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AMERICA AS A PACIFIC POWER: CHALLENGES

AND OPPORTUNITIES IN ASIA

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS

SECOND SESSION

APRIL 28, 2016

Serial No. 114–202

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

MO BROOKS, Alabama 

PAUL COOK, California 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

RON DESANTIS, Florida 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

CURT CLAWSON, Florida 

SCOTT DESJARLAIS, Tennessee 

REID J. RIBBLE, Wisconsin 

DAVID A. TROTT, Michigan 

LEE M. ZELDIN, New York 

DANIEL DONOVAN, New York 

ELIOT L. ENGEL, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas 

ROBIN L. KELLY, Illinois 

BRENDAN F. BOYLE, Pennsylvania

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

(III)

C O N T E N T S 

Page

WITNESS 

The Honorable Antony J. Blinken, Deputy Secretary of State, U.S. Department of State ........................................................................................................ 2

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Antony J. Blinken: Prepared statement ...................................... 6

APPENDIX 

Hearing notice .......................................................................................................... 48

Hearing minutes ...................................................................................................... 49

The Honorable Edward R. Royce, a Representative in Congress from the 

State of California, and chairman, Committee on Foreign Affairs: Material 

submitted for the record ...................................................................................... 51

Written responses from the Honorable Antony J. Blinken to questions submitted for the record by: 

The Honorable Ted Poe, a Representative in Congress from the State of 

Texas .................................................................................................................. 52

The Honorable Eliot L. Engel, a Representative in Congress from the State 

of New York ...................................................................................................... 58

The Honorable Matt Salmon, a Representative in Congress from the State 

of Arizona .......................................................................................................... 70

(1)

AMERICA AS A PACIFIC POWER: CHALLENGES 

AND OPPORTUNITIES IN ASIA 

THURSDAY, APRIL 28, 2016

HOUSE OF REPRESENTATIVES,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The committee met, pursuant to notice, at 10:08 a.m., in room 

2172 Rayburn House Office Building, Hon. Edward Royce (chairman of the committee) presiding. 

Chairman ROYCE. Committee will come to order. 

Some of the world’s most dangerous flash points are in Asia, as 

are some of our closest allies and these are critical relationships to 

foster. Deputy Secretary of State Blinken is just back from the region. We welcome him to the committee. America is a Pacific 

power, and we must act like one. 

This committee has played a leading role in shaping U.S. policy 

toward Asia. We took the lead imposing tough sanctions on North 

Korea, on highlighting human rights in Southeast Asia, and in 

strengthening our alliances with democracies in the region. 

Since North Korea’s January nuclear test—its fourth—Kim Jung 

Un’s belligerence has only increased. This rogue regime poses a direct threat to the United States. Last weekend the regime launched 

a missile from a submarine; reports suggest another nuclear test 

could be on the horizon. The good news is that earlier this year the 

President signed into law sanctions legislation this committee 

pushed to aggressively target North Korea’s cash. This strong, bipartisan measure, authored by myself and Mr. Engel, helped the 

administration get a sweeping U.N. Security Council sanctions resolution through. 

So the administration has the tools it needs to tackle the North 

Korean threat and keep Americans safe. But will it use them? A 

recent U.N. report found several countries still pushing cash to 

Kim Jung Un’s regime through prohibited arms deals. They must 

be pressed to stop, forced to stop, and frankly, through this legislation we can force them. The administration must designate more 

companies, more banks, and more individuals. North Korea is a 

human rights house of horrors. So how is it that not one North Korean official has been sanctioned specifically for human rights 

abuses? 

Looking south, the Beijing Government continues its aggressive 

push into the South China Sea with land reclamation and militarization of contested islands. Our allies are increasingly alarmed. 

And while these disputes must be resolved peacefully, that will be 

2

best done with a policy of strength, resolve, and clarity—rejecting 

Beijing’s apparent moves toward de facto control over international 

shipping lanes. 

In Southeast Asia, Vietnam’s poor human rights record continues. Bloggers and journalists are harassed and jailed. When myself or other members of this committee—Chris Smith—when we 

have traveled to Vietnam we have visited with political prisoners. 

We have visited with dissidents. When the President travels to 

Vietnam next month, President Obama could send a clear and unequivocal message to the Communist government and firmly stand 

by that country’s brave dissidents, unlike he did in Cuba. I would 

also urge the President to stress the importance of restoring the 

Bien Hoa Military Cemetery, the resting place of many South Vietnamese soldiers who fought to preserve their freedom, a cause especially important to the Vietnamese-American community. 

And while there is hope for the new government in Burma, and 

we have been pushing for many years on this committee for democratization in Burma, it is making progress and it must now perform for all Burmese, including the Rohingya population. I hope to 

hear that we are making the protection of this persecuted minority 

one of our priorities. 

Finally, no discussion of Asia is complete without mentioning its 

dynamic economies. We must continue efforts to open new markets 

for our businesses and build the capacity of tomorrow’s trade partners. Trade can play a key role in strengthening U.S. alliances. 

The United States has played a critical role in Asia. Our power 

and presence helped shape the economic miracles. When we think 

about what happened in Japan and in South Korea and in Taiwan, 

all vibrant democracies today, but that proud legacy has to be protected through constant vigilance and engagement. 

Mr. Engel will be here momentarily. We’ll move to introduce Mr. 

Blinken, we’ll have your testimony and then we will hear from the 

ranking member when he arrives. 

Thank you, Tony. 

STATEMENT OF THE HONORABLE ANTONY J. BLINKEN, 

DEPUTY SECRETARY OF STATE, U.S. DEPARTMENT OF STATE 

Mr. BLINKEN. Mr. Chairman, thank you very, very much and to 

members of the committee, thank you for having me here. It’s very 

good to be back to discuss our rebalance to the Asia Pacific region. 

I just got back from my sixth visit to the region in a little over 

a year and with each trip I have to tell you I’ve seen growing dividends of this effort to balance our focus on the region and to 

strengthen a rules-based, institutions-based order that is advancing 

our interests and increasingly not only in the region but globally. 

Chairman ROYCE. Secretary Blinken, could you—could you pull 

the microphone just a little closer. Some of the members were having trouble hearing you. 

Mr. BLINKEN. Sorry about that. Is that better? 

Chairman ROYCE. Yes. 

Mr. BLINKEN. Thank you. 

Chairman ROYCE. Thank you, Tony. 

Mr. BLINKEN. As you said, Mr. Chairman, really nowhere in the 

world are economic and strategic opportunities clearer or more 

3

compelling than in the Asia Pacific region, home to four of our top 

ten trading partners, five of our seven treaty allies, the world’s 

largest and fastest-growing economies including 40 percent of overall global growth, nearly two-thirds of the global middle class and, 

of course, some of the most wired and innovative people in the 

world. 

Over the last 7 years, this rebalance to Asia that is deepening 

our strategic, economic and diplomatic ties with the region commensurate with its importance has helped shape a positive trajectory in the region. 

We have given substance to the rebalance by bolstering our treaty allies, deepening engagement with emerging powers, strengthening regional institutions, promoting trade and investment, enhancing our military posture, advancing democratic reform and creating new networks of trilateral and multilateral relationships. 

There are multiple pillars to the rebalance. I just want to briefly 

go through—go through those pillars. First, we’ve invested in 

strengthening and modernizing our core alliances with Japan, with 

Korea, the Philippines, and Australia. 

We’ve updated our guidelines for our defense cooperation with 

Japan, included new host nation support agreements with both 

Japan and Korea, signed a forced posture agreement with Australia, and included a landmark enhanced defense cooperation 

agreement with the Philippines. 

Second, we’ve deepened engagement with emerging countries in 

the region. We’ve built a relationship with China defined by broader practical cooperation on global challenges while at the same 

time directly engaging our differences to try to resolve or narrow 

them while avoiding conflict. And we’ve worked to deepen the 

bonds between the people of the United States and Taiwan. 

Our partnerships with Indonesia, Malaysia, and Singapore have 

grown to reflect our increased cooperation on regional and global 

challenges, everything from countering climate change to violent 

extremism and we’ve forged new relations with Vietnam and 

Burma as they start to turn the page on the past. 

I just saw this again for myself in Vietnam last week. Thanks 

in part to the bipartisan leadership of this committee, the U.S. and 

Vietnam are deepening and broadening our ties in areas that we 

couldn’t even imagine a decade ago, even a few years ago, from 

military cooperation to human rights to peacekeeping. 

Third, we sustained an increased engagement with the institutions of the region like the East Asia Summit, APEC, ASEAN, including by sending our first dedicated Ambassador to ASEAN, 

hosting the first ever U.S.-ASEAN summit here in the United 

States, and hosting APEC in 2011. 

These are important forums for promoting collective action and 

facilitating the peaceful resolution of differences. They advance a 

regional economic, political, and security architecture in which the 

United States is a vital and permanent player. 

Fourth, we have vigorously promoted trade and investment opportunities designed to unlock growth for the United States as well 

as for our allies and partners in the region. We’ve implemented a 

free trade agreement with South Korea. We’ve worked with Burma 

4

to modernize and strengthen legal and regulatory regimes, helping 

set the stage for major American companies to enter that market. 

And, of course, the heart of our engagement in the region economically is the Trans-Pacific Partnership, which will bring 12 

APEC economies and 40 percent of global GDP together. TPP will 

eliminate more than 18,000 taxes on American exports and help 

level the playing field for American workers while solidifying an 

economic arena in which every participant, regardless of its size, 

agrees to fight bribery and corruption, abide by international labor 

standards including the formation of independent trade unions, 

and commits to enforcement of environmental safeguards. 

Fifth, we’ve enhanced our military posture in the Asia Pacific, 

deploying nearly 60 percent of our Navy in the region by the end 

of the decade and some of our most advanced capabilities. We are 

increasing the maritime security capacity of our partners and we 

are rotating American personnel into new and more places like 

northern Australia and new sites in the Philippines. 

Sixth, we are standing up for our values, for the basic rights and 

freedoms of individuals throughout the region. In Indonesia and 

the Philippines we are working with our partners to tackle corruption and strengthen institutions. And then, of course, in support of 

Burma’s historic elections and peaceful transition of power, we 

helped establish the nation’s first nonpartisan independent election 

observation organization. We trained over 11,000 political party 

members to improve their ability to effectively communicate with 

voters. We continue to stress the importance of upholding the rule 

of law and express our strong concern about discrimination experienced by ethnic and religious minorities including the Rohingya. 

In response to our engagement and demands from the Vietnamese people, Vietnam has taken some positive steps on human 

rights including releasing political prisoners, ratifying the Convention Against Torture and the U.N. Convention on the Rights of Persons with Disabilities, and agreeing to allow independent trade 

unions for the first time in modern history. Significant reforms remain to bring Vietnam’s domestic laws into sync with international 

human rights obligations and, indeed, with its own constitution. 

Seventh, and finally, we’ve invested in a new geometry of trilateral and multilateral networks to encourage cooperation among 

and between countries in the region. At the core of these efforts is 

a very robust trilateral partnership with South Korea and Japan, 

under which we convened the first ever trilateral meeting at the 

vice minister or deputy level. I’ve now done that three times, and 

the benefits of this relationship are crystal clear in the face of the 

region’s most acute challenge—the challenge from North Korea and 

its provocative acts in the nuclear missile domain. We are stepping 

up trilateral cooperation on sanctions implementation, including 

under the new U.N. Security Council resolution. 

We are working trilaterally to increase the capabilities of other 

countries to implement that resolution and our three countries will 

continue to shine an intense light on North Korea’s deplorable 

human rights violations and pursue accountability for them. 

We are also intensely focused on maritime issues, especially China’s assertive and provocative behavior in the South China Sea 

5

that is challenging respect for international law, freedom of navigation, and the peaceful resolution of disputes. 

We’ve also deepened our commitment to the U.S.-AustraliaJapan trilateral strategic dialogue, hosted the inaugural of the 

U.S.-Japan-India trilateral ministerial dialogue. 

These bilateral, trilateral, and multilateral relationships are not 

aimed at any particular country. They are not exclusive. We welcome any kind of flexible geometry of collaboration among countries 

that share important goals including steps toward greater ChinaKorea-Japan cooperation and the growing unity of the ASEAN community. 

And we are building interconnected relationships not just among 

countries but among people. The YSEALI community, now 67,000 

strong, connects dynamic young people throughout the region to 

the United States and to each other. 

Mr. Chairman, these efforts represent a small but important 

slice of the work that we are currently undertaking. Seven years 

after President Obama rebalanced our sight on the Asia Pacific, we 

are leaders of a region increasingly bound by common ideals, 

shared prosperity, and a collective sense of global responsibility. 

I thank you very much. 

[The prepared statement of Mr. Blinken follows:]

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Chairman ROYCE. Thank you, Mr. Blinken. 

I think without objection the witness’ full prepared statement 

will be made part of the record and members are going to have 5 

calendar days to submit statements and questions and extraneous 

materials for the record. 

I think what we’ll do is proceed with some of the questions from 

the committee and then when the ranking member arrives he’ll 

make his statement and ask the Deputy Secretary of State the 

questions that he has as well. 

If we could start, Mr. Blinken, with the North Korea sanctions 

and the administration of those sanctions, an issue I brought up in 

the opening statement. This is a strong North Korean sanctions bill 

that we passed and this bill did help get that U.S. resolution in 

place. But you’re just back from the region. 

What has been the reaction to this new law? How has the pressure been turned up? I raised the fact that no one has been sanctioned yet on human rights. I think it is high time that happened. 

And I know there’s a new U.N. report that points out that several 

countries are still purchasing North Korean weapons. If you would 

speak to that issue. European luxury goods are still making their 

way to Kim Jung Un and are we yet to hit any Chinese banks facilitating transactions as we did in the past with Banco Delta Asia 

which was, frankly, very effective at the time, if you’ll recall. It cut 

off the hard currency, stopped the production of the missile program at the time because they didn’t have the hard currency to 

proceed. 

Mr. BLINKEN. Thank you, Mr. Chairman. 

First, I want to thank the committee for the very important work 

that it did. I think the combination of the U.N. Security Council 

resolution, which is the strongest tool we’ve had to deal with North 

Korea, the legislation from Congress, and the Executive order that 

have put those into effect really puts us in a different position. 

We now have the ability if implemented—and that is the key—

to maximize pressure on North Korea to try to get it to change its 

conduct. For the first time through the U.N. Security Council resolution we require that all cargo going in and out of the country be 

inspected. For the first time we have sectoral sanctions that limit 

or in some cases ban the export of critical materials—coal, iron, 

gold, rare earth materials that are what they use to finance their 

activities. And we have financial sanctions that go at banks and assets and we also have a ban on all dual-use nuclear and missilerelated goods. 

The critical component now is implementation and we are looking principally at China as well as other countries to follow 

through on implementation. China played an important role in getting the Security Council resolution. It is our expectation that it 

will now implement it. It’s too soon to say whether that is the case. 

We’ve seen some encouraging developments including regulations 

that its promulgated, statements that it’s made but we are now 

watching intensely. 

But at the same time, it is not enough, and what we are focused 

on besides the implementation of the Security Council resolution is 

relentlessly building pressure on North Korea, working principally 

with our key allies Japan and Korea. 

16

We are working in various ways to cut off all the revenues going 

to the regime. For example, they have, as you know, overseas workers whose remittances are not going back to their families but are 

going to the regime. We are working to cut those off. We have socalled diplomats engaged in illicit activities procurement but also 

even in illicit businesses that were the restaurant workers who defected from China. We are seeing this in different countries around 

the world. They set up businesses and the money goes back to the 

regime. We are working relentlessly to find those places and to get 

countries to cut them off. We are working to further isolate North 

Korea by getting their diplomats who are, again, not engaged in 

diplomatic activities sent home. 

We are making sure that people don’t go out to North Korea including for the Worker’s Party Congress or invite them to international events and we are working as well to get countries to 

make sure that they’re doing exactly what you alluded to—making 

sure that the ships that go to North Korea don’t dock in their countries and that the planes don’t land. 

So right now we are working on enforcing all of that. 

Chairman ROYCE. And I have been part of the dialogue—our 

committee has on each of these fronts and all have been helpful but 

there is one final step that needs to be taken. Banks are concerned 

about the reputational risk of what will happen if they have to 

make a choice between doing business with North Korea or doing 

business with the United States, and we’ve seen in the past for 

those dozen banks that were affected back during the sanctions regime put in place when North Korea was caught counterfeiting our 

$100 bills. 

Just how concerned they are about reputational risk, even 

when—even when those sanctions were reported listed by State at 

the time Banco Delta Asia still wanted to know yes, but has the 

U.S. Treasury Department really signed off on this because otherwise we are not going to move the hard currency into North Korea. 

Without that hard currency, they find it very difficult to move 

forward with their nuclear program and their missile programs. So 

it is essential that decision be made and we are going to continue 

to dialogue on that. But that is a decision you need to make and 

I am sure you raised that in Beijing. 

Mr. BLINKEN. Appreciate that. 

Chairman ROYCE. The last two—again, I’d raise that issue about 

the Rohingya people. We’ll need to be working with that new government, frankly, in Burma to shape attitudes toward the 

Rohingya and you’re going to have to continue to lean in on that. 

On the Vietnam human rights issue, I’ve just got to share with 

you—we’ve got the case of a human rights—Nguyen Van Dai, who 

was arrested in December for his advocacy of human rights and advocacy of democracy. According to his wife, he was severely beaten 

by the police. He’s been in solitary confinement since his arrest. He 

was denied access to his lawyers and to his family. Will the President push for his release? I think this is very, very necessary. 

Mr. BLINKEN. Mr. Chairman, I very much appreciate those comments. First, on the Rohingya, we have been very focused on working the get the government in Burma to protect their rights. When 

I was there most recently a couple of months ago I raised this reVerDate 0ct 09 2002 11:07 Sep 13, 2016 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\042816\99949 SHIRL
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peatedly including with Aung San Suu Kyi. We are looking to the 

government to give them genuine freedom of movement so that 

they can work, so that they can go to school, so they can get health 

care, and the discrimination. We are working on that. 

With Vietnam, absolutely. I think the President will certainly engage with that community. When I was there last week, I met with 

civil society activists and lawyers and others, indeed, to express the 

concern that we have. 

Vietnam has made real progress, as you know. They released a 

lot of political prisoners. They’re working to conform their laws to 

the constitution. But work remains to be done. 

Chairman ROYCE. Thank you, Deputy Secretary Tony Blinken. I 

appreciate it. We’ll now go to our ranking member, Mr. Eliot Engel 

from New York, who has an opening statement first to make and 

then he’ll have question. 

Mr. Engel. 

Mr. ENGEL. Well, thank you. Thank you very much, Mr. Chairman. Thank you for calling the hearing and Mr. Deputy Secretary, 

I’ve known you a long time. Welcome to the Foreign Affairs Committee. 

It’s been a pleasure working with you over the years in the various roles in which you’ve served and we are very fortunate to—

I want to say this publicly—we are very fortunate to have such a 

dedicated and capable person as the number two in the State Department. So thank you for all you do. 

I was encouraged that the President and Secretary Kerry 

charged you with focusing on Asia during your time as Deputy Secretary—that is a focus we badly need—and I think you’re the right 

person for the job. 

Half the world’s population calls Asia home and the nations of 

Asia now account for more than a third of global GDP. From India 

to Japan, from Indonesia to Micronesia, Asia has a greater impact 

on global affairs than ever before. 

As a Pacific power, the United States faces no shortage of foreign 

policy challenges in Asia, from North Korea’s reckless behavior, to 

the impacts of climate change, to the recruitment of fighters into 

violent extremist groups. 

The way we manage the rise of China in the years ahead may 

well be the most consequential foreign policy issue of the 21st century. The decisions we make today will determine whether the 

value and the norms we championed in Asia after World War II 

will continue to thrive. 

That’s why this has been called this America’s Pacific century 

and that is why there is no better time to focus on this dynamic 

part of the world. 

The so-called Asia rebalance has hatched a number of important 

diplomatic achievements. We’ve strengthened our core regional alliance with Australia, Japan, Philippines and South Korea. 

With our ally Japan we’ve established new trilateral forums with 

Australia, South Korea and India. We’ve ramped up our engagement with ASEAN and demonstrated a clear commitment to the 

East Asia Summit, and we have normalized relations with Burma 

as that country has emerged from decades of isolation and begun 

the hard work of moving toward a more open democratic society. 

18

Yet, despite all these efforts, I regularly hear concerns from our 

allies and partners in the region that the rebalance is more a shift 

in military strategy than about diplomatic engagement. 

So this morning I hope we can drill down and look at other ways 

the State Department is making Asia a priority in areas in where 

the department’s approach could be more robust. 

I’ll start with a question that sounds more like it should be on 

a geography quiz. As far as the State Department is concerned 

with respect to the Asia rebalance, what do we consider to be Asia? 

I ask this because in my view the world’s largest democracy, 

India, should be an integral part of our Asia policy. As the world’s 

third largest economy, India has the potential to become a major 

economic player in East Asia and is already playing a constructive 

role in maritime issues. 

China regards Asia as a strategic hole with its One Belt, One 

Road policy aiming to expand Chinese influence beyond East Asia 

through Central Asia to the Caspian. 

Yet, the State Department structure with three different bureaus 

responsible for South and Central Asia and East Asia and the Pacific I believe creates an artificial barrier to cooperation across the 

entire region. 

So I would like to hear about what the State Department is 

doing to overcome obstacles and deal with Asia as a whole single 

strategic priority that includes South and Central Asia. 

Staying for a moment with structural issues at the State Department, I’d like to discuss if we are doing all we can from a resource 

standpoint to ensure our Asia policy will succeed. 

The East Asia bureau is the smallest regional bureau in terms 

of personnel and the region accounts for the second lowest level of 

foreign assistance. Now, obviously any questions about State Department resources has to start here on Capitol Hill. 

I strongly support investing more in diplomacy and development 

across the board. Our international affairs budget gives us tremendous bang for the buck. But I also wonder whether anything can 

be done in Foggy Bottom so that the rebalance is adequately 

resourced. 

We’ve heard again and again that this is a priority and that 

should be reflected in the investments we are willing to make. 

Lastly, I’d like to turn to the South China Sea. We expect the 

Law of the Sea Tribunal to issue a decision in the next month or 

so involving the claims of China and the Philippines. China’s response to the ruling could ratchet up tensions. 

While the United States doesn’t take a position on the specific 

claims made by various parties, we do want to see China play by 

the same rules as everyone else. 

So I support the ideas behind the Pentagon’s Southeast Asia 

Maritime Security Initiative which aims to help our Southeast 

Asian partners know what China is doing off their coastlines and 

to share that information with each other. 

If the U.S. and our partners are on the same page we can work 

together to keep China in check and make sure China doesn’t 

threaten our strategic and economic interests in the region. 

But it is not clear to me why the Defense Department is leading 

the way on this instead of the State Department. DoD’s new auVerDate 0ct 09 2002 11:07 Sep 13, 2016 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\042816\99949 SHIRL
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thorities for this program are entirely duplicative of existing State 

Department authority. 

I worry that putting such a program under DoD’s control could 

erode State security cooperation responsibilities. Our diplomats are 

responsible for overseeing security assistance and it should stay 

that way, and whatever level of cooperation exists between State 

and DoD on this matter, I am concerned that this is another example of what some call the militarization of foreign policy. This feeds 

into those concerns that the Asia rebalance is a military policy 

even in areas that have traditionally been diplomatic responsibilities. 

So, Mr. Deputy Secretary, I am interested in hearing your views 

on these issues as well as some other areas I’ll be touching on as 

well. I thank you again for your service and commitment. I look 

forward to your testimony. 

I want to raise two questions in conjunction with my statement 

and it is—the first one’s about India. It’s been characterized by 

U.S. officials as an indispensable partner of the United States. 

As I mentioned before, it is the third largest economy in the 

world by purchasing power parity and is the largest democracy in 

the Asia region. The U.S.-India relationship is important. It’s growing in particular on the defense side and Prime Minister Modi will 

be coming to Washington again in a couple of months to meet with 

President Obama. 

From a strategic perspective, India is a potential counterweight 

to China’s growing regional influence in Asia. They’ve become increasingly vocal on issues like freedom of navigation in the South 

China Sea and Indian Ocean region. 

Additionally, Central Asia occupies critical geography in Asia 

sandwiched between China, Russia and Iran. The Chinese recognize this potential of Central Asia for what has been historically 

a strategic crossroads at the doorstep of the great powers and a 

transit point for trade and culture between the East and the West, 

and the Chinese are aggressively seeking to expand their influence 

there. 

Yet, in your written testimony there’s only one mention of India 

in the context of a U.S.-Japan-India trilateral ministerial and there 

are no other mentions of South or 

Central Asia at all. 

So my question is does South and Central Asia not fit with the 

administration’s larger rebalance to Asia strategy and how can we 

be rebalancing to Asia without a strategic framework that considers Asia as a strategic whole? 

Thank you. 

Mr. BLINKEN. Thank you very much. 

We strongly share your view on the importance of India both in 

and of itself but also as part of the region and as an increasingly 

vital regional actor. 

India has its own regional policy that dovetails very nicely with 

the work we are doing on the rebalance. So we are working increasingly to integrate India into these efforts and you mentioned 

the one thing that I did point to in the statement—I think there 

may be more in the written statement—this U.S.-Japan-India trilateral effort at a ministerial level. Also we included Japan in the 

20

Malabar exercise, which was a significant development which we 

hope to continue to carry forward. 

But we are doing two things. We are building our own relationship with India as evidenced by the extraordinary level of highlevel engagement, including Prime Minister Modi’s return visit 

here, the President being received for the first time as the honored 

guest at Republic Day but also in very concrete collaboration across 

the board, everything from climate and Smart Cities to improving 

the business climate to defense cooperation to production cooperation even in the defense area. But intelligence sharing, information 

sharing, counterterrorism, countering violent extremism—across 

the board the relationship has been elevated. 

But critical to this is exactly what you’re pointing to, which is integrating India into these regional frameworks so that we are 

working together jointly and, again, the example with Japan is a 

very good. But this is exactly the direction that we want to go in. 

Mr. ENGEL. Thank you. 

I am wondering if you could comment on the South China Sea. 

I just want to ask you, the Philippines has brought an arbitration 

case against China’s claims in the South China Sea under the 

United Nations Convention on the Law of the Sea. 

If the ruling goes in the Philippines’ favors it is expected, and if 

China refuses to abide by it what are the implications for the Philippines and other claimants in the South China Sea, and how 

would this change the U.S. approach in the South China Sea? 

Mr. BLINKEN. Thank you. 

Well, first I’d say this is—South China Sea is incredibly important to us and to all of our partners in two ways. 

First of all, 25 percent of all traded goods, 25 percent of all that 

travels by sea goes through the South China Sea and, indeed, onethird overall of liquefied natural gas. 

We have no position, as you know, on the sovereignty claims. We 

are not a claimant ourselves. But we have a very strong interest 

in the way these claims are prosecuted by an claimant and a very 

strong interest in maintaining freedom of navigation, in making 

sure that disputes are resolved peacefully and the countries abide 

by international law and these are the very interests that China 

has been challenging with some of its actions, including the massive reclamations and militarization of these land features as well 

as various assertions that are not justified under international law. 

The case that you refer to is a very important moment. This is 

an arbitration case brought by the Philippines with China and we 

expect a decision by the tribunal in the coming months. 

China knowingly agreed to the provisions in the Law of the Sea 

Treaty when it signed up. Five independent arbitrators said—

unanimously rejected China’s claim that it wasn’t bound by the arbitration mechanism—that the jurisdiction was lacking. 

And the convention provides that its rulings are binding on the 

parties to the convention. So we have worked very hard to establish across the region an understanding that this is appropriate 

mechanism—arbitration to resolve these disputes and that the ruling of the tribunal should be binding on the two parties. 

21

We said to the Chinese, if you’re given satisfaction on any aspect 

of the decision we’ll be the first to stand up and defend it. But, of 

course, if the Philippines is you’ll have to respect that. 

China has a decision to make depending on how the ruling comes 

out. It will either decide to abide by the ruling and that gives us 

a great opportunity, I think, to narrow the scope of areas that are 

in dispute in the South China Sea. That would be good to get countries to work cooperatively together, for example, joint ventures on 

the exploitation of resources and to then work to resolve their disputes that remain peacefully. That’s one path. 

The other path is it ignores the decision, and then I think it risks 

doing terrible damage to its reputation, further alienating countries 

in the region and pushing them closer to the United States. 

China will have to decide depending on what the results of the 

arbitration are. We are watching that very, very closely. 

Mr. ENGEL. Thank you. 

Chairman ROYCE. We go to Ileana Ros-Lehtinen of Florida, our 

chairman emeritus. 

Ms. ROS-LEHTINEN. Thank you so much, Mr. Chairman. Thank 

you to the ranking member. 

Secretary Blinken, for over a month I have been trying to get a 

hold of you by phone to discuss the problem between Morocco and 

Ban Ki-moon. You’ve not had the courtesy to return my call. 

But at a hearing 10 days ago, Secretary Anne Patterson promised to work with me and the members of our Middle East Subcommittee regarding the draft U.N. resolution that would renew 

the mandate of MINURSO. 

It was obvious that this was going to be a problem for weeks and 

I would have appreciated a call back. As you know, the draft in its 

current form could very well jeopardize our relationship with Morocco and our important military and intelligence cooperation. 

There’s got to be a way that we can find a compromise here and 

we can do it without including the controversial provisions, including the one that will allow Ban Ki-moon yet another opportunity 

to insult Morocco and do further damage. So I strongly urge you 

to work with the Moroccans today and to fix it. 

What can you tell us about the draft resolution and what 

progress have we made? 

Mr. BLINKEN. Thank you. 

First, let me—let me apologize to you if I didn’t get back to you. 

I am sorry about that. I’d be very happy to follow up immediately 

this afternoon——

Ms. ROS-LEHTINEN. Thank you, sir. 

Mr. BLINKEN [continuing]. If that is convenient to you. So I am 

very sorry about that. 

Ms. ROS-LEHTINEN. That would be great. Thank you, sir. 

Mr. BLINKEN. Second, with regard to the situation, we’ve been 

deeply engaged in this since this problem first emerged and that 

was the Secretary General’s visit to the region. 

We worked very closely with Morocco and the U.N. to see if we 

could de-escalate the problem and get them working together. I immediately saw the foreign minister from Morocco. I was on the 

phone with him immediately. He came to visit me in my Office. 

Secretary Kerry saw him. We’ve had calls to—to the king. 

22

Here’s where we are. Morocco was very concerned with some of 

the things the Secretary General said during his visit to the region. 

We worked to ask the Secretary General to clarify what he meant 

and he did that. 

We said to our Moroccan friends that we hope that as we were 

looking at renewing the MINURSO mandate we wanted to renew 

it for 1 year without any changes. Unfortunately, one of the things 

that Morocco did in response to the Secretary General’s visit is 

they unilaterally decided to reduce and ask for the removal of 

members of the MINURSO mission. 

That creates a problem for us because as a member of the Security Council we also have an important stake in making sure that 

U.N. peacekeeping missions’ integrity is upheld and if we allow a 

precedent by which a country can unilaterally decide whether to 

accept or shut down a mission or change its composition that is 

going to be a real problem potentially in other areas with countries 

that, unlike Morocco, are not close friends or partners. 

Ms. ROS-LEHTINEN. But when the Secretary General of the U.N., 

sir, makes such a provocative statement and accusation against 

Morocco it really pinned them against the wall. 

Mr. BLINKEN. And I think that is exactly why we worked with 

the Secretary General’s office to get a clarification of what he 

meant and what he didn’t mean. 

Our hope is that we can now get this resolution to a place where 

Morocco’s concerns are answered but also the integrity of the 

peacekeeping missions are upheld and that it can go back to fully 

functioning as it was before. 

That’s what we are trying to achieve. But I want to assure you 

we share your commitment to the relationship with Morocco. This 

is one of our closest partners in the region and indeed around the 

world. 

Ms. ROS-LEHTINEN. It sure is. We need more Morocco. 

Mr. BLINKEN. So I thank you—I thank you for that. 

Ms. ROS-LEHTINEN. And moving on. Thank you, sir. 

At a hearing of the Middle East and North Africa Subcommittee, 

GAO testified that the State Department is not in compliance with 

the Iran, North Korea and Syria Nonproliferation Act, or INKSNA, 

a law that I authored several years ago. 

INKSNA is an important nonproliferation tool. GAO told us that 

State’s noncompliance has probably undermined the credibility of 

our sanctions. 

We learned that State took almost 3 years to prepare one report 

and then implement sanctions and that your predecessor sat on the 

report for more than a year as it awaited approval. 

So given that precedent, do you have an INKSNA report that 

you’re sitting on and have you signed off on it and what’s the status of that report, sir? 

Mr. BLINKEN. I believe the next report is being actively worked 

on and processed. It has not come to me yet. I can assure you that 

as soon as it does I will move it out of my inbox as quickly as possible. 

Ms. ROS-LEHTINEN. Thank you so much. Thank you, Mr. Chairman. 

Chairman ROYCE. Thank you, Ileana. 

23

We go now to Mr. Brad Sherman of California. 

Mr. SHERMAN. Mr. Blinken, congratulations on the new position. 

It’s good to hear that you’ll have a policy of returning members’ 

phone calls and I hope that doesn’t just apply to the lady from Florida. 

Asia’s important. That’s why it’s important that we not enter into 

bad trade deals or unnecessary military confrontations in Asia. 

Now, anyone who questions the adventures that are planned is 

patted on the head and told, well, you just don’t understand how 

important Asia is. 

No, Asia is so important that we better think carefully about our 

policy. When it comes to trade, we are given straw men. We are 

told well, if you don’t like TPP then we could have no trade, or we 

could continue the unbalanced trading system that we have now 

without every discussion about a radical departure from our current trade system designed to achieve balance trade. 

And when we are told that maybe we shouldn’t be seeking a new 

cold war over some islets, we are told that 25 percent of the world’s 

trade goes through the South China Sea. The vast majority of that 

goes in or out of Chinese ports, meaning that if China had military 

control of these islets that may actually belong to them anyway, 

they would be able to blockade their own ports. I don’t think that 

is something we have to spend a lot of money preventing. 

There is a tendency when making policy to yield to the interests 

of the most powerful entity in this country that cares about that 

policy, and that is why when it comes to trade policy, Wall Street 

is in the driver’s seat. 

But the deal is so bad that it has to be sold as a China containment policy because it is certainly not a jobs creation policy. But 

China enshrines the standard that currency manipulation goes 

hand and hand with trade deals. So they’re the big winner. But 

they’re even a bigger winner in the roles of origin where goods that 

are admitted to be 60 percent made in China and actually it’d be 

95 percent made in China can then get a polish in Japan or a few 

parts added in Vietnam and be fast tracked into the United States. 

So when it comes to the geopolitics, the Pentagon is very powerful in crafting American national security policy. What meets their 

needs now is a worthy uniformed adversary. Every time our military has gone up against a ragtag uniformed adversary it has been 

an unpleasant experience since the Philippines insurrection. Every 

time we have gone up against a uniformed foe it has been a relatively glorious experience, the most glorious perhaps winning the 

Cold War without a major confrontation with the Soviet Union. 

So it is not surprising that these islets which are not ours, that 

do not have oil, and if there were any oil it would belong to the 

people unwilling to spend their own money to defend these islands—that these are exaggerated into great importance. 

I am not saying that we don’t care about navigation, we don’t 

carry about—it obviously important. But to reconfigure the entire 

Pentagon to spend the lion’s share of a $600 billion defense budget 

on confronting China, and you can’t—it is a tough cost accounting 

job to determine what the defense budget is being spent on geographically. 

24

But is—but I want to go to a completely different question: North 

Korea. North Korea needs about 12 nuclear weapons to defend 

themselves from us. They have about 12 nuclear weapons. They’re 

creating enough fissile material for another two or three weapons 

a year. They need money. Iran now has—we can argue about it—

$50 billion or $100 billion burning a hole in their pocket. North 

Korea sold the technology for the Al-Kibar Syrian-Iranian nuclear 

weapons program that the Israelis bombed in 2007. 

Is the administration working toward an understanding with 

China that a Iranian plane will not be allowed to fly to North 

Korea without stopping in China for fuel? And please don’t tell me 

we intercept ships. Please don’t tell me that North Korean planes 

might not be allowed to do this. I am talking about an Iranian 

plane going nonstop to Pyongyang and coming back with a bomb. 

Mr. BLINKEN. Thank you. 

First, let me just say before addressing the question, which I 

very much appreciate, with regard to South China Sea, we are not 

looking for conflict. 

We are looking to prevent conflict and what’s at stake here is not 

just the transit of energy, oil and goods, as important as that is. 

There are larger principles at stake and these principles go to the 

entire foundation of the international order. If we don’t defend 

those principles everywhere where they’re being challenged the entire order that we invested so much in building over 70 years is at 

risk. That’s why this is a big challenge. 

Mr. SHERMAN. Mr. Blinken, I’ll agree with you. But at the same 

time, if an Argentine plane was getting too close to the Falkland 

Islands we wouldn’t be talking about it here. 

Mr. BLINKEN. You know, we engage with the freedom of navigation operations around the world, not just in the South China Sea. 

Most of them are actually——

Mr. SHERMAN. I know. This one is getting a lot more attention. 

Mr. BLINKEN. But leaving that aside, with regard to Iran and 

North Korea, this is something we are watching very carefully and 

you’re right to, I think, raise the subject. 

They’ve had a history of political engagement. Some of the reports of military, missile, nuclear engagement have been much 

harder to verify. What we are doing——

Mr. SHERMAN. Mr. Blinken, are you denying the reports that the 

Al-Kibar nuclear——

Mr. BLINKEN. No, no. I am saying——

Mr. SHERMAN [continuing]. Arms facility was North Korean technology? 

Mr. BLINKEN. I am just saying that what we are looking at is the 

concrete evidence of relationships across the board, beyond the political. 

What we are focused on is exactly what you pointed to. I think 

you make a very important point. What we are trying to do with 

regard to North Korea is to make sure that not only can its ships 

not dock but its planes. Air Koryo cannot land, not just in Iran 

but——

Mr. SHERMAN. Mr. Blinken, my question was about an Iranian 

plane flying to North Korea. 

Mr. BLINKEN. And we are working to make sure under these——

25

Mr. SHERMAN. Are we working to get China to say that they 

won’t allow the plane to go across China without stopping for fuel 

where it could be inspected? That is the only question. 

Mr. BLINKEN. All of——

Mr. SHERMAN. You’re free to address others but that is the only 

question. 

Mr. BLINKEN. All of the members of the United Nations are 

bound by the Security Council Resolutions that say that there 

should be no military ballistic missile or nuclear cooperation with 

the DPRK. 

As a result, they have——

Mr. SHERMAN. So the Iranian plane would—if it went to North 

Korea would be violating the U.N. resolution but if it flew nonstop 

over China no one would know about it. So you’re relying on Iran’s 

dedication to adhering to U.N. resolutions? 

Mr. BLINKEN. We are looking to every country involved to make 

that on its——

Mr. SHERMAN. I would urge you to talk to Beijing about making 

that plane land because if your sole defense for what I laid out is 

that the Iranians wouldn’t want to violate a U.N. resolution and 

they’d feel bad about violating international law, that is insufficient defense. 

If the Iranian plane going to North Korea does not stop in China 

then it may not have a trade delegation on it. It may have cash 

going one way and nuclear weapons going the other way and that 

is a very specific issue. 

I yield back. 

Chairman ROYCE. To the point that Mr. Sherman is raising, 

without objection I am going to put in the record a U.N. document 

that is drawn from some of our Treasury documents that show two 

suspected primary arms dealers from North Korea who visited the 

Islamic Republic of Iran and that information, because it goes to 

the point that was being made by the gentleman of California. 

Thank you, Mr. Blinken. 

We may be—we may have follow-up questions from the members 

on this specific issue. 

We now go to Mr. Chris Smith of New Jersey. 

Mr. SMITH. Thank you very much, Mr. Chairman, and thank you, 

Mr. Blinken, for your presence here today. 

The wire service writers did an extremely disturbing expose last 

year—a series of investigative reports—that found that the Obama 

administration gave undeserved passing grades to 14 countries 

with deplorable, and in many cases, worsening sex and labor trafficking records including China and Malaysia in Asia, Cuba, Oman, 

and others, making up 14 countries. 

I’ve had hearings on this. I actually did a hearing a few weeks 

ago that was titled ‘‘Get it Right This Time,’’ with the new TIP Report that is poised to come out shortly, being very concerned that 

when the administration does what it did, and that is give 

undeserved passing grades to countries that have deplorable 

records. It sells out the trafficking victims in those countries and 

those who are hurt by those countries’ governments and it also is 

a deplorable, I think, abandonment of human trafficking concerns 

that we as a nation have in a bipartisan way. 

26

Will China’s and Cuba’s, for example, and the other records be 

whitewashed once again this year? Secondly, I met with Nguyen 

Van Dai in Hanoi in 2007. He is one of the greatest peaceful 

human rights lawyers that I have met and I have met many in dictatorships like Vietnam. 

Will the President raise his case and demand his release? He has 

done nothing wrong, as you know, as we all know here in the 

United States, and he needs to be released immediately to let his 

wounds heal from the beatings that he has suffered at the hands 

of the Vietnamese Government. 

Thirdly, India and Japan have engaged in, clearly, patterns of 

noncompliance with the Goldman Act on child abduction. I’ve had 

nine hearings on child abduction. 

We’ve had parents, men and women, moms and dads, tearfully 

tell their stories with regards to Japan as well as India. And yet, 

they have not been leveled, especially Japan, having a pattern of 

noncompliance. 

The April 30th deadline is fast approaching for that report. I 

hope that reality is contained in the report. 

Finally, President Xi is on a tear, crushing civil society with his 

new draft law and crushing religious freedom, and even the 

churches—the Patriotic Church and the others that have worked in 

cooperation with the government are finding that their buildings 

are being demolished, their pastors are being incarcerated. 

The G-20 will meet in Hangzhou in September. Our hope is that 

the President—and that is right where the crosses are being taken 

off churches, the bulldozing of churches is occurring—that the 

President will raise these. 

The sinofication of religion by Xi Jinping, announced last year 

and just most recently in a speech he made, is all about all the religious bodies having no contact outside the country’s borders, and 

secondly and ominously, that everybody of faith has to serve the 

Communist Party. That will destroy religion or at least it will attempt to do it. If you could answer this. Thank you. 

Mr. BLINKEN. First, let me just express my own appreciation, the 

department’s appreciation, for your personal leadership on these 

issues and the focus you brought to them. It makes a huge difference around the world and, indeed, I’ve heard in places I’ve gone 

that you’ve been there first and have been putting the spotlight on 

these issues and it really does make a huge difference. 

With regard to trafficking in persons, I want to assure you we 

will do our very best to produce a gold standard report this year. 

We are working on it very hard. We’ve heard concerns that were 

expressed last year. 

We’ve looked to makes sure that the process internally is as 

strong and effective as possible to produce the best possible report. 

People are working very hard on it and we hope that that is the 

conclusion you’ll come to when you see it. 

With regard to Vietnam, I was just there and indeed met with 

a number of civil society activists, lawyers. We raise both individual cases and systemic problems that are—that remain at Vietnam at the highest levels on a regular basis. 

I can’t talk to the President’s schedule at this point but I am confident that he will be raising these issues. And I met with, I think, 

27

some of the same people that you’ve seen who are extraordinarily 

brave in what they’re doing every single day. 

With regard to parental/child abduction, I was also just in Japan 

and raised this with foreign minister, with the vice foreign minister, with other senior officials and we have concerns about Japan’s implementation of their commitments under the Hague Convention and that is something that I know you’ve been very, very 

focused on. We are working on that. 

Mr. SMITH. And would you yield briefly? 

Also, those that were left behind from the date of ratification. 

Mr. BLINKEN. Yes. 

Mr. SMITH. Those cases are heartbreaking and multi-yeared. 

Mr. BLINKEN. Yes, absolutely. We are focused on those as well 

as the cases that have arisen after the ratification. 

And then with regard to China, we very much share the concern 

that you expressed. We see across the board a crackdown on 

human rights and civil liberties. 

We’ve seen a crackdown against lawyers. I’ve met with a number 

of lawyers the last time I was in Beijing in January. I heard directly from them what that community is experiencing. 

I’ve met with religious leaders as well and have heard what’s 

happening there. The laws that you refer to, we’ve been very much 

engaged on them whether it is the NGO law, the cyber security 

law, the national security law, or the counterterrorism law and we 

have real concerns about the substance of the laws as well as the 

way they may be implemented. 

The NGO law, as you know, they’ve moved the enforcement of 

that law to the Ministry of Public Security, which sends a terrible 

signal about how they see NGOs, which are actually acting to the 

benefit of China and its own people. So we share those concerns. 

I just want to assure you we will continue to put the focus on them 

and do what we can to make progress. 

One aspect of this is not just us but us bringing together other 

countries to express concern because there is some strength in 

numbers. At the Human Rights Council in Geneva we got a dozen 

countries to sign a statement expressing their concerns about the 

evolution of human rights and civil liberties in China. 

These things over time have an effect and, you know, we went 

through decades of Cold War with the Soviet Union. Members of 

Congress played leading roles in putting that spotlight on the Soviet Union and its human rights abuses. And for decades it didn’t 

seem like anything was happening. There was no change, and then 

there was. So I think keeping at it as you are and as we are trying 

to do can make a difference. Thank you. 

Chairman ROYCE. For that to happen the administration needs 

to change its position on our legislation—myself and Mr. Engel’s 

overhaul of the Broadcasting Board of Governors with the same 

mission—that Radio Free Europe, Radio Liberty used to have during that period of time. We need to get back to broadcasting that 

information in to these countries where a totalitarian system prevents people from having free access, either on the Internet or 

radio or television, to the truth. 

We go now to Mr. Gregory Meeks of New York. 

Mr. MEEKS. Thank you, Mr. Chairman. 

28

Thank you, Mr. Secretary. China’s economy has entered a new 

phase. It has to contend with slower growth for the first time in 

decade and we should expect China to manage this shift with domestic and international actions that are nationalistic and even 

provocative. I am convinced that our reactions should be a deepening of our ties regionally and multilaterally. As we do, it is critical that we remember that some of our strongest partners in the 

Western Hemisphere are also strong partners in the Pacific realm 

and that we should build upon those relationships to work together 

in Asia. 

And there is no question in my mind that economic and diplomatic engagement is our strongest means of influence globally and 

that certainly is the case in Asia. And I don’t think militarily, when 

I consider any rise in tensions in the region as some do—I think 

about economic engagement instead, global rules and investment in 

cultural exchange. 

In fact, oftentimes people are looking at it and they say China—

well, I think TPP and the last I looked China is actually not a part 

of TPP. So when we talk about TPP and China a threat as we do 

TPP, well, TPP is actually a counter to China and hopefully will 

get China to then adhere to global standards and rules which they 

may not, which is more reason why we should do TPP because it 

is leveling the playing field for businesses with strong rules in 

place where they were weak or nonexistent. 

But my question is from some of my colleagues that I, you know, 

hear issues back and forth as we debate this issue that even an 

agreement like TPP, that has high standards as you talked about, 

is only as good as its implementation and enforcement and that is 

what I keep getting back. 

For example, I even have some concerns about governments that 

developed state-owned enterprises to avoid living up to their TPP 

commitments and localization requirements that limit the competitiveness of U.S. companies’ all over dollar security. 

So my question would be, first, how can the administration ensure that our TPP partners adhere to the rules of TPP, should we 

get it done, because that is always a question that some have. So 

how would we do that? 

And secondly, you know, I think we do have to make the geopolitical—there is a geopolitical argument to be made. Geopolitically, what happens in the region that we are so concerned about 

if we don’t do TPP? 

Let me just ask those two questions first. 

Mr. BLINKEN. Thank you very much, Congressman. 

First, I think you’re exactly right about the potential magnetic 

pull of TPP on countries that are outside of it including China. It 

so happened that I was in the region when the agreement was concluded and I was in Japan the day it was actually concluded. The 

Japanese were extremely excited because their own leadership had 

helped bring us to that point—Prime Minister Abe. 

The next day I was in South Korea. The first question I heard 

I heard was when can we join. The day after that I was in Beijing 

and what I saw was quite striking. 

29

They’ve done, if not a 180-degree turn at least a 90-degree turn 

including in state party media, saying oh, this is something that 

could benefit us because they don’t want to be left behind. 

But, of course, to get in they have to raise their game. They have 

to go to the high standards, not a race to the bottom. Environment, 

worker protections, intellectual property. 

So this has the potential to pull countries up, not create a race 

to the bottom, including with China. Second, you asked very, I 

think, appropriately about enforcement, and Congressman Sherman brought up a very important point a moment ago some of the 

concerns we’ve had with past trade agreements including on rules 

of a region. I think that is a very well taken point. Unlike previous 

agreements, TPP actually includes a rule—a clear rule on rules of 

a region. 

We want to make sure that parties that are not part of TPP can’t 

go to another country, have a few things done and then have the 

product benefit from TPP’s rules. So, for example, China finishing 

something in Vietnam—that is exactly why we insisted this rule be 

part of the effort. 

But it has to be implemented and everything else has to be implemented. That’s exactly why we’ve asked in our budget for a significant portion of resources to go to implementation. We want to 

make sure that it is done seriously. 

Finally, I also agree very much with you that, look, we can debate the economic merits of TPP and no trade agreement is going 

to be perfect. I think that the larger challenge that we face is 95 

percent of consumers live outside the United States. We have to 

reach them, and the question is how are we going to do that, under 

what rules, and who writes those rules? And I think we are always 

better off, even if imperfect, if we are the ones doing it as opposed 

to letting someone else do it. That’s more likely to benefit our companies and workers with a level playing field and make sure that 

the standards are high, not low. But we can debate the economic 

merits of it. 

Strategically, though, it sends a very important message. It 

sends to our partners in the region we are there to stay. It’s not 

just a security issue that may come up and a challenge that may 

arise that gets our attention and then we lose our focus. We are 

tied to you economically as well as through security considerations. 

It has, again, this potentially magnetic pull on countries outside 

the agreement who want to join it to lift their standards. And it 

sets the standard for the values that we’d like to see throughout 

the region. If we don’t have the agreement we jeopardize all of 

those interests. 

Thank you. 

Chairman ROYCE. We go to Mr. Dana Rohrabacher from California. 

Mr. ROHRABACHER. Thank you very much. 

Mr. Chairman, and I appreciate your leadership, Mr. Chairman, 

and the fact that you have spent considerable time and effort focusing on these specific issues. 

And Mr. Secretary, I am a bit concerned maybe not about specifics as about as much as your admirable optimism. May be someVerDate 0ct 09 2002 11:07 Sep 13, 2016 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\042816\99949 SHIRL
30

thing that is admirable but it is also of concern to those of us who 

think things maybe are more serious than your optimism suggests. 

Spratly Islands is not—I hope it can be taken care of in a consistent way is what you and Chairman Royce and others have tried 

to put forward as a game plan that would put them into a position 

or pressure the Chinese into a position that would not permit this 

type—what I consider to be aggression—aggression of the world 

order because you had no sovereignty over the Spratly Islands and 

now you have a claim by a dictatorial government in Beijing over 

a hunk of territory in the middle of the most important trading 

patterns in the world. 

Japan and Korea are ultimate allies in that area—seem to be 

getting second shrift on this and I will have to say that this should 

be of great concern—a greater concern to us than I believe that the 

plan that is set would suggest because it is a pattern. 

Spratly Island is not just taking—take on its own I would agree 

with a less aggressive approach to the Chinese. But instead, this 

is part of a very alarming pattern. The Chinese still make major 

land claims against India, for example. 

I think their land claim against India is a big as Texas. You couple Spratly Islands with that, couple it with the fact that the Chinese are all over the world making deals with corrupt dictators in 

order to fence in the resources necessary for an industrial society, 

meaning cutting us off. 

We have—we still have—basically for those of us who are—I 

think that the two-child policy still maintains the mass slaughter 

of innocent children in the womb and if not that—if you don’t accept that about abortion at least you accept the fact it is a violation—an attack on women’s rights to decide. 

And, of course, you still have the Chinese brutally suppressing 

the Falun Gong and engaged in the murder of prisoners in the sale 

of organs. 

So we are talking about a monstrous pattern here and the 

Spratly Islands should only be sort of the icing on the cake of how 

alarming this should be. 

So I would hope that—and by the way, during this whole time 

that I am talking, while these patterns have been going on, we 

have permitted them to make a massive profit in their relationship 

with us economically. Now, again, you’ve made your case on the 

Pacific trade agreement. 

It might give them some thought. But we are not withdrawing 

any of their ability to come here and make the profit they’re already making. 

And one last thought, and that is I think that we ought to be 

more concerned about Japan and South Korea, but especially 

Japan, than we are about trying to remain in a stable relationship 

with China. 

And my question for you, while I still have a couple seconds left, 

and that is do we or do we not support President Abe’s efforts to 

introduce him a new factor into the Pacific which might deter the 

Spratly Islands-type operation, meaning a rearming of Japan? 

Do we support that? And, quite frankly, I think Japan has been 

our best friend through this entire Cold War, never faltering. 

31

Maybe we should make sure we make it a more equal relationship 

with Japan and take Abe up on his answer. 

Mr. BLINKEN. Thank you very much. 

First, I’d like to just say with regard to optimism, I think it just 

may be an occupational hazard. But I appreciate the comment. 

Two things—first, let me also raise—quickly say that the various 

aspects of China’s policies that you refer to we share your view and 

object to them. It was an improvement to go from a one-child to 

a two-child policy. But we object to any limitations that a government would impose. 

Second, we’ve called for the release of the more than 2,000 Falun 

Gong prisoners in Chinese jails as well as other people who are repressed for religious views as well as political views. The Chinese 

have said that they have stopped the organ harvesting policy of 

prisoners as of last year. We have to see if that is actually being 

implemented. But they have apparently made a change in that policy. 

With regard to Japan and Korea, Congressman, we couldn’t 

agree more. These countries—these two countries—are at the heart 

of everything we are doing in the region and I have to say from 

my experience at least not only over the last 7 years but particularly in this job over the last year where I’ve made four trips now 

to Japan and Korea, in my judgment at least the state of our alliances has never been stronger. 

We have worked very hard in both countries to strengthen what 

we are doing with them. With Japan, we have a major achievement 

with the revision of the defense guidelines that are now allowing 

Japan, along with the changes that it is made in its own laws, to 

play a much more significant role militarily throughout the region. 

This is something we worked very hard to achieve. It’s going to 

allow us to expand our cooperation on everything from new realms 

like cyber and space but also intelligence surveillance and reconnaissance, missile defense, maritime security, logistics support, 

peacekeeping operations, humanitarian assistance—actually all of 

that as a result of this agreement. 

We have a new host nation support agreement, as you know, 

where Japan is contributing significantly to the support of our 

forces there. And throughout the region we are working more closely than ever with them. 

With the Koreans we have now an agreement that is conditionsbased on the transition during wartime of operational control that 

we worked very hard on that. 

We got another host nation support agreement from them for 5 

years to support the presence of our forces there. We have a trilateral information-sharing agreement between us, Japan and 

Korea and I’ve worked very hard personally to build a trilateral cooperative relationship with us, the Japanese, and the Koreans because the three of us working together on these issues are a very 

significant and powerful force. 

So we share the view that these two countries are at the heart 

of everything we are doing. Those two alliances are our most important and increasingly we are actually managing to work together. 

32

Ms. ROS-LEHTINEN. Thank you so much. Thank you, Mr. Rohrabacher. 

Mr. Sires of New Jersey. 

Mr. SIRES. Thank you, Chairlady. 

You know, I am from New Jersey and we are a big pharmaceutical state, and I am very concerned about what goes on with 

the intellectual properties in this part of the world. It’s not just 

stealing technological and intellectual properties but it is also some 

of the biggest research companies that we have in our state are 

constantly complaining that we don’t seem to do enough about 

stopping the stealing of our intellectual properties. 

And now we have a couple of treaties coming up. I just want you 

to reassure me so when I go back and speak to these pharmaceutical companies that we are doing everything in our power to 

prevent this. 

I mean, so can you ease my pain here? 

Mr. BLINKEN. I hope so, Congressman. I do want to assure you 

this is an area of intense focus. It has been. It will continue to be 

for the duration of this administration. We have different agencies 

in the government that are intensely focused on this. We’ve made 

it a mission to both elevate intellectual property rights standards 

across the board, including through trade agreements like TransPacific Partnership which would have the highest standards on intellectual property protections, as well as making sure that we enforce these protections. 

With China as well, one of the things that we’ve spent a lot of 

time on is the deep concern we had with the use of the cyber realm 

to steal trade secrets and to use cyber for commercial gain. This 

is an issue that the President engaged directly with President Xi 

on and we got an agreement with the Chinese that they will not 

do that. Now, obviously, that has to be enforced and implemented. 

But we are looking at that very vigilantly. 

At the same time, throughout the region and around the world 

we are trying to stand up every day for enforcing the intellectual 

property rights of our companies in every industry, including the 

pharmaceutical industry. 

So this is very much at the top of the administration’s agenda 

and I think when I hear my colleagues from Treasury, from Commerce, from USTR, they are intently focused on this. 

So I do want to give you that assurance we are doing everything 

we can. 

Mr. SIRES. Thank you. 

And I know North Korea keeps invading our computers and our 

systems here. I was just wondering, are we reacting back or are we 

just trying to put up walls so they can’t do it? 

I mean, there’s got to be a price to be paid for what they’re doing. 

Mr. BLINKEN. We’ve made clear that not only are we strengthening every possible defense but that we reserve the right to respond at a time and place of our choosing in a manner of our choosing so we are looking at a variety of ways of responding to any 

cyber provocation. 

Mr. SIRES. You sound like Donald Trump. Thank you. I don’t 

have any more questions. 

Mr. CONNOLLY. Would my friend—are you——

33

Mr. SIRES. Yes, I’ll yield to you. 

Mr. CONNOLLY. I thank my friend. 

Welcome, Mr. Blinken. I wanted to just follow up on my friend, 

Mr. Sherman’s, statement against TPP and give you an opportunity. 

So let’s say we pull the plug on TPP. Either the administration 

says we give up, you’re right, it is flawed, or we in Congress decide 

there’s no way we are going to give this our approval ever. What 

happens in a region to which we are pivoting and where China has 

its hungry eyes on trade relationships and economic ties as well? 

Mr. BLINKEN. Thank you, Congressman. I think a couple things 

happen. 

One is that in the immediate we’ll lose market share and the 

trade barriers that are high for our workers and our products will 

remain where they are and maybe they’ll even get higher. 

Second, we run the risk that other countries will try to take the 

mantle in writing the rules for how trade goes forward and I can 

almost guarantee you that if we are not the ones in the lead of that 

effort those rules will not be advantageous to our workers and to 

our companies and they certainly will not be advantageous to the 

standards. We want to set the highest possible standards when it 

comes to protecting labor, protecting the environment, protecting 

intellectual property, and good governance. 

So I think we are at real jeopardy, potentially, if we don’t go forward in seeing an environment turn against our interests when, to 

the contrary, this is an extraordinary opportunity. 

Again, we have in the region, as people have pointed out, close 

to two-thirds of the global middle class by 2030. That has extraordinary potential as beyond what we see today as an export market 

for the United States. 

Mr. CONNOLLY. Just one follow-up point. We hear lots of people 

rail against China and its trading practices and currency manipulation and so forth. For the record, do we have a free trade agreement with China? 

Mr. BLINKEN. We are working on a bilateral investment——

Mr. CONNOLLY. Do we have a——

Mr. BLINKEN. We do not currently have a bilateral——

Mr. CONNOLLY. We do not have a free trade agreement with 

China? 

Mr. BLINKEN. So no. But we are working on a bilateral——

Mr. CONNOLLY. But you can’t blame free trade in the case of 

China, since we don’t have a free trade agreement. Is that not correct? 

Mr. BLINKEN. Well, I think it is—as you know—a very complicated picture over the last 30 or 40 years. 

I think if you look at the displacement in manufacturing, for example, over the last four or five decades, and something that we 

are deeply concerned about because of the impact that it has on our 

fellow citizens, much of this, of course, predates any of the free 

trade agreements of the 1990s. This started, really, in the 1970s. 

Technology—robotics—is probably more responsible for those developments. 

That said, it is vitally important that in the agreements we reach 

that the standards, particularly for protecting workers, are the 

34

highest possible and if the United States is not in the lead in forging those agreements those standards are not going to be the highest possible. 

Mr. CONNOLLY. Thank you, and thank you, Ms. Chairman. 

Ms. ROS-LEHTINEN. Thank you, Mr. Connolly, and I will move to 

Mr. Chabot of Ohio. 

Mr. CHABOT. Thank you, Madame Chair. 

Let me begin with Taiwan, Mr. Blinken. Taiwan is going to be 

swearing a new President in May. The DPP will be coming back 

into power. 

Taiwan is, I believe, a very important U.S. ally and I would also 

expect the PRC in all likelihood to act up to try to throw its weight 

around. They are, after all, a classic bully. They want to show their 

displeasure, I think, in this election. They still have 1,600 missiles 

pointed at Taiwan. As Mr. Rohrabacher had mentioned, they’re in 

the process of building islands, to the great dismay of all their 

neighbors. 

They’re militarizing those islands now, and this is all occurring 

at a time when this administration unfortunately is reducing or 

trying to reduce the size of our military, including our Navy, which 

I think is just a terrible idea. 

We should, I think, clearly, first of all, make sure that Taiwan 

has a sufficient military and modernize that they are able to keep 

China from acting out. 

I think the only way China reacts is if they think that Taiwan 

is weak and that the United States lacks the resolve to defend Taiwan. 

What would you say on behalf of the administration to reassure 

Taiwan that the United States will have its back? 

Mr. BLINKEN. Thank you very much, Congressman. 

First, I think Taiwan has given the world a very vivid demonstration of what a democratic election is and what a democratic 

transition is. 

Mr. CHABOT. I agree. 

Mr. BLINKEN. That was a very powerful message. 

Mr. CHABOT. Very good point. I agree. 

Mr. BLINKEN. I met with the President—the new President. She 

came to visit Washington this past summer. We had a very good 

meeting with her at the State Department and we have strongly 

encouraged the Chinese to engage with her and with Taiwan in a 

manner of mutual respect, with flexibility to try to build on the 

positive developments in cross-strait relations over the last decade 

or so. We hope the Chinese will do that. 

Second, we very much agree with you that what has given Taiwan the confidence to engage with mainland China is the support 

from the United States, including arms sales. We have wanted to 

make sure, as have previous administrations, that Taiwan could 

not be coerced into doing things against the will of its people. I 

think we’ve notified something like $14 billion in arms sales since 

2010. We continue to look very actively at that. With regard to our 

own posture in the region, as I said earlier, we now have approaching 60 percent of our Navy in the region. We take very seriously 

that Taiwan must feel confident if it is to engage from a position 

of strength with the mainland. 

35

The other thing I think is important, and I know you’ve been a 

strong advocate for this, is we want to make sure that Taiwan and 

the talents of it is people are able to be employed around the world 

against global challenges. And so part of that is making sure that 

Taiwan can be represented in international organizations and 

we’ve been working very hard on that, to make sure that in organizations where recognitions of state is not required they be allowed 

in as members and where it is that they be able to participate irrespective of whether their statehood is recognized. 

So across the board we’ve been working to strengthen our ties to 

the people of Taiwan and support its efforts. 

Mr. CHABOT. Okay. Thank you. 

Let me turn to another topic. I don’t know that we’ve discussed 

Bangladesh at any length this morning. I think they clearly deserve more attention than they often have received, either by this 

administration or just in a whole range of things. But, first of all, 

as we all know, an election was held a while back and Sheikh 

Hasina was reelected, of course. Khaleda Zia and her party boycotted the election and so the political situation is, I think, a bit 

iffy there. 

But let me ask you this. Bangladesh has long been considered a 

moderate Muslim country and resisting Islamic radicalism. There 

have been a couple of incidences just within the last week where 

we’ve seen a gay activist who was murdered. We’ve seen an 

English university professor publicly murdered and it is believed 

that these are linked to extremist Islamic intolerant type groups. 

Could you comment on that and what could be done about it? 

Mr. BLINKEN. Yes. I am glad that you’re putting the focus on 

that because that is a concern that we very much share. We’ve 

seen a series of terrorist attacks in Bangladesh over the last several months including the ones that you referred to, which Daesh 

or al-Qaeda have taken credit for. 

Now, the government has sometimes claimed that these attacks 

were actually the work of the opposition in one fashion or another. 

But what we’ve seen, based on the evidence to date, is in fact that 

extremist groups, whether they are indigenous or whether they 

really are affiliated with ISIL or Daesh, are responsible and this 

gives us concern about the potential for ISIL, for Daesh, to take 

root in Bangladesh which, as you rightly pointed out, has been an 

important country in terms of a Muslim majority country with a 

moderate orientation that can be an important player in dealing 

with the problem of violent extremism. 

So as a result of that, we have been both engaging with the government on this problem but also, for example, with India, given 

the relationship between India and Bangladesh, to raise the concern and to try to work together with them on countering violent 

extremism before it takes root in Bangladesh. That’s the last thing 

we want. 

Mr. CHABOT. Thank you. 

Ms. ROS-LEHTINEN. Thank you, Mr. Chabot. 

And now we’ll turn to my good friend, Mr. Deutch of Florida. 

Mr. DEUTCH. Thank you, Madam Chairman. 

36

Deputy Secretary Blinken, thanks for being here today. Thanks 

for you service to our country and thanks for always being accessible to this committee. We appreciate it very much. 

I would like to get back to talking about China. There’s been a 

lot of discussion this morning about trade. I’d actually like to shift 

to foreign direct investment and in particular two areas: The area 

of security and the area of reciprocity. 

Through One Belt, One Road, and the Asian Infrastructure Investment Bank, China has demonstrated a significant interest and 

willingness to invest abroad both in private and public capacity. 

But the domestic ownership requirements in China and some security review that takes place I referred to, I think, as an opaque security review, in China continues to frustrate American investors 

there. So I’d just like to know, as they pursue more outlets for foreign investment, what are our options for encouraging reciprocity? 

Why don’t you answer that first and then I’ll get to the security 

issue. 

Mr. BLINKEN. Thank you. 

Two things on that, Congressman. 

First, with regard to their investments abroad, just on the first 

part of that equation, as a matter of principle, investments particularly in infrastructure in various parts of the world—Africa, Latin 

America, Central Asia, you name it—are welcome and needed. 

But what has concerned us with regard to China is that those 

investments be made to high standards, not low standards, and 

again, worker rights, environment, intellectual property, good governance. 

So they’ve established the Asia Infrastructure Investment Bank. 

We are not a part of that, although if the bank now operates to 

those high standards we’d welcome finding ways to work with it 

and other existing institutions. 

But the key is those standards, and what I think we found with 

China investing abroad is that sometimes the bloom comes off the 

rose after a while because what tends to happen is this is usually 

commodities driven. They’re trying to get commodities out of the 

countries that they’re investing in. They do invest in infrastructure. They put a lot of money in. They have a lot more state money 

than we have to invest. But typically they import hundreds of Chinese workers to actually build the projects, as you know, and that 

doesn’t sit well necessarily with the host governments. 

The quality of what’s built may not be up to standards and that 

tends to turn things a little bit so I think they have to look at that 

a bit carefully. 

When it comes to our own investment and ability to invest in 

China, we are working across the board to get much greater access 

to get rid of some of the restrictions that inhibit our ability to do 

this. 

This is very much part of our agenda with them and part of the 

bilateral investment treaty that we are seeking to negotiate is focused on exactly that. 

Mr. DEUTCH. Great. Then on the—and particularly on the issue 

of Chinese direct investment in the United States, the Committee 

on Foreign Investment in the U.S.—CFIUS—has turned down a 

37

number of high-profile Chinese acquisitions on national security 

grounds. 

Other deals fell apart and they were abandoned in anticipation 

of difficulties with CFIUS. But CFIUS only reviews a small number of transactions every year and I have two questions. 

One, how might CFIUS alter their approach if there is a bilateral 

investment treaty with China and I guess the bigger question is 

with the really significant amounts of capital that the Chinese are 

looking to invest in the United States, does the CFIUS process still 

work? 

Is it sufficient, given what might be coming, to safeguard our national economic security interests, the cyber interests—all of the 

sorts of things that we’ve been discussing already here today. Does 

this creation that has been around since the mid-70s still work or 

should we be looking at this in a new light? 

Mr. BLINKEN. I think it is an excellent question and one that deserves a lot of thought. I think the first point that you made is important. The CFIUS only winds up applying to a very, very small 

percentage of the investments that are made or sought to be made. 

So we are talking about a pretty narrow universe to begin with. 

Second, as a matter of principle, we welcome investment. This is 

good for our companies. It’s good for all sorts of industries and it 

is something that as a general proposition we want to encourage. 

But it is vitally important that when it comes to national security 

we remain vigilant and that is what CFIUS is designed to do. 

Now, I think you’re right to raise the question about whether in 

the event of a bilateral investment treaty the investment flow goes 

up significantly, is that going to put further strain on the process 

and do we need to look at it. That’s something I’d like to come back 

to if I can because it is a very good question that I need to think 

through a little bit more. 

Mr. DEUTCH. Great. I would welcome that and happy to discuss 

that further with you, too. Thank you very much. Thanks, Madam 

Chair. 

Ms. ROS-LEHTINEN. Thank you, Mr. Deutch. 

Mr. Poe of Texas. 

Mr. POE. Thank you, Madam Chair. Thank you, sir, for being 

here. 

I have a couple observations and I want to spend most of my 

time talking about China. 

When I visited with Admiral Harris at Pacific Command I asked 

him this question—of these five entities—Russia, China, North 

Korea, ISIS, and Iran—I think those are threats to the United 

States—which of those five do you think is the most troubling at 

this point? And he responded North Korea. Would you agree with 

that assessment or not? I just need a yes or no. 

Mr. BLINKEN. Yes. 

Mr. POE. Okay. I want to talk about China. China—they have 1 

billion more people than we do in the United States. I think some 

Americans don’t realize how populated China is. And some facts 

about China—they are the number-one recipient of poached ivory 

from Africa. The elephants are dying off. They’re being killed in Africa and the number-one recipient is China. 

38

They are thieves. They steal our intellectual property. Cyber attacks—I believe they’re responsible for those. They’re bullying Asia, 

trying to make new sovereign territory in the South China Sea and 

then claim the area around it. They’re helping Pakistan with intercontinental ballistic missiles. 

And then you get to human rights—they’re the worst offender I 

think in the world. They persecute Christians and other religious 

minorities and then they have this practice of putting people they 

don’t like, like the Falun Gong, in prison and charging them with 

trumped up political crimes and then harvesting their body organs 

and selling those on the marketplace. That’s probably the worst 

type of crime in the world, in my opinion. 

And, of course, we don’t say this anymore because it is not the 

right thing to say but they are still a Communist nation and I 

think that is who we are dealing with. And we talk about pivoting 

to China and whether they’re a threat and what we are doing 

about it and you talked about how we are increasing and focusing 

militarily. 

Let me just show you a few posters here. Here—I don’t know if 

you can see this or not. I know you can’t probably see that behind 

all this is China in the South China Sea and the Philippines. In 

1999, this is the relative strength of China in the red and the 

United States in the blue. It’s about equal. 

Let’s go to the year 2015. This is the Chinese buildup with ships, 

submarines, and planes and the United States’ military strength in 

the area in 2015—I got this from Pacific Command—is about the 

same. 

And Pacific Command expects that in 2020—if I can get the poster—it is going to look like this—that China will have all of these 

planes, intercontinental ballistic missiles, ships, submarines, and 

the United States’ strength in the area is still going to be just 

about the same. 

Without going into the details of how much of everything, do you 

agree that that is what is occurring in south China? 

Mr. BLINKEN. Thank you, Congressman. 

We’ve certainly seen a significant buildup in China’s military capacity over the last couple of decades and in recent years. 

Some of that, I guess, on one level is not surprising as China 

grows and is more engaged in the region. It wants to protect its 

expanding interests and what we’ve seen though are two things. 

We’ve seen an investment in these new capabilities which I think 

the chart shows very well. Everything from cruise missiles, short 

and medium range ballistic missiles, high-performance planes, integrated air defense and, of course, the Navy. 

They’re investing in those capabilities. They’re also engaged in 

trying to transform what had been a mass conscript ground-based 

force into a higher tech force as well. 

Mr. POE. That’s right. I don’t even include the number of military soldiers and sailors and airmen in these poster. 

Mr. BLINKEN. Yes. 

Mr. POE. Let me——

Mr. BLINKEN. So but just to get to your, I think——

Mr. POE. So what is our response? That’s my question. 

39

Mr. BLINKEN. Two things. First, of course, their budget is 

opaque. It’s hard to know exactly what they spend on the military. 

Mr. POE. What is our response? I am limited on time. What’s our 

response? 

Mr. BLINKEN. So our response——

Mr. POE. This is taking place. What is the U.S. response to this, 

if anything? That’s all I am asking you. 

Mr. BLINKEN. Sure. A few things. First, our military budget remains roughly three times what theirs is and they’re, of course, 

starting from a much lower base. So that buildup is significant but 

they’re trying to match something that is started at a much higher 

level and continues to invest at a significantly higher level. Second——

Mr. POE. But this is our presence in the area over here. 

Mr. BLINKEN. It’ll be about 60 percent of our Navy by 2020. Our 

technological capabilities, our experience, our capacity remains 

greater by far than any nation on earth including China and, 

again, I would defer to my military colleagues. I don’t believe that 

is going to be challenged anytime soon. 

Mr. POE. So you’re saying that even though this is our presence 

in the area—the theater, I think, is the word—that it really doesn’t 

alarm you because we are building up our capacity in the future? 

Mr. BLINKEN. No, I would say that we are being very vigilant 

about the growth in China’s military capacity. We are making sure 

across the board when it comes to any country that our own country remains unmatched. 

Mr. POE. Okay. If I may have one question, and go back to North 

Korea, the biggest threat supposedly in the area. North Korean 

intercontinental ballistic missile capability—they’re developing the 

concept not land to land—not sending something from North Korea 

over to Texas—their idea is build submarines and put intercontinental ballistic missiles on the subs and then float them around 

the Pacific and be the threat that we are. Is that a fair statement 

of what the North Koreans are trying to do? 

Mr. BLINKEN. Yes, that is part of their strategy. 

Mr. POE. All right. Thank you, Madam Chair. I appreciate getting this time. 

Ms. ROS-LEHTINEN. Thank you, Mr. Poe. 

Mr. Cicilline of Rhode Island. 

Mr. CICILLINE. Thank you, Madam Chair. Thank you, Mr. Secretary, for your service and for being here today. 

I want to turn again to the issue of China and after President 

Obama and President Xi met in Washington on the 31st of March, 

the two leaders affirmed cyber commitments that were announced 

in September 2015 and agreed to ensure their full implementation. 

Five days after that, Admiral Rogers, the commander of the U.S. 

Cyber Command, testified to Congress that, and I quote, ‘‘Cyber operations from China are still targeting and exploiting the U.S. Government, defense industry, academic and private computer networks.’’

So my first question is, are you aware of cases in which the Chinese Government may have supported cyber-enabled theft of intellectual property from U.S. targets since the announcement in SepVerDate 0ct 09 2002 11:07 Sep 13, 2016 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\042816\99949 SHIRL
40

tember 2015 and how is the State Department, in conjunction with 

the rest of the U.S. Government, addressing these challenges? 

Mr. BLINKEN. Thank you very much. 

I think there are two things going on here. It’s not a surprise 

that countries try to get information about other countries and that 

goes on every day and it continues to go on, of course, from China 

in the direction of the United States. 

Where we’ve drawn a very bright line is on the question of using 

cyber technology to steal trade secrets for commercial advantage 

and a critical component of the agreement reached between President Obama and President Xi actually last fall and then reaffirmed 

is that China will no longer do that. 

Now, it said that. It made a commitment. It’s reasserted that, reaffirmed that in the G-20 as well as directly with us. We now have 

to make sure that that in fact is the case and it is being implemented. 

So we are watching very vigilantly to see. I am not——

Mr. CICILLINE. But that is not my question. Has there—are 

you——

Mr. BLINKEN. I am not personally aware of cases—of current 

cases of that but I am happy to go back and confer with Admiral 

Rogers. 

Mr. CICILLINE. Great. Thank you. 

Next I’d like to turn to the issue of North Korea. In the wake 

of North Korea’s recent nuclear weapons test and satellite launch, 

South Korean society has begun to reengage in the debate about 

developing its own nuclear weapons capability, even though, of 

course, Seoul relies on the U.S. nuclear umbrella. And I’d like to 

know whether you think there’s support within the Korean Government for developing a nuclear capability and over the long term 

what should the United States’ response be to this development? 

Mr. BLINKEN. You’re right that that debate has reemerged in 

South Korea as a result of North Korea’s provocations. President 

Park was very clear in statements that she’s made that that is not 

the path that South Korea should or will take, at least under her 

administration. 

And we’ve tried to make clear to our allies and partners that it 

is not necessary because, to put it colloquially, we have their back 

with the nuclear umbrella and with every other means that we 

have to their defense. 

So we have not only reaffirmed that very solemn commitment to 

the defense of Korea, we have strengthened our own relationship 

and one of the things that we’ve done is now engaged in formal 

consultations with them on deploying the THAAD missile defense 

system to South Korea and they’re developing their own missile defense system in cooperation with us. So we’ve been building up the 

defenses including for our partners and allies and, of course, we’ve 

also been going very hard at the North Koreans on the nuclear 

missile program. 

Mr. CICILLINE. Thank you. 

And finally, Mr. Blinken, I’d like to turn to Malaysia. As you 

know well, there was significant concern about the upgrade of Malaysia to the Tier II watch list and I wondered if you could just 

speak a little bit to what progress Malaysia has made, particularly 

41

in the area of combating human trafficking, but in human rights 

as well as human trafficking since that time and whether or not 

we should—I mean, what progress has been made? I think you’re 

aware of the controversy that is surrounding that change in their 

classification. 

Mr. BLINKEN. As you know, Congressman, we are actually working very actively right now on the new report for this—for the past 

year and so I can’t speak to its conclusions because they haven’t 

been reached. 

I can say generally with regard to Malaysia just over the past 

year some of the things we’ve seen. We have seen very significant 

and in fact unprecedented consultations between the government 

and civil society and international experts to draft regulations to 

implement the legal amendments that were passed by their Parliament at the very end of the last reporting period. 

And that would really empower the agencies to enforce the 

amendments that were reached. So that is positive. That doesn’t 

mean its dispositive of anything we’ll conclude but it is something 

we’ve seen over the last year. 

This would allow victims of trafficking to live and work outside 

shelters, which is a strong consideration. I know that we have remaining concerns about the conviction rate in Malaysia. That’s 

something that we are looking at and that will factor in to the assessment and we need to continue to work with them to build their 

own capacity to investigate, to prosecute, to convict and we are 

doing that, for example, through IOM. 

We are funding some of those activities. So I would say I can’t 

speak to you, obviously, about the conclusions of the report. We 

haven’t reached them yet. I would say based on this we’ve seen 

some progress but that is not dispositive to the conclusion. 

Mr. CICILLINE. Well, can I just ask with respect to the implementation of one of the biggest issues then, virtually no prosecutions. 

Mr. BLINKEN. Yes. 

Mr. CICILLINE. So have you seen any progress on that? Enacting—it is one thing to enact and begin to implement but if it is not 

enforced it is sort of meaningless. Have you seen any progress on 

actual prosecutions? 

Mr. BLINKEN. I agree with you. I agree with you on that. I mean, 

enforcement is a critical piece of this. I am not aware of significant 

progress on the prosecutions but I can come back to you on that. 

Mr. CICILLINE. Great. I appreciate it so much. 

Thank you, and I yield back, Mr. Chairman. 

Chairman ROYCE. Mr. Matt Salmon of Arizona. 

Mr. SALMON. Thank you. 

Mr. Blinken, first, let me just go on record as saying how I commend the administration for pursuing deployment of THAAD in 

South Korea. I think it is incredibly important. 

One of my frustrations is that many of these sanctions that we’ve 

done haven’t really moved the needle with North Korea and I am 

not sure any other sanctions really will. I think that the one thing 

that will move North Korea is some flexing of the economic muscles 

by China and we’ve got to figure out a way to get them motivated 

because they haven’t been—they helped us a little bit at the U.N., 

and I appreciate that with the multilateral sanctions. But they 

42

hold a disproportionate influence with North Korea than any of the 

rest of us or any of the other in the Six Party talks and we’ve got 

to influence them to do the right thing and get North Korea under 

control. 

Last weekend, China announced that it formed a consensus with 

Brunei, Cambodia, and Laos that the territorial disputes over some 

islands, rocks, and shoals in the South China Sea are not an issue 

between China and the Association of Southeast Asian Nations—

ASEAN—as a whole. 

At the same time, China consistently relies on ASEAN’s declaration on the conduct of parties in the South China Sea, citing its endorsement of consultations and negotiations to argue that it is not 

subject to the binding arbitration brought under the Law of the Sea 

Treaty by the Philippines. 

Can China have it both ways? Is China trying to sideline ASEAN 

in relation to the South China Sea maritime disputes and what’s 

the administration’s response to the quadrilateral consensus between China, Brunei, Cambodia, and Laos and what’s the administration’s position on ASEAN’s role in resolving the maritime disputes? 

Mr. BLINKEN. Thank you very much. 

And first of all, I very much appreciate your comments on North 

Korea and agree very much with you that China has a unique role 

to play because of its unique relationship with North Korea. 

We are seeing some positive steps forward in terms of implementation of the Security Council resolution but it is not yet dispositive. So we are looking very carefully at that. 

I could not agree more with you as well that China can’t have 

it both ways. It can’t have it both ways in a number of areas. It 

can’t be a party to the Law of the Sea Convention and then ignore 

or reject the provisions of that treaty including arbitration as an 

appropriate mechanism and the binding nature of any arbitration 

decision on the parties to that decision. 

So we would expect that China, as a party to the Law of the Sea 

Convention, once the decision is issued by the tribunal, will respect 

it. So it can’t have it both ways there. It can’t assert the Law of 

the Sea and not respect its decisions. 

Second, with regard to ASEAN, I think you’re exactly right. We 

worked very, very hard to build up ASEAN as an organization to 

make sure that it created a space in which countries that individually might not have the confidence to take on difficult issues like 

the South China Sea might feel some greater strength in numbers 

and collectively. 

The President, as you know, had this historic summit with the 

ASEAN countries at Sunnylands just a few months ago. We are 

looking to ASEAN, as it did most recently at that summit, to express its support for these basic principles and we’d like to see that 

happen when the arbitration decision is issued as well. 

And by the way, on the agreement that you referenced with 

Brunei and Laos, I think there is a lot less there than meets the 

eye. 

Mr. SALMON. I hope so, and I hope that ASEAN really does step 

up to the plate when it comes to dealing with these maritime disputes and resolving them. I think the more they speak with one 

43

solid voice the better chance we have of resolving this without the 

conflicts that we hope we don’t have. 

My last point is that I am very optimistic about our economic opportunities in the region and I am a strong supporter of TPP. But 

I would also like to see us further enhance our trade ties with 

India and as such I have introduced legislation in concert with Senator Cornyn pushing for India’s entrance into APEC. 

What do you see as the obstacles to that getting done? 

Mr. BLINKEN. First, we welcome India’s interest in joining APEC 

and we also welcome, and I’ve said this directly to my Indian counterparts, talking to them about how they see membership in APEC 

fitting into their own thinking about their economy, about trade, 

and the evolution that they would make. 

So I suspect we will have those conversations going forward. I 

also very much agree with the larger proposition that you cite 

about the importance of India and in particular the importance of 

trying to deepen and expand our own trade relationship with India 

and its own relations in the area. 

I think a few things just in terms of obstacles. First of all, the 

other members, of course, would have to agree. It’s a consensusbased organization. The other thing I’ll tell you and I think, you 

know, this is a consideration as well. We want to make sure that 

as countries join organizations like APEC that they are going to 

work to productively and cooperatively to uphold its rules and 

standards and to be productive partners in that enterprise. So that 

is one of the things we’ll be talking to the Indians about. But the 

bottom line is we welcome their interest and will be talking to 

them about it. 

Mr. SALMON. Thank you. 

Chairman ROYCE. Mr. Daniel Donovan from New York. 

Mr. DONOVAN. Thank you, Mr. Chairman, and Secretary, thank 

you for your attendance and your testimony today. 

In February of this year, the U.N. came out with a report about 

Vietnam making prohibited purchases of weapons from North 

Korea. As the President and this administration is about to enter 

into a trade agreement should their avoiding and actually unlawfully purchasing weapons from North Korea be a consideration as 

we enter into an agreement with Vietnam? 

Mr. BLINKEN. We would be concerned with any country violating 

its obligations under the U.N. Security Council resolutions in terms 

of purchasing or making available to North Korea weapons, and if 

that is the case with Vietnam that is going to be a concern. 

We are being very vigilant about making sure the countries are 

not doing that. 

Mr. DONOVAN. And you also indicated about supplying North 

Korea with weapons. That same U.N. Council has indicated to us 

that Cuba is providing North Korea with illegal weapons. As the 

administration tries to renew relations with Cuba, should that be 

a consideration as we go forward? 

Mr. BLINKEN. Yes. As you know, there was an incident in which 

a ship that was transporting weapons that apparently originated in 

Cuba and seemed to be heading for North Korea was actually 

stopped by the Panamanians and weapons were found on board. 

The weapons were confiscated. The ship was finally returned to the 

44

North Korean ownership. There was, I think, a $700,000 fine that 

was paid. I think the captain was detained. 

We’ve come down very hard at the United Nations on this shipment, including putting a spotlight on it—putting a spotlight on 

Cuba’s apparent role in helping to facilitate this trade in weapons. 

This is a real concern and we’ve been very vigilant about making 

clear that that is unacceptable. 

Mr. DONOVAN. And finally, Mr. Secretary, yesterday I met with 

steelworkers from my district. They’re very concerned about China 

manipulating the steel market in the world. 

We’ve had, I think, zero growth in steel production in our country over the last 25 years. I think Europe’s steel production is down 

about 12 percent and there’s a fear that China is manipulating by 

selling steel below market price in order to box everyone else out. 

Is the State Department looking into that and what is the position of the administration? 

Mr. BLINKEN. Congressman, I can say generally two things. 

First, my colleagues in the Treasury, Commerce, and USTR are 

across the board very vigilant about trade enforcement generally 

and with regard to China specifically. 

We have, I think as you know, overall filed, I think, 20 WTO enforcement complaints since 2009—the most of any country. And by 

the way, we’ve won all of the cases that have been decided. 

With regard to China specifically, and this is not in steel but this 

is more generally, just this past month they signed an agreement 

ending export subsidies as a result of a challenge we made to those 

subsidies at the WTO. 

A year ago, we won a challenge to compliance on high-tech steel 

duties that we had challenged them on and that contributed to a 

$250 million annual loss to our exporters. That ended as a result 

of the enforcement actions that we took. 

In 2014, there was a finding against China on duties and quotas 

on rare earths and tungsten. And finally, we issued—this again 

was the result of an action that we took. And also in 2014 there 

was a finding of breach regarding unjustified duties on cars and 

SUVs—$5.1 billion worth of cars and SUVs sold. There, too, we got 

a decision. 

So I can’t speak to the specific case that you referenced but I can 

promise you that I am sure my colleagues are looking at this very 

carefully and based on the record to date if there is something that 

is actionable we’ll take action. 

Mr. DONOVAN. Appreciate that, Mr. Secretary, because I know 

the American steelworkers would appreciate it as well if you and 

the administration could look into that. 

Mr. Chairman, I yield back the rest of my time. 

Chairman ROYCE. Thank you very much, Mr. Donovan. 

We are at adjournment here. I do want to express our appreciation with the Deputy Secretary’s time this morning and thanks for 

meeting with us after your recent trip back from Asia. 

As we’ve discussed, the United States as a Pacific power has tremendous interests in Asia. We have allies in Asia. So we look forward to working with you on issues like the North Korean sanctions that I suggested. We need full implementation on that and 

on the transition in Burma, on the new government in Taiwan—

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in Taipei. So many issues for us to continue to collaborate on and, 

Deputy Secretary, thank you again. 

Mr. BLINKEN. Mr. Chairman, thank you very much. 

Chairman ROYCE. We stand adjourned. 

[Whereupon, at 11:57 a.m., the hearing was adjourned.] 

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