```

[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

   DIPLOMACY AND SECURITY IN THE SOUTH CHINA SEA: AFTER THE TRIBUNAL

=======================================================================

                                HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 22, 2016

                               __________

                           Serial No. 114-232

                               __________

        Printed for the use of the Committee on Foreign Affairs

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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       BRIAN HIGGINS, New York
MATT SALMON, Arizona                 KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas            GRACE MENG, New York
SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
DANIEL DONOVAN, New York

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 ------                                

                  Subcommittee on Asia and the Pacific

                     MATT SALMON, Arizona Chairman
DANA ROHRABACHER, California         BRAD SHERMAN, California
STEVE CHABOT, Ohio                   AMI BERA, California
TOM MARINO, Pennsylvania             TULSI GABBARD, Hawaii
JEFF DUNCAN, South Carolina          ALAN S. LOWENTHAL, California
MO BROOKS, Alabama                   GERALD E. CONNOLLY, Virginia
SCOTT PERRY, Pennsylvania            GRACE MENG, New York
SCOTT DesJARLAIS, Tennessee

                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Elbridge Colby, Robert M. Gates senior fellow, Center for a 
  New American Security..........................................     3
Mr. Dean Cheng, senior research fellow, Asian Studies Center, The 
  Heritage Foundation............................................    19
Amy Searight, Ph.D., senior adviser and director, Southeast Asia 
  Program, Center for Strategic and International Studies........    30
Amitai Etzioni, Ph.D., professor of international affairs, 
  Director, Institute of Communitarian Policy Studies, The George 
  Washington University..........................................    42

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Mr. Elbridge Colby: Prepared statement...........................     6
Mr. Dean Cheng: Prepared statement...............................    21
Amy Searight, Ph.D.: Prepared statement..........................    33
Amitai Etzioni, Ph.D.: Prepared statement........................    44

                                APPENDIX

Hearing notice...................................................    70
Hearing minutes..................................................    71

 
   DIPLOMACY AND SECURITY IN THE SOUTH CHINA SEA: AFTER THE TRIBUNAL

                              ----------                              

                      THURSDAY, SEPTEMBER 22, 2016

                       House of Representatives,

                 Subcommittee on Asia and the Pacific,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The subcommittee met, pursuant to notice, at 2:00 p.m., in 
room 2172 Rayburn House Office Building, Hon. Matt Salmon 
(chairman of the subcommittee) presiding.
    Mr. Salmon. Subcommittee will come to order. Members 
present will be permitted to submit written statements that 
will be included in the official record.
    Without objection, the hearing record will remain open for 
5 calendar days to allow statements, questions and extraneous 
materials for the record subject to the length limitation in 
the rules.
    South China Sea is one of the toughest and most persistent 
problems in this subcommittee's jurisdiction. These maritime 
and territorial disputes are universally recognized as a long-
term security challenge.
    Mr. Sherman. Mr. Chairman? If I can just ask for permission 
to give my opening statement after the witnesses.
    Mr. Salmon. Oh, I am sorry. Yes.
    Mr. Sherman. Yes, I wanted to----
    Mr. Salmon. Okay. Good.
    Yes, Mr. Sherman will give his opening statement after the 
witnesses testify. He has actually got to go between a couple 
of different responsibilities today.
    Back to what I was saying, the maritime and territorial 
disputes are universally recognized as a long-term security 
challenge and a potential short-term flashpoint.
    Conflicting claims to the strategic waterways which connect 
maritime Asia endanger trade, transportation, commerce and 
energy flows, creating the risk of conflict.
    China has taken the riskiest and most dangerous actions of 
any of any party to the disputes, seizing territory far from 
its shores, fielding huge fleets of Coast Guard and fishing 
vessels to bolster its claims and constructing military 
outposts throughout contested zones to consolidate its 
strategic position.
    Despite the dire and worsening situation, recent 
developments have given the South China Sea an unfulfilled 
potential for positive progress.
    This summer, an Arbital Tribune, constituted under the 
United Nations Convention on the Law of the Sea, issued an 
eagerly anticipated ruling in a case between China and the 
Philippines, bringing legal certainty to the obvious truth that 
China's claims on the South China Sea are illegitimate.
    Though the international community cheered the ruling, its 
influence is still uncertain. Since the tribunal announced its 
ruling, the uncertain status quo has persisted in the South 
China Sea, and there have been signals that China plans to take 
its construction efforts to the Scarborough Shoal, a sensitive 
area right off the Philippines' shores, which would be a 
serious escalation.
    At the same time, China has moved aggressively to generate 
diplomatic cover for its legally untenable and unjustifiable 
claims. Throughout the Association of Southeast Asian Nations 
(ASEAN) China has used surrogates to disrupt and block 
consensus, successfully preventing unified statements on the 
issue, at least in regional summits. There are also obvious 
signs of intense efforts to win more southeast Asian support 
for China's position.
    For instance, Thailand recently stated its support for 
China's so-called efforts to maintain peace in the South China 
Sea, though Thailand is not a claimant to that dispute and has 
traditionally remained neutral on the issue.
    Conduct from the Philippines during this period has been 
more and more disappointing. The Philippines' victory before 
the international tribunal was a shining example of the 
peaceful resolution of a dispute between two states based on 
legal principle as opposed to force.
    It demonstrated the value of the system of international 
law that states have used cooperatively to avoid major conflict 
for decades.
    Despite this victory, the Philippines has not leveraged the 
ruling in its dealings with China. The cool response was at 
first lauded as savvy diplomacy, but since then, things have 
become decidedly worse.
    The new President, Rodrigo Duterte, has called into 
question the Philippines' dedication to the rule of law, 
creating a domestic crisis of widespread extrajudicial killing.
    He's engaged in childish name calling toward President 
Obama and our Ambassador to the Philippines. He's announced his 
intention to end a longstanding and successful counter terror 
cooperation in Mindanao, raised the possibility of increasing 
arms acquisitions from China and Russia and spoken of ending 
joint maritime patrols with the U.S. Navy.
    At the same time, the importance of the Philippines' legal 
victory has been downplayed or avoided altogether. President 
Duterte has affirmatively avoided the topic in his discussions 
with Chinese interlocutors, and he deliberately declined to 
raise the issue in a recent high-profile speech, throwing away 
his prepared remarks on the ruling at the last minute.
    To be sure, many ASEAN states have good reason to evaluate 
critically their capacity and will to resist China's influence 
on the issue.
    In virtually every case, modest defense capabilities and 
close economic ties mean that China is an undeniably important 
partner for each ASEAN country.
    By playing their cards close to their chest while signaling 
potential compromise with China, southeast Asian nations seem 
to be navigating the post-ruling uncertainties of the South 
China Sea extremely cautiously, feeling out bilateral options 
and seeking the most advantageous near-term result at the cost 
of a collective response that might better suit each of their 
needs.
    As in many other realms, responsibility falls to the United 
States in the South China Sea, not just to advance our allies' 
and partners' interests but to protect our own.
    Every nation has a stake in the rule of law, the protection 
of territorial integrity and in peaceful dispute resolution.
    In southeast Asia, where a vacuum of strategic military 
strength is being filled by China's rising forces, these 
interests are in jeopardy.
    It falls to us to back stop our partners with our own 
strength and integrity and to remind those nations faltering 
under China's self-serving diplomatic assault what is at stake.
    With our expert panel today, we will review the 
developments in the South China Sea disputes following the 
Arbital ruling with an eye toward formulating policy options to 
protect the freedom of navigation, the rule of law and peaceful 
dispute resolution.
    We will also be looking to strengthen rather than weaken 
our relationships in the region in response to this challenge. 
And I look forward to the witnesses' recommendations for that 
as well. And, as we have mentioned earlier, the ranking member 
will make his opening statements after your comments.
    And so I will start with the panel. Mr. Elbridge Colby, 
Senior Fellow at the Center for a New American Security; Dr. 
Dean Cheng, Senior Research Fellow at The Heritage Foundation's 
Asia Studies Center; Dr. Amy Searight, senior advisor and 
director of the Southeast Asia Program at CSIS; and Amitai 
Etzioni--did I say that right?
    Mr. Etzioni. Yes.
    Mr. Salmon. Oh, good. Professor of international affairs at 
the George Washington University. We thank the panel for 
joining us today and for their expertise, and I will start with 
you, Mr. Colby.

STATEMENT OF MR. ELBRIDGE COLBY, ROBERT M. GATES SENIOR FELLOW, 
               CENTER FOR A NEW AMERICAN SECURITY

    Mr. Colby. Mr. Chairman, Ranking Member Sherman and 
distinguished members of the committee, thank you very much for 
inviting me to testify today on the South China Sea.
    It's an honor to speak with you on this matter of such 
importance to our Nation and to the Asia Pacific as a whole.
    Put forthrightly, the United States should press back more 
firmly against China's assertiveness in the South China Sea 
both directly and indirectly, and Washington should be must 
less shy about doing so.
    This course is likely to be more successful and stabilizing 
and, indeed, actually less risky than our current one, which is 
defined by a strange hesitancy on our part.
    Right now, China appears to believe it can rock the boat 
and that we will take pains to right it. We seem to be more 
nervous about China's will and ability to escalate and the 
threat that such firmness would have on our broader 
relationship with Beijing than they are. This is strange, 
because despite what President Duterte says, we still hold many 
commanding advantages.
    Our hesitancy seems to be leading Beijing to think it can 
continue pushing into the South China Sea and beyond. But, it 
is also leading regional states, both allies and partners as 
well as fence-sitters, to wonder whether it is prudent to work 
with us to balance and constrain China's assertiveness.
    If Washington is so anxious and tepid when we are still so 
strong, what does that say about our willingness to act as 
China grows stronger in the coming years? It certainly cannot 
and does not inspire confidence.
    Rectifying the situation requires resolute American 
leadership and sustained strength. Otherwise, states in the 
region are likely to be pulled toward accommodating rather than 
balancing Beijing.
    Moreover, the situation today is more serious than is often 
admitted. The perception of American irresolution risks 
hardening into a judgment, and China's militarized islands in 
the Spratlys already pose more of a threat to U.S. forces and 
regional states than is commonly appreciated.
    So what should we do? Our actions should be guided by two 
overarching principles. First, we need to demonstrate greater 
resolve and willingness to bear and assume risk.
    Second, we need to build up our allies' and partners' 
military and economic strength. In the first category, we 
should do the following.
    Conduct more FONOPs and conduct them more assertively, 
while describing their purpose and justification more candidly 
and unabashedly.
    At the same time, we should also conduct intense presence 
operations beyond those designed to vindicate U.S. legal 
positions. We should further encourage other like-minded 
countries like Japan, Australia, India and France, which has 
offered to coordinate EU patrols, to conduct their own FONOPs 
and/or presence operations either with us or separately.
    Secondly, we should shrink the white hull loophole China is 
exploiting by making clear we will respond to coercion or 
aggression by such ``white hull ships'' with whatever means we 
deem appropriate, including military force.
    China must not get a free pass by using technically 
nonmilitary ships for coercion or worse.
    Third, we should deter Beijing's militarization of 
Scarborough Shoal by showing resolve, demonstrating our 
capability and studying the merits of extending the mutual 
defense treaty with Manila to the shoal.
    Resolve is important, but military and economic power are 
even more so. China will only realistically be constrained if 
we are sufficiently strong. Accordingly, we need to strengthen 
our own hand and those of like mind. Thus, we should do the 
following.
    First, increase and extend U.S. military advantages and 
presence in the region. This means prioritizing and maintaining 
our conventional advantage in the Western Pacific through 
efforts like the Third Offset and related initiatives.
    Congress should fund and support these initiatives forward 
into the next administration. It also means increasing combat-
credible U.S. presence in the region including by continuing to 
shift forces and especially higher-end forces to the region.
    Second, we should deepen military and other links with 
allies and partners and encourage their own indigenous efforts. 
This means expanding on the EDCA with Manila, despite the 
current turbulence in the relationship, capitalizing on Japan's 
interest in a broader footprint in the region and following 
through on openings to deepen engagement with states like 
India, Vietnam and Indonesia.
    U.S. efforts should especially focus on building up like-
minded states' ability to resist or complicate Chinese 
assertiveness, both at the gray zone level through assistance 
with maritime domain awareness and more patrol craft and the 
like, but also selectively at the higher end by helping to 
develop anti-access area denial capabilities of their own.
    Third, and perhaps more importantly, we need to maintain 
U.S. economic leadership and leverage by ratifying TPP. A 
successful effort to balance China depends on a sense in the 
region of U.S. economic strength and leadership, especially in 
light of China's efforts to translate its own economic power 
into political leverage through efforts like the ``One Belt One 
Road'' initiative. TPP is crucial to such a successful effort.
    Conversely, rejecting TPP would deal a blow, and perhaps a 
very formidable one, to the U.S. position in the region. The 
Congress should therefore provide its advice and consent to the 
pact's ratification as expeditiously as possible.
    In sum, if the United States and other states fail to stop 
the expansion of China's power over the South China Sea, 
Beijing's ambitions are only likely to grow. If we succeed, 
however, a more stable and enduring balance is likely to 
result.
    Accordingly, we must get the South China Sea right. I hope 
that the steps offered here would contribute to that goal. I 
look forward to any questions you might have.
    Thank you very much.
    [The prepared statement of Mr. Colby follows:]
    
    
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    Mr. Salmon. Thank you.
    Mr. Cheng.

  STATEMENT OF MR. DEAN CHENG, SENIOR RESEARCH FELLOW, ASIAN 
            STUDIES CENTER, THE HERITAGE FOUNDATION

    Mr. Cheng. Chairman Salmon, Ranking Member Sherman, 
distinguished members of the committee, my name is Dean Cheng. 
I'm the senior research fellow for Chinese political and 
security affairs at The Heritage Foundation.
    I would like to begin by expressing my appreciation for the 
opportunity to be here this afternoon and to note that the 
views I express are my own and should not be construed as 
representing any official position of The Heritage Foundation.
    My comments today will focus on the military and security 
side of the growing Chinese challenge to Asian maritime 
security.
    The past quarter century has seen a substantial improvement 
in the capabilities of the Chinese People's Liberation Army, or 
PLA.
    With the PLA Navy we have seen the introduction of several 
new classes of surface combatants. The newest Chinese 
destroyer, the Type 052D, is comparable to our own Arleigh 
Burke DDG-51 Class.
    The Chinese Type 054A frigate is both more capable and, let 
me note here, more reliable than our Littoral Combat Ship, both 
types of which are now sidelined due to engineering problems.
    We know the Chinese are producing multiple classes of 
submarines and at least one new aircraft carrier is under 
construction.
    China's naval combatants are among the youngest in average 
age, thanks to this major shipbuilding program. As important, 
China is not neglecting the key issue of maritime support.
    China is building a fleet train of logistic support ships 
which will allow the Chinese navy to operate for extended 
periods away from shore.
    Chinese submarines operating in the Indian Ocean have been 
accompanied by submarine tenders, allowing them to operate for 
longer periods away from Chinese ports.
    China, of course, has now also begun construction on a new 
facility in Djibouti, their first formal overseas military 
base, but probably not their last.
    Given the importance of air power for the Asia Pacific 
region, it is worth noting how the PLA Air Force, or PLAAF, is 
working on both the J-20 and J-31 fifth generation fighters.
    China is the only other nation to be fielding two stealth 
fighter programs at the same time. Chinese bombers are now 
overflying islands in the South China Sea, and as these 
aircraft can be equipped with long-range anti-ship and land 
attack cruise missiles, the signal being sent to China's 
neighbors are very clear.
    Again, the Chinese are also not neglecting the haft of the 
spear even as they sharpen the tip. China has introduced air 
transports to allow power projection and electronic warfare 
aircraft and AWACS to allow them the same kinds of advantages 
that our Air Force enjoys.
    Most worrisome is the new PLA Strategic Support Force, 
which brings together under one service space warfare, 
electronic warfare and network warfare capabilities, reflecting 
the ongoing Chinese effort to establish information dominance, 
which the Chinese see as the central key to winning future what 
they term local wars under informationized conditions.
    The objection of all of these various force improvements at 
the military level is to support China's move from a near-shore 
strategy of the 1960s to the near-sea strategy of the 1990s to 
today's far-seas approach, pushing Chinese military capability 
ever more extended distances from China's shores and deeper 
into the central Pacific and the Indian Ocean.
    The shift reflects not only Chinese growing capabilities, 
but a broader transition in Chinese strategic thinking, which 
affects not only the military but national security thinking as 
a whole.
    For the military, the extending reach is part of China's 
new historic missions, and while we must never forget that the 
People's Liberation Army is a party army where every officer is 
a member of the Chinese Communist Party, it nonetheless has 
also been charged with the responsibility of defending party 
and also national interests. Those national interests now 
include the seas, outer space and the electromagnetic spectrum.
    China increasingly sees its fundamental security as tied to 
the world's oceans. This should not be surprising. China's 
economic center of gravity is now on its shores.
    There is no longer a buffer of millions of square miles of 
territory between the Chinese economic center and the ocean's 
from which American and other allied capabilities spring.
    At the same time, China itself is also more dependent on 
the sea for access to resources of power--Chinese economic 
growth. China is now a net importer of not only oil but food, 
including wheat, barley, sorghum and even rice.
    Indeed, China is unique in being a traditional continental 
power that has become dependent on the seas. Napoleonic France, 
Wilhelmine Germany, the Soviet Union--all of these were 
continental powers for whom navies were luxuries or added 
benefits.
    For China, it has become a central part of their economic 
existence. Unfortunately, as a result, the Chinese effort to 
safeguard its interests is expressed by extending Chinese 
sovereignty over what had been international common spaces. 
China's efforts to bring the South China Sea into the umbrella 
of Chinese control has led to remarkably intemperate remarks 
regarding the Permanent Court of Arbitration's findings.
    The Chinese foreign minister termed them, ``a political 
farce.'' The Ambassador to the United States termed them, ``a 
matter of professional incompetence.''
    What this suggests, and what this should serve as a 
warning, is that the United States, as the keystone upholding 
international order and the main advocate for international law 
and norms, must respond strongly through a combination of 
FONOPs, arms sales, robust presence but, above all, countering 
Chinese efforts at political warfare to undermine the 
legitimacy of the international order.
    Thank you very much.
    [The prepared statement of Mr. Cheng follows:]
    
    
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    Mr. Salmon. Thank you.
    Dr. Searight.

STATEMENT OF AMY SEARIGHT, PH.D., SENIOR ADVISER AND DIRECTOR, 
SOUTHEAST ASIA PROGRAM, CENTER FOR STRATEGIC AND INTERNATIONAL 
                            STUDIES

    Ms. Searight. Thank you so much for this opportunity to 
talk about regional reactions to the Arbital Tribunal ruling.
    Just a little bit over 2 months ago on July 12th, the 
Arbital Tribunal, under the United Nations Convention on the 
Law of the Sea, or UNCLOS, issued its landmark ruling in the 
case brought by the Philippines against China involving 
maritime rights and entitlements in the South China Sea.
    In the weeks and months that have followed, the reaction to 
the ruling by the parties involved and others have played out 
more or less as expected.
    But what was very unexpected was the breadth and the 
decisiveness of the ruling itself, which delivered an 
overwhelming legal victory to the Philippines and, by logical 
extension, to other claimants in the South China Sea in a 
decisive legal defeat to China.
    In essence, the ruling does four things. First, it ruled 
that China's nine-dash line is not consistent with the Law of 
the Sea and invalidated Beijing's claims to historic rights 
throughout the nine-dash line.
    Second, features in the South China Sea are, at most, 
entitled to only 12 nautical mile territorial zones and do not 
generate 200-mile exclusive economic zones or continental 
shelves.
    Third, the panel found that China infringed on the 
traditional fishing rights of Filipinos by not allowing them to 
fish at Scarborough Shoal.
    And fourth, the tribunal held that China's in violation of 
its obligations under UNCLOS to preserve and protect the marine 
environment, finding that it created massive environmental 
damage through its reclamation activities.
    Now, the reactions to the ruling were very much predictable 
and predicated in most ways. China reacted swiftly and 
predictably, denouncing the tribunal as unjust and unlawful, 
declaring the award as null and void and has no binding force.
    And Former State Counselor Dai Bingguo, in a visit to DC 
just before the ruling, said that the ruling would be treated 
as just a piece of trash paper.
    The international community, led by the United States, 
including Japan, Australia, New Zealand and Canada, all put out 
very strong statements underscoring that the ruling was final 
and legally binding on both parties.
    And, also of note, India put out a relatively strong 
statement as well. The ASEAN reactions to the ruling were also 
rather predictable, with Vietnam, Singapore, Malaysia and, 
somewhat surprisingly, Myanmar, using language that originated 
in the Sunnylands declaration in support for resolving disputes 
peacefully through ``diplomatic and legal processes'' in 
accordance with international law and UNCLOS.
    Indonesia and Thailand also put out statements that were 
somewhat less robust, and the Philippines gave a very low-key 
response to its resounding legal victory. President Duterte had 
previously signaled that he wanted to move toward a soft 
landing with China.
    So, Manila signaled its willingness to move forward to find 
a way forward toward talks to resolve the disputes and 
President Duterte dispatched Former President Fidel Ramos to 
Hong Kong to meet with Chinese officials.
    These talks did not appear to yield any real progress, and 
there is still a major disagreement between the Philippines and 
China over whether the ruling should be the basis for any talks 
to resolve competing claims.
    Duterte has also done a number of things, as Chairman 
Salmon elucidated. He has made clear that he wants the 
Philippines to have a more independent foreign policy. But what 
that precisely means I think is still being--still being played 
out.
    The ASEAN reaction as a whole, as a grouping, ASEAN failed 
to project real unity in its response. It did not release a 
joint statement in the immediate aftermath.
    It did have a joint communique that was issued 2 weeks 
later when the foreign ministers of ASEAN met in Vientiane, 
Laos, and this joint communique had a very long section on the 
South China Sea, which acknowledged concerns by some ministers 
on land reclamation and escalation of activities at sea which 
have eroded trust and confidence, increased tensions and may 
undermine peace, security and stability in the region.
    So this was a way of providing an out to countries like 
Cambodia, which did not want to be on the record expressing 
concerns while giving voice to some of the concerns from 
Vietnam, the Philippines and others.
    The communique also used the Sunnylands language of ``full 
respect for legal and diplomatic processes'' but, 
interestingly, it lifted this language out of the section on 
the South China Sea, and put it in the introductory section of 
the joint communique, reportedly at the request of Cambodia.
    So as--you know, once again, this kind of revealed that 
ASEAN is a glass half empty and a glass half full in terms of 
its ability to deal with this issue and stand as a 
counterweight to China.
    It is easy to be disappointed with the ASEAN, but I think 
it is very important to continue the engagement. We have seen 
repeatedly the positive effects that the President's engagement 
at Sunnylands has had on the grouping and their ability to 
signal some limited degree of unity and cohesion on this issue.
    Secretary Carter is hosting the 10 ASEAN defense ministers 
in Hawaii next week, and it'll be very interesting to see what 
comes out of that.
    Obviously, the most important factor in terms of how the 
impact of the ruling will have will be very much about how 
China will respond.
    But let me just say three quick words about what role the 
United States can play.
    First, the United States should continue to visibly 
demonstrate that it will continue to fly, sail and operate 
wherever international law allows by conducting regular freedom 
of navigation operations and other presence operations in the 
South China Sea.
    Second, the United States should continue and accelerate 
capacity-building and training under the Maritime Security 
Initiative, foreign military financing and IMET. This is 
critical for enhancing capabilities of our key partners such as 
the Philippines, Vietnam, Indonesia and Malaysia and increasing 
interoperability with U.S. forces.
    And, finally ratifying UNCLOS would be a very positive step 
to take as well. The ruling of the Arbital Tribunal panel and 
regional reactions to the ruling cast a glaring light on the 
mismatch between U.S. rhetoric, on the importance of upholding 
international law and the need for all countries to be bound by 
rules and norms and the fact that the United States has not yet 
ratified the treaty.
    Simply put, our failure to ratify the treaty undermines our 
ability to fully work with our allies and partners in the South 
China Sea and insist that UNCLOS be used as a basis for 
resolving claims and arbitrating disputes.
    China says this quite loudly in the region. But I would 
note that other countries say this more quietly as well.
    [The prepared statement of Ms. Searight follows:]
    
    
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    Mr. Salmon. Thank you.
    Dr. Etzioni. Could you turn on your microphone? Thank you.

STATEMENT OF AMITAI ETZIONI, PH.D., PROFESSOR OF INTERNATIONAL 
 AFFAIRS, DIRECTOR, INSTITUTE OF COMMUNITARIAN POLICY STUDIES, 
                THE GEORGE WASHINGTON UNIVERSITY

    Mr. Etzioni. Asking a professor to say anything in 5 
minutes is absolute torture.
    But thank you, Chairman Salmon, Ranking Member Sherman, 
distinguished members of the committee for tolerating a much 
less alarmed view of the situation and for the suggestion that 
we should see the questions of the contested islands in the 
context of the much larger question of the United States-China 
relationship.
    If I had to say in one sentence what I'm trying to suggest 
is that the situation is particularly ripe for a grand bargain 
between the United States and China on all the outstanding 
issues.
    The reason I argue that that on many, many issues, on most 
issues, is the United States and China have identical or 
complementary interests; therefore, the part which is left to 
be settled is relatively small.
    These include the fact that both nations desperately need 
resources for very pressing domestic issues. I won't list them 
because they are terribly familiar.
    But we tend to overlook that China also has enormously 
pressing domestic--hence, any additional deflection of 
resources needed for domestic rebuilding, to military, 
pressures both sides.
    China, as the Paris Accord shows, is concerned about 
climate issues. Both nations are concerned about proliferation 
of nuclear weapons.
    Both nations are concerned of jihadist terrorism. I cannot 
take more time. There is a long list of complementary and 
shared interests.
    The remaining issues, in my judgment, should be approached 
in a very different manner, and this is not often discussed--I 
appreciate the opportunity to put it before you--and that is 
focusing on issues in which there is a high difference in 
saliency.
    There are some issues which are very important to us and 
much less important to China and on those we should expect 
China to give way, and there are some issues that are very 
important to them and next to unimportant to us.
    And a bargain arises here not by trading A for B's but by 
us giving in on things that don't matter to us in return for 
things very important to us. Let me give an example to make it 
much less abstract.
    The number-one United States priority today is not who is 
going to fish where or who is going to build what on those 
rocks.
    The number-one security challenge is, obviously, North 
Korea, which in a year or two could have long-range missiles 
equipped with nuclear weapons.
    The only way short of an outright war, which would be 
extremely troubling, to get a handle on this is a collaboration 
with China.
    That's something very important to us. China has no deep 
reason to avoid reining in Korea other than they face much 
higher costs than we if they do so.
    So, if we are going to get China collaboration in reining 
in North Korea, we have to find out something which is 
important to them but not to us. And a great example is we 
don't need a missile shield in South Korea if the North Korea 
nuclear problem is defanged. China is very worried about it 
because it is not clear to them that the same shield will not 
stop their missiles.
    So, here is a good example of giving up something we really 
basically don't need in return for something which worries them 
a great deal.
    My second example would be the situation in Pakistan. Most 
security experts I know agree that the greatest threat as far 
as terrorism is concerned is if they get their hands on nuclear 
weapons in Pakistan, which are not under their control.
    Some of them are on the front lines next to India under 
local control. There have been already six attempts by ISIS or 
al-Qaeda and other groups to get a hold of these nuclear 
weapons. I would like to add something here which is not often 
mentioned.
    We control our airways, our interests in the United States 
and land quite well. Our seas are completely open. There are 2 
million recreational vehicles that come and go at will. It 
would be extremely easy for a group of terrorists and a nuclear 
weapon to land at any one of our beaches.
    So China has leverage with Pakistan, much more than we. We 
are arguing if you are going to give them $1 billion or not. 
China is pledging $25 billion. China has given them very large 
control of their armament and such.
    So here is an example. We should be very interested in 
China joining us in reining in the nuclear programs of 
Pakistan. But, what in turn will speak to them, which is of 
very low cost to us, may involve reining in India.
    I am running out of time here, but the basic principle is 
clear. You should see what's happening over the islands in the 
larger context, starting with most important to us, what is 
second most important to us, and see if there are not things 
which China can help us on these fronts, which they would be 
more than willing to do for giving them things which we are all 
too ready to get rid of.
    Thank you very much.
    [The prepared statement of Mr. Etzioni follows:]
    
    
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    Mr. Salmon. Thank you.
    I'm going to turn to Mr. Sherman and let him make his 
opening statement.
    Mr. Sherman. And I don't know if there are other Democrats 
who would also like to make an opening statement. But none of 
them are indicating such.
    Mr. Chairman, thank you for letting me defer my opening 
statement until after the witnesses. This is not our first 
hearing on the South China Sea. It's not going to be our last.
    It's an issue that we should take seriously. But I think we 
need to lower the temperature. My fear is that we're making 
mountains out of reefs.
    We should keep in mind that it is not just China, but four 
other countries that added dirt on top of various reefs in 
order to make them bigger than God ever intended them to be.
    We should resist a tendency that I see at the Pentagon to 
try to reconfigure our military as one devoted to fighting 
China in the South China Sea.
    I think that we need to focus on the threats to the United 
States, especially terrorism, also North Korea--the witnesses 
have mentioned Pakistan--and not focus on who owns the natural 
resources, which are not proven to be significant at all, 
knowing that the one thing we're certain of is that those 
resources do not belong to us. We should focus on the threats 
to the United States.
    Now, we're told by those who try to hype the importance of 
these islands that $5 trillion of trade goes through the South 
China Sea.
    That's true--almost all of it in and out of Chinese ports. 
The control of these islands--and I'm not saying China should 
control them--would give them the capacity to blockade their 
own ports. Not a major problem.
    The second largest chunk of trade are oil tankers going to 
Japan, which may go through the South China Sea. Even if these 
islets were adjudicated to be a part of China, they could 
continue to go, and if they had to reroute themselves to go 
east rather than west to the Philippines, it might add a full 
penny to the cost of gasoline in Japan.
    I would point out that while it is in the interest of those 
at the Pentagon that want to see huge new naval expenditures to 
tell us that these islets are of critical importance, they're 
not that important to the countries that claim them.
    The Philippines wants to calm down. Japan is willing to 
spend only 1 percent of its GDP defending itself. They'd like 
more American tax dollars devoted to that effort.
    And then those who exaggerate the importance, say oh, 
what's at stake here is all of freedom of navigation and 
maritime law, as if this is the only maritime dispute--as if 
China is the only country that won't let UNCLOS determine who 
controls what.
    The fact is there are dozens and dozens of maritime 
disputes. The fact that there are maritime disputes, other than 
those involving China is rarely mentioned in this room because 
it has so little effect on the average American.
    I would point out that I was just meeting with the Prime 
Minister and founding President of Timor-Leste. They want to go 
to UNCLOS to deal with their maritime dispute with Australia. 
Australia refuses, and yet we're not having hearings about how 
Australia poses a threat to the world and free navigation and 
everything America stands for, and I'm sure there's an 
Australian side to this issue as well.
    But every other maritime dispute in the world not involving 
the United States is one we don't focus on.
    Finally, I will respond to one of our witnesses who talked 
about not building missile defense in South Korea.
    I would point out we don't need that missile defense in 
South Korea only if China defangs the North Korean nuclear 
program. I'm not sure they're willing to do that, and so to say 
we don't need it jumps the gun. We don't need it ``if.''
    And one of the other witnesses talked about TPP. I think 
TPP is an incredible bonanza for China because of two 
provisions. You got to get down on the weeds on this. One is 
the rules of origin so that goods could be 60 percent made in 
China and 40 percent finished in, say, Vietnam gets duty-free 
access to the United States.
    We get no access to the Chinese market under TPP, and 
that's if they admit, and you can be sure that if they admit 
that 60 percent was made in China the goods will actually be 80 
or 90 percent made in China.
    So this is 90 percent of the benefits of a free-trade 
agreement in the United States for China, 0 percent of our 
access to their market.
    And second, the agreement enshrines the idea that free 
trade doesn't require that you give up currency manipulation. 
Those are two incredible victories for China, and they didn't 
even have to pay their diplomats to show up for the meetings. 
That's spectacularly good negotiating.
    I yield back.
    Mr. Salmon. Thank you.
    I would like to ask the panellists, why should we care 
about the South China Sea? Is it the same as the disputes that 
Australia has or other disputes across the world when it comes 
to maritime space? Why is this one significant? Any 
panellists--Dr. Searight?
    Ms. Searight. I will just say a few words. I'm sure others 
will chime in.
    I would say that the reason why these disputes are 
significant is this is not about rocks and reefs. It's about 
rules and principles, and U.S. leadership in the region has 
long upheld a regional order based on international law, based 
on freedom of navigation, open commerce, an open inclusive 
system that all the countries in the region including China 
have benefited from, and countries in the region are looking to 
the United States to continue that leadership.
    And so the anxiety in the region as China has launched into 
massive reclamation activities and built military 
infrastructure on those outposts--those artificial islands, 
which far outstrip anything--any other efforts that other 
claimants have done and other claimants, certainly, have 
engaged in reclamation and infrastructure development.
    But China has done it on a massively different scale--over 
3,000 acres in a very short period of time of artificial island 
building and all of the kind of coercive activities that have 
surrounded those efforts as well: Harassing fishermen, not 
letting Philippine fisherman, for example, in to fish in 
Scarborough Shoal vicinity, which has been their historic 
fishing grounds forever.
    I mean, this has caused real anxiety in the region, and 
there is a strong demand signal--strong appetite for the United 
States to continue to step up and show support, not because we 
care ultimately over how those disputes are resolved.
    If the Philippines does want to engage in talks with China, 
and they find a way to get to the table, I think the United 
States should support those efforts to find some sort of 
peaceful resolution.
    But, you know, if countries want to capitalize on the legal 
victory that has really spelled out some of the obligations 
under UNCLOS, you know, I think the United States has a real 
obligation, certainly in order to maintain its leadership by 
continuing to stand with the rule of law.
    Mr. Salmon. I just have a follow-up question, and I will go 
to you next, Mr. Colby. But my follow-up question is kind of an 
adjunct to what I just asked.
    If the United States takes a back seat on this issue and we 
don't really weigh in on what's going on in the South China Sea 
with some of these disputes, what could be the outcome, and why 
should we care?
    Mr. Colby. Thanks very much, Mr. Chairman.
    I mean, I think the legal issues are very important but 
fundamentally this is a strategic issue and what China appears 
to be pursuing or feeling its way toward with these salami-
slicing tactics is ultimately military and political economic 
dominance, which will allow them not just to project power in 
the immediate area but beyond and not just in the immediate 
seas.
    And I think the fundamental issue, sir, that you're 
alluding to is why would China stop and why would we expect 
them to stop.
    If they're able to push forward and make a lot of progress 
and achieve power that they can use then why stop? I think we 
know, given their behavior, their ambitions which have expanded 
markedly, even in their own rhetoric and certainly their 
behavior in the last few years as well given their ideological 
system, their approach to domestic international order, it is 
going to be in a way that's unfriendly to the kind of order 
that we have built and sustained.
    So, you know, just thinking about it rationally, if they're 
smart poker players, they're going to keep--they're going to 
keep raising if they're able to do so successfully.
    And I think the other point, sir, that you're raising is 
right now is crucial because there are a whole lot of allies, 
partners and fence sitters and a lot of those allies, partners, 
and fence sitters and they're determining right now, okay, 
China is Asia's rising behemoth. Is it safe, is it prudent to 
affiliate with the United States to work to constrain and 
balance China's assertiveness? They're making decisions right 
now, and it is going to be a tough and continuing struggle.
    If we are tepid and irresolute now, when we still have so 
many advantages, what does that say about the future? You have 
to say if you're a lot of those countries, I better make my 
case now because I don't want to stand naked before China, 
having alienated them.
    Mr. Salmon. Dr. Etzioni.
    Mr. Etzioni. Thank you. This is very difficult.
    I am surprised that the issue of freedom of navigation 
keeps coming up. As Congressman Sherman pointed out, why would 
China possibly want to prevent shipping from coming and going? 
I don't know they would survive 5 minutes.
    I mean, if there is any nation in the world which is 
dependent on regular flow of raw material and energy from 
overseas, it is China.
    I mean, nobody in their right mind thinks they would stop 
American ships and then Chinese ships would sail through.
    So whatever nationality of people coming up, I think this 
question of freedom of navigation is really a difficult 
argument to follow, if you agree or disagree.
    Second, as to the enormous military threats these islands 
will pose, they are basically like an aircraft carrier which 
lost its engines. They're marooned. Whatever two prop guns they 
have and one small Cessna, whatever, what are they going to do 
with it?
    They pose no serious military there; and, if there ever was 
a war, they can't move so they would be eliminated in the first 
5 minutes.
    I mean, there can be all kind of reasons. As to the 
question that they violated the rules and, therefore, if we 
stand here they're going to overrun us everyplace.
    As Congressman Sherman pointed out, if you allow the rules 
to be violated every Monday, Tuesday and Wednesday elsewhere 
and then we are now going to insist on them being protected in 
China, I am not sure that that will make us a very legitimate 
protector of rules.
    The place to look at is not what's happening necessarily in 
Australia. The place to look at is what happened in the Arctic, 
where Russia grabbed a huge amount of territory and we looked 
the other way.
    So yes, if you want to enforce the rules, yes, I very much 
agree with the previous witness. First of all, we should sign 
the rule ourself and second----
    Mr. Salmon. Thanks.
    Mr. Cheng.
    Mr. Cheng. Sir, in response to this rule, I'd like to 
respond to this at three levels.
    The first is the issue of military domination of the South 
China Sea. The Chinese were very clearly intent upon creating a 
strategic buffer throughout the South China Sea which would 
neutralize one of our key capabilities that we currently have, 
which is our undersea element.
    The ability of the Chinese to create a massive network, 
which they openly write about of sonar surveillance systems 
with additional anti-submarine helicopters and the like from 
the various runways that they are building would pose a really 
serious jeopardy to the ability of American submarines to 
operate there.
    Second of all, on the issue of FONOPs and why would the 
Chinese possibly cut their own throats, this goes to 
fundamentally larger issue, which is that China is, unlike 
Timor and Australia and et cetera, not simply focused on 
territorial sovereignty, but on the issue of rewriting the 
fundamental rules.
    The Chinese treat their exclusive economic zone not as 
unique--about economic exploitation, but as an extension of 
territorial waters.
    The same way we see with the East China Sea air defense 
identification zone, a demand that countries behave as though 
international airspace is actually Chinese territorial airspace 
where other nations must file flight plans and gain permission.
    So, would the Chinese necessarily cut their own throat by 
demanding other people file ship movements, et cetera? That 
depends on how far we are willing to push that and how far we 
are willing to accept a fundamental rewriting of those 
international rules.
    And finally, just very quickly, how would the region react? 
We see already that South Korea had to hem and haw an extensive 
amount of time before it chose to go ahead with THAAD because 
of Chinese pressure.
    We see the Chinese pushing Vietnam very hard by declaring 
their oil rigs ``mobile national territory.'' That is a Chinese 
description, not mine, and have now apparently deployed 
military radars on their oil rigs.
    So, the question that we have to ask is, how will the 
region react if we step away this one time? But, as my co-
panellist has pointed out, the broader issue of what that 
presages and the implications of allowing China to rewrite not 
only the rules but to employ ever greater pressure.
    Mr. Salmon. Thank you.
    Mr. Sherman.
    Mr. Sherman. Thank you.
    I want to make sure that my views are clear. I am not 
saying we should step away. I am not saying these are 
unimportant.
    But, when you compare these rocks to North Korea's nuclear 
program, to Pakistan--a state with over 100 nuclear weapons and 
a government is hard to view as a single unified entity--when 
we look at the threats of extremist Islamic terrorism, I would 
say these rocks are not among the top three threats to the 
United States and I didn't even mention the Iran nuclear 
program. First time we have had a hearing when I haven't 
mentioned the Iran nuclear program.
    Mr. Colby, Mr. Cheng, you say that control of these island 
would be a terrible strategic danger to the United States if 
China got that.
    But our position is we want this taken to UNCLOS which may 
very well award some of these islands to China, perhaps the 
very ones they need should the United States willingly accept 
any adjudication that puts China in control of islands when you 
regard the Chinese control of these islands as a strategic 
threat.
    Or, do we bow to Dr. Searight when she says it is a matter 
of rules and principles, and if that means they have their foot 
on our neck by controlling these strategic islands, so be it if 
they won it fair and square in an adjudication? Can we--yes?
    Mr. Cheng. I think that there is something of a difference 
between the person who walks into the 7-11 and pays $10 for a 
bottle of Mountain Dew and the person who walks in and takes 
the Mountain Dew.
    Mr. Sherman. But the point you are saying is if this 
Mountain Dew is capable of being a huge strategic threat to the 
United States, then maybe it doesn't matter.
    We are trying to separate here--I am trying to separate 
whether what's at issue here is the principle or the Mountain 
Dew, and you seem to say it is the principle--that if they get 
the Mountain Dew legitimately and they control these islands 
and they have the sonar equipment because UNCLOS said that some 
of these islands belong to them, that's fine. They paid $10 for 
the Mountain Dew. They get the Mountain Dew and they get the 
sonar, too.
    I want to go on to Dr. Searight. You talk about rules and 
principles being at stake. Aren't they just as at stake when 
Russia occupies three Japanese-inhabited islands near Sakhalin? 
Aren't they just as at stake in the dispute between Oman and 
Yemen, the dispute between Iran and the UAE, France and the 
Comoros? Why is it that rules and principles are at stake only 
when we have a chance to confront China?
    Ms. Searight. Of course rules and principles are at stake 
in all of those cases. But I think the reason why it is so 
salient here is because these disputes affect so many countries 
in the region. There are many claimant states----
    Mr. Sherman. Well, excuse me. There are, like, four or five 
countries in these disputes.
    Ms. Searight. Right.
    Mr. Sherman. We've got a dispute between Madagascar, the 
Comoros and France. There's three. You can throw in Iran and 
the UAE and you're up to five.
    Ms. Searight. Right. But then----
    Mr. Sherman. So it is not like oh, principles are at stake 
when there are five countries involved----
    Ms. Searight. There is----
    Mr. Sherman [continuing]. In separate disputes but all with 
China but three countries that's not a principle.
    Ms. Searight. There is--there is, you know, a community in 
southeast Asia, which there are four claimant states, and they 
have been dealing with China and with each other on these 
issues for a long time. And this is why----
    Mr. Sherman. Let me finish.
    Ms. Searight. Can I just----
    Mr. Sherman. Let me--I've got limited time. Let me contrast 
this.
    These islets have no proven economic value, compared to the 
dispute between East Timor and Australia that involves the 
Sunrise oil fields with $40 billion of potential oil and gas 
reserves.
    Our principles are at stake. Should we deploy the U.S. Navy 
to force Australia to accept an UNCLOS decision? Is there a 
threat to the world because Australia doesn't accept UNCLOS?
    Ms. Searight. This is why these disputes are so important. 
China has been rising dramatically as an economic power for a 
couple of decades. About a decade ago, it reached sort of an 
understanding with these countries that it would resolve these 
disputes peacefully.
    It would put some of the real disputes on the shelf for a 
while. It signed a declaration of conduct in 2002 and off we go 
with China's further rise.
    This is all about how the region, in partnership with the 
United States, can or cannot shape Chinese behavior. With China 
now going down a much more coercive track and seeking to 
intimidate, coerce, punish countries that don't give in to 
China----
    Mr. Sherman. So the principle here then isn't maritime 
adjudication. The principle here is oppose China because--and 
you talk about rising powers. Over the last 10 years Russia has 
been rising. They occupy inhabited Japanese islands not to 
mention the maritime disputes.
    Iran is a rising power. They have a conflict they refuse to 
adjudicate with the UAE. So, China is the only worthy adversary 
of our Pentagon, and it is perhaps just a coincidence that all 
these other things that seem to be in the same category don't 
merit our attention in much of the same way. I mean, we are not 
going to have hearings here on Timor-Leste's dispute with 
Australia.
    I yield back.
    Mr. Salmon. Thank you.
    Mr. Rohrabacher.
    Mr. Rohrabacher. Mountain Dew, huh? Mountain Dew. I think 
I'd be more disturbed if they came in----
    Mr. Salmon. Yesterday, it was Skittles, and today it is 
Mountain Dew.
    Mr. Rohrabacher. I would be much more disturbed if they 
were going into the 7-11 and taking beer, for example, and most 
importantly, if they were taking beer and were armed with a 
shotgun and had a bulletproof vest that might be of concern.
    Yes, even more concerning than the value of the beer is 
that there is someone there with a shotgun, in your 
neighbourhood, with a bulletproof vest who feels perfectly 
comfortable to going into a store and using that shotgun to get 
what they want.
    That's sort of what we are facing now, isn't it? The 
dynamics are changing in the South China Sea. This hearing is 
about whether or not we should be really concerned about it.
    Mr. Sherman and I agree on many things in this committee, 
but I am very concerned about it. This is something that 
warrants concern.
    The fact is that what we are talking about is there has 
been a massive increase in power in China over the last four 
decades and over the last four decades there hasn't been any 
liberalization of Chinese Government whatsoever.
    If we think that liberalization means there would be less 
chance of confrontation of war, what we have then is a massive 
expanse of power, thus an increase in the chance of armed 
conflict and somebody coming in and stealing more than the beer 
or Mountain Dew.
    Maybe, for example, the Vietnamese may understand this 
because a few years ago in this very area that we are talking 
about in the South China Sea, Vietnamese were massacred. 
Unarmed Vietnamese standing on some kind of a reef were just 
shot down by Chinese warships and so the Vietnamese haven't 
forgotten that.
    Maybe some of us don't know about that. But the Vietnamese 
remember that, and they are scared to death of what's going on 
in the South China Sea.
    Now, so if the security dynamics are changing, I would 
agree that that doesn't necessarily mean the United States has 
to be the one to take up all the slack. We always take up the 
slack. We are always the ones that have to jump out and pay the 
bill, send the troops, drive our own country into bankruptcy.
    Well, we can't do that anymore. That's another dynamic at 
play in this world. I think it is time that we look, and 
realistically, at the Chinese expansion of power in this 
society that's probably the world's worst human rights abuser 
in the world in the sense of the magnitude of it. So, how do we 
balance that off?
    Let me just ask the panel very quickly. Doesn't it mean 
that we should be thinking about working with Japan and 
rearming and making Japan a more viable force in the area to 
counteract the Chinese force that's improving?
    Is that a plan, rather than trying to have the United 
States simply make up for it ourselves? Right down the panel, 
please.
    Mr. Colby. Sir, if I could comment. I agree with you 
completely, and I actually think that the inequities of the 
burden sharing are a real problem.
    But, actually, I think the way to address it--first of all, 
because China is so powerful, we do need to take the lead.
    But, actually, that leadership role will be more likely to 
catalyse that burden sharing because it is going to be so 
competitive with the Chinese that the Japanese are going to 
need to, and they should spend more. It's embarrassing they're 
only spending 1 percent on defense.
    Mr. Rohrabacher. You know, I would think of it more as a 
partnership with Japan.
    Mr. Colby. Yes.
    Mr. Rohrabacher. Japan is a modern----
    Mr. Colby. Yes.
    Mr. Rohrabacher [continuing]. Powerful country that we have 
kept weak in their ability to influence international events 
like the ones we are talking about. Now it is time to become a 
partner with Japan and other countries in that region, but 
especially with Japan.
    Mr. Cheng?
    Mr. Cheng. Sir, Japan, of course, has certain limitations, 
particularly on the nuclear side, that I am not sure we want to 
cross.
    So while we would--I would agree with you that Japan needs 
to play a larger role, we do need to recognize that there are 
limits but that also means that there are other players in the 
region that can also play a larger role--India, for example, 
which has a ``Look East'' program, we now are allowed to sell 
arms to Vietnam.
    We have limited our relationship with Thailand in the wake 
of their coup, a policy that we did not do, for example, with 
regards to Egypt. Perhaps we should reexamine whether or not we 
should expand our relations with Thailand.
    There are a number of other countries in the region that 
could also be part of that burden-sharing effort. So while I 
absolutely agree with you, I think we need to look beyond just 
Japan.
    Mr. Rohrabacher. Just to mention, I don't think that it 
would be necessary to have Japan or anyone else have nuclear 
weapons in order to increase the offset for Chinese strength in 
the non-nuclear area.
    I think my time has run out, but do you want to have the 
other ones comment on that--the other witnesses? Maybe the 
other two witnesses would like to comment on maybe a rising 
partnership between India and Japan rather than the United 
States having to face it ourselves. Yes, sir.
    Ms. Searight. Yes, I completely agree. I think India is 
going to be an increasingly important partner in the future. I 
would add Australia as well.
    I think that the more that we do together with Japan, 
Australia and India not only does it, I think, send a very 
strong signal to China, but it sends a signal to the region as 
well.
    You know, the region is very happy to see the like-minded 
large countries work together, especially when we include some 
of the smaller southeast Asian countries in terms of 
multilateral exercises or other kinds of things--joint capacity 
building efforts that we are starting to do with Japan and 
Australia with some southeast Asia countries like the 
Philippines. This is absolutely, I think, the way to go to 
network these aligned partnerships together.
    Mr. Etzioni. May I? I think joining Japan is about the most 
assured way to push all the possible buttons in China. If we 
are to really push them to mobilize and spend on arms, then we 
should do this with Japan.
    I was born as a Jewish child in Nazi Germany, and I am 
following Germany. Germany really turned around. Never again. 
Japan hasn't yet admitted to all of the horrible things it did 
in China. So relying on Japan as a lead partner is highly 
provocative.
    Next, every time we do one of those military alliances with 
a country in the region, we give them a finger on our trigger, 
and so we already extended a military treaty with Japan to 
those miserable islands. Any dispute about the islands now 
requires us to go to war, basically. So every time we involve 
one of these people.
    As to the China military buildup, it built up from such a 
small base--you can talk percentages. They can increase 100 
percentages, and they're still 100 miles from where we are.
    It's symbolized by the fact that we have 11 aircraft 
carriers, and they have one. So I don't want to take more time. 
I know you know the answer. They are very far from the massive 
threatening.
    Mr. Rohrabacher. Admittedly, it started from a small base, 
but we have an expansion of power and, at the same moment, that 
doesn't strike me you have to worry about it. But, at the same 
moment, you happen to notice they are trying to make incredible 
territorial claims in areas.
    Then they're going to say who gets to fly over large areas 
of the South China Sea, then there's something to be worried 
about.
    Mr. Salmon. We need to move to Mr. Bera.
    Mr. Bera. Great. Thank you, Mr. Chairman, and thank the 
witnesses.
    I look at this slightly differently than my colleague, Mr. 
Sherman, in the sense that China is not following the rule of 
law and how we approach this is certainly important in today 
and the message that we send to the region about our 
relationship with the region--our commitment to the region.
    But it also sets the stage for, you know, avoiding a 
kinetic conflict, you know, a decade from now or two decades 
from now.
    Absolutely, Dr. Etzioni, we do hold military advantages far 
and away right now. But what we are doing is we are engaging in 
a region that is unsure of what the future looks like, that 
increasingly is unsure of what our commitment to the region 
looks like. You know, there's very much an interest in building 
commerce and trade and economic relationships.
    Trade is a tool of diplomacy. Trade is about a lot more 
than the movement of goods and services. It's also an 
opportunity to reduce future tensions with China and bring 
China into the fold here.
    So as opposed to always looking at this as an adversarial 
relationship--I mean, China certainly is probing us to see what 
we are doing and, you know, if we stick with that Mountain Dew 
analogy, if they go in and walk out without paying for that 
Mountain Dew today, tomorrow it might be a six-pack of Mountain 
Dew. They're testing to see what we will do and what our 
response will be.
    That is why how we respond and stand up in a forceful way 
to the South China Sea. Yes, I am not worried that that is 
going to tip the balance of power today, but if we do nothing, 
well, they will take a next step.
    And the reason why the South China Sea is so important: It 
is one of the most important throughways and seaways of goods 
that are moving in and out of Asia.
    So making sure there's rule of law, that those seaways are 
open are not just important to us, but they're important to the 
countries in that region.
    And right now, you know, with the fact that TPP looks 
pretty precarious, they're wondering what we are going to do 
with the South China Sea.
    There is a real conversation going on in the region about 
what our commitment is. It's not all pessimistic.
    I mean, the relationships that are building with India, you 
know, the fact that they are now our largest partner in naval 
exercises and the growing at least military-to-military, 
defense-to-defense partnership with India is a positive step.
    The recommitment to the Philippines, to Vietnam, the 
opening up of these relationships are all positive steps. And 
it is not appropriate to say well, we are just focused on 
China. We are doing multiple things.
    Clearly, North Korea is a real threat. Clearly, an unstable 
Pakistan is a real threat. Clearly, you know, tensions in the 
South China Sea are real threats.
    What we want to avoid, though, is aircraft that are just 
flying around or ships that--you know, much of what you see 
happening in the Persian Gulf right now where you see 
provocative movements, one mistake leads to a war sometimes or 
leads to conflict. We want to avoid that.
    I also think it is in China's interest. If we have this 
leverage, if we have economic leverage as well as military 
leverage, it does give us an opportunity to pull China into--to 
have a seat at the table and to talk about how we create this 
partnership.
    They clearly are a major force in the 21st century. Let's 
try to figure out how we move this in a direction of mutual 
benefit and mutual partnership as opposed to adversarial 
relationships.
    I guess, you know, the minute I have left if you'd like to 
talk about why this is important in addressing today in the 
context of avoiding that conflict a decade from now. Mr. Colby.
    Mr. Colby. Thank you very much, Congressman. I pretty much 
agree with everything you said.
    So, just kind of building on that, I mean, I'd just say 
one--the one note of caution I'd sound is that I think our 
military advantages in the region are not as great as are 
sometimes supposed.
    There's some very good unclassified analysis, for instance, 
by the RAND Corporation in their Scorecard report last year 
that showed that in a contingency over Taiwan or the South 
China Sea, if you just look out a couple years and the trend 
lines are not good--it could be very stressing for the United 
States and the nature of the conflict would be so difficult to 
control that it'll be a much larger thing.
    And if you think our resolve is these are a bunch of rocks, 
the Chinese are aware of this, and that's why this perception 
now of trying to influence and show that we are going to stay.
    And I think, addressing the ranking member's point, why it 
is so important to focus on this issue because China is the one 
country that could plausibly defeat us in a large conventional 
war if we don't play our cards right.
    The Russians, if we don't play our cards right, could use 
nuclear weapons or the threat to terminate a conflict. But the 
others--you know, North Korea presents a very, very serious 
problem but the Chinese, if we don't play our cards right in 
the Western Pacific, we could be on the losing end and that 
will be a very, very different Asia.
    So I think that's why we've got to front load resolve and 
show that we are committed and that we are focused, and then 
make the investments to maintain that high end. I think that is 
what the Pentagon is trying to do and I commend them for it.
    Mr. Salmon. Mr. Chabot.
    Mr. Chabot. Thank you, Mr. Chairman, and I have to say it 
is been a very interesting hearing, so I commend you for 
bringing this quality panel here together. Really, it has been 
very interesting.
    Mr. Cheng, let me begin with you, if I can. President 
Reagan famously had the goal of a 600-ship Navy. Does President 
Obama share that goal?
    Mr. Cheng. Sir, I work for The Heritage Foundation, and I 
think it should be noted that President Obama generally doesn't 
really talk to us over at The Heritage Foundation.
    That being said, I think that what we see right now is not 
a 600-ship Navy. There doesn't seem to be anything in the U.S. 
Navy shipbuilding plan to approach that number.
    Now, admittedly, of course, we are under different 
circumstances than we were in the 1980s. That also being said, 
the kind of Navy we had with a 600-ship Navy was one that could 
support two simultaneous major regional contingencies.
    It was one that could also fulfill a very robust strategic 
deterrent role. It was one that had ships such as the Spruance, 
the Oliver Hazard Perry, the Ticonderoga, which operated 24/7 
around the world.
    When we look at how well or not well the LCS is operating, 
when we consider the fact that we now operate without an 
aircraft carrier in the Mediterranean on a regular basis. We do 
not have the Navy that we did then to fulfill the missions of 
requirements that we seem to still have.
    Mr. Chabot. Thank you. And it is my understanding I think 
we are down to, I am not on Armed Services, but we are down in 
the 250s, I believe, now as far as ships. And yes, some of them 
are more powerful than the ones when we--that we had when the 
great Ronald Reagan was President of this nation. But it is 
pretty scary, I think.
    As a matter of fact, if I have my facts straight, I believe 
that for the last 25 years that China has increased its 
military expenditures over the previous years by double digits 
for the last 25 years whereas I think this President's stated 
goals has been to reduce substantially all the branches of the 
government. I think all the--not the branches of the 
government. I mean, I think much of the government other than 
the military should be dramatically reduced.
    He seems to think one of those three branches is much more 
important than, historically, I think our founders envisioned a 
couple of the other branches.
    But as far as the numbers, I think we are going to be down 
to numbers in our army that are pre-World War II. I think we 
have the smallest air force that we have had since we had an 
air force. Shipbuilding and number of ships is going in the 
wrong direction. So it is absolutely frightening, I think, 
particularly when you look at the world as it is today.
    My colleague, Mr. Rohrabacher, was talking about has China 
come along. Have they liberalized when we have done things like 
given them most favored nation, when we trade with them all the 
time?
    I think we have bent over backwards to have a cooperative 
relationship with them. Have they, just talking about a couple 
areas--maybe I've missed something--but have they changed their 
view toward Taiwan, for example, recently?
    Mr. Cheng. No, sir. In fact, China has suspended all formal 
communications with Taiwan since the election of a DPP 
President.
    Mr. Chabot. All right. That's what I thought.
    Mr. Salmon. I understand they also just cut the number of 
visas from Taiwan to China almost in half----
    Mr. Cheng. I believe that's----
    Mr. Salmon [continuing]. Just because of the election of 
President Tsai.
    Mr. Cheng. Yes, sir. I believe that's the case.
    Mr. Salmon. In retaliation or to----
    Mr. Chabot. Yes. Thank you, Mr. Chairman.
    Have they moderated their views towards, say, the Falun 
Gong recently? Did I miss that, by any chance?
    Mr. Cheng. No, sir. I believe Falun Gong is still 
considered a criminal organization in the context of the 
People's Republic of China.
    Mr. Chabot. Are they still rounding people up, putting them 
in hospitals, murdering them and selling their body parts?
    Mr. Cheng. There are still reports to that effect, sir. 
Yes, sir.
    Mr. Chabot. I thought maybe they were still doing that.
    How about the big aside, suddenly Free Tibet? Did I miss 
that one, by any chance? Have they changed their views toward 
Tibet?
    Mr. Cheng. No, sir. I believe that, in fact, if you meet 
with the Dalai Lama, the Chinese Government still expresses 
extreme displeasure.
    Mr. Chabot. And how much effort have they made, really, to 
rein in, say, North Korea, which actually could be helpful to 
not only that region to--but world peace if they would actually 
do it? Have they done much of anything in that area?
    Mr. Cheng. While they have announced sanctions and the 
like, there have been a number of open news reports about 
continuing Chinese trade, Chinese investment, Chinese companies 
continuing to operate.
    There has been highlighted a case of U.S.-Chinese 
cooperation cracking down on a single Chinese company. But that 
has not affected, for example, the flow of oil or food into 
North Korea.
    Mr. Chabot. Thank you. Because that's something they really 
could do that would make a big difference to the whole world. 
I've long held the view that the only thing that will ever 
really get their attention is if South Korea and Japan--they 
don't have to have a nuclear program, but they ought to 
seriously think about one.
    I think that would get China's attention and probably about 
the only thing that would get them to back down and to 
cooperate with respect to North Korea. I've only got a minute 
left.
    I had a million questions, but let me turn to you if I can, 
Mr. Colby. You had mentioned the TPP--Trans-Pacific 
Partnership--and how if we don't move forward with it that it 
is going to send a message that the U.S. is otherwise engaged, 
although the public's view tends to be that that's just--that 
just helps China, you know, which is ironic because the reality 
is it is just the opposite.
    If the U.S. doesn't with our allies establish the rules 
there then ultimately China will because they're the big 
partner in the neighbourhood and they bully everybody around.
    But to be quite honest with you, both in the House here to 
some degree and certainly in the Senate, a lot of people are 
running for the high grass on that one. We've got both 
Presidential candidates--Hillary Clinton, who had said it was 
the gold standard, but when Bernie was chasing her around she 
went into the high grass too and switched completely, and 
Donald Trump, of course, has also come out strongly against it. 
So, do you see any hope there or what----
    Mr. Colby. Well, Congressman, I hate to--I don't know if 
this is good form, but I'd beg to ask you that question. I hope 
so. I mean, you know, I am certainly no economist and I don't, 
you know, accept appeals to authority on that basis.
    But I did notice that I think the heads of the Council of 
Economic Advisors of the last, you know, six or seven 
administrations of both parties suggested it was good on trade 
grounds.
    I am sure it is not perfect but no trade agreement, by 
definition, is going to be perfect, and I do know it demands a 
lot of sacrifice from countries like Japan that have resisted 
opening up for a long time.
    And I think you put it exactly right, sir. If we don't set 
the terms of trade, this is essentially a gift to China, and I 
think Prime Minister Lee of Singapore and Prime Minister Abe of 
Japan and others have been quite frank in public, and I can 
only imagine in private, about what it will do to our position, 
but also to the kind of region that we want.
    And, you know, when I am in Asia you often sort of get this 
idea oh, the Americans, are they going to be around? I point 
out, look, the United States, well before it got involved in 
Europe, opened up Japan in 1853 with the black ships and, you 
know, the open door policy of John Hay.
    And this has been--this has been something that goes back 
to the beginning of the Republic 200 years ago. This is a core 
interest of the United States, and so no one should think that 
this is something new that we took on as part of post-World War 
II.
    No, this is really core and, you know, I know foreign 
policy arguments don't necessarily trump pocketbook ones, but I 
think they should be balanced, and I hope that Congress will 
move forward on it.
    Mr. Chabot. Thank you very much. My time has expired, Mr. 
Chairman.
    Mr. Salmon. Thank you.
    We talked today about Mountain Dew and beer and all kinds 
of other things. I will use the Fram man commercial. He always 
used to say, ``Pay me now or pay me a lot more later.''
    And I think that's the situation that we are in today. If 
we want to have a horrible problem, let's just ignore it 
because the more and more China bullies some of our partners in 
the region and we acquiesce or don't take part, the more 
position and ground that they gain it'll be very untenable 
maybe a few years from now.
    And maybe the solutions then will either be impossible or 
incredibly painful as opposed to if well, if we act today and 
do what we need to to make sure that the rule of law is 
returned to that maritime space, then I believe that by doing 
that we actually avoid a much greater conflict that would be a 
lot more painful to the United States.
    And so I really appreciate the witnesses that came today. 
It was a very, very informative session and my hope is that our 
leaders in this country keep a sharp eye on that problem 
because if it escalates it could escalate very quickly and very 
badly and the costs of dealing with a problem that escalates 
out of control are far worse than tackling it now when it is 
manageable.
    So I thank the witnesses for being here today, and this 
subcommittee is now adjourned.
    [Whereupon, at 3:15 p.m., the subcommittee was adjourned.]

                                     

                                     

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