[Congressional Record Volume 164, Number 79 (Tuesday, May 15, 2018)]
[Senate]
[Pages S2673-S2675]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                                 China

  Mr. RUBIO. Mr. President, I want to begin by reading an excerpt of an 
article that ran on October 8, 2012. It was in the New York Times. The 
article opened with the following quote:

       A House committee issued a blistering bipartisan report on 
     Monday that accused two of China's largest telecommunications 
     companies of being arms of the government that had stolen 
     intellectual property from American companies and could 
     potentially spy on Americans. The House Intelligence 
     Committee said that after a yearlong investigation it had 
     come to the conclusion that Chinese businesses, Huawei 
     Technologies and ZTE Inc., were a national threat because of 
     their attempts to extract sensitive information from American 
     companies and because of their loyalties to the Chinese 
     government.

  The story continued by saying:

       Allowing the Chinese companies to do business in the United 
     States . . . would give the Chinese government the ability to 
     easily intercept communications and could allow it to start 
     online attacks on critical infrastructure, like dams and 
     power grids.

  This was from a bipartisan report in the year 2012, in the month of 
October, by the U.S. House of Representatives Committee on 
Intelligence. Since then, over and over again, we have heard the 
intelligence community in this country clearly define this threat. In 
virtually every one of the open hearings that we had on the 
Intelligence Committee, I or one of my colleagues have had an 
opportunity to ask every member of the intelligence community--Director 
of National Intelligence, Director of the CIA, Director of the FBI, the 
Director of Counterintelligence, Mr. Evanina, or the nominee before us 
today--and every time one of us would ask: Would you use a ZTE phone? 
We are still waiting for one of them to say yes. Every single one of 
them said no, which is why I was pleased a couple of weeks ago when the 
Commerce Department brought sanctions against ZTE.
  It was not a Congressional issue. Although it could be, it wasn't. It 
was because, on top of the spying and everything else, ZTE had helped 
Iran and North Korea evade international sanctions. So the penalty was, 
American companies could no longer sell component pieces to ZTE, which 
has led them to being on the brink of being out of business.
  No one should feel sorry for ZTE. This is a company heavily 
subsidized by the Chinese Government that protects them at home, 
protects them in China, subsidizes them in China but exports them 
abroad with the hopes that they can help them steal secrets, monitor, 
and be an arm and tool of intelligence for them. No one should feel 
sorry for them.
  So I was surprised to see, a couple days ago--as the President 
tweeted and then there have been articles about how perhaps maybe these 
sanctions might be going away in exchange for a deal on agriculture. I 
want to tell you, if that is what happens, the President has gotten 
terrible advice, and it would be a terrible thing for him to do. I 
think it would be deeply problematic for the national security of the 
United States and ultimately for his hopes of rebalancing America's 
relationship with China, geopolitically, economically, commercially, 
and certainly on security.
  The most important thing to understand is, China is carrying out a 
plan. They put it out there. It is not a conspiracy. It is there for 
the world to see: Made in China 2025. Made in China 2025 is a plan to 
dominate the 10 most important technologies of the 21st century. You 
may ask: Why is that a big deal? Countries would want to do that. They 
have every right to aspire to that, and I agree. If they want to 
dominate these 10 fields, they have every right to invest in research 
and innovation. They have every right to do all of that.
  The problem is, that is not how they intend to dominate these fields. 
The way they intend to dominate the 10 top technologies of the 21st 
century is to steal the intellectual property, basically the protected, 
secret ideas our companies are innovating, that American researchers 
are innovating--to steal that and use it for themselves.
  Furthermore, they insist that all of their companies be allowed to 
sell whatever they want to the United States without any restriction. 
On the other hand, our companies are restricted--some prohibited--from 
selling to China's 1.2 billion, 1.3 billion-person market, soon to be 
the largest economy in the world.
  So, in essence, they intend to dominate these 10 fields by cheating 
their way into a position of dominance, and that alone is not just an 
economic issue. This is a national security issue. If you dominate the 
field of artificial intelligence, if you dominate the field of 
telecommunications, if you dominate the field of aerospace technology,

[[Page S2674]]

you will dominate the field of national defense and national security, 
and you will pose a threat to other countries that do not.

  We are giving it to them. We are literally allowing them to steal it 
from us, and they play our system against us. American companies go to 
China to do business, and here is what they tell them: You can only do 
business here if you partner up with a Chinese company. You have to 
give them all the secrets to how you do business. By the way, time and 
again, as soon as the Chinese company can do what the American company 
can do, the American company gets kicked out. Suddenly, you have a 
competitor all over the world that you helped build by giving it to 
them for free.
  Sadly, a lot of American companies play the game because all they 
care about is being able to sell to China in the short term and have 
profits, without any thought about the long term or national security 
of the United States.
  I imagine many of these are the same voices that are trekking down to 
the White House to tell the President to do this deal on ZTE. The ZTE 
thing is not just a commercial and trade issue--although it is and it 
could be. It is much more than just that. It needs to be taken with the 
seriousness it deserves. It is not just about telecommunications.
  If you have a ZTE phone--and they are widespread in the United 
States. These things are hitting up against our towers. They will not 
just use that to pull American phone companies out of business; they 
can use that to spy on American companies to steal the intellectual 
property of the United States. It is exactly what they have done. It is 
what the report said they do: spying on Americans and stealing 
intellectual property from American companies. This trade dispute with 
China is about a lot more than trade. It is about geopolitical balance. 
It is about fairness.
  This is our last chance to get it right. It is almost too late. I am 
telling you, if we get this wrong--if we back down, when historians 
write about this period of time in our history, they are going to say 
the Americans literally gave it over to the Chinese; allowed them to 
steal from them because they were more interested in short-term gain 
and were willing to turn over the future.
  We will live in a world where China dominates many of the top fields, 
including many that are critical to our national security and the 
defense of our interests and of our Nation.
  I would argue to you that ZTE should not be allowed to sell anything 
in the United States. I would argue to you that if a technology company 
from another country is being used by that country not just to spy on 
government secrets but to steal the intellectual property of our 
businesses, they should be out of business in the United States. Some 
people would say: Well, China is very powerful. They are going to come 
back and use other means to punish us for this. Let me tell you 
something. We have extraordinary leverage over their technology 
industry. For example, one of the things ZTE can do is they can buy 
from a company named Tsinghua Unigroup, which is a government-owned 
company. They can buy components from them, but then we can cut them 
off as well. In fact, every major telecom in China--Huawei, BBK, Yiomi, 
Lenovo--every single one of these depends on component parts from the 
United States.
  Ultimately, what I would hope to arrive at is a balanced trade 
situation, a balanced commercial arrangement, and a balanced 
geopolitical situation between the United States and China, but right 
now it is way out of balance, and when you allow imbalances to exist 
and persist in international relations, it leads to conflict. It leads 
to wars. It leads to showdowns. That is what imbalances lead to. An 
imbalance leads to the country that becomes dominant to try to take 
advantage of the countries that are not, unless you agree to surrender 
to them.
  This issue of China and ZTE is a terrible mistake. If the President 
cuts a deal with ZTE that says: Pay a couple of hundred million dollars 
in fines and you are back in business in exchange--and they violated 
the law. This is a law enforcement function on top of everything else. 
These sanctions against them are punishment for evading and breaking 
sanctions. If you basically wave that off in exchange for a deal on 
agriculture--these farmers didn't do anything wrong. These farmers are 
not being punished for evading sanctions. They are victims of 
retribution.
  We have other angles. In fact, what we should be saying is: If you 
don't lift the tariff on our farmers, we will do the same thing we did 
to ZTE, to Huawei, BBK, Yiomi, Lenovo or any other company. That is 
what we should be saying, instead of being tricked into this apparent 
deal that someone is cooking up over there and giving the President 
terrible advice--which, by the way, I know that is not where his 
instincts are, but someone is getting to him. I don't know if it is 
from Treasury or where it is, but someone is basically telling him now 
is the time to cut a deal. It is the wrong time to cut a deal. This 
would be a terrible deal.
  Let me close by telling you this. This is not just about technology. 
If you don't believe that China uses its leverage, the leverage of 
economics, to reach into your life here in America--people will ask: 
What does that have to do with me? What does it have to do with us? 
Yes, it is a bad thing. We are worried about China in the long term. 
What does that have to do with me here at home?
  China has no problem using its long arm and its economic leverage to 
interfere in the lives of Americans. I will tell you how.
  About 2 weeks ago, two American airlines, United and American 
Airlines, got a letter in the mail from the Chinese Government telling 
them: We notice that your website says ``Taiwan.'' It doesn't say 
``Taiwan-China.'' Unless you change your website, we are going to 
punish you. We may even take away your routes.
  They haven't made a decision yet. We have reached out to both 
companies. Let me clue everyone in right now. If they are anything like 
the other American companies that have been threatened, they are going 
to cave. They are going to cave, especially United, which has all of 
these routes over there. This is an American company, headquartered in 
the United States, that is going to have to change their website 
because China has threatened them.
  If you think that is not bad, I will tell you something crazy. 
Yesterday, the Gap clothing store came out with a T-shirt. It had a map 
of China, but it didn't have Taiwan on the T-shirt. China threatened 
them. Within hours, the Gap put out a tweet: We are so sorry. We 
apologize. We didn't mean to offend you. We respect your sovereignty.
  This is over a T-shirt, for God's sake. This is the leverage they 
have.
  Do you know there are Hollywood movies that are written in a way to 
avoid certain topics because, otherwise, they will not be allowed to 
play the movie in China? Do you know there are actors--such as Richard 
Gere--who are not allowed to be in certain movies or who can't get a 
Hollywood blockbuster movie because they can't distribute it in China? 
They will not let them. They can't have Richard Gere in movies in China 
because he is pro-Tibet. This is crazy stuff.
  Here is perhaps the most egregious one. Marriott, a great American 
company, a hotel--everybody has stayed at one. Marriott had an 
employee, a guy who lives in America; he is not even an executive--just 
a good guy, a hard-working guy. He accidentally went online and 
accidentally--it wasn't even on purpose--liked a tweet about Tibet, and 
China went crazy. They threatened Marriott. Marriott didn't just 
apologize; they fired him. This is an American. He didn't live in 
China. He lives in the United States of America. He lost his job for 
accidentally liking a tweet that China didn't like.
  This happens over and over again, and it isn't noticed. This is how 
they use economic leverage. This is how they get Panama to tell Taiwan: 
We no longer recognize you diplomatically; we now recognize China. This 
is how they got the Dominican Republic to do the same thing last week 
or a couple of weeks ago, and they are not going to stop. I hear 
Paraguay might be next. This has to stop.
  We don't want to contain China. We welcome a prosperous China. We 
want a global partner. Imagine the United States and China working 
together against nuclear proliferation, against radical terrorism, and 
against all the

[[Page S2675]]

threats in the world. But this is not leading to a partnership. This is 
leading to a world in which China dominates every key industry, remakes 
every institution, and America becomes a junior partner the way 
Vladimir Putin and Russia already are to China, and that we cannot 
accept. But that is where we are headed because administrations--both 
Republican and Democrat--have taken this threat too lightly. They 
thought that when China got rich, they would start playing by the 
rules. Guess what. They not only have not played by the rules, but they 
assume all the benefits of the rules and live by none of the 
responsibilities.
  This is our last chance. This administration has been given the 
historic opportunity--the last chance--to get the balance of this 
relationship right. One misstep could blow the whole thing apart and 
doom generations of Americans to living in a world--not one with a 
powerful China, one with a dominant China and a declining America.
  That may sound like hyperbole, but if they win this battle on ZTE, 
the world will notice, and the message it will send is that when push 
comes to shove, this administration is no different from the others. 
When they come under pressure, you can get to the right people with the 
right friends in corporate America, and they will back down. Once that 
happens, every country in the world will govern themselves accordingly. 
They will not join us in confronting China's aggression and China's 
unfairness because in the back of their minds, they will be saying to 
themselves: When push comes to shove, America is going to back down the 
way they did for ZTE.
  The issue itself is problematic. We can't be selling phones in 
America that they use to spy on us in our companies. But on a broader 
scale, it sends a message that demoralizes this effort and I think has 
dramatic consequences.
  I encourage the President to think very seriously and very carefully. 
He is in a very strong position right now. I urge him to think very 
carefully about the next step and to listen to the people in his 
administration who are talking to him about the ZTE issue for what it 
is--a national security threat much bigger than just one company in the 
telecom industry.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Pennsylvania.