Transcripts For CSPAN2 Hearing On Global Trade Online Censorship 20240712

The Senate Committee on finance the subcommittee on International Trade customs and Global Competitiveness will come to order. I know this seems a little strange but 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 treatment practices of foreign governments and especially china and russia. The topic of censorship in china is a common one because of its growing of facts on this list in the United States as well as culture. Last fall for example the National Basketball association had its Market Access lock in china because individual american citizens used to media platform not allowed in china to express a political opinion. Now the topic is become much more important to the lack of timely Accurate Information about the spread of covid19 due to chinese censorship has contributed to the havoc wreaked on our economy and help and indeed the pandemic. The story is nothing new. For some joining us today chinese censorship has long been growing and has had a negative effect on people around the world such as those in tibet where the uyghurs in china xinjiang province. First of want to set the scene or what censorship actually is and a simple dictionary definition is a good place to start. The suppression and her prohibition of any parts of the media that are considered obscene, politically acceptable or a threat to security. Today we will focus on how the use of censorship has become a barrier to global trade did with the World Trade Organization was founded two exceptions to the principles of National Treatment and mostfavorednation were created. Those are public morals and National Security. Notably there is no exception for a country to restrict trade because its deemed something politically unacceptable. The discussions over performing wto both the lateral talks or ecommerce and the prospect of the phase 2 bilateral trade deal with china progressing the subcommittee is uniquely positioned to inform congress up executive branch of these of censorship of the nontariff area to trade. We will help determine if this information data goods and services via Digital Media by countries like china constitute a trade barrier in violation of the debt we owe wto agreements and practices. So we look to determine the economic damage caused to human cultural business and political ramifications and what remedies are currently available or should be created to combat this unfair treatment. On a bilateral basis what is clear is the lack of reciprocity from countries like china or russia and the United States or are the Chinese Government spends billions of dollars to promote its propaganda overseas, a form of offensive censorship. For years russia has broadcast propaganda in the United States and it has justly been designated as a foreign agent. A lack of reciprocity takes advantage of our system of Free Expression to promote these countries agenda on line in Media Entertainment as well as our education system. Meanwhile china and russia did not grant the United States access to its markets are media. Said china has been expelling our media having kicked out through wall street journal and other reporters earlier this year over chinese censorship of covid19. For centuries countries block trade through physically restricting access to their ports. Today the same thing happened but with firewalls filters and outright restrictions to access but in fact nearly 100 of the world internet traffic travels throughout crisscrossing network of funders seen cables that form the back on a 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 in trade is censored. In the air of information where data is the new goal blocking or filtering of that traffic light nationstates growing the censorship is fragmenting our markets culture and understanding of one another. The internet itself is becoming less global. Countries like china and reshard not only building their own infrastructure to cut themselves off from the world but exporting their authoritarian model to other nationstates throughout for such as the digital silk road. Compared to the Congress Supporter nation in meeting this challenge thats why im working together with all of our colleagues in the senate and in the house to include hearts of the chips for america act and the National Defense authorization bill currently on the senate floor. We are forced to rely in china to build their networks and their technology the world we know will be much freer and open to expression of opinions and business. This bill would help us create their own Domestic Production capacity for semi conductors that underpin the technology we use in our daily lives. It will let the United States remained the Global Leader with free trade of goods information and speech. Finally a look forward to discussing what remedies are available to address the abuse of censorship has a nontariff area to trade. Last fall the chineseamerican constituent of mine from texas reported he was censored here on american soil by the Chinese Government. His america we chat accounts was shut down for supporting protests in hong kong. His response was cobmack if you have censorship in china find but in this country i am a republican and i suffer the same as democrats. We are all censored. I look forward to exploring this topic in the same bipartisan fashion which we always hoped to perceive this time for congress to ask hard questions and thats why we have called her panel of four experts here today to discuss this issue. Let me now recognize Ranking Member casey. Thank you very much for this hearing and i want to thank our witnesses for being with us today. This is as the chairman has noted the third in a series of hearings held by the subcommittee about the Chinese Government Civil Military efforts to implement the economic and geopolitical order. Just yesterday the Chinese National Peoples Congress passed the National Security law and hong kong that significantly erode hong kongs professional status based on available reporting denying people of hong kong are to protest the right to assemble and the right to criticize their government could United States congress has made it clear time and again the citizens of hong kong must enjoy certain rights from Mainland China in an effort to undermine the status quo and affront to people of hong kong and decades of International Agreement regarding the status quo. As i have said before when it comes to china we must work with our allies come execute it clear corrugated strategy. This applies to trade the Chinese Government will erode the rights of people of hong kong. Here in the United States at this time we know we are in the midst of a Public Health jobs crisis. People are suffering all across our country. You have seen the cost of our lines this Public Health crisis our reliance on a Single Source supplier and a reliance on production from a nonmarket economy. Last year senator porter and i begin this effort by outlining the main issues related to Market Access to china. We focus on specific initiatives and actions undertaken by the Chinese Government starting with the silk Road Initiative for today we turn our attention to censorship. The actions undertaken by the Chinese Government includes direct barriers entering their markets respecting content blocking internet firms dictating content and raised chinas territorial and economic plans. The demanding action or inaction by business related to taiwan to bed in the ongoing human rights agendas in xinjiang. The Chinese Government is increasingly assertive in its demand outside its borders. Their mandate related to extraterritorial messages are particularly troubling for the Chinese Governments response is a message of solidarity for hong kong and the general manager of the Houston Rockets for example to censor speech no matter where it occurs. Its intended message sent by beijings disproportional responses clear the Chinese Government and commanding control over any enterprise operating in china public or private. Simply stated the Chinese Government using its market power to shut the speech of our people. These actions are inconsistent with our principles, inconsistent with our values. The introduction of the corporate social Credit System takes this activity to another level. The action stated by the Chinese Government are clearly restrictive and discriminatory. They are insidious encounter to the conditions of a fair Global Economic system. This hearing was originated or originally scheduled i should say in march. We have seen clearly the cost of relying on china in a nonmarket economy for reductions for critical capability whether personal protective equipment or otherwise. I recently introduced a market economy act which will begin to right size the supply chain toward the United States. This is but one measure that must be adopted to refocus our trade rules of the Global Economic system. If we want this to be sustained we must take action now to assert competition and market principles not simply words in the textbook but rather used in the heart of government and governance. When it comes to this week the need to be responsive and created to address challenges and opportunities. Theres about congress, the citizens and businesses must support and defend the Economic Security of the United States of america. I look forward to hearing today from our witnesses and discussing potential responses including the required disclosure of these types of requests in appropriate federal entities and a nonmarket economy. Thank you mr. Chairman. Inky senator casey. Now id like to take a few minutes to introduce our witnesses and we look or to hearing from all of you today. I ask all witnesses to summarize or read testimony and try to abide by the fiveminute rule and come back and ask more questions are could all of your written statements will be made harder the record without objection. Our first witness is mr. Richard gere chairman of the International Campaign for tibet headquartered in washington d. C. Of course mr. Gere is an internationally known actor, social activist and philanthropist whose works for more than 25 years to advocate for human rights in for the two that the people to preserve tibetan culture. Is also cofounder of tibet house u. S. And created the gere foundation. He is cosponsored five historic assistant United States by the dalai lama. Mr. Gere i understand you had a ration addition to your family. Congratulations on your new son. Thank you for being here. Next i would like to welcome nigel cory associate director for trade policy in Information Technology and Innovation Foundation here in d. C. Mr. Cory is an expert on data and digital trade issues in the global time spent eight years working for australias department of Foreign Affairs and trade which include positions covering Global Economic and trade issues among g20 countries and the World Trade Organization. Hes also helped diplomatic posts in malaysia and afghanistan. Third i like to welcome Clete Willems a fellow at the institute. Monopoly power and trade and National Security. She previously served as democratic counsel for the house ways means trade subcommittee and spent six years as an associate general counsel with the United States trade representative for she participated in trade negotiations and litigated trade disputes. Ms. Baltzan has spent three years on the subcommittee on investigation. Finally i would buy to welcome mr. Clete willems was a partner at in washington d. C. Mr. Willems advises of writing clients and International Economic law and policy matters. Before he joined the firm mr. Willems served as the white house that the white house is Deputy Assistant to the president for International Economics represented the United States is a key negotiator with foreign governments and his litigated more than 30 wto disputes. Mr. Willemss work on capitol hill on the House Budget Committee for the former speaker paul ryan. Thank you very much for being here. Mr. Willems and all of our witnesses and mr. Gere if you were there please proceed with your opening statement. I am here, somewhere. Thank you for joining us. I certainly preferred this facetoface but lets engage each other anyhow. Ranking member case to members of the committee thank you so much for your deduction and inviting me to testify. Its been 35 years since i first testified in congress and that was on the half of our Central American brothers and sisters and of course on tibet for the last 30 years or so. Tibet is certainly been my compass that has helped me navigate through the world of washington and all of my life. This is the first time ive testified before the senate since i last met with one of your greatest colleagues, john mccain. He was a good man and a good friend and a good friend of the dalai lama and the tibetan people. He certainly was the best of us and many of you i hope our government can deliver at its best not only for the American People but for the millions of people all over the world who look to us and look to the United States and its democracy and its freedoms and its openness is a source of inspiration and refuge while they live under oppression and violence. American leadership is at its best when it sets its view beyond the horizon and looks with balance at the challenges and the opportunities that lie ahead. The rise of china in the world today is not something yonder horizon and it affects their daily lives, our work basis, our freedoms, our privacy, our health and obviously we are finding out and our elections and it will certainly shape the future of our world. Looking at the committees work on the Chinese Government plan since 1949 to replace the u. S. On the world stage and advance the economies of poor terion model everywhere in the world im happy to offer my experience with this existential important conversation. The conversation about the future of our relationship with the chinese is crucial not only to the u. S. And frankly weve been tragically naive under both republican and democratic administrations but its equally crucial for our democratic allies. Ive been involved in supporting people and the dalai lama were peaceful cosystems with the Chinese Government from most 40 years now. When it comes to china supporters have been in for the longhaul. We knew what was happening in tibet would not stop there and that chinas authoritarianism would expand well beyond tibet and now we seen xinjiang and especially in hong kong and beyond chinas borders. We have no quarrel with the chinese. We wish the Chinese People to enjoy development and quality of life and opportunities and joy and happiness for their families and their children. But what i fear is the chinese partys model of development that is predicated on control, dominance and violence. Chinese leaders quoted an old chinese proverb, from the outside a benevolent and from the inside the dash i recall vividly the time in the 90s when a very strong Bipartisan Coalition of members of Congress Called on the white house many times to condition chinas most favored nation status unclear criteria in a test of law and human rights. Coalition unfortunately was defeated by powerful interests was shortsighted financial goals and a very naive understanding of chinas 100 year plan which they are probably 50 years ahead of already. By opening our markets to china this would somehow by itself reduce meaningful political and social reforms. As we now know the opposite is proving to be true with more restrictions on religion mask incarceration crackdowns on all forms of dissent including concealing critical information about the spread of coronavirus. We also see the Chinese Government using economic policies to prey on weaker countries through the extremely dangerous builtin Road Initiative the longterm plan to control supply chains trade ports and sea lanes. The point im trying to make yours the environment of human rights and workers rights we have vacated for then we have also protected the larger economic interests of the u. S. And their allies. Let me give an example. The u. S. Opened its door to chinese products, chinese investments in various forms of influence including the state media. We have even allowed statesponsored confucius institutes to gain a foothold in our universities and chinese Companies Like huawei which spent large sums of money to enter the u. S. Market. As you also know china does not reciprocate projects is to Chinese Markets are limited or they do not allow American Media to broadcast in china. This lack of reciprocity fee by an orwellian system of state censorship and powerful, powerfully restricts the Chinese People access to information and american and foreign Media Companies access to one of the Worlds Largest markets could in fact china has repeatedly insisted that u. S. Tech companies except strict censorship to gain access to its 1. 4 billion people. Another example is freedom of movement. Americans have enjoyed an appreciation for the tibetan people and their unique buddhist culture and fragile very beautiful land. The roof of our rope and is the greatest source of the worlds fresh water. The Chinese Government highly restricts access to tibet for mickens including journalists and politicians like no other areas of china while chinese citizens face no such limitations when they had to the u. S. And they go where they want. Now congress recently took action to pass the reciprocal reciprocal access to tibet that revisits a rational and systematic response and is required by law to now. As an actor which is why am here i believe i know youre just in my experience in the Entertainment Industry and the growing chinese influence their. I cant say my speaking up for human rights in china has direct a affected my career, im probably an unusual case and we can talk about that more during the session. Chinese censorship coupled with the Film Industrys desire to access chinas market has led to avoid the social issues of Great American films once addressed. Imagine the life of the dalai lama or my own film red corner that is highly critical of the chinese system. Imagine that today. As i conclude my remarks i would like to call your attention to two bills in the senate for the first is sponsored by senators cardin kc cornyn rubio and wyden started past the hosts house with a roaming support. The tibet policy and support act, u. S. Policy in tibet all adjusting one key overriding issue the selection of the next dalai lama. We cant be allowed to be controlled by the communist party only by tibetan buddhists. Im sure that you support this principle and i ask you to cosponsor this bill razor with the Senate Leadership or swift passage by the Senate Foreign relations committee. The second bill the mongolian word neighbor trade act introduced by senators sullivan and cosponsored by Ranking Member wyden and majority whip thune would grant a democratic and independent mongolia better access to u. S. Markets for products manufactured in mongolia. Mongolia is under extraordinary pressure in china. This will greatly benefit jobs for mongolian women reinforce Democratic Institutions and a way to strengthen democracy and in the most critical time in the indo pacific and help mongolia remain independent and i call on the senate to pass this bill as soon as possible. Thank you very much. Spin it thank you for joining us. Well hear the other Opening Statements and come back for some questions. Mr. Cory. Thank you senators and thank you for the opportunity to testify. That may start i saying that its important to acknowledge that china uses as a disguise for protectionism. Let me start by saying its important to acknowledge china uses censorship as a disguise tool for protectionism and censorship in the chinese context means overly broad and discriminatory control by the Digital Content Distribution Platform infrastructure and the firms involved in this disguised protectionism has 30 costs the u. S. Economy so dearly but this cost will only rise of china is able to export its model of digital governance to other markets around the world. The United States needs a stronger strategy to push back on the direct trade impact of censorship in china but also to prevent it from burning down the market. The stakes are high. If we fail to act the u. S. Could lose its edge in the Global Digital economy and this is especially the case given censorship along with the internet policy as part of a rotter troubling rise of socalled equal sovereignty. While not allowing china is the world leader in using overly broad interest to give and discriminatory rules around content it deems illegal prechina has advocated for a model that other countries are also attracted to it. They are going to for political reasons because it provides them with control but its also providing them with a protectionist tool as they lack the Economic Impact it will censorship is not the only restricted stall that china sees that a central one that is led to a generation of chinese internet having an internet experience that is completely different than most all in other countries around the world. It is known that china uses to block access to thousands of foreign web sites which is a clear barrier to Market Access but its only one tool of many. It is less known the censorship is also a key factor that leads to u. S. Firms from being prohibited from operating in key internet sectors and how it plays a part in the opaque discriminatory and restricted content review project to video games movies and tv and its a key factor that limits or restricts their ability to connect to the Global Internet which essentially renders their ability to be used to access or develop software on a crossborder basis. While the primary motivation of censorship in china is beijings ability to get the economic benefit and the economic benefit to china and the cost United States is already significant. Over the last 20 years the u. S. Industry and firms have lost hundreds of billions of dollars in revenue and while its hard to calculate an exact cost Information Technology Innovation Foundation conservatively estimates that for example google which differed from the Chinese Market in 2010 as lost in excess of 33 billion just over a fiveyear period from 2013 to 2019. In contrast, sans and markets services which are restricted in china are estimated to cost over 1. 6 billion just over a twoyear period that from 27 to 20 team and why should we care about this . This lost revenue or billions of dollars which would have otherwise supported innovation and employment here in the United States. U. S. Policymakers want to exacerbate the impact of censorship in china by calling the u. S. To leave chinaris they have a china. Now with or without u. S. Firms chinas internet water main censored. There should be no doubt that its in americas economic and security interests that as Many American firms as possible sell goods and services into the Chinese Market. Every dollars worth of digital and physical exports is a dollar that chinese firms dont earn in the dollar that u. S. Firms can otherwise use to reinvest in research and development and to support economic and Employment Opportunities here in the United States. Its important to recognize human rights are not mutually exclusive the United States government should obviously lead the world in advocating for human rights and democracy like in china and elsewhere but it should also able to develop more more nuanced detail understanding of how its playing out in developing a counter strategy to china has to played censorship and to ensure that it doesnt spread any further credit cards apply to rec amend to congress that the u. S. International trade commission for detailed study into the impact of censorship in the study faces new rules so to be used by the department of commerce commerce but can form the basis for Global Digital economy strategy that is needed to counteract chinas access to advocate for a tour of mortals over which directions countries should go and which approach they should take in censorship and protectionism. Again i thank you for the opportunity to testify and i look forward to your questions. Thank you. Ms. Baltzan. My name is beth baltzan and ive been a lawyer for nearly 25 years. As senator cornered with any work to ustr in on the Oversight Board the Senate Permanent subcommittee on investigations and House Ways Means Committee proud these experiences for my testimony today. In 1989 Francis Fukuyama published an influential article called the end of history. He argued that the imminent dissolution of the soviet union reflected a triumph of economic and political revolutions and economic liberals might pave the way for political liberalism. This view permitted the wto when we let china into it. China has shattered that terry could rather than to mock sizing it into the global come to the chinese come his party weaponized that using its economic leverage of foreign citizens in their home countries. Economic liberalism has become a vector for political liberalism. For the am i recognized a state going to first identify cheneys state capitalism is the most salient idea logical threat. When we look at the actual ruse of what windows usually see how this Design Service and 90s we focus on liberalizing capitol is in believing the model would produce ideals economics and political outcomes. It would guard against a government that would exploit the system with a competitive strategy. That strategy not the National Comparative advantage that has led us to the economic dependence on authoritarian regime to its wrong to say we could have seen this coming for the founders of the multilateral trading system sought to prevent it. They designed a regime grounded in fair competition cheating through currency methylation laborist oppression or monopolistic pave your. They warned without these rules state trading government uber annapolis would destroy Free Enterprise and democracy. These rules were memorialized in a charter signed in 1948 by over 50 countries but it never entered into the court. Its popular isolation of congress protected it but thats not accurate. The charter fail because the American Business community rejected it. We managed to forestall them a threat to democracy and Free Enterprise but keep in the soviet union out of the gap but we did allow the prc a modern government to wto and the prophecy seems to becoming troopers not too late to mitigate the risk for addressing the pcp ability to interfere in our Civil Liberties requires us to reduce economic leverage arrest. I offer five recommendations. First you must address or supplychain dependency through so much as change since early march when the hearing was rescheduled. People understand in real terms with means to have the supplychain dependency problem with china prefer safer the First Time Since the 70s United States is having a conversation about strategic industrial policy going to identify critical sectors map of supplychain to make sure we have diverse components as well. Second we must recognize unless we reform the systemic incentive that will be difficult for us to sustain. As long as the rules tolerate anticompetitiveness to offshore we must anticipate any newly rebuilt supply chains will eventually end up back where they started. Therefore we need the reform of the wto for the narrow focus is crucial insufficient to do with the structural problem of the anticompetitive approach to trade. Third related to sustaining supply chain diversity must keep an open mind about tariffs. Tariffs can be a useful tool for driving behavior but United States has lowest boundary of the deputy oprah that low rate coupled with anticompetitive behavior as made a particularly lucrative to offshore american production but until we have achieved a full reform we must consider tariffs to be one way of incentivizing. Fourth we should work with our allies. Many of our allies do not see this ccp as a threat to economic and local freedom however the person diversification is the way we can fifita must accept your Market Access in china is a luger he. It will give us as much Market Access as they want to. Being a Market Access increases their ability to interfere with our Civil Liberties. Thank you for the opportunity. Thank you very much. Mr. Willems. Mr. Chairman Ranking Member and members of the committee thank you very much for the opportunity to testify today the chinas expanding its use of censorship to promote National Interest with adverse consequences around the globe. This has been driven home runs by information on the coronavirus and in the impact its had on the nice aispuro censorship is one of many tools that is used to promote the partys interest and we have talked about others already today is something that is not then prioritized and policymaking including the phase 1 negotiation that i was a part of what was in the best race and therefore its right by further exploration and action. It manifests itself in many ways. One primary example is the great firewall which restricts free speech through web sites blocking and filtering but according to ustr china currently blocks over 10,000 web sites and as ive been getting ready for this hearing ive seen other assets that put that number closer to 20 or even 30,000 prechina controls domestic news outlets and directs them to avoid unfavorable stories on issues related to the economy and of course the coronavirus itself. Chinas interact efforts to censor speech are deeply troubling. During last years nba twitter controversy china retaliated against a single piece by a single individual with a single theme of prohibiting the broadcast of all games of all teams in china which is a clear effort to intimidate those abroad who intended to speak out and whoever wanted to do business in china produces just the tip of the iceberg create chinas social credit scoring system will enable regulators to conference if i monitor and influence behavior in real time. Overall chinas polities enable it to spread propaganda and promoted Business Environment environment where only if companies can compete her china has been encouraging other repressive regimes to adopt similar policies and has yet to back down in the face of u. S. Pressure predicted the state department classified chinese news outlets as foreign agents china responded like spelling journalists from beijing could i find a particular ironic that chinas wolf warrior diplomats are taken to twitter to influence Global Opinion on a site that is banned in china. At the wto the u. S. Challenge chines to insurgents and foreign providers under the Service Agreement which banned prohibitions of market assets and skirmished over these rules are not particular specific when it comes to censorship which could lead to uncertainty preacher and it could try to avail itself of certain exceptions such as port net i believe the u. S. On balance is strong case that given the time and resources that it would take to bring in some of the uncertainty and mentioned that think its better to move in a different direction. That may give you a couple of ideas at the outset. First we must consistently highlight chinas nefarious policies and use the full power of government to seek change the governments are better positioned to push back against this behavior and we should not expect their companies to do it alone we cant always expect them to do what we think is the right thing on their own. They need the government behind them. Second we must work at key allies. China will find it much more difficult to stir up antiu. S. Sentiment and excuse his behavior others stand by her side are those others must not hedge their bets and they must not send the wrong signal to china by adopting similar policies. They used digitally sovereignty agenda and its that severe pain firewall is a point. Third i would apply the same advice to us but its a seikh to counter the threat posed by china we must be careful not to adopt the same policies that we are condemning come policies to stifle free speech or increase Market Access barriers proposal backed iraq in him if we and it will cause us to learn lose moral high ground is so important in building initiatives of coalition. Fourth we should pursue a broad reform agenda with rules on censorship force Technology Transfer subsidies intellectual property theft and the ideas that death rates are worth considering or we should require china to have the same obligations as an estate. The debbie to as falling short of subjective no doubt but abandoning the system that we, not china helped create would be a tragic mistake or china would like nothing more than to see the u. S. Created system collapse. That we should negotiate a broader range of trade agreements with strong censorship provisions reducing was a revamped u. S. Antilateral and chapters with existing fta partners like australia and the taiwan ft and the renegotiated ttd. Putting politics aside the tpp provides a great opportunity to encircle china with policies that stand in contrast to its economic model. Though their general concerns about it these reforms are jeff nafta which will bring in tomorrow could lets do the same thing on ttp. Sixth they must pass the laws to inspect u. S. Companies so they can safely act for overbilling his recent ideas like protecting voice at work prohibiting u. S. Companies from complying with censorship request and disposing pressure from the Chinese Government. Finally we must not draw false equivalence between the Chinese Government and its people did many good chinese citizens are suffering with their voice is muffled by same policies ive just been describing. A commentary was briefly posted on line in china early this year before was deleted by the censorship always misstated the openness of information is the best vaccine. Blocked ears and eyes are also contagious disease and no one can escape. Thank you. Thank you very much. Well proceed with around a five minutes per senator of questions. Mr. Gere let me start with you if i may. Your courage in confronting the Chinese Communist party for its methods and tactics of censoring, retaliating in a fishing those with whom it disagrees is commendable and i thank you for that. As chinas economy has grown we have seen more selfcensorship. Theres the censorship that can be imposed or by the government but theres 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 in parallel with the growth it has experienced . Yeah willen my experience and certainly in the government diplomatic world over the last 40 years, china is not shy about letting everyone know that they dont like the dalai lama to be treated well and tibetans to be treated well. Gentleman squared tibet and taiwan and certainly they do call everyone local state and national and federal all over the world when issues do come up but ive seen over the last 30 or 40 years the countries and diplomats do selfcensor now. They take it upon themselves not to put themselves in a position where they are going to be represent reprimanded by the chinese or lack him kind of economic access. Norway went through a whole period when when jiabao was given the nobel prize or they were cut out completely from trade with china. Richard gere there called digital cgi films. You know some of those movies that are three d. And our consumers and really high level in china. And entrepreneurs can make a lot of money. And the distributing companies in china are stateowned. The Film Industry owned by the state. In china. Theres a lot of censorship. What wouldve been a villain, maybe was at china villain come as no north korean villain in the movie. In the movie, highprofile movie in which tom cruise welcome to shanghai and wears underwear or something. It makes shanghai look like a less developed city. Christopher robin was not allowed to be screened in china because of some amusement, it was refused entry into china. It comes up even recently with me. There is a public script that takes place mostly in china. In the producers that first balked at the idea of me. And then they were and actually had supporters of the dalai lama. They said no going to make the moral decision. So we are talking about a making a film there. But we will never be able to film it in shanghai. Im not 11 china. On running in london hong kong. I have a chinese actress friend of mine, if i could work with them and they said absolutely not. The careers would be over and they never be allowed to work again. And then other circumstances, very talented chinese directors, what appears with me having to call me up and say that he cannot work with me. His career would be over his family cannot travel. This is personal total of people. I am career, while adult make cgi type of films. My films wouldnt naturally be shown in china any health underground on the black market. I dont feel that i made, we couldnt to date, you couldnt even get insurance because of me. But when it was shown, i did go to hong kong after that. That wasnt officially shown in china. As going up the elevator there and the operator looked up to see the camera and was watching us in the elevator. And as a testament my for he said, thank you whispering. There is that technical surveillance and it police state that by which. Richard gere we know the budget for surveillance in china is larger than the militarys budget. Thank you very much. Senator casey, do you have questions. Sen. . [inaudible]. I understand we have a little technology issue. Let me turn to senator cassidy. Sen. iran thank you very much. I will start with mr. Geer and then move onto the next person. I want to note for the record, the those of the members of the seminar know this, but you have strong design it roots personally and in your family and i know that we want to note that for the record. And we appreciate that. And we are always welcoming people back. But i want to thank you for that. I also want to thank you today for the great work that youve done calling attention to these issues over now decades. In a manner that sometimes is not the kind of sustained effort that those of us in washington can undertake. Takes a lot more focus. And you have been sounding the alarm for years. I wanted to start with your observations with regards to the tactics and the strategy of the Chinese Government. Especially over the last decade. To compel or to elicit actions of individuals or companies in some cases governments. I guess is a twopart question for your observations of the tactics strategies, deployed by the Chinese Government. What is your advice for both terms here in the United States as well is the congress. Richard gere , can you hear me and my on now. Had to say yes. My mother and father came from their. Brooklyn, pennsylvania which i dont think is in the order today and it was in the 20s. In the farming community, dairy farm some of my father grew up milking cows by hand early on. So still have family there and consider that my spiritual home. The big overriding thing for my point of view is that we have to understand that chinas going the wrong game. They do have 100 year plan in their way ahead. They were very clever and they realize were coming from a very weak position and they decided it would be the cheapest place in the world to make products. And this was well thought out from their side. They were looking to make profits. What they were looking to do is on the markets. Which they do this point. Theyve are medicines from china. You most of our manufacturing from china. Get almost everything that you bike in the store, made in china. They own us in many ways. And certainly, thats of them is controlling the world, the world that we have bought into which is one of who is to make the most money. And weve made huge mistakes along the way. Very short sighted and 90. They are much smarter than us. The much more patient than us they bequeath into powers would back off of it away from asia. And they feel it immediately. And when we back off in the environmental world, they feel it immediately. When we break up our alliances, they go man immediately. The making alliances with that silly right now. And now there in italy. Should be the americans. That is chinese. Again, in his longterm thinking especially now that the emperor is there. This 100 year plan will be continuous. And as we change administrations and focus of what youre doing and how are you thinking that we approach the world, there are spaces and vacuums that are created in the chinese have taken them every single time. They creep into every open space. It is hard to leaders all over europe and Central America, and asia. They do not take a loan to build an airport. When the chinese. They will take that airports in the port away. We seen it in many places and were going to seed in italy. So i think the strategy for us is to step back and understand this longterm strategy of world dominance is coming from the chinese dominanc communist part. Part of it to each other. We are relying on real honest relationships. This is the world of strong alliances confronting with the chinese and women. And i had a question. Maybe go on in the second round. Thank you. Thank you senator. Doctor cassidy, senator cassidy. Sen. thank you. Mr. Geer, he said something. What thank you all for testifying. I think you very much. And you just mentioned, creeps into power. I like that. As a kind of, creep into the vacuum. Im trying to ask myself how we stop. I am struck by your testimony because actually the chinese ability to do digital censorship and economic power that they are. Its just like the whole of exchange writing your thing about if you have free trade by itself doesnt necessarily things happen. As we otherwise guard rails. And ive been recently told by Central American country the workers rights, human rights and environmental requirements placed upon them, in order to conduct trade has increased the cost of production and put them in the competitive disadvantage for Company Looking for a low cost place to produce. Therefore they go to china which is a have the workers protections to say the least and environmental protections etc. And so it kind of slides that way which if you will, and works in multiple fashions. You have a followup to that. Richard gere is that to me. Okay thank you very much. Yes and i think this is something that we see with mexico as well. I think the answer to stopping this race to the bottom which is fundamentally based on anti competitiveness. For trade is to incorporate the standards at the wto is very surprising to me that in not only with these issues and Central America and mexico and other places but and bangladesh, the collapse and bangladesh greatest price me that we were having Environmental Issues in this race to the bottom. I did point out in my testimony that there were labor rules in heaven a charter which is supposed to be the governing document to the Global Trading system which is required back into 1948. And then you would have the opportunity to mitigate the race to the bottom as you are saying brightest back with them asking for a second, you mention the problem with our supply chain going to china. But they are going to be the lower cost as long as they are willing to sacrifice International Environmental standards and labor rules etc. Granted the non might be lower in some places but even that is a for the race to the bottom. For talking about bringing supply chains back to more secure places and increasing the Economic Growth in china by which they can coerce people into accepting their censorship, we really have to kind of taken to a combination now would you are describing. Second of the essence. Would you agree with that. I think thats right pretty think we need race to the top or not race to the bottom. In a waiver is part of section 301. On waiver with respect with chinas well well. Why not. Okay. This very helpful. Im sorry three defendant windows in front of me. Im not used to working remotely. The gentleman who spoke at the very end, thank you spoke kind of a need to confront this digital in censorship across the globe but tell me again on the u. S. Is to do that. We get for example italy, did not accept censorship when according to mr. Geer, hollywood effectively excepting censorship. A. So thank you for the question. And what i was referring to and general is that i we need a much more robust negotiating agenda. With a range of potential allies that is moral with this on the censorship question really made some progress in the u. S. Mta, the japan trade agreement where we talk about nondiscrimination in the free flow of information across borders. But i think we can go much further and deeper and much more explicit on censorship and i think that doing so, would actually help address the concerns that i have about a dispute and some of the uncertainty that can be put into place by some of chinas counter arguments. Something much broader trade negotiating agenda is the wood to go. But the other thing on italy, that i think that mr. Gere was referring to was that italy had basically signed up for some run money. It happened about two years ago while, i mean, in administration and i personally was involved in calling italy and getting them stopped. In the problem was center in an economic crisis. They wanted infrastructure and china was offering it cheaply. Its a huge problem. We need to have an american alternative. Week trying to do that with the International Developed finance corporation. Its a very helpful addition to the u. S. Toolkit. But i would like to see us even more money into the effort. It in the up with other trading partners and have International Standards on development financing. Standards about accountability. Standards that we needed that europe needs, that china cannot. Thats another. Like to go. Thank you very much. Sen. thank you mr. Chairman for hauling this hearing. In thank you to all of our witnesses the movie industry is for profits and access to chinas huge audiences make makes it uniquely acceptable to the selfcensorship that the chinas party like to encourage and have others imposing on themselves another one corner of the Global Box Office came from china. Disney earned 600 million off of adventures and gaming in china. That is a lot of leverage. The peoples republic of china is very clear that when it comes to movies, and launches products that are not only entertaining, that align with parties worldview. So mr. Gere, and films that are not seeking propaganda pieces, do they get access to china. Given the Global Box Office. What affected china having on the movie industry overall. Richard gere i dont think it is as dark as you were describing in this moment. And certainly benign movies that are completely apolitical that have access. This movies issues product, both for Pure Entertainment free and politically neutral. If i think those will never have a problem having access to the 1. 4 billion chinese viewers. But i do think that challenging films along the lines of all of the president s men or record that i made. Theyre highly unlikely that these kind of films are going to be supported by the chinese investors. And especially if they say in advance which they often do, theres no way that film will have access to the Chinese People. But even in the case of those who are rather do not believe in the chasm top and, fabric whose producers remove references to the japanese and taiwanese flag and china still has a lot of power to dictate their practices. It is not fair to say. Richard gere pricing fair to say. But its also showing the weakness. Possibly as that. How completely ridiculous. Its about the dalai lama. The kindest most generous man on the planet is consumed in saturated with love and compassion and forgiveness. The mere mention of his name makes him crazy. The problem is that the communist parties everywhere. And someone like the dalai llama for instance, is human. They love him for defense powerful reasons. You dont love the communist party for video abide by it because its powerful and it controls you. But you dont love it. The truth legitimacy comes from the heart. Thats really what theyre afraid of. Something that touches the heart and through the heart, a sense of right and wrong indecency. I think basically they have that, that would challenge even the idea of the communist party. Totalitarianism the kind of surveillance state that they have developed their creative anything the challenges that, even in the poetic ways want to make that crazy predict. I agree with you. How is it, or how small is it for them to worry about the place but, something is laws that is something that that they were willing to submit. I agree with you in the dalai lama. In appreciate what you have done your own class to the recognition and the freedom of the dalai lama to do what he does is disparage special literature of the money. We know what the chinese are and what they do. Im concerned about their influence over us. Look at the fact that present she may reform movie to be shown in china must be vented by the Central Propaganda Department depending on the contents of the ministry estate state security and Public Security and Ethnic Affairs committee and the bureau of religious affairs may also be involved. I think theyre looking at lighting, cinematography or editing. Think theyre looking to preempt themselves and this is a challenge. I wonder the senate, does this influence film makers choices to preempt themselves from offending chinese sensors. What happens if they Creative Team is unwilling to make the source of changes in china wants. Richard gere what he of different types of movies. And certainly atop gun type of movie none are Film Festival type of movie in the massmarket entertainment. I dont know the changing of the flags on his uniform, is a major blow to the soul of the film makers. The stuff i kind of him. Im not worried about those freedom worried about the rabbit holes the windows down at this point. If all of our films become primarily financed by chinese money, then clearly are going to see films that are there to glorify the chinese parties life. Now thats a ways down the rabbit hole. I think filmmakers way to make the kind of felt that they want to make. The commercial movies that youre talking about, the one access to mass market. And i dont blame them for that. Minor changes along the way. I am more concerned about the soul storytelling and movies and entertainment which is beyond the marble moviemaking. Now clearly you have chinese villains anymore. Thats not going to happen. That is done. This would be north korean. From now on. But always felt there were different tigers anyway. I never felt comfortable without in any of that. But as i have mentioned in my original talk, the inability for the serious films, looking at deeply and profoundly, the situation in china. It will not happen now. Thank you. On make one last comment. I understand richard what youre saying. Sometimes the soul is lost to stepbystep and dollar by dollar. Richard gere that is the rabbit hole that im afraid of. Yes. Senator cortez masto. Thank you. I appreciate the conversation today. Let me pressure from this perspective. Im going to return to hong kong. American and European Companies are being pressured towards the National Security vp access and the freedoms. We know that. The pressure will almost certainly be tested. But what we have also seen as the pressure on to change some of chinas i do know, help principles. Some of their in the response to china. I guess my question is what can congress do to support American Companies and the pressure and propaganda. That is the challenge we have made and we just had discussion on how American Companies are succumbing to the pressure put on the Chinese Government. When we need to be aware of here in congress. What we need to support our American Companies want to get into that market spring event at the same time, be true to our freedoms and democracy and who they truly are. I just have one comment here. And bring the attention of reciprocity, International Norms of reciprocity. Weve given a way way way way too much. We didnt have to. In the chinese are sitting back in their chairs and saying well we got we would want to begin. And again and again. Reciprocity. The norms of International Behavior. Access to the markets. Access to information. That is huge. And we cant demand that there is reciprocity. Movements. No one gets to do that. Its impossible. Its easier for a journalist to get into north korea and into tibet. Reciprocity. The norms of International Behavior have to be demanded. And we cannot be drunk with those shortterm goals. We cant predict we have seen what he has done to us unless 25 30 years. I appreciate that. I think mr. Courier cory, regarding china. What you do after that. We know, and let me put it in this perspective. Is there opportunity to bring in International Organizations or other two really put pressure here and focus on these reciprocitys or what we should be doing to address the censorship. I think that the studies, civil first step that would send a clear signal that the United States recognizes that this is no longer some while it is a strategic calculation with china. And because what we are saying is that countries like my home country of australia, canada and the European Union and the United States are all around spectrum of waking up to blood china and the Chinese Communist party represents to their trade interest in their economic interest but also there political interests and values. His sense that clear signal. This starts the process of outlining things that the steps that United States can take. That is multifaceted. That is addressing the cases where Chinese Communist party action is applied extra territorially outside of china in the United States in an australian also also operated documenting and bringing the transparency to that. So the setting of the mechanism to talk with u. S. Firms and industries who are in the impossible position to try to set up to the Chinese Communist party to get a better understanding of what exactly is going on. Were they asking for and one of the asking for what is the legal basis. Because only then does the United States have the information that they need to respond. But also importantly, i think the study would reflect the strategy that it should lead to, wasnt the United States, and most definitely need to lead the charge in making the case impressing back against was and is doing but the point is popped. When the United States can do this on his own party whether it was ten 15 years ago. As a matter of fact now that the United States really does need to work with this likeminded, value shared, especially the European Union, japan and china and others. To provide a collective response because thats the best chance we have for making change in china and its effect outside of china. Thank you and mona turned to the next person. Thank you very much. And i appreciate all of our guests being with us. I take great interest in this. Welcome and i want to ask, about something that john bolton wrote in his book. Im going to read it to you. It is the opening dinner of the meeting on only interpreters present. They had explained to trump why he was basically building concentration camps and changing. This was xi. According to our interpreter trump said that xi should go ahead with building the camps. And then truck that was exactly the right thing to do. The National Security council talk to an agent staffer, told me that trump says something very similar during his novembe. So we have very knowledgeable witnesses on this panel. And i would just like to see if any of you believe that encouraging foreign leaders to build detention and forced labor for the religious minorities, is anything but a repudiation of american value. Does anybody think that is not the case. The repudiation of american values. I dont know what crazy movie we are in all of a sudden. This is doctor strange. I cannot imagine another person or an american citizen who would even remotely would believe with the president said. I would feel the same way. The concentration camps of the what right way to go. Does anybody want to add to that. A pretty much think that sums it up. Shirt certainly does me. And her family knows about concentration camps as well. Thank you. I look forward to learning more about all you have discussed pretty thank you credit. I know that we move to the next question before and youve had your hand up and you wanted to make it, go ahead pretty. Thank you very much. Let me just, quickly on the last two questions. I mean, first, on this question about the dinner. I was out of the administration by the time so i have no firsthand knowledge of it. I can tell you that while i was in the administration, did work closely with Matt Pottinger and ambassador wilson and others in 20 pushback on the pause deese of xi and ultimately i think action has been taken there is a should. What is going on in that region is appalling. And all eyes are on the role in the u. S. Need to stand up against it. The comment, i also to make in the previous question. Was not what we can do to help our companies rated and i do think in particular, many debate interplay of robust role of the government level. A lot of this conversation has been about how it is terrible that we are trying to act as chinas market because it gives them more leverage. I must flip it another way to say that having access to chinas market, where getting a lot of money that our companies can then pump into research and development to make sure their innovation later head of china. So another way to put it is that china is subsidizing our innovations. I think if you look at our Semiconductor Industry but you have paid a lot of attention to, they get 30 to 40 percent from china so thats an important source of revenue for them we also need to our part. I think it is important to not only look at the adverse but the positive ones as well. I like the idea that omission in my opening of disclosure. Making our companies disclose when the pressured by the Chinese Governments. I think you should conduct the transfer as well. And put the focus on the u. S. Law instead of on the company. Therefore makes it much more difficult for china to retaliate. The problem is that the u. S. Companies. As the u. S. Governments to bring it to us. We can stand up. In the similar thing, i would consider is prohibiting u. S. Companies, since ownership request, start respect to the activities that they are connecting in our jurisdiction and what i like about this is it is reciprocal. That mr. Gere was talking about. And that is what we are familiar with. Legislation that you all have been looking at, basically would say its unacceptable for china to refuse access to our auditors. Want to regulate the financial records. But this companies tell regulators, we cant do it the chinese law pretty solicitous and thing. This tell our companies they cant comply the censorship because of u. S. Law. Thats exactly what china is doing to us. Lets do it back to them. Its unacceptable for them to say we cannot access the audits. So lets use a robust response to help us companies. Thank you for mentioning the ship sacked rated this a major bipartisan effort to bring highend semi come nectars back on shore and reduce the supply chains and Critical Technology that can you imagine if we did not have access to that. The capacity to build here in america. Obviously a huge vulnerability. In the has taught us many lessons. Most of them painful. Some of them point to a much different path. We traveled there before. We simply cant continue to depend on china just because it is cheap. Especially with some of these very sensitive areas. I think senator brown is next if he is with us. While i understand he is not able to be with us. Mr. Gere, let me just ask you, how much money does the Chinese Government invest in hollywood. Do you have it anyway quantifying that. Richard gere im probably not the person to ask. I was looking through some material aside in the mean deals in the 250 million range and there were several in the hundred Million Dollar plus range. We can wear those numbers down. Let me ask you this. Last year, very much involved in the effort to reform the committee on or an investment. In the United States but we were focused primarily on Foreign Investment and in technology and startups. As you know the tourneys government does not observe any distinction between the private sector in the military and in fact, the private sectors compelled to share anything they have at the military that the military wants. And the communist party. But given what you have described about the self censorship and they influence the china house on the sorts of movies and hollywood makes. To think we ought to be looking more broadly beyond this technology to other investments in china is making in the United States and helps facilitate the path thereon. Richard gere i think they read it very well. The hundred year plan, was to sit back and really look at the rest of the world. And they saw the trajectory that the u. S. Was on. And if they could 12 with the way and they began by creating things that were menu. Well the two displays we all pilfered and that created a situation of control coverage. Using frantically now, method, the participles this is going to omit everything in our society as long as money is a prime motivator. If it is power and control. They gave us the money part of it earlier on. An understanding that the control can payoff decades later. And i will back to when mr. Course and i will emphasize it. The u. S. Should go along has been a mistake in terms of current. The only way we can count credits of the u. S. And e. U. , there are now friends predict if japan and india also, creative coalition. That we will understand with the attorneys returned to duty. And that we negotiate with them. And of the democracy. Market democracy. Independent. It is the only way that you can make changes in the u. S. Government and congress extraordinary things. You just cannot do it alone. Especially the situation where it is america first. What a very interconnected world. In the speak inter connection with the rest of the world. In our european brothers and sisters, japan and india. The great democracies of the world. You can do this together. We can create the world we want encounter the Chinese Government party. Summa thank you. Senator casey, give any other questions you would like to ask. Mr. Chairman i hope you can see and hear me. There we can. We can see you and hear you. I was hoping to at least pretty but thanks so much. For that caring. His had one question i wanted to ask earlier. Some of the amendment charges which he gave the history of. In the act that was signed by 54 countries. His opposition out from our business community. I guess i would ask that in addition to the history of the significance of it. What is still relevant today. In particular, how it relates to conditions in terms of trade. Thank you so much for the question senator casey. There is the end this part of the foundations of Global Trading system is about civilization and nothing else but nothing the narrative was fast and extremely harmful. If someone thinks mr. Gere was talking about, is moving out in the 90s in which the conditions that we created and let china and. And it directly traceable crone history. If you look at close motivating the founders of the system. Were talking about initially espionage and john maynard kaman and those who follow them. These were people who had lived the gilded age. They had seen an equality of nationalism and political instability. More importantly, they could see how particularly in europe, authoritarian government and been able to deploy concentrated economic power and to pursue an authoritative agenda. They were just thinking about it delayed germany they were looking ahead to india all the communists valley but it was the same fundamental problems which with the relationships between authoritarian government concentrated Industrial Production in those quiet so much of this is about making sure your protecting competition itself because they believe the protecting competition will is a way of protecting democracy and somehow that entire line of thinking has been lost so looks at is the chp humana china today. And with the issue to the senator casey. You cannot just take suppressing the rights and expect not to have authoritarianism and revolt of the working people. So if we want to do with these structural issues and we can have a set of rules that promotes competition. Think again arise in industrial concentrations on bring all of this and look what is going on in china and in my view, we see the emergence of the very things that matter with the Global Trading system. We are trying to prevent that and is an authoritarian government is not only able to leverage Industrial Power to pursue but its actually able to use a trading system to execute that agenda. And i really want to point out something in your opening remarks that is important. This really isnt about publicly owned versus privately owned and predict havana charter cover that freedom i that we spent a lot of time talking about things in china when the pivotal variable isnt who owns what. If the relationship between the industry said the government. Thank you. Senator cassidy, give another question. I do. Suet four sort of winding down here little bit but i want to make sure that i give everybody an opportunity to ask a question i want rated. I go back to your thesis. Economic power allows them to shift down and so, and again i find that valid. But still i will ask you. I agree, we should not allow people to use environmental laws for the workers flights for human rights plates labor etc. In order to undercut the majority of a worker in the United States. On the other hand, theres an area, if we have environmental laws that we really need and another nation is not, we can easily require everybody to have the same environmental laws and same labor laws in the conditions and say, Central America that are different than the United States. In regards to what of the minimum wage for example. If we are going to reexamine our trade relationship, to the degree that i think at least that were to demand a certain Environmental Standards in the u. S. And chinese air pollution was over to the u. S. , we should ask same Environmental Standards there. But going back to the wages. Do you see that they could also be to required to be like our folks going to be a disadvantage . Im actually very supportive of what is there and i am supportive of rules that have been enforceable in the trade agreement since 2007 glitches labor standards. About setting a specific set of rules every this is about and this is also the founders was limited in the havana charter. If we havent trade agreement concerning, we wouldve known what was done none the less it would be remedied correct placement what he is a wto in Section Three oh one to establish that. Although any testimony you point out, the Consensus Organization can be difficult to open the wto. I think we should ask for it. And if we fail there because it did, and three oh two and anything else. I think there has been proposals and not in any concrete terms for proposals about exit to u. S. Markets know if they have simple standards as part of our domestic regimes. I think those are worth considering. Summa thank you very much. Senator cortez masto. You have additional questions. Senator why didnt do you have any questions you would like to ask. Fleming toothache appreciate it in a week ill appreciate your testimony here today. Mr. Gere, what is worth. Then we need to sort of get to a place where we recognize that the ministrations whether they are republican or democrat in a good ideas and some because of good ideas and note this administration seems to believe the bilateral trade negotiations are optimal. I can understand why their argument is that if you do a fulllength lateral trade agreement, you will have to give it to a jeweler to get but there are benefits and then described the vertically dealing with china. Do need to work with our allies. And to confront this challenge. And when because theyre in the same situation we are in. Theyre being economically destroyed in an economically and threatened to thoroughly read this important for us to work with people who share valley to canada. This credible aggressive economic and military threat from china. So let me thank you freezing point. Nothing to think you find a lot of people in congress who sure that. Then without thank you all of you for joining us here today and this very important topic. Group going to have a deadline of two weeks for additional questions and may be that the senators have additional written questions they would like to ask it will keep the record open for two weeks. If the witnesses would be so kind as to respond to those. We would very much appreciate it. And with that, subcommittee on International Trade and customs and Global Competitiveness stands a Georgia Party to think as much. During the summer months, reach out to your elected officials was expands congressional directory. It contains all of the Contact Information you need to stay in touch with members of congress, federal agencies and state governors. Order your copy online today. A cspan store. Org. 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