[inaudible conversations] good afternoon, i am the president of the us institute of peace and im delighted to welcome everybody to a timely conversation with senator mark warner from virginia about the Us China Relationship. An issue that is getting a lot of attention these days. Senator warner has been at the forefront of china and has been a leader on the conversation related to Foreign Policy and National Security issues on china and through his years of service in the senate. For those of you joining us for the first time, us ip was founded by congress as nonpartisan National Institute dedicated to working with partners around the world to prevent and resolve violent conflict with one of the things we do in our headquarters in washington is to provide a space for conversation about the most critical Foreign Policy issues of the day in the Us China Relationship certainly qualifies as that. That brings us together. We have seen over the past decade how china has shifted many of its policies and become far more active on the International Stage and invested heavily in countries around the world and we have seen this from north korea to burma to africa and our China Program has looked at the goal of china in affected countries and as part of that work, a series of bipartisan senior study groups, the first two of which looked at north korea, nuclear and peace negotiations and chinas role to determine conflict. I invite you to check those out on our web which is where you can find them. It is my pleasure to introduce senator warner who brings a very rich background, useful background that combines business technology, career and public service. In addition to being the senator from the great state of virginia he has also served as virginias governor. He has a proven record of bipartisanship working to advance us interests and security abroad. And worked with richard burr on both sides of the aisle. This combination of the private sector, it is particularly keen insights to what we are discussing, the forefront of leading conversations. Each are at the core of the china relationship. Thank you for joining us today. Thank you for those joining us online. If you are using social media, use the hashtag and join us for the conversation, hashtag senator warner, please join me in welcoming senator warner. [applause] thank you for that introduction and the great work you do on so many subjects. I want to acknowledge my dear friend who has been talking and is very involved in the institute of peace but a number of terribly critical interests both international and around the region. I want to commend the institute for the important work you do on foreignpolicy challenges. I have a lot to say. Let me get right at it. Today i think there is widespread understanding that confronting a rising china is the foreignpolicy challenge of our time. China is a global competitor of 1. 4 billion People Living under an authoritarian system of government that is flying for economic, political and military globally. It is governed by the Chinese Communist party whose view of individual liberty, rule of law and Democratic Values is starkly different from those of us. On all these points there is broad bipartisan agreement. However, there is far less agreement on what our response to these realities should look like. How do we enact a strategy that continues to protect us interests in International Institutions while staying true to our values. I believe we can retain our leadership and Global Competitive advantage by embracing these defining characteristics that have made america a leader of the free world. Those characteristics are our belief in the pool of law, our checks and balances against government overreach and our respect for the individual. Especially when those rates come into conflict with the government or a majority faction. These values are the foundation of our International Successes and strongest alliances. Today china is offering a different model to the world. It has achieved a meteoric rise while rejecting these core values. I want to make one thing clear at the outset. My beef is with the policies of president xi jinping and the Chinese Communist party, not the Chinese People and especially not with americans of chinese dissent. The truth is the Chinese Communist party today is intent on fundamentally reshaping the norms and values that have underwritten global stability, security, and prosperity. How do we respond, do we engage china in a head to head cold war on multiple fronts or do we embrace more traditional leadership role and strengthen the International Order that beijing is attempting to append. I would argue the second approach of a better model to the world, one rooted in freedom and opportunity is consistent with our values and the approach most likely to succeed. I want to talk about why we got here. We are having a conversation like this because the conventional wisdom has changed rapidly. Over the past few years. And potentially a democratic china, and a rising china would be good for the world. Today, it is clear that the aims of president xi and the Chinese Communist party do not align with that vision. Instead, Chinese Government has worked to challenge a rulesbased International System and expand its brand of global influence, military presence and economic power it is time toak up to the fact that beijing is pursuing a strategy not only to strengthen china but to explicitly diminish u. S. Power and influence. To do this they communist party is exploiting all the elements of state power to strengthen chinas position in the world, and they are doing this at the expense of human rights and human dignity. The way i see it, these efforts fall into four buckets, electric power, influence campaigns, economic expansion, and an area that is not received enough attention, science and technology policy. First, on the military front. The Peoples Liberation army, pla, is expanding both its own domestic bases and starting to establish bases overseas. Chinas naval forces are now able to conduct operations further from home kick in the indian ocean waters around europe, and the western pacific. Under the doctrine of military civilian civil fusion, beijing has pursued a cutting edge, set cutting Edge Technologies such as ai and hypersonics. Which will be the essential 21st century war fighting. And the pla is modernizing its military at a fraction of the cost those of us and was approaching. They are skipping a generation of expensive r d by adopting platforms from foreign militaries, or sometimes stealing the intellectual property to do so. Contrast that with the United States where we continue to spend 750 billion on defense, including expensive updates to legacy military systems and platforms. To compound this shine is focusing its efforts on tools of asymmetric warfare like cyber, space, and misinformationthis information. U. S. Intelligence officials increasingly concerned that the pla now threatens the United States in specific domains such as cyber and space and that chain even leads specific military Technology Begin such as hypersonic weaponry. Former dni coats and others have warned chinas ability to target Critical Infrastructure right here at home like our electric grid using Cyber Attacks. I worry as well about the pla willingness to use cyber theft for economic espionage. The truth is china is demonstrating that wars with nearpeer competitors may no longer be a traditional mil to mil conflict, but instead for the u. S. And our allies increasingly clear that cyber and again misinformationdisinformation will be just as critical as military might Going Forward in the 21st century. The second aspect of china strategic strategy deals with its efforts to wage influence campaigns beyond its borders. The prc has tried to dictate how foreign entities characterize sensitive topics like the dalai lama or tiananmen square. Beijing has often forced global businesses to conform to its worldview in order to maintain access to the Chinese Markets are for instance, dictating how u. S. Airlines put taiwan under global mark maps. On College Campus switching changes student groups like the confucius institutes to shape and stifle debate. More broadly, the Chinese Communist party relies on a network of think tanks, newspapers and align possesses and political leaders to shape perception china. It also used the economic investments abroad to leverage pressure, to pressure other nations to support that diplomatic agenda. Just recently, and this one i think is particularly noteworthy, just recently a number of countries, including majority muslim countries, signed a letter expressing support for chinas tactics with the weaker population. And the Chinese Government weaker. Weaker exploiting multiples of youtube, facebook, twitter, all sites and in Mainland China despite propaganda. Not only within its borders but within its Expat Community as well. These tactics are an extension of chinas doctrine of cyber sovereignty, the idea that the state as the absolute right to control information within its border. China has already brought this notion to bear on its people in the form of censorship, domestic disinformation and the social Credit System. But increasingly we are seeing it exported on a global scale. Third, on the economic front, president xi has pursued to the Economic Strategies aimed at displacing the United States position of economic leadership. Through the china 2025 plan xi is focused on developing domestic chinese capabilities in a Strategic Industries of the future. At the same time the prc is working to expand chinese exports globally to its existing customers as well as the developing world. President xi is making a play for dominance in areas like 5g, ai, quantum computing, robotics, and increasingly even biotech. In addition, china is employing the full power of the state to build the infrastructure, and heres with her doing something different, and actually set the standards for new technologies like 5g wireless. Actually, adopting tactics that the United States used for much of the 20th century. But unlike the u. S. , china is trying to set these standards to promote its own interests rather than the notions of any sort of fair competition. At the same time china exploits the openness of the International Trading system to gain access for Chinese Companies. And beijing has maintained or even increased barriers to foreign competition. Globally, the belt and Road Initiative to build infrastructure and trade relationships heavily weight and chinas interest. Accompanying this has been a Digital Initiative to promote Chinese Telecommunications equipment. The goal is not simply to promote chinese vendors but to feed the market that could ultimately be exploited by Chinese Security services. The truth is Chinese Communist party is attempting to harness Chinese Companies, civil society, and even overseas diasporas as an extension of the states. These efforts are frankly neither hidden or frankly very subtle. Over the past few years china enacted laws requiring all citizens and companies to act in support of National Security as defined by the Chinese Government. Despite protests to the contrary, no Chinese Company, however global, is actually private. These companies dont make decisions entirely for economic or commercial reasons because they are legally required to act as an extension of the Chinese Communist party when called upon. And this leads to the fourth aspect of chinas efforts to reshape the International Order, science and technology policy. Again and again we have seen u. S. Companies forced into joint ventures with Chinese Companies or required to share specific code and other ip in order just to get access to the chinese market. Weve heard from American Companies who have been put out of business after chinese competitors stole the technology and produced their own lowercost version of the american product with state subsidies. But chinas blatant effort to steal western technology does not stop at its border. The Justice Department revealed last year that more than 90 of dojs economic espionage cases, and more than twothirds of its currently open trade secrets cases, all involve china. In particular, the Chinese Communist government views western universities and government labs as fertile grounds for transfer of Sensitive Research back to china. And whats particularly alarming is that it sees chinese expat, especially students and academics, is essential assets in these efforts. The fact is chinese nationals now make up roughly onethird of all foreign students studying in the u. S. Out of the 363,000 chinese nationals studying in the u. S. Last year, nearly half of them were majoring in s. T. E. M. Fields. Fields. And many of them are returning home to take advantage of the opportunities in chinas growing economy. And my concern isnt necessarily with people who want to come here and learn and then go home. But i do have a concern that the communist party is attpting coerce some of these individuals for Technology Information and intelligence collection purposes. Let me be clear. The majority of the students are blameless and make significant contributions to the Research Environment and to the u. S. Economy, but we have to acknowledge that whats changed is within the last few years more and more Chinese Intelligence Services often praised upon this population. Literally threatening the students families back at home saying, your son or daughter needs to not only come homeut bring a thumb drive back. The truth is, president xi, china is drifting from the International Cooperation and shifting to a more nationalistic and confrontational path of scientific advancement. And while we must not lose sight of our own founding principles, we also cannot ignore the fact that china is now playing by a different set of rules. So where does that leave us . Left unopposed, this threat to global norms and values jeopardizes not just americas position in the world, it risks undermining the whole notion of free inquiry, free travel, free enterprise, and other values that of animated decades of global stability and prosperity. Thats what im so deeply concerned by the Trump Administrations erratic and cool incoherent approach. While the administration has rightly raised concerns about china, something frankly the previous president s should have done earlier, the administrations unilateral approach to this challenge is not leading us toward success. After all these difficulties ive outlined pose a a challen, but make sure, china is a cellist not just to the trend, not just to the west, but to all nations committed to democracy, individual liberty, independent judiciary, and of law, countries like japan, australia, india and others. They all face the same challenges as the traditional west does. Yet rather than building a coalition to confront these issues, President Trump has alienated some of our closest allies. Instead of building a a valuesbased International Coalition to stand up to china, the president has minimize the importance of human rights and representative government, even when we see the protesters in hong kong standing up and singing the starspangled banner. The president insistence on framing this as a conflict between our two countries has resulted in little tangible gain. We cannot afford to frame this strategic challenge in simplistic cold war terms, dividing the world into two and seeing who can wait out the best because frankly this is not just realistic, given chinas Enormous Economic integration into the rest of the world. The prc is the top trading partner for more than twothirds of the world. Unlike many of our allies, the u. S. Economy is deeply intertwined with china. Meanwhile, while china and u. S. Are competitors in many areas, as nancy said can we also confront many common challenges from Climate Change to our security to north korea. The stakes are too high for both of our countrys to treat drift into a permanent confrontational faces. Instead, i think we need a conference its strategy to defend against chinas bad behavior, to compete with china in the 21st century, to strengthen strengthen the International Order seeks to up and. First, lets talk about defensive measures and how to protect ourselves especially in the short term it. This cant just be left up to the federal government. It needs to be a partnership between the government and the private sector. Thats why over the past year ive been convening a series of briefings from business and academia, always partnering with a republican member of the Senate Intel Committee and with leaders from the icy to give those outside government and inside view of what we have seen. Ive introduce legislation with marco rubio that would in part helped formalize and courtney this effort. Our bill establishes an office of Critical Technologies at the white house which would be responsible for developing a governmentwide strategy to protect against statesponsored threats to critical american supply chains and technologies. However, i believe the government can and should do more. Rs w need to protect our supply chains. Especially for military platforms and equipment. An october 2018 gao report found cyber vulnerabilities in nearly all u. S. Weapon systems. And our navy has admitted in public, reports that rely upon systems so compromised by our adversaries that they are quote reliability is questionable. We can start by securing the internet of things devices before they are exploited. I have bipartisan bicameral legislation that would require all government purchases of internet connected things, particularly coming out of dod, immediately beating de minimis security stance. Back in 2010 i was proud to support language into the annual defense bill that would ban the use of huawei components in government systems. I think we need as i said a National Strategy to deal with supply chains. Thats why i along with senator mike crapo introduce a bill to establish a National SupplyChain Security center with in odni. Companies to to fortify their own systems against Cyber Attacks and insider threats. Second, weve got to get a lot more serious about securing our telecommunication systems, especially when it comes to 5g. That means rely on trusted companies to build our Telecommunications Infrastructure and it means setting standards that adhere to our Democratic Values. I have supported the administration initial steps to limit the use of huawei and other Telecom Equipment from china. I just hope that the president sticks with these efforts, but more still needs to be done. I also believe we need a serious conversation about how to both replace current equipment that is across the country. Many of our smaller carriers bought huawei equipment because frankly its been a lot cheaper. Third, the federal government needs to develop better oversight and controls to stop Chinese Investment in critical dual use technologies. By law, all chinese citizens and companies are ultimately beholden to the communist party, not their board of shareholders. And our corporate ownership rules need to acknowledge that. I have supported reforms to expand oversight over these transactions, but we need to ensure the implementations meet the congressional intent in companies and companies cant skirt oversight. Another area working on is much needed Beneficial Ownership legislation so that Chinese Government and other bad actors cannot hide their investment inside anonymous shell companies. Fourth, we need to continue our progress on enhancing export controls which prevents sensitive technologies from the exported to china. Congress has made some progress. The department of commerce is currently working on language to strengthen the u. S. Export control system, but given how much Cutting Edge Technology and research and development is happening within the commercial sector, we need to establish these controls quickly and coordinate with our allies. We currently partner with 42 other nations to the export control regime. These are exactly the kind of International Organizations that must be strengthened. Fifth, there must be clear consequences for American Companies and citizens that enable chinas bad behavior. I have become increasingly disturbed that u. S. Businesses and Academic Community has deepened partnerships with china to gain shortterm market opportunity, while ignoring the larger geopolitical impact. Equally troubling, weve seen american investors pour money into Chinese Companies that advance the drcs military capabilities. Weve also seen American Companies develop technologies that directly enable the censorship surveillance and social control efforts of china and other authoritarian regimes. These efforts may be good for business, but they directly support chinas efforts to rewrite global norms of rules. And the very least we should make clear to both companies and academic institutions that complicity in chinas repression efforts will jeopardize their ability to do business with or receive grants from the federal government. Sixth, we need to do a better job of protecting our research and development, especially the critical work that goes on at u. S. Universities and research labs. Universities should double down on security and compliance requirements, things like disclosing additional sources of income or affiliations with Foreign Military and intelligence organizations. That said, these security measures must be enforced in a transparent and fair way. The goal is to protect our ip, but its also to these students and researchers being preyed upon by the communist party not to discriminate against them. This will require creative thinking to flip the script on the ccps efforts to coerce Chinese Students and researchers to bring home Early Stage Research into technologies. Aging relies on its leverage including families back home to force individuals with access to federally funded research, Sensitive Research, to return to china for the transfer of such technologies. What if we actually considered expanding asylum access to include Chinese Students and their families if they were threatened . It wouldnt be a guaranteed to turn but it might create enough doubt in the minds of the communist party that they would have to rethink the current tactics. But we need to do more than just play defense against chinas tactics. This should serve as a wakeup call to mobilize and support and maintain our Competitive Edge. Actually a sputnik moment for the 21st century. In 1957 the successful launch of sputnik actually shocked the American People and our government into making more investment in science education, stem research, and host of other technologies. Sputnik demanded and required a Quick Response and led to americas leadership literally for the next 70 years. We not only gender infected or not invented here, often times set the standards. Over the last 60 years we send integrated circuit Wireless Communications and the internet, to name a few where we actually set the standards. And that helped move the rest of the world. That was an enormous strategic and economic advantage for us in the post world war ii period and we need to ask that effort again today. Following world war ii the United States funded literally 69 of annual global r d. Today, that number is down to 28 , and only 7 in nondefense areas like wireless technology. Even if we are successful in convincing our allies that huawei and cpe equipment present significant security risks, weve got to have an alternative. And if we look ahead to the technologies of the future, we need to step up our commitment to Funding Scientific Research if we hope to compete in the decades ahead. It likely will mean a different kind of investment strategy. I work for some time that we are investing, investing in the best 20th century military that money can buy. With much of the conflict unfortunate, in the 21st century, i believe will happen in domains like cybercom space and misinformationdisinformation. In many of these areas like satellites, just like supersonics, china is rapidly becoming our peer. While we spend 750 billion on defense, china spends 250 roughly. With that i voted billion dollars delta, china is investing all these Cutting Edge Technology. The United States needs to ensure that we are no longer over investing in legacy systems and platforms. Our Defense Budgets need to better align with the fact that the battlefield might not be the south china sea. They could be the networks, that power grid or financial sector. But ensuring our Competitive Edge also means mobilizing outside the defense industry. It means promoting s. T. E. M. Education and making sure our children get an affordable highquality education so they can compete. It means investing in u. S. Infrastructure, not just railways and roads and bridges, but it also means highspeed internet and other connectivity. And if were going to train and the track a workforce of the future, it has to be up to the task. Fortunately this is an area we could call upon some of our nations greatest strengths, inclusion, diversity, and entrepreneurial spirit. One reason that we are in the land of opportunity is that you can come to this country as an immigrant and in the first generation become an american. China with its oppression and persecution of minority populations cannot say the same thing sadly, this is again one area where the truck administrations policies have been remarkably shortsighted. The truth is we cannot effectively advance our National Security interests alone. Whether its standing up to china on trade issues, advancing a free and open indopacific region or developing a secure telecom infrastructure, it cant happen without our allies and partners. Acting in isolation only enables china to play countries and companies off one another, undermining our leverage an impact, especially when so many countries actually do share our commitment to democracy, global security, and a rulesbased trading system. This is where the Trump Administration again has gotten it all wrong. Us underestimating the importance of partners and advancing our most fundamental interests for example, our efforts to convince allies to adopt alternatives to huawei have been constantly undermined take when the president keeps hinting that the restrictions on huawei could be used as a bargaining chip in the context of a trade deal. We should instead be working closely with our allies and partners to create market competitors to huawei that could actually abide by our rules. This includes setting there and open secure standard for 5g based upon technological rigor, not chinas geopolitical interests. On the trade front we should be making common cause with trading partners and allies who face the same economic consequences of chinas behavior. We should be correlated coordih our allies on extra controls in screening of foreign investments. Lets also recognize that our allies are ahead of the United States on certain key technologies. We should be coordinated with them on research and development. In order to pursue a free and open indopacific based on our values we must deepen our cooperation with our allies and partners, such as south korea, japan, australia and india, while expanding our network. As cochair of the indian caucus i see me opportunities to increase engagement with india on a set of shared Strategic Interests such as maritime cooperation, cybersecurity and counter piracy. The United States also has a number of existing security arrangements with key allies, trilateral and quadrilateral that can be bolstered. We should continue to enhance defense capabilities of our regional partners, increased interoperability, and support Democratic Institutions in developing countries. Using new tools such as the recently established u. S. International Development Finance corporation, the United States should work with partners to bring private capital to developing worlds in a way that is again consistent with our values. Across the board the u. S. Should be rallying countries with similar concerns about multilateral mechanisms to challenge chinas behavior. The u. S. And ourlls built the wto built on open and the idea that their plan actually benefits anyone. Collective action on behalf of a freedom and fairness can push back on president xis dangerous ideas, and actually move china into a more responsible path. This will require a significant strategic shift from business, academia, and the federal government. It will also require us to focus our own approach. We need to increase our defenses, step up our response to chinas economic ambitions, and strengthen our partnerships abroad. We face great challenges when it comes to china, but this is not a time to be fearful. We remain the strongest country in the world,nd our values are still the envy of the world. We know at time sometimes we look at our current politics and thing seems a little bit of a mess. But its never been a very good idea to bet against the United States of america. I still believe thats true today, even with the challenges we confront. Thank you all very much. [applause] senator warner, thank you for a very comprehensive overview of speeches that was the longest talk i think ive ever given. [laughing] but you laid out in a very comprehensive way to complications in the nuances of a relationship that the wintertime but earlier has shifted tremendously over the last decade. Can i just ask you to say a few more words about this remarkable shift occurred that has changed how we think about this critical relationship . Let me again, i say this in my speech but i want to reiterate. China is a great country. China has a history that rivals any nation in the world. I remember when i was governor leaving a state trip to china in 2005, just incredibly impressed with the energy, entrepreneurship, the activity. And i was absolutely part of the group that embrace this notion that the rise of china and the rights of the United States, there would be points of conflict but we would generally end up with greater collaboration. My view though has fundamentally changed over the last three to five years. Part of that has come from increasing words from businesses that have invested in china, that it seemed her intellectual property stolen, that is seen chinese competition with state subsidized enterprises take out other activities. Part of that is come from the level of intellectual property theft that they can place in this country. But most of that has come from the absolutely unanimous sense of everyone across the whole intelligence community, that, as president xi for the consolidated party, power, and reestablished the primacy of the communist party in ways that both change the legal structure and the Business Outlook of enterprises in china, that their goal no longer for china was a collaborative effort, but it was a real goal to dominate, and not just dominate within the region, but in a host of technological and various ferries across the whole world. I think thats caused the reassessment. I frankly think, and while im critical of some of the things President Trump has done, i give him credit for elevating this issue. I actually president obama should have in the later stages of his term, and i think it is the Foreign Policy threat, the challenge of our time, and the challenge we face is not, we should not default to u. S. China as a competition. This is the competition between the communist party of china versus kind of any economy that is marketbased, that has ruled law, independent judiciary, and thats what i think i tried to make the point that we need to rely upon these alliances and rebuild them. You also said we need to not retreat back into a cold war frame, but yet we need to be able to g headtohead on some of the Technology Challenges with an own values and within her own systems. That presents a particular challenge, if you think about the spread of huawei and 5g and technologies that have the full weight of the Chinese Government behind them. Have you given thought to what does it look like . Howd we tackle that kind of child . First of all, and i think we were all caught off guard. The government and private industry. Again, im a little biased. Im a telecom guy. I was in the Wireless Industry for years. We, at least america, had kind of gotten a little lazy, presuming that every technological iovatio, if not invented in america, if it wasnt invented in america we wouldve ended up setting the standards. By virtue of being the Worlds Largest economy and we were usually close, if not invented here, we were close to the collaboration. We never really process that into policymaking because it always assumed we would set the rules, number one. And number two, we always thought with almost kind of had hands off approach the said we didnt believe mine who ended up being the Technology Leader on the private sector, because if we set the rules and we were the largest market, we would figure out away. Nine times out of ten the Market Leader was always an american company. So as on 5g we shouldve been thinking about this, not just recently but years ago. So whats happened is china has gone out. They have their enterprise, huawei, back by innocence china inc. In terms of financing, so they can offer the same equipment with huge subsidies, 140 financing come in many ways taking exactly the playbook that Companies Like motorola and 18k used back in 80s and 90s as American Companies dominate the earlier stages of wireless development. And we are left, one, without a national champion. So when we first went out and said, let me make two. 2. With huawei we went out and i think inappropriately tried to explain why this was a problem. This is not a problem currently because there is a backdoor in the equipment. But when you move to a 5g network it means it is much more software driven, theres not a single switch and it means when huawei only sells its equipment in a sense what is called a full stack, you have to buy all huawei equipment and if you get updates come to think about under apple phone, update you get on a regular basis, in a ig network the number of updates that you will be receiving softwarebased will be exponentially higher. And if you have a company that at the end of the day, this is why the australians are habited huawei, is ultimately not respond to do independent judiciary will of law but responsible to the government at any moment in time in the future the government consider huawei, the next update you send, put malware in. I dont think we made that clear thathe problem is not, countries were saying she was the current backdoor. It is the ongoing threat and the fact that we dont have recourse because while we at the end of the day is responsible to the communist party, not to a rule of law when independent judiciary. We didnt explain the threat well enough and then it we did, most of the intelligence communities around the world have acknowledged this problem, but we have challenge that of saying, if this equipment is a lot cheaper, and what are you saying, america, we should by then . There is no american company. So you think competitors from erickson, gnocchi and samsung, all Great Companies but none of them have the wherewithal of their countries their locating located in to match the financing of the china inc. Can bring. We may need and this is a pretty dramatic consequence but theres a lot of conversation going on. We in this country have always avoided notions of industrial policy where the government tries to pick winners or losers. I think some of that when were competing against the nation of size and scope and focus of china may need to be rethought. So we may need and where having conversations that say should we with our five eyes partner or other ventures think about how we can combine and have, doesnt nasa had to be american, but western, and i say western any concept of geographic not geographic but countries that were first brought to attention, japan, korea and australia, open democracy type equivalent that would have Quality Equipment with the financing able to compete. That would be, that is a dramatically different approach than anything weve thought about in recent times, but it is driven by the fact that when were competing against china with its size, scope, economic heft, did a intellectual capabilities, were going to have to think differently. I want to ask what other question and then well open it to the audience so be thinking. You made i think a big point of differentiating the government from the people of china. I think everyone appreciated your call to not demonize chineseamericans or the chinese nationals were studying among us. But you also noted the importance of both the business sector and the University Academic sector participating in a partnership to address the shift that you so articulate outlined. How do you assess the risk benefits of the engagement, the kind of very fruitful, which engagement with academia, with business, with people to people, with the need to think differently . How do we move on that . Let me try to take that a couple different ways. First, ive been making this point, particularly visavis my beef is not with the Chinese People, and the best indication i think of the fact that, is the people of hong kong. The people of hong kong are expressing in ways remarkable, remarkable courage that last what is Commerce Party system. I think that strengthens the case and many students who are studying here the first get exposed to what happened to them at square, the get exposed to different democracy. We need to nourish that emanate to be more supportive of the folks in hong kong but also constantly be careful in language and framing that this is not anticheese. It is particularly a concern for chineseamericans who are rightfully, horribly afraid that there was an incident back in the 80s, i forget the gentlemans time who was killed, from chinese ancestry during the 80s because people thought he was japanese come drink the antijapanese phobia of that period. You clearly see the kind of buys that took place against muslimamericans after 9 11. It is essential, and i dont think our government has been nearly a good enough job engaging with the Chinese American Community on an ongoing basis to say, because they are very much the trying to be exploited by wechat and by other tools of the chinese use against that the aspirin and theres a lot of scorn on particularly and australia. So put that on one side what we need to continue. On academia it is a challenge. Throughout a 63,000 students all paying 100 cents on the dollar tuition. Many of these university have become addicted to that tuition flow. And these are great students and this is an area that we need to be very thoughtful about also have to acknowledge, many universities are kicking off the confucius institutes who really manipulate the students, but the number of our top universities that at intellectual property theft in the last five years has skyrocketed. Let me get to the last point matt, which is with business, and this is the part where weve had some pushback, when they see some of her friends in private equity who, much of our bases to mary has acknowledged this but the private equity folks who ney by investing some of these chinese Tech Companies, or helping build the surveillance state and the social Credit System that would make orwell blush in terms of levels of surveillance, and some essay they bear no moral no more responsibility, i think we really need to expose this and we think it. What do we d aut, given this, agenda with the terrible human rights abuses happening right now against the uighurs . You mention the hong kong protesters. What will be able to do about that . Thats again where, when america doesnt make its priority human rights, individual freedom of liberty, freedom of expression, we lose our moral force. The fact that many countries, muslim majority, signed that letter supporting the chinese policy against the uighurs is pure economic intimidation. It is extraordinarily disappointing that this administration has not spoken up. Of. On the other hand, i think about senator rubio. I think a lot about my republican colleagues. They have remained stalwart in speaking up about american values, and 98 of what i went through today, maybe not the trump parts, but the other 95 i think most of my republican colleagues will wholeheartedly agree on. Lets take three questions from the audience. We will start with this jump in right there and then come down here to the front row. Go ahead. Thank you very much, start one of her to talk about the importance of working with our allies please identify yourself. Thank you. My name is patrick and im with the Telecommunications Industry association and overcome global policy. Huawei is not a member. You talked about the importance of working with our allies on a lot of these issues but i think its challenging because not about our allies, or not all allies in europe or other places are necessarily on the same page and would be willing to limit own commercial interests in some of these issues. So how do we convince them, how do we work with them to push this agenda . Were going to down here in front and then lets actually go here with this gentleman and then pass it over there. We will do the three. Thank you very much, senator warner. Doctor elaine, associate director of you acu in kiev, ukraine. Id like to focus a little on, if you would expand on your thinking with regard to u. S. Higher education institutions, and what could the u. S. Government on a larger scale due to support u. S. Higher education institutions so that they are not so back into the corner, as you pointed out, with foreign students and with a third of them coming from china . So much is based monetarily on the survivals in the case of the rising of Higher Education costs and the United States. Of those institutions needing to bank on the students, because without it, our students cant move forward. Thank you. Thanks. We will let you take a batch. Senator, im proud to be one of your constituents in virginia. I was you have to introduce yourself. Im mobley. I was on the China Commission as a commissioner, and what i saw was a change in our corporations from takeover to shareholder ask you to get to a crisp question. Okay. I saw the Chinese Companies being able to play on that that are companies would transport r d knows that i was delighted with the Business Roundtable stated recently that the moving away from that emphasis solely on shareholder value back to a more stakeholder valued system. Im wondering if thats part of the issue and we should be addressing and taking on the china challenge . Ill try to do this quickly. One, more state and federal support for Higher Education. Again, chapter and verse, the decline and support in terms of public dollars, we simply increase the debt limits of our students. My 22 friends or one for president obama got a variety of ideas. They have a bunch of ideas and that bucket but we have to make Higher Education both more affordable and more accessible for americans. At the same time recognize one of the greatest assets of our country have been foreign student who stayed and decide to build their business in america. Northern virginia is 40 of our Tech Companies are started by firstgeneration americans. I do not want to walk away on that attracting the worlds best and brightest and, frankly, we need immigration policy actually allows i would think more of his qualified students to stay here if they choose that because after both, the worst of both worlds at this point. With incredibly bright people coming and standing, many of them wanting to stay but we are not very immigrant friendly right now and its very hard for china when they have the ability to threaten the family if you dont come back, and the other students they can simply, if theyre not welcome here they are welcoming canada, australia and the uk that we need to emulate. In terms of the question mark stakeholder versus shareholder primacy, i actually support what theyve done proper to make sure those are more than words. Candidly, and this is would be a much haphazard my spiel on this but we need to make capitalism work and i feel that will go to this issue, good investment in Human Capital and how we communicate because the Chinese Company with their state support have a much longer time horizon and dont have that enormous pressure to make three cents next quarter that then sometimes make the American Companies disinvest in r d in hopes of longerterm issues. In terms of the telecom companies, i think most nations are starting to understand, at least at the intelligence level, community level, that huawei is a longterm security threat. And its really based on two two issues. It is based upon the vulnerabilities in 5g, on Software Updates but is ultimately based upon the fact if you make your country dependent upon a system from a country where it is no independent judiciary or rule of law and that company at the end of the day is loyal to the political party, not to an open trading system, youre going to be vulnerable. But we have to couple that with, one, the ability to think about how we help finance the way we did the first three or four generations of wireless where the western companies could provide the same kind of financing. We have to provide the same kind of financing whether its an expanded five eyes separate or even greater effort and we also have to have an alternative that we can say, and this is we get into an area where weve not done it before and industry might, wouldve problems if we start to say here are our one or two champions that have the heft and the staying power. As much as i respect the three companies that are out there, i measured in it and think they have the staying power to compete longterm against huawei back by the chinese power. Over here, ambassador, right there. Keep your hands up. Go ahead and then we will take to make more. Thank you so much, senator warner. In your remarks you mention sorry, my name is , senior fellow at the u. S. Institute of peace. In your remarks you had mentioned the growing outreach of china and the use of its military forces away from home, but then it can be argued that at the time of the ascendancy, most of the western powers they did exactly the same china is doing. My question is, isnt this criticism slightly out of place and selfcontradictory . Thank you. Repeat the speedy you mentioned about the growing chinese outreach and the use of a military forces away from home. Thats something you mention in your remarks. My question is that it can be argued that at the time of their ascendancy, most of the western powers, they did exactly the same the china is doing, so isnt this criticism of chinas behavior slightly misplaced and selfcontradictory . A couple more questions. Lets see, this gentleman here and write down here in the front front. Tim aiken, also a constituent of the syndicate. Thank you for being here. Prospects everybody Transpacific Partnership on sorry, a second question ill try to work in, what is the sustainability of the current, based under intelligence perspective, of the current communist leadership . Is there an opportunity for change and how might that occur . On the cycling id love to tell you but but i would have o kill you. [laughing] thank you so much, senator warner, for presentation and overview where we stand right now. Im also your constituent, so appreciate you. My question is currently mention theres 750 billion investment into the fence. Thats how defense budget. How do you think a some what you said it has to be reallocated and where new investments perhaps need to come, and should we make some particular Educational Programs and national priority, say create legislation to support that . Thank you so much. The first gentleman, ambassador, your critique is 100 accurate. You know, in many ways the west had these same expansionary imperialistic tendencies. I would argue that even if not fully implemented, at least the underlying values that the western governments said they adhere to, democracy, rule of law, individual rights, and some expression of freedom, while not perfect, was at least the underlying argument. I think what makes, what i fear that china is doing is Chinese Military expansion is still relatively small. The belt and Road Initiative is good oldfashioned 20th century imperialism in a different suit. But what concerns me is that what china is actually exporting is an Economic System that is kind of a state run capitalism, but i think more frightening is what they have been able to create in terms of a surveillance state using technology to monitor peoples behavior in a way that is pervasive beyond anything that even the soviets expected. If you are saying here we will build your power plant, build your roads, offer you deeply discounted huawei equipment, and he put that equipment in, we can find a way for you to monitor all your people and all your dissidents . That to me is a clash of values that democracies, the matter where theyre located around the world, or people who inspire and moxie the matter where you live all over the world should be concerned about. In terms of tpp i think we look when it tried to stop not as a trade you but as a National Security. The fact that both Political Parties have kind of walked away from multilateral trade agreements is a concern to me because i think there is a reason that we can help build those values, and if we do it right, whether tpp, some argued many of the countries we have bilateral relations with, i still think some International Economic security, order that pics asian parts of the americas, is an effort worth reinvigorating. But the rest of the group has moved on, as you know. I think there needs to be back on the agenda. To your question, i think that let nikki two examples. Ive also had a little bit of time and focus on the washington intervention into our democracy in 2016 and what russia did against us in 2016 also did to the uk and the brexit, the french president ial elections. If you a up all the russians spent in american intervention, brexit vote in the french president ial elections, its less than the cost of one new f35. We know russia, china iran and others will be back is because its effective and its extraordinarily cheap. It will not hurt them, we cannot take the 750 billion and move it to 1,000,000,000,000. 5 a year if are going to meet all the needs and cyber in all the new investment areas and we need to make sure our grades and our systems are safe. But the willingness of the establishment who said to me, that we agree with you but we really do not have a process that says how do we actually reprioritize if we are going to take 250 billion of the 750 and moving into research. I would argue for the longerterm of economic and power and values, that might be a better investment than simply buying more 20 century stuff. Senator, you have given us a very comprehensive and very thorough framework both with challenges and prescriptions on how to move forward, i want to thank you for taking time were great in turn. Grateful that some do with your background. Thinking and did. And thank you for this opportunity and i think the audience, that was the longest talk ive ever given. I was getting tired i can imagine how tired you guys were. No means is a fully competent to pray. Live to a conversation on u. S. Military property and into pacific regions with the u. S. Marine corps live coverage from the Heritage Foundation on cspan2. Im kim holmes the executive Vice President we are very excited and very proud and honored to be hosting this mornings event. Before we get started as a courtesy to our speaker at the to take a moment to remind everyone to do a final check to make sure your mobile device is siler