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64–008PDF 2011

ASSESSING CHINA’S BEHAVIOR AND ITS IMPACT

ON U.S. INTERESTS

BRIEFING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

JANUARY 19, 2011

Serial No. 112–2

Printed for the use of the Committee on Foreign Affairs

(

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

(II)

COMMITTEE ON FOREIGN AFFAIRS 

ILEANA ROS-LEHTINEN, Florida, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

STEVE CHABOT, Ohio 

RON PAUL, Texas 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

GUS M. BILIRAKIS, Florida 

JEAN SCHMIDT, Ohio 

BILL JOHNSON, Ohio 

DAVID RIVERA, Florida 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ANN MARIE BUERKLE, New York 

RENEE ELLMERS, North Carolina 

VACANT 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

BRAD SHERMAN, California 

ELIOT L. ENGEL, New York 

GREGORY W. MEEKS, New York 

RUSS CARNAHAN, Missouri 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

DENNIS CARDOZA, California 

BEN CHANDLER, Kentucky 

BRIAN HIGGINS, New York 

CHRISTOPHER S. MURPHY, Connecticut 

FREDERICA WILSON, Florida 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

VACANT 

YLEEM D.S. POBLETE, Staff Director 

RICHARD J. KESSLER, Democratic Staff Director 

(III)

C O N T E N T S 

Page

BRIEFERS 

Mr. Larry Wortzel, commissioner, U.S.-China Economic and Security Review 

Commission ........................................................................................................... 7

Mr. Gordon Chang, author of ‘‘The Coming Collapse of China,’’ Forbes.com 

Columnist .............................................................................................................. 22

Yang Jianli, Ph.D., president, Initiatives for China and Harvard Fellow .......... 27

Mr. Robert G. Sutter, visiting professor, School of Foreign Service, Georgetown University .................................................................................................... 31

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE BRIEFING 

The Honorable Ileana Ros-Lehtinen, a Representative in Congress from the 

State of Florida, and chairman, Committee on Foreign Affairs: Prepared 

statement .............................................................................................................. 3

Mr. Larry Wortzel: Prepared statement ................................................................ 9

Mr. Gordon Chang: Prepared statement ............................................................... 24

Yang Jianli, Ph.D.: Prepared statement ................................................................ 29

Mr. Robert G. Sutter: Prepared statement ............................................................ 34

APPENDIX 

Briefing notice .......................................................................................................... 64

Briefing minutes ...................................................................................................... 65

(1)

ASSESSING CHINA’S BEHAVIOR AND ITS 

IMPACT ON U.S. INTERESTS 

WEDNESDAY, JANUARY 19, 2011

HOUSE OF REPRESENTATIVES, COMMITTEE ON FOREIGN AFFAIRS, Washington, DC. 

The committee met, pursuant to notice, at 10:35 a.m., in room 

2172, Rayburn House Office Building, Hon. Ileana Ros-Lehtinen 

(chairman of the committee) presiding. 

Chairman ROS-LEHTINEN. The briefing will be called to order. 

Welcome to my fellow members of the committee, our distinguished 

panel of witnesses, honored champions of the struggle for human 

rights in China, who are joining us today, ladies and gentlemen. 

There is an old saying that the Chinese invoke when they wish to 

avoid political discourse with the central powers in Beijing; the 

mountains are high and the Emperor is far way. 

Well, ladies and gentlemen, this morning there are no mountains 

to shield us. And China’s newest Emperor has just landed in Washington and is at the front lawn of the White House; yet the pressing issues which separate our countries need to be urgently addressed. 

Three of those many issues, which will be the focus of today’s 

briefing, include security concerns, human rights, and how our 

trade imbalance and the Chinese currency manipulation adversely 

impact our U.S. economy. 

When the Cold War ended over two decades ago, many in the 

West assumed that the threat from communism had been buried 

with the rubble of the Berlin Wall. However, while America slept, 

an authoritarian China was on the rise. China became one of our 

biggest mortgage companies, holding over $900 billion of our international debt. And in these past two decades Western observers 

forgot that while freedom blossomed in Eastern Europe, reform in 

China failed. 

China was led by a cynical group of leaders who, sobered by the 

Tiananmen massacre and marked by the blood of its victims, were 

determined to go forward with economic but not political change. 

And the China that emerged has fallen far short of the benign 

China of which former Deputy Secretary of State Zoellick spoke in 

the coining of the phrase ‘‘responsible stakeholder.’’

Does a responsible stakeholder, as reported in the Western press, 

allow the transshipment of North Korean missile components to 

Iran via Beijing airport in open defiance of those U.N. sanctions, 

which as a Perm-5 Member State, it is duly bound to enforce? Does 

a responsible stakeholder declare that the South China Sea is one 

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of its core interests, in open defiance of the navigational and territorial rights of its Southeast Asian neighbors? Does a responsible 

stakeholder admonish the U.S. Navy that it cannot operate in the 

Yellow Sea in the very waters where General Douglas MacArthur 

undertook the heroic landing which turned the tide of the Korean 

War? 

Would a responsible stakeholder refer to the Nobel Peace Prize 

Committee as a ‘‘bunch of clowns’’ for awarding an honor to a distinguished Chinese human rights advocate? Would a responsible 

stakeholder arrest the wife of a Nobel Peace Prize winner as further retaliation for speaking the truth about the gross human 

rights violations in China? 

The United States took a big gamble when it voted for permanent normal trade relations for China over a decade ago in what 

some termed as the most important vote since World War II. The 

vote was based upon what I see as a sadly mistaken belief that economic openings and a free market reform would lead to democracy, 

respect for the rule of law, and a full array of political and human 

rights for the Chinese people. 

Yet today as we meet here, the Laogai Research Foundation estimates that there are close to 7 million people currently in Chinese 

labor camps. It is as if the entire population of Switzerland was 

being held behind barbed wire. Chinese authorities’ ruthless campaign against Falun Gong practitioners, a peaceful organization 

which promotes truth, compassion, and tolerance, has continued 

unabated for more than 11 years. 

I was proud to be the sponsor of a resolution in the last Congress 

which received overwhelming bipartisan support addressing the 

persecution of Falun Gong. The brutal denial of rights to the people 

of Tibet and the Uyghur people and the forced repatriation of 

North Korean refugees continue to draw the attention of concerned 

citizens throughout the world. 

And the American people have also borne the brunt of China’s 

mercantile trade policies which promote trade surpluses through 

cheap exports based upon an artificial depreciation of China’s currency. Jobs and American dollars have flown across the Pacific to 

China for the past two decades as the American people have suffered high unemployment and a diminished standard of living. 

Last fall I was pleased to be able to vote in favor of the Currency 

Reform for Fair Trade Act, which overwhelmingly passed the 

House 348 to 79. We are back with a new energy from our newly 

elected Members who are determined to take back America’s economy and are committed to a foreign policy that stands with our allies and holds accountable those who threaten our Nation’s security 

interests. 

And now I am pleased to turn to my distinguished ranking member for this committee Mr. Berman for his remarks. 

[The prepared statement of Chairman Ros-Lehtinen follows:]

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Mr. BERMAN. Well, thank you very much, Madam Chairwoman. 

And Chinese President Hu Jintao is in Washington this week for 

a state visit; and as we speak, he and President Obama are meeting at the White House. After an often tense year in U.S.-China relations, the two leaders will try to set the contours of the relationship for the immediate future. 

The U.S.-China relationship, one of the most interconnected and 

complex in global affairs, has major implications for the future of 

Asia and the entire world. The challenge for the Obama administration is to manage that relationship in a way that strengthens 

our cooperation with Beijing in areas where we have shared interests, while at the same time addressing the serious concerns we 

have regarding a number of China’s policies. 

China is neither an ally nor an enemy. It is both a competitor 

and a partner in foreign affairs, security, and economics. A key 

goal of our China policy must be to prioritize our myriad global interests, identify those issues where we are most likely to positively 

change China’s position, and then find and use our leverage with 

the Chinese to achieve those changes and accomplish our wider foreign policy objectives. 

In my view, our highest priority with China should be Iran. 

Gaining China’s acceptance last year for tougher United Nations 

sanctions on Iran was a significant diplomatic achievement for the 

Obama administration. But there is ample evidence that Chinese 

entities continue to invest in Iran’s energy sector. This helps 

Tehran avoid the full impact of sanctions and facilitates Iran’s continued development of nuclear weapons capability, which threatens 

the United States, our allies in the Middle East, and China, which 

is dependent on stable sources of oil from the Middle East. We 

must intensify our efforts to ensure China’s full participation in the 

multi-lateral sanctions regime against Iran. 

The United States and China must also strengthen our collaboration to denuclearize the Korean Peninsula. As North Korea’s economic lifeline, Beijing holds considerable leverage over Pyongyang; 

yet it has been too slow to make it clear to the North Korean leadership that security and respect can be obtained only by giving up 

its nuclear weapons and refraining from other aggressive behavior. 

The promotion of human rights and political freedom is a central 

goal of American foreign policy. These universal values must remain a central focus of our relationship with China, whose record 

in this area remains deplorable. Moreover, those values are in China’s self-interest. Both its international image and its economic 

growth are dependent on developing a society based on the rule of 

law. 

In the sphere of economics and trade, one area of particular concern is China’s theft of intellectual property and its indigenous innovation policy. In addition to compliance with the recent WTO decision, China must do more to stop the piracy and counterfeiting 

that occurs openly on street corners and over the Internet and step 

up its enforcement efforts. 

The crossroads we currently face in the U.S.-China relations 

present less of a choice for the United States and more of a choice 

for China. The Obama administration has articulated a pragmatic 

policy toward China, and in several key areas the administration 

6

has had some modest success. There is no clear indication, however, that China has made a fundamental decision to alter its strategic goals of leveraging the international community to promote 

its own policies of economic growth, with heightened political control and military modernization, with regional and extra regional 

power projection, while at the same time insulating China as much 

as possible from outside influences. As much as the rest of the 

world looks to China to play a constructive role, it is not clear 

China wants to play a positive influence beyond its borders. 

I look forward very much to hearing the testimony from all of our 

witnesses today and I yield back. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. Berman. 

And now I would like to yield 3 minutes to the chairman-designate of the Subcommittee on Asia and the Pacific, Mr. Manzullo. 

Mr. MANZULLO. Thank you, Madam Chairwoman, for calling this 

important briefing concerning China’s rise and its impact on the 

United States. I strongly believe that China’s new assertiveness in 

foreign and economic relations is one of the greatest foreign policy 

challenges that we must face in this century. China’s weight in the 

global economy cannot be ignored; that nation’s rapid modernization represents both opportunity and peril for America. 

As chairman-designate of the Subcommittee on Asia and the Pacific, I am keenly aware of the challenges our Nation faces when 

it comes to dealing with China. As experience has shown, China’s 

unfair trade practices, including currency manipulation, illegal subsidies, and lax enforcement of intellectual property law make it 

very difficult for the hardworking people of America to compete at 

a level playing field and benefit from this relationship. 

American manufacturers have been hurt most by this unbalanced relationship. Manufacturing is the lifeblood of the 16th Congressional District of Illinois, which I represent. Our congressional 

district has somewhere between 1,400 and 2,500 factories—no one 

is quite sure—supporting more than 51,000 jobs. In fact, 24 percent 

of value-added manufacturing in our congressional district represents exports. It is one of the most dense areas in terms of manufacturing base and one of the most exporting congressional districts 

in the country. These hardworking men and women want to know 

what their government is doing to enforce our trade laws with 

China and preserve America’s industrial base. 

I hope our distinguished witnesses will focus their remarks on 

what the administration is doing and what more it can do to urge 

the Chinese Government to follow the rules. Very little has been 

done in the past several years. 

My experience with the Chinese Government is that it is in fact 

capable of stopping the violators when they see it is in their interests to do so. With so many Americans out of work, now is the time 

for this administration to work with Congress to hold China responsible and give American manufacturers a chance to compete 

with China on a level playing field so our manufacturers can create 

jobs. 

Madam Chairwoman, I commend you for giving the American 

people a well-deserved voice when it comes to China. I look forward 

to the testimonies of our witnesses. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. Manzullo. 

7

We would be recognizing the ranking member-designate, Mr. 

Faleomavaega, but he is not present, so we will proceed with the 

testimony. 

We are pleased to have as our witnesses a wonderful panel. 

Thank you. We are pleased to welcome Mr. Larry Wortzel to today’s briefing. Larry is a commissioner on the U.S.-China Economic 

and Security Review Commission, appointed by Speaker Boehner. 

Among his many qualifications, Mr. Wortzel served two tours of 

duty as a military attache ́ at the American Embassy in China and 

retired from the Army with a rank of colonel. Thank you for briefing us today. 

Also with us is Gordon Chang, who is currently a columnist at 

Forbes.com. Mr. Chang practiced law in China and Hong Kong for 

nearly 20 years and has written extensively on China and North 

Korea. We are grateful to have him today, as he is a much sought 

after expert on the future of China’s economy. 

Mr. Yang Jianli is the founder and president of Initiatives for 

China. In 2002 Mr. Yang was imprisoned in China. And following 

an outcry by Congress and others for his release, Mr. Yang was 

freed in April 2007. Immediately following his return to the United 

States, Mr. Yang formed Initiatives for China, a pro-democracy 

committee that is committed to peaceful transition to democracy in 

China. 

And lastly, Mr. Robert G. Sutter, who has been a visiting professor of Asian studies at the School of Foreign Services in Georgetown University since 2001. In addition to his full-time position, 

Mr. Sutter teaches regularly as an adjunct professor of Asian studies in the Elliott School of International Affairs, George Washington University. Mr. Sutter had an extensive government career—an extensive government career in Congressional Research 

Service and other U.S. Federal agencies that lasted 33 years. 

So we will begin with Mr. Wortzel. I am sorry that I am not so 

great with the pronunciations, but look at my name. I don’t get too 

picky. So I will be rather ruthless with the 5 minutes, so please 

confine yourself to 5 minutes. Larry, you are recognized. Thank 

you. 

STATEMENT OF MR. LARRY WORTZEL, COMMISSIONER, U.S.-

CHINA ECONOMIC AND SECURITY REVIEW COMMISSION 

Mr. WORTZEL. Chairwoman Ros-Lehtinen, Ranking Member Berman, members of the committee, thank you for the opportunity to 

brief you today. The views I present are my own and formed by my 

service in the U.S. Army, on the U.S.-China Economic and Security 

Review Commission, and my own research. 

In late 2004, Chinese Communist Party Chairman Hu Jintao set 

out a new set of missions for the People’s Liberation Army, or PLA. 

These new historic missions provide the basis for China’s future defense research and weapons acquisition plans. They also set the 

stage for a more assertive use of the armed forces inside and outside of Asia in pursuit of expanding national interests. The PLA’s 

military modernization efforts provide the means for the armed 

forces to fulfill these new missions. 

China’s military modernization efforts are comprehensive, affecting all of the domains of war, including space and cyber operations. 

8

In recent years, China has acquired advanced surface ships and 

submarines, modern combat aircraft, ballistic and cruise missiles, 

and advance command and control missions that tie everything together. 

In addition, as Admiral Willard, the PACOM commander, recently stated, China will field an antiship ballistic missile, a potential threat against U.S. aircraft carriers in the region. The PLA is 

still the fallback force of repression for the Communist Party 

against the populace. 

The combination of these new missions and the means to carry 

them out has brought about changes in China’s military operations. 

Traditionally, the PLA focused on domestic response and local contingencies. Now it is a military with a wider range of missions and 

activities. The dispatch of Chinese naval vessels in support of 

antipiracy operations off Africa is one example. 

China’s national interests are global and the PLA is becoming a 

force capable of acting beyond China’s periphery. A more capable 

military accompanies a more assertive Chinese foreign policy. This 

can be seen in China’s recent provocative activities concerning its 

disputed territorial claims in the South and East China Seas and 

in the exclusive economic zone. 

China’s military capabilities also stoke Beijing’s confidence. China’s officials stridently complained about U.S. and allied operations 

in the Western Pacific. Beijing failed to condemn North Korean attacks on South Korea and strongly objected to joint military exercises in the region between the United States and South Korea. 

In military-to-military relations, Beijing continues to circumscribe the range of discussions between China and the United 

States, refusing to address strategic issues such as cyber warfare 

and space operations. I am pleased to see that Secretary Gates got 

to visit the 2nd Artillery Corps and there was some discussion of 

nuclear doctrine during his visit. 

Despite a noticeable improvement in relations across the Taiwan 

Strait, Beijing continues to insist on the right to use force should 

it interpret Taiwan’s activities as moves toward independence. The 

cross-Strait military balance increasingly favors China, and Beijing 

has deployed over 1,100 short-range ballistic missiles opposite the 

island. In my view, Taiwan’s most pressing need is for new or modernized fighter aircraft. 

China continues arms sales in support to international pariah 

states such as North Korea, Burma and Iran. In addition, the food 

and energy and foreign investment that China provides to North 

Korea indirectly enabled Pyongyang to continue its nuclear efforts. 

It showed its economic power by a stoppage of the supply of rare 

Earth minerals to Japan when it was unhappy with Japanese policy. 

Madam Chairwoman, members of the committee, thank you for 

the opportunity to address you today. I look forward to your questions. 

[The prepared statement of Mr. Wortzel follows:]

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Chairman ROS-LEHTINEN. Thank you so very much, and thank 

you for the time limit. 

Mr. Chang, we appreciate your time. Five minutes, please. 

STATEMENT OF MR. GORDON CHANG, AUTHOR OF ‘‘THE 

COMING COLLAPSE OF CHINA,’’ FORBES.COM COLUMNIST 

Mr. CHANG. Chairwoman Ros-Lehtinen, Ranking Member Berman, distinguished members of the committee, thank you for the 

opportunity to be here today. 

The dominant narrative in the United States and elsewhere is 

that China has the upper hand when it comes to the United States, 

and that is why President Obama is hosting a state visit for an autocrat, Chinese President Hu Jintao. 

But does China really have the upper hand? I think that most 

Americans misperceive the economic relationship between the 

United States and China, and today I would like to comment on 

three of those misperceptions. 

First of all, everybody says that China is decreasing its dependence on the United States. Well, China has an economy that is 

geared to selling things to us. The Chinese economy is dependent 

on exports, and its export sector is especially reliant on sales to the 

United States. Last year, when all the statistics are in, I think that 

we are going to see that more than 140 percent of China’s overall 

trade surplus related to sales to the United States. That is up from 

an already stupendous 90.1 percent in 2008. Now, China’s trade dependence on us gives us enormous leverage, because China is not 

a free trader. China has accumulated its surpluses because of real 

clear violations of its obligations under the World Trade Organization. 

Second, everybody says that China’s debt provides—our debt held 

in the hands of China—provides a weapon that the Chinese can 

use against us. Since August 2007, the Chinese have talked in public about using debt as a weapon, and of course they call it, appropriately, ‘‘the nuclear option.’’ Well, China hasn’t used the nuclear 

option since it first started talking about it, and the reason is they 

know their attack plan won’t work. Let’s think about the worst possible scenario, that the Chinese drop all of our debt at one time. 

Well, we have got to look at the way the global markets operate. 

If the Chinese do that, they have got to buy something, which 

means they have got to buy things denominated in pounds, euros 

and yen. That would send those currencies soaring through the 

ceiling in their values, which means that London, Brussels, and 

Tokyo would have to go out into the global markets to rebalance 

their currencies; in other words, to bring their currencies back 

down in value. And the only way they can do that is to buy dollars. 

There would be turmoil in the global markets, but it wouldn’t last 

very long, just a few weeks, maybe a calendar quarter at the most. 

And after this is all done, we would have our debt held by our 

friends rather than a potential enemy. I think the global markets 

are deep and they can handle just about everything, and although 

I don’t think the United States should be accumulating debt, and 

certainly I don’t want the Chinese to hold it, I also don’t think it 

gives them a weapon. 

23

Third, you hear many commentators say that China’s currency 

manipulation is not the sole cause of America’s trade deficit. Well, 

of course that’s right, because there are a number of reasons that 

relate to our trade deficit, but China’s currency manipulation is an 

important reason. Due to Beijing’s active manipulation of its currency—it intervenes in the markets every day—the discount value 

of the renminbi to the U.S. dollar is somewhere in the vicinity of 

20 to 40 percent. Maybe 30 percent would be a good estimate for 

today. A discount of that magnitude, of course, is significant. 

When I practiced law in Asia, many of my clients were U.S. manufacturers, and I would just watch my clients haggle for days over 

pennies on unit prices. That is how important price is. 

So it is counterintuitive to think that a discount of 30 to 40 percent—and that is what we are talking about—would not have an 

effect on our trade deficit. But you don’t have to take my word for 

it. Chinese Premier Wen Jiabao, the top economic officer in China, 

came to the United States last September and he said—he talked 

about the possibility of ‘‘countless Chinese enterprises going bankrupt and countless Chinese workers becoming unemployed if the 

renmimbi increased in value.’’ Well, if that is what the currency 

does to China’s manufacturers and their employees, then what do 

you think it does to ours? 

Nonetheless, many economists say, well, you know, you shouldn’t 

do this, this currency bill, H.R. 2378, which passed the House. I 

think that we certainly need to do that. China won’t change its destructive currency practices if we appeal to its self-interest, which 

is what the Bush administration and the Obama administration 

were doing. I think that we have to apply pressure. 

[The prepared statement of Mr. Chang follows:]

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Chairman ROS-LEHTINEN. Thank you Mr. Chang. Thank you so 

much. 

Mr. Yang. 

STATEMENT OF YANG JIANLI, PH.D., PRESIDENT, INITIATIVES 

FOR CHINA AND HARVARD FELLOW 

Mr. YANG. Thank you, Your Excellency. Thank you for the opportunity for me to testify on a very fundamental matter in the relationship between the United States and China that must be addressed. It is the matter of how the Chinese Government treats its 

own citizens. China is the country with the most prisoners-of-conscience in the world, including a Nobel Peace Prize winner. Among 

thousands, if not tens of thousands of prisoners-of-conscience, is Dr. 

Liu Xiaobo who got the longest prison term, life imprisonment. His 

two children, Song Tung, and a daughter Tiana are here with us 

today. 

In addition to the official prison system, it is practically public 

knowledge that in China there exist hundreds of black jails established and run by local governments of various levels. These prisons take in numerous innocent petitioners arbitrarily. 


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Going beyond this prison system, there are three new types of 

measures of control that the Chinese authorities have been increasingly using in the past 3 years. 

Number one, direct violence. The direct violence against dissidents, human rights activists, and petitioners has increased in recent years. The people who have been doing this are local policemen or rogues hired by the police. In some cases governmental officials are also involved. 

Number two, house arrest. In recent years, house arrest has become more and more widely used as a means for limiting dissidents 

and their families. Yuan Weijing and Liu Xia are two typical examples. As the wife of the blind human rights lawyer Chen 

Guangcheng, Yuan Weijing was placed under house arrest not long 

after her husband had been arrested. Ever since Chen Guangcheng 

was released after serving 4 years and 3 months in prison last September, the entire family has been put under house arrest. The 

Chens, the entire family, has been cut off from all contacts with the 

outside world. Those who tried to visit them were badly beaten. Liu 

Xia, Liu Xiaobo’s wife, has been put under house arrest ever since 

last year, when her husband won the 2010 Nobel Peace Prize. And 

her communication with the outside world has been completely cut 

off since October 20th, last year. 

Number three, ‘‘made disappearances.’’ I also urge you to pay attention to the disappearance of Chinese citizens as the result of the 

government’s unwarranted actions. The most notorious case is Gao 

Zhisheng. He has not been heard from ever since last April, after 

repeatedly being detained and severely tortured. And his wife is 

with us today here. 

Another important case is Mongolian scholar Hada who was arrested in December 1995 for peaceful activities demanding more 

autonomy for the Mongolian region. He was later sentenced to 15 

years in jail. His prison term was set to end on December 10th last 

year, but a few days before that the Chinese authorities detained 

his wife and their son. Hada was never seen getting out of prison. 

And to date, the entire family has not been heard from. 

Around the time of the Nobel Peace Ceremony, more than 100 

of Mr. Liu’s friends, family members, and supporters, including 

Tiananmen mother Ding Zilin and her husband, were either put 

under house arrest or made missing. 

So coming back to the issue I raised at the outset, the question 

is why should China’s treatment of its citizens be an important 

concern for U.S. foreign policy toward China? Pundits and laymen 

can give a slew of analysis on and answers to this question, and 

some people can even denounce this question as irrelevant. But I 

just want to echo Phelim Kine’s question from his Wall Street Journal article last Monday: Will a rising power that fails to honor commitments to its own people act responsibly to fulfill its commitments to other nations and their peoples? 

[The prepared statement of Mr. Yang follows:]

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Chairman ROS-LEHTINEN. Thank you. That is a good question. 

Thank you. 

Mr. Sutter. 

STATEMENT OF MR. ROBERT G. SUTTER, VISITING PROFESSOR, SCHOOL OF FOREIGN SERVICE, GEORGETOWN UNIVERSITY 

Mr. SUTTER. Thank you very much, Madam Chairwoman and 

members of the committee. 

The U.S. relationship with the People’s Republic of China has 

been troubled throughout its twisted history. Important areas of 

converging interests between the two powers are usually accompanied by important areas of differences. The relationship has become very broad ranging, multifaceted and complicated, and it is 

the most important bilateral relationship in the world today. 

A pattern of seeking to advance common ground while managing 

differences prevailed throughout most of the George W. Bush administration. Like President Bush, President Obama showed a 

course with China involving pursuing constructive contacts, preserving and protecting American interests, and dealing effectively 


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with challenges posed by rising Chinese influence and power. A 

strong theme in President Obama’s initial foreign policy was to 

seek cooperation of other world powers, including China, to deal 

with salient international concerns. He worked very hard at this, 

but he found the Chinese leaders offered only limited cooperation 

on issues like climate change and others. 

More worrisome were the challenges that the Chinese administration posed for the Obama government, and this has been well 

documented by my colleague, Mr. Wortzel, particularly about the 

maritime areas about the periphery of China, but also a hard line 

on the President’s arms sales to Taiwan, on his meeting with the 

Dalai Lama, and the U.S. interventions in the South China Sea 

and other issues. 

The Obama government reacted calmly and firmly to what Secretary of State Clinton called these tests or manifestations of new 

assertiveness by China. It gave no ground on any of the Chinese 

demands. It also found that Chinese assertiveness with the United 

States in neighboring countries over various issues damaged China’s efforts to portray a benign image in Asia. 

These Asian governments became more active in working more 

closely with the United States and encouraging an active U.S. presence in the Asia Pacific. The overall effect was a decline in China’s 

position in the Asia Pacific and a rise in the position of the United 

States. 

Meanwhile, the Obama government made clear to the Chinese 

Government and to the world that the United States is prepared 

to undertake military measures needed to deal with the buildup of 

Chinese forces targeting Americans and American interests in the 

Asia Pacific. It also helped to move China to curb North Korea’s 

repeated provocation by warning privately as well as publicly that 

the United States viewed North Korea’s nuclear weapons development as a direct threat to the United States. 

Over the past few months China has tried to ease differences 

with the United States in the period leading up to the current visit 

of President Hu Jintao. We have done a number of different things 

in calming the situation between the United States and China over 

these various areas of differences. Looking out, President Obama 

wants to pursue closer engagement with China as part of his administration’s overall reengagement with the Asia Pacific. His administration also has made clear that it will not give in to Chinese 

assertiveness or pressure and, if needed, will respond to such Chinese actions with appropriate military diplomatic or other means. 

Given China’s recent assertiveness, it may appear less certain 

that President Hu Jintao shares President Obama’s interest in reengagement. On the other hand, China’s recent assertiveness has 

proven much more costly than beneficial for China’s broader interest. 

It is against this background it seems likely that prevailing circumstances will preserve and reinforce the positive equilibrium in 

U.S.-China relations for three general reasons. First, both administrations seek benefit from positive engagement in various areas. 

Second, both administrations see that the two powers have become 

so interdependent that emphasizing the negatives in their relationship will hurt the other side but also will hurt them. Third, both 

33

leaderships are preoccupied with a long list of urgent domestic and 

foreign priorities. In this situation one of the last things they would 

seek is a serious confrontation in relations with one another. 

Thank you for your attention. I look forward to responding to 

your questions. 

[The prepared statement of Mr. Sutter follows:]

34


64008d-1.eps
35


64008d-2.eps
36

Chairman ROS-LEHTINEN. Thank you so much to an excellent set 

of panelists. I will be recognizing members for 5 minutes of questions and answers in order of seniority, for those who were in their 

seats when the gavel fell, and in order of arrival for those who arrived after the briefing began. I would like to yield my 5 minutes 

for questions and answers to Congresswoman Buerkle of New York. 

The Congresswoman is recognized for 5 minutes. 

Ms. BUERKLE. Thank you, Madam Chairwoman. I will direct my 

question to Colonel Wortzel, but if anyone else on the panel would 

like to comment, I would welcome the answer as well. 

First of all, thank you for your service. According to recent news 

reports, China facilitated the transshipment of missile parts from 

North Korean aircraft to Air Iran cargo flight at Beijing’s airport. 

How involved are both the Chinese Government officials and Chinese companies in weapons procurement for Iran and in the development of Iran’s nuclear and missile programs? 

Mr. WORTZEL. Congresswoman Buerkle, they are pretty heavily 

involved. They accept those transshipments from North Korea 

through China. They facilitate them. Those things don’t happen 

without the concurrence of central authorities in the provinces and 

from a national air control system. They have got their own customs people, so they are well aware of it and they could stop it. 

They have refused to participate in the Proliferation Security Initiative which would have the effect of at least helping to control 

North Korean proliferation. I mean, they simply have very different 

interests in Iran than we do. And I would argue that one of their 


64008d-3.eps
37

interests is frustrating United States policy and creating a second 

potential military competitor that is at least a barb down in that 

part of the world. That limits what we can do. That means we have 

to be a lot more careful in how we act. 

They have sold—everything falls below the limits of the missile 

technology control regime, but they have sold short-range missiles, 

they have sold cruise missiles, anti-aircraft missiles. So they are 

not doing a thing to reduce the potential level of violence and tension in that region. 

Ms. BUERKLE. Thank you very much. 

Chairman ROS-LEHTINEN. The gentlelady yields back. I would 

like to recognize the ranking member, Mr. Berman, for 5 minutes. 

Mr. BERMAN. Well, thank you very much, Madam Chairwoman. 

And I would like to get Mr. Chang’s response and also perhaps 

hear from Mr. Wortzel and Sutter on the very interesting thesis 

that Mr. Chang had, essentially looking at the issue of our debt obligations to China and our trade deficit as perhaps more our leverage than China’s leverage, and to ask you to play that out a little 

longer. 

To what extent are you suggesting we use that leverage and 

whether it is in countervailing duties or in passing the kind of legislation that the House passed last year, and for what policy purposes should they be restricted to persuading and pushing China 

to live within the WTO ground rules, or should they be utilized to 

achieve broader geopolitical and military purposes? So that is one 

question. I will ask them all right now. 

And then the second question, 15, 20 years ago, there was a notion that in its heart of hearts, China liked American presence in 

the Western Pacific, that that was a lot better for them than Japan 

reconsidering its traditional military policy, thinking about its own 

nuclear weapons; more recently, what South Korea might decide to 

do. But in a way there was a beneficial effect. Is that just out the 

window now? 

Is the Chinese military modernization so strong now that they 

are not concerned about that, and they are truly seeking to have 

us reverse a position we have had since the end of World War II? 

And add to that, if either Robert Sutter or Larry Wortzel would 

do it, this notion that this weekend, that this isn’t the visit of the 

most recent Emperor of China, that there is a People’s Liberation 

Army out there that is starting to do their own things without necessarily under the direct direction of the leadership of the Communist Party. Is there anything to a couple of those stories that 

have emerged recently? 

And then finally, if we can get it—I don’t know if there will be 

time—Mr. Yang, you were eloquent regarding the issue of political 

disappearances and the families and the abuse and what goes on 

inside China. But what you weren’t able to get into is how do you 

think we—what role can we play in affecting and changing that? 

I do worry that there won’t be time for that last one, but go ahead. 

Mr. CHANG. First of all, I would like to thank the Congressman 

for being so polite in his characterization of my views. Most people 

think that I am wrong, and you were very nice in saying so, in saying what you just did. 

38

I think there are a couple of things that we need to do. First of 

all, we need a little bit less diplomacy. We are feeding China’s 

self—a sense of self-importance. I think we don’t need new agreements on economic matters, because everyone says when there is 

a problem with China let’s go out and negotiate a new deal. We 

have tons of deals with the Chinese. All we need to do is enforce 

them; and we need to enforce them more vigorously, which means 

that we need to take cases to the WTO more quickly. And also because of the real problem that China does pose to American manufacturers, as I heard earlier, I think we need to do a little bit of 

self help, which is H.R. 2378; in other words, imposing penalties 

at an early stage for Chinese subsidies. Of course, currency manipulation is one. 

Mr. BERMAN. Basically, you want to limit that to the economic 

issues—the currency valuation, the violation of trade rules, the 

subsidies—not to larger geopolitical issues? We only have 30 seconds. I would just like to get real quickly from Mr. Wortzel and Mr. 

Sutter. 

Mr. WORTZEL. I think the PLA is not an independent actor. It is 

currently under the control of the Politburo Standing Committee of 

the Chinese Communist Party and the Central Military Commission. I think China is ambivalent about the U.S. presence. It is 

very happy that extended deterrents restrains Japan from becoming a nuclear power but wants a more forceful role in the Pacific. 

And I think Gordon is absolutely correct on U.S. treasuries. 

Chairman ROS-LEHTINEN. Thank you. We will continue with Mr. 

Sutter at another time. 

Before yielding to Mr. Smith, I would like to recognize, as has 

been pointed out, the presence of Chinese human rights dissidents 

in the audience, representing a cross-section of oppressed groups 

inside China, including representatives of Liu Xiaobo, the Falun 

Gong, the Uyghurs, the wife of Mr. Gao, one of several Chinese political prisoners unjustly imprisoned by the Chinese regime. 

And now I am pleased to recognize Mr. Smith, the chairman-designate of the Subcommittee on Africa, Global Health, and Human 

Rights for 5 minutes. 

Mr. SMITH. Thank you very much, Madam Chairwoman. Besides 

being the jailer of Liu Xiaobo, the 2010 Nobel Peace Prize winner, 

we have to ask ourselves a very serious question: Who is Hu 

Jintao? Let us not forget that in 1989, just a few months before the 

massive Tiananmen Square, the massacre at Tiananmen Square, 

Hu Jintao was Beijing’s iron fist in Tibet, the man who ordered the 

savage beating of Tibetan nuns and monks, even children—there 

are eyewitness accounts of children being pummeled to death—and 

the murder of hundreds of Tibetans. 

Hu Jintao presides over a gulag state, clearly a dictatorship. 

President Hu is directly responsible for the systematic detention 

and torture of millions of peaceful Chinese, Tibetans, and Uyghurs. 

Harry Wu, who is here with us, spent almost two decades in the 

Laogai. He knows what happens in those gulags—torture, cattle 

prods put under the armpits and at the genitals. President Hu 

Jintao presides over that sickness and that perversity. 

President Hu’s secret police hunts down Christians, Uyghur 

Muslims, Falun Gong, and Tibetan Buddhists and beats them often 

39

to death, especially the Falun Gong who are massively being killed 

in China today. President Hu is responsible for the barbaric, and 

really the worst violation of women’s rights, in my opinion, ever: 

The one-child-per-couple policy, which relies on forced abortion to 

achieve its goals. 

In President Hu’s China, brothers and sisters are illegal. They 

are illegal. Anyone in the audience who has a sibling in China, you 

are only allowed one. As a direct result, the cumulative effect of 

this barbaric policy, there are 100 million missing girls in China. 

Why haven’t the feminists—most of them have been silent about 

this terrible gendercide directed against little girls. 

Let me ask Yang Jianli who has been an outspoken leader on behalf of Chinese human rights. It seems to me that when a man like 

Hu Jintao comes in, the press give him a free pass. There will be 

a press conference. I would ask the press to ask the hard questions, 

not just the generic questions about human rights. Ask specifics 

about what is happening in the Laogai, what is happening to Liu 

Xiaobo, what is happening to Gao, whose wife is with us today, 

missing, who has been repeatedly tortured, and the misuse—and 

the terrible burden they put on the children of the dissidents. Ask 

the tough questions of the press. 

And to President Obama and Secretary Clinton, please be very 

specific in your conversation with Hu Jintao. Just a glossing over 

of we talked about human rights, something on a list of talking 

points simply won’t cut it. Be specific and press this man who I believe ought to be at The Hague being held to account for crimes, 

rather than being treated with a state dinner. So I would ask Mr. 

Yang Jianli, please. 

Mr. YANG. I agree, Congressman Smith, and I will answer Congressman Berman’s question also—I think the U.S. Government 

should, at least what the U.S. Government can do and should do 

is to raise the specific occasions in various meetings with their 

counterparts. 

This upcoming—I mean this meeting, for example, if Obama 

really raised the cases like Liu Xia, Liu Xiaobo, it works. It worked 

with my case; it will continue to work with the other cases. And 

look at the practice of the U.S. Government in the past 2 years. 

The government believes that the private talking will work more 

effectively. But look at the record. The U.S. Government has not 

been successful in the past 2 years in helping get any of the prisoners out of the prison. So we have to do it, we have to apply pressure, raising specific cases, both privately and publicly. And that 

is the least the U.S. Government can do and should do. 

And another way to do it is to engage with Chinese democracy 

movements directly. Now we have recognized the leadership. Then 

we have a shared principle that is enshrined in China weight. As 

the democracy movement is viable in China, so engagement with 

China contains a part that is engaged with the people, with the 

China’s democracy movement. Thank you. 

Mr. SMITH. Thank you. And you emphasized the word ‘‘publicly,’’ 

not just private conversations. 

Mr. YANG. Yes, also public. 

Mr. SMITH. Conversations with President Obama must be very 

public. 

40

Chairman ROS-LEHTINEN. Thank you. The gentleman’s time is 

expired. 

I am pleased to recognize Mr. Payne, the ranking member-designate of the Subcommittee on Africa, Global Health, and Human 

Rights for 5 minutes. 

Mr. PAYNE. Thank you very much for yielding, Ms. Chairperson. 

I would like to focus my line of questioning on China’s economic interest in Africa and impact and implications of China’s engagement 

with African nations for governance, economic growth, and human 

rights across the continent. 

The expansion of China’s investment in Africa that we witness 

today began in the 1990s. In that decade alone, China’s investment 

grew by an impressive 700 percent. Accompanying this economic 

expansion was the wave of Chinese migrants, some 750,000 in 

2007, who live in Africa now, mainly construction, mining workers, 

and oil workers and private traders, but not an expansion of the 

Africa middle class that would normally accompany infrastructure 

development. 

There has been complex and varied reactions among analysts regarding the implications of China’s engagement in Africa. These 

range from enthusiasm and guarded optimism to concern over potential Chinese strategy and economic threats to Western or African interests. 

So I would like to get your thoughts on the overall scope of China’s growing ties with Africa. What are the main political and economic goals? What are the main potential benefits and drawbacks 

for Africa of these ties? Also, in what way would you say China’s 

relations with African governments have a negative impact on 

human rights in Africa? And what are the potential opportunities 

for U.S.-China cooperation on political humanitarian development 

priorities in China? 

They have had a meeting where 43 countries were invited to 

China; 42 showed up, heads of states in Africa. On the one hand, 

they have opened fire on workers who protested about poor working conditions in Zambia. Chinese soldiers just fired on them and 

wounded 11 or 12 of them. But on the other hand, they give 4,000 

scholarships a year to African students, and that may be to indoctrinate them as to China. So maybe Mr. Wortzel or Mr. Sutter 

would like to take that. 

Mr. SUTTER. Thank you very much, Congressman. This is a very 

complicated and important issue. Keep in mind that China—I 

think the driving force of China’s high profile in Africa is somewhat 

desperate in a way. They need resources. And so what you find is 

a highly competitive environment where companies of China are in 

Africa getting these resources. In a way, the government is sort of 

lagging behind these companies as they search and get these resources. 

The intensity of the Chinese economic development is such that 

for the Chinese to improve their GDP they have to use four times 

the level of resources that are used in the United States for the 

same amount of improvement. They need stuff. And so they are all 

over Africa trying to get the material that they really need to promote their economic development. 

41

At the same time, China is full of competitive companies that are 

looking to sell things, and the Chinese administration wants to 

have a balanced trade with Africa. And they have one because all 

these Chinese enterprises, very competitive with one another, are 

building things throughout Africa, selling things. And as you say, 

these migrants have gone to Africa to sell these sorts of things. It 

is a very understandable way to keep a balanced type of relationship that the Chinese seek with Africa. 

So if you understand it this way, you can see the driving force 

isn’t really to control Africa; it is really to get the stuff and to make 

money at the same time. And there are several good books on this. 

Deborah Brautigam of American University has done an excellent 

book on this if you are interested in this topic. I am sure as you 

are interested. And so the upshot of Chinese behavior vis-a`-vis the 

United States and so forth, it is secondary. They are out to get the 

material. And as a result there is collateral damage, if you will, 

there is a variety of things that aren’t very good. 

Just a small point. I am not sure the PLA were the people that 

shot these people in Zambia; I think it may have been guards of 

some sort. 

Mr. WORTZEL. Congressman, thank you for the question. I agree 

with Mr. Sutter. I do not believe there are PLA soldiers in Africa. 

I believe they are people out of the PLA working for governmentcontrolled security companies. And we have done a lot of work on 

that in our committee. 

Mr. PAYNE. In Ethiopia in the Ogadan region they were soldiers 

that actually were killed by the OLF. They are in the Ogadan region. 

Mr. WORTZEL. I think they were U.N. peacekeepers, United Nations peacekeepers, but I will look at that. 

Mr. PAYNE. All right. No, they were there protecting the oil reserves in Ethiopia. 

Mr. WORTZEL. I will have to look at that. I may be incorrect. 

China is interested in the extraction of resources. They don’t care 

about human rights in those countries, and they bring in their own 

labor and transfer no jobs whatsoever to the African citizens. And 

that is the major dissatisfaction in Africa. 

Chairman ROS-LEHTINEN. The gentleman’s time has expired. I 

recognize Mr. Rohrabacher, the chairman-designate of the Subcommittee on Oversight and Investigations, for 5 minutes. 

Mr. ROHRABACHER. Thank you very much, Madam Chairwoman. 

And also I would like to thank you for having this hearing at this 

moment, because we have to understand that as we speak, our 

country is officially welcoming President Hu as if he had the same 

stature and acceptability here as a democratic leader. And we welcome him the same as we do countries that are democratic and respect their human rights. This is wrong. We should not be granting 

monstrous regimes that are engaged with massive human rights 

abuses. And, in this case, the world’s worst human rights abuser 

is being welcomed to our White House, with respect. Now, what 

does that do to those people in China who are our only hope for 

a peaceful future with that large chunk of humanity? The people 

of China are America’s greatest allies. The people of China who 

want democracy, the people of China who want to respect human 

42

rights, and are looking forward to a more humane system at peace 

with the world, those are our allies. What do we do to them when 

we welcome their oppressor, their murderer, the one who is murdering their children, here to the United States with such respect? 

And as we look to this visit with President Hu, if our government, if our President follows suit the way our former Presidents 

have as well—this isn’t just President Obama—we are doing a 

great disservice not only to the people of China and to our future, 

the cause of peace, but we are doing a great disservice to the American people. Because what is happening? We have for three decades 

leaned over backwards for this regime. We have permitted the regime in China, a monstrously human rights abusing regime, to 

have trade benefits that we wouldn’t give to democratic countries. 

We have built them with technological transfers, with investments. 

We have let them get away with murder, economically as well as 

human rights—in the area of human rights. 

Well, these are things we have got to call them to task for or our 

situation will continue to deteriorate. We are now vulnerable to a 

regime that was weak 30 or 40 years ago. We are vulnerable to 

them. If we do not change our way of dealing with that regime, 

they will destroy the peace of the world and we will be to blame 

for that, not only the repression of their own people. 

So I would like to ask Mr. Wortzel in particular, China now, not 

only does it have a more peaceful stand to the rest of the world, 

we see claims, slowly but surely, more land claims and sea claims 

coming out. China is making claims in the Pacific that threaten 

Korea, Japan, the Philippines, and commerce throughout that area. 

We see claims against India and Vietnam. And, frankly, let me just 

say, our Russian friends someday are going to wake up and find 

out that they have now become partners with a country that means 

them great harm and is willing to take away their territory. Do 

these Russian—do you see any major threat to the peace of the 

world in the expanding territorial claims of China? 

Mr. WORTZEL. Mr. Rohrabacher, first of all, I think it is ironic 

that while China is brutally repressing the Falun Gong, the Chinese Government is flooding the United States with Confucius institutes, that are universities that are supposedly spreading this 

peaceful Chinese culture. 

With respect to their security claims, as they get stronger militarily, they are simply becoming more forceful in the region and 

they are expanding their claims. And that affects all the countries 

in Southeast Asia and all the countries on their periphery. 

For that reason, I think it was very important that both Secretary Clinton and Secretary Gates took pretty forceful stands on 

ensuring the peaceful resolution of these disputed claims in the 

South China Sea and East China Sea. And I think it is very important that our military works with and backs up Japan, even though 

we don’t take a position on the disputed claims, because it is a 

threat to peace and stability. 

Mr. ROHRABACHER. Let me just note that this government which 

we have bolstered with policies that we knew would make that 

country stronger under the idea if it was more prosperous it would 

be more peaceful, that strategy hasn’t worked. And this country 

43

now is the head of an alliance of rogue nations that threaten the 

peace and freedom of the entire world. 

Chairman ROS-LEHTINEN. The gentleman’s time is expired. 

I would like to recognize Mr. Sires of New Jersey for 5 minutes. 

Mr. SIRES. Thank you, Madam Chair. 

You know, as I read the newspaper, some of the accounts, I am 

always fascinated by the statement that the Chinese simply have 

different interests in many parts of the world than we do. I think 

that that hides an awful lot. 

I do think that the Chinese have a hidden agenda. And their 

agenda, in my eyes, is more like world domination. Somehow they 

want to go back to 2,000 years ago, and I think they never lost 

that. But we seem to help them in their goals. They just fill the 

void wherever we are not. 

Take North Korea, for example. They do nothing. They do nothing, and they use North Korea to their benefit. 

The relationship with Iran. All they do is just boost Iran. And 

everywhere we seem to have a void they are there. 

I look at South America, and I see going in South America many 

of the businesses. I look at what they are doing in Africa, the way 

they are using Africa. 

I don’t know. We just don’t seem to get it. And I was just wondering, Dr. Yang, you have been a spokesman for human rights 

and the abuses that have gone on in China. Do you still fear for 

your life or your family’s life back home? 

Mr. YANG. Yes. 

Mr. SIRES. You still do, after all these years? 

And some of the members that are here today from some of the 

other groups, I assume that they also fear for their families as they 

speak up against this, you know, this monster that is developing 

before our eyes. I was just wondering if you could comment on that. 

Do you still get threats? Does your family still get threats back 

home? 

Mr. YANG. Yes. My family members in China need to report to 

the authorities on a regular basis. 

Mr. SIRES. They have to report to the authorities on a regular 

basis? 

Mr. YANG. Yes, so that is why I minimize my correspondence 

with them, to minimize the trouble to them. And my case may not 

be the worst. I think many of my colleagues and their family members are being with us today. And I want to emphasize that China 

has the largest Communist system in the whole world, and it is 

still able to put anybody in prison, disappear anybody if it determines to do so. So this government is not responsive to its own people, and treats its own people harshly. 

So I am wondering this kind of a government will do any good 

in the rest of the world. So we have to keep asking this question 

once and once again. So when we come to the foreign policies toward China, we cannot forget this component. And I often hear 

many people in this country talking about Cold War mentality. So 

whenever we hear the word Cold War we will fear. So I don’t understand. But I, my comment is, we just cannot simply explain 

away the component which can be described as Cold War in the relationship between U.S. and China. 

44

Look at the U.S. allies, friends with China, Japan, South Korea, 

Taiwan, these countries are democratic, and these two countries, 

U.S. and China, have fundamentally conflicting values which you 

just cannot explain away. It will not go away in the days to come. 

So there is a component that can be called Cold War. And the only 

difference is that U.S. and China has economic interdependence 

that the Cold War did not. The United States has no such close 

economic relationship with former Soviet Union and Eastern Europe. But that is the only different element. 

But I echo what Mr. Gordon Chang said. There is a myth in this 

country that China always has upper hand in economic relationship with U.S. 

Chairman ROS-LEHTINEN. The gentleman’s time has expired. 

Thank you. 

I recognize Mr. Manzullo, the chairman-designate of the Subcommittee on Asia and the Pacific. 

Mr. MANZULLO. Thank you, Madam Chair. As I mentioned in my 

opening statement, manufacturing is the backbone of our economy 

in northern Illinois. This question is for Mr. Chang, but others on 

the panel are obviously welcome to answer. I spend much of my 

time working with numerous small and medium size manufacturers that have been harmed in one way or another in China. Most 

of the time the issue is theft of intellectual property and piracy, 

which is the case with a waste water treatment company in my district called Aqua Aerobics. We actively engaged the Chinese embassy and asked them to intervene and actually got a favorable ruling in the Chinese courts on that issue. But how many companies 

can pick up the phone or go to their Congressman to get a direct 

intervention on an obvious IP violation? 

Other times the problem is more complicated, such as the case 

of the office shredder maker Fellows. It is, I think, the number one 

paper shredder maker in this country. They are fighting a fierce 

battle in China on a joint venture where they were locked out, inventory stolen, machine tools, business practices and IP. And if you 

are big you can succeed. But the small guys or the medium sized 

manufacturers are having an extraordinarily difficult time. And so 

how do we encourage the national provincial and local governments 

of China to enforce the law? And beyond the rhetoric and grand 

themes there has to be a better way of dealing with China. 

I guess that is an easy question. 

Mr. CHANG. Right. And I think the important thing that we have 

to do is start, as I said, less diplomacy in a way. But I also think 

that we need to follow the approach of H.R. 2378, which is really 

to impose penalties whenever we see that there are violations of 

China’s trade obligations because this gives us immediate relief. 

You talk about the problems of small manufacturers. They can’t 

wait for the 3 or 4 years that it takes to get through the dispute 

resolution mechanism of the World Trade Organization. That is 

just not a practical remedy for them. And that is why I think that 

we need legislation, which is really tough, because when we do that 

the Chinese will understand. They have reacted to pressure, and 

this is really about the only way I think that we can do it in terms 

of saving small manufacturers because their plight is not only important, it is also urgent. 

45

Mr. MANZULLO. And sometimes it is like Whack-a-Mole. You go 

in there, I have testified twice before the ITC on tires, recreational 

vehicle tires and automobile tires, and once was on the surge and 

the other two were on dumping and illegal subsidies. And you get 

the remedies, and then they come right back again and all of a sudden someone is doing the same thing under a different name. It is 

over and over and over and over and again, and these companies 

spend fortunes on attorney’s fees trying to protect their intellectual 

property. 

Isn’t there, can’t there be a mechanism that our government can 

have, for lack of a better word, an 800 number for people who are 

the objects of piracy that simply can’t afford attorneys to go in 

there and do battle for them? 

Mr. CHANG. Well, we certainly could do that in many ways. That 

would basically involve beefing up the commercial sections of our 

embassy in Beijing and in the consulates around China, but also 

in the Department of Commerce. It just needs to be put at a higher 

priority that we have. 

Normally, what happens in trade disputes, as you point out, is 

you have this enormous litigation, and the United States really relies on injured parties to bring their case and to prosecute it. I 

think that your suggestion is an excellent one, which is really to 

have the government be much more proactive and to bring all sorts 

of proceedings, both internally in the United States and through 

the WTO because that is about the only way we can do it. We need 

to speed up the process because time, I think, is critical. 

Mr. MANZULLO. I would look forward to meeting you in my office 

and putting our heads together and try to come up with some type 

of remedy there. 

Mr. CHANG. I will be there. 

Mr. MANZULLO. Thank you very much. I yield back my time. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. Manzullo. 

We are proud to recognize Mr. Cicilline of Rhode Island. Welcome 

to our committee, sir. 

Mr. CICILLINE. Thank you, Madam Chairman. I appreciate the 

opportunity to ask some questions. My questions also relate to the 

impact of our relationship with China on American manufacturing. 

And I know that, I think it has been pretty clear to most of us that 

the Chinese have really woefully been weak in addressing the theft 

of intellectual property, and it is presenting real problems for 

American businesses, and so I would like to hear your thoughts on 

what actions we might take to really protect American businesses 

from this theft of intellectual property, the seizing of assets in joint 

ventures, and the refusal to meet contractual obligations. And related to that, I am particularly interested in your thoughts on what 

mechanisms we have, in particular on the opportunity that exists 

for the production and development of renewable energy. I know 

there was a recent complaint filed at the WTO against the Chinese 

subsidy policy which the administration contends favored Chinese 

producers of wind equipment and that there have been examples 

where those kinds of conflicts have been resolved at the U.S.-China 

Joint Commission on Commerce and Trade. 

So in answering that, I am wondering whether you think those 

are an effective place for resolution, if there are changes we need 

46

to make that really will help American manufacturers be sure that 

we are enforcing in every way policies that protect the American 

manufacturers and the jobs connected to those manufacturers. 

Mr. CHANG. We really have two problems. One of them is China’s 

internal rules such as the new indigenous innovation product accreditation rules that President Hu Jintao has been pushing. Those 

would basically force a transfer of American intellectual property 

to joint venture companies for anyone who wants to sell to government or state enterprises. And that is really an issue for the 

United States itself in its discussions with China. The Obama administration has put this up at a higher priority because it is so 

important. And I think that it is just a question of these needing 

to be discussed all the time. 

The other point which as you raised, which is just the outright 

theft, this is extremely difficult because you can’t litigate in the 

Chinese courts because the courts are controlled by the party and 

often controlled by local interests that have been, really, the culprits. And so the only way the United States can deal with this 

issue really is to have the commercial section in the embassy and 

in the various consulates make it known to both national and provincial authorities that this is a case which is of importance to the 

United States which oftentimes is sending the Ambassador or the 

Consul General to a court case to show the presence of Washington 

and its importance to us. But this is extremely very difficult. 

Mr. CICILLINE. Mr. Sutter, do you have anything to add? 

Mr. SUTTER. I would agree. I think you need to keep the pressure 

on. It has to cost the Chinese. I think you are advocating an approach, you are pushing on an opening door with the Obama administration, it seems to me. Listening to the Secretary of Commerce and the USTR, they very much want to do this kind of thing. 

Maybe they need more people. Maybe they need some funding from 

the Congress to help in this regard. But I think there is a broad 

sentiment in the Obama government that this should be done, that 

you have just what Mr. Chang was saying. You need case-by-case, 

you need to work these issues, you need to pressure in a way that 

is credible. And I think that high level attention to it with officials 

is a way to go. And I think that is going to, as I say, it is going 

to win some support, I think, from the USTR and the Commerce 

Department. 

Mr. CICILLINE. Thank you very much. I yield back the balance 

of my time. 

Chairman ROS-LEHTINEN. Mr. Cicilline yields back. Thank you 

for that. 

I recognize Mr. Rivera of Florida for 5 minutes. 

Mr. RIVERA. Thank you very much, Madam Chairman. I am 

going to ask about two island nations, Cuba and Taiwan, one, an 

island prison and the other a bastion of democracy surrounded by 

a fortress of tyranny. And we will start with Cuba. 

Given China’s involvement in Cuba, and this question specifically 

we will start off with Dr. Wortzel. Given China’s involvement in 

Cuba, I wonder if you could give us your thoughts as to China’s 

geopolitical intentions in Cuba, perhaps as establishing another 

beachhead in Latin America, generally, and specifically, what you 

believe China is up to with regard to oil drilling, given information 

47

that has been published regarding the company involved with oil 

drilling also having a nexus with Iran. So generally speaking, China’s geopolitical interest in Cuba, and specifically with regard to oil 

drilling. 

Mr. WORTZEL. Thanks for the question. First of all, China has 

taken over, as I understand it, the entire signals intercept complex 

that the Soviet Union had in Cuba. So there is, without question, 

a military and an intelligence purpose for their relationship. I 

think part of it is also support for another socialist state, and I 

think you can link Chinese activities with Venezuela and support 

there, their support in Cuba and for Cuba. 

With respect to resources, I think they would be very happy to 

extract resources any way they could get it. But if you look at the 

visits of Chinese military leaders and political leaders, I always ask 

myself why the head of China’s strategic rocket forces, the Second 

Artillery, is visiting Cuba? We are not going to be in another 

Cuban missile crisis, but there is certainly something to a military 

relationship going on there, and the same goes with Venezuela. 

In some cases their relationships in Central America and Latin 

America are related to diplomatic relations with Taiwan, and they 

have managed to wean a couple of countries away from recognition 

of Taiwan and toward recognition to China. And that is part of it. 

I think it is fair to say, and I sum it up, that they sure don’t recognize the Monroe doctrine. 

Mr. RIVERA. Thank you very much. With respect to Taiwan, and 

I will direct this question to Mr. Chang, and the issue of the F–

16s and this administration’s decision or decisions, previous decisions on prolonging shipment of F–16s to Taiwan and what you believe is your perspective on how this affects the Taiwan Relations 

Act and fulfillment of the Taiwan’s Relations Act. 

Mr. CHANG. I would love to talk about this topic, but I am sitting 

next to the world’s expert, and so perhaps——

Mr. RIVERA. I yield to Mr. Wortzel. Thank you. 

Mr. WORTZEL. Taiwan’s Air Force really needs modernized aircraft. The debate is F–16 CD, which has longer range and could be 

used for deeper strikes inside China if their military chose to do 

that, versus modernizing the AB. When I talk to aviation engineers, they think you could take the AB, put in brand new avionics, new radar and targeting equipment, it needs new refrigeration to be able to handle that, and that they would then have a 

very, very capable aircraft. It is not one that would necessarily satisfy the Taiwan legislature. And there would still be a fight over 

the programming for the weapons systems and the avionics. They 

are going to want program codes. We are not going to transfer 

them. We never do. So they need it. If you have made the decision, 

I don’t think there is any guarantee that they would accept the 

way we make it. And then there is the political cost of approving 

a brand new system that China would object to. They are going to 

object no matter what we do, but they need the aircraft and I think 

they have to have that need addressed. 

Mr. RIVERA. Thank you. Thank you, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you, Mr. Rivera. 

I am pleased to recognize Mr. Connolly of Virginia. Welcome 

back, my friend. 

48

Mr. CONNOLLY. Thank you very much, Madam Chair. And thank 

you for your service. I want to thank the panel. And particularly 

Bob Sutter. Bob, we used to work together when I was on the Senate Foreign Relations Committee and you were at CRS, as I recall, 

so great to see you on the other side of the table. Let me ask you, 

Bob, understanding serious, serious human rights issues in China, 

and lots of other issues that we are concerned about that have been 

enumerated here at this dais: In your view, given the fact that 

since Richard Nixon we have had a level of relations with the head 

of state of that country notwithstanding, is it a mistake for this administration to receive the President of China? 

Mr. SUTTER. Thank you, Congressman. It is great to be here. I 

think what you find is that we have a very complicated and interdependent type of relationship. We have so many priorities, we 

have to balance them. And as you have indicated, every President 

that we have had since Nixon has done this. And so people can object in various ways and have very good reasons for this, but obviously Republican and Democratic Presidents, they prioritize these 

things and they determine no, this is the best way to go. 

We may be at a crossroads now. We may have to change the situation. China may be trying to dominate the world and this type of 

thing. I don’t think so. I think China has got too many problems. 

I think the United States is the leading power in the world, and 

that is going to stay that way for some time. And so it gives me 

a lot of confidence in this situation. 

But I think the bottom line is, you have to figure out where do 

you come down on these priorities and I think it is, and as you 

have indicated, every President of the United States has endorsed 

this kind of approach. 

Mr. CONNOLLY. Thank you. Mr. Wortzel, you were talking a little 

earlier about Taiwan’s defense capability, and you said they are in 

bad need of an upgrade of their fighter aircraft. Is there any reason 

to believe that the government in Taiwan is not capable of defending itself in the event of a military incursion? 

Mr. WORTZEL. I don’t think that that is the issue. I think that 

the issue is how capable would they be of doing it and what form 

might any attack take. They would have a hard time defending 

against all those 1,100 ballistic missiles which could do a lot of 

damage. I think they would be very hard pressed if there were 

massive special operations insertions into Taiwan to disrupt infrastructure. They themselves could do more to harden some of their 

air fields and their storage facilities. I think they have been woefully deficient in the way they dribbled in the command and control 

and data links for their current forces. I mean, if I—and I said this 

to their Minister of Defense. If there is one thing you could do to 

immediately improve your capabilities, it is take the whole data 

link and C–4 ISR package and link all your ground and naval and 

air assets and missiles so they could take part in cooperative targeted engagements. 

But they are doing things, and they have bought a lot, not everything that we offered. They are also developing their own modable 

launch rocket systems. They could probably use assistance with 

precision guided rounds. 

49

Mr. CONNOLLY. Let me ask you another part of that, given the 

limitation of time. We have 1 minute. Is there—one of the things 

that always concerns somebody about the Taiwan Straits is that 

there is a misunderstanding about the nature of the United States’ 

commitment to the security of Taiwan. 

In your view, does the current government of China fully understand the nature of the U.S. commitment to Taiwan? 

Mr. WORTZEL. I think the government of China does. I think at 

times some of the political actors in Taiwan misinterpret our support as—I mean, I had a legislator from Taiwan say, you know, we 

are glad to get this $16 billion arms package. As far as we are concerned it is a $16 billion insurance policy that you will come to our 

defense. They have to be ready to defend themselves. 

Mr. CONNOLLY. That is right. Mr. Chang, we have 20 seconds, 

but you wanted to answer that, too. 

Mr. CHANG. I think that with the remilitarization of Chinese politics and policy, there is a danger that Beijing does not understand 

our commitment and thinks that we will not defend Taiwan. 

Mr. CONNOLLY. Thank you. 

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

I would like to recognize Congresswoman Ellmers of North Carolina; so pleased that you selected our committee. Welcome. 

Mrs. ELLMERS. Thank you, Madam Chairman. I would like to 

thank our distinguished panel, and I would also like to reach out 

to the individuals and family members who have suffered human 

rights violations in China. You are a constant reminder to us that 

we need to be vigilant around the world to human rights violations 

and how fortunate we are here in the United States. 

My question is for Dr. Wortzel, do you prefer to be referred to 

as Colonel? Doctor? 

Mr. WORTZEL. It doesn’t matter, ma’am. Either are very polite. 

I have been called a lot of other things. 

Mrs. ELLMERS. Along the security issues that we have been discussing, last September a Chinese fishing boat, thought to be a spy 

vessel, deliberately collided with some Japanese Coast Guard vessels in the vicinity of the Senkaku Islands. Tensions rose to an unprecedented level before the Chinese boat captain was released. 

How close did the two sides come to military conflict? And in your 

opinion, what are the implications for the United States, given our 

treaty obligations with Japan? 

Mr. WORTZEL. I don’t think in that instance they came close to 

military conflict, but it was a very serious diplomatic spat, and it 

still continues to reverberate among the populace in both countries. 

But I think these things can escalate and could escalate if there 

are other incidents. 

We have a treaty obligation with Japan. It is a very, very important ally. And without question, if Japan got into a conflict, a military conflict with China, we would be at their side. I think that the 

Pacific Commander and the Secretary of State have taken very 

strong and principled positions not recognizing the sovereignty of 

the island, of the islands, but at the same time, ensuring that the 

Chinese understand that the United States is fully supportive of its 

treaty ally, and I think the Japanese understand that. We need to 

be very close to them. We need to work very closely with them. And 

50

even under the Democratic Party in Japan I know the Foreign 

Minister well, they have got a strong leadership that understands 

the threats from China. 

Mr. SUTTER. If I could say something about this, it is part of a 

pattern we have seen over the last 2 years of China being very assertive about the maritime area around their periphery, South 

China Sea, Yellow Sea, this type of thing. The net effect of this has 

really damaged China’s position in the Asia Pacific region. China 

is weaker today than it was a year ago because of this behavior. 

The United States is much stronger and the Obama government 

has this re-engagement of Asia strategy which this just feeds into. 

And so what you are doing is reinforcing America’s stature and 

strength in Asia while weakening China. 

If I were a calculating person in China I would say this is really 

dumb policy. We have to stop doing this type of thing. And so the 

thing to watch, after Mr. Hu Jintao’s visit is will they stop. Will 

they stop doing this kind of thing? Because it really is dumb. It is 

hurting them. And I think this is how you get the attention of the 

Chinese leaders. It costs them. You make it hurt them and then 

they stop. And I think the Obama government has done a very 

good job, very quietly, of intervening in various ways and saying, 

we are not going to allow this; this isn’t going to happen. And I 

think it has been quite effective. And so let’s watch. Let’s see what 

happens. 

If we have a situation where the military is out of control in 

China, if it is being remilitarized, as Mr. Chang suggested, then it 

could be a more dangerous situation. But at this point I would have 

to agree with Mr. Wortzel. I think the civilian leaders do have ultimate control and when they look at their cost and benefits this 

kind of behavior hurts them, and so I think they have to calm it 

down. 

Mrs. ELLMERS. Thank you very much. And thank you, Madam 

Speaker. I yield back the remainder of my time. 

Chairman ROS-LEHTINEN. Thank you so much. The gentlelady 

yields back. 

I am pleased to recognize Mr. Ackerman, the ranking memberdesignate on the Subcommittee on Middle East and South Asia. 

Mr. ACKERMAN. Thank you, Madam Chair. The Chinese have always been bad actors. They were the national focus of attention for 

being almost exclusively the world’s number one recluse until Richard Nixon, as was pointed out, came along and decided to have an 

intervention, and decided it was a better policy to try to engage the 

Chinese rather than to continue with China bashing, which to 

some seemed counterproductive to reaching a particular policy and 

behavior change end. Now we have noticed that there is a small 

club of recluse nations, and the Chinese and the North Koreans 

have found each other, and have formed Recluse Anonymous, with 

China being the recovering recluse, trying sometimes very unsuccessfully to affect the behavior of the North Koreans. Both seem to 

be engaging in very provocative activities on and off, especially of 

late. 

Can the Chinese really affect the behavior of the North Koreans? 

They seem to be looking like they are trying, sometimes looking 

like they are not. Is that something that they dial up, dial down, 

51

depending on China’s needs, kind of a control? Or do they lack any 

influence in the end? 

Mr. WORTZEL. I don’t think it is a can they. The question is will 

they?, Congressman Ackerman. 

Mr. ACKERMAN. You are saying they can? 

Mr. WORTZEL. Well, they provide somewhere between 70 and 90 

percent of North Korea’s energy needs, somewhere around 40, 50 

percent of their fuel needs, and a great deal of foreign investment. 

So, yes, they can. They fear that if they cut some of that, it would 

lead to instability in North Korea, and they would end up with 

South Korea, Japan, and the United States on their border. That 

is one thing. 

Second, my view is that they absolutely enjoy the fact that the 

United States is pretty heavily dependent on them, at least perceptually, to interact with North Korea, and that certainly restrains, 

in my view, a lot of the State Department’s diplomacy against 

China—or toward China. 

Mr. SUTTER. I think China could help with North Korea, too, and 

I think their interest is very much on stability. That is what they 

want. And they worry that pressure on North Korea not only could 

lead to the effects that Mr. Wortzel pointed out, but North Korea, 

you could see them as an enemy. The North Koreans talk like this 

quite often, how hostile their feeling is toward China. And so—but 

the net effect is what will the Chinese do? I would think they will 

seat their interest in stability. If the situation in North Korea looks 

like it is going to become very unstable then they will intervene. 

And I think they did intervene in the case of the North Korean 

provocation at the artillery barrage that killed several South Koreans later, in the latter part of last year. And the United States has 

maintained to the North Koreans that North Korea’s provocations, 

and particularly its development of nuclear weapons, is a direct 

threat to the United States. 

So the United States put I think very good pressure on the Chinese to get them off the dime to move the North Koreans into their 

tactical——

Mr. ACKERMAN. You are saying that the Chinese have an actual 

12-step plan? 

Mr. SUTTER. No, they don’t have a 12-step. I think this the idea 

of China rising and being in control. They are not in control. They 

are riding the tiger on this one. They don’t control North Korea. 

They have a lot of influence over it, but this is——

Mr. ACKERMAN. The same can be said with their very different 

but also dangerous relationship with Iran. 

Mr. SUTTER. Iran is much further away and their influence in 

Iran is much lower than it is in a place like North Korea. They are 

fundamental in North Korea. It is right on their border, it is 

very——

Mr. ACKERMAN. But they are dealing with a nuclear power and 

a nuclear wannabe. And the Chinese are usually pretty farsighted. 

Don’t they see this as a threat, not just to us, but to themselves? 

Mr. SUTTER. They see the more near term threat more dangerous. The danger of instability, not so much the geopolitical. It 

is the geopolitical element of South Korea being on the border of 

China. It is the basic whole idea of instability. 

52

Mr. ACKERMAN. You are talking about the economic instability? 

Mr. SUTTER. Exactly. It is bad for business. 

Mr. ACKERMAN. And they are threatened more by that than the 

nuclear instability? 

Mr. SUTTER. I believe they are, yes, sir. 

Mr. ACKERMAN. I yield back the remaining 4 seconds. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. Ackerman. 

I recognize Mr. Burton, chairman-designate of the Subcommittee 

on Europe and Eurasia. 

Mr. BURTON. Thank you, Madam Chair, for having this hearing. 

I am going to ask, after I ask a couple of questions, I am going to 

yield my time to my good friend, Mr. Smith. First of all, you may 

have answered this question, Mr. Yang, but is there any, do you 

have any idea how many people, how many million people are in 

Communist gulags? 

Mr. YANG. It is really difficult to get a number, for the obvious 

reason. And I am talking about a prison system. I have to talk to 

two prison systems. One is official. Through the court, you can get 

a record of how many people they detained. But there is another 

prison system that is black jail. There are hundreds of them in 

China now run by local government on various levels. So you just 

cannot find out how many people are being detained. And on top 

of that, many people are made missing, and many people are being 

put under house arrest. So you just don’t know how many people. 

Mr. BURTON. Well, we have been told it is in the millions. And 

I presume that you would agree with that. 

Mr. YANG. I don’t have a specific number, and I would say many. 

I would say China has the most prisoners of conscience in the 

world. Yeah. 

Mr. BURTON. One of the things that I gathered from listening to 

these learned people is that I believe China is not dumb. I believe 

they are very smart. They are leaders and I think that they are 

playing chess and they are doing it over a long period of time. They 

are moving as they can into the Caribbean and into South America. 

They are making friends and supporting tyrants who are not socialists, but many of them are just plain out Communists. And they 

are putting us in a trick bag because of the economic things that 

they are doing to us. Right now we have a $270 billion trade deficit 

with them. I think we are well over $1 trillion in hock to them as 

far as what we owe them. And if they started pulling those strings, 

which I think they probably will at some point, they can make us, 

at least to some degree, dance to their tune. 

And so I would like to get from you gentlemen your perception 

on the long term goals of China and whether or not they are doing 

what I think they are doing, both economically and militarily. They 

are building their military up dramatically, and so they have got 

us by the throat as far as our debt to them. And that would threaten our economy long term. And if they are building up their military and making these connections around the world, does that 

pose as a real long-term threat to the United States and our security? And I yield to Mr. Chang and Mr. Wortzel. 

Mr. WORTZEL. Let me say that, in my view, there is a long-term 

historical and cultural——

Mr. BURTON. Can you sum up pretty quickly? 

53

Mr. WORTZEL. Yes, long-term cultural affinity for the accrual of 

power and dominance in China, and that creates the sense of suzerainty where Chinese leaders believe they can almost dictate to 

other independent states how they should behave. And that is the 

way I read a lot of their behavior, particularly around their periphery. 

Mr. CHANG. I believe that they want to be a peer competitor to 

the United States. They want to drive the United States out of 

Asia, which I think is very clear. They would like the renmimbi, 

their currency, to be the world’s reserve currency. And certainly, 

they want to dominate nations on their periphery. 

This is clear from what the Chinese have been doing. And as we 

have seen in this past year, it has been very concerned about their 

relations with Japan, South Korea, India, where we see military or 

semi-military moves against these countries, which are after all our 

allies. So clearly, China is an adversary, and one that we have to 

be very careful about because, yes, I do think that they do play 

chess. But the one thing though is that they often make very serious strategic errors. They are very good on tactics, but long-term 

strategic moves may be not so good, as we saw in this past year, 

and as Dr. Sutter talked about. 

Mr. BURTON. Thank you. I yield to Mr. Smith. 

Chairman ROS-LEHTINEN. Mr. Smith is recognized. 

Mr. SMITH. Thank you very much. Let me just make a point. My 

friend and colleague, Mr. Connolly, a moment ago asked the question about receiving, you know, a Chinese President like Hu Jintao. 

It is not that you don’t meet with or receive, it is how you do it. 

And the concern that many of us have is that a state dinner, when 

Bush had a working lunch in 2006, it sends a message, especially 

when he is the jailer of Liu Xiaobo. 

Chairman ROS-LEHTINEN. Thank you, Mr. Smith. Thank you. 

We welcome Congresswoman Bass of California to our committee. Thank you. And I am pleased to recognize Mr. Chabot of 

Ohio. We are so pleased to have you return to serve with us. Thank 

you. The gentleman is recognized. 

Mr. CHABOT. Thank you very much, Madam Chair. Mr. Wortzel, 

I have a couple of questions for you first. I was, for quite a few 

years, one of the cochairmen of the Congressional Taiwan Caucus 

and so have been very interested in those issues and been there 

many times over the years. And relative to their defense, you had 

mentioned the fighter planes, in particular. Could you discuss, at 

the time there was a move for some submarines as well, and that 

ultimately didn’t go anywhere. I see you frowning. What are your 

thoughts about that? 

Mr. WORTZEL. It is a very difficult problem. It is a problem for 

the United States Navy because they really don’t want to have to 

work on or produce diesel submarines. 

Mr. CHABOT. They were talking about doing it in France or Europe or someplace. 

Mr. WORTZEL. The French got away with bribing enough Chinese 

and Taiwanese to get some destroyers there. Everybody involved in 

that had an accident falling off a tall building. I don’t think that 

will work a second time. They need this submarine. I mean, if the 

United States could get Costa Rica to buy a dozen submarines from 

54

Germany and then transfer them it doesn’t hurt anybody, if the 

Germans look the other way on the retransfer license. If we 

brought them and retransfer, they need them. But I don’t think it 

is viable to think that they are going to begin to produce them from 

nothing and then fill out the rest of their defense budget. 

Mr. CHABOT. Okay. And relative to the missiles, I think when we 

first organized the caucus, and this has been 12, 14 years ago or 

so, I think the number then was 400 or 500 missiles, then it went 

to 600 or 700, kept going up now to 1,100. I mean, clearly China 

has been threatening Taiwan for many, many years now, and bullying to a considerable degree. Relative to the missiles, is there 

anti-missile technology that would be helpful? There was talk 

about that at the time. You mentioned some missile system. Could 

you elaborate on that slightly? 

Mr. WORTZEL. Well, we have sold them ballistic missile defense 

technology. They bought a limited amount. It will help them. It 

could protect specific areas. That is still an awful lot of missiles. 

My personal view, and this is really a United States defense need, 

we need to be working on a laser. We don’t want to be shooting two 

or three missiles at another missile. We need to melt them right 

out of the sky quickly. 

Mr. CHABOT. Okay. And then slightly off topic, but not really 

that much, again, continuing in the Taiwan vein, President Chen 

Shui-bian has been in prison now for some time. And you know certainly he has been punished for his alleged transgression. Isn’t 

enough enough? Isn’t it about time—I mean, have they reached the 

point where you have perhaps the criminalization of politics here? 

Mr. Chang, I see you nodding. If you want to jump in you are 

welcome to do so. 

Mr. CHANG. I think the real issue with former President Chen 

is the procedures under which he was convicted, and at this point 

there needs to be a thorough review of the way that the current 

government, the Kuomintang government, has been prosecuting 

and persecuting members of the Democratic Progressive Party. 

This is really a very bad story. The United States needs to pay attention. Freedom House has talked a lot about the erosion of 

human rights in Taiwan and it is going to be a big story in Taiwan 

for the next 2 or 3 years. 

Mr. CHABOT. Okay. Thank you. 

Mr. SUTTER. Congressman, if I could just say something about 

Chen Shui-bian and your comments about Taiwan. One thing 

about the—first, on the Chen Shui-bian side, yes, there have been 

problems perhaps with the due process. But, my God, the charges 

against him that have been proven are very damning. So the fact 

that he is in jail it seems to make a lot of sense to someone like 

me. 

Mr. CHABOT. How long has he been in prison now? 

Mr. SUTTER. 2 years maybe, a little less than 2 years. 

Mr. CHABOT. Family members in prison as well, son, I think 

wife. 

Mr. SUTTER. Yes. His wife. I am not sure where she is right now 

but she has been convicted. So this is big corruption, sir. And so 

I think the charges are worth looking at carefully. On the military 

side, just keep in mind, with the one reservation I have about this, 

55

one of the most important ones, is Taiwan willing to buy? Taiwan, 

their GDP, their military budget is less than 3 percent of their 

GDP. You are not dealing with a country that really wants to militarize itself or build itself up militarily. 

Mr. CHABOT. And I have only got 5 seconds. That was one of the 

frustrating parts. We kept pushing them to buy the weapons system and the legislature just couldn’t find a way to do it. 

Chairman ROS-LEHTINEN. Thank you. And we thank Ms. Bass of 

California for yielding her time. And recognize Mr. Marino of Pennsylvania who will be yielding his time to Mr. Smith. If you could 

make that motion. 

Mr. MARINO. Madam Chair, I do yield my time to Mr. Smith. 

Thank you. 

Chairman ROS-LEHTINEN. Mr. Smith is recognized. 

Mr. SMITH. Thank you, Madam Chair, for that courtesy, and my 

good friend and colleague, the new member. Just a couple of questions in follow-up. I kind of ran out of time a moment ago about 

the issue of how you receive a person who, with his past and 

present, raises serious issues about what we are actually doing, especially to the dissidents who we know in the laogai throughout all 

of China, including Liu Xiaobo and his wife who is under house arrest, that the jailer of Liu Xiaobo is getting a state dinner. These 

aren’t nuances. These are profound issues that are raised here. 

So if you could perhaps some of you might want to speak to that 

issue. And let me also say that and the distinguished chairlady 

mentioned a moment ago that in this audience are some of the 

greatest and finest human rights defenders and their loved ones. 

Liu Dejun was abducted out of Vietnam right as the President took 

over in 2002. They have not seen their father. They try to get in 

to see him. He was abducted out of Vietnam back to China where 

he is now spending a horrific, enduring a horrific ordeal in the 

laogai. Geng He, who is Gao’s wife, who is here today, she made 

a 2000 trek to Thailand with her two children, after her older 

daughter was so despondent, perhaps even suicidal because she 

was being so mistreated. 

What we often forget, it is not just the dissidents, but it is their 

families who share in the cruelty meted out by the Chinese dictatorship. She made it, thankfully, and her children. But again, it 

raises the question about how can a man who is responsible, and 

I would say directly responsible, he gets a state dinner. When 

Frank Wolf and I made several trips to the PRC we met with Li 

Peng, premier. I believe we do have meetings like that. We had a 

list of prisoners. We had issues dealing with forced abortion, religious persecution. We laid it all out. He wasn’t happily in receipt 

of all that, but it was a very, very real conversation. And I wonder 

if, when the toasts are made later on tonight and there is all of this 

hoopla around a state dinner that all of that kind of like simmers 

into the background and what message have we sent? 

Also, if you can speak to this then I will yield to you, the bad 

governance model. You know, I chaired, when I chaired the Africa 

Subcommittee years ago, three hearings on what China is doing in 

Africa, you know, when people like Bashir in Zimbabwe, Mugabe 

and so many others who are dictators love the Chinese model of 

control and secret police. And I am very worried about the influVerDate 0ct 09 2002 15:33 Feb 24, 2011 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 F:\WORK\FULL\011911\64008 HFA PsN: SHIRL
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ence that their bad governance model and their bad human rights 

model is having, unless we really speak loud and clear. And I 

would again make my appeal to the President, to the Press Corps, 

be public. Don’t namby pamby, don’t walk on egg shells. Speak 

boldly about, especially President Obama, about his fellow Peace 

Prize winner, because he won it last year, this year obviously Liu 

Xiaobo, who is languishing guilty in prison and his wife under 

house arrest. 

Mr. YANG. Congressmen, I am personally upset about the honor 

that Hu Jintao is receiving. So it is not a matter whether to meet 

or to receive Hu Jintao. It is how to do it. I agree with you totally. 

And giving Hu Jintao this honor will send two messages to China, 

one to Chinese government and the other to Chinese people. To the 

Chinese government that can be described as that we can get away 

with the atrocities we perpetrated in the past. Disappearing people. 

Put Nobel Peace Prize winner in jail. We can get away with any 

human rights violations. 

The message to the people, that is, U.S. may not be that sincere 

about human rights issues in China. And I want to emphasize that 

China is a very practical, very rational player. Chinese government 

legitimacy is performance based; namely, the only source of legitimacy for this regime to continue its rule in China is fast economic 

growth. 

So we have too much imposed fear on ourselves thinking that if 

we take a stronger position on human rights issues, that will jeopardize our economic relationship with China. Why should I fear? 

They are the persons, it is them that we should fear, you know, 

any jeopardizing of economic relationship with the United States 

and the rest of the world because the slow economic growth will 

leave bare all the problems we have been accumulating in the past 

years that will cause the government to collapse. 

Mr. SMITH. Thank you. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. Marino, for 

yielding the time to Mr. Smith. 

And now, batting cleanup, one of our committee’s super stars, 

Mr. Royce, chairman-designate of the Subcommittee on Terrorism, 

Nonproliferation, and Trade, is recognized for 5 minutes. 

Mr. ROYCE. Thank you, Madam Chair. I was going to ask Larry 

a question. I think this is an issue that maybe everybody who is 

representative of the business community who does business in 

China should be thinking about. There was an article on extortion 

in the Harvard Business Review in December entitled ‘‘China vs 

the World: Whose technology Is It?’’ It is an exhaustive study of the 

actual consequences for U.S. businesses in China. Let me just read 

you, Larry, one of the conclusions that the authors wrote here:

‘‘Chinese officials have learned to tackle multi-national companies,’’ including U.S. companies, ‘‘often forcing them to form 

joint ventures with its national champions and transfer the latest technology in exchange for current and future business opportunities. Companies that resist are simply excluded from 

projects. The Chinese Government uses the restrictions to 

drive wedges between foreign rivals vying to land big projects 

in the country and induce them to transfer the technologies 

that state-owned enterprises need to catch up.’’

57

This is extortion, and we all know numerous examples. We have 

heard from witnesses; I think 2 years ago we heard from Nancy 

Weinstein, of Nancy’s Lifestyles, who opened a business in Beijing, 

only to have it stolen out from under her. She was in Shanghai. 

That was a Shanghai example. But since that hearing I have probably heard from a half dozen businesses that said we don’t want 

to go public, but this is their modus operandi. Now this appears in 

the Harvard Business Review, laying out the case that this is the 

modus operandi for the Chinese Government. 

Could I have your thoughts on that. 

Mr. WORTZEL. Mr. Royce, it is the modus operandi. Now, I have 

to say that American companies that are induced to do that do that 

of their own volition because they hope that, based on the ability 

to enter the marketplace, they can earn a lot of money. Some do, 

some don’t. 

Mr. ROYCE. Larry, we understand that part. But the next chapter is once the technology is stolen, that company had better be 

prepared for a pretty quick exit out of China because its contracts 

are often about to change, its work force doesn’t show up the next 

morning. This is in violation of any number of new rules, its leases 

are terminated. We have heard the stories over and over again. 

Mr. WORTZEL. Well, I would only suggest a legislative strategy 

to remedy it, and that is if a company can legitimately demonstrate 

that its products or its technology were stolen, then prohibit the 

sale of that stuff in the United States. 

Mr. ROYCE. Well, that is a good remedy. But from the experience 

that we have had going to bat with our constituents out in California, and Nancy Weinstein would be an example, we have not 

been able, through the court system in China, to have any success 

and, to my knowledge, I don’t know of any success. 

I wondered if you would agree with one of the points made in 

this report, and the authors conclude, it might be useful for the 

United States to dispense with the premise that it can have an economically compatible relationship with China; in other words, 

knowing that these are two radically different systems and China 

has failed to bring their system into compliance with any of the 

international norms for commercial activity or for rule of law. 

Mr. WORTZEL. I don’t know why you would choose to do business 

with a documented thief. 

Mr. ROYCE. Well——

Chairman ROS-LEHTINEN. Excuse me. Did you say ‘‘documented 

thief’’? 

Mr. WORTZEL. Yeah. 

Mr. ROYCE. My hope would be that there are many other countries in Asia that have an interest in closer relations with the 

United States. We see this in polling all the time, and I think a 

key aspect of managing China’s rise will be our alliances with China’s neighbors across East Asia and South Asia. I think that giving 

reassurance to our friends and placing a check on China’s regional 

ambitions is going to be necessary. But, what more should we be 

doing with these countries to encourage trade investment? And 

what more should we do to let the U.S. business community know 

their return on investment is a negative one in terms of China? 

That gets out occasionally in the Journal, but not often enough. 

58

Chairman ROS-LEHTINEN. Thank you, the gentleman’s time has 

expired. And now for truly our last question and answer, 5 minutes, will be Mr. Fortenberry of Nebraska, a strong pro-life legislator, Mr. Fortenberry to close out our hearing. 

Mr. FORTENBERRY. Thank you, Madam Chair, for the time. And 

thank you, gentlemen, for appearing before us today. I have a fairly 

lofty sentence in front of me. Basically it says, I want to stress the 

importance of managing our complex relationship with China in a 

manner that honors the transcendent principles that define our national purpose and identity. 

But let me stop there. As I look out into the audience here, I see 

a number of young people. And I think it is important to get your 

mind around this. Many of you are perhaps newly married or hope 

to be married in the future. Let’s suppose you were in China, and 

the authorities come by and say, how many children do you have? 

We have one, and we have one on the way. Well, that is one too 

many. Come with us. 

Can you imagine that in the United States? We can’t even get 

our mind around these concepts. And yet, this is President Hu 

Jintao’s China of today. Now, I sincerely hope that as the President 

meets with—as President Obama meets with President Hu, that 

human rights issues are going to figure most prominently in these 

discussions and the White House has indicated some direction in 

that regard. But since I have been serving in Congress, members 

of both sides of the aisle have boldly challenged Beijing on the 

ruthless treatment of democracy activists and their families, Internet freedom activists, religious minorities, and women and families 

victimized by a callous policy of coerced abortion. 

Now, let’s turn to economics. A full estimate is that we owe about 

$2 trillion to China, and we have a bilateral trade deficit approaching $300 billion and, of course, this poses weighty concerns. Where 

appropriate, I believe we must challenge China to abandon its unbridled mercantilism which manifests itself in massive subsidies 

and other trade distorting practices that contribute to this staggering imbalance. I think also we must look ourselves in the eye 

in the United States and take action to get our fiscal house in 

order, to revive our stagnant manufacturing industries, refurbish 

our industrial base and take responsibility for our economic future. 

The reality is we buy their stuff and they buy our debt, and this 

is a truly dysfunctional marriage. So I think we have an obligation 

to forthrightly address the sources of tension in this relationship 

with China, and our commitment to mutual respect should never 

entice us to ignore these very serious concerns. And I hope that the 

administration will echo these concerns in their meetings today 

with the Chinese leadership. 

My question to the panel is this: The Chinese give cover to the 

North Koreans. The Chinese do business with Iran. The Chinese do 

not respect human rights. What type of world does China envision? 

What is their end game? A nationalistic surge underwritten by a 

new capitalistic Communist model never foreseen in the history of 

the world? Can you comment on that, please? 

Mr. SUTTER. I would be very happy to comment. I think the Chinese objective is very much focused on the here and now. Mr. Yang 

emphasized that they have a legitimacy deficit. And their legitVerDate 0ct 09 2002 15:33 Feb 24, 2011 Jkt 000000 PO 00000 Frm 00062 Fmt 6633 Sfmt 6633 F:\WORK\FULL\011911\64008 HFA PsN: SHIRL
59

imacy rests on economic performance and to do that they need stability. And to do that they have to interact with the world on a lot 

of different ways, in a lot of different ways, with economic development being primary. And so to confront the United States in a 

major way is something that I think is not fundamental to what 

they are about right now. Their long-term plans are very vague. 

They have got a very big agenda for the short term, and it is going 

to keep them busy for a long time. 

Mr. FORTENBERRY. So does raising the concerns that I raised, as 

well as many others today, help address or give rise to more legitimacy concerns as they further distance themselves from what we 

would consider to be the international community of responsible 

nations? 

Mr. SUTTER. The idea that we should address all the issues that 

you have mentioned in a forthright way is very, very clear. We 

should do that. No question. But I think your idea that somehow 

the Chinese have this plan for domination and control of the world, 

I think, a better image is that China is a bit scrambling, trying to 

keep legitimacy, trying to keep control over their very, very vibrant 

economic and social situation, that isn’t under good control in many 

respects. 

Mr. FORTENBERRY. Does raising the issues I just raised hinder 

their quest for this legitimacy. 

Mr. SUTTER. I think it could. It could. 

Mr. FORTENBERRY. Or do you not care, because economics trumps 

everything? 

Mr. SUTTER. No, economics does not trump everything because 

prestige is important as well and their position is important as 

well. 

Chairman ROS-LEHTINEN. Thank you. The gentleman’s time has 

expired. 

It is a testament to the great interest that this topic has that 

members keep coming back. So pleased to recognize Mr. Deutch, 

my Floridian colleague, for 5 minutes. 

Mr. DEUTCH. Thank you, Madam Chair, I appreciate it. I appreciate your leadership of this committee. 

I would like to spend a couple of minutes talking about the way 

in which the Chinese Government has been willfully weak in enforcing intellectual property rights. The creativity, the imagination, 

the innovation of American workers, their intellect, is being stolen 

and it is being stolen on a regular basis in China. It is being stolen 

by illegal downloads, it is being stolen by pirated DVDs, it is being 

stolen by seizing, again, the intellectual property of our Nation. 

What can we do to increase the pressure on the Chinese Government to be more serious in enforcing and protecting the intellectual 

property rights of our citizens? 

Mr. CHANG. I think the one thing that we can do if we really are 

serious about it is start adding tariffs for goods of countries that 

do engage in willful theft of intellectual property. This is a really 

important thing for us to do, and I think it is probably about the 

only way to do it. 

There are a number of other strategies. And one thing the 

Obama administration has done is, it has gone after these indigenous innovation rules that President Hu Jintao has sponsored and 

60

really does put American companies at a serious disadvantage if 

they want to do business in China. So that is one thing. 

But when it comes to the actual theft, which is another issue, I 

believe that the only way to deal with this is sanctions of some 

sort, penalties of some sort. And they probably are going to follow 

the general trajectory of H.R. 2378. 

Mr. DEUTCH. Dr. Wortzel, are you nodding your head? 

Mr. WORTZEL. I agree with Mr. Chang. We have to avail ourselves of the available World Trade Organization remedies, and we 

are not always doing that. They are more limited than we might 

like, but we must avail ourselves of them. And we have to work 

particularly with our European allies and friends, so that when a 

case is brought, it is not just brought by one country. I think that 

helps. 

Countervailing duties is another potential remedy that I think 

would be useful. 

Mr. DEUTCH. I would like to broaden the discussion to the implications of the theft of intellectual property to the links between 

stealing intellectual property and the funding of terrorist organizations like Hezbollah and Hamas. A majority of the counterfeit 

goods originate in China and wind up in places like the tri-border 

region of South America, where millions of dollars in direct contributions have then been to Hezbollah. One such specially designated global terrorist entity in Paraguay provided a lump-sum 

payment of $3.5 million to Hezbollah. 

Is there a way, even moving beyond the important nature of intellectual property rights on its own, to helping, to reinforcing the 

severe implications of these violations in our own and helping to 

protect our national security? 

Mr. WORTZEL. I kind of think you just pointed the way toward 

a response to that. And that would be to take a look at the Iran 

Sanctions Act, and with the terrorism nexus see if legislation could 

be modeled along the lines of the Iran Sanctions Act that would 

specifically sanction the Chinese violators that are engaged in that 

activity. 

Mr. DEUTCH. And along those lines, Dr. Wortzel, under the Iran 

Sanctions Act and the legislation that we passed last year, by all 

accounts there are Chinese firms that ought to be sanctioned. They 

have not been. Do you have thoughts on the actions taken by these 

Chinese companies, state-owned in Iran, in helping them to overcome the sanctions that have been imposed on other companies? 

Mr. WORTZEL. You know, here you really have to get the Oversight Administration and Enforcement. If they are not doing the 

job, they are not doing the job. 

Mr. CHANG. You know, we sanctioned individual Chinese enterprises, but essentially they all are controlled by the state. So essentially what we should be doing is thinking about sanctions that go 

beyond just the individual enterprise. Because essentially what we 

are doing is, we are going after the pinkie when we really should 

be going after the head. 

Mr. DEUTCH. In the remaining seconds on that specific issue, 

how do we go after the head? 

Mr. CHANG. It would be basically putting sanctions on goods from 

countries that are involved in certain prohibitive behavior. This is 

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going to be very difficult for the United States to do. We haven’t, 

up to now, had the will to do it. But when it comes to things like 

Iran sanctions or selling arms to the Taliban, something else, we 

really have to think about our priorities. 

Mr. DEUTCH. Thank you. Thank you, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. Deutch. 

Thank you, panelists, for excellent testimony. And thank you to the 

members who participated, thank you to the audience. And the 

briefing is now adjourned. Thank you. 

[Whereupon, at 12:43 p.m., the committee was adjourned.] 

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