Executive Calendar

Floor Speech

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Mr. RUBIO. Mr. President, I want to begin by reading an excerpt of an article that ran on October 8, 2012. It was in the New York Times. The article opened with the following quote:

A House committee issued a blistering bipartisan report on Monday that accused two of China's largest telecommunications companies of being arms of the government that had stolen intellectual property from American companies and could potentially spy on Americans. The House Intelligence Committee said that after a yearlong investigation it had come to the conclusion that Chinese businesses, Huawei Technologies and ZTE Inc., were a national threat because of their attempts to extract sensitive information from American companies and because of their loyalties to the Chinese government.

The story continued by saying:

Allowing the Chinese companies to do business in the United States . . . would give the Chinese government the ability to easily intercept communications and could allow it to start online attacks on critical infrastructure, like dams and power grids.

This was from a bipartisan report in the year 2012, in the month of October, by the U.S. House of Representatives Committee on Intelligence. Since then, over and over again, we have heard the intelligence community in this country clearly define this threat. In virtually every one of the open hearings that we had on the Intelligence Committee, I or one of my colleagues have had an opportunity to ask every member of the intelligence community--Director of National Intelligence, Director of the CIA, Director of the FBI, the Director of Counterintelligence, Mr. Evanina, or the nominee before us today--and every time one of us would ask: Would you use a ZTE phone? We are still waiting for one of them to say yes. Every single one of them said no, which is why I was pleased a couple of weeks ago when the Commerce Department brought sanctions against ZTE.

It was not a Congressional issue. Although it could be, it wasn't. It was because, on top of the spying and everything else, ZTE had helped Iran and North Korea evade international sanctions. So the penalty was, American companies could no longer sell component pieces to ZTE, which has led them to being on the brink of being out of business.

No one should feel sorry for ZTE. This is a company heavily subsidized by the Chinese Government that protects them at home, protects them in China, subsidizes them in China but exports them abroad with the hopes that they can help them steal secrets, monitor, and be an arm and tool of intelligence for them. No one should feel sorry for them.

So I was surprised to see, a couple days ago--as the President tweeted and then there have been articles about how perhaps maybe these sanctions might be going away in exchange for a deal on agriculture. I want to tell you, if that is what happens, the President has gotten terrible advice, and it would be a terrible thing for him to do. I think it would be deeply problematic for the national security of the United States and ultimately for his hopes of rebalancing America's relationship with China, geopolitically, economically, commercially, and certainly on security.

The most important thing to understand is, China is carrying out a plan. They put it out there. It is not a conspiracy. It is there for the world to see: Made in China 2025. Made in China 2025 is a plan to dominate the 10 most important technologies of the 21st century. You may ask: Why is that a big deal? Countries would want to do that. They have every right to aspire to that, and I agree. If they want to dominate these 10 fields, they have every right to invest in research and innovation. They have every right to do all of that.

The problem is, that is not how they intend to dominate these fields. The way they intend to dominate the 10 top technologies of the 21st century is to steal the intellectual property, basically the protected, secret ideas our companies are innovating, that American researchers are innovating--to steal that and use it for themselves.

Furthermore, they insist that all of their companies be allowed to sell whatever they want to the United States without any restriction. On the other hand, our companies are restricted--some prohibited--from selling to China's 1.2 billion, 1.3 billion-person market, soon to be the largest economy in the world.

So, in essence, they intend to dominate these 10 fields by cheating their way into a position of dominance, and that alone is not just an economic issue. This is a national security issue. If you dominate the field of artificial intelligence, if you dominate the field of telecommunications, if you dominate the field of aerospace technology, you will dominate the field of national defense and national security, and you will pose a threat to other countries that do not.

We are giving it to them. We are literally allowing them to steal it from us, and they play our system against us. American companies go to China to do business, and here is what they tell them: You can only do business here if you partner up with a Chinese company. You have to give them all the secrets to how you do business. By the way, time and again, as soon as the Chinese company can do what the American company can do, the American company gets kicked out. Suddenly, you have a competitor all over the world that you helped build by giving it to them for free.

Sadly, a lot of American companies play the game because all they care about is being able to sell to China in the short term and have profits, without any thought about the long term or national security of the United States.

I imagine many of these are the same voices that are trekking down to the White House to tell the President to do this deal on ZTE. The ZTE thing is not just a commercial and trade issue--although it is and it could be. It is much more than just that. It needs to be taken with the seriousness it deserves. It is not just about telecommunications.

If you have a ZTE phone--and they are widespread in the United States. These things are hitting up against our towers. They will not just use that to pull American phone companies out of business; they can use that to spy on American companies to steal the intellectual property of the United States. It is exactly what they have done. It is what the report said they do: spying on Americans and stealing intellectual property from American companies. This trade dispute with China is about a lot more than trade. It is about geopolitical balance. It is about fairness.

This is our last chance to get it right. It is almost too late. I am telling you, if we get this wrong--if we back down, when historians write about this period of time in our history, they are going to say the Americans literally gave it over to the Chinese; allowed them to steal from them because they were more interested in short-term gain and were willing to turn over the future.

We will live in a world where China dominates many of the top fields, including many that are critical to our national security and the defense of our interests and of our Nation.

I would argue to you that ZTE should not be allowed to sell anything in the United States. I would argue to you that if a technology company from another country is being used by that country not just to spy on government secrets but to steal the intellectual property of our businesses, they should be out of business in the United States. Some people would say: Well, China is very powerful. They are going to come back and use other means to punish us for this. Let me tell you something. We have extraordinary leverage over their technology industry. For example, one of the things ZTE can do is they can buy from a company named Tsinghua Unigroup, which is a government-owned company. They can buy components from them, but then we can cut them off as well. In fact, every major telecom in China--Huawei, BBK, Yiomi, Lenovo--every single one of these depends on component parts from the United States.

Ultimately, what I would hope to arrive at is a balanced trade situation, a balanced commercial arrangement, and a balanced geopolitical situation between the United States and China, but right now it is way out of balance, and when you allow imbalances to exist and persist in international relations, it leads to conflict. It leads to wars. It leads to showdowns. That is what imbalances lead to. An imbalance leads to the country that becomes dominant to try to take advantage of the countries that are not, unless you agree to surrender to them.

This issue of China and ZTE is a terrible mistake. If the President cuts a deal with ZTE that says: Pay a couple of hundred million dollars in fines and you are back in business in exchange--and they violated the law. This is a law enforcement function on top of everything else. These sanctions against them are punishment for evading and breaking sanctions. If you basically wave that off in exchange for a deal on agriculture--these farmers didn't do anything wrong. These farmers are not being punished for evading sanctions. They are victims of retribution.

We have other angles. In fact, what we should be saying is: If you don't lift the tariff on our farmers, we will do the same thing we did to ZTE, to Huawei, BBK, Yiomi, Lenovo or any other company. That is what we should be saying, instead of being tricked into this apparent deal that someone is cooking up over there and giving the President terrible advice--which, by the way, I know that is not where his instincts are, but someone is getting to him. I don't know if it is from Treasury or where it is, but someone is basically telling him now is the time to cut a deal. It is the wrong time to cut a deal. This would be a terrible deal.

Let me close by telling you this. This is not just about technology. If you don't believe that China uses its leverage, the leverage of economics, to reach into your life here in America--people will ask: What does that have to do with me? What does it have to do with us? Yes, it is a bad thing. We are worried about China in the long term. What does that have to do with me here at home?

China has no problem using its long arm and its economic leverage to interfere in the lives of Americans. I will tell you how.

About 2 weeks ago, two American airlines, United and American Airlines, got a letter in the mail from the Chinese Government telling them: We notice that your website says ``Taiwan.'' It doesn't say ``Taiwan-China.'' Unless you change your website, we are going to punish you. We may even take away your routes.

They haven't made a decision yet. We have reached out to both companies. Let me clue everyone in right now. If they are anything like the other American companies that have been threatened, they are going to cave. They are going to cave, especially United, which has all of these routes over there. This is an American company, headquartered in the United States, that is going to have to change their website because China has threatened them.

If you think that is not bad, I will tell you something crazy. Yesterday, the Gap clothing store came out with a T-shirt. It had a map of China, but it didn't have Taiwan on the T-shirt. China threatened them. Within hours, the Gap put out a tweet: We are so sorry. We apologize. We didn't mean to offend you. We respect your sovereignty.

This is over a T-shirt, for God's sake. This is the leverage they have.

Do you know there are Hollywood movies that are written in a way to avoid certain topics because, otherwise, they will not be allowed to play the movie in China? Do you know there are actors--such as Richard Gere--who are not allowed to be in certain movies or who can't get a Hollywood blockbuster movie because they can't distribute it in China? They will not let them. They can't have Richard Gere in movies in China because he is pro-Tibet. This is crazy stuff.

Here is perhaps the most egregious one. Marriott, a great American company, a hotel--everybody has stayed at one. Marriott had an employee, a guy who lives in America; he is not even an executive--just a good guy, a hard-working guy. He accidentally went online and accidentally--it wasn't even on purpose--liked a tweet about Tibet, and China went crazy. They threatened Marriott. Marriott didn't just apologize; they fired him. This is an American. He didn't live in China. He lives in the United States of America. He lost his job for accidentally liking a tweet that China didn't like.

This happens over and over again, and it isn't noticed. This is how they use economic leverage. This is how they get Panama to tell Taiwan: We no longer recognize you diplomatically; we now recognize China. This is how they got the Dominican Republic to do the same thing last week or a couple of weeks ago, and they are not going to stop. I hear Paraguay might be next. This has to stop.

We don't want to contain China. We welcome a prosperous China. We want a global partner. Imagine the United States and China working together against nuclear proliferation, against radical terrorism, and against all the threats in the world. But this is not leading to a partnership. This is leading to a world in which China dominates every key industry, remakes every institution, and America becomes a junior partner the way Vladimir Putin and Russia already are to China, and that we cannot accept. But that is where we are headed because administrations--both Republican and Democrat--have taken this threat too lightly. They thought that when China got rich, they would start playing by the rules. Guess what. They not only have not played by the rules, but they assume all the benefits of the rules and live by none of the responsibilities.

This is our last chance. This administration has been given the historic opportunity--the last chance--to get the balance of this relationship right. One misstep could blow the whole thing apart and doom generations of Americans to living in a world--not one with a powerful China, one with a dominant China and a declining America.

That may sound like hyperbole, but if they win this battle on ZTE, the world will notice, and the message it will send is that when push comes to shove, this administration is no different from the others. When they come under pressure, you can get to the right people with the right friends in corporate America, and they will back down. Once that happens, every country in the world will govern themselves accordingly. They will not join us in confronting China's aggression and China's unfairness because in the back of their minds, they will be saying to themselves: When push comes to shove, America is going to back down the way they did for ZTE.

The issue itself is problematic. We can't be selling phones in America that they use to spy on us in our companies. But on a broader scale, it sends a message that demoralizes this effort and I think has dramatic consequences.

I encourage the President to think very seriously and very carefully. He is in a very strong position right now. I urge him to think very carefully about the next step and to listen to the people in his administration who are talking to him about the ZTE issue for what it is--a national security threat much bigger than just one company in the telecom industry.

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