Transcripts For CSPAN3 Sen. Mark Warner On U.S.-China Relations 20240714

Next, a discussion on u. S. China relations with virginia senator washing a mark warner vice chair of the Intelligence Committee from the u. S. Institute of peace this is an hour and ten minutes. Good afternoon, everybody im Nancy Lindberg im the president petition u. S. Institute of peace. And delighted to welcome everybody here for a very timely conversation with senator mark warner from virginia. About the u. S. China relationship, an issue getting a lot of attention these days. Senator warner has been at the forefront of china. And has been a leader on the conversation related to Foreign Policy and National Security issues both on china and through his years of service in the senate. For those of you who are joining us for the first time, u. S. Ip was founded by congress as a nonpartisan national institute, dedicated to working with partners around the world to prevent and resolve violent conflict. And one of the things we do here in our headquarters in washington is to provide a space for conversation about the most crystal Foreign Policy issues of the day. And i think the u. S. China relationship certainly qualifies as that. And that is exactly what brings us together. We have seen over the past decade how china has shifted many of its policies. Becoming far more active in the international stanl and particularly its invested heavily in countries around the world and playing a much more active role regionally. We have seen it from north korea, to burma to africa. Here at usip our China Program directed by jennifer stats has looked at the role of mcin conflict affected countries. As part of that work u. S. Leads a series of bipartisan senior study groups, the first two of which have looked at north korea, nuclear and peace negotiations and chinas role in burmas internal conflicts. I invite you to check those out on our web which is where you can find them. It is my pleasure to introduce senator werner. He brings a very rich background, a very useful background that combines a Business Technology career with Public Service. And in addition to being the senator from the great state of virginia, he has also serve as virginia virginias governor. He has a proven record of bipartisanship working to advance u. S. Interests and security abroad. And most importantly he is the various chair of the senate Intelligence Committee where he has worked with senator richard burr and other senators on both sides of the aisle. This combination of the private sector, Technology World and Public Service world, i think gives him particularly keen insights into the topic that we are discussing today. And he ha has really been in the forefront of leading conversations about technology, economic and trade issues. All of which are at the core of the u. S. China relationship. Thank you everybody for joining us today. Thank you for those joining online. If you are using social media, please use the hashtag and join us for the conversation at hashtag sen werner at usip. With that please welcome o join me in welcoming senator warner. Thank you, nancy. Thank you for introduction. Thank you for the great work usip does on so many subjects. Its great to see so many people here. I do want to acknowledge my dear friend raymond mood who we were just talking, close to 40year friend and involved in the u. S. Institute of peace and a number of terribly critical jent ventures nationally and around the region. Toipt commend the institute for the important work you do on Foreign Policy challenges. Ive got a lot to say. So and i want to make sure we have plenty time for the discussion let me get right at it. Today i think there is a widespread understanding that confronts a rising mcis the Foreign Policy challenge of our time. China is a global competitor of 1. 4 billion people, living under an authoritarian system of government. That is vying for economic, political and military influences globally. It is governed by the Chinese Communist party whose view of individual liberty, rule of law and Democratic Values is starkly different from those of our own. On all these points there is broad bipartisan agreement. However, there is far less agreement on what our response is to these realities should look like. How do we enact a strategy that continues to protect u. S. Interests and International Institutions while staying true to our values . I believe we can retain our leadership and Global Competitive advantage by embracing these defining characteristics that have made america the leader of the free world. Those characteristics are our belief in the rule of law, our checks and balances against government overreach, and our respect for the rights of an individual, especially when the rights come into conflict with the government or a majority faction. These values are the foundation of our International Successes and of our strongest alliances. Today, china is offering a very different model to the world. It has achieved a meteoric rise while rejecting some of the core values. I want to make one thing clear at theout set. My beef with the policies of president xi jinping and the Chinese Communist party. Not with the chinese people. And especially not with americans of chinese decent. But the chuting truth is the Chinese Communist party is intent on fundamentally reshaping the norms and values that underwrite decades of global stability, security and prosperity. The question is, how do we respond . Do we engage mcin a head to head square cold war on multiple fronts . Or do we embrace what i would argue is our more traditional leadership role and strengthen the International Order that beijing is attempting to upend. I would argue the second approach of offering a better model to the world, rooted in freedom and opportunity is both consistent our values and the approach most likely to succeed. First, i want to talk briefly about how we got here. In many ways were having a conversation like this because the conventional wisdom has changed rapidly over the past few years. Until recently conventional wisdom told us that the u. S. And china would both rise together, two nations intertwined, partnership and trade, business and education. Ic many, i hoped that the prcs greater global integration would lead for a more open, prosperous and potentially more democratic china, and that a rising china would be good for the world. Today it is clear that the aims of president xi and the Chinese Communist party do not align with that vision. Instead, the Chinese Government has worked to challenge the rulesbased International System and expand its brand of global influence, military military presence and economic power. It is time to wick up to the fact that beijing is pursuing a strategy not only to strengthen china but to explicitly diminish u. S. Power and influence. To do this, the communist party is exploiting all the elements of state power, to strengthen chinas position in the world. And theyre doing this at the expense of human rights and human dignity. The way i see it, these efforts fall into four buckets. Military power, influence campaigns, economic expansion, and an area that has not received enough attention, science and technology policy. First on the military front, the Peoples Liberation army, the pla is expanding both its own domestic bases and starting to establish bases overseas. Chinas naval forces are now able to conduct operations further from home. In the indian ocean waters around europe and the western pacific. Under the doctrine of military civilian civil fusion beijing has pursued a cutting edge set of cutting Edge Technologies such as ai, unmanned systematics and hypersonics withes, the essential to 21st century war fighting. And the pla is moderning its military at the fraction of the cost that those of news the west approach. They are effectively skipping a generation of expensive r d. By adopting platforms from foreign militaries or sometimes stealing the intellectual property to do so. Contrast that with the United States where we continue to spend 750 billion on defense. Including expense of updates, the legacy military systems and platforms. To compound this, china is focusing efforts on tools of asymmetric warfare like cyber, space and misinformation and disinformation. U. S. Defense and intelligence officials are increasingly concerned that the pla now threatens the United States United States in specific domains such as cyber, and space. And that china even leads in specific military technologies again such as hypersonic weaponry. Former dni coates and others have warned of chinas ability to target Critical Infrastructure right here at home. Like our electric grid using Cyber Attacks. I worry as well about the pl as willingness to use cybertheft for economic espionage. The truth is china is demonstrating that wars with near peer competitors may no longer be a traditional mill to mill conflict but instead for the u. S. And our allies increasingly clear that cyberand again misnegatives, disinformation will be just as critical as military might Going Forward in the 21st century. The second aspect of chinas strategy deals with efforts to wage influence campaigns beyond its borders. The prc has tried to dictate how foreign entities characterize sensitive topics like the dalai lama or tiananmen square. Beige has forced globals powers to dictate the world. You dictating how u. S. Airlines put taiwan on global maps. On college campuses, we have seen china use student groups like the confucius institutes to shape and stifle debate. More broadly, the Chinese Communist party relies on a network of think tanks, newspapers and aligned businesses and political leaders to shape perceptions of china and the party. They have also used their economic investments awraud to leverage pressure to pressure other nations to support diplomatic agenda. Just recently this one was particularly noteworthy just recently a number of countries, including marmgt muslim countries signed a letter expressing support for chinas tactics with the uyghur population. And the Chinese Government has pursued an extensive social media disinformation campaign, exploiting the continued vulnerabilities of youtube, facebook, twitter, all sites banned in mainland china, to spread propaganda abroad. The party also dominates chinese Language Services like we chat. Expanding control over the flow of information, not only within its borders with you but within its Expat Community as well. The tactics are an extension of the doctrine of cyberthe sovereignty. The idea that the state has the absolute right to control information within its border. China has already brought in notion to bear on its people. In the form of censorship, domestic disinformation and the social Credit System. But increasingly we are seeing it exported on a global scale. Third, on the economic front, president xi has pursued two Economic Strategies aimed at displaysing the United States position of economic leadership. To the china 2025 plan xi has focused on developing domestic chinese capabilities in Strategic Industries of the future. At the same time, the prc is working to expand chinese exports globally to existing customers as well as the developing world. President xi is making a play for dominance in areas like 5g, ai, quantum computing. Robotics. And increasingly biotech. In addition china to employing the full power of the state to build the infrastructure and here is something ditch set the standards for new technologies like 5g wireless. Actually adopting tactics the United States used for much of the 20th century. But unlike the u. S. Mcis trying to set the standards to promote its own interests. Rather than the notions of any sort of fair competition. At the same time, china exploits the openness of the International Trading system to gain access for Chinese Governments. And beijing has maintained or even increased barriers to foreign competitions. Globally, the belt and Road Initiative to build infrastructure and trade relationships heavily weigh in chinas interests. Accompanying this has been a digital initiate toef promote Chinese Telecommunications equipment. The goal is not simply to promote chinese vendors but to seed the Global Telecom market with equipment and service that is could be exploited by Chinese Security services. The truth is Chinese Communist party is attempting to harness Chinese Companies, Civil Society and even overseas die spora as an stinks of the state thighs efforts are frankly neither hidden or frankly very despite protests to the career contrary pb, no chinese company, however global, is actually private. These companies dont make decisions entirely for economic or commercial reasons. Because they are legally required to act as an extension of the Chinese Communist party when called upon. And this leads to the fourth aspect of chinas efforts to reshape the International Order. Its science and technology policy. Again and again we have seen u. S. Companies forced into joint ventures with Chinese Companies. Or required to share specific code and other ip in order just to get access to the chinese market. We have heard from American Companies who have been put out of business after chinese competitors stole their technology and produced their own lower cost version of the american product with state subsidies. But chinas blatant effort to steal western technology did not stop at its border. The Justice Department revealed last year that more than 90 of dojs economic espionage cases and more than two thirds of currently open trade secrets cases all involve china. In particular, the Chinese Communist government views western universities and government labs as fertile grounds for transfer of Sensitive Research back to china. And whats particularly alarming is that it sees chinese expats, especially students and academics as essential assets in these efforts. The fact is chinese nationals now make up roughly one third of all foreign students studying in the u. S. Out of the 363,000 chinese nationals, studying in the u. S. Last year, nearly half of them were majoring in s. T. E. M. Fields. And many of them are returning home to take advantage of the opportunities in chinas growing economy. My concern isnt necessarily with people who want to come here and learn and then go home. But i do have a concern that the communist party is attempting to coerce some of these individuals for Technology Information and intelligence collection purposes. Let me be career. The majority of these students are blameless. And make significant contributions to the Research Environment and to the u. S. Economy. But we have to acknowledge that whats changed has been in the last few years more and more the Chinese Intelligence Services often preys upon this population. Literally threaten the students families at home saying your son or daughter needs to not only come home but bring a thumb drive back. The truth is president xi, china is drifting from the International Cooperation and shifting to a more nationalistic and confrontational path of scientific advancement. While we must not lose sight of founding principles we cant ignore the fact that mcis now playing by a different set of rules. So where does that leave us . Left unoppose ds this threat to global norms and values jeopardizes not just americas position in the world. It risks undermining the whole notion of free inquiry, free travel, Free Enterprise and other values that have animated decades of global stability and prosperity. Thats why im so keeply concerned by the trump administrations erratic and incoherent approach. While the administration has rightly raised concern about china, something frankly that previous president s should have done earlier, the administrations unilateral approach to the challenge is not leading us toward success. After all the difficulties i have outlined pose a challenge let me makes sure challenge not just to the United States, not just to the west but to all nations success. Democracy, individual liberty or independent judiciary and the rule of law, countries like japan, south korea, japan, australia, india and others all face the western and others. Rart than building a coalition to confront these issues President Trump has alienated some of our closest allies. Instead of building a value sensed coalition to stand up to china the president has minimized the importance of human rights and Representative Government even when we see the protesters in hong kong standing up and singing the starspangled banner. The president s insistence on framing this as a conflict between our two countries has resulted in little tangible gain. We cannot afford to frame this strategic challenge in simplistic cold war term, dividing the world into two and seeing who can weigh out the best. And frankly this is just not realistic given chinas Enormous Economic integration into the rest of the world. The prc is the top trading partner for more than two thirds of the world. And like many of our allies the u. S. Economy is deeply intertwined with china. Meanwhile while the china and u. S. Are competitor ins many areas as instancy said, we also confront many common challenges from Climate Change to water security to north korea, the stakes are too high for both of our countries to retreat into a permanent confrontational basis. Instead we need a comprehensive strategy to defend against chinas bad behavior, to compete with china in the 221st century and strengthen the International Order it seeks to upend. Heres where i believe i shall start. First lets talk about defensive measures and how to protect ourselves especially in the shortterm. This cant just be left up to the federal government. It needs to be a partnership between the government and the private sector. Thats why the past year ive been convening a series of briefings for the academia always partnering with a member of the Senate Intel Community and those leaders of the ic to give those outside government an inside view of what weve seen. Ive introduced legislation with marco rubio that would help formalize this effort. However, i believe the government can and should do more. First, we need to protect our supply chains especially from military platforms and equipment. In october 2018 gao report fund cyber vulnerabilities in nearly all u. S. Weapons systems. And our navy has admitted in public reports that were wise on systems so comparable to adversaries that theyre, quote, reliability is questionable. We can start by securing the internet of things devices before theyre exploited. I have bipartisan, bicameral legislation that would require all government purchases of internet connected things particularly coming out of the dod meet at least the minimist security standards. In 2018 i was proud to introduce language into the defense bill. I think we need as i said a National Strategy to deal with supply chains. Thats why i along with senator mike introduced a bill to establish a National Supply Chain Security center. Companies also need to fortify their own systems against Cyber Attacks and insider threats. Second, weve got to get a lot more serious about securing our Telecommunications Systems especially when it comes to 5g. That means relying on trusted companies to build our telecommunications infrastructure, and it means setting standards that adhere to our Democratic Values. I have supported this administrations initial steps to limit the uses of huawei and other Telecom Equipment from china. Just hope that the president sticks with these efforts, but more still needs to be done. I also believe we need a more serious conversation about how to both replace current equipment across the country. Many of our smaller carriers have bought huawei equipment because frankly its been a lot cheaper. Third, the federal government needs to develop better oversight and controls to stop chinese investments in critical dual use technologies. By law all chinese citizens and companies are ultimately beholden to the communist party, not their board shareholders and our corporate ownership rules need to acknowledge that. Ive supported reforms to expand oversight over these transactions but we need to ensure the implementation meet congressional intent and companies cant skirt oversight. Another area im working on is much needed Beneficial Ownership legislation. So the Chinese Government and other bad actors cannot hide their investments inside anonymous shell companies. Fourth, we need to continue our progress on enhancing export controls, which prevent sensitive technologies from being exported to china. Now, congress made some progress. And the department of commerce is currently working on language to strengthen u. S. Export control systems. But given how much Cutting Edge Technology and research and development is happening within the commercial sector, we need to establish these controls quickly and to coordinate with our allies. We currently partner with 42 other nations through the Australia Group export control regime. These are exactly the kind of International Organizations that must be strengthened. Fifth, there must be clear consequences for American Companies and citizens that enable chinas bad behavior. Ive become increasingly disturbed that u. S. Businesses and the Academic Community has deepened partnerships with china to gain shortterm Market Opportunity while ignoring the larger geopolitical impact. Equally troubling weve seen mee american investors pour money into Chinese Companies that advance the prcs military capabilities. Weve also seen American Companies develop technologies that directly enable the censorship, surveillance and social control efforts of china and other authoritarian regimes. These efforts may be good for business, but they directly support chinas efforts to rewrite global norms and rules. And at the very least we should make clear to both companies and academic institutions that complicity in chines repression efforts will jeopardize their ability to do business with or receive grants from the federal government. Sixth, we need to do a better job of protecting our research and development. Especially the critical work that goes on at u. S. Universities and research labs. Universities should double down on security and compliance requirements. Things like disclosing additional sources of income or affiliations with Foreign Military and intelligence organizations. That said, these security measures must be enforced in a trance parent and fair way. The goal is to protect our ip but its also to help these students and researchers being preyed upon by the communist party, not to discriminate against them. This will require creative thinking, to flip the script on the ccps efforts to coerce Chinese Students and researchers to bring home early state research and key technologies. Beijing relies on its leverage including families back home to force individuals with access to federally funded Sensitive Research to return to china for the transfer of such technologies. What if we actually considered expanding asylum access to include Chinese Students and their families if they were threaten. It wouldnt be guaranteed to term but it might be enough doubt in the mind of the communist party they might have to rethink the tactics. This should serve as a wakeup call to mobilize in support of maintaining our Competitive Edge. Actually, a spotnick moment for the 21st century. Remarkable investments in education, stem and a host of other technologies. Sputnik demanded a quick response, and it led to americas leadership literally for the next 70 years. We not only generally invented or not invented here but we often set the standards. Over the last 60 years weve seen the integrated circuit, wireless communications, and the internet to name a few where we actually set the standards and that helped move the rest of the world. That was an enormous, strategic and economic advantage for us in the postworld war ii period and we need to match that effort again today. Following world war ii the United States funded literally 69 of annual global rnd. Today that number is down to 28 . And only 7 in nondefense areas like wireless technology. Even if we are successful in convincing our allies that huawei and zte equipment presents significant security risks weve got to have an alternative to point them to. And if we look ahead to the technologies of the future, we need to step up our commitment to Funding Scientific Research if we hope to compete in the decades ahead. It likely will mean a different kind of defense investment strategy. Ive worried for some time that we are investing we are investing in the best 20 kt century military that money can buy. With much of the conflict, unfortunately ipt unfortunately in the 21st century will happen in domains like cyber, space and misinformation. And many of these areas, like satellites, like supersonics china is rapidly becoming our peer. China spends 250 roughly, but that 500 billion delta, china is investing in all of these cutting Edge Technologies. The United States needs to ensure that we are no longer overinvesting in legacy systems and platforms. Our Defense Budgets need to better align with the fact that the battlefield might not be the southchina sea. It could be the networks that power our grid or our financial sector. But ensuring our Competitive Edge also means mobilizing outside the defense ministry. It means promoting Stem Education and making sure our children get an affordable high quality education so they can compete. It means investing in infrastructure. And if were going to train and attract a work force for the future it has to be up to the task. Fortunately, this is an area we can call upon some of of our nations greatest strengths inclusion, diversity and entrepreneurial spirit. One reason is that we are the land of opportunity is that you can come to this country as an immigrant and in the first generation become an american. China with its oppression and persecution of minority populations cannot say the same. Sadly, this is again one area where the trump administrations policy have been remarkably shortsighted. The truth is we cannot effectively advance our National Security interests alone. Whether its standing up to china on trade issues, advancing a free and open endo Pacific Region or developing a secure telecom infrastructure, it cant happen without our allies and partners. Acting in isolation only enables china to play countries and companies off one another. Und undermining our leverage and impact especially when so Many Companies countries actually do share our commitment to democracy, Global Security and a rules based trading system. This is where the trump administration, again, has gotten it all wrong. Underestimating the importance of partners in advancing our most fundamental interests. For example, our efforts to convince allies to adopt alternatives to huawei have been constantly undermined particularly when the president keeps hinting that the restrictions on huawei could be used as a bargaining chip in the context of a trade deal. We should instead be working closely with our allies and partners to create market competitors to huawei that actually abide by our rules. This includes setting fair and open secure standards for 5g based upon tech logical rigor not chinas geopolitical interest. On the trade front, we should be making common cause with trading partners and allies who face the same economic consequences of chinas behavior. We should be coordinating with our allies on expert controls and screening of foreign investments. Lets also recognize that our allies are ahead of the United States on certain key technologies. We should be coordinating with them on research and development. In order to pursue a free and open endo pacific based on our values, we must deepen our cooperation with our allies and partners such as south korea, japan, australia and india while expanding our network. As cochair of the india caucus i see real tupopportunities to increase our engagement with india and a set of shared Strategic Interests such as maritime cooperation, Cyber Security and counter piracy. The United States also has a number of existing security arrangements with key allies, trilateral and quadrilateral that can be bolstered. We should continue to enhance defense capabilities of our regional partner, increase interpoperability and support Democratic Institutions in developing countries. Using new tools such as the recently established u. S. Development International Finance corporation or the new opec, the United States should work with partners to bring private capital to the developing world that is again consistent with our values. Across the board the u. S. Should be rallying countries with similar concerns about multilateral mechanisms to challenge chinas behavior. The u. S. And our allies built the wto based on openness and the idea that their play actually benefits everyone. Collective action on behalf of freedom and fairness can push back on president xis dangerous ideas and actually move china into a more responsible path. This will require a significant strategic shift from business, academia and the federal government. It will also require us to focus our own approach. We need to increase our defenses, step up our response to chinas economic ambitions and strengthen our partnerships abroad. We face great challenges when it comes to china, but this is not a time to be fearful. We remain the strongest country in the world, and our values are still the envy of the world. We know at times sometimes when we look at our current politics, things seem a little bit of a mess. But its never been a very good idea to bet against the United States of america. I still believe that is true today even with the challenges we confront. Thank you all very much. [ applause ] thank you for a very comprehensive overview of yeah, that was the longest topic ive ever given. You laid out in a very comprehensive way the complications and nuances of a relationship as we were talking about earlier has shifted trumitr tremendously over the past decade. Can i ask you more to say about the shift that has occurred, this change in our relationship. I stated this in my speech but i want to reiterate, chinas a great country. China has history hat rivals any national in the world. And i remember when i was governor leading a state trip to china and in 2005 was incredibly impressed with the energy, entrepreneurship, activity. And i was absolutely part of a group that embraced this notion that the lives of china and the lives of the United States, there would be points of conflict but they would generally end up with greater collaboration. My view, though, has fundamentally changed over the last three to five years. Part of that has come from increasing words from businesses that have invested in china, that have seen their intellectual property stolen, seen chinese competition with state subsidized enterprises taken up with activities, part of that come from the level of intellectual property theft taking place in this country. But most of that comes from the absolutely unanimous sense of everyone across the whole Intelligence Community that as president xi further consolidated party power and reestablished the communist party in ways that both changed the legal structure and the Business Outlook of enterprises in china, that the goal no longer for china wasnt a collaborative effort but it was a real goal to dominate and not just dominate within the region but in a host of technologies and various across the whole world. I think thats caused a reassessment. I frankly think and while im critical of some of the things President Trumps done, i give him credit for elevating this issue. I actually believe president obama should have in the later stages of his term. And i think it is the Foreign Policy threat challenge of our time. This is a competition between the communist party china versus kind of any economy that is marketbased that had rule of law independent judiciary. And thats why i think as i try to make the point we need to rely on these alliances and rebuild. But you also said we need to not retreat back into a cold war frame, but yet we need to be able to go head to head on some of the Technology Challenges within our own values and our own systems. So that presents a particular challenge if you think about the spread of huawei and 5g and technologies that have the full weight of the Chinese Government behind them. So have you given thought to what does that look like . How do we tackle that kind of challenge. First of all, and i think we were all caught offguard. The government and private industry and lets say again im a little biased. Im a telecom guy, i was in the Wireless Industry for years. We, at least america had kind of gotten a little lazy presuming that every tech logical innovation if not invented in america, even if it wasnt invented in america wed end upsetting the standards and by virtue of the Worlds Largest economy and if not invented here we were close in the collaboration. And we never really processed that into policymaking because we always assumed we would set the rules, number one. And number two, we always thought we almost kind of had a handsoff approach that said we did want really mind who ended up being the Technology Leader on the private sector because if we set the rules and we were the largest market wed figure out a way, and nine times out of ten the market was always an american company. And 5g and im thinking about this not just recently but years ago. So whats happened is china has gone out, they have their enterprise, huawei backed by in a sense china inc. In terms of financing, so they could offer decent equipment with huge subsidies, 140 financing, in many ways taking exactly the play book moat rolea and at t used and were left one without a national champion. So when we first went out and two points here, with huawei we wept out and i think inappropriately tried to explain why this is a problem. This is not a problem currently because there is a back door in the equipment. But when you move to a 5g network it means its much more software driven, theres not a single switch and it means when huawei only sells, its essentially a full stack so you have to buy all huawei equipment, so you have to get updates. How many updates you get on a regular basis, the number of updates youll be receiving software base will be exponentially higher, and if you have a company that at the end of the day this is why the australians prohibited huawei, its ultimately not responsible to independent judiciary or rule of law but were responsible to the government. At any time in the future the government can say to huawei, the next update you send, puts malway in, and i dont think weve made that clear that the problem is not countries are saying show us the back door, it is the ongoing threat and the fact we dont have recourse because huawei at the end of the day is responsible to a communist party, not to the rule of law of independent judiciary. So we didnt explain the threat well enough. And most of the intelligence communities around the world have acknowledged this problem, but we have the challenge then of saying if this equipment is a lot cheaper and what are you saying, america, we should buy instead . So the competitors are nokia and samsung, all Great Companies but none of them have the wherewithal of the company their located in to match the financing power that china inc. Can bring. So we may need and we have and this is a pretty traumatic cop cept but theres a lot of conversation going on. We in this country have always avoided notions of industrial policy where the government tries to pick wipers nners or l. I think some of that when were competing against the nations size and scope and focus of china may need to be rethought. So we may need and we are having conversations that say, you know, should we with our partners or with the other ventures think about how we can combine and have a it doesnt necessarily have to be american but western and i say western in the concept of geographic because the countries that first brought this to our attention was japan, korea and australia, open democracy type equipment that would have Quality Equipment with financing able to compete. That is a dramatically different approach than anything weve thought about in recent times, but it is driven by the fact when were competing against china with the size, scope, economic heft and intellectual capabilities, were going to have to think differently. I want to ask one other question and well open it up to the audience so be thinking. Well have mics coming through. You made a point of differentiating the government from the people of china. I think everyone appreciated your call to not demonize chineseamericans or the chinese nationals who are studying among us. But you also noted the importance of both the business sector and the University Academic sector participating in a partnership to address the shift that you so articulately outlined. How do you risk how do you assess the risk benefits of the engagement, the kind of very fruitful, rich engagement with academia, with business, with people to people, with the need to think differently . How do we move on that . Let me try to take that a couple of different ways. First, ive been making this point particularly visa vi my beef is not with the chinese people. And the best indication i think of the fact that its the people of hong kong. I mean, the people of hong kong are expressing in ways that has remarkable courage, that the last thing they want is this communist party system inflicted upon them. I think that strengthens the case and i think frankly many Chinese Students who are studying here, who first get exposed of what happened at the square and democracy, we need to be more supportive of that, and two constantly be careful in language and framing this is not antichinese. It is particularly concerning to chineseamericans who are rightfully horribly afraid that i think it was back in the 80s, a gentlemans name who was killed from chinese ancestry during the 80s because people thought he was japanese. This is the antijapanese phobia of that period and then we clearly see the bias that took place against Muslim Americans after 9 11. So it is essential and i dont think our government has done nearly a good enough job engaging with the chineseamerican community on an ongoing basis to say because they are very much trying to be exploited by other tools of the chinese use and theres a lot of this going on between australia, so put that on one side where we need to continue to make this. On academia, its a challenge. You know, 363,000 students all paying 100 cents on the dollar tuition, many of these universities have become addicted to that tuition flow. And these are great students, and this is an area that we naed to be very thoughtful about, but we also have to acknowledge the many universities are picking off the confiduciausuos tutes and let me get to the last part. With business, and this is where ive had some push back when i see some of our friends in private equity, the private equity folks who may be making huge amounts of money by investing in some of these Chinese Tech Companies who are helping bring the surveillance state or the social Credit System that would make old world wash in turps of surveillance, and some have said there are no moral responsibility, i think we really need to expose this and rethink it. And what do we do about given this complicated agenda with the terrible human rights abuses happening right now against the leaders, you mentioned the hong kong protesters. What are we able to do about that . Well, thats again where when america doesnt make part of its Foreign Policy, human rights, individual liberty, freedom of expression, we lose our moral force. The fact that many countries, muslim majority sipe that letter supporting the chinese policy against the leaders is pure economic intimidation. And it is extraordinarily disappointing that this administration has not spoken up. On the other hand, you know, i think about senator rubio and a lot of my republican colleagues, they have remained stall worked into speaking up about american values. 90 of what i wept through today maybe not the trump parts, but the other 90 i think my american colleagues would wholeheartedly agree on. Lets take three questions from the audience. Well start with this gentleman right there, and then well come down here to the front row. Go ahead. Okay, thank you very much, senator warner. You talked about the importance of working with our allies. And please identify yourself. Im with the Telecommunications Industry association and i work on global policy. Huawei is not a member. You talked about the importance of working with our allies on a lot of these issues, but i think its challenging because not a lot of our allies or not all of our allies in europe or other places are necessarily on the same page and would be willing to limit their own commercial interests in some of these issues. So how do we convince them, how do we work with them to push this agenda . Down here in front and then this lets actually go here with this gentleman and then pass it over there. Well do the three. Thank you very much, senator warner. Associate director of uacu in kiev, ukraine. Id like to focus a little if you would expand on your thinking to u. S. Education institutions and what could the u. S. Government on a larger scale do to support u. S. Higher education institutions so that they arent so backed into a corner as you pointed out with foreign students and with a third of them coming from china. So much is based monetarily on the survivals in the case of the rop rapid rising Higher Education costs. Needing to bank on those students because without it our students cant move forward. Thank you. Thanks, and well let you take a batch. Senator, im proud to be one of your constituents in virginia. And introduce yourself. Im pat malloy. I was on the China Commission as a commissioner in five twoyear terms. And what i saw was the change in our corporations from stakeholder to shareholder value, our corporation felt the only responsibility was to enrich their shareholders and top management. Im going to ask you to get to a crisp question. Okay. I saw the chinese being able to play on. I was delighted with the business round table statement recently that theyre moving away from that emphasis solely on shareholder value back to more stakeholder value system. Im wondering if thats part of the issue we should be addressing in taking on the china challenge. Want me to go ahead and take a shot . One high support for federal education, i can give you the chapter and verse and publicly increased and 22 friends running for president who have all got a variety of ideas, theres a bunch of ideas in that bucket, too, but we have to make Higher Education both more affordable and more assessable to americans but at the same time recognize one of the greatest assets of our country have been these foreign students who have stayed and decided to build their business here in america. Northern virginia is, you know, 40 of our tech business started by first generation americans. So i do not want to walk away from that attracting the worlds best and brightest. And frankly we need an immigration policy that actually allows i would think more of these qualified students to stay here if they choose afterwards because we have the worst of both worlds at this point. We have incredibly bright people coming and studying, many of them wanting to stay but were not really immigrant friendly right now, and particularly harder with china when theyve got the ability to threaten the family when they dont come back. With the other students they can simply if theyre not welcome here, they are welcome in canada, australia and the u. K. Youve done meaningful immigration reform. In terms of stakeholder versus private shareholder privacy, i support what theyve done, but weve got to make sure those are words. We absolutely need to make capitalism work for a Broader Group of people. I think it goes how we treat it on a tax encounter basis because c c c Chinese Companies dont have that enormous pressure to make 3 cents next quarter that sometimes makes the American Companies disinvest in rnd and a host of longer terms. In case of the telecom companies, i think most of most nations are starting to understand at least at the intelligence level, Committee Level that huawei is a longterm security, and its really based on two issues, its based upon the vulnerabilities in 5g on software updates, but its ultimately based from the fact if you make the country dependent upon a system from a country where there is no independent judiciary or rule of law and that company at the end of the day is loyal to the particular party, not to an open trading system, you know, youre going to be vulnerable. But we have to couple that with, one, the ability to think about how we help finance the way we do the first three or four generations of wireless where the Washington Companies could provide the same kind of financing. We have to provide the same kind of financing whether its through the new opec or maybe it should be an expanded 5i, and we have to have an alternative and we can say, and this is where you get into an area which was not done before and the industry might have problems if we start to say here are our one or two champions that have the staying power. At this point as much as i respect the three companies that are out there, im not sure any of them think they have the staying power to compete against huawei backed by china. The ambassador over there, keep your hands up and then well take two more. Thank you so much, senator warner. Sorry, im a senior fellow at the institute of peace. Senator warner, in your remarks you had mentioned the growing outreach of china and the use of its military forces away from home. But then it can be argued that at the time of the asendancy most of the western powers they did exactly the same china is doing. So my question isnt this criticism slightly out of place and selfcontradictory . Repeat. You mentioned about the growing chinese outreach and the use of their military forces away from home. Thats something you mentioned in your remarks. My question is that it can be argued that at the time of their ascendancy, most of the western powers did exactly the same that china is doing. So isnt this criticism of chinese behavior slightly misplaced and selfcontradictory . A couple more questions. Lets see this gentleman up here and right down here in the front. Hi, tim akin, also a constitch wpt in the center. Aspects of the Transpacific Partnership also a second question ill try to work in here is what is the sustainability of the current based on your intelligence perspective of the current communist leadership, is there an opportunity for change there and how might that occur. Thank you . Id love to tell you but id have to kill you. Thank you so much, senator warner, for the presentation and overview of where we stand right now. Im also your constituent in virginia, and my question is so youve mentioned theres 750 billion investment into defend the federal defense budget. How do you think based on what you said it has to be reallocated and where new investments perhaps need to come, and should we make some particular Education Programs a National Priority and create legislation to support that . Thank you so much. The first gentleman, ambassador your critique is 100 accurate. In many ways these had the same expansionary imperialistic tendencies. I would argue that even if not fully implemented at least the underlying values the western governments said they adhered to of democracy, rule of law, individual rights and some expression of freedom, while not perfect was at least the underlyi underlying argument. I think what makes what i fear that china is doing is the Chinese Military expansion is still relatively small. Bebelt and Road Initiative is good oldfashioned 21st century imperialism in a different suit. But what concerns me is that what china is actually exporting is an Economic System that is kind of a staterun capitalism. But i think more frightening is what theyve been able to create in terms of a surveillance state using technology to monitor peoples behavior in a way that is pervasive beyond anything that even the soviets at the most extreme expect. So if you are suddenly saying to a regime and i wont cite around the world, here we will build your power plant, well build your roads. Were going to offer you deeply discounted huawei equipment. And if you put that equipment in, we can find a way for you to monitor all your people and all your dissidents, that to me is a clash of values that democracies no matter where theyre located around the world or people who aspire to democracy no matter where they live all over the world should be concerned about it. In terms of tpp i think we totally blew it when we didnt try to sell it as not a trade deal but a National Security deal. And the fact that both Political Parties have, you know, kind of walked away from multilateral trade agreements is a concern to me because i think theres a reason that we can help build those values in if we do it right. Whether tpp in its and some will argue many of the countries we have bilateral relations with, i still think some International Economic Security Order that takes asian parts of the americas is a effort worth reinvigorating. But the rest of the group has moved on as you know, but i think that needs to be back on the agenda. To your question i think that let me give you two examples. Ive also got a little bit of time and focus on the russian intervention into our democracy in 2016. And what russia did against us in 2016 they also did to the u. K. And the brexit vote, they did in the french president ial elections. If you adup all the russians spent in american intervention, the brexit vote and the french president ial elections, its less than the cost of one new f35 airplane. So the reason we know russia, china, iran and others will be back because its effective and extraordinarily cheap. So i talked to lots of folks in the defense establishment and this is where the rhetoric and reality sometimes dont match up. And if we all realize that 750 billion, investing in all these legacy systems, that it does it longterm, we cant take that 750 billion and move it to a trillion five a year, if were really going to meet all the needs in cyber, all the investment areas, really make sure our grids and systems are totally safe. But the willingness of a defense establishment who said to me, yes, senator, we agree with you but we really dont have a process that says okay how we actually reprioritize if were going to rye to take maybe thought gnat 5 bill yp, but could we take 250 for of that and move it into research . I would argue for our economic and powers vision that might mean more investment than simply buying more 21st century stuff. Senator, youve given us a very comprehensive very thorough framework both of the challenges and some prescriptions for having to move forward. I want to thank you you for taking time out of a very busy schedule to come down and share that with us. Were very grateful to have someone with your background and knowledge in energy working what is clearly a significant set of challenges. Thank you, nancy. Thank you, sip for this opportunity, particularly thank the audience. That was the longest talk ive ever given and i was getting tired. I can imagine how tired you guys this is big, big subject and by no means is it fully comprehensive there, but we really it needs this kind of attention across all these areas and im sure people in the crowd have got good ideas to add to it as well. Well, thank you everyone whos online. Thank you everyone who joined us today and especially thank you, senator warner. Its been a pleasure. Please join me in thanking senator warner. [ applause ] acting director of National Intelligence Joseph Maguire testifies this week about the whistleblower complaint. The leader of ukraine that included talk about former Vice President joe biden and his son. Thats live thursday 9 00 a. M. Eastern on cspan 3. 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