Good morning. This hearing will now come to order. I am pleased to welcome our distinguished panels of Witnesses Today on the economic subcommittee focusing on a very important topic and i think theres a lot of bipartisan interest in and that is the economic geostrategic challenge with the rise of china poses for the United States not just today but in the future. The calmness party led peoples republic of china through unfair treatment practices and intellectual property theft market manipulation and very prominently in my view not reciprocal treatment not just in the economic realm but in many realms has been a force in the Global Economy that undercuts the resiliency of the u. S. Economy. Its been one of the worlds fastestgrowing economies averaging close to 10 growth from 1979 to 2015. In 2014 china overtook the United States as the Worlds Largest country in reducing power according to the International Monetary fund. I believe there is a strong bipartisan interest and hopefully we will see that today and establishing a longterm economic United States strategy with our allies that focuses on reciprocity, intellectual property theft and ultimately from the United States person if outcompeting chinese. In may the white house issued its document called the United States strategic approach to the peoples republic of china. This document stated quote the Chinese Communist party expanding use of economic political and military power to compel acquiescence from nationstates across the globe armed vital American Interest and undermines the sovereignty and dignity of countries and individuals around the world. This document is part of the Broader National Security strategy issued a couple of years ago by the Trump Administration and National Defense strategy issued by the department of defense. These documents in my view has very strong bipartisan support in the congress for laying out the challenge that our nation faces with regard to china. But they lack right now is implementing documents, implementing strategies particularly as it relates to economic challenges that china poses. What our hearing intends to do today is to start the focus on the implementation and execution of these strategies. As i mentioned i think these strategies have broadbased bipartisan support but we are going to need to reintegrate our government and society together for the longterm, literally decades like we did in the cold war with the soviet union if we are going to execute these in a way that protects American Interest their workers are economic and National Security interest that im hopeful that is the path that we are big inning on in the Trump Administration and cabinet members in the last two weeks have started to lay out the strategy. I know secretary pompeo as we speak is testifying on the Senate ForeignRelations Committee and im hopeful with their two panel of Witnesses Today government witnesses and experts from the private sector and inc. Tank community we will be able to start informing the congress on this issue with the think is one of the most important issues facing the United States. That is our goal and im excited to have Ranking Member markey as my Ranking Member here and we feel the same on a lot of issues regarding the challenges that china poses and with that i will turn to the Ranking Member for his Opening Statement. Senator markey. Thank you mr. Chairman. Thank you so much for appearing and for your continued hardship on the subcommittee and i want to thank our witnesses for their willingness to participate today. The Ranking Member i believe meeting the china challenge should he have bipartisan priority. We must defeat beijings efforts to unfairly tilt the Playing Field against American Workers and businesses. Those actions include support for companies as well is increasingly using multilateral institutions to set standards that privilege Chinese Companies and technology appeared china also uses economic tools to threaten freedom around the world. Beijing is already exploiting the size of its market to coerce american citizen sent Business Leaders as well as foreign governments. To selfcensorship to protect official Chinese Government messaging. We know china is using exports and foreign assistance including the initiative to in bed around the world not only surveillance technologies but also the values and practices that activate those technologies for a torah terion use for it as we engaged in the competition we must remember that the Chinese Government is testing their authoritarian tools first and foremost of the people of china. I want to make clear in todays hearing and otherwise we are focused on the threats posed by the chinese. We are focused on the threats posed by the Chinese Government. While countries around the world lead an International Coalition to push back on chinese aggression they know the United States has retreated from our historic support of democracy and human rights as a key p for. They know the trump restriction has abandoned International Institutions and the World Health Organization while the Chinese Government has stepped up there and puts campaign and they know this administration is unprecedented support for it or terions over air allies. Pulling together Global Coalition to combat chinese policy directives is a is pursued aggressive approach that swings between pandering to china including an apparent greenlight from president trump. The closing of the chinese consulate in houston without any clear reason or explanation of what we seek in return. We cannot consider china policy in a vacuum but every policy decision on the past three and half years impacts how the rest of the world use us to dissect ss these policies for its clear to me that we have veiled to rise at this moment. As china steps up its Propaganda Campaign in the midst of the coronavirus is hard for United States to point fingers when our own virus response has been so inept. The presence inexplicable failure to lead a National Response to the Coronavirus Crisis and its attacks against science has left the United States flailing as other countries lead in responding to the pandemic rear as china continues to dominate manufacturing and required reporting on sharing of intellectual property in cutting domestic spending has not raised spurred economic involvement that. We should be investing in our research and development and Technology Sectors and putting money into education for a particular focus on s. T. E. M. Agree should be utilizing the defense production act which mobilizes the economy during the pandemic. As china engages in a conference of campaign to exploit International Institutions for their own purposes we have retreated even further from the world stage. United states is absent on the world stage in china is only too happy to fill the void. Or a competition with china is fundamentally about free society versus authoritarian. We must utilize at our disposal making the nice is competitive and resilient as we work with democratic countries around the world to push back in a connected way at the values would hold so dear and the challenges. The stakes are too high and the United States cannot ordered this so thank you mr. Chairman for this very important hearing. Thank you to all of the witnesses who are participate in today as this is really a very important subject. Senate thank you senator markey and i appreciate her ship on the subcommittee where we have spent a lot of hearings and a lot of overall bipartisan agreement particularly as it relates to china. I noticed the chairman of the Commerce Committee senator richter is here and i would ask him to give an Opening Statement as well. Mr. Chairman. Thank you mr. Chairman. I appreciate leadership on this issue and Ranking Member markey has been an ambitious two Panel Hearing this morning and should be quite valuable. The focus is the Chinese Communist party and their predatory economic is and their impact on American Companies both at home and abroad. Protecting our economic advantages in the future will require an aggressive u. S. Government response by congressional action and oversight. Today the white house published its whole of government Response Plan in a document called the United States strategic approach to the peoples republic of china. Todays hearing will look is on the economic overall u. S. Strategy but as the white House Strategic ward points out the ccp uses a variety of weapons to undermine americas economic competitiveness with Cyber Attacks political property that Technology Transfer and illegal subsidies for stateowned enterprises. I hope our witnesses will describe in particular the impacts of the China Campaign with respect to the Commerce Committees jurisdiction such as telecommunications Maritime Aviation and space. Americas future of Economic Trust 30 is not the only thing at stake in the strategic competition as the covid19 pandemic continues chinas apparently using tactics permits military playbook against our Public Health sector. Last week the Department Justice justice for a widespread cyber attack supported by the chinese intelligence service. The target allegedly included at least four u. S. Armistead akel tax working on a covid19 related vaccine and treatment project rate it has revealed unacceptable vulnerabilities by years of letting the ccp be an ott hopefully thats about to change. During the initial phase of the covid19 outbreak chinese exporters and shipping ground to a hault and he was the scissors were forced to go without supplies. In particular the United States pharmaceutical industry has been shown to be over reliant on the chinese buyer. We cannot tolerate economic liabilities. The dcp is unlikely to stop its legislative practices. Therefore the u. S. Government should help congress become more resilient against constant pressure from beijing could i would ask her witnesses from the state department and the Commerce Department to detail the measures they are taking to support they can play a significant role in supporting the efforts of the executive branch. An ott the shtick here and trusted Communications Network act known as rip and replace. Their funds in the face for proposal by the majority leader in this regard. This law will help attacked american Communications Networks threats posed by ct by supporting their mobile update and we welcome suggestions from all of you to bolster the administrations effort rate mr. Chairman and Ranking Member markey you are both champions in this regard and i appreciate your bipartisanship and i think the witnesses. Thank you very much. Thank you mr. Chairman and want to welcome our witnesses. I have instructions here that say the witnesses have not taken their seats please ask them to do so. We have no witnesses here in the room but i think they have taken their seats virtually. I can see them on the screen and i want to welcome mr. Michael wessel commissioner of the u. S. Economic Security Review Commission and mr. Rush doshi director of the China Strategy Initiative has the brookings institution. Gentleman you each will have five minutes to deliver an oral statement or an and your written statement will be included for the record. Thanks again for being here and mr. Wessel we will begin with you. Thank thank you for the annotation to appear before you today. The topic of todays hearing directly affects every one of our citizens could my name is Michael Wessel and im appearing before you today at the the commission of u. S. China economic and security review condition but as a normal washington im speaking for myself although my comments are informed by my service and other works have been involved with for several years todays hearing raises the critical issue of how to respond to the china challenge. While chinas policies are the greatest threat to our competitive posture of innate nations are watching americas response to determine whether they should immolate chinas actions or whether america will stand tall and defendant. Last week chinas foreign minister said quote the Current Situation in chineseu. S. Relations is not what china desires to see. United states is response to for all of this unquote but i agree we dont want to current relations to continue but i strongly disagree that the u. S. Is solely responsible. Years of repeated attacks on our Industrial Base and continuous eft of our intellectual property, countless unfair trade practices massive subsidies statesupported entities and many other predatory and rejectionist policies along with chinas human rights abuses current actions in hong kong and projection of the South China Sea and elsewhere require that we more seriously confront china. Chinas actions with regard to their policies for chinas leadership is made clear their intentions through policy pronouncements and neck cavities. They dont pose their approaches being winwin but the chinese come his partys policies contributed to the halting of reduction that dangerous reliance on sometimes risky supply chains and resilient super countless jobs and lost. In my prepared testimony i outlined many of the policies and practices that form the basis for our concerns. They are welldocumented. We are dependent on china for medicines personal protective equipment but that dependence exists in many other sectors and could increase if the ccp achieves its stated goals. As a relates to policy failures in the west it must be addressed. Our inaction on certain fronts and actions on others have contributed. After the recession of china the World Trade Organization u. S. Businesses began to set up a recent with the stated goal of serving the Chinese Market. Despite facing requirements for joint ventures Technology Transfer and other policies the amount of investment by u. S. Firms in china increased as did their climate which rose by almost 600 to 1. 7 Million People by 2017. U. S. Firms in china have increased an average of 13. 6 her year since 2003 were double the rate of their domestic orders. The promise of serving the Chinese Market has not claimed benefits. Research shows 60 of chinas exports in the u. S. Emanate from foreign invested enterprises. Not all of those are u. S. But any art. Now with chinas rising debt load the capital is beginning to open its Financial Sector to foreign firms its serving its own needs. The risk to Foreign Investors is significant in economic terms of advancing chinas military and technological capabilities. Hundreds of billions of dollars have will flow to china of the next years with strict scrutiny. We should examine some policy options to promote our interests are in my testimony identifies several recommendations made by the commission as well as several of my own. We need a conference of approach and i believe immolating the congressional effort in the autonomous on the best trading act of 1998 which this committee played a role in his work