Hearing of the House Armed Services Committee on Report of the US-China Economic and Security Review Commission - Transcript

HEADLINE: HEARING OF THE HOUSE ARMED SERVICES COMMITTEE SUBJECT: REPORT OF THE UNITED STATES - CHINA ECONOMIC AND SECURITY REVIEW COMMISSION

CHAIRED BY: REPRESENTATIVE DUNCAN HUNTER (R-CA)

WITNESSES: ROGER W. ROBINSON, JR., CHAIRMAN, U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION; CAROLYN BARTHOLOMEW, COMMISSIONER, U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION

LOCATION: 2118 RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C.

BODY:

REP. DUNCAN HUNTER (R-CA): The committee will come to order. This afternoon, the committee is pleased to take testimony from the United States-China Economic and Security Review Commission, which was established by Congress to provide an in-depth and independent review of the many critical issues facing the relationship between the United States and the People's Republic of China.

Our witnesses are Mr. Roger W. Robinson, Jr., chairman, United States-China Economic and Security Review Commission and Ms. Carolyn Bartholomew, commissioner, United States-China Economic and Security Review Commission. We welcome both of you. Thank you for taking your time to be with us and talk to us about this very important issue. I thought we're doing to some degree all Iraq all the time. We've also been working our bill, moving our Defense bill through the committee and through the House.

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REP. RICK LARSEN (D-WA): Thank you, Mr. Chairman.

It's probably a good segue for my first question, I want you to get your pens and paper ready, because I'm going to provide some information, two questions on two separate issues, just ask them and then ask you to answer both. The first set is on education, and I guess I would urge the commission to find a nexus to your mandate to explore the implications of the national-I think it was the National Science Foundation's report last month about the relative lack of science, computer science and engineering graduates that the U.S. is producing relative to countries like China, like the United Kingdom, like Germany for instance, but certainly like China.

Specifically for two reasons, one is some economists say that 50 per cent of the GDP growth since World War 2 is related strictly to innovation, the ability to make good things better, and that comes from people being smart and making-finding out how to make things better so you've got the economic security issue. But the second one is the implication it may have for our ability to continue to modernize our military at the rate that other countries like China might be doing as well, so I think there is a Nexus and if you could provide perhaps a comment on that issue.

The second set of issues has to do with the national security issues, really, the North Korea. One person has said that when it comes to six party talks, we haven't approached North Korea but we lack an approach to our regional partners. That is our approach to North Korea is CVID, but we really don't have an approach to our regional partners to get them to have the urgency that we have for CVID and so I was somewhat surprised that in your report you didn't discuss the North Korean refugee issue and how that plays out with an interest-Chinese interest in the six party talks.

You said that China and Russia as well, but China specifically here certainly wishes to have a nuclear free peninsula, that doesn't mean to say that they want one or they care enough to really want one, so related to the refugee issue and Chinese interests in the six party talks, how do you think China defines security on the peninsula, and what can we do in terms of U.S. policy to create leverage to get them more interested in our definition of security on the peninsula?

So the first set of questions is commenting on trying to create a nexus to your mandate on the education issue, and if that's possible to do, and maybe see it reflected in your next report, and the second, so it's more of a broader comment I'd like from both of you, the second is specifically how do you think China defines security on the peninsula and how do we get definition closer to how we define security on the peninsula with regards to the six party talks?

MS. BARTHOLOMEW: All right, Mr. Larsen, an excellent question and I commend you for sitting for all of this in order to get to your opportunity to question.

REP. LARSEN: This is my indulgence for the week, this particular hearing, so I'm looking forward to it.

MS. BARTHOLOMEW: I'm really glad that you're here. Certainly, you know, as I emphasize the issue of education at all levels, is obviously very important and we did have a discussion amongst ourselves as we were working on the report, was this too domestic, was it not China specific, it isn't China specific in the sense that these are challenges in terms of globalization. I think we can go back and sort of revisit it to see how much we can take on. The other thing I can suggest of course is that our commission was set up through legislation and the mandate can be changed, and so that's always possible, we can talk to your staff if you want to figure out some sort of way to possibly add that to our mandate so there's no question about that.

REP. LARSEN: Sure.

MS. BARTHOLOMEW: On North Korea, it's a very interesting way I think you're proposing to think about the problem, I do think that part of the problem as I mentioned is that there is dissention within this administration about how to handle U.S. policy towards North Korea, and that confusion has muddied the waters a little bit. I think in a lot of ways China has defined-the fact that China has not done as much as we believe they could be and should be doing to solve the crisis indicates to me that it is not the crisis to them as it is to us, which gets of course to the issue of one of the main things they do not want. It's an outpouring of North Korean refugees across the border into China, so stability is obviously a very important issue as the Chinese government defines it, and I think that that's one of the things.

I think if they believed that North Korea was more of a threat, a nuclear North Korea was more of a threat to them, they would have acted more frankly. How we bring that into convergence with what we perceive the threat is, is certainly a major challenge diplomatically. I think that if the administration could come to a firmer decision about what it believes it needs to be doing, sort of stopping the debate within the administration about how to approach it and move forward to putting some pressure-putting some proposals on the table. I mean, it is not enough to say we're all going to sit down and talk. What is it that we are going to do at that table in order to get to that point that we need to believe-that we believe needs to be reached?

REP. LARSEN: Mr. Robinson?

MR. ROBINSON: I would say that-I mean, I'm also intrigued and I think it's very useful, the way that you've posed that question.

I think that we should be doing more of that, trying to understand the Chinese perception and how we could reach some kind of convergence in views here, because we're very concerned that we're on different sheets of paper entirely here. Certainly the refugee issue is a big one, but what we're doing to anticipate their concern, to suggest to them that that, you know, we are going to be a big part of mitigating the risk of a flood of starving refugees, for example, in the event that this comes to blows or the tension becomes-tensions become ratcheted up to the point where there's a sense of panic in North Korea that something indeed may go wrong, that would, I think, go some distance to ameliorating that particular concern.

But, similarly, you know, I'm not sure that China has in mind altering the divided status of North and South Korea. I tend to think they're reasonably happy with the fact that unification is not in the picture, and certainly unification on something akin to American terms, where South Korea obviously is the dominant and senior partner, which would inevitably be the case. They were then thinking about, okay, what do we have? A unified nuclear Korea in the American camp. Is that the outcome here? Probably not so appetizing to them. Maybe there are some assurances or some dialogue that can take place as to what that future scenario would look like.

Let's take uranium enrichment facility. They say that we-they doubt that it's there. They simply are not buying our assertion that it exists. That's in their literature and it's been stated very recently by the Chinese. Well, maybe this is an intelligence sharing opportunity if we can do so in a prudent way, which is a question mark. And I'm not going to second-guess our intelligence community on that. But leave it to say that we've got some convincing to do, as Commissioner Bartholomew mentioned, concerning the level of the threat.

I mean, if they believe that sort of half of that nuclear equation is not in the picture, they're going to be more relaxed about this. And relaxed is something I think none of us can be. So I don't, for example, see how this crisis is going to languish on, say, beyond 2005, 2006. This is not a containment strategy, in my mind anyway, or in the commission's mind, that we're going to be dealing with five to 10 years from now. This is on a short tether. And these are the kinds of dialogues, anticipatory dialogues, that should be happening. It's, frankly, part of the reason that the Iraq scenario comes under some criticism. I mean, that perhaps there wasn't as much forward planning as there might have been.

I'm not going to, again, second-guess that issue either, but it is on the table today in this country and we need to be thinking about the fact that this North Korea crisis is not going away, and what are the scenarios and how can we ameliorate some of the principal concerns of key pivotal players like China so that they come on board in a timely way before this thing goes hypercritical.

MS. BARTHOLOMEW: Mr. Chairman, could I just add one thing, because Mr. Larsen also asked about the sort of lack of approach to regional partners, and I think that is an important too, which is this is a circumstance where we need to be working with our allies in the region and our allies who are at the six-party talks with South Korea, with Japan. We need to be understanding more, I believe, what they believe the solutions to the problem is, giving their positions more standing in our position at the table, and I think that that's an important thing the administration could be doing.

REP. LARSEN: Thank you, Mr. Chairman.

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REP. LARSEN: Thank you, Mr. Chairman. With regards to the proliferation security initiative, you have about three or four paragraphs on it in your report and given its relative newness, I can imagine three or four paragraphs is about all-you can find three or four paragraphs on it. Maybe next year, we can see a little bit more on it.

One thing that strikes me is that the main point you make about it, separate from North Korea, is that China obviously hasn't agreed to participate although it's been asked. As well China did fight against the U.N. resolution and seek changes to the U.N. resolution passed in earlier this year on proliferation.

And just trying to think through this a little bit, perhaps looking at-perhaps for next year, looking at the reasons why perhaps China seems to be nervous about it.

Three quick points that I thought of, PSI does certainly mean an increased naval presence-U.S. naval presence in the region. Transshipment issues which you address elsewhere in your report, transshipment issues with regards to DPRK as well as perhaps China's own role in proliferation of technology. But if we could get some additional information, maybe we could explore that issue a little bit. As large as China is, it would be useful to have them as a partner in PSI.

And in the second set of issues, I don't want us to walk away without-we focused on cross-Strait issues. We focused on North Korea. We focused on capital flows. It was only mentioned a couple of times. I don't want us to walk away without, I think, again expressing concern about the potential of the EU's arms embargo. It could be left and we could be sure that we communicate that that is a very serious issue although we may not have explored it as deeply as other issues. I think it's still a critical one that we communicate.

MR. ROBINSON: We certainly take your point. You can count on the fact that we'll be giving more extensive treatment to the proliferation of security initiative. If China doesn't come on board, we'll talk to the issue of why in some detail, I would think. And if they do, we'll certainly want to monitor their performance with that set of obligations as well.

With the EU arms embargo, that's coming down the pipe soon. And it's not going to go positively, at least from my personal perspective. We have suggested, indeed recommended as a commission, that this can't be just a rhetorical issue for the United States, a matter of so-called d?marches to our European allies asking for restraint and not to lift the embargo and, if they do, then one of these throw up the hands, oh well, let's move on to other issues. We've recommended that foreign firms that engage in the sale of sensitive military relevant equivalent technology to China, as a policy option, be barred from research, joint venture, co-production type of cooperation with the U.S. government and U.S. defense contractors. That can be narrowed and targeted to the areas in which-to the areas of technology that they were engaged in selling to China.

Let's take a radar, a sophisticated radar system of the type that almost went, and gratefully was stopped from the Czech Republic, the so-called Vera system. If a radar system is sold by a firm, then it would be that area of defense cooperation that could be put at risk. So the decision would, in effect, have to be we can do business with China in that category or we can do business with U.S. Defense contractors and government. But we're not going to be permitted to do both. Now that's a sobering calculation.

And again, we don't pose it-we pose it for your consideration as an option but it goes to the seriousness with which the commission views the fact that, if this EU embargo is lifted and European firms start moving state-of-the-art technologies and equipment to China, we believe that's going to translate into or could well translate into American casualties in the not so distant future, much less further out. And that's just from our perspective as a commission and we had a unanimous view on this. That's not on.

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