[Congressional Record (Bound Edition), Volume 151 (2005), Part 4]
[Senate]
[Pages 5503-5508]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   CHINA'S SPREADING GLOBAL INFLUENCE

  Mr. INHOFE. Mr. President, as I have done many times before on this 
floor, I rise to address a national security issue of the highest 
importance, one that demands our utmost attention. I wish to alert this 
body and the American people to China's spreading global influence and 
the imminent threat this poses to our national security.
  Our past concerns have come to fruition on all levels--economically, 
militarily, and ideologically. We are on a collision course. As I will 
detail, China has become a progressive danger we can no longer afford 
to overlook. As I said, this is not new. Over the years I have made 
numerous remarks on the Senate floor regarding our national security 
and China.
  During the Clinton administration, there were growing concerns about 
Chinese espionage, which were later confirmed in the Cox report. The 
report showed that reality surpassed our worst fears. China had been 
stealing U.S. nuclear secrets. The W-88 warhead, with which we are all 
familiar, was the crown jewel of our nuclear program which allowed for 
up to 10 nuclear warheads to be attached to the same missile. In 1995, 
we discovered that China had stolen this technology.
  Under President Clinton, U.S. companies such as Loral Space and 
Communications and Hughes Electronics were given the green light to 
improve the precision and reliability of China's satellites and their 
nuclear missiles, undoing 50 years of technology export restrictions. 
China also gained the capability of accurately reaching the continental 
United States with nuclear missiles and targeted between 13 and 18 U.S. 
cities. All of this occurred while President Clinton proclaimed ``not 
one missile is pointed at American children.'' This body responded by 
investigating to what extent we were lied to and our security was 
compromised, but ultimately nothing changed.
  From those events, the Chinese Government learned that it could rely 
on our acquiescence and charged ahead.

[[Page 5504]]

China transferred prohibited weapons technology to North Korea, 
Pakistan, Libya, Iraq, Iran, Syria, and other countries. China 
threatened to absorb Taiwan and intimidated our regional treaty allies, 
South Korea and Japan.
  That was 5 years ago. Since then we have had a new administration and 
have gone through such major events as 9/11, the current conflict in 
Iraq, and an ideological shift in the way we fight war. I wish I could 
say that with the new administration China's conduct has changed. 
President Bush has taken some steps in the right direction, notably 
rejuvenating the missile defense system; however, I am afraid that 
transpiring events tell a different story.
  Since 2000, the United States-China Security Economic Review 
Commission has been holding hearings and issuing annual reports to 
evaluate ``the national security implications of the bilateral trade 
and economic relationship between the United States and the People's 
Republic of China.'' Congress established the Commission to act as the 
bipartisan authority on how our relationship with China affects our 
economy, industrial base, China's military and weapons proliferation, 
and our influence in Asia. I fear their reports have gone largely 
unnoticed. It is remarkable they have gone unnoticed as significant as 
they were.
  In a most recent report, dated June of 2004, less than a year ago, 
the Commission makes this alarming opening statement. This is a 
bipartisan report:

       Based on our analyses to date, as documented in detail in 
     our report, the Commission believes that a number of the 
     current trends in U.S.-China relations have negative 
     implications for our long-term economic and national security 
     interests and therefore that U.S. policies in these areas are 
     in need of urgent attention and course corrections.

  As the report and recent events show, China has continued on an 
alarming course in conflict with our national security.
  Last January, the Bush administration imposed sanctions against eight 
large Chinese companies for aiding Iraq's missile program and 
transferring technology to other problematic countries. There was no 
public announcement, and the only reason we know about this is that 
some Sino-American Web sites came across this information on page 133 
in the Federal Register. Last December, four companies were sanctioned 
for the same reason. Many other examples can be cited from 2004, with 
some of these companies being repeatedly penalized for more than a 
decade. The fact is that China has repeatedly vowed to curb its weapons 
sales and has gone back on its promises. This has been going on for 
some time. I spoke of this on the Senate floor on June 23, 1999.
  Beijing made nonproliferation commitments in 1992, 1994, 1998, 2000, 
and most recently in 2002. The U.S. State Department admits these 
guarantees came about ``only under the imminent threat, or in response 
to the actual imposition, of sanctions.''
  The Commission report comments on China's continued assistance to 
countries such as Libya, Pakistan, Iran, and North Korea. This 
assistance has continued despite nonproliferation assurances as the 
report outlines. Keep in mind, they have agreed to all these 
agreements, and yet the report says:

       China's assistance to weapons of mass destruction-related 
     programs in countries of concern continues despite repeated 
     promises to end such activities and the repeated imposition 
     of U.S. sanctions. The Chinese Government and Chinese 
     enterprises have assisted such states to develop their 
     nuclear infrastructure, chemical weapons capabilities, and/or 
     ballistic missile systems notwithstanding a consistent 
     history of denials. Libya's decision to open up its weapons 
     of mass destruction programs and the revelations by Pakistan 
     that A.Q. Khan supplied uranium enrichment technology to 
     Libya, Iran, and North Korea, provides new insight into 
     China's legacy of proliferation. China's continued failure to 
     adequately curb its proliferation practices poses significant 
     national security concerns to the United States.

  Again, this is not new. As I stated on the floor on March 15, 1999, 
China has been stealing our nuclear secrets, but, as the Commission 
points out, China is now sharing its nuclear knowledge--some of it is 
quite possibly ours--with other countries. For years China has 
transferred ballistic and cruise missile technology to countries with 
troubling proliferation records, but these transfers have evolved to 
become even more problematic.
  Again I quote from the bipartisan Commission that spent 4 years 
studying this relationship:

     . . . Chinese transfers have evolved from sales of complete 
     missile systems, to exports of largely-dual use nuclear, 
     chemical, and missile components and technologies . . . 
     Recent activities ``have aggravated trends that result in 
     ambiguous technical aid, more indigenous capabilities, longer 
     range missiles, and secondary proliferation.'' Continuing 
     intelligence reports indicate that the Chinese cooperation 
     with Pakistan and Iran remains an integral element of China's 
     foreign policy . . . Beijing's failure to control such 
     transfers gives the appearance that these are allowed in 
     accordance with an unstated national policy. China has 
     generally tried to avoid making fundamental changes in its 
     transfer policies by offering the United States carefully 
     worded commitments or exploiting differences between 
     agreements.

  As further evidence of this disturbing proliferation, the CIA report 
to Congress in mid-2003 said that ``firms in China provided dual-use 
missile-related items, raw materials, and/or assistance to . . . 
countries of proliferation concern such as Iran, Libya, and North 
Korea.''
  Virtually every country we worry about possesses or has access to 
some form of chemical, biological, or nuclear weapon, but most lack 
effective delivery systems. China is a proven violator of 
nonproliferation treaties that keep such countries from gaining access 
to delivery system technology. According to State Department testimony, 
China has a ``serial proliferation problem,'' and while the official 
line is to crack down on weapons trade, ``reality has been quite 
different.'' In her January Senate confirmation hearings, Secretary of 
State Condoleezza Rice listed six countries as ``outposts of tyranny.'' 
China has strong ties to four of these. They are Cuba, Burma, North 
Korea, and Iran.
  Recently, Iran has been in the headlines because of its support for 
terrorism, threatening posture, and nuclear program. China supplying 
them with weapons technology is similar to the role the Soviet Union 
played in the Cuban missile crisis. It is probably worse because at 
least in Cuba, the U.S.S.R. maintained control of the weapons and 
technology. On the other hand, China is fully willing to proliferate 
regardless of the consequences. Some say the real issue is with private 
companies and Beijing does not have knowledge of what is going on.
  With the delicate situation in North Korea, the Bush administration 
is holding that line. But the fact remains that at the very least, the 
Chinese Government is negligent in deterring such proliferation and 
apparently does not feel any pressure to do so. However, as some of 
these companies are closely linked with the Chinese military, it is 
clear that the government is not so ignorant as we may like to imagine.
  This continued proliferation in the face of intense pressure to stop 
makes me ask the question: What is China getting in return? China seems 
to proliferate with countries that have been terrorist sponsors, such 
as Iran, Iraq, and Libya. These countries offer China something they 
desperately need, and that is oil. That is what is significant.
  Energy is a major problem facing China, which ranks No. 2 in the 
world for consumption. This is very interesting because right now we 
have been talking about the fact we have a very serious problem in not 
having an energy policy, not being able to pass an energy bill--it has 
been killed by people who think we do not need to run this great 
machine called America.
  Since my floor speeches in 1999, China's oil imports have doubled and 
surged upwards of 57 percent in the last year alone. I have a chart 
that shows what could very well happen in the future. This chart starts 
in 1990 and goes to 2025 and shows what China's projected oil 
production versus consumption is. The red line is consumption. The 
green line is production. We can see they do not have production. They 
have to get production from someplace. That is something to which we 
should be most sensitive. China's oil production is topped out while 
its demand continues to rise at an alarming pace.

[[Page 5505]]

Some analysts project China's oil needs will double again by 2010, and 
it will use its reserves within 14 years. This information is from 
International Energy Outlook of 2004. We believe this to be accurate.
  China's alarming need for oil has caused it to look around to the 
world for new sources, sources that are often problematic states with 
security concerns to the United States. The Commission makes an 
unpopular but straightforward observation. I am going to quote this 
very significant statement out of the Commission report:

       This need for energy security may help explain Beijing's 
     history of assistance to terrorist-sponsoring states with 
     various forms of weapons of mass destruction-related items 
     and technical assistance, even in the face of U.S. sanctions. 
     But this pursuit of oil diplomacy may support objectives 
     beyond just energy supply. Beijing's bilateral arrangements 
     with oil-rich Middle Eastern states also helped create 
     diplomatic and strategic alliances with countries that were 
     hostile to the United States. For example, with U.S. 
     interests precluded from entering Iran, China may hope to 
     achieve a long-term competitive advantage relative to the 
     United States.
       Over time, Beijing's relationship-building may counter U.S. 
     power and enhance Beijing's ability to influence political 
     and military outcomes. One of Beijing's stated goals is to 
     reduce what it considers U.S. superpower dominance in favor 
     of a multipolar global power structure in which China attains 
     superpower status on par with the United States.

  In Venezuela, anti-American President Hugo Chavez announced a $3 
billion trade strategy with China, including provision for oil and gas. 
Army GEN Bantz Craddock, who heads the United States Southern Command, 
stated that China is increasing its influence in South America, filling 
a vacuum left by the United States.
  In his March 9 House testimony, General Craddock called China's 
progressive interest in the region ``an emerging dynamic that could not 
be ignored.''
  I have been traveling to Africa for many years. The Chinese are 
everywhere. I just got back last night from Africa. I saw a conference 
building being constructed, given to them free, from China, and we know 
what kind of relationship that gives them. I saw a conference center 
being constructed in the Congo. I saw a large sports stadium. Both were 
donated by the Chinese. China has been expanding its influence 
throughout Africa with projects like this.
  One saying I heard was: The U.S. tells you what you need, but China 
gives you what you want.
  Has China suddenly become compassionate and generous? I think the 
fact that these countries have large oil and mineral deposits paints a 
real picture.
  In the Middle East, Beijing recently signed a $70 billion oil and gas 
deal with Iran from which it receives 14 percent of its oil imports. 
Naturally, China has come out firmly against the U.N. Security Council 
holding Iran economically accountable for its nuclear program.
  I was just in Sudan 2 days ago. Likewise in Sudan, China seeks to 
diffuse or delay any U.N. sanctions against Khartoum. It hardly seems 
coincidental that 7 percent of its oil imports comes from that 
conflict-stricken country, a supply that China seems ready to protect.
  At this point, I will pause and tell my colleagues the experience we 
had just 2 days ago in that area in Uganda, just across the Sudan 
border. We were working with President Museveni. We actually went up to 
the area called Gulu, which is right on the Sudan border where the 
terrorists are coming across maiming children, cutting their limbs and 
their lips off. It is horrible. It is beyond description. I do not 
think there has been anything like that since the Holocaust. Yet China 
is supporting that group.
  Not only are they willing to use the U.N. to safeguard its energy 
sources but also its regional influence. This is not new. In 2003, the 
United States spearheaded the proliferation security initiative as a 
multilateral weapons of mass destruction interdiction strategy. The 
initiative has proven effective, particularly in the interception of 
centrifuge parts bound for Libya. The Bush administration believes this 
success was a major reason Libya peacefully ended its nuclear program.
  Major European and Asian countries have joined and China was invited 
to participate and refused, citing dubious concerns about the delicate 
situation in North Korea. To quote the Commission:

       China appears to be working through the United Nations to 
     not only undermine the initiative but also to render it 
     globally ineffective. This has been accomplished by getting 
     the United States to drop a provision on the interdiction of 
     foreign vessels carrying banned weapons on the high seas.

  I think it is worth repeating what the Commission statement said:

       One of Beijing's stated goals is to reduce what it 
     considers U.S. superpower dominance in favor of multipolar 
     global power structure in which China attains superpower 
     status on par with the United States.

  The tense situation in Taiwan continues to simmer. A few days ago, 
the Chinese Communist Party formalized a new stance on Taiwan. The 
following was approved by the National People's Congress:

       If possibilities for a peaceful reunification should be 
     completely exhausted, the state shall employ nonpeaceful 
     means and other necessary measures to protect China's 
     sovereignty and territorial integrity.

  This represents a change from earlier ambiguous language that would 
have allowed China flexibility to consider other options should a 
conflict arise. As it is, China has taken away its alternatives.
  This is a direct threat. The Chinese are solidifying and increasing 
their presence in east Asia. When not using overt political influence, 
they are expanding economically.
  As political economist Francis Fukuyama observed:

       The Chinese [have been] gearing up a series of multilateral 
     initiatives of their own, including Asean Plus One, Asean 
     Plus Three, a China-Asean Free Trade Area, a Northeast Asian 
     Free Trade Area and so on in seemingly endless profusion.
       The purpose of these proposals, it seems fairly clear in 
     retrospect, was to allay fears of China's growing economic 
     power by offering selective trade concessions to various 
     Chinese neighbors. The Chinese greased the path to the East 
     Asian Summit last December by offering its Asean neighbors a 
     free trade agreement that would open access to much of the 
     Chinese market by 2010.
       Asean Plus Three appears to be a weak and innocuous 
     organization. But the Chinese know what they are doing: Over 
     the long run, they want to organize East Asia in a way that 
     puts them in the center of regional politics.

  China is also expanding militarily. Their string of pearls strategy 
includes a listening post in Pakistan, billions of dollars in military 
aid to Burma, military training and equipment to Cambodia, increased 
naval activities in the South China Sea, and expanding cooperation with 
Thailand and Bangladesh.
  The purpose of this strategy is to create a military corridor for the 
Middle East to mainland China that would be impervious to any potential 
American oil embargo. As a recent internal Pentagon report outlines:

       China . . . is not looking only to build a blue-water navy 
     to control the sea lanes, but also to develop undersea mines 
     and missile capabilities to deter the potential disruption of 
     its energy supplies from potential threats, including the 
     U.S. Navy, especially in the case of a conflict with Taiwan.

  The weapons in which China is investing include cruise missiles, 
submarines, long-range target acquisition systems, specifically cutting 
edge satellites, unmanned aerial vehicles, and the advanced SU-30 
fighter aircraft, and I have to pause at this moment and say something 
about someone to this day I still think is a real American hero, GEN 
John Jumper, the Chief of the Air Force. Back before he was in that 
position in the late 1990s--I believe it was 1998--he had the courage 
to stand up and publicly say something, and it certainly was not 
endorsed or wanted by the Clinton administration, but he said we have 
to do something. We have stopped our modernization program so now 
Russia is selling tactical vehicles, air vehicles, that are better than 
our fighters. He is talking about the SU-30 series, better than our F-
15s and F-16s.
  There are a lot of people who do not want us to advance militarily 
and be

[[Page 5506]]

No. 1 and give our troops and our airmen the very best equipment. There 
are people who are trying to keep us from developing the F-22 and the 
joint strike fighter so that we again will gain superiority. Right now 
we do not have it.
  China has bought in one purchase, and this has been several years 
ago, 240 of the SU-30s and probably a lot more, but that is what we 
found out. The new intelligence report states that China has 
accelerated its amphibious assault ship production. It plans to build 
23 new boats capable of ferrying tanks and troops across the Taiwan 
Strait. This development is potentially destabilizing and has alarming 
implications.
  We have to keep in mind they now are buying this capability to get 
across to Taiwan after for the first time coming out and directly 
threatening Taiwan.
  A further concern is China's investment in nuclear submarines. It 
recently launched the type 094 class, the first capable of striking the 
continental United States with nuclear missiles from its own waters. It 
can strike the United States of America from its own waters. They have 
launched this class of a nuclear missile--or the ability to deploy it.
  China has also been developing the JL-2 submarine-launched ballistic 
missile, expected to have a range of 4,600 miles. These represent a 
departure from traditional Chinese deterrent strategies. They have 
little tactical purposes. They will not be used in a regional battle. 
Rather, their importance is strategic.
  China has modernized its military at an unprecedented rate. According 
to testimony from Dr. Evan Medeiros of the RAND Corporation, between 
1990 and 2002 China's official defense budget for weapons procurement 
grew approximately 1,000 percent. That is 1,000 percent in a 12-year 
period. Nearly every year since 1997 has seen a defense budget increase 
of 13 percent, an increase far above China's GDP growth average of 8.2 
percent for those same years.
  In comparison, President Bush's fiscal year 2005 budget increase in 
defense spending is 4.8 percent. Keep in mind, we are currently engaged 
in two major operations and numerous smaller ones as part of the global 
war on terror. Yet this is just China's officially announced defense 
budget.
  The Commission and the Defense Department assess:

       The PLA defense budget is grossly underreported and that 
     official figures exclude much of China's military 
     modernization program.

  So when we are talking about what China is putting into their 
military program, we recognize that this may be 50 percent of what they 
are really putting in it because we have no way of knowing.
  Our intelligence does show in an unclassified form that they are 
doing a lot more than the reports they send out. The Commission 
estimates the actual defense budget is two to three times the stated 
amount.
  In the midst of this ominous military expansion, the European Union 
is planning on lifting its arms embargo against China. The embargo was 
put in place after the 1989 Tiananmen Square massacre to reflect 
China's appalling human rights record. The European Union claims the 
embargo is no longer effective but ignores the obvious. Why lift the 
embargo without replacing it with a better one?
  Their solution, an informal code of conduct, allows for no 
comprehensive enforcement. Without uniform and enforceable standards, 
competent European firms will be left to themselves to determine 
acceptable arms sales. Even with the embargo, Europe's sales to China 
recently doubled this past year to a half billion dollars.
  Underneath all of the semantics, the EU appears to have more to gain 
in Euros than by maintaining what principled respect for human rights 
it once had. Any weapons technology China buys will only add to its 
leverage against Taiwan and our other Asian allies. If the embargo is 
lifted, Europe and Russia will be in competition to sell China 
increasingly higher technologies. We can also expect the EU technology 
to proliferate beyond China's borders to states that would gladly use 
it against the United States. The EU does not consider this a strategic 
threat.
  The United States-China Commission report observes, however:

       Access to more advanced systems and integrating 
     technologies from Europe would have a much more dramatic 
     impact on overall Chinese capabilities today than say five or 
     ten years ago. For fourteen years China has been unable to 
     acquire systems from the West. Analysts believe a resumption 
     of EU arms sales to China would dramatically enhance China's 
     military capability. If the EU arms embargo against China is 
     lifted, the U.S. military could be placed in a situation 
     where it is defending itself against arms sold to the PLA by 
     NATO allies.

  With all the other problems that we have had recently with some of 
our multinational groups, this is really not surprising.
  Imagine, we share military technology with our European allies and 
then find our security threatened and possibly our servicemen killed by 
this same technology. We cannot allow for this potential to exist.
  Because of China's centralized economy, economic issues are 
irrevocably intertwined with security implications. The Commission 
reports:

       The Chinese government has selectively chosen firms--
     predominantly State-owned enterprises, SOEs--to list on 
     international capital markets . . . Many SOEs were previously 
     controlled by the People's Liberation Army, PLA, and there is 
     concern that unofficial links to the PLA remain intact after 
     privatization . . . As of 2002, more than three-quarters of 
     companies listed as A shares in China's capital market are 
     State-controlled. These include known proliferators such as 
     NORINCO, which was sanctioned by the U.S. Government on four 
     separate occasions in 2003 for offenses including missile 
     proliferation and sales of equipment or expertise to Iran 
     that could be used in a WMD or cruise or ballistic missile 
     program.

  Chinese firms lack adequate disclosure; as the case of NORINCO 
demonstrates, American investors may unwittingly be supporting 
companies that oppose our national security.
  One company, China National Nuclear Corporation--CNNC--is currently 
slotted to receive $5 billion from the U.S. Export Import Bank to build 
nuclear power plants in China. However, there are two problems: first, 
this company was discovered to be sending Pakistan prohibited materials 
that weaponize uranium. Sanctions were imposed for 1 month and removed. 
Later that same year, a subsidiary of CNNC was discovered to be selling 
more illegal materials to Pakistan. Connections have also been made to 
Iran's weapon program. Second, because the Export-Import Bank of the 
United States supplies the credit, the U.S. Treasury will have to back 
this loan, either by direct payment or guarantee. Ultimately, American 
taxpayers will be aiding a Chinese company that is a known 
proliferator. I look at these things and ask why doesn't that bother 
anybody? Nobody is talking about it.
  Another issue is China's purchasing of U.S. companies. On March 9, 
the Committee on Foreign Investment in the United States--CFIUS--
approved China's Lenovo Group buying IBM's PC business. The $1.75 
billion deal creates the third largest PC maker in the world. The 
problem is that there is potential for Chinese computer experts to use 
this as a base for espionage. Some say that this is ridiculous; that 
China could never use IBM networks that way. I would ask that they 
consider not only the immediate situation but also China's track 
record. As a side note, I believe that CFIUS does not apply a broad 
enough conception of U.S. security. I understand that Representatives 
Hyde, Hunter and Manzullo expressed similar views in a January letter 
to Treasury Secretary John Snow, the chairman of CFIUS.
  One example of CFIUS falling short is with Magnequench International 
Incorporated. In 1995, Chinese corporations bought GM's Magnequench, a 
supplier of rare earth metals used in the guidance systems of smart-
bombs. For over 12 years, the company has been moved piecemeal to 
mainland China, leaving the U.S. with no domestic supplier of 
neodymium, a critical component of rare-earth magnets. CFIUS approved 
this transfer. The problem takes a unique twist, as Nathan Tabor of The 
Conservative Voice outlines:

       China [has] become the dominant supplier of rare-earth 
     elements, also called

[[Page 5507]]

     lanthanides. But in the U.S., owners of the Mountain Pass 
     mine in California, one of the finest rare-earth deposits in 
     the world, have been spending millions of dollars over many 
     years to resolve an environmental complaint that processing 
     the element threatens the habitat of the desert tortoise.

  This is something that has restricted some of our activities.
  Dependence on outsourcing has the potential to be a paralyzing 
problem in time of war. During the current Iraq conflict, Switzerland 
stopped shipments of smart-bomb components to the U.S. because it 
disagreed with our role. As more and more of our military equipment is 
outsourced, we have become dangerously dependent on the whims of 
foreign countries. Current law requires only 50 percent of defense 
equipment be American-made. When Representative Duncan Hunter tried to 
raise this to 65 percent, defense contractors told him that it would 
force them out of the market.
  Information technology is also leaving our borders at an alarming 
rate. John Chambers, the CEO of CISCO Systems, said:

       China will become the IT center of the world, and we can 
     have a healthy discussion about whether that's in 2020 or 
     2040. What we're trying to do is outline an entire strategy 
     of becoming a Chinese company.

  However, this technology transfer can also have a darker side. The 
Commission report states:

       U.S. advanced technology and technological expertise is 
     transferred to China in a number of ways, both legal and 
     illegal, including through U.S. invested firms and research 
     centers in China, Chinese investments in the United States, 
     bilateral science and technology cooperative programs, and 
     Chinese students and researchers who return home following 
     their work and study at U.S. universities and research 
     institutes.

  In a previous speech that I gave on China, on June 23, 1999, I called 
attention to China's covert stealing of our technology. The FBI is 
currently investigating numerous instances of alleged industrial 
espionage; over 3,000 companies in the U.S. are suspected of supplying 
illegal technology and collecting information for China. Such cases are 
major problems in industrial centers like Silicon Valley where 
espionage investigations linked with China have increased 20 to 30 
percent annually.
  Most recently, the Bush administration is investigating whether China 
has illegally altered legitimate U.S. exports for military use. One 
instance of this is U.S.-made Boeing 737 jetliner being modified to 
have military capabilities. Experts believe that China is using the 
aircraft to monitor tests of its long-range cruise missile similar to 
our Navy Tomahawk. Such a missile would be capable of delivering long-
range conventional or nuclear payloads.
  Whether it is military or economic expansionism, human rights, 
illegal proliferation or outright stealing of military technology, 
China has continued to defy the U.S. and the world unabated and 
unchallenged.
  Let me repeat what concerns me, and apparently the U.S.-China 
Commission, about China:
  No. 1, eight major Chinese companies, some of which are directly 
connected with the military, were sanctioned last January for illegally 
selling weapons technology to countries including Iran. This is only 
one example of an ongoing and grave strategic problem. It is a problem 
we cannot afford to tolerate.
  No. 2, China has been modernizing and expanding its military to 
reduce any leverage we may have in a conflict situation, particularly 
over Taiwan. They have been stealing or developing highly advanced 
technology, including nuclear warhead designs and technology that would 
enable them to reach the continental U.S.
  No. 3, skyrocketing energy consumption is a major problem for China 
and a potential conflict with us. It is drawing the PRC into 
cooperation with Iran and other problematic states. These bilateral 
arrangements improperly influence Chinese action the U.N., and in some 
cases may involve illegal weapons transfers. You can see from this 
chart behind me that China has to do something. Look at their energy 
requirements. They are doing it today.
  No. 4, the European Union is projected to lift its arms embargo on 
China by this summer, an embargo that was meant to pressure China to 
improve its human rights record. That record has not improved. Europe 
has also failed to address the question: What country will China most 
likely use the new European technology against? It is ultimately the 
United States.
  No. 5, despite Justice Department and Homeland Security concerns, 
China's Lenovo Group is taking over IBM's PC manufacturing business, 
based in North Carolina. This is revealing of a distressing trend that 
threatens the U.S. industrial base. Our practice of outsourcing 
military equipment is also of deep concern.
  No. 6, China continues to repress religious and human rights, and 
intimidate our Asian allies while expanding their influence in areas 
like South America and Africa. The recent Taiwanese ``anti-secession'' 
bill is further evidence of this hegemonic outlook.
  No. 7, according to the FBI, cases of Chinese espionage in the States 
are increasing at 30 percent annually in some places. Civil aircraft 
that the U.S. sold to China appear to be outfitted with military 
surveillance equipment. Revelation of such activities garners few 
headlines because this behavior is nothing new. They have been doing it 
for a long time and no one seems to care.
  Indeed, we are used to this pattern and have become all too 
complacent about it. Scolding the Chinese for their disregard for 
proliferation treaties, while providing them unprecedented economic 
benefits is at best a bizarre foreign policy. We must link China's 
trading privileges with its human rights record and its conduct abroad, 
including its weapons proliferation. As China's No. 1 importing 
customer, accounting for 35 percent of total Chinese exports, we have 
the influence. I agree that the way we handle an emerging China must be 
dynamic, but it must not be weak. As the Commission report concludes:

       We need to use our substantial leverage to develop an 
     architecture that will help avoid conflict, attempt to build 
     cooperative practices and institutions, and advance both 
     countries' long-term interests. The United States has the 
     leverage now and perhaps for the next decade, but this may 
     not always be the case. We also must recognize the impact of 
     these trends directly on the domestic U.S. economy, and 
     develop and adopt policies that ensure that our actions do 
     not undermine our economic interests . . . the United States 
     cannot lose sight of these important goals, and must 
     configure its policies toward China to help make the 
     materialize . . . If we falter in the use of our economic and 
     political influence now to effect positive change in China, 
     we will have squandered an historic opportunity . . . China 
     will likely not initiate the decisive measures toward more 
     meaningful economic and political reform without substantial, 
     sustained, and increased pressure from the United States.

  There is an inherent tension between drawing China to freedom through 
relaxed policies, and a vital need to protect U.S. security. I fear we 
have conceded far too much and contributed to the emergence of a very 
real threat.
  Finally, I wish to applaud the U.S.-China Economic and Security 
Review Commission. Their efforts to provide this body with a clear 
picture of a very complex and multifaceted situation have been 
illuminating and challenge us to face these real problems. Thank you 
for your hard work.
  The Chinese have something called an idiom, a four-character phrase 
that is sometimes used to simplify a complex thought. I would borrow 
one to describe the current situation: ``One who obeys on the surface 
but not from one's heart.'' Unless our relationship with China is 
backed up with strong action they will never take us seriously. We will 
certainly see more violations of proliferation treaties and in the 
context of the growing threat of terrorism. That is unacceptable. We 
have also ignored the danger that China is becoming in its own right. 
Some think that I am alarmist. If China breaks its consistent pattern 
of human rights abuses, military and economic expansionism, and illegal 
weapons proliferation, I am prepared to concede my concerns are 
unfounded. But I fear that the next few years will continue to confirm 
an obvious trend. The time to act is now, before the problem is beyond 
the realm of

[[Page 5508]]

policy. We urgently need a coherent strategy for dealing with China, 
one that allows room for China's changing role without sacrificing our 
national security and other interests.
  As I have demonstrated, we are on a collision course with China on 
all levels: economically, militarily, and ideologically. The situation 
has only worsened since my previous floor speeches about China in 1999. 
We are two trains accelerating in different directions on the same 
track. After the last decade I think we have seen that appeasement 
doesn't work; it's time to deal in a very real way with our unpaid 
bills.
  I often think about the appeasement policies we sometimes have 
against these countries.
  I think it was Horace Mann who said:

       No man survives when freedom fails. The best men rot in 
     filthy jails. Those who cried ``appease, appease'' are hanged 
     by those they try to please.

  I am afraid that pretty well describes our relationship with China.
  I hope this debate will awaken the American people to the real threat 
China poses. To that end, I intend to deliver several more talks 
highlighting the United States-China Commission's report and will 
introduce a resolution to formally adopt the Commission's 
recommendation.
  I remember so well back when I was critical of the Clinton 
administration in the very opening months of that administration in the 
early 1990s when one of the first things they did at our energy 
laboratories was to intentionally lower our security policy. They did 
away with background checks. They did away with the color-coded 
security badges to demonstrate on site what level of security an 
individual could have. They did away with some of the FBI checks. I was 
very disturbed. That was over 10 years ago. We knew this was coming, 
and now it is here. It is time for us to take a different policy to 
China.
  With that, I yield the floor.
  I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. WYDEN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. WYDEN. Mr. President, I ask unanimous consent I be permitted to 
speak for up to 30 minutes after the distinguished Senator from 
Massachusetts.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. KENNEDY. Mr. President, I understand we are in morning business.
  The ACTING PRESIDENT pro tempore. The Senator is correct. The Senator 
should also be reminded he currently has a 10-minute time limit.

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