Transcripts For CSPAN3 Select 20240706

This strategy has worked well in the past and the is confident it will work again. Our task on this committee is to ensure that it does not thanks to Speaker Mccarthy we have an Excellent Group of thoughtful legislators on this committee. On both sides, well be working handinhand with our teammates on the sandy committee particularly House Foreign Affairs committee who help stage our work through the 2020 china task force. German mccaul leadership produced bipartisan proposals that we must build upon as we investigate and expose ideological technological economic, and military threat posed by the chinese commune communist party we may call this a strategic competition, but its not a polite tennis match this is a struggle over what life will look like in the 21st century. And the most fundamental freedoms are at stake. The ccp is laser focused on its vision for the future a world crowded with totalitarian states where human rights are to the whims of the party. For the tile being it is still up to us to decide if that is the future we want for our children but it wont be for much longer time is not on our side just because this congress is divided we cannot afford ways of the next two years lingering legislative limbo or pandering to the press we must act with a sense of urgency. I believe our policy over the next ten years will set the stage for the next hundred. We cannot allow the ccp tech power to still prevail. Therefore, we must learn from our mistakes for much of the past half century we tried to win the ccp over with engagement believing that Economic Engagement in particular would lead to reforms in china. But parties made same bet only problem is it didnt work out ccp laughed ats our naivete and took advantage of our good faith but that era of Wishful Thinking is over. The committee will not allow to lull us into complais or maneuver us to submission. Tonight were joined by a distinguished group in the audience. Include a titan of the Chinese Democracy Movement youll hear in a video that looks at some of the suffering the Chinese Communist party has inflicted since it came to pour over 70 years ago. This should remind us that all times in an all the work that we do together that we must constantly distinguish between the Chinese Communist party and the Chinese People themselves. Who have always been the parties primary victim and now i would like to introduce a joint video that the rank member and i put together to help set the stage for the hearing. Without objection the video shall be entered into the record and the clerk will play the video. Forward, chairman totalitarian will collect industrialize impossible quotas for a bureaucracy with the chinese countryside. Tens of millions suffered excruciating death 1966 a reason from society through struggle sessions and the public exhibitions. Over a hundred people were slaughtered some were buried alive all in the cases of over 130 people literally eaten 1989, students protest [inaudible conversations] they storm the city threw their bodies in front to slow them. Thousands of protesters and innocent citizens were killed. 1997 the honk hong kong for 50 years and in 2020 the National Security law make that promise into farce journalist are jailed the opposition is silenced. Activist are left harassed forced into exile or even worse. Today the communist party of china has separated one million clirn from their families and sent to boarding schools where any trace of the culture and identity is forbidden. Dell llama called cultural genocide since 2009, 157 protest the ccp suppression. Today the ccp task into a hightech prison for the millions there. While develop in the family. [inaudible conversations] are in Detention Centers forced abortion, forced inflation. The largest birthrate drop in year records. A twisted new form of genocide. Today the party monopolizes truth and millions even written disappearing. Whether youre a doctor or billionaire tech executive, a tennis player, testifying to sexual assault, or activist containing for gay rights. Ai power control techniques perfected roll out to china during the zero covid lockdowns china surveillance and families brought it into their homes left to burn alive in fires in the name of public health. Each of these Human History was perpetrated by the same paranoid thuggish genocidal organizations the Chinese Communist party. One protesters stands alone in beijing and gives voice to the countrys frustrations. The authorities disappear him. But his words touch off a wildfire protest as people of china call for human rights to be respected. I now recognize Ranking Member for Opening Statement. Good evening an thank you mr. Chairman it is honor to serve of select comment join chair of the colleagues in a bipartisan effort to address the Economic Security and Technology Challenges our country faces from the Chinese Communist party also known as the ccp. I believe three overarching themes will underpin our success as a committee. First, we must always, always protect American Values and interests. Second, at our best this committee can help us as americans to up our game as a people. For example, through investments in technologies of the future work force improvement, and by fixing weaknesses in our economy. Such as in our supply chain and even our Legal Immigration systems. Third, we must practice bipartisanship. And avoid antichinese or asian stereotyping at all cost and must recognize that ccp wants us to be fractious partisan and prejudices. In fact this ccp hopes for it. But what they dont get is that the diversities are view points and background is not a bud in america operating system it is our defining feature and structure as nancy pelosi this room is named as said our diversity is our strearnght our unity is our power. Our unity of purpose, our unity in in and our unity as americans we must summon that unity if we were to safeguard our values and our economic way of life Going Forward. Over the last three decades both democrats and republicans underestimated the ccp and assume that trade and investment would inevitably lead to democracy and greater security in the Indo Pacific Region including in the prc. Instead, the opposite happened. As chineses economy is grown more than 10 fold since gaining access to u. S. And world markets, the ccp has among other things strengthened its authoritarian control at home including engaging in a genocide of the uighur people. The ccp has funded a massive military buildup threatening its neighbors including taiwan. And it is pursued economic and trade policies that flat out undermine our economy. The goal of the ccp has become clear, to gley u. S. And other competitors especially in tomorrows strategic industries. As chairman xi himself recently said, quote, the east is rising while the west is declining. Close quote and by 2049 a mere 25 years away which would mark the 100th anniversary of the birth of the peoples republic of china chairman xi expects to ensure that china, quote, leads the world in terms of strength, National Composite strength and internationalling influence. As a committee we must use the insights we learn here today to make our country stronger at home and more secure in the world. Heres some principles i respectfully submit for our consideration. First, we must continue to invest in High Technology sectors of the future and boost u. S. Manufacturing. The chips and science act and the bipartisan infrastructure law were a strong start. But more work needs to be done. Second, we must determine aggression by the ccp. We do not want a war with the prp. Not a cold war, not a hot war. We dont want a clash of civilizations. But we speak a durable peace and that is why we have to deter aggression. Last august i joined Speaker Pelosi and my colleagues in visiting to show support for people of taiwan together we demonstrate that ccp cannot deter swan security or ours. Third, we must strengthen our global partnerships in coalitions not only to counter ccp security challenges but also to address its anticompetitive economic policies. Finally, we have no quarrel with the Chinese People or people of chinese origin. Thats why we should never engage in antichinese or antiasian stereotyping or prejudices, comments that question the loyalty of Asian American members of congress but completely unacceptable and must be rejected. These comments only feed the scapegoating and targeting of Chinese Americans further in dangering them and other Asian Americans. Indeed, this xenophobia and stereotyping as i mention before is what the ccp would want to happen. The ccp is counting on us to be divided. We must rise to the occasion and prove them wrong. Thank you and i yield back. Thank you. If any other member wishing to submit without objection those will be submitted to the record. None we are privileged to have an all star lineup of witnesses each of whom brings an important and unique perspective on the Chinese Communist party. First matthew fellow marine who i first met in the desert in western iraq patiencely converted converting to china watcher he served National Security advisor under President Trump now served chairman of the program for the defense of democracies among other affiliation next is Lieutenant General general mcmaster had a distinguished military career is also a distinguished historian his book of adult remains among the all time classic in terms of history of the vim war and service to our nation culminationed during the previoused administration hes w the senior fellow at the Hoover Institution also very privileged to be joined as you will soon hear is an incredibly moving personal story to tell without spoiling anything let me say there are few people who are better equipped to speak on a personal level about the nature Chinese Communist party were honored to have you here and scott fall of the alliance for American Manufacturing mr. Paul is true expert on manufacturing policy. And few are better equipped to speak on ccp align economic practices and consequences for american industry and American Workers than him. Welcome to all of you and thank you all for being here this evening. If you could please stand and raise your right hand i will now swear you in. Do you swear or affirm under penalty of perjury that testimony youre about to give is true and correct and belief so help you god . You may be seated let the record slow that witnesses have answered in the affirmative and mr. Pottingjer you may begin. Thank you mr. Chairman. It is part of my opening remarks, i would like to enter into the record a video that has been provided to the committee. Without objection video will be entered into the record and the clerk will play the video. It is hard to let go of the myth we hold about chinas rulers and their intentions. Sometime it helps to listen to china leaders in their own words. Myth number one, the china communest party is communist name only. [inaudible conversations] will inevitably perish and they will myth number two bay yin is not seeking to spread its own model or up end liberal and National Order. [inaudible conversations] all needs a new roared that surpasses and plants balance of power. In new world order is now under construction that will surpass and sub plant the system. Myth number three beijing is not pursuing competition with democracy or new cold war. [inaudible conversations] has emphasized that a states ideology has social system of fundamental incompatible the west. She has said this determines that our struggle and with western countries is irreconcilable so it is inevitably be a long complicated and be sharp. To use war as means to protect our Core National interest is not contradiction with the pass of Peaceful Development moreover it is manifestation of the view of warfare. [inaudible conversations] [inaudible conversations] [applause] chairman gallagher ranging member and distinguish members of the select committee, if any of this quotations that i just gley masters degree that short film surprised you, youre far from alone. And thats because china communist lead reverse masters at dis guising their true intentions. Those quotes you heard some of them from previously secret speeches and from military textbooks are just a few reflections of what china communist leaders really think. The success that the chinese communest party once enjoy presenting itself as constructive cooperative responsible, normal was one of the great magic tricks of the modern era. Leaders xi jinping might actually agree on that point. You were first to parties influence and propaganda activities as a magic weapon for advancing the regimes interest. You can say that the chinese communest party is the hue and david copper field of communist and krais chris and lfield but imagine sick fading theres no excuse for being fooled about beijing intentions and the canon of chairman seeing publicly available statements accumulated actions of regime too brazen to be misunderstood at this hour and by simply know too much thank you for the opportunity to testify today. General mcmaster youre recognized for five minutes. Ranking member christian moorety and distinguish members of the committee. It is a privilege to testify before this committee at this critical moment of our nation and the free world. And it is an honor to be seated next to three people for whom i have tremendous admiration and respect. This committees work is urgent and important because the United States has fallen behind in cons again cialg competition with the Chinese Communist party. For too long leaders across the private sector and academia, industry and finance as well as private sector across multiple administration in congress, clung to the assumption that china having been welcomed into the International System would play by rules and as china prospered would liberalize its economy and its form of governess. Relate proved otherwise but many leaders were slow to overcome Wishful Thinking and selfdelusion in turning intentions of the ccp. As a result, United States and other nations across the free world underwrote the erosion of their competitive advantages. Through the transfer of capitol and technology to a strategic competitor determined to gain preponderance, economic, and military power. This committee can help the United States catch up in the competition with the ccp. It can do so by Holding Hearings that reveal the nature of this ccp aggression, and what is at stake for americans and citizens of the free world. And perhaps most important the committee can help determine the combinations of policies and legislation necessary to counter ccp aggression and rebuild americas and free worlds competitive advantages. Pause for a second youll be given additional time and well take care of it. [inaudible conversations] all right general mcmagser you may continue. Thank you. This committee as i was saying can help the United States about favor its not about peace. We need cooperation your sign is upside down. [inaudible conversations] and the world we need with china well you know thank you i think these are indicative of really the effect that the United Work Department has had and maybe we can talk a little bit about that during the course of the hearing. I think they have reenforced to sol degree what you might call a curriculum of selfloathing that has taken hold in academia for many years they reenforce idea that america is the problem in the world and only if america disengages or in this case become more passive the things will get better. But the reality is, that this Committee Social work really important because we have to catch up mainly because of the complacency but we have to much ka up in the competition with the ccp as i was saying i think what youll be able to do is hold hearings that reveal true nature of the aggression and what is at stake for americans and citizens of the free world and the people of china. And perhaps most important this committee can help determine the combinations of policies and legislation necessary to counter ccp aggression and rebuild americas and the free worlds competitive advantages. The one Year Anniversary of russias brutal reinvasion of ukraine and degree to which ccp the ccp has covered authoritarian partner adds sense of urgency to your vitally important work and im kflt that the committee would help our government as well as leaders in the private sector understand the implications of the war against ukraine for the competition with the ccp. And the urgent actions we must take to restore and preserve peace, promote prosperity and build a Better Future for generations to come. Thank you for the privilege of being with you and for the bipartisan spirit in which youve undertaken this important work for the American People. Thank you general mcmaster i apologize for the interruption. I should not have told him that his sign was upside down i guess. But ive experienced worse i know you have. [laughter] this time youre recognized for your Opening Statement. Thank you mr. Chairman distinguish member of the committee turn your microphone on. Mr. Chairman, Ranking Member, distinguished members of the committee, it is a privilege to be here. In late november of last year, students and others in several large chinese cities gathered in protest. On the surface they were angry about highrise upon looting in city of the real protest was against the lockdown that xi jinping zero covid policy. Has imposed on hundreds of millions of people. And even deeper level, the young people were protesting a political system that could allow the whim of one model had a dictator to cause such harm. The students protest was deep in society and hi covid tyranny. The challenge to xi jinping was how to change the covid policy but keep the tyranny. It did boats. The november 2022 protest latest bubbling to a surface of the content that has been beneath surface the Chinese Communist Society Everything is 1949. The Chinese People have shown repeatedly that communist rule have been a problem for them. Three decades ago, in 1989, i myself was a student protester. I witnessed the killing of the innocent people at the poa near scare on that fateful night of june 3rd and 4th. Many others more experienced articulate than i could be sitting here before you cannot risk harm to themselves or their families. Especially those with relatives in china. I stayed active in prodemocracy work and in 1993 began assisting and interpreting for wage, a leading who have been released as part of a ccps bid for the 2,000 summer olympic game. Was urging u. S. To condition trade on chinas human rights performance. I interpret it for his meetings with then senator john kelly congressman chris smith, and assistant secretary of state john. Our meeting alarm regime and we were arrested soon afterward in the Detention Center in beijing in wee hours of many consecutive mornings, police interrogated me about what beijing said to the u. S. Dignitaries. They were truly afraid thaws might listen. You can imagine my disappointment when i heard on the loud speaker inside my detention cell that president clinton decided to deal issues of human rights and trade. Under chinese law. I protested and for that the authority and organized inmates to beat me up. The beatings eventually i was able, with the help of a fellow inmate to smuggle a note about my condition out to my mother to a Human Rights Organization in new york. Media picked it up, as for me in his last trip to beijing. From my own experience i can say this with certainty. Those who have been arrested or disappeared but wonder those of us on the outside shout about their injustice as loudly as we can. I can also say based on what happened to me and others our shouting will likely improve the condition not heard it. In the u. S. We need to face the fact that we have helped until it has grown to what it now is. Since the 1990s have enriched themselves by exploiting cheap labor in china have in the process also enrich the ccp. They have as far as dick digital dictatorship force transfers by fast times with the blessing of u. S. Companies by purchasing it. Send billions of dollars from the account of americans to the use of the ccp. It did not have to be this way. After the june 4 a massacre in 1989 h. W. Bush did not have to undermine western sanctions on beijing by secretly sending emissaries and nothing of importance had happened. In 1994 bill clinton the interest by delinking to. In 2001 the u. S. Did not have to give the ccp the undeserved i later cynically abused membership. We are seeing now the consequences of these policy choices there is increasing oppression inside china. Increasing aggressiveness outside of china. An enormous trade deficit. I am a proud immigrant citizen of the u. S. And i want my country to do better. Thanks for having me. Thank you very much. Mr. Paul you are no records or Opening Statement for cracks and mr. Chairman mr. Ranking member chairman and members of the committee. Fellow witnesses paper should the opportunity to testify. I think its worth saying those protesters have been the right to an un amount of free speech in the United States. To petition their government for the redress agreements. They would have no such right in china would not be broadcast voices would be saltz pratt permanently. The economic policies of the Chinese Communist party represent a clear and present danger to the american worker, innovation based interNational Security. For decades to ccp is telegraphed its intentions with fiveyear plans the made in china 2025 program, military civil fusion in the road initiative. Its goals to dominate Key Industries set Global Standards seek opportunity for crisis and wiccan competitors. Then we can investment to do this. I now ask consent to play a video. U. S. Big Company Investment china grew tenfold in two decades, 1. 3 trillion in total for there are indeed in china grew at nearly three times the domestic rate. As a corporate of ambition stealing International Property tens of thousands of factory closures in america 600 billion in ip losses alone. The ccp also created impossibly cheap price that masked the true cost of production. Exploiting workers in the environment. Even forced labor. Lacked Safety Standards that harmed our consumers. I asked to roll the next graphic. Fixate on zombie factories that just would not die global markets. Commencing complicity of global businesses operating in china these firms have conformed. Big tech, hollywood sports league, retail legends all say the right things in america but are silent in china. Bending the knee to the ccp. The Peoples Liberation army because this fusion strategy. All ccp policies have been destructive of our own policies in some cases have made matters worse bringing china into the world trade system in 2000. Seemed like a slam dunk. But instead became a spectacular failure of conventional wisdom and elite opinion. Turn a blind eye to his cheating time and time again accepting empty promises to reform with no real consequences. The San Francisco bay bridge, boston, chicago, other cities. A veneer of student name for the father of American Manufacturing policy. May not taxpayer financed research was handed to china. One example of breakthrough battery was invented at a national lab made in china. 3. 7 million jobs vanished. Wages plunge, communities were wrecked for the china import shock lead to more death and despair and evidence of social unraveling. America became to depend on china for many essential goods. Think of ppe during the pandemic, 5g hardware, commercial drones, critical minerals, medicine. The list is long and terrifying. The same time Manufacturing Capabilities are eroded. Defense Industrial Base weekend. We are behind the curve on clean energy manufacturing. We cannot make enough Semiconductor Chips which broke supply chain. It does not have to be this way. Starting to shift. Here is what we should do next. Both on the highly effective Semiconductor Technology export restrictions. Vigorously inform the new law called uf lpa that vance forced labor imports. Sharpen trade tools asked the bipartisan leveling the playing phil asked 2. 0. Taking trade actions to accelerate the return of key supply chains. Perform the policy that gives chinese shopping app such as team you was well as amazon a way to evade inspections and tariffs. And tighten up oversight and chinese investments in the u. S. Expand the law but now bands chinese firms all other Public Investment streams. We must also build on the ships acts, infrastructure lot Energy Investments to reduce our dependency on china. Finally, we should suspend or revoke normalized trade relations with china. The ccp certainly does not deserve the same straight trade status as our allies in reciprocal partners. In closing our hubris and neglect aided beijings week in our capabilities and hollowed out the middle class. Even in the wake of the ccp policies. Factories are rebound and its not accidental. It is a result of Public Policies and pressure on corporations to rethink their supply chains. But there is a long to do. This long list of vulnerabilities with critical minerals, Machine Tools and microelectronics. The ccp is not slowing down. While conflict with china is not inevitable, fierce economic competition is. We look forward to working with you on building a new american strategy to defend our workers. Thank you. Quick thinking mr. Paul i commend all of our witnesses tet wit and testimony. They are all exceptional. Will now move on and i reckon us myself for five minutes. A few issues received as much bipartisan attention recently as tiktok. Could you elaborate on your concerns with espionage control over the algorithm as well as potential president mitigation agreement when it comes to tiktok and other directed Technology Companies operating in the United States. Inspections are gentlemen, thank you. Certainly the data privacy issues which have gotten a lot of attention are a real problem for the privacy and for our National Security. Already the Chinese Parent Company that controls tiktok as having use the app prevail u. S. Journalists. And to retaliate against their sources. That is just one small example of the universe that would be. Theres nothing in chinese law that would suggest the chinese Columnist Party would back off of its legislative privilege to access all the data produced by social media platforms and other chinese apps. I certainly dont think its possible to mitigate in a credible way against that threat. The bigger coup for the Chinese Communist party if tiktok is permitted to continue operating in the United States at if wechat and continue to operate as it gives the Chinese Communist party to manipulate our social discourse. The news, to censor and suppress or to amplify what tens of American Mind see, read, experience, here the social media app. Tiktok is already one of those powerful Media Companies in american history. It is still growing. It doesnt just dance and kid stuff. Its becoming a major source of news for a generation of americans. General mcmaster your written testimony right one year later what more could we have done to deter lesson from ukraine. What lesson from deterrence can we apply to taiwan . Transfer so hard power matters. Much much more than pledges of mort defense sales are real capabilities on the ground and integrated in this place with the taiwanese forces. All of you know there is a 19 billiondollar backlog of what the taiwanese have already purchased to make that indigestible by convincing Peoples Liberation army lesson weve been talking about certainly big mistake the authoritarian theme that bradley and kremlin and russia. There are all sorts of supply chain of vulnerabilities associated with batteries, magnets, certain minerals in the upstream processes of producing those minerals. We could be creating a form of Energy Dependency for example. And finally whats really important is the need for us to recognize that we have to build our defense capabilities. That underpin defense planning for a long time had been that we can do one thing at a time. I think what china has been able to do is take advantage of crises elsewhere through coercion and other places by the bludgeoning indian soldiers to death for building islands and fortifying them in the South China Sea to control the ocean or at least a part of the ocean lesson number one above all of these we have to act with the real sense of urgency. Correct thank you general mcmaster i dont have time for the question of these time remains of how i feel about the five minute rule on this committee. I will enforce it among our members gently in the first hearing and ruthlessly thereafter. Because i spent most of my time at the far end. I know you can spend hours waiting to ask a question but that being said if you are the eager student that stays until the end, i will entertain a second round of questions we may find yourself alone with me and the witnesses at 1 00 a. M. Asking endless rounds of questions if you are so interested in the topic. At that ill stop talking and recognize the Ranking Member for five minutes. Think it was her chair. Could you please put up the side with a great graphic . Mr. Probably wanted to bring your attention to this particular graphic. Titled manufactured employment on the u. S. Trade deficit from 197,322,015. Two lines on that graph, right . The top line tracks manufacturing employment over time between 73 and 2015. It starts out 19 million american jobs in manufacturing. It goes all the way down to about 12. 4 million jobs in 2015, you see that, right . Absolutely. Cracks of the same time as the trade deficit. It starts out as 01973 that some of the really began trading with the peoples public of china after long embargo before that. But then it gradually rises until we reach about three to 67 billion in trade deficit meeting 367 billion and stuff then we are selling to them, right . Correct. It gradually increasing in the 1980s , 90s on the sun in 2000 and happened at which point manufacturing appointment falls off the cliff. Ryan is dramatically upward. Talk to us what happened 2000. Thank for the question. That is a product of some of the features i mentioned in my testimony. Verse about u. S. Policy, liberalized trade with china which reduced tariffs to virtually zero. We opened up investment into china 1. 3 trillion over that period of time. It displaced American Workers. What we were once bruising here was now being produced in china. Im certain you and your colleagues saw that reflected in your communities. There were factories all over the place. That once stood but are now gone these went up the value chain. That is like nuclear technology, bio health, sophisticated metal. It is not simply an equation we are getting cheap tshirts and had a normals crisis. Think it mr. Paul. Strategic International Studies recently developed a wargame simulation for taiwan. By that ccp today. They found roughly 24 out of 24 times there in the simulation they would fail to successfully invade taiwan today and gaps exist in their capabilities to do what german xi jinping has commanded the Peoples Liberation army to be able to be by 2027. Talk about some the gaps are today that chairman xi jinping is trying to address on his side . Congressman the pla the Peoples Liberation army has been receiving massive amounts of investments that increase by double digits in many years. Precisely to try to fill gaps they would need to fill to successfully invade taiwan. That is we should be working to prevent is an invasion. Include amphibious lift two at all right its the of missiles pointed at taiwan. That is very scary. Countries barely submit to airstrikes alone. This other things we need to do to get people, soldiers on the ground and equipment there. Helicopter lift is another key area. Also the capabilities designed to keep us out of the fight long enough. Cracks in your testimony you quote german she in his speech he gave in november 2021 were he put praised for a preemptive strike Douglas Macarthur 1950. I do envision a scenario a preemptive attack on america . Its possible. We know pla is training for the likelihood its part of the fight. That raises the excellent tory pressure on china to try to eliminate use capabilities right there in the pacific to buy them time. Hes been telling the communist party to study the korean war which they called the border resist america. Also said we in china says we should be willing to ruin our own country internally to rebuild and new. Those are the kind of posted do not give me great sleep at night, thank you. Mr. Whitman is recognize her five minutes. Thank you would like to thank our witnesses tonight. Begins as a committee and as a nation making one thing clear to everyone from around the world. The Chinese Communist party is a threat to the United States. Ccp undermines u. S. In a economy. It also attempts to use budgeting is intent on building a military that not only threatens the world on the end of pacific but across the globe. Beijing has no problem exploiting our Financial Systems against us. It illegally sieges resources in the United States and our friends around the world. And insidiously it attempts to shape the thoughts, the ideas, and the viewpoints of our children through their use of media for the many other elements we can talk about there. I want to get you to elucidate why the chinese comments party seem so intent on challenging the United States . How does beijing view america . And maybe most importantly what are the ccp vulnerabilities . What are their weaknesses . What do we have as an advantage over the ccp . Arcs are the Chinese Communist party has viewed us as the primary adversary going back quite a long time. Very clearly on the end of the cold war. Beijing posted on the military throughout chairman gallagher spoke about paranoia that runs the heart of the ccp. That democracy and freedom might come to the shores in ways that would unseat them. The vulnerabilities are significant for the most important vulnerability for all the party dealers most of all his own people they fear the Chinese People. We have seen that on display. Where xi jinping was unable to remove this covid policy of lockdowns. Even when it is not working as containing the virus. And yet, when did he found give up the policy . Many of those brave young people young women to love the purchase on the streets of chinese cities. Once that happened again with the policy overnight and out scope it was really a cold and had nothing to worry about. They are fearful of their own people. Very good, thank you. General mcmaster we have heard our military leaders over the past five years define what they believe the growing threat of china. Now most recently we heard maybe within the next year or two is the window chinese would look to try to take taiwan. First of all, will be the cost of that conflict for the nine states and others around the world . It would be of the scale even greater than i think world war ii because of the massive amounts of power between the two nations. Could you also tell us what would be the cost if we failed to deter the ccp . Thank you for that question. We are in a difficult position we are under invested, what has happened is the Peoples Liberation army studied us. Trying to recruit some of our exquisite they develop Counter Measures offense of cyber capabilities, counter sunlight longrange precision fires. What they have done is try to felt that what to take apart is her differential advantages. We need now and we need for some Time Investments and countermeasures to those countermeasures. But weve not been up to pull it off. We have promise of capacity at the same time. I think what xi jinping sees is a fleeting window of opportunity, an opportunity to move while he perceived weakness in the United States. Its worth going back and read the joint statement between xi Jinping Vladimir putin on the eve of the beijing olympics. The messages hey, United States, west, free world, you are over a cent for new era of International Relations and we are in charge now. The other factors i think at impetus to this is the sense the frailties in the chinese economy them incurred in the race to surpass us are really beginning to show cracks in the chinese system. Through National Sentiment is at tonys selection 24 its not going to be good our own election which we tend to be fractious. We think of deterrence as capability times will their perception i dont think is right. Think it mr. German. Thank you so much for being thank you for your bravery your defense of human rights, freedom and Democratic Values. At the outset of our committee work, what we need to understand about Chinese Culture traditions how we strategically compete i think Chinese People fundamentally develop more freedoms. And most recent white paper protests show the desire the zero covid even gets sick young people rose up traditional chinese would just obey the authority. Look at what taiwan has showcased us the traditional chinese and values that keep that very well. Taiwans example is actually ccp. The Chinese People only deserve dictatorship. Since 1949 democracy of war movements the demonstrations in recent years, and also the most recent protest has showcased the Chinese People just to have the same values and principles like other western people. Under president xi the Chinese Communist party has vastly expanded digital surveillance of the Chinese People. They are unable to do anything without the ccp being aware. I understand the mgs of the personal Data Collected on individuals as a method of social control. I mostly like a digital dictatorship. Of this state of affairs is not enough to ccp increase the export of Surveillance Technology abroad. Work on behalf of of the ccp sometime say for smart city systems. But in reality these are the authoritarian government to surveilled citizens and repress human rights. But it gets worse. These companies can gain access to any data in hand it over to the Chinese State security. What is your view on this . We are going to need to develop strategies Going Forward what is your view and how bad is it . Congressman thank you. We need to have a much more rigorous defense and office. The same capabilities were describing being used to oppose what one former Chinese Commerce a partner in xl cause exquisite totalitarianism. Export onto our shores to the Chinese Communist party the ability to manipulate our own discourse and to steal our data silence and intimidate as it is already doing their social media platforms here in the United States. On the offensive side we are a free country but we do not need to peddle this information or deep fakes are now part of the stock in trade they are experimenting with. Make it easier for the Chinese People to connect with the outside world we need to make it easier to communicate with one another. I dont think we try very hard. This thing that looks so formidable is made of papiermache. I think you could punch holes in the great chinese firewall program if not made the concerted effort the publicprivate effort of Silicon Valley firms leading the way. Theyre not going to gain access like google and facebook and others who have tried years ago to work in china. Theyve been banned them nothing to lose working for the cause of freedom in the u. S. Government theres a lot more we can do that front as well but we have not got started jet. Recognized for five minutes. Thank you chairman gallagher and i want to thank this evenings witnesses for being with almost tonight. Just last week the department of agriculture forecasted 14 and a half billion dollars has been one of her most significant markets similar to what we heard from mr. Paul china has and will continue to treat our American Farmers and ranchers with significant tariffs as well as nontariff trade failures on. Do not play by the global rules on trade. You might already know this, entities associated with the prc have already made and continue to make investments in u. S. Agricultural land and assets. Some of the proposed purchases are in close proximity to National Security assets. This is not a good trend Food Security is literally National Security my question i will near know if you are involved with decisions in your previous role as National Trading advisor, inc. Has a Statutory Authority to block him should block land purchases by the ccp on National Security grounds . Thank you for that. Has pursued a Massive Campaign of espionage. The dependency my written testimony on the three cs of cooption, coercion and conceal them coop by trying to build agriculture onto chinese market. To use that for purposes forms organizations that look innocuous. To promote u. S. , China Dialogue and economic discourse to advance the prc agenda. And then to conceal all of this is normal business practices. Quite right to have you concerned what you are doing shine the light on that behavior its the most important first step. Appreciate that. The time i have remaining and thank you very much for your moving testimony. Someone who has lived through a repressuring regime and china. He knew what written testimony and touch on the courageous individuals in china participated white paper protests just last fall. Could you talk a little bit about what was both similar and different in these protests compared to previous decisions movements in china . Similarities in both white paper protests or massive took place in many large cities in both cases young process protesters were idealistic and felt it was my up for more rights and against the totalitarian regime. The deference is lasted for more than 50 days the White Paper Movement last just a few days a couple of days. The difference in abilities today. Its greater manpower number of the white tape paper protests was smaller than 1989 participants. And light and the enhanced civilian capacity their individual courage i would say was a greater then the generation. The cases that came to light, more women were detained at this time then men . It is the first time in china. I also want to say this points, recently the chinese and government announced it has one victory over covid. In fact the victory should belong to the white paper protesters is number one command to get rid of the zero covid policy they achieve the results that ccp is trying on the internet and on social media to erase peoples memories about their draconian zero covid policy measures. At this is not the white paper protests victory, what should we call it . Thank you very much. I appreciate all you being here helping to educate us in the challenges we face extra chairman i yield back too. Recognized for five minutes. Thank you chairman thank you Ranking Member this question is for everyone. How do you recommend that new law imposing limits on importing goods, produced using force tyler specially the uyghur minority. Is there anything we should be focusing on to ensure this law as having the desired effect . Carved out be happy to take a crack at that. Thank you for the question predict uyghur for sprint act was a tremendous example of the bipartisan concern that passed nearly unanimously at the support of the administration obviously. Implementation is the key here. Importers are fighting against every step of the way. We have seen some results. And Border Protection continues the need to scale up its capabilities here. It is an overwhelming volume that we still see. It should expand the Priority Areas of concern. They include a policy on tomatoes, some fibers. There is evidence uncovered by researchers in alarming amount of the Automotive Supply Chain has chemicals. Most brandname original equipment manufacturers have either subcontractors they are. Metals should be another area of concern. I think from a congressional perspective oversight is very goods are being seized and should not be depending on forced labor. Any article made from that region was made of forced labor. There is basically no transparency human Rights Groups have into the atrocities taking place. Too that point mr. Paul this is my final question. Stemming from the erosion of u. S. Manufacturing capabilities many of the strong Industrial Base what in your opinion was needed to reverse this negative trend and bolster these critical sectors . Long and proud history. I would quickly add for the chairmans benefits and many other states as well. For too long we did not have that intense we had that philosophy took for granted china would play by the rules there is no single policy is going to change this been smarter about trade enforcement actions. We have tried to invest in our Manufacturing Capabilities through offsetting the costs of setting up fabs and Semi Conductors. The same with tvs, batteries, and also clean energy wind and solar as well. It is going to take that effort along with other competitive measures such as making sure our infrastructure is 21st century and her workforce is compared to compete. We have to be ready for this reassuring as well. Our trade policy. Of informants coffee in the back. We have spared no expense cant vouch for the quality of this coffee but we have caffeine. Thank you, mr. Chairman thank you Ranking Member this opportunity. I want to ask you the federal crisis here in the United States. How should we counter that. Sir, its good to see you again. Only a few years ago was shipping sentinel directly weve made progress u. S. Made progress in a Trump Administration and turning back that getting china to classify as a controlled substance. The precursor chemicals in mass quantities to cute tens of thousands each year. The best we can say the chinese cummins parties practicing malign neglect in allowing that business to continue. They could stop it if they wanted too. That is been the judgment of many dea and fbi officials, former officials, craig fowler and admiral who commanded south calm for us for the fact china has become chinese organized crime Money Laundering flows. That has fueled the fentanyl traded in the u. S. There are things we need to do to go after those illicit flows of money. And updating know your customer laws anti laundering for banks for starters sir the deepening control over Chinese Companies. I wanted to and also mr. Paul, you had mentioned ccp fusion strategy. No businesses unchanged. Could you both speak to that situation . One of the remarkable has been that re centralization Party Control businesses including private companies the pushing outs of the founders of Dynamic Companies like ali baba beijing has been trying to promote an dual messaging one message being provided to Foreign Investors in davos. Seidel simultaneously saying we need to double doubt of strength and control of economic activity. Major accident not a veto vote on the board of normally private companies in china. I would add program has been in operation for nine years. Businesses in china under obligation to participate in it. You see many commercial entities in china state owned and other affiliates there pretty also see cases joint ventures which have involved u. S. Investments have necessarily had to turn over technology as well. This is an area of increasing concern for me and should be for lawmakers. Thank you very much. I want to thank her distinguished members for joining us. The success of ukraine, nato, principal of the rule of law against a Vladimir Putin and his illegal war is a great cautionary tale for shooting pain and his stated desire to invade taiwan. From all the success in ukraine we have to admit deterrence of failed. How do we prevent that from happening . Xi jinping seems to believe his own propaganda. How to make our powerful determent believable that present she and the Chinese Communist partys the hospital work. And give her that question. Peace through strength still works. Thats our defensive capabilities and those were partners and allies in the region. I think its immensely encouraging japan is doubling its defense investment. I think new formats and encourage defense cooperation, very encouraging. I think you have to recognize we are very far behind. If we remember the runup to the re invasion of ukraine, many people thought we need to lay out redlines need to allay security concerns. This is a narcissistic view of the world which we think what we do or what we say is decisive towards achieving a favorable outcome. Both Vladimir Putin and xi jinping have aspirations that go far beyond those in reaction to us. Therefore its important for us and demonstrate the strength necessary to convince xi jinping, leaders in that party and leaders in the Peoples Liberation army they could not a compass or objective to the use of force. I think that modernization efforts ongoing are an adequate. The direction and policy is starting to turn in the right direction. For example some activity so we can project power more readily back to the philippines for example. One of our most powerful components is our strength thats clearly demonstrated in europe. Its our partners in our partnerships. They are not as developed. What do need to do to strengthen our allies in the partnership with us . I think first of all we ought to think xi jinping he is really helping us in this connection with this abrasion aggression from the himalayan frontier south tennessee to 1700 just last year many other violations oriented on japan, on south korea. What wes typically here i think its becoming clear its not a choice between washington and beijing. Its a choice between sovereignty and servitude. I think we see that especially in this vision for the endo pacific weight building momentum. One belt one road but we are on the site of many belt many roads. Cooks where some of present she is vulnerabilities . One useful statistic to keep in mind is china is spending more on its a military the rest of asia combined. And yet that number still smaller than the amount of money xi jinping is spending on his domestic Security Apparatus surveillance presses on people. So it really is fear of his own people. Sphere of the axis of the capitol markets. Another vulnerability for him is losing access to american technology. It is clear china has not yet achieved selfsufficiency Self Reliance imaginative or taking more than the baby steps rather than serving up on a silver platter. Fearful of his own people. If you remember just had a Party Congress second decade in power predecessor walked out of the proceedings only loyalist to be elevated to the bureau of the standing committee. He fears people any constructive criticism at this point. After one just Speaker Mccarthy for crating this committee. Long overdue we put together a Committee Like this and it is bipartisan for to expose members serious substantive and conscientious members ive been fortunate enough to serve on the intelligence committee. Its more clear to me than ever that china has a plan and diplomatically. Number two, im going to talk to about the history of china may lead Global Economy. I look back at when we let china into the wto. I dont think any of us are in congress at the time when that happened. The argument was bring them into the wto the going to westernize, reform, liberalize their ways. Here we are 20 years later there some spotty things we can find. I would argue theyve really taken advantage of the and many of our Global Economic systems we have in place. We hear a lot from people in d. C. Particular in Business Community, we need engagement. We need diplomacy. People apologize for the ccp. I look at it is been alluded to here today just in the last four years here you have heard about obviously in ukraine china sided with putin in an unprovoked illegal invasion, right . You talk about unbreakable bond with putin. The covid outbreak originally what did the ccp do question work they blames it on the u. S. Army look at the deceitfulness related in the diplomacy thats been put across the globe. Democracy doesnt work anymore. Thats what she tells people around the globe. It was a two by my colleague, the fentanyl start at 100 10,000 deaths last year in the United States. 99 the fentanyl is coming from precursor drugs from china. We have consistently of the last recess china to do something, theyve done nothing. Just yesterday was announced china 2022 issued to new coal powered plant permits per week. 104 new coal powered power plants in there. I talk about doing stuff on the environment. I mention all that the two points now to my question. We hear often from wall street incorporations and global businesses that are many of our friends. Need to continue to engage in got to turn the other cheek we hear china is not north korea. In the Business Community and how we deal with them in terms of their argument china is going to change. I would be curious the video you played was very powerful. What would be your advice is to be engaged with Corporate America that really doesnt like redoing appear and is scared and worried. Cooks general mcmaster the phrase first do no harm i can allow him to talk about a little bit. We want to keep channels open with beijing. Critically highlevel channels. One of the reasons we want to do that is we want to prevent xi jinping for making grave cap miscalculation. Miscalculation of the things dictators do. Especially when they have been power for a long time. But we should not kid ourselves. While many protesters, whoever it is. We should not joke to herself that beijing has any interest in collaborating with the United States or others and trying to Serious Problems in the world. Whether its drug abuse proliferation of weapons, pollution never opens, or pandemics. When you take the time to study the causes of these problems the ccp is usually one of the primary contributors to those problems. Its very rarely and any kind of honest way trying to mitigate against those problems. Cooks general mcmaster if you could reply . Lexi with the nail on the head in terms of the false promises of liberalization or cooperation. What about the same for the record as we do have to take almost a hippocratic oath. This is not just the work and that committee its the Corporate Board rooms for the first do no hurt or harm in three areas. Do not get the ccp investing company so give them a differential advantage over us militarily. Second is not compromised. Exchange shortterm profits. And third an immense importance dont help them perfect technologically enabled or commit genocide. I think as we saw with brushes re invasion the private sector took measures that might be on what we had done in terms of sanctions on Vladimir Putin and on russian. I think the genocide want to start missing a word about the protesters. If i disagree them i respect them. Take guts to come into the halls of power not block the doorways when a question of your existence of the community we show by example exactly what makes the United States of america different than the communist Chinese Party. And mr. Chairman, thinking to the right thing by asking them to leave. You cannot descriptive democratic meetings. I was told they were in handcuffs outside i hope theyre not going to be arrested simply for speaking their mind. I thought is very telling about the mistake we made as a country for the last 40 years and basically the vesting the nation. Manufacturing did not matter we can have the m it folks with noble price and somehow production is not relevant. Your statistics i want to amplify them because i have my staff look up after your testimony previously 20 were down to 4 on is making 57 . 3 30 7 of aluminum down the tubes, china is a 57 . We assume a 36 paper, down to 17 , china is at 30 . You can go industry by industry and i commend your testimony. Heres my question a chinese scholar wrote the rise of china resembles that of the United States a century ago. China basically Incorporated Many elements of hamiltons formula. They copied in part we invented with hamilton and the american system. You noted in your testimony china spent 1. 70 of its gdp on industrial financing. We are. 39 . Would you agree that part of what is going to help us re industrialize is having some government financing and Government Purchasing that the government has to be part of the private sector and rebuilding the american industry . Works think if your observations and i appreciate the question. I think there is no doubt the government has to be a partner in this. In a Perfect World the market would work it would settle things out. We are not in this world is a Chinese Communist party has demonstrated. We have a market failure and we are starting from behind. If we could have Public Financing to Leverage Private investment we will have more success in the Chinese Communist party because we have more entrepreneurial sip. We have more opportunity and there is not state control. There may be state financing and this makes a difference. We have seen this with a chip sect. A small amount of money is leverage 200 billion in private investment in the United States. Cooks appreciate you saying that a special is a coauthor of the chip sect with Haley Stevens and others i am bipartisan i appreciate your support for that. You point out trends putting in one or 50 billion. Let me ask you this on ships. I was in taiwan in one of the things is tsmc is going to lead when it comes to 3millimeter chips for intel may leave between three and 10 millimeters chips. When it comes to the actual chips and most of our cars, most of our refrigerators, customer dishwashers those are 28 or 15 guest with us are being built . In china. I do not want us to make the same mistake on ships we have the leading edge and chips that every american bite made in america chips for all their consumer goods. You think there should be some effort at a chips act despite having chips being put in most americans products. Cox congressman i think it is essential to expand that scope. Not only the array of chips you mentioned but also the value chain and Semi Conductor fabrication. Because they have to be tested. They have to be fabricated as you well know they have temp circuit boards. They have many components. For an effective ecosystem to be created for that you have to bring it here. You have to and youre sure some of it as well. You cannot rely on china. The last time we did that that i mentioned in my testimony if we are dependent on china for these sources we end up with supply change disruptions at worst we have incredible leverage against us as well any time of crisis. If there is a National Security event happening. So guess and think the scope needs to be expanded. Thank you. Thank you vess the Capitol Police for clarification of what happened to the protesters. We defer to them in these matters. I am certainly not pressing charges. Nowhere is general mcmaster. We will get you more information on that. I was appreciate i was in that meeting with you found it fascinating. Mr. Jon is recognized for five minutes per. Thank you, mr. Chairman also to think the panelist for the testimony. I believe everyone here could tell a story of how the ccp infiltrated their congressional districts. I like to tell the one instance it happened in panama city, florida england with a shipyard could be at risk for this. What i seek to know is are the chinese weakening our navy in our coast guard from within . In 2016 domestic shipyard panama city was awarded u. S. Coast guards phase one contract for 25 off shark counters these cutters are being completed on time and on budget despite Hurricane Michael category five devastation to our region. The coast guard has repeatedly stated the quality of the ships is as good or better than any that they have. In spite of the success the coast guard went on toward the opc stage to contract to another company, austell usa which is the largest shipbuilding contract United States coast guard has ever awarded 3. 3 billion. This is the same that was awarded the contract to build the combat ships for the u. S. Navy. As has been widely reported, these ships are craig bite cracked halls, and technologies that just dont work. Now, you would think the navy would be hesitant to award another Contractor Company that delivered such faulty products. But it was also awarded a contract to design filled with navies expeditionary ships also a failure. Most recently it was awarded the contract to build the command and control modules of the u. S. Nuclear powered submerging submarines in virginia these are essential to the Nuclear Defense triad. Now, how does this story connect to our hearing on china today . What happens is part of international the company with close china links. In fact they co own the entire tender building ships for the u. S. Navy. This should alert everyone here a company like this has won multiple defense and Homeland Security contracts in spite of close ties to the ccp. This is a National Security threat. General mcmaster and decades of combined experience of constructing ships for the u. S. You would surmise why would both the navy and the coast guard play such a high value sensitive contract with Bishop Mueller that has its close ties to china . Judgment prior attention to a post in front of me. States a new design being built for chinas pla navy bears a striking resemblance to that u. S. Navy combat ship. Gentlemen, speak to the threat of proprietary information, National Security information required by the Chinese Government. Given the close connection. Congress was a lot of weapon systems the Liberation Army has designed and fielded look a lot like our designs in our capabilities for that is because we have been lax in the area of counterespionage. When an enterprise hardening is quite dramatic once in the defense sector. This applies to other sectors of our economy as well but defensively technologies but also technologies mr. Paul knows are really critical to maintaining our competitive advantage economically as well but its incumbent obvious in your work, on the administration but on the private sector themselves to harden their enterprises as Chinese Industrial espionage. There are many ways to do it there cyber espionage, theres also often time penetration mss for pla scientists breathers 1000 talent program. Trident recruits top scientists. Many of whom have worked in her most sensitive lab student travel to china and essentially get debriefed to share their knowledge with essentially the party state in the Liberation Army. There are many vectors of a tech crew know sure if you front doors open whats coming in the front door. I keep both your front door theyre coming to the window pretty boat your windows and put up screens the tunnel on your house to take a holistic approach to enterprise certainly in our Defense Industry and our defense labs, in our universities. But also across the private sector were ever Sensitive Technology or intellectual property is housed. Thank you information general mcmaster prevent other questions you submit to the panel in writing. Thank you very much for coming, i yield back. Mr. Kims market is for five minutes per. Thank you mr. Sharon thinking to my colleagues are raising so many different issues and to the witnesses here laying out along the different threats are out there. Since a lot of the things that were talked about have been raised already, less much about this recently different angle. I know you came and spoke in front of Congress Last year. He spoke at a hearing condemning january 6. He sent partner National Security. Theres a lightness and got some use, embolden our enemies. Its a narrative system doesnt work. Press on to say thank you for saying them. Second i want to get that youre trying to say critical part of our success in our competition is a sure democracy it worked, it was strong. One thing ill say heres right now a lot of Big Decisions we are trying to deal with. If we are not able to enter Work Together and solve some of the challenges, lets say we end up defaulting our National Debt we cannot get this shown on the debt ceiling done. Would you also send out feed into a narrative our system of government is not working well . Works well i think people understand democracies are messy. It is a high do not always reach the north stars that we guide ourselves by. It is the process of trying to create the more perfect union. It does not mean that we always reach perfection. We strive for. If the democratic process follows rules and follows traditions and that there is respect i think people understand is not always going to look pretty. I get that employment correctly that it doesnt stray into dangerous territory and break those rules and thats a problem. What i will get at is just a couple of years ive been here in congress, things are broken here. We have a level of dysfunction here. The reason i reassess is i want us on this committees function in our democracy right now the National Security problem two. We have the global consequences if we are not able to solve problems amongst ourselves. We are certainly not setting a good example of how democracy can go. He simply met janet talking about western decline weve got to make sure not feeding into that. Got to make sure not make it easy for them to do their job in terms of spread the propaganda about our own country. That is something i hope we can meditate on and commit to ourselves not all in this chamber and this committee but across our congress. The dysfunction is causing space for china to gain strength globally kind of narrative. Going to talk about china actions i share concerns about threats. The principles you outline in your testimony, a lot of them felt very reactionary productivity opportunity i saw mr. Pauls comments are very strong here. What was missing from your testimony is investing our own economy. Healing our own democracy. Building a coalition we need. We cannot take on the ccp alone. I want to expand on this part of those as central as the sixpoint to race . Certainly they are. I think our alliances and our example or one of the greatest assets we have. And of course her Retirement Office i spent a massive amount of time cultivating and nurturing those alliances. I think it paid off very well. I think the main thrust of what is trying to get through the testimony today was to open peoples eyes to right now the Chinese Communist party is the protagonist. Because we have been complacent. And before we can seize the initiative we have to react to the fact that our National Interest has been deeply undermined over the course of the last quartercentury. You heard a lot of testimony about that tonights house and charts and graphics about that. I want us to take the initiative. First we have to fall through and follow through and recognition jinping is the protagonist. We are not seeking what was already waged against us for the last several years i dont relish the cold war. As time went on a hot one. It is incumbent upon us to try to deter a hot war now that we are already seeing proxy wars waged against our allies. Someone to say i agree with a lot thats been said about addressing these thoughts that we are facing. Fixing the vulnerabilities within our own economy in our own country. I want to express that i really do believe how we shape in this competition very much comes from the idea of will we as a country get our act together. Can we heal this democracy and can we fire on all cylinders Going Forward . I believe we can still do that and im hopeful this committee will play a role enjoying them. Thank you, mr. Chairman. Are recognized for five minutes per. Where he discussed sentinel the leading cause of death in americans my age might working age killing more americans in the entire died in the entire vietnam war. After Speaker Pelosi visited taiwan china stop cooperating with the u. S. On counter narcotics. In response to export controls to combat the ongoing we are genocide Chinas Embassy declared they quote seriously affected china examination and identification of mental substances. You already said china was intentionally allowing sentinel to be shipped to the United States. I believe chinas using fentanyl to commit diplomatic blackmail. What can the biden ministrations or diplomatically to restrict the flow of chinese pencil precursors that are coming to the United States . Thank you congressman. I think going after the Money Laundering networks, which are now the most potent Money Laundering networks in the world. That is chinese organized crime. When you pull on the threat of chinese organized crime groups that often goes back to a united front groups which are responsive to the Chinese Communist party. One of chinas top Law Enforcement officers back in the 90s he was the minister of Public Security said publicly that china should look to work with and unite with organized crime groups so long as he organized crime groups are patriotic. By what she meant loyal to the party and its interests. What we have seen with recent cases that have not gotten a lot of attention here. I would recommend members rate a major expose on october 11 by pro public up. Wrote a major story look into Money Laundering in the fentanyl trade. Australia has just invested 10 billion Money Laundering scheme which ties back to communist party interest. I think we have to look at it from the financial side. Much Better Regulation much more informed screening of the customers. Much more informed aml and k yc rules. It also means we need to start sanctioning the Chinese Companies that are providing those precursor chemicals. Some are state owned firms. All are subject to the rule of the Chinese Communist party. Why would we not punish those Companies Might sanctioning them . Ive not seen a lot of effort on the Treasury Department that area. Text less than an hour ago the fbi director Christopher Wray confirmed covid19 originated in the wuhan land. Do you think theres a chance to look on land was involved in my own research . We know for certain that the Chinese Military is involved in research into coronavirus. We know they were experimenting using Less Technology by the way to work on viruses. We know the Chinese Military had been involved in trying to develop vaccines for coronavirus is. This is an area theyre still great deal of information that is yet to come out that will show is an enormous amount of interest. Their published peerreviewed miracles and articles per. To believe chinas taking appropriate steps to make a future lab leak less likely . I think the system that is in place in china does not permit or prize serious safety. We have seen multiple leaks of dangerous pathogens on chinese laboratories over the years. We have seen banal leaks in Chinese Government labs by their own admission of the original sars coronavirus 2010 2003 virus. General mcmaster what message was a chinese chemist party sent into the American People with the chinese spy balloon . Thanks it will take everything they can get. Over time they used to complacency. And i think the message is we are intending to broad range of surveillance activities. The balloon is in many ways and mentor for for a massive effort at espionage. You can see from the path chuck im not privy to anything that you are in that our government is at this stage that maneuvered over strategic locations. I think we fear or previous balloons have gone most of the same pattern of trying to get a better look from singles Intelligence Communications intelligence is most adventurous in her most sensitive sites. And then when you combine that with the massive buildup of chinese strategic forces, nuclear forces, i think that is a cause for concern. You combine that with xi jinping talk about preemptive war. Thats an even greater cause for concern. I think they believe is important to look at printing placing the balloon in context was perhaps most important. Recognize for five minutes per. Thank you, mr. Chairman thank you to each and every member of this committee. As we meant for an organizational meeting and i heard stories and statements from members about their deeply held belief in and love for our country and our Democratic Values i was reminded once again that evening. Frost times theres always more that unites us than divides us. And this committee is so important as we work to promote and protect our values and our economic interests here at home and across the world. Americas ability to hold the chinese chemist Party Accountable is central to that. Its the most complex and important aspect ever foreign economic policy. Protecting human rights, ensuring a fair economic playing field, promoting freedom and democracy. Generations of americans fought to protect these ideals in the more successful we are, the more american citizens prosper and thrive. This in our generations challenge in this committee and each and every member of it stands ready to call that call to action. We are here to strategically compete with china in force and rules based system. We are here to protect human rights and promote democracy around the world. Were here to promote american ideals which have led millions poverty create opportunity and prosperity across the world. Make no mistake this cannot happen soon enough. For too long the ccp human rights and economic norms but they have aided in the encroachment of authoritarian regimes throughout the world through surveillance architecture and would be on a crescent shutting down free speech and thought. The ccp has engaged in illegal subsidies and dumping making new jerseys less compatible in the global marketplace. Staff and gas trade secrets and intellectual property cost American Families and workers hundreds of billions of dollars each year. Just about everyone has heard about the surveillance balloons on the Chinese Alliance of putin against ukraine. But just as insidious as a ccps attack on the global and u. S. Economy resulted in job losses, lower wages in the outsourcing of american jobs that is our families Small Businesses and communities across the nation. So mr. Paul communist customer manufacturers in your association passing rule breaking by the ccp and how that has impacted their ability to compete and create jobs . Thank you for the statement and for the question, and grateful. Manufacturers have been impacted by policies in a number of different ways. First of all they are competing against firms in some cases that are owned by the date. Hell early in the steel sector but others as well. When half of the Steel Companies are actually owned by the Chinese Government for example. Second we have a system where china agreed to a set of rules in 2000 2012 join the wto and has completely ignored them. The ustr just releases most recent report on chinas compliance with wto obligations and found chinas compliance has been completely inadequate and nonexistent. Tell the state owned enterprises have different costs of business and u. S. Firms. The damping as you mention the selling products into the u. S. Market at a cheaper rate than the art calm. The direct subsidies the government provides for energy, labor and Environmental Standards for the less dangerous begin with and they are rarely enforced. From time to time there has been misalignment of the chinese currency that is artificially given chinese imports an advantage into the u. S. Markets. And as a result we shed in an enormous amount of manufacturing capacity in just over a decade. A stunning amounts. 90000 factories right missile job losses in the chart as well as how the intellectual property theft. It has been staggering for American Manufacturing. Thank you we certainly sound that in new jersey. And in a company by the administration announced sweeping sanctions and export restrictions against china related to semiconductors, sect of the ccp has built up in no small part enforced Technology Transfers. Early admission both japan and the netherlands also join us in imposing these restrictions. Can you discuss on these types of export and investment will impact the ccps illegal activity such as ip theft and dumping . Thanking him for the question representative. I think the longterm impact is not entirely clear at this point spread the shortterm impact has been profound. We have seen a screeching halt to a lot of u. S. Personnel and Company Involvement in the chinese Semi Conductor manufacturing. Which was the intent make the edition of japan and netherlands because of the supply chain with respect to semiconductors. Critically important as we enlist more allies may expand the scope of the Technology Restrictions i think we have a decent chance to be successful. Thats why i was so grateful to hear general mcmaster say tonight it was a mistake to give an anniversary coercive power over your economy, and i was so grateful to hear mr. Paul say we need tighter controls over ccp investment in this country, particularly in critical sectors. And with that, mr. Pottinger and others i want to draw our attention to what is assuredly a critical sector and that is food, Food Security is National Security. We know that in recent years the Chinese Communist party has increased their holdings of farmland outside of china by 1000 . During that same timeframe, theyve acquired 1300 Agricultural Processing facilities. This is a deliberate and focused attempt. And so mr. Pottinger, do you do we know to what extent those efforts by the ccp are motivated by their desire to gain the kind of coercive power that the general was talking about . One of the reasons that we should be extremely careful about permitting purchases of farmland in the United States by companies that are beholden to the Chinese Communist party is that sometimes the farmland is an proximity to sensitive installations, Nuclear Facilities or other military bases. There may be more at play as well. It certainly bears close scrutiny. Why has there been such a significant increase in chinese purchases and farmland . I think that with the committee for Foreign Investment in the United States, there should be closer scrutiny on these purchases, but weve seen some purchases go through even recently that were relatively close proximity to military bases. Im not sure why they chose not to scrutinize that particular deal. Theyve had a trend of not exercising its ability to actually block and instead they frequently try to mitigate, but the mitigation measures are usually hollow and dont actually protect our National Security. So with regards to the domestic investment, there are many in congress, myself, mr. Newhouse and others that have legislation that would address that. Lets focus on chinese investments in food supply elsewhere. I think about the southern globe, africa, south america, Southeast Asia. To what extent should that investment concern americans . I think the communist partys actions to try to lock up major supplies of commodities and goods probably including figurative also certainly rare earth material, cobalt and things that go into everything from regular Consumer Products to military goods is part of a grand strategy. Its not just haphazard organ ot making a buck. That it bears repeating this is part of a grand strategy into something we want to be focused, thoughtful and deliberate about as we work to strategically decouple from the Chinese Communist party theres an opportunity for us to draw our allies in the indo pacific and elsewhere closer. Thats going to give us a great opportunity to protect freedom. Its not just of course in Food Security that this investment has the potential to create coercive power. I have a letter here, mr. Chair man from when many within the Communications Industry talking about the importance of the rip and replace regime regarding other chinese in telecommunications infrastructures. I would ask for unanimous consent to enter it into the record. Hearing no objection there is no objection. Is there anything you want to add to telecommunications and potential threats for chinese investments in infrastructure there . Thanks to enterprising reporting we know that haewei was going to survey political opponents and in some cases those political opponents and activists were arrested and in jail. So, beijing is exporting all of the tools that you would need to run a totalitarian system. Thank you mr. Pottinger. Mr. Chairman, i yield back. I wouldnt dare to object. You are recognized for five minutes. Oakland county, michigan is home to 2600 manufacturers, largely in the automotive space. We also boast the largest robot piece of equipment in north america if not the world. We have a highly competitive economy. The gdp is larger than 14 states. If you arent aware of the Industrial Assets into the promise that exists in the midwest, you certainly arent paying attention. Nearly every week that ive served as a member of congress, ive paid a visit to the manufacturer to see their product, to learn their equipment and to meet the workforce. Its been done through the pandemic and news of the day. What ive learned has been astonishing, inspiring and motivating. This, want to know. But what i must ask. Mr. Paul, from an economic standpoint, is it acceptable with regards to this competition that 80 of battery manufacturing capacity takes place in china, yes or no . No, in my view it has not. General mcmaster, from a National Security standpoint as it pertains to this competition, is it acceptable that 98 of the microchips that dod purchases are manufactured in asia . Congresswoman, no its not. I think all the supply chains need to become much more resilient. And gentlemen, is it acceptable that an estimated 85 of the Refining Capacity for Rare Earth Minerals is controlled by china . No, it is not. This is cause for great concern and its going to take i think a lot of measures in this committee that the rectify including permitting entity regulation reform. So we are aware that we have a trade deficit that has been articulated this evening. The existential question that we are facing, that we are reacting to deficits, that we are reacting to supply chain deficits, supplychain deficiencies when we should be crafting, creating and leading. Mr. Paul, how can we expect to compete if we are operating industrial policies while we lurched from crisis to crisis . Some of us have been ringing the alarm bell for decades on microchips. The tide rolls out, it hit us real here in the United States of america, in michigan without automotive sector. It deploys as well as the american worker. How can we revitalize industrial policy in this nation . Representative stevens, first of all, thank you for your leadership on this issue. We are grateful for your support for manufacturing workers. I would say the first thing is assessing the problem, and there we have volumes of material. We were sounding the alarm a decade ago. I know that in the last administration, there was a defense Industrial Base review. The Biden Administration has a 1400 page supplychain review that looks at of these vulnerabilities with the same type of data that you provided. Not only in batteries and critical minerals, but other key sectors that we should be very, very concerned about like medicines as we move ahead. Or electrolytes into factoring. Which by the way, we have one in michigan and one in tennessee and there is no way to compete in this easy space and that future if we dont resource these critical manufacturers here in the United States of america. General mcmaster, weve talked about our trade deficit, weve talked about the gdp investment. But sir, i just want to very clearly ask because of your profound background and contributions to this nation that if we were to invest more of our nations gdp in the orgal randy does that pose a National Security threat that you are aware of . No, it does not. Especially if it is in the right sectors and is tied to the private sector and we can then apply those technologies to maintaining our economic and defense competitive advantages. So one might say that it provides dividends not only to the economy but to the National Security, to invest in orlando. Ms. Steele is recognized for five minutes. Think you, mr. Chair man. I am honored to serve as a member of the committee and i take the job we have before us very seriously. More than one third of my constituents are Asian Americans. Many of them are firstgeneration immigrants who, like my own parents, fled communism to find a freedom in this country. For them and for me, the threat from the Chinese Communist partys personal. The threat of the ccp is not a personal issue were talking point for the headlines. Its the greatest single threat facing the American People into democracy around the world. As a member of the committee im hopeful that we can come together to find solutions to stop these events, stand with our allies and protect our National Security. Calling on corporate sponsors to use their platforms to raise awareness of the human rights abuses to introducing legislation to revoke the status as a developing nation this is a top priority for me. It should be a top priority for all of my colleagues and i look forward to opportunities to Work Together on this most important issue. Thank you very much that you are willing to stand up for freedom, your decades of sacrifice including the fateful night in Tiananmen Square has led to you here tonight. Thank you for your work alongside the ccp to the internal labor camp. Having said that, a lot of times we are very much discouraged when elected officials are seen across western countries and Global Corporate companies turn a blind eye to the ccp and xi jinping. What do you feel the leaders need to do to protect those groups and vulnerable populations in china . I think what the u. S. Government could help for the Chinese People is to help Fund Programs that do research, how to break down the great firewall. The Chinese Communist party is afraid of its people most. If the Chinese People have access to internet, free flow of the information, then they would know the truth. And the truth is powerful on its own. The lies the communist party has built up over many decades crumble, and that will help the Opposition Forces to organize together and then to fight more effectively against the Chinese Communist partys ideals or history. Another way to help the chinese, i mean, to counter, is to fund the programs for supporting journalists and rights lawyers. The two professions are trained for truth and justice, but they will heavily repress inside china. So if the u. S. Gives more funding for the programs to train the organizations, the professions, it would be great. The reciprocity principle and fairness principle i would also advocate that if the Chinese Government doesnt allow hightech companies such as facebook, google, youtube, twitter to have presence inside china, the u. S. Should certainly have the same right to block tiktok presence in the u. S. Many Congress Many of the Congress Women talk about the harm that tiktok has inflicted on the american teenagers but i would call your attention to the harm that wechat because for the chinese diaspora around the world, because the super app, wechat, is a must have inside china, and it also has become a must have for every chineseamerican or other chinese living in europe who have it to have ties to connect with friends and family inside china people like me, wechat has an invisible war so my postings couldnt be viewed by folks inside china and for those who do not want to sacrifice their ties. The u. S. Should certainly find ways to counteract this pernicious effect. I have a question for general mcmaster but my time is up so i will submit it in writing. Thank you. Mr. Auchincloss. The committee is about competition and the competition is about values. The testimony of ms. Yi shows it rejects the inherent value of the individual who believes people are pawns of the state. The United States by contrast was founded upon universal into selfevident truths centered on and dignity and freedom of the individual. Mr. Pottinger in your written testimony, you assert free societies like ours need not employ disinformation and i agree the truth is on the side of freedom and democracy but the lies spread faster and deeper. How can the United States engage other nations particularly in the global south and diffusing propaganda and building civic rules for the International Order . Thanks for your question. I think that helping fund independent journalism and countries in the global south is critical right now that includes a small Pacific Island nations and includes large african countries and certainly includes countries and our own hemisphere south of our border. The work that is being done to identify government proxies and their bots and others representing but not always transparently autocratic governments need to be called out. It doesnt mean that you have to silence autocrats but it means making sure that theres truth in advertising that people know about. General mcmaster, another element of the International Order particularly in Southeast Asia is through the trade and investment. The u. S. Selectively decouples from china to prevent the chokepoints how might Congress Structure a trade Promotion Authority for the revised Transpacific Partnership to deepen and widen the bonds of trade with the rest of the indo pacific . Congressman, i think we have to do everything we can to foster an incentive for a country to do business with us, for companies to do business in the United States rather than china to accept rather than accept the bad deals they get from china. I think the indo Pacific Economic framework is a good start, but there are portions of ttp especially like data standards for example that could be adopted more broadly across the region. But then i dont think theres much appetite at least in my assessment you would know better than i would for multilateral trade agreements. So we need more capacity for highquality, bilateral trade agreements. We havent had a new one of those. Weve had to revise means but we havent had a new one of those for ten years. We could start with a tpa for taiwan. Absolutely. How about one with great britain. That would certainly be a priority. We should build the well for the multilateral trade agreements with Southeast Asia. And we have received solicitations from our allies australia, new zealand and others in that region that they are willing to revise the tcp and i think that updated the tpa from congress would send a very strong signal about our constrained meant i think mr. Pottinger would put it in his written testimony of chinese aggression. I want to know finally your concluding paragraph and written testimony that i will read hear you right we should be confident. We might have to remember how the kremlin leadership watched a well choreographed parade even as the poorly trained, undisciplined military was failing in ukraine. Meanwhile, the ccp was doubling down on its selfdestructive zero covid policy continuing its crackdown on the tech sector as it continued a real estate crisis. Authoritarian regimes are brittle. Democracies are resilient. The democracy is up to us. Yes the kremlin and ccp have committed public self defeating errors in the past two years but also in the past two years the world watched as an american president summoned a mob to overturn a free and Fair Election and kill officers of the law. January 6, 2021 was xi jinpings best day in office. I hope the bipartisan spirit of competing with the Chinese Communist party overseas extends the defending democracy here at home. I yield back, chair. The senator is recognized for five minutes. Thank you, mr. Chairman. Its very clear we have quite the challenging task ahead of us not just tonight, but for months and years to come. Im confident with the leadership of congressman gallagher and krishnamurthy we will win this strategic competition with the Chinese Communist party and we will also make sure that president xi jinpings marxist outlook for the new world order squashes freedom will never come to pass. We are not going to allow that to happen and we cannot fail. To the witnesses, thank you for appearing before us tonight and having the courage to tackle these tough issues with us. I would like to start with you, mr. Pottinger, and id like to review for a moment to i kind of made a list of if you want to call them the top ten hit list of some of the activity is that the ccp end of the pla engage in, and these are things just discussed here tonight. Human rights abuses, surveillance of the Chinese People, genocide, trade exploitation, theft, economic coercion, funneling fentanyl with cartels, international espionage, economic espionage, direct threats against our allies in the sovereign nation of taiwan. So, that is just a start. Its certainly not a comprehensive list. But would you agree that this is a fair summary of the ccps maligned activities . That is a pretty good top ten and the list is a lot longer, congresswoman. I agree. Its the tip of the iceberg as we would call it. Would you say another issue that is important to all the people who pay us to be here about their hardearned paychecks should certainly not be funneled to funding these activities were the ccp or the pla, any of those organizations . Thats right. There is already a basis for halting the investment of american retirees. Money in any American Investment from going into the Chinese Military affiliated companies. Its not being enforced by the Treasury Department. And i would like to highlight one other important issue. I think we are in agreement a long working farmer in iowa shouldnt be on the hook for funding bad actors that are literally stealing the corn out of his fields which happened right in iowa in our backyard. So, what do you make of the reporting that american taxpayer funds have been funneled to the ccp and pla and can you provide the most concerning examples beyond what you mentioned in terms of investment . Well, the amount of money is vast. That is because the Chinese Communist party, and like i was talking about at the beginning, they are magicians. They created insensitive to coercive measures for wall street index funds to out more Chinese Companies to their embassies and a lot of investors, a lot of Big Fund Managers dont actually look at the Chinese Companies they are investing they just follow those big embassies. Theyve been resisting adding these Companies Including ones affiliated to the list into the party said if you dont add more of our companies we will withhold data and licenses for you to upgrade. Low and behold certainly the number of Chinese Companies that appear triple, quadruple and more and more money slowed from american pensioners. Endowment funds in universities into these Chinese Companies that are opaque and many of them are servicing the Chinese Military. So its term gain the, the opposite as normal. Its fiduciary the responsibility on top of that. And i would like to applaud you for bringing up the journalist that was my career before i got into politics i started off trying to get to the bottom of the truth and show that every single day. You experience of the truth so thank you for your bravery. What would you say in the propaganda space is the ccps biggest tool the biggest threat and how are they utilizing that Propaganda Machine here in the United States . From wall street journal and New York Times and washington post, cnn to have any presence in china the u. S. Should band the chinese journalists from coming here as well. And currently, Chinese People certainly could not review the American Program such as this in china so we should not allow their presence in the United States as well. And also the wechat played a very, very big role in many ties with the chineseamericans here about what their values of outlook is. Within wechat, there are a lot of platforms set up by the ccp. For example targeting Chinese Student organizations and communities even for heating purposes they could gather a lot off chineseamericans to for example protest in front of some organization for their purpose to do their bidding. So all of these ways that the united front work has penetrated our society very suddenly and we should get smarter to counter the ccp propaganda especially against the united front work. We had a chinese newspapers with the propaganda being delivered to the offices here in congress not long ago and we put a stop to that as well. So thank you and i will yield back. Mr. Torres is recognized. Francis declared of the end of history in the 20th century the u. S. Had high hopes the world would bring freedom to china. Today in the 21st century, hoping the world will bring freedom to china the u. S. Fears the ccp will bring a Totalitarian Police states to the world and will do so to an extent not even George Orwell himself could have imagined. Under the leadership of xi jinping, the ccp has become more totalitarian and more of known nationalist. Totalitarian turn and f no National Ethos of the ccp has led to a genocide against Uyghur Muslims and aggression against taiwan. Mr. Pottinger, i have a deceptively simple question. Has he changed the ccp or simply revealed the ccp what it truly is and has always been . Congressman, that is a great question. I think it is more of the latter that there has been names that have been consistent even though sometimes theyve been kept quiet by the ccp for decades. If you look at a couple of recent books, frank has a new book, china after mao, and a current work and the Biden Administration called the long game that explores that. The Leadership Matters in any system including in a totalitarian dictatorship and a xi jinping is putting his personal stamp on this system. Hes accelerating the goals that theyve been trying to reach. Another question about the mindset. Does he know that the consolidation of power likely comes at a cost to Economic Growth as evidenced by the zero covid policy and if he knows, does he even care . It seems like he prioritizes f no nationalism and totalitarianism even at the extent of national growth. One of the powers from his predecessors is that he clearly doesnt rank Economic Growth and the growth of prosperity first. Its a distant second data best to centralizing political controlling and grabbing hold of what he calls the tools of dictatorship. Thats the line he uses repeatedly it means controlling all aspects of the society and the politics, the economy, the ideology and information. Even though China Remains intent overtaking the United States Worlds Largest economy, the ccp is confronting a perfect storm, debt crisis, demographic crisis and declining productivity crisis. Can you think of a single country in history that has achieved sustainable Economic Growth in the face of productivity decline, population decline and a prohibited debt burden and i will start with you mr. Pottinger. Not that im aware of. Mr. Mcmaster, can you think of one . Not that im aware of. Mr. Paul . One doesnt come to mind, congressman. Given the lack of historical precedent, mr. Pottinger, are you skeptical china will surpass the United States . Quite skeptical that they will. The real issue is how much damage can they do to their own people and to the rest of the world before the moment of truth arrives for their system. Mr. Mcmaster . Im optimistic in terms of our ability to prevail if we stop underwriting our own demise. Mr. Paul. I think its an open question. China is starting to choose its friends differently and if its friends are russia and iran then we have larger issues to be concerned about. During world war ii weasel sentiments against japanese against japanese government, dissemination against japanese americans resulting in one of the darkest moments in american history, the mass internment on japanese americans. In our bipartisan efforts to confront the real challenge of the ccp, we must never allow sentiments against the ccp to become a pretext for discrimination against chineseamericans. Calling into question the loyalty of chineseamericans as a member of congress recently did is as dangerous as it is deplorable. If we allow the ccp to change who we are and turn america against americans we lose the moral authority that we rightly claim. The strategic competition with of the ccp isnt merely about interest but about values and we must remain true to our values and nowhere more so than here at home. I will yield back. Mr. Man is recognized for five minutes. Thank you and im truly honored to serve on this committee. I could identify with you because i also a. M. A political refugee. I came here when i was 6yearsold. I didnt suffer what you suffered at the hands of the communist party in china but i can tell you that marxist regimes are the same everywhere. There is no difference and though the communist Chinese Party was able to hide its intentions for a long time, in the end they always expose themselves to what they want and the marxist ideology wants to simply dominate the world and they want to subjugate all of us and oppress us, take away our freedoms and the people in china and at the Chinese People are suffering under the same oppression as people in cuba suffered the last 60 years and youve suffered it more even longer in china so i would identify with you and thank you for your courage. General, do you think that china poses a greater threat to our freedom and worlds freedom then the soviet union adverted . Congressman, yes, i do because of the complexity of it especially the interconnectedness of china with the Global Economy and with the skill of what they are doing from an Economic Perspective and espionage perspective i think is unprecedented. We never gave the soviet union the kind of access that we give to Chinese Communist Party Operatives members of the party. Based on what weve all been talking about, it is fundamentally flawed assumption that having welcomed into the National Order would play by the rules to try to prosper to liberalize its economy and its form of governance. I agree. And after world war ii it was pretty clear the soviet union was going to be our adversaries so we treated them as an adversary unlike what we did with china that maybe if we treat them kindly they will change their ways. And i will tell you one thing you can never assume that with a marxist regime. They will lie, cheat, do whatever it is to gain their way or what their goals are and so i believe the fundamental difference is unlike the soviet union we are funding the instrument of our demise and that we must decouple. But we cant do it alone. We have to actually do it with our allies. So, now that this veil has kind of been withdrawn and the rest of the world can start to see what china is about, do you feel that our allies have sufficiently woken up to the reality of what china is and the threat that china, russia, iran, north korea poses to the rest of the world . Congressman, no i dont. I believe the trend is in the right direction, but the word is insufficient. Its important to understand that the person thats driving decoupling is xi jinping but on his own terms to create this dual circulation economy. Now talking about things what china wants to do is insulate from any kind of consequences, financial or economic associated with chinese aggression while he cultivates dependencies he can use for the course and purposes. And i think the lesson again to go back to the lesson of the greek invasion of ukraine is the economic relationship with russia and the degree with which some companies have stranded capital investments. I think what we really need is a private sector response to this growing geostrategic danger so Companies Need to begin to mitigate the risk. I wish i had that confidence and international companies. A lot of them are looking for profit or shortterm profit over the longterm consequences of that so i believe we have to take some more aggressive steps. We cant do this incrementally. We need a dramatic action and we need it now in order to stop this threat. Some of the folks here in the committee talked about the supply chain and he would be surprised 70 of those Rare Earth Minerals we need to start looking in our own backyard to combat the threat. Thats the first place we need to start and then we have to take action around the world. Thank you and i guess my time is up. U. S. Competitiveness is critical to the residence and ohios 11th congressional district, the midwest and across the nation. As the relationship between the u. S. And china evolves, i am committed to supporting American Manufacturing and trade boosting american competitiveness with equity and inclusion, supporting human labor, opposing surveillance and permitting cybersecurity threats pertaining to the spread of misinformation and disinformation in the United States. Since 2020, the u. S. Government is restricted to certain firms from doing business in the United States. They havent used the restrictions leaving most commercial activities open. The u. S. Government handles state commercial actions on a casebycase basis and holds individual actors accountable, not to the state more broadly. So, mr. Paul, my question is for you. What brought to state restrictions and accountability if any could address these u. S. Concerns . Representative brown, thank you for the question. Its an important issue. I think we have some foundations upon which to build. We have Inbound Investment reviews through the cfius law. We can certainly enhance the enforcement of that and expand its scope for direct taxpayer investment. We could restrict the access to chinese firms, for example theres over 100 chinese firms that had connections to the government that receive ppp assistance or state owned firms and transit in crc and state connected firms that secure transit dollars. You can expand the scope of restrictions there. And we can more carefully calibrated research and aware that it goes in my testimony i articulated issues with u. S. Labs and licensing technologies that was developed at the taxpayer expense to chinese firms. There is a law in place to stop that. It was bipartisan and Homeland Security but that should be expanded as well. We should also consider with the scope and with the type of the investment is what weve seen, and i think youve experienced this in ohio youve seen Industries Like steel and glass and others where thereve been total decimation of these industries. Sometimes chinese firms come in and take up some of the domestic marketplace and thats not necessarily something that i think is healthy for our economy, for every job that creates it probably displaces three or five other jobs in the United States, so theres a lot of room to maneuver here. Thank you for that. Have u. S. Officials prioritized shortterm commercial interest over a longer term considerations related to the u. S. Competitiveness . I think until recently the answer was yes and thats why we had to decades of permanent normal trade relations with china, no real consequences for the chinese misbehavior that i described that was measurable in any way. Recently, we have seen that shift. I think we are playing the long game now and as i mentioned theres a couple aspects to that. I think a trade and person of strategy is key but a domestic competitiveness agenda is also key and that requires investment and attention to the infrastructure, to the workplace to make sure we are not only the leaders in innovation but the leaders in production. Thank you for your recommendation. As the committee continues to explore opportunities to create policy and oversight regarding the u. S. China trade relationship and with that, mr. Chair man, i yield back. Mr. Barr is recognized. Thank you to the witnesses for their outstanding testimony and expertise. As china expert and former defense official has written the ccp is entering the final phase of its 100 year marathon to replace the United States as the worlds global superpower and underappreciated dimension of the strategic competition between the United States and at the ccp. One of the reasons the ccp has arguably ahead of schedule and that marathon is the ccps economic aggression against the west. But i believe very strongly that the United States should not mimic the Chinese Industrial policy, should not copy the chinese command and control system. We should not embrace overly broad measures that would raise questions about our commitments to the market economy which is a key source of strength in the United States in contrast to be communist Central Planning policies. In other words, as this committee does its work and as we consider policy responses to the threat from the ccp i would submit to my colleagues and policymakers in the country we shouldnt try to Counter China by becoming more like china. Mr. Pottinger, though i do believe there are certain areas where we need strategic targeted focus and tailor decoupling and that strategic decoupling should be limited and focused on National Security issues, so to that point i want to set the stage for those watching tonight on the risks of u. S. Investment and western capital flows into chinese Surveillance Companies that do threaten the National Security. To what extent are american investors through these emerging index funds public equity exchanges and even private equity and Credit Investments either knowingly or unknowingly investing in Chinese Companies that directly threaten u. S. National security. I would point you to the work that Roger Robinson has done in this area. Hes a former Reagan Administration official whose tried to tally the amount of money we talk about hundreds of millions of dollars that have been flowing to the opaque firms including genocide, slavery. I think most americans dont know. If americans knew thats where their money was going as a way to say im out. What are you talking about. But i do think that theres been poor stewardship on the part of the index providers and frankly on the part of a lot of big Money Managers whove not paid close enough attention to where that money is flowing. Lets talk about the tailored and focused response. What is the policy solution here that is consistent with the values added to the general commitment to Crossborder Capital flows. What is the right policy response, so as you consider that response, talk to us about the disparate lists within the department of commerce, the entity list within the department of defense, the socalled 1260 list and also within treasury the Chinese Military Industrial Complex list that is subject to these executive orders is the right policy response a very surgical direct sanctions regime cannot only tell american investors green light, red light that would coordinated the sanctions regime with our entity lists so that a company that shouldnt be transferring technology through should also be on the sanctions list so that outbound capital screening and capital flows are not subsidizing or investing companies that are a Technology Transfer risk. One final point, is there a multilateral effect so that nonus investors are also not funding the rise of the Technology Companies . To start with the last point, when the United States leaves our allies sooner or later tend to follow. That was the case when the Trump Administration but the first ever sanctions on china on their genocide for europeans and others slowly began to follow suit. Theres no substitute for americas deep and liquid capital markets. No one else can substitute for the massive liquidity that we provided through the capital markets. So the answer is when we are talking about an adversary that doesnt wish us well and is involved in the worst human rights abuses, yes we need to actually begin coordinating and at least try to study why it is for example the u. S. Commerce department has thousand Chinese Companies on its export control list because the companies provide a dual use military technologies. But at the Treasury Department down the street, only 68 companies and americans are prohibited from investing in. Sixtyeight companies that are either affiliated with of the Chinese Military or involved in gross human rights abuses the numbers should probably be several tens of thousands of companies not merely 68. So the Treasury Department has a lot of explaining to do. My time is expired but the coordination is critical and i will yield back. Mr. Luetkemeyer is recognized. Thank you to the witnesses again today. I want to follow up on mr. Barrs quick line of questioning here. In your testimony, you say that the ccp weve helped to feed the baby dragon of the ccp until it has grown into what it is now. I use a little bit different phrase that we are investing in china which is a line that is going to eat us if we are not careful. Mr. Paul, in your testimony you said at the ccp sought to accomplish the objective by drawing in the investment in technology. They are sucking us in and finding a way to attract our investment. And general mcmaster, in a statement before the Senate Armed Services committee and a hearing march, 2021, the companies on the Stock Exchange and my information was 2020 about a thousand Companies Listed on the Stock Exchange january 9 of this year yet i think one of the reasons is we said every two years. I would like to see that go down to one year. Our Asset Managers, you have the largest Asset Managers in the world that probably a bunch of us in this room may have our Retirement Funds with of them makes the statement this is the best place to invest in the next 20 years is china. This is very concerning because all of you this evening have made a statement that weve got to stop investing. We have to decouple our investments so that we can slow down the rate of growth and compete with us and here we have one of the largest Asset Management in the world but says thats where we need to put our money. How would you suggested that we detour them. Thats where my colleague was going a minute ago. How do you suggest we detour them from saying that and investing in china . Mr. Mcmaster were mr. Pottinger, either of you want to take that . They have large compliance shops to make sure they are compliant with the law. I think that companies will follow the guidelines if they are painted brightly and that is the work of this committee incumbent upon the executive branch to have executive orders that make clear what the left and right limits are for what we can invest in. General mcmaster. With case studies and we are working at the institution on the case studies that will illuminate how the u. S. Investments into private equity and Venture Capital investments have enabled the Peoples Liberation army in some circumstances for example some several hundred Million Dollar investment in the company in 2014 that company now provides all the battlefield Artificial Intelligence for the Peoples Liberation army and also how our investments have enabled the chinese to double down on state support for certain sectors that drive the industries out of business, wind turbines, solar panels, the list is vast. So i think that really shedding the light on this is important because i think so many Fund Managers have been under this idea of maybe some sort of cosmopolitanism or a belief that they get in the assumption that china is going to become just like us. Thank you for that. I want to make a point here though that it would seem to me i read somewhere the other day that it takes about 300 billion a year but the cost to deter and incarcerate and surveilled the Chinese People. It costs about 300 billion. A figure i saw somewhere. If you look at the trade deficits that is 383 billion in mr. Pauls testimony so basically we are paying through the trade deficit for the Chinese Government to surveilled and incarcerate and build centers, prisons, for their own people. Is that a fair statement . I think it is. Question for you then. You gentlemen have talked about ways to perhaps legislatively do this. I think we also need to have the American People behind us when we do this. We need to have them understand that they cant necessarily go for the highest return on the investment in china. How would you recommend we sell that to the American People . Youve got a fantastic story to tell of what goes on in china today. Would you like to answer that very quickly . It was less than 5 of the u. S. Gdp. In 2022, it is 62 of the u. S. Gdp. Over the last three decades with easy access to the western markets, cuttingedge from Silicon Valley and the american universities and also business and manufacturing know the transfer and Enterprises China has now become a geopolitical threat to the u. S. In hindsight the american policymakers should regret much of this. Sacrificing American Values and principles for shortterm profits will never serve americans longer National Security or economic wellbeing. Thank you for the statement. I will yield back. My time is up. Thank you and thank you to the witnesses for their incredible testimony. Im struck by the amount of overlap and good ideas that were generated in the course of this discussion. We now also know that it takes approximately three hours to get through every member of the committee. Everyone is still here. Everyone is still here indeed but mercifully no ones asked for a second round of questions. Three hours is roughly the length of a long movie. I think like an avatar length movie and like any cinematic experience examining the strategic opposition tonight, weve got a sense of heroes and villains and of the we might disagree slightly, the good guys and the bad guys at times theres no question in my mind that we, america, or the good guys. We are the good guys that even on our worst day, the rest of the world is looking to us for leadership. And i was reminded of the fact today when we had a press conference with a group on the twoYear Anniversary of 47 activists being jailed in hong kong for having the temerity to hold unofficial elections in hong kong. That was too much for the Chinese Communist party. I think it illustrates a world in which people are free is a world unsafe for the ccp. And thus they are trying to change it. I am reminded of what joshua, who remains jailed, said. Our bodies are held captive but our pursuit of freedom cannot be contained. I want to paraphrase what president reagans said at the end of the old cold war. Freedom is the victor. Freedom is the victor. In that spirit, i want to thank all the members for their thoughtful contributions tonight i cant tell you how excited i am to work with you on a bipartisan basis Going Forward. Again i want to thank the witnesses and remind members questions for the record or do one week from today march 7. The staff will receive submission instructions shortly. Without objection, the Committee Hearing is adjourned. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]. [inaudible] [inaudible conversations] [inaudible conversations] one. [inaudible conversations]. [inaudible conversations]. [inaudible conversations]. [inaudible conversations]. [inaudible conversations]. [inaudible conversations]. [inaudible conversations]