Transcripts For CSPAN2 Hearing On Global Trade Online Censorship 20240712

And online censorship by countries such as china. Richard gere chaired the International Campaign for tibet testifies at the Senate Finance subcommittee hearing. The Senate Committee on finance come subcommittee on International Trade cousins and Global Competitiveness will come to order. I know this seems a little strange with an empty room except for three witnesses live in front of me and many of our colleagues are going to be joining us virtually, but i want to welcome all of you nonetheless to this important hearing. This subcommittee continues to do its work in exploring the unfair trade practices of foreign governments, especially china and russia. The topic of censorship in china is a common one because its a growing effect on business in the United States. Last fall, for example, the National Association had its Market Access blocked in china because an individual american citizen using a media platform not even allowed in china expressed a political opinion. Now the topic has become much more important. The lack of timely and Accurate Information but of the covid19 due to chinese censorship has contributed to the havoc wreaked on our economy and health and indeed the pandemic. This story is nothing new. For some joining us today chinese censorship has long been growing and has long had a negative effect on people around the world such as those in tibet or the uighurs in sinjar province. First i want to set the scene for what censorship actually is at the simple dictionary definition is a good place to start. The suppression of provision of any parts of media that are considered obscene, politically unacceptable, or threat to security. Today well focus on how the use of censorship has become a barrier to global trade. When the World Trade Organization was founded, two exception to the principle of National Treatment and mostfavorednation were created. Those are for public morals and National Security. Notably, theres no exception for a country to restrict trade because it deems something politically unacceptable. The discussion over reforming the w. T. O. Multilateral talks on ecommerce and the prospect of a face to bilateral trade deal with the china progressing, this subcommittee is uniquely positioned to inform congress, the public and executive branch on the use of censorship as a nontariff barrier to trade. We will help determine if the suppression of information, data, goods and services via Digital Media by countries like china constitute a trade barrier in violation of the w. T. O. As well as multilateral and Bilateral Agreements and practices. If so, we will look to determine the economic damage caused the human, cultural, business and political ramifications, and what remedies are currently available or should be created to combat this unfair trade practice. On a bilateral basis what is clear is the lack of reciprocity in countries like china or russia and the United States. The Chinese Government spends billions of dollars to promote its topic and overseas, a form of offensive censorship. For years russians broadcast state propaganda in the United States and has justly been designated as a foreign agent. The lack of reciprocity accident of our system of Free Expression to promote these countries agenda online, in the become entertainment as well as our education system. Meanwhile china and russia do not grant the United States the same access to its markets or media. Instead, china has been expelling our media come having kicked out three wall street journal and other reporters earlier this year over chinese censorship of covid19. For centuries countries locked trade through physically restricting access to their ports. Today the same thing happens but with firewalls, filters and outright restrictions to access your can fact nearly 100 of Global Internet traffic travels through through a crisscrossing network of undersea cables that form the backbone of Global Digital trade. These cables are another front in the Global Technology race with Companies Like Huawei Marine rapidly moving to control the media by which content and trade is censored. In the era of information where data is a new gold, the block your filtering of that traffic by nationstates is a growing. This censorship is fragmenting our markets, culture, and understanding of one another. The internet itself is becoming less global. Countries like china and russia are not only building their own infrastructure to cut themselves off from the world, but exporting their authoritarian model to other nationstates to effort such as the digital silk road. Its imperative that congress support our nation in meeting this challenge, and thats what i am working together with all of our colleagues in the senate and in the house to include parts of the chips for america act in the National Defense authorization bill currently on the senate floor. If we are forced to rely on china to build our networks and our technology, the world we know will be much less for your and open to expression of opinions and do business. This bill will help us create our own Domestic Production capacity for high in semiconductors that underpin the technology we use in our daily lives. It will also let the United States remained a Global Leader in promoting free trade of goods, information and speech. Finally i look forward to discussing what remedies are available to address the abuse of censorship is a nontariff barrier to trade. Last fall a i chineseamerican constituent of mine in texas reported he was censored here on american soil by the Chinese Government. His american we chat account we shut down for supporting protests in hong kong. His response was, quote, if you censorship in china, fine, but in this country, im a republican but i suffer the same as democrats. We are all censored. I look forward to explain this topic in the same bipartisan fashion in which we always hope to proceed. Its time for congress to ask hard questions, and thats why with called our panel of four experts you today to discuss this issue. Let me now recognize Ranking Member casey. Mr. Chairman, thanks are much for this hearing and what you think eyewitnesses for being with us today. This is, as the chairman has noted, the third in a series of hearings held by the subcommittee outlining Chinese Governments Civil Military agenda and efforts to influence the economic and geopolitical order in a manner that benefits its authoritarian and anticompetitive practices. Just yesterday, the Chinese National Peoples Congress passed a National Security law for hong kong that significantly erodes hong kongs special status and based on available reporting, will deny the people of hong kong the right to protest, assemble or the right to criticize their government. The United States congress has been clear time and time again the citizens of hong kong must enjoy certain rights that are distinct from mainland china, and efforts to undermine the status quo is an affront to the people of hong kong and decades of International Agreement regarding the status of hong kong. As ive said this before when it comes to china, we must work with our allies to execute a clear and coordinated strategy. This applies to trade and to the Chinese Governments most recent efforts to erode the rights of the people of hong kong. Here in the United States, we are in the midst of a Public Health and jobs crisis. So much suffering all across our country. We have seen the cost of our reliance on a Single Source supplier, and more to the point our reliance on production from a nonmarket economy. Last year, senator cornyn and i began this effort by outlining the main issues related to Market Access in china. We then focused on specific initiatives and actions undertaken by the Chinese Government, starting with the belt and road initiative. Today, we turn our attention to censorship. The actions undertaken by the Chinese Government include direct barriers, such as blocking movies from entering their market or restricting content, to blocking internet firms, to dictating content related to chinas territorial and economic claims, to demanding action or inaction by businesses related to taiwan, hong kong, tibet, and the ongoing human rights abuses in xinjian. The Chinese Government has become increasingly assertive in its demands within and outside of its borders. Their mandates related to extraterritorial censorship is particularly troubling. The Chinese Governments response to a message of solidarity for hong kong by the general manager of the houston rockets, brings to light the lengths the government will go to censor speech, no matter where in the world it occurs. The intended message sent by beijings disproportional response is clear the Chinese Government can exert command and control over any enterprise operating in china, public or private. Simply stated, the Chinese Government is using its market power to stifle speech of our firms and people. These actions are inconsistent with our principles; they are inconsistent with our values, and those of our allies. The introduction of the corporate social Credit System takes this activity to a new level. The actions undertaken by the Chinese Government are clearly restrictive and discriminatory. They are insidious and counter to the necessary conditions of a fair, global, economic system. Since the sink was originated, originally scheduled i should say in march, we have seen all too clearly the cost of relying on china, a nonmarket economy, for production of our nations critical capabilities, whether that is personal protective equipment or otherwise. I recently introduced the market economy sourcing act which will begin to rightsize supply chains towards the United States and other market oriented countries. This is but one measure that must be adopted to refocus our trade rules and the Global Economic system. If we hope to sustain market oriented principles for the next 100 years, we must take action now to ensure competition and market principles are not simply words in a textbook, but rather infused into our system of government and governance. When it comes to trade, we must be responsive and creative to address challenges and harness opportunities. There is no doubt congress, citizens and businesses must support and defend the Economic Security of the United States of america. I look forward to hearing from our witnesses and discussing potential responses, which, in my view, should include the required disclosure of these types of requests to the appropriate federal entities, and trade rules that prevent freeriding from nonmarket economies. Thank you, mr. Chairman. Thank you, senator casey. Now i would like to take a few minutes to introduce eyewitnesses and look for hearing from all of you today. I ask all witnesses summarize your written testimony and try to abide by the fiveminute rule. Well come back and ask your questions. All of the written statements will be made part of the record, without any objection. Our first witness is mr. Richard gere. He is chairman of the International Campaign for tibet, headquartered in washington, d. C. Of course mr. Gere is internationally known actor, social activist and philanthropist whos worked for more than 25 years to advocate for human rights for the tibetan people and preserve the tibetan culture. He is also cofounder of tibet house u. S. And creator of the cure foundation. He is cosponsored five historic visits to the United States by the dalai lama. Mr. Gere i understand you had a recent addition to family. Congratulations on your new son and you for being here. Next i like to welcome nigel cory, associate director for trade policy for the Information Technology and Innovation Foundation here in d. C. Mr. Cory is an expert on data and digital trade issues in the Global Economy. He spent eight years working for australias department of Foreign Affairs and trade which includes positions covering Global Economic and trade issues among g20 countries, and at the World Trade Organization. Hes also a diplomatic postings in malaysia and afghanistan. Third i would like to welcome beth baltzan, a fellow in the open markets institute here in d. C. Ms. Baltzan currently focus on the impact of monopoly power on trade and its consequences for National Security. She privacy serve as democratic counsel for the house ways and means trade subcommittee. She spent six years as an associate general counsel at the United States trade representative where she participate in trade negotiations and litigated trade disputes. She has been three years detailed in the Senate Permanent subcommittee on investigations. And finally i would like to welcome mr. Cleve willems who is a partner at Akin Gump Straus Hauer Feld here in washington, d. C. Esther williams currently advise a variety of clients on International Economic law and policy matters. Before he joined the firm he served as the white house at the white house as Deputy Assistant to the president for International Economics buddies represented the United States as a key negotiator with foreign governments and litigated more than 30 w. T. O. Disputes. His work on capitol hill on the House Budget Committee and for the former speaker paul ryan. Thank you very much for being here. Mr. Willems and oliver witnesses, and mr. Gere, if you are there, please proceed with your opening statement. Im here. Somewhere. Thank you for joining us. Yeah, i mean, this a bit bizarre. I certainly prefer the facetoface but lets engage each other anyhow. Chairman cornyn, Ranking Member casey, embers of the committee, thank you so much for your introduction in inviting me to testify. Its been 35 years since i first has been in congress as i was on behalf of our Central American brothers and sisters and then of course on tibet for the last 30 years or so. Tibet has certainly been my compass at is help me navigate through the world and through washington and currently through all of my life if this is the first time i testified he for the senate since i last met with one of your greatest colleagues, john mccain. He was a good man, a good friend. As well as the dalai lama to the tibetan people. He certainly enlisted the best of us. I like john mccain and im sure many of you, i hope our government can deliver at its best known for the american people, but for the millions of people all over the world who look to us, look to the United States and its a democracy and its freedoms and its openness, its source of inspiration and refuge while they live under oppression and bylaws. American leadership is at its best when it sets its of you its view beyond the horizon of the challenges and opportunities that lie ahead here with the rise of china in the world today is that something beyond our horizon its right here, right in front of us, in our face and affects our daily lives, our workplaces, our freedoms, our privacy, our health, obviously were finding out, our elections and it will certainly shape the future of our world. After looking at the committees work on the Chinese Government plan since the 249 to replace the u. S. On the world stage and advance the authoritarian model of you were in the world, im happy to offer my experience to this exit accidentally importat conversation. The conversation about the future of our relationship with the chinese is crucial not only to the u. S. And franco weve been tragically naive under both republican and democratic administrations, but it is equally crucial for our democratic allies. Ive been involved in supporting the dalai lama peaceful coexistence with the Chinese Government for almost 40 years now. When it comes to china tibet supporters have been in for the long haul. We knew that what was happening in tibet would not stop there, and that chinas authoritarianism would expand well beyond tibet, as do we see in xinjian, especially in hong kong and beyond chinas borders. We have no quarrel with the Chinese People. We wish the Chinese People to enjoy development and quality of life improvements and opportunities and joy and happiness with their families and their children. But what i fear is the Chinese Communist partys model of development, that is predicated on control, dominance and violence. Chinese leaders have often quoted an old chinese proverb in private, wai ru, nei fa. On the outside, the benevolent. On the inside, be ruthless. I recall vividly a time in the 90s when a very strong Bipartisan Coalition of members in Congress Called on the white house many times, the condition chinese mostfavorednation status, clear criteria that would protect the rule of law and human rights. That coalition unfortunately was defeated by powerful interests with shortsighted financial goals and a very naive understanding of chinas 100 year plan which they are probably did the years ahead of already. Conventional wisdom, this is allow by itself produced meaningful political and social reforms. As we now know the opposite has proven to be true with more restrictions imposed, thomas Party Control of religion, mass incarceration, tracked anselmo l forms of dissent including concealing article information about the spread of the coronavirus. We also see the Chinese Government using economic policies to pray on weaker countries with extremely dangerous belt and road initiative, the longterm plan to control natural resources, supply chains, trade, ports and sea lanes. The point im trying to make is that the environmental human rights and Worker Rights reforms we advocated for then would also protected the larger economic interests of the u. S. And our allies now. Let me give an example. The u. S. Open to stores to chinese produce an and various forms of chinese cultural influence, including state media. Weve even allowed to statesponsored confucius institutes to gain a foothold in our universities, and chinese Companies Like huawei has spent large sums of money to lobby the u. S. And into the u. S. Markets. But as you also know, china does not reciprocate. Accessed the Chinese Market is limited. They do not allow American Media to broadcast in china. This lack of reciprocity, fueled by an orwellian assistant of state censorship and powerful that powerfully restricts the Chinese Peoples accessed information and american and foreign Media Companies access to one of the Worlds Largest media markets. In fact, china has repeatedly insisted that use Tech Companies accept strict censorship to gain access to its 1. 4 billion people. Another example is freedom of movement. Americans have a strong interest and appreciation for the tibetan people for the unique buddhist culture and the fragile and very beautiful in. It is the roof of our world. It is the third pole and it is the greatest source of the worlds fresh water. But heres what happens in tibet. The chinese, highly restricts access to tibet for americans including journalists and politicians like no other areas of china, while chinese citizens face no such limitations when they visit the u. S. They go where they want. Now, congress recently took action and passed the reciprocal access to tibet act which is a good company rationalizes somatic response that we hope the state department for implementing its symbol required by law now. As an actor which is why i hear i think, i know youre interested in my experience in the Entertainment Industry and growing chinese influence there. While i cant say that my speaking out for human rights in china has directly affected my career, i and probably an unusual case and we can talk about that more in the q a session. Theres about the accommodation of chinese combination of chinese censorship coupled with the desire of American Students have access to chinas market can lead to selfcensorship and to avoiding social issues that Great American films once addressed. Imagine Marty Scorsese is life of the dalai lama or my new film red corner which is highly critical, imagine cindy made today. Or not. As i conclude my remarks, i would like to call your attention to to make bills innocent. The first is sponsored by senators cardon, casey, gordon, rubio and widen and all we passed the house with overwhelming support. The tibet policy a sport act strengthens u. S. Policy in tibet while addressing one key and overriding issue, the selection of the next dalai lama which cant be allowed to be controlled by the communist party, but only by tibetan buddhists. Im sure you support this basic principle and ask you to cosponsor this bill and raise it with the leadership for swiss passage of the Senate Foreign relations committee. On the second bill is the mongolian neighbor trade act introduced by senators sullivan ben cardin, cosponsored by Ranking Member wyden and majority whip soon. This bill would grant a democratic and independent mongolia better access to u. S. Market for cashmere products manufactured in mongolia. We can go into the slit of the mongolia is under extraordinary pressure and threat from china now. This will greatly benefit mongolia, create jobs for mongolian women and reinforce democratic institutions. Its a concrete way to strengthen democracy at the most critical time in the indopacific and will help one goalie of remain independent. I call on the senate to pass this bill as well as soon as possible. Thank you very much for your attention and i look forward to your question. Thank you for joining us. We would hear the other Opening Statements and come back for some questions. Mr. Cory. Thank you. Good afternoon, sedative. I greatly appreciate the opportunity to testify. Censorship as a disguise for talk of censorship. Censorship means overly broad and discriminatory control of digital content, distribution platforms, infrastructure in the firms involved. This has cost the us economy dearly but this cost will only rise of china is able to export its model of digital guidance to other markets around the world. The United States needs a stronger strategy to push back on the trade impact of censorship in china but to prevent it moving to other markets. Stakes are higher. If we fail to act the us could lose its edge in the digital economy. And other disputes that are internet policy. And china means overly broad and discriminatory rules around content illegal. Other countries are attracted to it. They are drawn to it for political reasons because it provides them with control and also as protectionist tool because they like the economic impact. Censorship is not the only restrictive tool that china has used that is a central one led to chinese internet consumers having an internet experience that is completely different from most people in most countries around the world and it is known china uses a great firewall to block access to thousands of websites which is a clear barrier to Market Action but it is only one of many. It is less known censorship is a key factor that leads to us firms from being prohibited from operating in key Internet Service sectors and how it plays a part in the opaque, discovers were in restrictive content review process for video games, videos and tv and a key factor that limits or restrict their ability to connect to the Global Internet which renders their ability to use cross border, to access, use or develop software on a crossborder basis. The primary motivation for censorship in china is regime stability but it gets the economic benefit and the economic benefit to china and cost to the United States is insignificant in over the last 20 years a host of Us Industries and firms blocked hundreds of billions of dollars in revenue and while it is hard to calculate an exact cost the Innovation Foundation conservatively estimates that for example google which withdrew from the Chinese Market in 2010 has lost in excess of 32 billion from 20132019. In contrast amazon and Microsoft Cloud Services which are restricted in china estimate the loss of 1. 6 billion over a 2year period from 20162018 is why should we care about this . This lost revenue of billions of dollars would have supported innovation and employment in the United States. Us policymakers want to exacerbate the impact of censorship in china by calling for us firms to leave china or stay out of china, to do business there. Without us firms, chinas internet, connected to the internet. There should be no doubt americas economic and security interests, Many American firms as possible so goods and services at the Chinese Market, other dollars worth of digital and physical exports is a dollar the chinese firms dont turn at the dollar us firms can otherwise use to reinvest in research and development and support economic and Employment Opportunities in the United States. It is also important to recognize human rights and trade are not mutually exclusive. The government should lead the charge around the world in advocating human rights and democracy but in china and elsewhere, able to develop a more nuanced, detailed understanding how it is playing out and developing a countering strategy, china has deployed censorship the way it has to ensure it doesnt spread further. As a consequence we recommend to congress the us International Trade commission for detailed study into the impact of censorship, the city could form the basis of new rules to be used in future trade agreements in the department of commerce but could also form the basis for more holistic global autonomy strategy that is needed to counteract chinas ever to advocate for its own model, there is a fierce debate underway to which direction countries should go, which approach they should take in china is based on censorship and protectionism. I thank you for the opportunity to testify and look forward to your questions. Miss paulson. I am a fellow at the open market institute. I have been a trade lawyer for 25 years. I have worked at ustr, the Public Company accounting oversight board, senate permits the committee on investigations and house ways and means committee. All of these and for my testimony today. In 1989, there was an influential article called the end of history, argued the imminent dissolution of the soviet union reflected the triumph of economic and political liberalism and economic liberalism paved the way for political liberalism globally. This view permeated the the guys when we designed the wto and let china into it. Development in china shattered that theory. Rather than democratizing as a result of it coming integration into the Global Economy the Chinese Communist party weapon iced it using its economic leverage to quash the rights of foreign citizens in their home countries. Economic liberalism has become a vector for political liberalism. There was a mistake to identify Chinese State capitalism is the most salient ideological threat to democracy. When we look at the actual rules of globalization we see how this came to pass. We focus on liberalizing capital believing a laissezfaire model would produce ideals, economic and political outcomes. We didnt guard against government that would exploit the system, the fundamentally anticompetitive 0sum strategy. It is that anticompetitive strategy, not comparative advantage that led us to be economically defendant on authoritarian regimes. It is wrong to say we couldnt have seen this coming. The founders of the multilateral trading system sought to prevent it. They designed a regime rounded in fair competition, cheating through currency manipulation, labor rates a personal monopolistic behavior was prohibited. They presciently warned without these, state trade and governments would destroy Free Enterprise and democracy. These were memorialized in the havana charter by 15 and entered into force. The charter failed because the American Business community rejected it. We managed to forestall the threat to democracy and Free Enterprise by keeping the soviet union out of the gap. A modern state trading government into the wto and the prophecy is coming true. Addressing the ability to interfere in Civil Liberties requires us to reduce its economic leverage, i offer 5 recommendations, we must address our supply chain dependency, so much has changed since early march when this hearing was first scheduled. People understand in real terms what it means to have a supply chain dependency problem. For the First Time Since the 70s, their strategic industrial policy, we need to identify critical sectors, map out supply chains and ensure we have diverse sources not just to finished goods but components as well. We must recognize unless we reform systemic Global Trading incentive it will be difficult for us to sustain supply chain diversification, as long as will tolerate anticompetitive inducements to offshore we must anticipate that any newly rebuilt supply chains will end up back where they started. We need the rate of reform at the wto, the narrow focus on subsidies is grossly insufficient to deal with much more structural problems of the ccp anticompetitive approach to trade. Third and related to the question sustaining supply chain diversification we must keep an open mind about tariffs which can be a useful tool for driving behavior. The United States has the lowest bound rate of the wto, coupled with anticompetitive cct behavior, made it off nuclear could have to offshore production and export it. Until we achieve global reforms we must consider tariffs to be one way of incentivizing the source and move on. Fourth, we should work with our allies but be realistic. Many of our allies simply do not see the ccp as a threat to economic and political freedom. Supply chain diversification is one area where we can cooperate with countries that share our values. Fifth, we must accept the true Market Access in china is the loser he. The ccp will give us as much Market Access as they want. The more we telegraph that we believe unfettered Market Access is possible the more leverage they have over us. We are in a position of weakness and increases their ability to interfere with our civil liberty. Thank you for the opportunity to present these. Thank you very much. Mister chairman, Ranking Member and members of the committee, thank you for the opportunity to testify today. China is expanding its use of censorship to promote National Interest with adverse consequences around the globe, this is driven home for us by suppression of information on the coronavirus and the impact this has in the United States. While censorship is one of the many tools used to promote party interest, talking about others already today, it is something that has not been prioritized in policymaking in the state won negotiations, in the administration, it is right for further exploration and action. Chinas subactivities manifest themselves in many ways. One primary example is the great firewall which restricts freespeech through website blocking and filtering and according to ustr china currently blocks 10,000 websites and as i have been getting ready for this hearing i see other estimates that put that number closer to 20 or even 30,000. China controls the mystic news outlets, to avoid unfavorable stories, on issues related to the economy in the coronavirus itself. They are equally troubling, during last years and be a twitter controversy. China retaliated against a single tweet by, prohibiting the broadcast of all games of all teams in china which is a clear effort. They intended to speak out and want to do business in china. This is the tip of the iceberg. Chinas as a credit scoring system will enable its regulators to monitor and influence behavior in real time. Overall chinas policies and able to express disfavored views, spread propaganda and promote a Business Environment when its company can compete. China has been encouraging other oppressive regimes to adopt similar policies and back down in the face of us pressure. After state department, chinese newsagents and china responded by expelling journalists from beijing and i find it ironic that chinas diplomats have taken to twitter to influence Global Opinion on a site that is totally banned in china. Wto, the us could seek the challenge chinas restrictions and for an Internet Service providers under the Service Agreement which bans prohibitions in this, nation. However these rules were drafted before the internet age, and not specific when it comes to censorship which could lead to uncertainty. China could try to avail itself to certain exceptions like public morals or National Security. I believe the us on balance has strong case given the time and resources it would take to bring a dispute and the uncertainty i mentioned, it is better to move in a different direction. How should we deal with this issue . Let me give you a couple ideas at the outset. First, we must consistently highlight chinas nefarious policies and use the full power of government to seek change. They pushed back against this behavior and we must not expect our companies to do it alone and we cant even always expect them to do what we think is the right thing. We need the government behind them. We must work with key allies to do the same. China will find it more difficult, to excuse its behavior if others stand by our side. Those others must not hedge their bets and must not send the wrong signal to china by adopting similar policies. The eus digital sovereignty agenda and discussion of the european firewall is a case in point. Third, i apply the same advice to us. As we seek to counter the threat posed by china we must be careful not to adopt the same policies we are condemning, policies that stifle free speech or increase Market Access barriers. This will backfire economically and will cause us to lose the moral high ground that is so important to building an Effective International coalition. Fourth, we should pursue a broad wto reform agenda with exquisite rules on censorship emma technology transfer, subsidies, intellectual property theft and ideas that are worth considering. We should require china to take on the same obligations as the United States and fix the dispute settlement system. The wto is falling short of its objective no doubt but abandoning the system that we, not china helped create would be a tragic mistake. China would like nothing more than to see the us create a system collapsed. Fifth, we should negotiate a broader range of trade agreements with strong censorship provisions including a revamped us eu japan trilateral and digital trade chapters with existing fda partners like australia, a new taiwan fda renegotiated tpp. Putting politics aside the tpp provides a great opportunity to encircle china with policies the state in contrast to its economic model. There are concerns about it but should be reformed like nafta which we bring into force tomorrow, the new us mca. Lets do the same thing on tpp. 6, we must pass new laws to protect us companies so they can access a market of over 1 billion consumers. Ideas by protecting employees for voicing opinions about foreign government, prohibiting us companies from complying with censorship requests and disclosing pressure received from the Chinese Government all deserve debate. Finally, we must not draw false equivalence between the Chinese Government and its people. Many good chinese citizens are suffering. With their voices muffled by the same policies i have been describing. A commentary briefly posted online in china earlier this year before it was deleted by the Censorship Police stated the openness of information is the best vaccine. Blocked ears and eyes are contagious disease and no one can escape. Thank you. We will proceed with a round of five minutes, let me start with you if i may, your courage in confronting the Chinese Communist party for its methods and tactics of censoring, retaliating and punishing those with whom it disagrees is commendable and i thank you for that. The economy has grown. We have seen more selfcensorship, the censorship that can be imposed by the government but also the practice of selfcensorship by companies and individuals that want to do business in china. Can you describe how chinese practices operate in the magnitude changed in parallel with the growth it has experienced. In the last 40 years china is not shy of letting everyone know they dont like what retreated well and it is to be treated well. The three keys, tiananmen square, tibet, and taiwan. They do call everyone, local, state, national, all over the worlds, the issues come up. In the last 30 or 40 years countries and diplomats do self censor now. They took it upon themselves not to put themselves in a position to be reprimanded by the chinese with some kind of economic access, giving the nobel prize, they were cut out from trade with china, moving on i see the same thing happening in the past few years. As i said before, we will not see any film made by a studio that was critical of china as an investment, let me go back a little bit and understand how the system works in china. There are only 34 International Forums that are allowed to be shown that year in china and 12 of those, has to be an imax film or 3d film at minimum so what they want is high profile tentpole movies, digital, cgi films, etc. Which are consumed at a high level in china and entrepreneurs make a lot of money, the two biggest distributing companies in china are state owned. The Film Industry is owned by the state in china so of course theres a lot of selfcensorship. What would have been a villain, chinese villain is now mercury villain. That means some of it is quite silly. There was a high profile movie where tom cruise was in shanghai and there is some underwear on a clothesline. The sensor objectives that because it made shanghai look like a less developed city. Christopher robin, not allowed to be screened in china because there was some amusement, it was recused in 3 into china. I see this, recently with me, there was a script that takes place partly in china and producers of at first balked at the idea of me being in the film and then they were taught and supporters into that of the dalai lama and they took a deep breath and said no no no, we will make the decision, talking about making a film, i am not allowed to go to china. I dont know now a very wellknown actress, chinese actress that i could work with him and absolutely not, they would never be allowed to work again and other circumstances, very talented chinese directors, one was in tears having to call me up and say his career would be over and his family could not travel so this is personal to a lot of people. My own career i cant say suffered at all because i dont make cgi films. My films wouldnt naturally be shown in china anyhow except underground and on the black market. We couldnt shoot it in asia, couldnt get insurance because of me and threat from the communist party but when it was shown, i did go to hong kong after that. It wasnt officially shown in china, going up the elevator, the elevator operator looked at the camera, was watching us in the elevator and asked him, thank you for the corner. There is that ubiquitous technical surveillance in a police state. The budget for surveillance in china is larger than the military budget. Thank you very much. Senator casey, you have questions . Senator casey . I understand we got a little technology issue. Let me turn to senator cassidy. Go ahead, senator casey. Mister chairman, thank you very much. I want to first note for the record, other members of the senate may not know this but strong pennsylvania roots personally and in your family, want to note that for the record and we appreciate that, we are always welcoming people back. Calling attention to issues over decades. In a manner that is not the kind of sustained effort those of us undertake, a lot more focused than we brought to bear on issues related to china, you have been sounding the alarm for years. I want to start with observations with respect to tactics and strategy, especially over the last decade, to compel or illicit actions, some cases government, a 2part question, your observations of tactics and strategies employed by the Chinese Government and what is your advice in the United States as well as congress . You hear me . My mother and daughter came from susquehanna county. I dont think susquehanna is larger today than it was in the 20s. Farming community, grew up making cows milking cows by hand early on. I still have family there and consider that my spiritual home. The big overriding thing from my point of view is we have to understand china is playing the ball game. They do have a 100 year plan and they are way ahead. You were very clever, they realized they were coming from a weak position and they decided they would be the cheapest place in the world to make products. This is well thought out from that side, what they were looking to do his own the markets which they do at this point. We get our medicines from china, most of the manufactured goods from china, everything from the store made in china. They own us in many ways and certainly that to them is controlling a world, the world we have bought into which is who is going to make the most money. We make some huge mistakes along the line, very shortsighted, very naive, very much smarter than us, more patient than us. They creep into power as we pivot away from asia and leave a vacuum. They fill it immediately, they fill it immediately. When we break up our alliances they come in immediately, they make allowances with italy right now. It is constant italy. It should be the chinese again, it is longterm thinking. Now that have made xi jinping emperor for life this hundred year plan will be continuous. We change administrations, focus, how we are thinking and approach the world, there are spaces in vacuums that are created in the chinese are taking them every single time. They created every open space. I talk to leaders all over europe, america, asia, please, do not take a loan to build an airport or a port from the chinese. They will take that airport, they will take that railroad. We see it in sri lanka and italy. The strategy for us is to step back and understand this longterm strategy for dominance from the Chinese Communist party. Having these alliances relying on tpp, relying on honest relationships with the eu, this is a world of strong alliances, cant confront with the chinese are doing and when win. I know you had a question. On the second round. Thank you. Thank you. Doctor cassidy, senator cassidy. You just said something. By the way, thank you for testifying, mister gary just mentioned creep into power, i kind of like that. Trying to ask myself how it stops, i am struck by your testimony because the chinese ability to do digital censorship to the economic power they are approved and it suggests the whole exchange they had in your thing, free trade by itself doesnt necessarily make things happen that has to be otherwise in Central American countries that workers rights, human rights and the environmental requirements we place upon them in order to conduct trade has increased their cost of production and put them in a competitive disadvantage for a Company Looking for a lowcost place to produce. They go to china which does not have the workers protection, the Environmental Protection etc. It slides that way, in multiple fashion, you ever thought of that . Is that to me . Am i pronouncing your name correctly . Very much. Thank you very much. This is something that we see with mexico as well. The answer to stopping this race to the bottom which is fundamentally based on anticompetitiveness, anticompetitive bases for trade is to incorporate these standards that the wto and it is surprising to me that not only the issues in central america, mexico and other places but the fire at has dream in bangladesh, the collapse, in bangladesh, it surprises me labor issues and Environmental Issues in the race to the bottom are not part of the wto reform package, there were labor roles in the have in a charter which is supposed to be the governing document for the Global Trading system going back to 1948. If china were required to adhere to these rules like everyone else then you would have the opportunity to mitigate the risk bottom we are seeing. You mentioned the problem with our supply chain going through china but going to be the lower cost as long as they are willing to sacrifice International Environmental standards, liberals, human rights, etc. Granted, vietnam might be lower cost in some places based on labor but even that is a further race to the bottom. Talking about bringing supply chains back to more secure places and decrease the Economic Growth to china by which they can coerce people into accepting their censorship what we have to take into accommodation what you are describing now, is that the essence, would you agree with that . We need a race the top, not race to the bottom. Labor is part of section 301, section 301 with respect to negotiations with china as well, why not. That is very helpful. I dont have my notes in front of me. Im not used to working remotely. The gentleman who spoke at the end. The need to confront the digital and censorship across the globe but tell me again how the us will do that, how do we get italy to not accept censorship when according to mister garrett, hollywood is accepting censorship . Thank you for the question. What i was referring to in general is we need a much more robust negotiating agenda with a range of potential allies that is more on the censorship question. We made some progress and some trade agreements, the us mca, japan digital trade agreement where we talk about nondiscrimination in the free flow of information across borders, but we can go further and deeper and more explicit on censorship and doing so will address the concerns i have about wto dispute and the uncertainty that can be put into place by chinas counterarguments. A broader trade agenda is the way to go. The other thing on italy mister geer was referring to is italy sign up for bold and road money about two years ago when i was in the administration but i was involved in calling it and getting it to stop, the problem, they were in an economic crisis, they wanted infrastructure offering it cheaply. It is a huge problem. We need to have an american alternative. We try to do that with the finance corporation, it is a helpful addition to the us toolkit but i would like to see us put more money at that effort and link up, with trading partners. And International Standards on development financing, standards about transparency and accountability, standards europe needs the china cannot. Another area to go. I yelled back. Senator menendez. Thank you for holding this hearing and thank you to all our witnesses. The movie industrys first for profit and access to chinas huge audiences makes it uniquely susceptible to the sort of selfcensorship the chinese commonest party, the ccp, likes to encourage, others to impose on themselves. One quarter of aquamans Global Box Office came from china. Disney earned 600 million off of avengers end game in china. That is a lot of leverage in the peoples republic of china, very clear that when it comes to movies it wants products that are not only entertaining but that all line with the partys worldview. Films that are not ccb propaganda pieces, given the role of china and the Global Box Office, what effect is china having on the movie industry overall. It is not as dark as you are describing in this moment. Of the 9 movies, those movies that you brought up were pure entertainment. Those will never have a problem of having access to 1. 4 billion chinese viewers but i do think challenging films along the lines of all the president s men or red corner that i made. How unlikely these films are supported by chinese investors. Especially if they say in advance which they offer 2, that there is no way they will have access to the Chinese People. How about even in the case, i get that those who are rather be 9 but even top gun matter, the producers removed references to the japanese and taiwanese flag at the request of the chinese investor, china has a lot of power to dictate their preferences. Is that fair to say . Very fair to say but very illustrative of the weakness. How silly is that . How completely ridiculous, the way the hypersensitive, the dalai lama, the kindest, most generous man on the planet, who is consumed with love and compassion and forgiveness, the rear mention of his name makes him crazy. The communist parties everywhere lack legitimacy and someone like the dalai lama for instance is legitimate. People love the dalai lama for deep and powerful reasons. You dont love the communist party. You abide by it because it is powerful and it controls you but you dont love it. Legitimacy, true legitimacy comes from the heart and that is what they are afraid of. Something that touches the heart and through the heart, the sense of right and wrong and decency, what would challenge even the idea of a communist party or totalitarianism or the kind of surveillance state they developed, anything that challenges that even in a poetic way will make them crazy. I agree with you, how small is it to be worried about the japanese or taiwanese flag but even something as small as that is something filmmakers were willing to submit themselves to. I agree with you on the dalai lama and appreciate my other formulations committee, what youve done in your long quest to have the recognition and freedom of the dalai lama to do what he does as a spiritual leader of so many but this is what we know the chinese are and what they do. Im concerned about their influence over us. I look at the fact that president xi has declared every foreign movie to be shown in china must be vetted by the central propaganda department, depending on the contents the ministry of state security, ministry of public security, the Ethnic Affairs committee and the bureau of religious affairs may be involved. I dont think they are letting at lighting or cinematography or editing. I think they are looking to preempt themselves, this is a challenge. I wonder, i said it to the panel. Does this influence filmmakers choices to preempt themselves from offending chinese sensors . What happens of the Creative Team is unwilling to make the sorts of changes china wants . You have different types of movies and certainly top gun kind of movie is not an art Film Festival kind of movie. It is massmarket entertainment. I dont know the changing of the flags on his uniform is a major blow to the soul of the filmmakers. Im not worried about that kind of film. Im worried about the rabbit hole one goes down at this point. If all of our films become primarily financed by chinese money then clearly you will see films that are there to glorify the Chinese Party in some way. That is a way down the rabbit hole. I think still serious filmmakers are going to make the kind of film they want to make. The commercial movies youre talking about, they want access to a massmarket and i cant blame them for that and minor changes along the way, i am more concerned about the soul of storytelling and movies and entertainment which is beyond the kind of marvel movie kind of moviemaking. Clearly are not going to have chinese that is done. It is going to be north korean from now on. But i thought those were paper tigers anyhow. I never felt comfortable with that in any event, but as i mentioned in my original talk the inability, serious films looking deeply, profoundly at the situation in china will not happen now. I just want to make one last comment. I understand what you are saying but sometimes the soul is lost stepbystep and dollar by dollar. That is the rabbit hole i am afraid of. Senator cortez masso. Thank you to the panel. I appreciate the conversation. Let me approach it from this perspective. Let me turn to hong kong. American and European Countries are receiving pressure to endorse National Security and other key actions toward restricting freedom and Civil Liberties, we know that. The pressure will certainly extend to other issues but what we have also seen is pressure on what to do in china and to change some of their, i dont know, policies, and principles, some of their products in response to the pressure on china. My question to all the panelists is what can congress do to support American Companies choosing the government pressure and propaganda. That is the challenge we have here, we just have this discussion on how American Companies are succumbing to the pressure put on Chinese Government. What do we need to be aware of in congress, what do we do to get into that market and at the same time, who we are. One comment here, to bring the attention of reciprocity, International Norms of reciprocity. We have to demand, weve given away too much, too much, we didnt have to. The chinese just are sitting back in their chairs going we got what we wanted again. Again and again, reciprocity, the norms of International Behavior, access to information. That is huge, we can demand reciprocity, reciprocity. In north korea into tibet. Reciprocity, the norms of International Behavior have to be demanded and we cant be drunk with shortterm goals of money. We have seen what it has done for 25 or 30 years. Let me open it up to the panel because earlier, you said there should be a study on chinas sensitive protection. What do you do . Because let me put it perspective. An opportunity to bring the organization to put pressure, focus on this reciprocity and censorship and protection. The study, a simple first steps in the clear signal the United States recognizes the decision is no longer some minor trade irritant, but a strategic, part of the strategic calculation with china and because what we are seeing is countries like my home country of australia, the United States, canada and the European Union are somehow waking up to what china and the Chinese Communist party represents to their trade interests, economic interests, political interests, it sends a clear signal and starts the process outlining the corresponding steps that the United States and taken that is multifaceted. That is addressing cases where Chinese Communist party action is applied extraterritorial he in australia and elsewhere documenting, bringing the transparency to that and setting up mechanisms to talk to us firms and industry who are in the position of trying to stand up to the Chinese Communist party to get a better understanding of what exactly is going on, what they are asking for, what is the legal basis because only then does the United States have information it needs to respond but importantly i think the study would reflect, the strategy it should lead to that the United States cant do this alone. It needs to lead the charge in making the case for what china is doing but the point has passed where the United States can do this on its own whether it was 10 or 15 years ago. It is a matter of fact that the United States needs to work with likeminded value sharing partners especially the european, japan and others in providing a collective response. That the best chance we have in china and its effect outside china. We will turn to senator wyden. Thank you, mister chairman. I appreciate our guests being with us and i take a great interest in this. Good to see you again, welcome. I want to ask about something john bolton wrote in his book, the opening dinner of the g 20 meeting in june of 2019 with only interpreters president xi explains to trump why he was basically building concentration camps. According to our interpreter trump said that xi could go ahead with building the camps, which trump thought was exactly the right thing to do. National Security Council top asia staff are told me that trump said something similar during his november of 2017 trip to china. Very witnesses on this panel, i would like to see if any of you believe that encouraging foreign leaders to build tension and forced labor facilities for religious minorities is anything but a repudiation of American Values . Does anybody think that that is not the case . That this is a repudiation of American Values . I dont know what crazy movie we are in all of a sudden. This is doctor strangelove. I cant imagine theres another person in Us Government or another person in american citizen who even remotely would be leave what the president said, would feel the same way, concentration camps are the right way to go. It is appalling. Anybody want to add to that . That sums it up. It certainly does for me and our family knows a lot about concentration camps. Thank you, chairman, good job, incredibly important hearing and i look forward to learning more about all you have discussed. I know that we have moved to the next questioner and you had your hand up to make a comment on the earlier testimony or questions, go ahead. Let me just comment quickly on the last two questions. This questions about the osaka dinner, i was out of that, i have no firsthand knowledge of it. While i was on the administration i worked with matt pitt under, ambassador bolton and others to push back on policies and ultimately action has been taken as it should. What is going on in that region is appalling, us and allies around the world need to stand up against it. A comment i wanted to make on the previous question was what we can do to help our companies and in particular we need to play a robust role at the government level. A lot of this conversation has been about how it is terrible we are trying to access chinas market because it gives more leverage. I might put it another way and say by having access to Chinese Market we are getting a lot of money that our companies can pump into research and development to make sure they are an innovation leader at of china. Another way to put it is china is subsidizing our innovation. If we look at the Semiconductor Industry that you paid a lot of attention to they get 34 of their sales in china. That is an important source of revenue. We should do our part like the chips act. It is important to look at this as the adverse consequences of Market Access and also the policy ones but in terms of helping our companies i like the idea i mentioned in my opening of disclosure, making our companies disclose when they are pressured by the Chinese Government, we should do that for forced Technology Conference reservoir, puts the onus on us law instead of the company and makes it more difficult for china to retaliate because the problem is not the us company but the Us Government so bring it to us, we can stand up. A similar thing i would consider is prohibiting us companies from complying with censorship with respect to activities they are conducting our jurisdiction and what i like about this, it is reciprocal as mister geer was talking about, the time of the pca ob legislation you have been looking at would say it is unacceptable for Chinese Companies to refuse access to our auditors who want to regulate their financial records and what those companies allow regulators is we cant do it for chinese law so lets do the same thing, tell our companies they cant comply with censorship because of us law and that is what china is doing to us so lets do it back to them. Just as it is an acceptable for them, they should center our companies and use robust response from the Us Government to help those companies. Thank you for mentioning the chips act. This is a major bipartisan effort to bring high end Semi Conductor manufacturing back on shore, and to reduce as mrs. Paulson pointed out the testimony of supply chains of critical technology. Imagine if we did not have access to that or the capacity to build it here in america. Obviously that is a huge vulnerability. The virus has taught us many lessons, most of them painful but some of them point to a much different path that we have traveled down before. We simply cant continue to depend on china because it is cheap, because of sensitive areas. I think senator brown is next if he is with us. I understand hes not able to be with us so mister geer, let me ask how much money does the Chinese Government invest in hollywood . Do you have a way of quantifying that . Im probably not the person to ask. I was looking through some material last night and there were some deals in the 250 million range, there were several in the 100 million plus range. We can run those numbers down. Last year, i was very much involved in the effort to reform the committee on Foreign Investment in the United States but we are focused primarily on Foreign Investment in technology and startups, the Chinese Government doesnt involve any distinction between the private sector and the military and in fact the private sector is compelled to share anything they have that the military wants with them and the communist party but given what you have described about the selfcensorship and the influence china has on the sorts of movies that hollywood makes, do you think we are to be looking more broadly beyond Just Technology to other investments china is making in the United States that helps facilitate the path they are on . They read us very well. There hundred year plan was to step back and look at the rest of the world and they saw the trajectory the us was on. If they could, money was the way and they began by creating products created, manufactured the cheapest in the world as we all know and that created the situation with the control of money. We are seeing tragically now for medicines, pharmaceuticals. This is going to permeate everything in our society as long as money is our prime motivator. If it wasnt for them, power and control, they gave the money part early on to make sure that control would pay off decades later. I want to go back to something mister corey said and emphasize it. The turn this Administration Made that the us should go along is a huge mistake in china. The only way we can counter chinese if the us and the eu our european friends now and japan and india create coalition. The u. S. Cant do it alone, especially in the situation where its America First and almost all those frankly naive cliches. Whenever interconnected world and lets be interconnected with the best of the world, and the best of the world still exists, our european brothers and sisters, japan, india, the great democracy of the world. We can do this together and create the world we want and counter the Chinese Communist party. Thank you. Senator casey, do you have any other questions you would like to ask . Mr. Chairman, i i hope you n see and hear me. We can see you and here you. Thats great. I was hoping at least for audio but thanks so much for the hearing. Just one question i wanted to ask earlier about the havana charter which she gave some of history of, but that it was signed by 54 countries but never went into force and that there was opposition from at the time from our business community. I guess i would ask you, in addition to the history and the significance of it, what still relevant today and come in particular how it relates to conditions of trade in terms of trade . Thank you so much for the question, senator casey. Theres been this narrative that the foundation of the Global Trading system was about terror of liberalization and nothing else. I think that narrative is false and extremely harmful and some of things mr. Gere was talking about the philosophy we had in the 90s about the condition in which we could the wto and let china in. If a look at what was motivating the founders of the system and were talking about additionally fdr and John Maynard Keynes and those who follow them, these were people that lived through the gilded age. Fixing income inequality. Fixing nationalism, political instability, authoritarianism. More importantly they had seen how particularly in europe authoritarian governments have been able to deploy concentrated economic power in the form of cartels and trusts to pursue an authoritarian agenda. They were not just thinking about italy and germany in the past. They were looking at the soviet union and that was timing is rather than fascist but the same fundamental problem which is this relationship between an authoritarian government and concentrated Industrial Production and that is why so much of the havana charter is about making sure youre protecting competition itself because they believe that protecting competition was a way of protecting democracy. Some of the entire line of thinking has been lost so lets look at what we confront today is this havana charter relevant today . Its a second gilded age. This goes to the issue with senator casey cassidygraham you just cant keep suppressing labor rights and expect not to have authoritarianism and a revolt by the working people. If we want to deal with these issues then we got to have a set of rules that promotes competition. We are seeing a rise in International Concentration and would bring all this to bear and look at whats going on in china, and in my view we see the emergence of a very things, the founders of the Global Trading system were trying to prevent which is an upsurge in government that is not only able to leverage Industrial Power to pursue its ends that is able to use the multilateral trading system to execute that agenda. I really want to point out something in her opening remarks thats important. This isnt about publicly owned versus privately owned. Havana charter covers both. Im concern we spent a lot of time type of Stateowned Enterprises in china when a pivotal variable is and who owns what. It is the relationship between those industries and the government. Thanks thanks very much, mr. Chairman. Thank you, senator casey. Senator cassidy, do you have another question . Ideal. We are sort of white he down but it want to give everybody was another question an opportunity. Go ahead please. I go back to your guest thesis, economic power that allows him to exert this, and so again i find that balance. A little far afield from the searing but still you raise it some going to ask you, i agree, we should not allow people to use arbitrage and departmental laws or workers rights or human rights, using slave labor et cetera to undercut the ability of a worker of the United States, for example. On the other hand, there is a tension there. If we have environmental laws that we really need and another nation does not, either would require everybody to have the same environmental laws and the same labor laws even though conditions in say such a gardener for those of the United States. I would say what is the minimum wage, for example . If were going to reexamine our trade relationship, i think everybody would agree, i think at least that if were going to admit a certain environmental standard for air pollution in the u. S. And chinese air pollution blows over to the u. S. , we should ask the same environmental standard there. I get that. But going back to wage rates. You concede that wage rates would also be required at some sort of a otherwise our folks would be disadvantaged . Im very supportive of what is in the new nafta. Im supportive of the rules that of enforceable in our trade agreements since 2007, which is core labor standards. This is about setting set of rules that of a country much follow without regard to its development level. This is about setting a floor and that is also with the founders of the system did in the havana charter. And so if we had the fourth part of a chait agreement with china that may be a remedy, knowing but nonetheless the would be a potential remedy, correct . I would use the w. T. O. Ngas section 301 to oh one to establish that. Also your w. T. O. It because when you point out the Consensus Organization would be difficult to work through w. T. O. I think thats true. So i think we should ask for it. And if we fail because undoubtedly we will fail, the section 302 anything else . I think theres been proposals not in any concrete terms but proposals about access to u. S. Markets and how they set a central stage as part of our domestic regime. I i think those are worth considering. Thank you very much. Senator cortez masto, do you have an additional question . Senator wyden, do you have any other questions you want to ask . Well, let me just say how much i appreciate it. I know we all appreciate your testimony here today, and mr. Gere, for what its worth, you know, i think we need to sort of get to a place where we recognize that administration, whether the republican or democrat can have good ideas and some not so good ideas. I know this administration seems to believe that bilateral trade associations are optimal, and i can understand why their argument is that he did it by multilateral trade agreement youre going to have to give up too much in order to get but there are benefits and a take you described one of them, particularly dealing with china. We do need to work with our allies and to confront this challenge. One, because they are in the same situation we are in. They are being eviscerated economically and threatened militarily. It is important to work with people who share our values to counter this incredible aggressive economic and military threat from china. So let me thank you for raising that point and i think youll find a lot of people in congress who share that view. So with that let me thank all of you speedy Higher Education. How congress can help a major test examining the impact of covid19 on the future of Higher Education this is a completely virtual hearing. I doubt on microphones from for members and witnesses which is meeting remotely be kept muted as a general to avoid unnecessary background noise members and witnesses will be responsible for im beating themselves with you recognized to speak or when the wish to seek recognition i muting themselves. For house