[Congressional Record Volume 164, Number 58 (Wednesday, April 11, 2018)]
[Senate]
[Pages S2052-S2053]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                            China and Trade

  Mr. CORNYN. Mr. President, I preface my remarks today about China 
with a recent article from The Economist, dated March 1, 2018, which, I 
think, does a very good job of crystallizing what the hopes and 
aspirations that we in the West had for China and what the reality has 
turned out to be.
  It points out that in March 2000, Bill Clinton divided the American 
opinion on China into two camps. The first, he said, was of the 
optimists, and the second was of the hawks and the pessimists. The 
optimists, as it describes it, have an eye on the future and can see 
China becoming the next great capitalist tiger with the biggest market 
in the world. That was the optimistic view. The Economist writes that 
the hawks and pessimists, who were stuck in the past, saw China as 
stubbornly remaining as the world's last, great Communist dragon and a 
threat to stability in Asia.
  As this article points out, it was not an either/or. It called it a 
both/and. It concludes that the China of Xi Jingping is a great 
mercantilist dragon that is under strict Communist Party control and 
that it is using the power of its vast markets to cow and co-opt 
capitalist rivals to bend and break the rules-based order and to push 
America to the periphery of the Asia-Pacific region. It calls this one 
of the starkest reversals in modern geopolitics.
  Indeed, the administration's national security strategy that 
President Trump rolled out just a couple of months ago states that 
China challenges American power, influence, and interests. It points 
out again that the hopes and aspirations of the optimists appear to 
have been dashed. Instead, we have one of the starkest reversals in 
modern geopolitics. This leads me to the subject I want to at least 
start talking about because it does relate to China.
  Today, in the Subcommittee on International Trade, within the Senate 
Finance Committee, which I happen to chair, we are convening a hearing 
on trade issues and China. The core issue my colleagues and I will 
examine involves challenges to U.S. businesses, manufacturers, and 
service providers who are trying to get access to the Chinese market--a 
market that represents the second largest economy in the world. China, 
of course, has almost unfettered access to the United States. There are 
important protections in place, like the Committee on Foreign 
Investment in the United States, which does look at some of those 
investments to make sure our national security interests are not 
compromised.
  By and large, China has open access to the United States and the U.S. 
market. China is the United States' largest merchandise trading partner 
and the third largest export market for U.S. goods abroad. Although the 
legitimate flow of goods and services between the United States and 
China has increased over the years and is, in many respects, a positive 
thing, statistics alone do not capture the whole story, hence the 
preface that I gave about The Economist's view of what has changed in 
China.
  Unfortunately, while Chinese companies largely enjoy open access to 
U.S. markets and an economy that is receptive to foreign investment, 
U.S. companies are not afforded reciprocity in this regard. In his 
State of the Union Message, the President made that point, which is 
that in our trading relationships, we expect reciprocity--in other 
words, to treat our trading partners the same way they treat us--
hopefully, to everybody's advantage.
  U.S. companies that seek to do business in China often encounter--I 
would say always encounter--a protectionist system, one that employs 
predatory tactics and promotes domestic industries over foreign 
competitors, many of which receive State subsidies. In many cases, 
China has used trade as a weapon and coerced U.S. companies to enter 
into joint ventures or other business arrangements that require a 
company to hand over its key technology and know-how--the so-called 
secret sauce of its business--in order to gain market access.
  This practice has already begun to erode America's technological 
advantage and undermine our defense industrial base, which is something 
that

[[Page S2053]]

should concern all of us and is the subject of a revision of the 
Committee on Foreign Investment of the United States, CFIUS, statute 
that is going to be coming out of the Senate Banking Committee and the 
House Financial Services Committee. It will be an updating of the CFIUS 
process to meet the challenges of today.
  Of course, under section 301 of the Trade Act of 1974, the Trump 
administration is currently considering potential investment 
restrictions to address the harm that has resulted from China's effort 
to acquire sensitive technologies through investments. I look forward 
to working with the President and others to ensure that the proper 
steps are taken, but the real issues are clear, and we will be 
considering them in more detail at the hearing this afternoon on 
China's restrictive market.
  Even though multiple administrations have attempted to engage Chinese 
leaders on their trade practices, the high-level diplomatic talks have 
generally yielded little progress and have often resulted in 
commitments with zero follow-up action. Discussions may continue in the 
future, but China's market access reforms are still too slow, and real 
barriers exist. Reciprocal treatment for U.S. companies should not be 
too much to ask. Indeed, it is the minimum we should insist upon. It is 
my hope that today's hearing will paint a clear picture of the problems 
that persist with access to Chinese markets and that significant 
reforms will follow.