People in power tell us constantly that China is a threat but… Why? In this episode, we explore the big picture reasons why China poses a threat to those in power in the United States and what our Congress is doing to combat that threat. Spoiler alert: There’s a another U.S. military build-up involved.
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- CD052: The Trans-Pacific Partnership (TPP)
H.R. 5105: BUILD Act of 2018
- Became law as a part of H.R. 302: FAA Reauthorization Act of 2018
- BUILD Act text from FAA law
- Purposes for which support may be provided
- The new bank “may designate private, nonprofit organizations as eligible to receive support… to promote development of economic freedom and private sectors” and “to complement the work of the United States Agency for International Development and other donors to improve the overall business enabling environment, financing the creation and expansion of the private business sector.”
- Powers of the new development bank
- The bank “shall have such other powers as may be necessary and incident to carrying out the functions of the Corporation”
S. 2736: Asia Reassurance Initiative Act of 2018
- Sec. 101: Policy
- “Promotes American prosperity and economic interests by advancing economic growth and development of a rules-based Indo-Pacific economic community”
- Sec 102: Diplomatic Strategy
- To support the “Association of Southeast Asian Nations”, “Asia-Pacific Economic Cooperation”, and the “East Asia Summit”
- #1: Emphasize our commitment to “freedom of navigation under international law”
- #7 : “Develop and grow the economy through private sector partnerships between the United States and Indo-Pacific partners”
- #8: “To pursue multilateral and bilateral trade agreements … and build a network of partners in the Indo-Pacific committee to free markets”
- #9: To work with Indo-Pacific countries to pursue infrastructure projects and “to maintain unimpeded commerce, open sea lines or air ways, and communications”
- Sec. 201: Authorization of Appropriations
- Authorizes $1.5 billion for each fiscal year 2019 through 2023 to be divided among the State Dept., USAID, and the Defense Dept.
- Congressional Budget Office: The total authorization is almost $8.6 billion
- The money is allowed to be used for “foreign military financing and international military education and training programs”
- The money is allowed to be used “to help partner countries strengthen their democratic systems”
- The money is allowed to be used to “encourage responsible natural resource management in partner countries, which is closely associated with economic growth”
- Authorizes $1.5 billion for each fiscal year 2019 through 2023 to be divided among the State Dept., USAID, and the Defense Dept.
- Sec. 205: United States-ASEAN Strategic Partnership
- Sense of Congress expressing the value of “strategic economic initiatives, such as activities under the United States-ASEAN Trade and Investment Framework Arrangement and the United States-ASEAN Connect, which demonstrate a commitment to ASEAN and the ASEAN Economic Community and build upon economic relationships in the Indo-Pacific region.”
- Sec. 209: Commitment to Taiwan
- “The President should conduct regular transfers of defense articles to Taiwan”
- Sec 213 Freedom of Navigation and Overflight; Promotion of International Law
- “It is the sense of Congress that the President should develop a diplomatic strategy that includes working with United States allies and partners to conduct joint maritime training and freedom of navigation operations in the Indo-Pacific region, including the East China Sea and the South China Sea, in support of a rules-based international system benefitting all countries.”
- Sec. 215: Cybersecurity Cooperation
- Authorizes $100 million for each year (2019-2023) to “enhance cooperation between the United States and Indo-Pacific nations for the purposes of combatting cybersecurity threats.”
- Sec. 301: Findings; Sense of Congress
- Free trade agreements between the United States and three nations in the Indo-Pacific region have entered into force: Australia, Singapore, and the Republic of Korea
- According to the National Security Strategy, the United States will “work with partners to build a network of stated dedicated to free markets and protected from forces that would subvert their sovereignty.”
- Sec. 304: Trade Capacity Building and Trade Facilitation
- (a) “The President is encouraged to produce a robust and comprehensive trade capacity building and trade facilitation strategy, including leveling the playing field for American companies competing in the Indo-Pacific region.”
- Authorization of Appropriations:”There are authorized to be appropriated such amounts as many be necessaryto carry out subsection (a).”
- Sec. 305: Intellectual Property Protection
- The President “should” take “all appropriate action to deter and punish commercial cyber-enabled theft of intellectual property” and orders a report on the government’s efforts to do so.
- Authorization of Appropriations: “There are authorized to be appropriated to the United States Trade Representative such amounts as may be necessary to sponsor bilateral and multilateral activities designed to build capacity in the identified priority areas” in the report
- Sec. 306: Energy Programs and Initiatives
- Orders the President to create a strategy, updated every 5 years, to “encourage” Indo-Pacific countries to “implement national power strategies and cooperation with United States energy companies and the Department of Energy national laboratories”
- Authorization of Appropriations: $1 million per year from 2019 through 2023
- Sense of Congress: “the United States should explore opportunities to partner with the private sector and multilateral institutions, such as the World Bank and the Asian Development Bank, to promote universal access to reliable electricity in the Indo-Pacific region, including Myanmar (Burma)”
- Sec. 409: Authorization of Appropriations
- $210 million each year (2019-2023) to “promote democracy” and the money can be given to “universities, civil society, and multilateral institutions that are focusing on education awareness, training, and capacity building.” This money can be spent to “promote democracy” in China.
- Sec. 411: Young Leaders People-to-People Initiatives
- Authorizes $25 million per year (2019-2023) to support the “Young Southeast Asian Leaders Initiative, the ASEAN Youth Volunteers program, and other people-to-people exchange programs that focus on building the capacity of democracy, human rights, and good governance activities in the Indo-Pacific region.”
- Sec. 412: Savings Program
- “Nothing in this Act may be construed as authorizing the use of military force.”
HR 5515: John S. McCain National Defense Authorization for Fiscal Year 2019
- Sec. 1252
- Amends the NDAA for 2016, which authorized the South China Sea Initiative providing military equipment and training to Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, to change the name of the program to the “Indo-Pacific Maritime Security Initiative” and expands the authorization to include the Indian Ocean in addition to the South China Sea and the countries of Bangladesh and Sri Lanka.
- Adds India to the list of countries allowed to be paid for expenses, along with Brunei, Singapore, and Taiwan.
- Extends the expiration date from September 30, 2020 to December 31, 2025.
- Sec. 1253
- Changes the name of the military build-up authorized in NDAA 2018 from the “Indo-Asia-Pacific Stability Initiative” to the “Indo-Pacific Stability Initiative”.
- Changes the activities authorized to include an increase in “rotational and forward presence” of the US Armed Forces and adds the prepositioning of “munitions” in addition to equipment.
- Expands the options for funding by removing the requirement that funding come “only” from a section 1001 transfer authority.
- Requires a 5 year plan be submitted to Congress by the Secretary of Defense by March 1, 2019.
Public Law 115-91: National Defense Authorization Act for Fiscal Year 2018
- Sec 1251
- Authorized the “Indo-Asia-Pacific Stability Initiative” to “increase the presence and capabilities” of the United States Armed Forces in the region by building new infrastructure, “enhance the storage and pre-positioning in the Indo-Asia-Pacific region of equipment of the United States Forces”, and with military training and exercises with allies.
Sound Clip Sources
Hearing: Democracy Promotion in a Challenging World Senate Foreign Affairs Committee, June 14, 2018.
- Carl Gershman – National Endowment for Democracy: President
- Daniel Twining – International Republican Institute: President
- Kenneth Wollack – National Democratic Institute: President
Timestamps & Transcripts
1:43:38 Representative Michael McCaul (TX): I had a briefing yesterday in a classified setting on ZTE and Huawei, and their efforts to conduct espionage in this country. I’ve also seen them in Sri Lanka where they have burdened them with so much debt that they had to turn over a strategic port to the Chinese. We see the Chinese now in Djibouti for the first time, and we see them leveraging the continent of Africa into so much debt that they will be able to eventually take over these countries. They exploit them. They bring in their own workers—they don’t even hire the host countries’ workers—and they export their natural resources in what is this One Belt, One Road policy.
1:45:00 Carl Gershman: In March, The Economist magazine had a cover story on China, and the bottom line of the cover story was—and this is a direct quote—”The West’s 25-year bet on China has failed.” The bet was that if China was brought into the World Trade Organization, was encouraged to grow economically, it would become a more liberal society and be part of the liberal world order.
1:46:26 Carl Gershman: It’s a problem with the Belt and Road Initiative, which is not just an economic expansion. This is intimately tied to China’s geopolitical and military strategy precisely to get strategic ports in Sri Lanka or in Maldives because countries fall into the debt trap and pay back by leasing their ports.
1:58:05 Representative Ted Yoho (FL): They’re a form of socialism with Chinese characteristics, and, as we all know, that’s communism. Our form of government empowers the people. Empowered people reach their full potential. China empowers the government where the people are suppressed for the benefit of the government.
2:00:10 Daniel Twining: It’s the surveillance architecture. This Orwellian total surveillance state they’re building with artificial intelligence and facial recognition and all this stuff. It’s very attractive, as you say, not to people but to leaders.
2:07:52 Representative Ted Poe (TX): Globally, what do you personally see is the number-one entity that is a threat to democracy worldwide? Is it China? Is it Russia? Is it North Korea? Is it ISIS? Is it Iran? Pick one. Pick the one you think is the threat. Carl Gershman: China. Rep. Poe: China. Gershman: China. Rep. Poe: Mr. Twining. Daniel Twining: China. Rep. Poe: Mr. Wollack. Kenneth Wollack: Russia. Rep. Poe: Russia. Russia and China.
Hearing: The China Challenge, Part 1: Economic Coercion as Statecraft, Senate Foreign Relations Subcommittee on East Asia, the Pacific, and International Cybersecurity, July 24, 2018.
- Dan Blumenthal: Director of Asian Studies and Resident Fellow at the American Enterprise Institute
- Ely Ratner: Vice President and Director of Studies at the Center for a New American Security
Timestamps and Transcripts
33:49 Chairman Senator Cory Gardner (CO): This hearing will be the first hearing in a three-part series of hearings titled The China Challenge and will examine how the United States should respond to the challenge of a rising China that seeks to upend and supplant the U.S.-led liberal world order.
34:12 Chairman Senator Cory Gardner (CO): According to the National Security Strategy, for decades U.S. policy was rooted in the belief that support for China’s rise and for its integration into the post-war international order would liberalize China. Contrary to our hopes, China expanded its power at the expense of the sovereignty of others. According to the National Defense Strategy, the central challenge to U.S. prosperity and security is the reemergence of long-term strategic competition by what the National Security Strategy classifies as revisionist powers. It is increasingly clear that China and Russia want to shape a world consistent with their authoritarian model: gaining veto authority over other nations’ economic, diplomatic, and security decisions.
35:28 Chairman Senator Cory Gardner (CO): The question before us now is identifying the tools the United States has at its disposal to counter the disturbing developments posed by China’s less-than-peaceful rise. This is why Senator Markey and I and a bipartisan group of co-sponsors in the Senate joined in introducing the Asia Reassurance Initiative Act, or ARIA, on April 24. The legislation sets a comprehensive policy framework to demonstrate U.S. commitment to a free and open Indo-Pacific region and the rules-based international order. ARIA provides a comprehensive set of national security and economic policies to advance U.S. interests and goals in the Indo-Pacific region, including providing substantive U.S. resource commitments for these goals. I’m joined in this legislation on the committee by Senator Kaine, Senator Coons, Senator Cardin, Senator Markey, by Senator Rubio, and Senator Young, as well as Senators Sullivan and Perdue and Graham.
38:12 Chairman Senator Cory Gardner (CO): Our first witness is Senator—is Dan Blumenthal—I almost gave you a demotion there, Dan—who serves as director of Asian studies and resident fellow at the American Enterprise Institute. Mr. Blumenthal has both served in and advised the U.S. government on China issues for nearly two decades. From 2001 to 2004 he served as senior director for China, Taiwan, and Mongolia at the Department of Defense. Additionally, from 2006, 2012 he served as a commissioner on the U.S.-China Economic and Security Review Commission, including holding the position of vice chair in 2007.
38:54 Chairman Senator Cory Gardner (CO): Our second witness today is Ely Ratner, who serves as the vice president and director of Studies at the Center for a New American Security. Mr. Ratner served from 2015 to 2017 as the deputy national security advisor to Vice President Joe Biden, and from 2011 to 2012 in the Office of Chinese and Mongolian Affairs at the State Department. He also previously worked in the U.S. Senate as a professional staff member on the Senate Foreign Relations Committee and in the office of Senator Joe Biden.
42:01 Dan Blumenthal: I have to state that the era of reform and opening in China is over. It’s been long over. It’s been over, probably for 10 years. And China is back to being run by state-owned enterprises that are related to the party. The private sector is diminishing. That provides the Chinese state with a lot more control over economic coercive policies.
49:27 Ely Ratner: First, the Senate Foreign Relations Committee should hold hearings on the cost and benefits of rejoining the Trans-Pacific Partnership. Rejoining TPP is among the most important things we can do to advance our economic position in Asia and erode the effectiveness of China’s economic coercion. By contrast, U.S. withdrawal has done substantial damage to our standing in the region and is facilitating the development of a Chinese sphere of influence in Asia and beyond. Rejoining TPP would renew confidence in the credibility and commitment of the United States, help to re-route supply chains in the region, open new markets for U.S. companies, and ultimately reduce China’s economic leverage.
56:28 Senator Ed Markey (MA): And through its Belt and Road Initiative, BRI, China is burdening countries receiving infrastructure loans with debts so extreme that they begin to undermine their own very sovereignty. According to a recent New York Times report, this Belt and Road Initiative amounts to a debt trap for vulnerable countries around the world, fueling corruption and autocratic behavior in struggling democracies.
59:30 Senator Cory Gardner (CO): Mr. Blumenthal, you mentioned in your opening statement, you talked about the economic opening in China being over. Could you go into a little bit more detail of what you mean by that? Dan Blumenthal: So, the period of reform and opening, which Deng Xiaoping began in 1978 and allowed for the great growth of China, the great growth of the private sector, private-sector entrepreneurs and brought so many Chinese out of poverty and benefitted the world, ended, probably 10 years ago, the Chinese we now know. The Chinese have gone back to the state sector dominating, taking out room for entrepreneurs to grow. They’ve gone back to things like price controls. They’ve gone back to things like lending on the basis of non-market, non-profitable lending but rather through patronage from the party to state-owned enterprises. They certainly haven’t moved any further than they were 10, 12 years ago on market access, things that we’ve been pressing for. They haven’t stopped subsidizing. In fact, they’ve doubled down on subsidizing their state-owned enterprises, which is probably the single biggest cause of probably the WTO stalling as much as it has. And Xi Jinping is certainly not taking China down the road of another round of market reforms—quite the contrary. He’s a statist and favoring state-owned enterprises and the subsidization of state-owned enterprises over the private sector.
1:11:42 Ely Ratner: China is going to use its economic clout to try to achieve its geopolitical aims, which include dividing American alliances and eroding the influence of the United States in the region. So I think that was a very important episode. It was very revealing. I think we can talk about trying to incorporate China into a rules-based order. I don’t think that’s where we’re going to be in the next several years. I think what we have to do is pull up our socks, get more competitive, slow down Chinese momentum in its efforts to develop this sphere of influence. That’s a much more urgent task than a long-term goal of developing a rules-based order.
1:13:44 Senator Todd Young (IN): Mr. Ratner, thanks for your testimony. As I reviewed your written statement, you seem to be making a pretty simple argument with very serious implications. In short, you seem to be saying we’re in a high-stakes competition with China, that China does not accept this rules-based international order we had hoped to welcome them into back in 2000. The legitimacy of that order and the institutions that were stood up to oversee that order are not respected by China. China, instead, respects power. And we as a nation have insufficient leverage, it seems, to be able to affect the sort of change we want with respect to intellectual-property theft, joint-licensing requirements, dumping, and so many other things. What we lack—and this is language you employed—is a comprehensive strategy. Is that a fair summary of your viewpoint, Mr. Ratner? Ely Ratner: Yes, sir.
1:21:05 Ely Ratner: When it looked like the United States was going to join the Trans-Pacific Partnership and that agreement was going to pass, the Chinese were starting to ask questions quietly at senior levels, with American officials about what they would need to do down the road to improve their practices to join that agreement, and obviously, those conversations are no longer happening today.
1:22:30 Senator Jeff Merkley (OR): Mr. Ratner, under WTO, is China allowed to offer subsidies to its businesses? Ely Ratner: Senator, I’m not a trade lawyer, so I can’t get into the weeds of WTO law, but I think the answer is no, and there’re several other dimensions in which they’re not in compliance with the agreement. Sen. Merkley: Under the WTO, China is required to do an annual report of all of its subsidies to different enterprises. Does it do that report? Ratner: I believe not, Senator. Sen. Merkley: So, when it fails to do the report, we are, under the WTO, allowed to do a report on their subsidies. I did an amendment a few years ago that said if China doesn’t produce a report, our trade representative will be directed to produce our report. And before that amendment, the ink could dry on it, our trade rep under President Obama produced a list of 200 Chinese subsidies, subsidies we’re well aware of but rarely kind of articulated. So that’s—so we certainly have an understanding of massive Chinese subsidies that are not allowed under WTO. How about to offer loans at non-market rates? Ratner: I believe not, sir. Sen. Merkley: Or to provide land for free as a form of subsidy? Ratner: I think that’s right, as well as forced technology transfer and a number of other practices. Sen. Merkley: And how about being required—for our companies to be required to locate in a particular part of China where the infrastructure is inferior to other locations? Ratner: Correct. Sen. Merkley: A couple years ago, when I was a part of a delegation to China, we were at a meeting of the U.S. Chamber of Commerce in which many of these practices were highlighted, but one company in particular stood up and said, and I won’t name the exact company because they probably didn’t want it too much publicized at the time, but they said they were basically told, we have to put our manufacturing center in this far-western city, far from the port infrastructure; we are told we cannot build any size of item that is in direct competition with the Chinese items; they were told they only could build larger versions that the Chinese weren’t yet building, or they would be shut down and shut out of the country. Is that type of activity by the Chinese legal under the WTO? Ratner: No, sir. Sen. Merkley: And what about requiring American companies to do joint-venture arrangements in order to be able to locate in China? Ratner: Also, not part of the agreement. Sen. Merkley: So, and you’re familiar with how these joint-venture agreements are often used as a way to drain U.S. technology? Ratner: Yes, sir. Sen. Merkley: So, what does one say to the American citizen who says, “China is violating all of these rules, and the WTO has no mechanism by which we appear to be able to hold them accountable. Why shouldn’t we work intensely to create an ability to hold China accountable to the structure of the WTO?” Ratner: I think that was the intention of the Trans-Pacific Partnership.
1:45:22 Senator Cory Gardner (CO): In recent writings in the Wall Street Journal, quotes from President Xi, China has its own ideas about how the world should be run, and as he put it, “to lead in the reform of global governance.” Another quote, or another statement, “in at least eight African countries, as well as some in Southeast Asia, Chinese officials are training their counterparts in how to manage political stability through propaganda and how to control media and the Internet,” and that the China model provides “a new option for other countries who want to speed up their development while preserving their independence.” And finally this: China has committed to train 10,000 political elites in Latin America by 2020. All of this speaks to the need for what you have described, Mr. Ratner, what you have described, Mr. Blumenthal, is U.S. leadership and U.S. response, whether it’s the BUILD Act, whether it’s legislation that Senator Young has described, the legislation that we have co-sponsored together—the Asia Reassurance Initiative Act. This is a time for U.S. leadership, and it’s a time to stand boldly for our values that have empowered the world to be a better place, that has lifted up hundreds of millions of people around the globe up and out of poverty through a system of rules and standards that don’t favor one country over another but that give people a chance to participate in global governance and that global rise.
Hearing: The China Challenge, Part 2: Security and Military Developments, Senate Foreign Relations Subcommittee on East Asia, the Pacific, and International Cybersecurity, Septemer 5, 2018.
- Dr. Oriana Skylar Mastro: American Enterprise Institute
- Abraham Denmark: Director of the Asia Program at the Woodrow Wilson International Center for Scholars
Timestamps and Transcripts
27:50 Chairman Cory Gardner (CO): Our first witness is Dr. Oriana Skylar Mastro, who is the Jeane Kirkpatrick visiting scholar at the American Enterprise Institute where she focuses on Chinese military and security policy in the Asia Pacific. She is also assistant professor of Security Studies at the Edmund A. Walsh School of Foreign Service at Georgetown University and serves in the United States Air Force Reserve as a political-military affairs strategist at Pacific air forces. Previously, Dr. Mastro was a fellow in the Asia-Pacific security program at the Center for a New American Security.
28:25 Chairman Cory Gardner (CO): Also joined on the panel by Abraham Denmark, who is director of the Asia program at the Woodrow Wilson International Center for Scholars. Prior to joining the Wilson Center, Mr. Denmark served as deputy assistant secretary of defense for East Asia, where he supported the secretary of defense and other U.S. senior government leaders in the formulation and implementation of national security strategies and defense policies toward the region. Mr. Denmark also previously worked as senior vice president for political and security affairs at the National Bureau of Asian Research, a fellow at the Center for a New American Security, and held several positions in the U.S. intelligence community.
42:40 Oriana Skylar Mastro: What China is doing is they’re exploiting gaps in the order. So, we talk about the U.S.-led international order and whether China is challenging it or not. But in reality, there’s many areas of the order that lacks certainty, or ambiguous, don’t have consensus. So I would label cybersecurity as one of these areas. And so what China does is it’s trying to build consensus or work on the periphery of the order. So, for example, when they did One Belt, One Road, and they initially moved to the central Asia, they weren’t challenging the United States, because the United States was not there. And so I would say that in addition to strengthening our relationship with traditional partners and allies, the United States needs to think more broadly about its relationships with countries around the globe. Also, in terms of the security initiative, I would recommend that we think more about demand not supply, in kind of business terms. You often, at least in my experience, you think about what the United States has to offer in terms of security assistance, and then we try to put together packages, whether it’s visits, port visits, or a rotation of a squadron or what have you, instead of looking at what those countries actually demand. And so we should move away from this model of increasing advertising and hoping that countries around the world will decide they want what we have to offer, and instead try to look at what they actually want and start supplying that.
1:05:45 Senator Ed Markey (MA): Should the United States abandon the rules-based international system, and what would the concessions be that we would try to extract in order to take such a step? Dr. Mastro. Oriana Skylar Mastro: So, sir, I don’t think we should abandon it. Instead, what I’m arguing for is an expansion of that system. I think that actually the international, is very limited. If you look at the definition, the party to that order, the amount of countries that actually might be involved in certain treaties, it’s not every country possible. For example, India has very different views on things like cybersecurity than the United States does. And so I think if we could manage to build consensus in these areas of uncertainty, we could actually shape China’s choices. And to that end, that gives the United States a lot of political power because the bottom line is one of the main differences between today and maybe 10 years ago is for the United States, the security benefits that we give to our partners, allies, in the region are no longer enough to outweigh the economic benefits that they get from interacting with China. And so we need a security-benefits-plus type of strategy in which we think also about the economic benefits, which is difficult under the current administration, given the trade policy, but also those political benefits by building new international institutions and building new norms and consensus around areas where that consensus has failed to date.
1:07:08 Chairman Cory Gardner (CO): Going back to the question I started to talk about, just the investments that China has made in South America, the investments China is making in Central America. If you look at investments in Panama, El Salvador, and at least apparently in El Salvador, as perhaps part of an agreement as it relates to the decision El Salvador made on Taiwan. Look at the sale of submarines to countries—Thailand—do we see that as continued opportunity for China’s military expansion? Will we see military basing affecting U.S. operations in Thailand? Will we see, perhaps, an opportunity for military entrance into Central America, into South America, China, basing, even, perhaps? Mr. Denmark. Abraham Denmark: Well, I think there’s a lot that remains to be seen. I don’t think there’s a definitive yes or no answer to that question, but I do expect that Djibouti be the first overseas base that China has established. I fully expect that that will not be the last. Where additional facilities may pop up remains to be seen. I personally would expect more facilities to be established along the trade routes from the Western Pacific, through the Indian Ocean, into the Middle East. I would expect to see more there than before I’d expect to see them in Latin America, primarily because of China’s economic interests, but it remains to be seen.
1:20:00 Senator Ed Markey (MA): In September of 2013, China began a concerted effort to build artificial islands in the South China Sea by crushing coral reefs into sand. It built land features where none previously existed. On top of that, China expanded small outposts into military bases capable of conducting operations. Admiral Philip Davidson, the commander of the United States Indo-Pacific Command, stated this year that China’s militarization of the Spratly Islands in the South China Sea means “China is now capable of controlling the South China Sea in all scenarios, short of a war with the United States.” Ms. Mastro, what considerations or challenges do these bases pose for other claimants and the United States in peacetime, in the gray zone, or in conflict? In other words, what are the implications of China’s military bases in the South China Sea? Oriana Skylar Mastro: So, militarily, sir, they expand the range of Chinese capabilities. And so I think I made the point previously that it’s difficult for us to conceive of fighting a war with China using our bases in Korea and Japan, and that’s primarily because of the range of conventional precision-guided munitions that China has that can reach those bases and render them inoperable. In the South China Sea, which is about the size of the United States, China’s power-projection capabilities historically have been quite limited. And in the report, for example, one thing that was highlighted was the H-6K, when it has ______(01:37), now China can extend its range to 3,300 kilometers. But if you actually have bases there, coupled with carriers, then China’s able to sustain combat sorties, for example, for longer periods of time and at farther ranges than it was before. And this is what allows it to be able to control, as the quote suggested, large areas of the South China Sea, the air, and the sea. I would just mention on the gray-zone side, that China can engage in gray-zone activities only because the United States allows it to. There’s nothing that, as far as I understand it, there’s nothing that tells us that, for example, if China says, “Well, this is a Coast Guard,” that we can’t respond with the use of the U.S. Navy. We are too concerned about escalation, and China knows this. They don’t believe in miscalculation and in inadvertent escalation, and so they use this to their advantage. And we should start being very clear about what our redlines are and, obviously, being then able to follow through with that.
1:42:30 Senator Ed Markey (MA): I just have one final area of questioning, if I may, and that just goes back to the Belt and Road Initiative which has resulted in a very generous policy by China of loaning money to countries, which they then can’t pay back, which then results in China being able to extract huge long-term concessions from those countries. Sri Lanka, just a perfect example where they’ve now had to give up a 99-year lease to the Chinese company, which is partially owned by the Chinese government, 15,000 acres of land. And now it appears there are more countries that are deciding to reconsider how far in debt they want their countries or companies to be to a Chinese entity. But at the same time, President Xi, just in the last few days has announced a new $60 billion program—grants, loans—around the world, on top of the $60 billion program that they’ve had in the past that now has these consequences. So, what are the implications for the United States, for global security, of these Chinese strategies in country after country to gain access, or control over, ports in countries? And what would you recommend to the United States that we do to try to make sure that we minimize the ability of this Belt and Road program to build economic and security relationships with companies in a way almost giving them offers they can’t refuse so they become deeper indebted and more entangled into Chinese foreign policy objectives?
1:48:09 Abraham Denmark: The initiative announced several weeks ago by Secretary of State Pompeo in this vein to enhance U.S. engagement, economic engagement, in these areas I thought was a good indication of seeing the problem and trying to address it, not trying to copy the Chinese system, but playing to American strengths of the free market and American corporations.
Hearing: The China Challenge, Part 3: Democracy, Human Rights, and the Rule of Law, Senate Foreign Relations Subcommittee on East Asia, the Pacific, and International Cybersecurity, December 4, 2018.
- Laura Stone: Acting Deputy Assistant Secretary, Bureau of East Asian and Pacific Affairs at the US Department of State
- Scott Busby: Deputy Assistant Secretary for Human Rights and Labor at the US Department of State
- Gloria Steele: Acting Assistant Administrator, Bureau for Asia at USAID
Timestamps and Transcripts
01:23:05 Senator Ed Markey (MA): Around the world, all countries, including the United States, rely on the rules-based international order to underpin security and prosperity to help provide a level playing field, to provide the maximum opportunity for the greatest number of people, and to defend and protect certain fundamental rights. So it is of the utmost importance that we do everything in our power to ensure that this system remains.
01:30:00 Senator Cory Gardner (CO): Our first witness is Scott Busby, who serves as deputy assistant secretary of state at the Bureau of the Human Right, Democracy, and Labor. Previously, he served as director for human rights on the National Security Council in the White House from 2009 to 2011, where he managed a wide range of human rights and refugee issues.
01:36:20 Scott Busby: My bureau, DRL, is implementing $10 million of FY 2018 economic support funds to support human rights in China, just as we have done for the past several years. Nevertheless, such programs are increasingly challenged by the difficult operating environment in China, including the new and highly restrictive foreign NGO management law.
1:59:58 Senator Marco Rubio (FL): And then you see sort of what the global reaction has been to it, and there’s reason to be concerned that this post-World War II, pro-democracy, pro-human rights, global norms are being eroded and reshaped and that China is using its geopolitical heft and its economic power to push it in that direction.
Meeting: Press availability at the 51st ASEAN Foreign Ministers’ Meeting and related meetings, August 4, 2018.
Speaker: Secretary of State Mike Pompeo
Timestamps and Transcripts
1:15 Secretary of State Mike Pompeo: “Throughout my ASEAN-centered engagements these past days I’ve conveyed President Trump’s commitment to this vital part of the world that continues to grow in importance. Security has been a major focus of our conversations. As part of our commitment to advancing regional security in the Indo-Pacific, the United States is excited to announce nearly $300 million in new funding to reinforce security cooperation throughout the entire region.”
4:50 – Secretary of State Mike Pompeo: “As I said earlier this week, the United States practices partnership economics; we seek partnership, not dominance. Earlier this week at the Indo-Pacific Business Forum hosted by the United States Chamber of Commerce, I outlined the Trump administration’s economic strategy for advancing a free and open Indo-Pacific, and I talked about why U.S. businesses’ engagement in the region is crucial to our mission of promoting peace, stability, and prosperity. There is no better force for prosperity in the world than American businesses. When nations partner with American firms, they can have confidence they are working with the most scrupulous, well-run, and transparent companies in the world. As a down payment on a new era in American economic commitment to a free and open Indo-Pacific, I announced at the forum $113 million in new U.S. Government resources to support foundational areas of the future: the digital economy, energy, and infrastructure. In addition, the Trump administration is working with Congress to encourage the passage of the BUILD Act. It recently passed the U.S. House of Representatives and now before the United States Senate. Under this bill, the government’s development finance capacity would more than double to $60 billion to support U.S. private investment in strategic opportunities abroad.”
Meeting: Beyond NAFTA and GATT, National Association Southern Center, April 20, 1994.
Speaker: Arthur Dunkel – Director of the UN
- Wrote the “Dunkel Draft” in 1991, a 500 page general outline of what became the WTO 3 years later – it’s basically the WTO’s Constitution
- “Retired” from GATT in 1993, became a “trade consultant”, and served on the board of Nestle
- Is a registered WTO dispute panelist
Arthur Dunkel: If I look back at the last 25 years, what did we have? We had two worlds: The so-called Market Economy world and the sadly planned world; the sadly planned world disappeared. One of the main challenges of the Uruguay round has been to create a world wide system. I think we have to think of that. Secondly, why a world wide system? Because, basically, I consider that if governments cooperate in trade policy field, you reduce the risks of tension – political tension and even worse than that.”
- Article: Disney sets out international leadership team post-Fox deal by Stewart Clarke, Variety, December 13, 2018.
- Article: IMF delays Sri Lanka’s loan discussion on political crisis, Reuters, November 20, 2018.
- Annual Report: U.S.-China Economic and Security Review Commission, USCC.gov, November 14, 2018.
- Article: Sri Lanka’s political shake-up is a win for China by Bharath Gopalaswamy, Foreign Policy, October 29, 2018.
- Article: Sri Lanka to secure sixth tranche of $250 million IMF’s EFF, Press Reader, Sunday Times (Sri Lanka) October 14, 2018.
- Article: The BUILD Act has passed: What’s next? CSIS, October 12, 2018.
- Article: Power play: Addressing China’s belt and road strategy by Daniel Kliman and Abigail Grace, CNAS, September 20, 2018.
- Article: Taiwan’s monthly minimum wage to increase by 5% in 2019 by Keoni Everington, Taiwan News, September 6, 2018.
- Fact Sheet: U.S. security cooperation in the Indo-Pacific region, U.S. Department of State, August 4, 2018.
- Article: Treasury weakens donor disclosure requirements for some nonprofits by Michael Wyland, Nonprofit Quarterly, July 18, 2018.
- Article: China is doing the same things to Sri Lanka that Great Britain did to China after the opium wars by Panos Mourdoukoutas, Forbes, June 28, 2018.
- Article: Chinese firm pays $584 million to secure 99-year lease of Sri Lanka port by Reuters, GCaptain, June 26, 2018.
- Article: How China go Sri Lanka to cough up a port by Maria Abi-Habib, The New York Times, June 25, 2018.
- Article: China’s use of cercive economic measures by Peter Harrell, Elizabeth Rosenberg, and Edoardo Saravalle, CNAS, June 11, 2018.
- Article: China’s military escalation by The Editorial Board, WSJ, June 4, 2018.
- Article: China owns US debt, but how much? by Investopedia, April 6, 2018.
- Article: China’s military facilities in South China Sea ‘almost ready’ by Raul Dancel, The Straits Times, February 6, 2018.
- Report: China’s economic rise: History, trends, challenges, and implications for the United States by Wayne M. Morrison, Congressional Research Service, February 5, 2018.
- Article: U.S. leadership needed in the Asia-Pacific by James W. Fatheree, U.S. Chamber of Commerce, November 17, 2017.
- Article: China’s new island-building ship raises the stakes in South China Sea by Dan Southerland, Radio Free Asia, November 10, 2017.
- Report: Taiwan: Issues for Congress, Congressional Research Service, October 30, 2017.
- Article: Inside the fight for OPIC reauthorization by Adva Saldinger, devex, February 21, 2017.
- News Release: Charles A Kupchan and Ely Ratner join CFR as Senior Fellows, Council on Foreign Relations, February 15, 2017.
- News Report: PG&E receives maximum sentence for 2010 San Bruno explosion by Kate Larsen, ABC 7 News, January 26, 2017.
- Article: Lockheed Martin scores $395M DHS security operations center contract by Billy Mitchell, Fed Scoop, September 9, 2016.
- Article: Terror in Little Saigon by A.C. Thompson, ProPublica, November 3, 2015.
- Article: Taiwan multinationals serving a broader role by Molly Reiner, Taiwan Business TOPICS, October 28, 2015.
- Article: China’s island factory by Rupert Wingfield-Hayes, BBC News, September 9, 2014.
- Article: Why was the Dalai Lama hanging out with the right-wing American Enterprise Institute? by David Rose, Vanity Fair, February 26, 2014.
- Article: The secret foreign donor behind the American Enterprise Institute by Eli Clifton, The Nation, June 25, 2013.
- Article: Inside the secretive dark-money organization that’s keeping the lights on for conservative groups by Walt Hickey, Business Insider, February 12, 2013.
- Article: How Beijing won Sri Lanka’s civil war, Independent, May 23, 2010.
- Article: The one-year review: Obama’s Asia policies by Daniel Blumenthal, Foreign Policy, November 3, 2009.
- Article: Former high-ranking Bush officials enjoy war profits by Tim Shorrock, Salon, May 29, 2008.
- Report: ChoicePoint sold to LexisNexis parent, Atlanta Business Chronicle, February 21, 2008.
- Article: Scientists offered cash to dispute climate study by Ian Sample, The Guardian, February 2, 2007.
- Article: The man who said to much by Michael Isikoff, Newsweek, September 3, 2006.
- Article: Put a tiger in your think tank, Mother Jones, May/June 2005
- Article: What I didn’t find in Africa by Joseph C. Wilson, The New York Times, July 6, 2003.
- Article: Armitage is ready to step into ring by Steven Mufson, The Washington Post, February 14, 2001.
- Article: Advocacy and lobbying without fear: what is allowed within a 501(c)(3) charitable organization by Thomas Raffa, Nonprofit Quarterly, September 21, 2000.
- About Page: The CNA Coporation
- About Page: Kasowitz Benson Torres LLP
- About Page: The National Bureau of Asian Research
- About Page: Oriana Skylar Mastro
- AEI Scholar List: Dan Blumenthal
- AEI Scholar List: Oriana Skylar Mastro
- Alexander Hamilton Society: Our Principles
- American Enterprise Institute: Annual Report 2017
- American Enterprise Institute: Board of Trustees
- American Enterprise Institute: Jeane Kirkpatrick Fellowship and Scholars Program
- American Enterprise Institute: Leadership
- American Enterprise Institute: Scholars
- Armitage International: Our Team
- Biography: Scott Busby, Deputy Asst. Secretary, Bureau of Democracy, Human Rights, and Labor
- Cambridge University Press: Think Tanks, Public Policy, and the Politics of Expertise
- Center for New American Security: About CNAS
- Center for New American Security: Victoria Nuland, CEO
- CRS Report: U.S. Security Assistance and Security Cooperation Programs
- Center for Strategic & International Studies: Richard L. Armitage, Trustee
- Interactive Map: China Belt and Road Initiative
- IRS: Exemption Requirements – 501 (c)(3) Organizations
- LinkedIn Account: Oriana Skylar Mastro
- LinkedIn Account: Scott Busby
- LinkedIn Account: U.S.-China Economic and Security Review Commission
- Lockheed Martin: Board Members – Daniel F. Akerson
- OpenSecrets: American Enterprise Institute
- Park Hotels & Resorts: Board of Directors
- ManTech: Mission, Vision, and Values
- Report to Congress: U.S.-China Economic and Security Review Commission, November 2018
- Right Web: American Enterprise Institute
- Search Results: Paul | Weiss Professionals
- Security Cooperation Programs: Fiscal Year 2017 Handbook
- SourceWatch: American Enterprise Institute
- SourceWatch Infographic: Donors Trust Infographic
- Tesla Investors: James Murdoch Biography
- Website: American Enterprise Institute
- Website: Chartwell Strategy Group
- Website: CNAS
- Website: U.S.-China Economic and Security Review Commission
- Website: Wilson Center
- Whitehouse Publication: National Security Strategy of the United States of America, December 2017
- Wilson Center: Abraham Denmark
- Wilson Center: Corporate Council
- World Trade Organization: Overview and Future Direction, updated Nov 29, 2018
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Design by Only Child Imaginations
Music Presented in This Episode
Intro & Exit: Tired of Being Lied To by David Ippolito (found on Music Alley by mevio)