China (PRC) in 
the Indo-Pacific. Whether through economic coercion and trade 
retaliation, encroachment on sources of vitality through 
illegal fishing in the South China Sea and damming of the 
Mekong River, excessive and illegal maritime claims, the 
People's Liberation Army's power projection within and beyond 
the First Island Chain, and influence operations to advance 
Chinese Communist Party (CCP) narratives in other countries, 
China's reach and malign influence is felt acutely by its Indo-
Pacific neighbors. As the PRC aims to reshape the Indo-Pacific 
into a region that is deferential to the CCP, coordinated 
American and European engagement and cooperation will become 
all the more important.
    There is clear alignment between our shared principles and 
the areas of emphasis in the American and European strategies 
and approaches to the region. This foundation could provide a 
basis for increasing cooperation on advancing economic growth 
and connectivity, upholding regional security, promoting good 
governance, and addressing environmental challenges. To do so, 
the United States and European nations will have to decide at 
the political level at what extent to leverage the 
transatlantic relationship to advance a free, open, inclusive, 
and rules-based Indo-Pacific region.\622\ At a minimum, the 
alliance should ensure it does not duplicate efforts or create 
direct conflicts between our goals and actions. This demands a 
higher degree of collaboration and cooperation than our 
countries have been accustomed to, but as the Indo-Pacific 
region experiences dramatic shifts, it is critical that we do 
so.
---------------------------------------------------------------------------
    \622\ ``Free, open, inclusive, and rules-based'' combines all the 
terms described in the United States, French, and German strategies for 
the Indo-Pacific.
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Areas of Potential Cooperation
Private Sector-Led Investment
    As Indo-Pacific countries develop, the United States and 
Europe share an interest in fostering private sector 
investments in emerging markets, including through high-
standard infrastructure projects. Both the United States and 
Europe have called for partnerships with other nations on--as 
the EU's strategy puts it--``connectivity based on commonly 
agreed rules and standards enabling a better governance of 
flows of goods, people, capital and services.'' \623\ Both want 
to meet demands in emerging markets by ``crowding in'' more 
private investment, and both recognize the necessity of 
providing technical assistance and support to emerging markets 
in areas such as public procurement and protection of 
intellectual property rights, generally.\624\ Finally, both the 
United States and the European Union call for a particular 
focus on energy, transport infrastructure, and the digital 
economy.
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    \623\ ``Joint Communication to the European Parliament, the 
Council, and the European Economic and Social Committee, the Committee 
of the Regions and the European Investment Bank: Connecting Europe and 
Asia - Building blocks for an EU Strategy.'' European Commission High 
Representative of the Union for Foreign Affairs and Security Policy, 19 
Sep. 2018, p. 3, https://bit.ly/3k1ORvF.
    \624\ Ibid, p. 10, 12. And A Free and Open Indo-Pacific, U.S. 
Department of State, 04 Nov. 2019, p. 16, https://www.state.gov/wp-
content/uploads/2019/11/Free-and- Open-Indo-Pacific-4Nov2019.pdf.
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    Alignment on some of these principles and priorities 
already has turned into agreements among development finance 
institutions (DFIs), such as the agreement among the U.S. 
Development Finance Corporation (DFC), FinDev Canada, and the 
European Development Finance Institutions (called the DFI 
Alliance) to enhance coordination on ``shared development 
objectives,'' the EU's quality infrastructure agreement with 
Japan, and the U.S.-Japan-Australia memorandum of understanding 
on providing market-based alternatives to state-directed 
financing for emerging markets.\625\
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    \625\ ``OPIC Signs MOU Establishing DFI Alliance with key allies.'' 
U.S. International Development Finance Corporation, 11 Apr. 2019, 
https://www.dfc.gov/media/opic-press-releases/opic-signs- mou-
establishing-dfi-alliance-key-allies. And ``US, Japan, Australia Sign 
First Trilateral Agreement on Development Finance Collaboration.'' U.S. 
International Development Finance Corporation, 12 Nov. 2018, https://
www.dfc.gov/media/opic-press-releases/us-japan- australia-sign-first-
trilateral-agreement-development-finance.
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    The next step is to transform these agreements into 
concrete cooperation among U.S., European, and Indo-Pacific 
partners to demonstrate the value of private sector-led 
investment that is ``sustainable, comprehensive, and rules-
based.'' \626\ \627\ The United States and Europe share this 
key goal in the Indo-Pacific, and have the opportunity to 
combine and synchronize investments ``into a force 
multiplier,'' offering a better chance to demonstrate the 
visibility and credibility of private sector-led investment. 
This is in stark contrast to the state-directed and often 
opaque investments offered by the PRC.\628\
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    \626\ ``Joint Communication to the European Parliament, the 
Council, and the European Economic and Social Committee, the Committee 
of the Regions and the European Investment Bank: Connecting Europe and 
Asia - Building blocks for an EU Strategy.'' European Commission High 
Representative of the Union for Foreign Affairs and Security Policy, 19 
Sep. 2018, p. 2-3, https://bit.ly/3k1ORvF. And ``Acting OPIC President 
and CEO David Bohigian Leads Delegation to Meet with Key Allies.'' U.S. 
International Development Finance Corporation, 08 Mar. 2019,https://
www.dfc.gov/media/opic-press-releases/acting-opic- president-and-ceo-
david-bohigian-leads-delegation-meet-key.
    \627\ For an overview of bilateral and multilateral development 
finance institutions, see: Development Finance Institutions and Private 
Sector Development. Organization for Economic Co-operation and 
Development, https://www.oecd.org/development/development-finance-
institutions-private-sector-development.htm. OPIC has since been 
replaced by the International Development Finance Corporation.
    \628\ Mohan, Garima. A European Approach to the Indo-Pacific. 
Global Public Policy Institute, Dec. 2019, p. 24, https://bit.ly/
2I9Dbdd. And Runde, Daniel F. and et al. ``Strategic Directions for the 
United States International Development Finance Corporation (DFC) 
Supporting Development and National Security.'' Center for Strategic 
and International Studies, Sep. 2019, p. 24, 32, https://bit.ly/352FqHS 
190923--RundeBanduraMurphy--USDFC--WEB.pdf. And Ingram, George, and 
Robert A. Mosbacher Jr. ``Development finance: Filling today's funding 
gap.'' Blum Roundtable on Global Politics, Brookings Institution, 31 
Jul. 2018, https://brook.gs/3p1rHcw.
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    Strengthening the DFI Alliance should be a top priority for 
the United States, Europe, and Canada. The DFI Alliance 
provides a framework for cooperation on transactions, 
operations, policy processes, and public engagements on the 
value of DFIs to fostering economic growth.\629\ Key lines of 
effort could include policy dialogues that define and scope the 
types of projects most ripe for joint financing or cooperation, 
improving alignment on standards (using the G-20 standards 
agreed to in Japan in 2018 as a starting point), solidifying 
data and information sharing, and setting up processes for de-
conflicting investments.\630\ The DFI Alliance should also 
advance technical level discussions to address and streamline 
obstacles to effective and efficient cooperation, such as 
separate due diligence processes and differing documentation 
for project applicants to complete.\631\ A 2019 paper by the 
Center for Strategic and International Studies offers an 
extensive list of cooperative initiatives the DFI Alliance 
could pursue, including establishing joint project preparation 
facilities, co-financing or co-guarantees, joint technical 
assistance, and harmonizing tools and measures to assess 
development impact.\632\
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    \629\ ``Memorandum of Understanding on Cooperation Between Overseas 
Private Investment Corporation/DFC, European Development Finance 
Institutions, And Development Finance Institute Canada (DFIC) 
Inc.(``FinDev Canada'').'' U.S. International Development Finance 
Corporation, 11 Apr. 2019, p. 2-3, https://bit.ly/38hhx1A.
    \630\ ``G20 Principles for Quality Infrastructure Investment,'' 
Ministry of Foreign Affairs Japan, 2018, https://bit.ly/3p0Rq4R. And 
``Memorandum of Understanding on Cooperation Between Overseas Private 
Investment Corporation/DFC, European Development Finance Institutions, 
And Development Finance Institute Canada (DFIC) Inc.(``FinDev 
Canada'').'' U.S. International Development Finance Corporation, 11 
Apr. 2019, p. 3, https://bit.ly/38hhx1A. And Runde, Daniel F. and et 
al. ``Strategic Directions for the United States International 
Development Finance Corporation (DFC) Supporting Development and 
National Security. Center for Strategic and International Studies, Sep. 
2019, p. 33, https://bit.ly/352FqHS.
    \631\ Runde, Daniel F. and et al. ``Strategic Directions for the 
United States International Development Finance Corporation (DFC) 
Supporting Development and National Security.'' Center for Strategic 
and International Studies, Sep. 2019, p. 33, https://bit.ly/352FqHS. 
And Ingram, George, and Robert A. Mosbacher Jr. ``Development finance: 
Filling today's funding gap.'' Blum Roundtable on Global Politics, 
Brookings Institution, 31 Jul. 2018, https://www.brookings.edu/
research/development-finance-filling-todays-funding-gap/.
    \632\ Runde, Daniel F. and et al. ``Strategic Directions for the 
United States International Development Finance Corporation (DFC) 
Supporting Development and National Security.'' Center for Strategic 
and International Studies, Sep. 2019, p. 33, https://bit.ly/352FqHS.
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    Disagreements over environmental standards may present a 
significant barrier to further cooperation, as European nations 
claim U.S. environmental standards are insufficient, a position 
the United States disputes. Reconciling these differences will 
require sustained transatlantic dialogue. Again, the Osaka G20 
principles on infrastructure could provide a starting point. 
The United Kingdom, the European Union, and European states 
should remain open to joining the Blue Dot Network, an 
initiative spearheaded by the United States, Japan, and 
Australia that establishes shared standards for infrastructure 
development. The United States will continue to invest in 
fossil fuel projects given continued demand, but it is also 
making significant global investments in renewable energy. Of 
the DFC's total active financial commitments to energy 
projects, 64 percent of those are for renewable energy, with 36 
percent going to fossil fuel projects.\633\ Many developing 
country energy plans call for clean and renewable energy built 
onto a strong grid baseload reinforced by traditional energy 
sources. The United States and Europe are well positioned to 
assist these countries in developing such energy sources in an 
efficient and environmentally responsible manner, and there 
remains ample opportunity for cooperation with European DFIs 
that have exited fossil fuels.
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    \633\ U.S. International Development Finance Corporation, as of 30 
Jun. 2020.
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    The United States' Indo-Pacific strategy and the EU 
connectivity strategy also both emphasize investing in and 
strengthening connections among people.\634\ Within the goal of 
advancing private sector-led development, the United States and 
Europe could consider coordinating certain training for 
officials on project development and preparation, open 
procurement and tendering processes, developing and managing 
project pipelines, and effectively managing key sectors like 
energy, transport infrastructure, and digital economy.\635\ 
This could also include, for example, embedding expert advisors 
(at the invitation of host governments) in ministries of 
important Indo-Pacific partners. This line of effort should 
focus on areas where the United States and Europe can agree on 
standards and policy processes, so as to increase fair, 
competitive opportunities for private sector actors on both 
sides.
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    \634\ ``Joint Communication To The European Parliament, The 
Council, The European Economic And Social Committee, The Committee Of 
The Regions And The European Investment Bank: Connecting Europe and 
Asia--Building blocks for an EU Strategy.'' European Commission High 
Representative of the Union for Foreign Affairs and Security Policy, 19 
Sep. 2018, p. 6, https://bit.ly/3k1ORvF. And A Free and Open Indo-
Pacific, U.S. Department of State, 04 Nov. 2019, p. 25-28, https://
bit.ly/3p0rmH4.
    \635\ Runde, Daniel F. and et al. ``Strategic Directions for the 
United States International Development Finance Corporation (DFC) 
Supporting Development and National Security.'' Center for Strategic 
and International Studies, Sep. 2019, p. 33, https://bit.ly/352FqHS.
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    Legislatures on both sides of the Atlantic must bolster 
these efforts, including by demonstrating support for 
cooperation among U.S. and European DFIs and highlighting such 
cooperation publicly. Legislatures can also signal political 
support for DFIs to pursue more creative and challenging 
investments in unconventional or ignored developing country 
markets. This is important to enable increased visibility and 
credibility of U.S. and European private sector-led options, 
and counter state-directed options that might present 
unacceptable risks to developing countries. Legislatures should 
support U.S. and European aid agencies prioritization of 
funding for relevant technical assistance programs. In 
addition, lawmakers should support preserving the flexibility 
of DFIs to make investments according to development and 
foreign policy goals that are also consistent with free market 
principles and trade obligations.
Maritime Security
    The connectivity and open trade that our economies rely 
upon is underpinned by security and the preservation of public 
goods in the region. Among the greatest challenges to 
connectivity and global trade is the PRC's aggressive pursuit 
of greater control of critical land routes, sea lanes, and air 
space in the Indo-Pacific in the hopes of eventually exercising 
greater influence beyond the region. The South China Sea, the 
Indian Ocean, and other maritime areas witnessing greater PRC 
presence are crucial to commercial activity, energy 
exploration, transport, and the exercise of security operations 
in areas permitted under international law. Without referencing 
China's recent actions specifically, European nations have 
increasingly stated their clear interest in maintaining open 
sea lanes, trade routes, and supply chains, and their desire to 
expand their roles beyond being ``passive trading partners.'' 
\636\ In its strategy, for example, France seeks to play a 
stronger role in mediating disputes in the Indo-Pacific 
region.\637\ Germany warns of ``disruption to these maritime 
trade routes'' in the region.\638\ Both France and the United 
Kingdom have recently stepped up their engagement by 
establishing additional defense partnerships and deepening 
security cooperation.\639\
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    \636\ Lee Jeong-ho and Keegan Elmer. ``European nations `determined 
to stay relevant' in Asia-Pacific, South China Sea.'' South China 
Morning Post, 15 Sep. 2019, https://bit.ly/3l3sY0m.
    \637\ French Strategy in the Indo-Pacific: ``For An Inclusive Indo-
Pacific'' Republic of France Ministry of Foreign Affairs, Aug. 2019, p. 
35, https://bit.ly/2IaW5A1.
    \638\ Policy guidelines for the Indo-Pacific region: Germany--
Europe--Asia: shaping the 21st century together. The Federal Government 
of Germany Federal Foreign Office, Sep. 2020, p. 9, https://bit.ly/
2U1gPgg.
    \639\ For some examples, please see: ``Indo-Pacific Strategies of 
U.S. Allies and Partners: Issues for Congress.'' EveryCRSReport, Demand 
Progress/Congressional Data Coalition, 30 Jan. 2020, https://
www.everycrsreport.com/reports/R46217.html#--Toc31982453. And Odgaard, 
Liselotte. ``European Engagement in the Indo-Pacific: The Interplay 
between Institutional and State-Level Naval Diplomacy.'' Asia Policy, 
vol. 14, no. 4, The National Bureau of Asian Research, 30 Oct. 2019, 
https://bit.ly/32khqP0.
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    Upholding internationally recognized freedom of navigation 
rights and promoting maritime security provide a strong 
starting point for greater transatlantic cooperation, alongside 
other partners like Japan, Australia, and ASEAN member states. 
Cooperation and coordination on freedom of navigation and 
maritime security training, capacity-building, and exercises 
would serve as strong examples of the multilateral engagement 
emphasized in European strategies and central to the U.S. Indo-
Pacific strategy.\640\ Providing capabilities and training to 
enhance maritime domain awareness, improve information sharing, 
exercise sovereignty over one's exclusive economic zones, 
increase interoperability in the maritime domain, and other 
areas will continue to be a top priority for U.S. security 
assistance to the region. Further integrating transatlantic 
cooperation into the growing web of partnerships and regional 
security could help build a ``flexible, resilient network of 
like-minded security partners to address common challenges.'' 
\641\ Europe's interest in working within multilateral security 
forums presents opportunities to partner with ASEAN member 
states in concert with the United States, Japan, and Australia. 
In addition, as the North Atlantic Treaty Organization (NATO) 
examines its response to Chinese actions, building on existing 
partnerships between NATO and Indo-Pacific countries should be 
a key focus--something Germany's strategy calls for.\642\
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    \640\ A Free and Open Indo-Pacific, U.S. Department of State, 04 
Nov. 2019, p. 7-8, https://www.state.gov/wp-content/uploads/2019/11/
Free-and-Open-Indo-Pacific-4Nov2019.pdf.
    \641\ Ibid, p. 22.
    \642\T3APolicy guidelines for the Indo-Pacific region: 
Germany--Europe--Asia: shaping the 21st century together. The Federal 
Government of Germany Federal Foreign Office, Sep. 2020, p. 16, 29, 
https://bit.ly/2U1gPgg. And ``Partnership Interoperability 
Initiative.'' North Atlantic Treaty Organization, 12 Jun. 2020, https:/
/bit.ly/32gP4Fi. And ``Relations with Australia.'' North Atlantic 
Treaty Organization, 15 Jun. 2020, https://bit.ly/3ez3zcj. And 
``Relations with Japan.'' North Atlantic Treaty Organization, 12 Sep. 
2018, https://bit.ly/2TXdHCj.
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    The United Kingdom, France, and Germany each demonstrate 
strong and consistent support for international law principles 
generally and freedom of navigation rights in the South China 
Sea specifically.\643\ The trio recently advocated for freedom 
of navigation and maritime claims rooted in international law 
at the United Nations (UN), and the French and U.K. navies have 
conducted several freedom of navigation operations.\644\ France 
also conducts periodic transits of the Taiwan Strait.\645\ 
Germany's Indo-Pacific strategy emphasizes upholding 
international maritime law and ``expanding security and defence 
cooperation.'' \646\
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    \643\ ``Joint Statement by France, Germany and the United Kingdom 
on the situation in the South China sea today'', Federal Foreign 
Office, 29 Aug. 2019. https://bit.ly/3p3HWWn; And: Roy Chaudhury, 
Dipanjan. ``France, Germany and UK joins India on safeguarding Freedom 
of Navigation in South China Sea'', The Economic Times, 30 Aug. 2019. 
https://economictimes.indiatimes.com/news/defence/france-germany-uk-
joins-india-on-safeguarding-freedom-of-navigation-in-south-china-sea/
articleshow/70910429.cms?from=mdr;
    \644\ ``Note Verbale'', UK Mission to the UN, 16 Sept. 2020.https:/
/bit.ly/3l0XXdu.; And: ``South China Sea: France and Britain join the 
US to oppose China'', Deutsche Welle, 27 June 2018. https://www.dw.com/
en/south-china-sea-france-and-britain-join-the-us-to-oppose-china/a-
44422935.
    \645\ ``China accuses France of illegally sailing warship in Taiwan 
Strait'', Financial Times,, 25 Apr. 2019.https://www.ft.com/content/
12f4ff22-674d-11e9-9adc-98bf1d35a056.; And Ali, Idrees and Stewart, 
Phil. ``Exclusive: In rare move, French warship passes through Taiwan 
Strait'', Reuters, 12 Mar. 2018. https://www.reuters.com/article/us-
taiwan-france-warship-exclusive/exclusive-in-rare-move-french-warship-
passes-through-taiwan-strait-idUSKCN1S027E.
    \646\ Policy guidelines for the Indo-Pacific region: Germany--
Europe--Asia: shaping the 21st century together. The Federal Government 
of Germany Federal Foreign Office, Sep. 2020, p. 8, https://
www.auswaertiges-amt.de/blob/2380514/f9784f7e3b3fa1bd7c5446d274a4169e/
200901-indo-pazifik-leitlinien--1--data.pdf.
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Good Governance and Human Rights
    At the 2019 UN General Assembly, the United States, Canada, 
the United Kingdom, Germany, and the Netherlands hosted an 
event on Xinjiang, attended by 31 other nations representing 
the European Union and the Organization of Islamic 
Cooperation.\647\ Legislatures on both sides of the Atlantic 
have since pushed through legislation and resolutions on the 
horrific human rights abuses being perpetrated by the Chinese 
government against Uyghurs and other Muslim minorities, and 
American and European leaders continue to call for unfettered 
UN access to the province.\648\
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    \647\ Churchill, Owen. ``US calls for UN to demand unfettered 
access to China's XinJiang region'', South China Morning Post,, 25 
Sept. 2019. https://bit.ly/3eu1ZIN.
    \648\ ``France's Macron urges U.N. mission to visit China's 
Xinjiang region'', Reuters, 21 Sep. 2020. https://www.reuters.com/
article/us-un-assembly-france-china/frances-macron-urges-u-n-mission-
to-visit-chinas-xinjiang-region-idUSKCN26D2SO.
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    As the Indo-Pacific region figures more prominently in the 
transatlantic relationship, the United States and Europe should 
identify further opportunities to promote the rule of law, 
democratic freedoms, human rights, and good governance in the 
region. Shared priorities include: promoting freedom of speech, 
assembly, religion, and association; supporting freedom of the 
press, including through training for reporters and 
investigative journalists; advancing transparency, 
accountability, and citizen-responsive governance; combatting 
corruption; countering disinformation; promoting human rights 
and gender equality; supporting human rights defenders; 
building civil society organizations and partnerships among 
them; and fostering inclusive economic growth under a rules-
based system.\649\
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    \649\ ``A Free and Open Indo-Pacific,'' U.S. Department of State, 
04 Nov. 2019, https://www.state.gov/wp-content/uploads/2019/11/Free-
and-Open-Indo-Pacific-4Nov2019.pdf. And ``EU Annual Report on Human 
Rights and Democracy in the World 2019.'' Council of the European 
Union, 15 Jun. 2020, https://www.consilium.europa.eu/media/44432/
st08580-en20.pdf.
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    The United States and Europe should use international 
organizations and other high-impact forums to highlight 
important human rights challenges. U.S. and European embassies 
and development organizations could also hold joint events more 
regularly in China and other countries. On-the-ground dialogue 
and cooperation with each other, including the sharing of best 
practices and coordinating or de-conflicting programs, may 
become more important if Europe acts to increase its good 
governance initiatives in the region. Legislatures should also 
strengthen cooperation in this area through hosting joint 
events and conducting exchanges and dialogues with regional 
counterparts.
Environment
    Finally, the Indo-Pacific provides an opportunity for the 
United States and Europe to work together on environmental 
issues. The United States and Europe may not fully align on 
some environmental matters, but can nevertheless agree on 
certain specific issues, such as the importance of assisting 
developing nations in mitigating against the effects of natural 
disasters, increasing responsible management and stewardship of 
natural resources, and advancing sustainable forms of energy. 
There has been severe environmental degradation by PRC actors 
in the region especially over the past few years, through 
dredging to construct illegal islands in the South China Sea, 
rampant illegal fishing, harmful use of the Mekong River, and 
construction of coal-fired power plants across the region, 
among other issues.
    Both the French and German Indo-Pacific strategies 
prioritize climate change and environmental issues, as does 
Sweden's 2016 regional development strategy. For France, 
``climate, environment and biodiversity'' is one of the three 
pillars outlined in its strategy.\650\ Germany's strategy 
emphasizes the importance of economic growth in the Indo-
Pacific being ``environmentally friendly and socially 
compatible'' and states that ``natural resources must be 
managed sustainably.'' \651\
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    \650\ French Strategy in the Indo-Pacific: ``For An Inclusive Indo-
Pacific,'' Republic of France Ministry of Foreign Affairs, Aug. 2019, 
p. 5, https://www.diplomatie.gouv.fr/en/country-files/asia-and-oceania/
the-indo-pacific-region-a-priority-for-france/
#::text=In%20an%20international%20context%20marked,the%20heart%20of%20th
is%20strategy.
    \651\ Policy guidelines for the Indo-Pacific region: Germany--
Europe--Asia: shaping the 21st century together. The Federal Government 
of Germany Federal Foreign Office, Sep. 2020, p. 10, https://
www.auswaertiges-amt.de/blob/2380514/f9784f7e3b3fa1bd7c5446d274a4169e/
200901-indo-pazifik-leitlinien--1--data.pdf.
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    The United States also emphasizes environmental issues in 
its Indo-Pacific strategy. The State Department's 
Infrastructure Transaction and Assistance Network provides 
assistance to help countries evaluate potential infrastructure 
projects, including for environmental sustainability.\652\ The 
United States engages in capacity building for security forces 
to address environmental challenges, an issue that is becoming 
more acute given China's environmental degradation in the South 
China Sea and along the Mekong River.\653\ The United States 
Agency for International Development (USAID) also operates 
multiple programs to improve resource management and build 
resilience to environmental shocks and stresses throughout the 
region. These efforts include: the SEVIR-Mekong program; the 
Green Invest Asia initiative; the Green Power Asia initiative; 
a broader development portfolio focused on improving energy and 
water security; combatting illegal fishing, logging, and 
wildlife trafficking; and enhancing forest protection and 
management.\654\
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    \652\ A Free and Open Indo-Pacific, U.S. Department of State, 04 
Nov. 2019, p. 15, https://www.state.gov/wp-content/uploads/2019/11/
Free-and-Open-Indo-Pacific-4Nov2019.pdf.
    \653\ Ibid, p. 22.
    \654\ ``Indo-Pacific Region: Improving Natural Resource 
Management.'' U.S. Agency for International Development, 28 Aug. 2020, 
https://www.usaid.gov/indo-pacific-vision/nrm.
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    To advance their cooperation in this region, the United 
States and Europe could coalesce around several concrete areas. 
First, the United States and European partners can continue to 
invest in energy development in the Indo-Pacific. The DFC is 
investing significantly in renewable energy projects in 
India.\655\ U.S. assistance provided under the U.S. Department 
of State's Asia Enhancing Development and Growth Through Energy 
program has mobilized $806 million in public and private sector 
financing for 11 renewable energy programs in Indonesia.\656\ 
The United States also recently established a partnership with 
Mekong River countries that will focus, in part, on energy and 
water security, and the European Union has provided assistance 
to Mekong countries on natural resource management and other 
issues over the years.\657\ France is active in providing 
energy-related development assistance across Southeast 
Asia.\658\ The U.S., U.K., and German governments have come 
together to support large-scale grid integration in India.\659\
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    \655\ ``DFC Approves $3.6 Billion of New Investments in Global 
Development in Largest Quarter Ever.'' U.S. International Development 
Finance Corporation, 09 Sep. 2020, https://bit.ly/2GCH1Lq. And ``OPIC 
Board Approves More than $1.3 Billion to Development Projects in 
Africa, Indo-Pacific, and Latin America.'' U.S. International 
Development Finance Corporation, 13 Dec. 2018, https://www.dfc.gov/
media/opic-press-releases/opic-board-approves-more-13-billion-
development-projects-africa-indo.
    \656\ A Free and Open Indo-Pacific, U.S. Department of State, 04 
Nov. 2019, p. 17, https://www.state.gov/wp-content/uploads/2019/11/
Free-and-Open-Indo-Pacific-4Nov2019.pdf.
    \657\ Pompeo, Michael R. ``The Mekong-U.S. Partnership: The Mekong 
Region Deserves Good Partners.'' U.S. Department of State, 14 Sep. 
2020, https://bit.ly/3p4ALgW. And Soutullo, Jorge. The Mekong River: 
geopolitics over development, hydropower and the environment. European 
Parliament Policy Department for External Relations, Nov. 2019, https:/
/bit.ly/32gRMKJ.
    \658\ ``Southeast Asia - Activity Report.'' Agence Francaise de 
Developpment, Nov. 2019,https://www.afd.fr/en/ressources/southeast-
asia-activity-report?origin=/en/rechercher?query=southeast+asia.
    \559\ ``U.S., Germany & U.K. Bolster Support for India's Large-
Scale Grid Integration of Renewable Energy.'' U.S. Agency for 
International Development, 04 Sep. 2019, https://bit.ly/368MD8L.
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    A second area could include fostering resilience to 
environmental challenges in the Pacific Islands. Germany 
specifically highlights this aim in its strategy, and the 
United Kingdom and France are also active on this topic.\660\ 
In May 2019, a joint statement by the United States and the 
leaders of the three Federated American States emphasized 
cooperation on ``supporting the resiliency of the Pacific 
Islands environment.'' \661\ Since then, the United States has 
provided further assistance as part of its Pacific Pledge 
program for ``disaster resilience, weather forecasting, and to 
address environmental challenges.'' \662\ We have a mutual 
interest in protecting these islands and all parties should 
look for opportunities to work together to tackle these 
challenges.
---------------------------------------------------------------------------
    \660\ Policy guidelines for the Indo-Pacific region: Germany--
Europe--Asia: shaping the 21st century together. The Federal Government 
of Germany Federal Foreign Office, Sep. 2020, p. 7, https://
www.auswaertiges-amt.de/blob/2380514/f9784f7e3b3fa1bd7c5446d274a4169e/
200901-indo-pazifik-leitlinien--1--data.pdf. And: Field, Mark. ``UK 
support for Pacific Islands on climate change.'' Pacific Island Forum 
in Nauru on `Climate Change--A Key Security Risk', United Kingdom 
Foreign & Commonwealth Office, 05 Sep. 2018, p. 7, https://bit.ly/
2JJCYy9.
    \661\ ``Joint Statement from the President of the United States and 
the Presidents of the Freely Associated States.'' The White House, 21 
May 2019, https://bit.ly/3lfKi2p.
    \662\ ``U.S. Engagement in the Pacific Islands: UN General Assembly 
Update.'' U.S. Department of State, 03 Oct. 2019, https://
www.state.gov/u-s-engagement-in-the-pacific-islands-un-general-
assembly-update/.
---------------------------------------------------------------------------
    Third and finally, combatting poaching; illegal wildlife 
trade and trafficking; and illegal, underreported, and 
unregulated fishing are priorities for both the United States 
and Europe. Germany lists some of these areas as priorities in 
its strategy, and USAID has existing efforts.\663\ While this 
challenge affects countries throughout the region, China is the 
largest market for trafficked wildlife goods.\664\ Thus, ending 
destructive wildlife trafficking presents an area where the 
United States and European countries should work together to 
press China to stem demand for these products, address 
prevalence of trafficking in captive-bred wildlife products, 
and raise public awareness and other avenues of 
cooperation.\665\
---------------------------------------------------------------------------
    \663\ ``USAID Wildlife Asia.'' U.S. Agency for International 
Development, 03 Sep. 2020, https://www.usaid.gov/asia-regional/fact-
sheets/usaid-wildlife-asia-activity.
    \664\ Stephens, Suzanna and Matthew Southerland. China's Role in 
Wildlife Trafficking and the Chinese Government's Response, U.S.-China 
Economic and Security Review Commission, 06 Dec. 2018, https://bit.ly/
3exiwvm.
    \665\ De Gabriel, Grace. ``Will China Say No to Wildlife Trade?'' 
UN Chronicle, United Nations, https://www.un.org/en/chronicle/article/
will-china-say-no-wildlife-trade. And United States, Congress, Senate, 
Risch, James E. STRATEGIC Act. Congress.gov, 116th Congress, 2nd 
Session, Senate Bill 4272, introduced 22 Jul. 2020, https://
www.congress.gov/bill/116th-congress/senate-bill/4272?s=1&r=5.
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Conclusion
    The United States and European nations are making decisive 
shifts towards the Indo-Pacific in their respective foreign 
policies. The next steps are to build upon the existing 
political will to cooperate in the region and to decide where 
to focus and what cooperation means in practice. For the United 
States and the European Union, these are a perfect set of 
topics to explore in the context of the dialogue on China. The 
United States and the United Kingdom should begin to have 
similar conversations after the latter's Integrated Review is 
published. Discussions with EU member states who already have a 
significant regional footprint, like France, should also be 
emphasized.
    Launching these discussions should be encouraged because 
the extent of Europe's interest in a concrete partnership with 
the United States in the region is not yet clear. The French 
and German regional strategies rarely mention the United 
States, and there is no mention of any political desire to 
partner with the United States in the region, other than broad 
references to working through NATO and regional organizations. 
In addition, neither France nor Germany acknowledges the 
central role that U.S. alliances with Japan, Australia, and 
others play in upholding regional peace and stability. Some 
have also pointed out that American strategy documents on the 
Indo-Pacific barely mention Europe.\666\ This is not to suggest 
that European nations should center their strategies on the 
United States, or is not intended to ignore the private 
discussions on the region that have increased over the past 
several years. However, U.S. involvement in the Indo-Pacific 
today is much deeper than Europe's; the scant public discussion 
by European governments on cooperation with the United States 
has caused some European commentators to argue that the Indo-
Pacific strategies reflect Europe's desire to position itself 
equidistantly between the United States and China, and that it 
does not view the United States' approach to China as positive 
for the region.\667\
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    \666\ The Department of Defense's Indo-Pacific Strategy Report does 
mention UK and French contributions to the region. The State 
Department's strategy document mentions the European Union only once. 
See: Samaranayake, Nilanthi. ``Future US-France Cooperation: Think 
Indo-Pacific,'' The Diplomat, 03 Feb. 2020, https://thediplomat.com/
2020/02/future-us-france-cooperation-think-indo-pacific/. And Indo-
Pacific Strategy Report: Preparedness, Partnerships, and Promoting A 
Networked Region. U.S. Department of Defense, 01 June 2019, p. 42-43, 
https://media.defense.gov/2019/Jul/01/2002152311/-1/-1/1/DEPARTMENT-OF-
DEFENSE-INDO-PACIFIC-STRATEGY-REPORT-2019.PDF. And A Free and Open 
Indo-Pacific, U.S. Department of State, 04 Nov. 2019, p. 16, https://
www.state.gov/wp-content/uploads/2019/11/Free-and-Open-Indo-Pacific-
4Nov2019.pdf.
    \667\ Fulda, Andreas. ``Germany's New Policy Paper for the Indo-
Pacific: Some Change in Tone, Little in Substance.'' Royal United 
Services Institute, 11 Sep. 2020, https://bit.ly/36blBxo; And Xu, 
Yixiang. ``A Stronger Germany in the Indo-Pacific?'' American Institute 
for Contemporary German Studies, 17 Sep. 2020, https://www.aicgs.org/
2020/09/a-stronger-germany-in-the-indo-pacific/.
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    While the potential avenues for cooperation are numerous, 
it will require political will and interest on both sides of 
the Atlantic to identify concrete opportunities to align and, 
to the greatest extent practicable, integrate distinct lines of 
effort. If the European Union opts to publish a pan-European 
Indo-Pacific strategy, a more overt acknowledgement of the 
utility of transatlantic cooperation would be a useful signal 
and starting point. The United States Government--both the 
executive and the legislative branches--should incorporate the 
need for cooperation with Europe more explicitly in its 
diplomatic messaging on the Indo-Pacific. There already is 
ample evidence of significant overlap in interests, such that 
the United States, the European Union (especially France and 
Germany), and the United Kingdom should begin identifying areas 
for cooperation sooner rather than later. Indo-Pacific partners 
seek a strong presence from the United States in the region, 
and they are hopeful for greater European engagement as well. 
Taking initial steps to ramp up cooperation in fostering 
private sector-led development, strengthening maritime 
security, promoting good governance and human rights, and 
safeguarding the environment hold great promise for advancing 
shared interests and reaping mutually-advantageous gains for 
the transatlantic alliance and Indo-Pacific partners.


                     CONCLUSION AND RECOMMENDATIONS

                              ----------                              

    The United States and Europe on the one hand, and China on 
the other, have very different visions of what the world should 
look like. This competition of ideas and of systems touches on 
our political and cultural values, our economic prosperity, and 
our security. Led by the transatlantic community, much of the 
world has created an open system of rules, norms, and 
institutions that upholds individual rights and freedoms, 
advances market-based economic prosperity, and safeguards the 
security interests of everyone. Yet China is attempting to 
fundamentally alter the foundation upon which shared prosperity 
and security are built.
    Despite some differences, the transatlantic alliance has 
enjoyed enormous success in fostering and advancing that 
system. The United States and Europe must decide how we will 
ensure the international system maintains its commitment to its 
values, even in the face of China's unfair trading practices, 
murky and corrupt investment, and political interference to 
advance its authoritarian ends. The United States and Europe 
will have stronger answers if we stand together.
    Neither side of the Atlantic can respond to the challenges 
China poses alone. The only way forward is to work together. 
Transatlantic security and prosperity requires that we renew 
our commitment to each other and pledge to use all of our 
combined tools to succeed. The recommendations below are a 
starting point to build upon the shared assessments of both 
sides about the challenges the People's Republic of China (PRC) 
poses and begin to address the issues that will define the 
years and decades to come.\668\
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    \668\ The three above paragraphs are drawn from a speech given in 
November 2019 by Senator James Risch on the importance of transatlantic 
cooperation on China. United States, Congress, Senate, Committee on 
Foreign Relations, ``Risch: U.S. and Europe Must Compete with China,'' 
12 Nov. 2019, https://bit.ly/32eAYEs.
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Safeguarding Our Open Societies
   Collaborate on university and think tank codes of conducts 
        designed to forestall undue foreign influence by 
        authoritarian countries like the PRC.\669\ These codes 
        of conduct should advocate standards and mechanisms for 
        transparency in donations and contracts, mutual support 
        in the event of PRC pressure, adequate protection for 
        students, institutional reciprocity with the PRC, and 
        academic independence. The European Commission's 
        concept note on foreign interference in higher 
        education proposes the creation of guidelines by member 
        states and stakeholders, as well as the co-creation of 
        a shared code of conduct between European universities 
        and research institutions.\670\ This could be expanded 
        to include universities in the United States and in 
        other democratic allies.
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    \669\ Diamond, Larry and Orville Schell. Chinese Influence and 
American Interests Promoting Constructive Vigilance. The Hoover 
Institution, 24 Oct. 2018, https://hvr.co/2TX8TwH.
    \670\ ``Concept Note on Tackling Foreign Interference in Higher 
Education Institutions and Research Organizations.'' European 
Commission, 20 Feb. 2020, https://s3.eu-central-1.amazonaws.com/euobs-
media/3ef6dc3d60ee27a2df16f62d47e93fdc.pdf.

   Share standards and best practices for increasing 
        transparency of the lobbying industry. Governments 
        should update their regulations to ensure they address 
        specific and emerging challenges posed by the PRC.\671\ 
        U.S. and European transparency regimes should determine 
        requirements for the United Front Work Department and 
        its sub-entities to report their activities.\672\ 
        Democracies could consider a particular designation for 
        lobbying by governments that pose particularly acute 
        national security concerns, re-examine scholastic and 
        academic registration exemptions from countries 
        designated national security concerns, and consider 
        limitations on former government officials representing 
        the governments of such countries.\673\
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    \671\ And Benner, Thorsten, et al. Authoritarian Advance: 
Responding to China's Growing Political Influence in Europe. Global 
Public Policy Institute/Mercator Institute for China Studies, Feb. 
2018, https://bit.ly/32jHY2C.
    \672\ Diamond, Larry and Orville Schell. Chinese Influence and 
American Interests Promoting Constructive Vigilance. The Hoover 
Institution, 24 Oct. 2018, https://www.hoover.org/sites/default/files/
research/docs/chineseinfluence--americaninterests--fullreport--web.pdf.
    \673\ United States, Congress, Senate, Risch, James E. STRATEGIC 
Act. Congress.gov, 116th Congress, 2nd Session, Senate Bill 4272, 
introduced 22 Jul. 2020, https://bit.ly/2I5jAuD.

   Hold gatherings among government officials in the United 
        States, Europe, and other democratic partners to 
        discuss PRC authoritarian influence within their 
        countries and ways to effectively push back. The U.K. 
        Parliament, the U.S. Congress, the European Parliament, 
        and other democratic legislatures are already at the 
        forefront of their nations' and organization's 
        responses to the PRC's authoritarianism. The recent 
        creation of the Inter-Parliamentary Alliance on China 
        is a great place to start and could be further 
        institutionalized.\674\ The North Atlantic Treaty 
        Organization (NATO) Parliamentary Assembly could 
        provide a successful model for this type of 
        cooperation.\675\
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    \674\ Inter-Parliamentary Alliance on China. https://ipac.global/.
    \675\ NATO Parliamentary Assembly. https://bit.ly/3mUr2Yv.

   Continue to enhance collaboration on countering 
        disinformation to ensure coordinated counter-messaging. 
        Government organizations tasked with combatting 
        disinformation, such as the U.S. Global Engagement 
        Center, the European External Action Service Strategic 
        Communications Task Force, the Group of Seven Rapid 
        Response Mechanism, and NATO, should strengthen their 
        relationships and ensure their jurisdiction and 
        expertise includes countering malign influence from the 
---------------------------------------------------------------------------
        PRC.

   Continue to invest in and prioritize the development of 
        independent China expertise.\676\ The creation of the 
        European Think-Tank Network on China to deepen European 
        expertise is a positive development.\677\ A well-
        developed cohort of independent China experts will 
        greatly improve transatlantic capacity to understand 
        and counter the PRC's malign influence. The U.S. 
        government has pledged to increase funding for the 
        study of Mandarin Chinese, and European nations should 
        do likewise. The Government of Sweden proposed a 
        national knowledge center on China,\678\ and other 
        democracies should follow suit.
---------------------------------------------------------------------------
    \676\ Conversation with European researcher. And Benner, Thorsten, 
et al. Authoritarian Advance: Responding to China's Growing Political 
Influence in Europe. Global Public Policy Institute/Mercator Institute 
for China Studies, Feb. 2018, https://bit.ly/32jHY2C.
    \677\ ``European Think-tank Network on China.'' Mercator Institute 
for China Studies, https://merics.org/en/european-think-tank-network-
china.
    \678\ Lofven, Stefan. ``Approach to matters relating to China.'' 
The Government of Sweden Ministry for Foreign Affairs, 26 Sep. 2019, 
https://bit.ly/3mTLPeM.

   Conduct effective outreach to Chinese diaspora communities 
        to help them protect themselves from efforts by the PRC 
        government to target them.\679\ This could include 
        efforts to build awareness, creation of reporting and 
        early warning mechanisms, training on legal rights and 
        protections, and proactive law enforcement engagement, 
        such as briefings and trainings for local police.\680\ 
        In conducting such outreach, the United States and 
        European governments should ensure they do not 
        stigmatize members of Chinese diaspora communities, and 
        consult with these communities to understand how to 
        best support them.
---------------------------------------------------------------------------
    \679\ Staff conversation with Europe-based academic researchers. 
And Benner, Thorsten, et al. Authoritarian Advance: Responding to 
China's Growing Political Influence in Europe. Global Public Policy 
Institute/Mercator Institute for China Studies, Feb. 2018, https://
bit.ly/32jHY2C.
    \680\ Staff conversation with academic researcher. And Benner, 
Thorsten, et al. Authoritarian Advance: Responding to China's Growing 
Political Influence in Europe. Global Public Policy Institute/Mercator 
Institute for China Studies, Feb. 2018, https://bit.ly/32jHY2C. And 
Diamond, Larry and Orville Schell. Chinese Influence and American 
Interests Promoting Constructive Vigilance. The Hoover Institution, 24 
Oct. 2018, https://hvr.co/2TX8TwH.
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Protecting the Integrity of International Organizations 
   Adopt a ``whole of United Nations (UN)-system'' approach in 
        addressing policy issues at the UN. The UN system is 
        large and missions are often siloed. In addition to 
        closer coordination within particular UN agencies, this 
        approach should involve more information sharing, 
        message coordination, and other efforts among U.S. and 
        European representation at UN missions globally, such 
        as in New York, Geneva, Rome, Paris, and other 
        locations. The United States and Europe should not take 
        the traditional approach of only discussing human 
        rights issues in Geneva or UN Security Council issues 
        in New York. Instead, they should be reaching out in 
        capitals and at other UN missions to align priorities 
        and raise awareness of challenges to UN principles.

   Work together to promote good governance in international 
        organizations by coordinating on the election of 
        candidates to top UN positions. This should include 
        avoiding situations in which an ``American'' candidate 
        and ``European'' candidate both run, thereby splitting 
        votes. Instead the United States and Europe should seek 
        to coalesce around a highly qualified consensus 
        candidate who is committed to impartiality and 
        transparency.

   Increase the number of citizens employed in UN positions 
        and Junior Professional Officer (JPO) programs. The UN 
        maintains a list of countries that are ``under-
        represented'' in the UN system. In the latest report 
        for 2018, the United States remains under-represented, 
        as are some European countries.\681\ The United States 
        and those European countries that are under-represented 
        should increase efforts to have nationals apply to open 
        UN jobs. Both the United States and Europe should 
        increase their support for JPOs across the UN system. 
        Supporting JPOs from the United States and European 
        partners provides long-term pathways within the UN 
        system to protect shared values and mutual security 
        interest.
---------------------------------------------------------------------------
    \681\ UN Secretary-General. ``Composition of the Secretariat : 
staff demographics : report of the Secretary-General'', United Nations 
Digital Library, 2019, https://digitallibrary.un.org/record/
3809594?ln=en.

   Continue to defend international human rights standards at 
        the UN. The UN has many tools to protect and promote 
        human rights, even outside the UN Human Rights Council. 
        At every opportunity, the transatlantic alliance should 
        defend these rights and stymie efforts to water down UN 
        resolutions and other relevant documents to shield 
        countries from criticism of their human rights 
        violations.
Defending the International Trading System
   Advance shared objectives at the World Trade Organization 
        (WTO). Despite the difficulties of reforming the WTO's 
        25-year-old rules, the United States and Europe share 
        two key priorities that can provide a starting point 
        for reinvigorated collaboration on international trade 
        issues. First, we must advocate for revocation of 
        China's developing country status. China, the world's 
        second largest economy, is taking advantage of this 
        status to the detriment of other market players as well 
        as truly developing nations. Second, we should further 
        advance efforts by the European Union, Japan, and the 
        United States to ``strengthen existing WTO rules on 
        industrial subsidies''--one of the most blatant ways in 
        which China violates the rules.\682\ Finding agreement 
        among like-minded partners, building a majority, and 
        only then incorporating China into the discussion, may 
        be the only way to overcome the current deadlock at the 
        WTO. In addition, some parochial differences should be 
        set aside so additional trade agreements can be 
        advanced that help lower income countries develop 
        faster.
---------------------------------------------------------------------------
    \682\ ``Joint Statement of the Trilateral Meeting of the Trade 
Ministers of Japan, the United States and the European Union.'' U.S. 
Trade Representative, 14 Jan. 2020, https://bit.ly/38edz9V.

   Broaden and deepen existing trilateral trade discussions 
        among the United States, the European Union, and the 
        United Kingdom. During the now-suspended Transatlantic 
        Trade and Investment Partnership discussions, the 
        United States and the European Union discovered the 
        significant gains to be made in searching for 
        convergence on rules and regulations. While such 
        discussions can be quite difficult, they are worth 
        exploring and strengthening, given the tremendous 
        economic gains that could be achieved. Small but 
        positive steps have recently been taken to reduce 
        reciprocal U.S. and EU tariffs.\683\ We must build on 
        this progress. A United States and Europe more united 
        on these economic and regulatory issues would present 
        an irresistible force in promoting our shared values 
        and hopes for economic outcomes against China's 
        mercantilist worldview.
---------------------------------------------------------------------------
    \683\ ``Joint Statement of the United States and the European Union 
on a Tariff Agreement.'' U.S. Trade Representative, 21 Aug. 2020, 
https://bit.ly/38fsOzl.

   Fix the reparable issues in our own trading relationship so 
        we can focus on the real challenge: China. A prime 
        example is the ongoing dispute between Boeing and 
        Airbus. Governments on both sides of the Atlantic 
        should engage in discussions to prevent future 
        disputes. Governments should also encourage discussions 
        within industry to focus the combined energies of 
        Boeing and Airbus to address the larger, emerging 
        problem--a Commercial Aircraft Corporation of China 
        replete with stolen technology and fully backed and 
---------------------------------------------------------------------------
        financed by the Chinese government.

   Undertake a more coordinated approach to export controls 
        with respect to China. This is key to protecting shared 
        security interests and the future competitiveness of 
        U.S. and European companies in certain industries. 
        Recent U.S. export controls protect dual-use items and 
        safeguard key technologies from military end users in 
        China. These are necessary choices, but difficult in 
        that they can put U.S. companies at a disadvantage vice 
        their competitors in other advanced economies. Forging 
        a community of advanced democracies around critical 
        technology issues has strong support in the United 
        States, in the U.K. government, and in the European and 
        Japanese expert communities.\684\ Coordinating and 
        harmonizing export controls should be at the top of the 
        agenda. This has become more urgent as China looks to 
        ``implement a unified export control system'' in 
        legislation currently under consideration by the 
        People's Congress.\685\
---------------------------------------------------------------------------
    \684\ ``The Clean Network.'' U.S. Department of State, https://
bit.ly/3mXz5Up. And United States, Congress, Senate, Risch, James E. 
STRATEGIC Act. Congress.gov, 116th Congress, 2nd Session, Senate Bill 
4272, introduced 22 Jul. 2020, https://bit.ly/2I5jAuD. And Fishman, 
Edward and Siddharth Mohandas. ``A Council of Democracies Can Save 
Multilateralism: Boris Johnson's ``D-10'' Is the Club the World 
Desperately Needs'', Foreign Affairs, 03 Aug. 2020, https://fam.ag/
3ewNV1m. And ``UK seeks alliance to avoid reliance on Chinese tech: The 
Times.'' Reuters, 14 Apr. 2020, https://www.reuters.com/article/us-
britain-tech-coalition/uk-seeks-alliance-to-avoid-reliance-on-chinese-
tech-the-times-idUSKBN2343JW. And Ebrahimian, Bethany Allen. ``Report: 
How democracies can push back on China's growing tech dominance.'' 
Axios, 15 Sep. 2020, https://www.axios.com/china-tech-dominance-
democracies-d60a4e60-53c7-46a6-85c6-8979ef0225cf.html. And Jain, Ash, 
et al. D-10 Strategy Forum. Atlantic Council, 16 Mar. 2017, https://
www.atlanticcouncil.org/programs/scowcroft-center-for-strategy-and-
security/global-strategy-initiative/democratic-order-initiative/d-10-
strategy-forum/.
    \685\ ``Export Control Law of the People's Republic of China 
(Draft) (Second Version).'' Translated by Etcetera Language Group, 
People's Republic of China National People's Congress, 28 Jun. 2020, 
https://cset.georgetown.edu/research/export-control-law-of-the-peoples-
republic-of-china-draft-second-version/.

   Consider working together to diversify some key supply 
        chains away from China as a hedge against future trade 
        disruptions, whether politically, economically, or 
        naturally instigated. COVID-19 has caused companies and 
        governments to rethink the extent of their reliance on 
        China-based supply chains. Earlier, to help guard their 
        industries against political retaliation, South Korean 
        multinationals began to relocate their factories,\686\ 
        and Japan introduced financial incentives to help 
        companies relocate.\687\ Now, the transatlantic 
        community should work together to agree upon the 
        sectors most disadvantaged and endangered by over-
        concentration in China, and when appropriate, exploit 
        each other's comparative economic advantages when 
        diversifying the location of manufacturing resources. 
        We could also consider jointly working to support the 
        creation of free trade and manufacturing zones in 
        Africa and Southeast Asia.
---------------------------------------------------------------------------
    \686\ Bermingham, Finbarr and Lee Jeong-ho. ``How the trade war led 
to Samsung and other South Korean companies' exodus from China.'' South 
China Morning Post, 04 Jul. 2019, https://www.scmp.com/economy/china-
economy/article/3017110/samsung-and-other-south-korean-firms-exodus-
china-example.
    \687\ ``Japan sets aside 243.5 billion to help firms shift 
production out of China.'' Japan Times, 09 Apr. 2020, https://bit.ly/
368OgDp. And Jin Yiqian qibai jia zai hua ri qi shenqing banqian butie 
riben chanye lian cheli zhongguo.'' Asia Pacific Report, Radio Free 
Asia, 14 Sep. 2020, https://www.rfa.org/mandarin/yataibaodao/jingmao/
ql2-09142020062444.html/.
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Shaping the Future of Technology
   Form a community of advanced democracies that promotes 
        cooperation on critical technology. Cooperation should 
        focus on developing norms, standards, and regulations 
        on the development and application of new and emerging 
        technologies; coordinate basic and pre-competitive 
        research and development initiatives; and engage other 
        activities related to harnessing the combined 
        technological prowess of advanced democracies. 
        Coordination on export controls and investment 
        screening as it relates to key technologies should also 
        top the agenda. This proposal has bipartisan support in 
        the United States, the U.K. government, and in the 
        American, European, and Japanese expert 
        communities.\688\ The community should also facilitate 
        discussions among other stakeholders, such as executive 
        branch members, legislators, and private sector 
        industry professionals on these issues.
---------------------------------------------------------------------------
    \688\ ``The Clean Network.'' U.S. Department of State, https://
www.state.gov/the-clean-network/ And United States, Congress, Senate, 
Risch, James E. STRATEGIC Act. Congress.gov, 116th Congress, 2nd 
Session, Senate Bill 4272, introduced 22 Jul. 2020, https://bit.ly/
2I5jAuD. And Fishman, Edward and Siddharth Mohandas. ``A Council of 
Democracies Can Save Multilateralism: Boris Johnson's ``D-10'' Is the 
Club the World Desperately Needs'', Foreign Affairs, 03 Aug. 2020, 
https://fam.ag/3ewNV1m. And ``UK seeks alliance to avoid reliance on 
Chinese tech: The Times.'' Reuters, 14 Apr. 2020, https://reut.rs/
36nzmtl. And Ebrahimian, Bethany Allen. ``Report: How democracies can 
push back on China's growing tech dominance.'' Axios, 15 Sep. 2020, 
https://bit.ly/2HZAsDq. And Jain, Ash, et al. D-10 Strategy Forum. 
Atlantic Council, 16 Mar. 2017, https://www.atlanticcouncil.org/
programs/scowcroft-center-for-strategy-and-security/global-strategy-
initiative/democratic-order-initiative/d-10-strategy-forum/.

   Initiate regulatory dialogues between partner agencies. A 
        series of dialogues comprised of U.S. and EU experts 
        that will examine topics relevant to boosting emerging 
        technology development. The dialogues should start by 
        1) identifying technology sectors where there are 
        little to no regulatory barriers to cooperation; 2) 
        identifying niche areas in which there are no standards 
        and would benefit from uniform standardization at the 
        development-level; 3) setting priorities for greater 
        regulatory harmonization and alignment of regulatory 
        practices; and 4) examining spheres in which both sides 
        are facing difficulties in competing with Chinese 
        companies or Chinese-government led initiatives to 
        capture technological market share.\689\
---------------------------------------------------------------------------
    \689\ United States, Congress, Senate, Risch, James E. STRATEGIC 
Act. Congress.gov, 116th Congress, 2nd Session, Senate Bill 4272, 
introduced 22 Jul. 2020, https://bit.ly/2I5jAuD.

   Identify ways and implement incentives to encourage greater 
        private sector and academic collaboration in niche 
        technology areas that address disadvantages on both 
        sides of the Atlantic in competing with China. Two 
        potential examples include (1) artificial intelligence 
        software and manufacturing development and (2) 
---------------------------------------------------------------------------
        renewable energy.

   Address issues with global patent enforcement through 
        multilateral international intellectual property 
        organizations. This is particularly important as PRC 
        companies demand compensation for standard-essential 
        patents while failing to pay for using products that 
        have parts which use U.S. and European patents.

   Work with advanced democracies such as Japan, Australia, 
        India, Canada and New Zealand, on aligning science and 
        technology agreements and explore further opportunities 
        for plurilateral cooperation on technology development 
        and associated regulation. This alignment would help 
        set baseline standards for technology infrastructure 
        and development, as well as values that should be 
        upheld in the usage of emerging technologies. It would 
        also help leverage economies of scale when competing 
        with PRC technologies and international standards-
        setting.
Addressing the Implications of China's Strategic Investments
   Focus investment screening cooperation on the implications 
        of state-directed acquisitions and investments by 
        China. Recent alignment on investment screening--and 
        the requirement under U.S. law for more cooperation 
        with allies and partners--is an opportunity to bring 
        together the U.S. federal agencies and relevant 
        European counterparts to prioritize addressing the 
        implications of state-directed PRC investment and 
        acquisition in certain sectors. Through appropriate 
        forums and dialogues, the United States and Europe 
        should identify and focus on areas of current or future 
        strategic dependency or vulnerability vis-a-vis the 
        PRC. Power grids, ports, and undersea cables certainly 
        all fit into this category, but other emerging areas of 
        concern should be constantly explored. These 
        discussions and information sharing should be further 
        expanded to include other non-EU nations with good 
        screening mechanisms, as well as like-minded nations 
        like Canada, Japan, and Australia.

   Examine the security of our power grids and establish fail-
        safe measures to protect our increasingly connected 
        grids. The United States and Europe can use existing 
        legislative and regulatory regimes to accomplish this. 
        The two sides of the Atlantic should also consider the 
        establishment of exchange programs between our energy-
        specialized institutes and departments that will focus 
        on the development of improved security protocols for 
        the new and advanced forms of energy generation and 
        transmission.

   Work together to hold the PRC to account on its 
        environmental mismanagement. While the PRC makes a lot 
        of promises about its intent to improve its green 
        credentials, and has made some improvements within the 
        PRC itself, its energy-related actions outside of China 
        continue to degrade the environment. The United States 
        and Europe, together with our democratic partners, 
        should examine various means of holding China to its 
        promises on environmental issues. Germany has held up 
        the ratification of an EU-wide trade deal with South 
        America over Brazil's deforestation of the Amazon--
        similar tactics could be considered for use with the 
        PRC.\690\
---------------------------------------------------------------------------
    \690\ Stuenkel, Oliver. ``Why the EU-Mercosur Deal Hinges on 
Germany's Reaction to Bolsonaro''. America's Quarterly, Americas 
Society/Council of the Americas, 09 Sep. 2020. https://bit.ly/3evX0Y1.

   Conduct U.S.-Europe port mapping exercises and identify 
        risk mitigations. The United States and NATO countries 
        should conduct independent exercises to identify ports 
        that are strategically significant and are currently 
        operated or controlled by PRC state-owned enterprises 
        or vulnerable to future acquisition or investment. In 
        the United States, for example, the National Security 
        Council should lead an effort that takes a broad view, 
        while each regional combatant command within the U.S. 
        military identifies those ports that are ``essential to 
        United States joint forces in carrying out assigned 
        missions in their areas of responsibility.'' \691\ NATO 
        allies should use independent assessments as a basis 
        for comparison, prioritization, and identification of 
        measures to mitigate risks, focusing primarily on ports 
        in Europe. The United States and individual security 
        partners that are active in Africa and the Indo-Pacific 
        (e.g. France, the United Kingdom) should conduct a 
        similar exercise looking at those two regions.
---------------------------------------------------------------------------
    \691\ Kardon, Isaac B. ``Panel II: China's Development of 
Expeditionary Capabilities: `Bases and Access Points.' '' Chinese 
Military Power Projection and U.S. National Interests, U.S.-China 
Economic and Security Review Commission, 20 Feb. 2020, p. 14, https://
bit.ly/2U48kkB.

   Address cyber and data security issues in ports. The United 
        States and Europe should conduct a fulsome review--in 
        coordination with industry--of cyber and data security 
        vulnerabilities, including potential security 
        vulnerabilities in Nuctech equipment. Transatlantic 
        partners should ensure that scanning and other 
        equipment from untrusted vendors are not used in 
        embassies, at military bases, or in any NATO 
        facility.\692\
---------------------------------------------------------------------------
    \692\ Cooper, Sam, and Andrew Russell. ``Canadian minister promises 
review after security contracts awarded to Chinese-state tech 
company.'' Global News, 17 Jul. 2020, https://bit.ly/2Ic5FTE.

   Initiate NATO discussions on undersea cables and conduct 
        exercises that test NATO preparedness for severe 
        compromise of undersea cable systems. These discussions 
        should identify any existing vulnerabilities for NATO 
        with respect to undersea cables (especially with 
        respect to cables supplied by PRC firms). Upon 
        identifying vulnerabilities, NATO countries must limit 
        or eliminate the presence of undersea cables that land 
        in NATO countries or on which NATO countries rely. 
        Furthermore, NATO countries should improve information 
        and intelligence sharing on trends in PRC investment in 
        undersea cables and the use of cables for intelligence 
        collection. The United States, Europe, and other 
        partners should also increase general attention on the 
        security challenges associated with growing of PRC 
        firms in the cable market. NATO should assess the 
        necessity and potential for deploying more ``dark 
        cables'' for redundancy.\693\ Exercises should consider 
        security and economic ramifications.\694\ NATO should 
        also evaluate its preparedness to operate in an 
        environment where an adversary has access to its vital 
        data and determine the efficacy of mitigations (such as 
        shifting traffic to other systems).
---------------------------------------------------------------------------
    \693\ Sunak, Rishi. Undersea Cables Indispensible, Insecure, Policy 
Exchange, 2017, p. 8, https://policyexchange.org.uk/wp-content/uploads/
2017/11/Undersea-Cables.pdf.
    \694\ Ibid, p. 8.
---------------------------------------------------------------------------
Growing U.S.-Europe Cooperation in Africa
    and the Indo-Pacific
Both Regions
   Highlight transatlantic cooperation in diplomatic 
        messaging. U.S. and European administrations and 
        legislatures should highlight joint transatlantic 
        efforts in both the Indo-Pacific and Africa in 
        diplomatic and public messaging.

   Prioritize full implementation of the Development Finance 
        Institution Alliance. Efforts should prioritize 
        defining and scoping the types of projects most ripe 
        for joint financing or cooperation, improving alignment 
        on standards (using the G-20 standards agreed to in 
        Japan as a starting point), solidifying data and 
        information sharing, setting up processes to de-
        conflict investments, addressing technical barriers, 
        and addressing differences on environmental issues. 
        Both sides of the Atlantic should focus on shared 
        goals, such as bringing cleaner power online faster for 
        developing countries. European countries should remain 
        open to joining the Blue Dot Network. Legislators on 
        both sides of the Atlantic should continually 
        demonstrate support for initiatives to spur private 
        sector investment, including by signaling support for 
        exploring investments in strategic but heretofore 
        underexplored markets.

   Hold regular and high-impact events on human rights, good 
        governance, development, and other issues. This builds 
        on the already strong cooperation demonstrated during 
        the joint Xinjiang event at the 2019 UN General 
        Assembly. Legislatures should strengthen cooperation in 
        this area as well.
Africa
   Reframe the ``Transatlantic Relationship'' to include 
        African partners. In the next century, countries like 
        Nigeria, South Africa, Ghana and Senegal will only grow 
        as centers of economic and political power, and it is 
        critical that the United States and Europe begin 
        treating them as such. The United States, Europe, and 
        Africa should establish a dialogue on trade, security, 
        development, and environmental issues of mutual 
        interest. This initial gathering would be an important 
        step toward showing our African counterparts that we 
        view them as important partners and neighbors, and 
        start conversations that are long overdue.

   Codify into law the Prosper Africa initiative while also 
        considering an inter-continental Prosper Africa 
        initiative to provide an attractive alternative to 
        China that speaks to our principles. The United States 
        and Europe must look at Sub-Saharan African countries 
        as principal economic, political and security partners 
        in their own right, not just through the lens of 
        competing with China. While the U.S. Congress should 
        codify the Prosper Africa initiative and authorize 
        consistent funding to ensure its future success, the 
        United States and the European Union should also 
        examine the establishment of an intercontinental 
        Prosper Africa initiative. This means the United States 
        and Europe need to work together to ensure that we are 
        providing our African partners with attractive and 
        mutually-beneficial opportunities. There is no shortage 
        of stories about how the United States and Europe are 
        preferred partners for African governments, but that we 
        often do not show up at the table or that our 
        bureaucratic processes impede collaboration. An inter-
        continental Prosper Africa initiative could help 
        achieve better collaboration (for example, by creating 
        a framework to align our trade and investment 
        facilities) while limiting barriers and challenges 
        faced by African countries in working with us.

   Expand assistance programs that build democratic 
        institutions, fight corruption, increase government 
        accountability, grow American and European investment 
        in Africa, and push back on corrupt practices by PRC 
        firms. Investing in these areas are important to the 
        enabling environment for the expanded and mutually-
        beneficial trade with Africa that both the United 
        States and Europe seek. In addition to trade, the 
        institutionalization of democratic norms and 
        institutions in Africa will also further our security 
        and diplomatic interests. Improving legal regimes that 
        provide accountability for corrupt activities and 
        improve fiscal transparency and encourage competition 
        (particularly on large state contracts) should also be 
        a major focus.

   Come to consensus on how to engage China in sub-Saharan 
        Africa. While the United States views PRC activity in 
        Sub-Saharan Africa as predatory, self-serving and 
        extractive, Europe's perspective allows for some 
        cooperation based on respective priorities. China's 
        presence is unlikely to diminish and both sides of the 
        Atlantic will need to remain present and involved. In 
        this context, the United States and Europe must be on 
        the same page as allies on how to engage China in 
        Africa, as daylight between us will only provide 
        opportunities for China to exploit.

   Continue supporting African partners to combat the threat 
        posed by violent extremist groups and armed conflict. 
        On counterterrorism, the international community must 
        work with our African partners to identify a single 
        venue for coordination located within each region that 
        prioritizes the inclusion of African partner voices. 
        The United States and Europe must also expand 
        cooperation with each other and African partners on 
        counter trafficking and transnational crime, such as 
        intelligence sharing and capacity building to 
        investigate and prosecute criminal activity, including 
        money laundering and other financial crimes. This also 
        has the benefit of highlighting criminal activity on 
        the continent that is being supported by Chinese 
        interests.
Indo-Pacific
   Put the Indo-Pacific front and center in transatlantic 
        dialogues. The Indo-Pacific region should be 
        prioritized as a central topic in the U.S.-EU dialogue 
        on China, and a U.S.-U.K. dialogue should be initiated 
        after the latter's Integrated Review is published.

   Align efforts under U.S. Indo-Pacific economic strategy and 
        the EU-Asia connectivity initiative. The European Union 
        should move full speed ahead with implementing its Asia 
        connectivity strategy. The United States and the 
        European Union should identify commonalities in their 
        approaches and start to identify concrete projects or 
        initiatives to pursue together, such as potential 
        coordination to build human capital in areas that helps 
        foster open markets more hospitable to private sector-
        led investment and growth. This could also include de-
        conflicting and coordinating technical assistance and 
        training to government official and private sector 
        representatives in procurement practices, management of 
        key economic sectors, and other areas.

   Increase coordination and cooperation on maritime security 
        and freedom of navigation. Areas of focus can include 
        joint freedom of navigation operations, increased 
        multilateral training exercises, providing capabilities 
        and training to Indo-Pacific partners, aligning efforts 
        in regional security forums, and strengthening NATO 
        cooperation with Japan, Australia, and other interested 
        Indo-Pacific partners.

   Cooperate on environmental and natural resource challenges 
        in the Indo-Pacific. Initial areas could include 
        renewable energy, resilience in the Pacific Islands, 
        and illegal and unregulated fishing. On wildlife 
        trafficking, the United States and Europe should team 
        up to jointly press China for greater transparency, 
        accountability, and cooperation.


                       ABBREVIATIONS AND ACRONYMS

                              ----------                              

AGOA--African Growth and Opportunity Act

AI--Artificial Intelligence

ASEAN--Association of Southeast Asian Nations

AU--African Union

BRI--Belt and Road Initiative

CAPDTC--China Association for Preservation and Development of 
        Tibetan Culture

CCP--Chinese Communist Party

CFR--Council on Foreign Relations

CGNPC--China General Nuclear Power Corporation

CGTN--China Global Television Network

COMAC--Commercial Aircraft Corporation of China

COSCO--COSCO SHIPPING Corporation Limited

CMPort--China Merchants Port Holdings Co.

CSSA--Chinese Students and Scholars Associations

CSSC--China State Shipbuilding Corporation

DFC--U.S. Development Finance Corporation

DFI Alliance--An alliance of development finance institutions 
        that includes U.S., Canadian and European development 
        finance institutions

DFIs--Development Finance Institutions

DESA--UN's Department of Economic and Social Affairs

DSR--Digital Silk Road

ECFR--European Council on Foreign Relations

ECOSOC--The UN's Economic and Social Council

EU--European Union

FAO--Food and Agriculture Organization, a UN specialized agency

FBI--Federal Bureau of Investigation (U.S.)

FOCAC--Forum on China-Africa Co-Operation Summit

G7--Group of Seven

GATT--General Agreement on Tariffs and Trade

GDP--Gross Domestic Product

GDPR--General Data Protection Regulation

GPOI--U.S. Department of State's Global Peace Operations 
        Initiative

ICAO--International Civil Aviation Organization, a UN 
        specialized agency

ICT--Information and Communications Technology

IDAR--Introducing, Digesting, Absorbing, and Reinnovating 
        foreign intellectual property and technology

ID-CPC--International Department of the Communist Party of 
        China

IEC--International Electrotechnical Commission

IO--International Organization

IP--Intellectual Property

IT--Information Technology

ITIF--Information Technology & Innovation Foundation

ITU--International Telecommunication Union, a UN specialized 
        agency

JPO--The UN's Junior Professional Officer program

MOU--Memorandum of Understanding

NATO--North Atlantic Treaty Organization

OBOR--One Belt, One Road

PEACE Cable--The Pakistan East Africa Connecting Europe 
        undersea cable

PLA--People's Liberation Army (China)

PLAN--People's Liberation Army Navy (China)

PRC--People's Republic of China

R&D--Research and Development

SASAC--State-Owned Assets Supervision and Administration 
        Commission of the State Council

SOE--State-Owned Enterprise

State Grid--State Grid Corporation of China

TCC--Troop-Contributing Country

UHV--Ultra-High Voltage

U.K.--United Kingdom

UN--United Nations

UNGA--UN General Assembly

UNHRC--UN Human Rights Council

UNSC--UN Security Council

U.S.--United States

USAID--United States Agency for International Development

UCSF--University of California at San Francisco

WHO--World Health Organization

WIPO--World Intellectual Property Organization, a UN 
        specialized agency

WTO--World Trade Organization

ZTT--T1Zhongtian Technology Submarine Cable Co., Ltd.

                                  [all]