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AMERICA’S FUTURE IN ASIA: FROM REBALANCING

TO MANAGING SOVEREIGNTY DISPUTES

HEARING

BEFORE THE

SUBCOMMITTEE ON ASIA AND THE PACIFIC

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS

SECOND SESSION

FEBRUARY 5, 2014

Serial No. 113–123

Printed for the use of the Committee on Foreign Affairs

(

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

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

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ADAM KINZINGER, Illinois 

MO BROOKS, Alabama 

TOM COTTON, Arkansas 

PAUL COOK, California 

GEORGE HOLDING, North Carolina 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

STEVE STOCKMAN, Texas 

RON DESANTIS, Florida 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

LUKE MESSER, Indiana 

ELIOT L. ENGEL, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

JUAN VARGAS, California 

BRADLEY S. SCHNEIDER, Illinois 

JOSEPH P. KENNEDY III, Massachusetts 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

SUBCOMMITTEE ON ASIA AND THE PACIFIC

STEVE CHABOT, Ohio, Chairman 

DANA ROHRABACHER, California 

MATT SALMON, Arizona 

MO BROOKS, Alabama 

GEORGE HOLDING, North Carolina 

SCOTT PERRY, Pennsylvania 

DOUG COLLINS, Georgia 

LUKE MESSER, Indiana 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

AMI BERA, California 

TULSI GABBARD, Hawaii 

BRAD SHERMAN, California 

GERALD E. CONNOLLY, Virginia 

WILLIAM KEATING, Massachusetts 

(III)

C O N T E N T S 

Page

WITNESS 

The Honorable Daniel R. Russel, Assistant Secretary, Bureau of East Asian 

and Pacific Affairs, Department of State ........................................................... 6

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Daniel R. Russel: Prepared statement ......................................... 9

APPENDIX 

Hearing notice .......................................................................................................... 34

Hearing minutes ...................................................................................................... 35

The Honorable George Holding, a Representative in Congress from the State 

of North Carolina: Prepared statement .............................................................. 36

Written responses from the Honorable Daniel R. Russel to questions submitted for the record by: 

The Honorable Steve Chabot, a Representative in Congress from the State 

of Ohio, and chairman, Subcommittee on Asia and the Pacific .................... 37

The Honorable Mo Brooks, a Representative in Congress from the State 

of Alabama ........................................................................................................ 46

The Honorable Luke Messer, a Representative in Congress from the State 

of Indiana .......................................................................................................... 48

(1)

AMERICA’S FUTURE IN ASIA: FROM 

REBALANCING TO MANAGING 

SOVEREIGNTY DISPUTES 

WEDNESDAY, FEBRUARY 5, 2014

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON ASIA AND THE PACIFIC,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The committee met, pursuant to notice, at 2 o’clock p.m., in room 

2175 Rayburn House Office Building, Hon. Steve Chabot (chairman 

of the subcommittee) presiding. 

Mr. CHABOT. Committee will come to order. 

Good afternoon. I would like to welcome everyone to this afternoon’s subcommittee hearing. I, first, want to apologize a bit for 

the late start but we had a series of votes. So we were called to 

the floor to vote and I hope you will take that into consideration. 

Hopefully, we won’t have any other interruptions, and I want to 

thank Ms. Gabbard from the great state of Hawaii for being the 

ranking member here today. Eni Faleomavaega from American 

Samoa is unable to make it, and we know that she will do an excellent job for the other side. So, thank you very much. 

The United States’ presence in the Asia-Pacific is built on promoting regional stability, fostering respect for international law, 

advancing respect for human rights, and maintaining freedom of 

navigation and unhindered lawful commerce in the maritime regions. These objectives are fundamentally hinged on the United 

States’ alliances with Japan, South Korea, Australia, Thailand and 

the Philippines; our resilient relationships with Taiwan and Singapore; and our evolving relationships with Vietnam and Indonesia. 

As the title of today’s hearing implies: What is America’s future 

in Asia? One thing is certain—the United States will never leave 

Asia, because as a Pacific nation, we recognize that the nexus of 

global commerce and strategy has transitioned to the Western Pacific, and the strong bonds formed with our friends and allies cannot be broken; however, America’s presence in the region is being 

challenged. 

The recent flare-up of confrontations between China and its 

neighbors over sovereignty claims in the East and South China 

Seas is the latest example of how decades-old conflicts could easily 

pivot from fishermen skirmishes into all-out military battles. China 

is attempting to seize its primacy over the Asia-Pacific region, at 

the expense of its neighbors. These moves may well be aimed at 

2

undermining the interests of the U.S. and its allies, challenging the 

administration’s strategic rebalance efforts, and altering the myth 

that China seeks a ‘‘peaceful rise.’’

Take, for example, the increasing frequency of clashes between 

Chinese maritime law enforcement authorities and Vietnamese, 

Philippine and Japanese fishing vessels; or the confrontations between the U.S. Navy and Chinese naval vessels, including the time 

the USNS Impeccable was harassed by Chinese vessels in 2009, 

and the recent USS Cowpens incident. Let us also not forget the 

2001 Hainan Island incident when a U.S. EP–3 electronic surveillance aircraft and a People’s Liberation Army Navy fighter jet collided mid-air. Any misstep in these situations—an overzealous pilot 

or fisherman—could have unnecessarily escalated tensions to the 

breaking point. 

From my perspective, the administration appears to be struggling to find a way to better direct America’s resources toward the 

Asia-Pacific and find a way to manage the growth of maritime territorial disputes—surely the greatest threat, at this point, to the 

strategic rebalance policy. Without a coherent and cohesive direction, these disputes could significantly impact America’s ability to 

promote regional peace and stability, enhance economic prosperity, 

and preserve U.S. interests. 

Finding a way to mitigate these growing tensions and decrease 

the chances of miscalculation will not be easy. I think Japan’s decision to create a National Security Council is a significantly positive 

step because not only will it more efficiently direct Japanese foreign and defense policies regarding national security, but it will 

also allow for stronger collaboration with the United States—something that is critically needed. I support efforts to revise the U.S.-

Japan bilateral defense guidelines, as well as the consideration to 

locate rotational U.S. troops in the Philippines, as we’ve done in 

Australia. At the same time, I urge our regional allies to be measured in their actions and rhetoric because even a slightly provocative remark could further and unnecessarily inflame tensions. 

I also believe the administration needs to do a better job at clearly conveying U.S. commitment to working with and supporting our 

regional allies. China’s unilateral action to impose an Air Defense 

Identification Zone over the East China Sea presented the administration with an opportunity to do this, but instead of rising to the 

occasion, it sent mixed signals of its willingness to stand up to China’s acts of provocation. While I do not believe it is in the United 

States’ best interests to ‘‘contain’’ China, I do think balancing its 

rise by maintaining a strong regional presence that is focused, engaged, and forceful is imperative. 

Unfortunately, that is not where we are today and since the 

hearing this subcommittee held a year ago with then-Assistant Secretary Robert Blake and Acting Assistant Secretary Joseph Yun, efforts to strategically rebalance the U.S. toward Asia still lack a 

long-term sustainable focus. They are still hinged on ambitious 

rhetoric that have not reassured our allies or partners in the region, or anyone else, for that matter. As a result, China sees the 

Obama administration as weak and indecisive, and will continue 

its attempts to fill a perceived power vacuum in the region unless 

we find a way to enhance our presence across the board. 

3

In the meantime, as China continues to flex its muscles, countries around the region are recalculating and hedging on whether 

they can count on the U.S. Consequently, I think it is in the interest of this country and in the interest of our regional allies, notably 

Japan, South Korea, Taiwan, and the Philippines, for the U.S. to 

once and for all articulate a coherent strategy that is fundamentally built on actions. It’s time for the administration to move beyond speeches and find a way to reassure the region that the 

United States is there to stay and that America’s future in Asia is 

strong, committed, and absolute. 

I’d now like to yield to the gentlelady from Hawaii for the purpose of making an opening statement. 

Ms. GABBARD. Thank you very much, Mr. Chairman. 

I appreciate your bringing attention to this critical issue for us 

to discuss and have this necessary conversation that answers the 

question of what is the United States role in the Asia-Pacific region 

and being able to bring about a better understanding of the current 

situation so that we can best address what that role should be both 

with the challenges that we are presented with today but also so 

that we can project long-term into the future. 

As was previously mentioned, China’s expansion in the East 

China Sea and its claim over the Senkaku Islands is something 

that has escalated tensions with both Japan and South Korea. 

Last month, China, expanding its maritime law enforcement 

presence, enforcing its fisheries law in South China Seas contested 

waters, has done the same. 

We need to seek cooperation in order to achieve the maritime 

and air safety within the region that I think is a common objective 

for all interested parties and continue to be proactive in the AsiaPacific region to mitigate as much as possible the risk of an accidental military clash. 

I think the United States needs to remain engaged with China 

in a proactive, sustained and strategic manner, using diplomatic 

peaceful means to try to address these disputes. Abiding by international airspace and maritime rules will decrease the threat to 

peace and stability in the region. 

Obviously, there are several sensitivities that the United States 

will need to navigate through and balance in order to have an effective strategy in strengthening relations, both with China as well 

as our allies—long-time allies within the region. 

As I mentioned, it’s in the best interests of all parties to maintain freedom of navigation both in international waters and international airspace. 

It’s time to be proactive now before we end up in a situation 

where there is a trigger, there is an escalation and we are dealing 

with a crisis that is highly elevated and one that will involve many 

of the countries in the region. 

Given the increasing trade among nations on the Pacific Rim, the 

urgency of setting clear norms, of having a deeper understanding 

and acceptable territorial borders is paramount. 

I look forward to reviewing our positions and policies in the AsiaPacific region as we assess our future role in the region, as we also 

address the immediate air and maritime safety concerns. 

4

Mr. Chairman, thank you again for bringing us together to really 

look at this important issue and look forward to hearing from our 

witness today. Thank you. 

Mr. CHABOT. Thank you very much. 

The gentleman from Arizona, Mr. Salmon, is recognized for 1 

minute. 

Mr. SALMON. Thank you. 

I’d like to thank the chairman, Steve Chabot, for holding this important hearing. Secretary Russel, thank you for coming to testify 

before this subcommittee. 

Since the administration announced their pivot toward the AsiaPacific region in 2011, we’ve seen the tensions in the region escalate. They have risen. The hope was that if there was U.S. influence in the region a significant influence would help balance China’s growing aggressiveness with their neighbors. 

Unfortunately, I fear the pivot has been in name only, and the 

administration’s strategy in Asia remains overpowered by other regions around the globe. Over the last several years, we have seen 

increased aggressions in the disputed waters of the South China 

Sea and, more recently, in the East China Sea. 

As China sought to expand their control in the region, our allies 

are struggling to ensure their sovereignty is maintained and navigational rights to the South and East China Seas are protected. 

Military and commercial access to the navigable waters of the 

South and East China Seas are critical to the security and economic viability of every country in the region. Strong U.S. allies including Japan, Taiwan, Philippines, Vietnam, and South Korea 

have come under increasing pressure from China to cede or temper 

these inalienable sovereign rights to Chinese will. 

There must be a peaceful pass forward that protects U.S. regional allies, ensures U.S. national security interests and avoids 

unnecessary conflict and aggressions. 

One of my heroes of the region, President Ma of Taiwan, has proposed the East China Sea peace initiative as a means to resolving 

disputes peacefully by exercising restraint, refraining from taking 

antagonistic actions and following international law and continuing 

the dialogue. 

I hope the Chinese and other regional powers will embrace this 

as a solution going forward. It’s the most proactive positive solution, I think, that is on the table yet. 

They have indicated—they, China, have indicated that they have 

a desire to settle disputes peacefully, but they have been unwilling 

to open dialogue and negotiate in a multilateral way and this is extremely disappointing, and I would hope that as we go forward we 

will all come to some recommendations or conclusions that will 

help strengthen our allies in the region. 

And like you, Mr. Chairman, I don’t believe any of us want to 

do anything to contain China. I have been one of the most vigorous 

proponents of free trade with China, I believe, in this entire body. 

But we cannot neglect our allies in the region and there has to 

be constructive dialogue. President Ma has put a reasonable proposal on the table. I would like to see us run with that. Thank you. 

Mr. CHABOT. Thank you very much. 

5

The gentleman from California, Mr. Sherman, is recognized for 

making an opening statement. 

Mr. SHERMAN. We all agree we should be engaged in the region. 

We ought to provide diplomatic support for our allies. But I fear 

that we have already begun to go overboard. Within the thing called the Pentagon budget, well over $600 billion, there are shifts and we could say that we are now spending 

tens if not hundreds of billions of dollars a year allocable to this 

effort to fight over a few islands, most of which are so tiny that 

no one in history has ever chosen to live there. 

Already I see us shifting our research, our training, our force 

configuration to facing down China in the South China Sea. Compare that to Japan, which consistently spends only 1 percent of its 

GDP on its military and is ready to see us allocate tens of billions 

if not hundreds of billions of dollars to fighting for a few islands 

that they will wish to exploit for economic purposes. 

Keep in mind that neither Vietnam nor Japan sent any forces to 

fight in the U.N. action in Afghanistan, the place from which 

America was attacked for the first time in the lifetime of, I think, 

just about everybody on this panel. 

So likewise these islands do sit astride trade routes, but for the 

most part they sit astride this trade route between the United 

States and China, and you can say, well, hundreds of billions of 

dollars of trade goes through that area, yes—trade between the 

United States and China, trade between China and other nations. 

We—it meets the institutional needs of the Pentagon for us to 

begin a new cold war with China. It gives them the kind of adversary that we have prevailed upon in glorious actions. 

Uniformed, technological, the great victories of our military were 

in World War II and the Cold War, and it is understandable that 

we will be told by the Pentagon that we now have another great 

opportunity to confront a large, militarily sophisticated, uniformed 

and conventional foe. 

But keep in mind, we are talking about islands no one has chosen to live on. We are talking about countries that have always 

supported us or often supported us diplomatically but not militarily 

and that they themselves, especially in the case of Japan, limit 

their own military commitment while asking us for a much more 

open-ended commitment. 

These are uninhabited islands. Let’s stay calm. I yield back. 

Mr. CHABOT. Thank you. The gentleman’s time has expired. 

The gentleman from North Carolina, Mr. Holding, is recognized 

for 1 minute. 

Mr. HOLDING. Mr. Chairman, I will submit a statement for the 

record. 

Mr. CHABOT. Okay. Thank you very much. 

The gentleman from Pennsylvania, Mr. Scott, is recognized. 

Mr. SCOTT. Mr. Chairman, I will also submit a statement. 

Mr. CHABOT. Okay. 

The gentleman from Indiana, Mr. Messer, is recognized. 

Mr. MESSER. Thank you, Mr. Chairman. Very much appreciate 

the opportunity to be here at this hearing, looking forward to the 

opportunity to travel to the region with many of you just in the 

coming couple of weeks. 

6

Would just sort of hope for Mr. Russel and emphasize the importance of talking today about the—President Ma’s from Taiwan’s 

East China Sea peace initiative and the importance of as we work 

through the challenges in that region that we apply common sense 

and listen to our allies. Thank you. 

Mr. CHABOT. Thank you very much. 

I will go ahead and introduce our distinguished panelist here this 

afternoon. Mr. Daniel Russel is the Assistant Secretary of State for 

East Asian and Pacific Affairs and is a career member of the Senior Foreign Service. Prior to his appointment as Assistant Secretary, Mr. Russel served at the White House as Special Assistant 

to the President and national security staff. During his tenure 

there, he helped formulate President Obama’s strategic rebalance 

to Asia. Before joining the national security staff, he served as director of the Office of Japanese Affairs and had other various assignments in Japan, South Korea, the Netherlands, and Cyprus. 

He has also served as chief of staff to Ambassador Thomas R. Pickering and assistant to the Ambassador to Japan, former Senate 

Majority Leader Mike Mansfield. Mr. Russel was awarded the 

State Department’s Una Chapman Cox Fellowship sabbatical and 

authored the book, ‘‘America’s Place in the World.’’ Before joining 

the Foreign Service, he was manager for an international firm in 

New York City. Mr. Russel was educated at Sarah Lawrence College and University College, University of London, U.K. 

We welcome you here this afternoon, Mr. Russel, and since we 

have only one panelist we will be extending your time for a statement from 5 minutes to 7 minutes before we will ask questions. 

So you are recognized for 7 minutes. Thank you. 

STATEMENT OF THE HONORABLE DANIEL R. RUSSEL, ASSISTANT SECRETARY, BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, DEPARTMENT OF STATE 

Mr. RUSSEL. Thank you very much. You’re very kind, Mr. Chairman. 

Thanks to Ms. Gabbard and the other members of the subcommittee for the opportunity to testify today on these important 

issues. 

Before I begin, I would respectfully request that you accept my 

written testimony for the record. I would also like to take the opportunity to thank the chairman for his leadership on the issue and 

his work to enhance our engagement with the Asia-Pacific region. 

The members of this subcommittee know full well the importance 

of our interests in the Asia-Pacific region. As Secretary Kerry has 

made very, very clear, at the core of our strategic rebalancing is a 

determination to ensure that the Asia-Pacific region remains open, 

inclusive and prosperous, and that it is guided by accepted rules 

and standards and respect for international law. 

Through our alliances, through our partnerships, the U.S. has 

been instrumental in sustaining a maritime regime based on international law that has allowed the countries in the region to prosper, and as a maritime nation with global trading networks the 

U.S. has a national interest in the maintenance of peace and stability, respect for international law, unimpeded lawful commerce 

7

and freedom of navigation and overflight, including and especially 

in the East China Sea and the South China Sea areas. 

For these reasons, the behavior and the tensions between the 

claimants are of deep concern to us and to our allies. An incident 

in these waters could touch off an escalatory cycle, which would 

have very serious adverse effects on our economic and our security 

interests. 

That is why the Obama administration has consistently emphasized the importance of exercising restraint, of maintaining open 

channels of dialogue, of lowering rhetoric, of behaving safely and 

responsibly both in the sky and the sea and peacefully resolving 

territorial and maritime disputes and keeping with international 

law. 

We oppose and we have sought to prevent unilateral actions that 

disrupt the status quo or jeopardize that peace and security. In the 

South China Sea we have supported efforts by ASEAN and China 

to reach agreement on an effective code of conduct, which is long 

overdue, in order to promote a rules-based framework for managing 

and regulating the behavior of the countries. 

And in the East China Sea, we remain concerned about the serious downturn in Sino-Japanese relations. It is important to lower 

tensions, to turn down the rhetoric and to exercise caution and restraint in this sensitive area. 

However, China’s announcement of an Air Defense Identification 

Zone, an ADIZ in the East China Sea in late November, was a step 

in the wrong direction. We neither recognize nor accept China’s declared ADIZ. 

The United States has no intention of changing how we conduct 

our operations in the region and we have made clear to China that 

it should not attempt to implement that ADIZ and should refrain 

from taking similar actions elsewhere in the region. 

Mr. Chairman, as I mentioned out the outset, the U.S. has a 

deep and long-standing stake in the maintenance of prosperity and 

stability in the Asia-Pacific and an equally deep and abiding longterm interest in the continued freedom of the seas based on the 

rule of law—a rule that guarantees, among other things, freedom 

of navigation, freedom of overflight and the other internationally 

lawful uses of the sea. 

International law also makes clear the legal basis on which 

states can legitimately assert their rights in the maritime domain 

or can exploit maritime resources. So the United States takes the 

strong position that maritime claims must accord with customary 

international law. 

Even though the United States isn’t a claimant and even though 

the United States takes no position on the competing claims to sovereignty over disputed land features in the East China Sea or the 

South China Sea, we believe strongly, as I said, that the claims 

must accord with international law. 

We also care deeply that all countries deal with the territorial 

and their maritime disputes peacefully, diplomatically and in accordance with international law. This means ensuring that claimants manage their differences without intimidation, coercion or the 

use of force. 

8

We are candid with claimants, all the claimants, when we have 

concerns regarding their claims or the behavior in the way that 

they pursue them. Deputy Secretary Bill Burns and I were in Beijing last month and held extensive discussions with Chinese officials, for example. 

In these discussions, we directly raised our concerns about what 

we see as a growing incremental pattern of efforts by China to assert control over the area contained in the so-called nine-dash line 

in the South China Sea. 

Among other steps, this includes continued restrictions on access 

to the Scarborough Reef, pressure on the long-standing Philippine 

presence at the Second Thomas Shoal and the recent updating of 

fishing regulations covering disputed areas in the South China Sea. 

Our view is that these actions have raised tensions in the region 

and have exacerbated concerns about China’s long-term strategic 

objectives. China’s lack of clarity with regard to its South China 

Sea claims have created uncertainty in the region and limit the 

prospect for achieving mutually agreeable resolution or equitable 

joint development arrangements. 

At the risk of repeating myself, I want to reinforce the point, Mr. 

Chairman, that under international law, maritime claims in the 

South China Sea must be derived from land features and any Chinese claim to maritime rights not based on claimed land features 

would be inconsistent with international law. 

China could highlight its respect for international law by clarifying or adjusting its claim to bring it into accordance with international law of the sea. Along with that, we strongly support serious and sustained bilateral as well as multilateral dialogue among 

claimants to address and manage overlapping claims in a peaceful 

and noncoercive way. 

We support the rights of the claimants themselves to avail themselves of peaceful dispute mechanisms. The Philippines itself chose 

to exercise such a right last year with the filing of an arbitration 

case under the Law of the Sea. 

Now, these legal and diplomatic processes will take time but the 

relevant parties in the near term can take steps to lower tension 

and avoid escalation. That includes practical mechanisms to prevent incidents or manage them when they occur. Another would be 

for the claimants to agree not to undertake new unilateral steps to 

change the status quo. 

In the meantime, the U.S. is committed to promoting regional 

stability through continued strong diplomatic and military presence. This includes our efforts to promote best practices and good 

cooperation on all aspects of maritime security and to bolster maritime domain awareness including through our capacity-building 

program throughout Southeast Asia. 

It includes strengthening institutions like ASEAN and the East 

Asia Summit as regional venues where countries can engage in dialogue with all involved both about the principles but also about 

practical measures to avoid conflict. 

This is an issue of immense importance to the United States, to 

the Asia-Pacific and to the world, and I want to reaffirm here today 

that the United States will continue to play the central role in underwriting security and stability in the Asia-Pacific that has guarVerDate 0ct 09 2002 14:23 Apr 08, 2014 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 F:\WORK\_AP\020514\86590 SHIRL
9

anteed peace and facilitated prosperity for the last six-plus decades. 

Mr. Chairman, I thank you very much for the opportunity to appear here today and I look forward to hearing further views from 

the members of the committee and to answering any questions that 

you have. 

Thank you. 

[The prepared statement of Mr. Russel follows:]


86590a-1.eps
10


86590a-2.eps

2 

maritime and trade and investment The effect, of what happens in the 

Asia-Pacific Region will be felt across the globe and have direct implications for 

America's interests. 

It is precisely with this in mind that this administration has for the past five years 

made sustained engagement in the Asia-Pacific a strategic priority. This is 

precisely why Secretary KelTY is about to make his fifth visit to Asia in ten months 

and why he has devoted so much time and effort to meeting, calling and consulting 

with his Asian counterparts. 

We have a strong stake in the continuing economic growth of this region, and we 

are working to ensure that Americans can fully participate in that grO\vth and share 

in that prosperity. We are negotiating high-standard trade and investment 

agreements that wjJl unlock the dynamism of Pacific Rim economies for mutual 

benefit. We are bolstering regional cooperation on transnational issues through 

ASEAN and its related institutions. And we are helping countries manage 

complex environmental issues resulting from rapid development. The common 

thread mnning tlu·ough our strategic rebalancing is a determination to ensure that 

the Asia-Pacific remains an open, inclusive, and prosperous region guided by 

widely accepted rules and standards and a respect for intemational law. 

Since the end ofthe Second World War, a maritime regime based on international 

law that promotes !1-eedo1l1 of navigation and lawful uses orthe sea has facilitated 

Asia's impressive economic growth. The United States, through our our alliances, 

our security pal1nerships and our overall military presence and posture, has been 

instrumental in that maritime regime and providing the security that has 

enabled the countries in the region to prosper. As a maritime nation with global 

trading networks, the United States has a national interest in freedom ofthe seas 

and in unimpeded lawful commerce. From President Thomas Jefferson's actions 

against the Barbary pirates to President Reagan's decision that the United States 

will abide by the Law oftlle Sea Convention's provisions on navigation and other 

traditional uses ofthe ocean, American foreign policy has long defended the 

freedom of the seas. And as we consistently state, we have a national interest in 

the maintenance of peace and stability; respect for intemationallaw; unimpeded 

lawful commerce; and fi·eedol11 of navigation and overflight in the East China and 

South China Seas. 

For all these reasons, the tensions arising from maritime and territorial disputes in 

the Asia-Pacific arc of deep concern to us and to om allies. Both the South China 

and East China Seas are vital thoroughfares for global commerce and energy. Well 
11


86590a-3.eps

3 

over halfthe world's merchant tonnage flows through the South China Sea, and 

over 15 million barrels of oil per day transited the Strait of Malacca last year, with 

most of it continuing onward through the East China Sea to three ofthe world's 

largest economies - Japan, the Republic of Korea, and China. A simple 

miscalculation or incident could touch off an escalatory cycle. Confrontations 

between fishermen and even law enforcement patrols are not unusual in these 

waters. But the frequency and assertiveness of some countries' patrols are 

increasing. In addition, the imposition of competing regulations by different 

countries over disputed territory and associated maritime areas and airspace is 

raising tensions and increasing the risk of confrontation. We witnessed a tragic 

incident in May oflast year, when a Philippine Coast Guard patrol shot and killed 

a tisherman from Taiwan. Both sides, to their credit, took steps to prevent an 

escalation of tensions. But the risk of confrontation could have very serious 

adverse consequences for all of our economic and security interests. 

Accordingly, we have consistently emphasized in our diplomacy in the region as 

well as in our public messaging the importance of exercising restraint, maintaining 

open channels of dialogue, lowering rhetoric, behaving safely and responsibly in 

the sky and at sea, and peacefully resolving territorial and maritime disputes in 

accordance with intemationallaw. We are working to help put in place diplomatic 

and other structures to lower tensions and manage these disputes peacefully. We 

have sought to prevent provocative or unilateral actions that disrupt the status quo 

or jeopardize peace and security. When such actions have occurred, we have 

spoken out clearly and, where appropriate, taken action. In an etlort to build 

consensus and capabilities in support ofthese principles, the administration has 

invested considerably in the development of regional institutions and bodies such 

as the ASEAN Regional Formn, the ASEAN Defense Ministers Meeting Plus, the 

East Asia Summit, and the Expanded ASEAN Maritime Forum. These forums, as 

they continue to develop, play an important role in reinforcing international law 

and practice and building practical cooperation among member states. 

Tn the South China Sea, we continue to support efforts by ASEAN and China to 

develop an effective Code of Conduct. Agreement on a Code of Conduct is long 

overdue and the negotiating process should be accelerated. This is something that 

China and ASEAN committed to back in 2002 when they adopted their 

Declaration on the Conduct of Parties in the South China Sea. An effective Code 

of Conduct would promote a rules-based framework for managing and regulating 

the behavior ofthe relevant countries in the South China Sea. A key part of that 

framework, which we and many others believe should be adopted quickly, is 

inclusion of mechanisms such as hotlines and emergency procedures for 
12


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4 

preventing incidents in sensitive areas and managing them when they do occur in 

ways that prevent disputes from escalating. 

And in the East China Sea, we remain concerned about the serious downturn in 

China-Japan relations. We support Japan's call for diplomacy and crisis 

management procedures in order to avoid a miscalculation or a dangerous incident. 

It is important to lower tensions, turn down the rhetoric, and exercise caution and 

restraint in this sensitive area. China and Japan are the world's second and third 

largest economies and have a shared interest in a stable enviromnent to facilitate 

economic growth. Neither these two important countries nor the global economy 

can afford an lillintended clash that neither side seeks or wants. It is imperative 

that Japan and China use diplomatic means to manage this issue peacefully and set 

aside matters that can't be resolved at this time. 

China's annOlllcement of an Air Defense Identification Zone (ADIZ) over the East 

China Sea in November was a provocative act and a serious step in the wrong 

direction. The Senkakus are under the administration of Japan and unilateral 

attempts to change the status quo raise tensions and do nothing under international 

law to strengthen territorial claims. The United States neither recognizes nor 

accepts China's declared East China Sea ADIZ and has no intention of changing 

how we conduct operations in the region. China should not attempt to implement 

the ADIZ and should refrain from taking similar actions elsewhere in the region. 

Mr. Chainnan, we have a deep and long-standing stake in the maintenance of 

prosperity and stability in the Asia-Pacific and an equally deep and abiding longterm interest in the continuance of freedom ofthe seas based on the nue oflaw -

one that guarantees, anlOng other things, freedom of navigation and overt1ight and 

other internationally lawful uses ofthe sea related to those freedoms. International 

law makes clear the legal basis on which states can legitimately assert their rights 

in the maritime domain or exploit marine resources. By promoting order in the 

seas, international law is instrumental in safeguarding the rights and freedoms of 

all countries regardless of size or military strength. 

I think it is imperative that we be clear about what we mean when the United 

States says that we take no position on competing claims to sovereignty over 

disputed land features in the East China and South China Seas. First of all, we do 

take a strong position with regard to behavior in connection with any claims: we 

firnlly oppose the use of intimidation, coercion or force to assert a territorial claim. 

Second, we do take a strong position that maritime claims must accord with 

customary international law. This means that all maritime claims must be derived 
13


86590a-5.eps

5 

from land features and otherwise comport with the international law of the sea. So 

while we are not siding with one claimant against another, we certainly believe that 

claims in the South China Sea that are not derived from land features are 

fundamentally flawed. In support ofthese principles and in keeping with the 

longstanding U.S. Freedom of Navigation Program, the United States continues to 

oppose claims that impinge on the rights, freedoms, and lawful uses ofthe sea that 

belong to all nations. 

As I just noted, we care deeply about the way countries behave in asserting their 

claims or managing their disputes. We seek to ensure that territorial and maritime 

disputes are dealt with peacefully, diplomatically and in accordance with 

intemationallaw. Of course this means making sure that shots aren't fired; but 

more broadly it means ensuring that these disputes are managed without 

intimidation, coercion, or force. We have repeatedly made clear that freedom of 

navigation is reflected in intemationallaw, not something to be granted by big 

states to others. President Obama and Secretary Kerry have made these points 

forcefully and clearly in their interactions with regional leaders, and T - along with 

my colleagues in the State Department, Defense Department, the National Security 

Council and other agencies - have done likewise. 

We are also candid with all the claimants when we have concems regarding their 

claims or the ways that they pursue them. Deputy Secretary Burns and I were in 

Beijing earlier this month to hold regular consultations with the Chinese 

govemment on Asia-Pacific issues, and we held extensive discussions regarding 

our concerns. These incl ude continued restrictions on access to Scarborough Reef; 

pressure on the long-standing Philippine presence at the Second Thomas Shoal; 

putting hydrocarbon blocks up for bid in an area close to another country's 

mainland and far away even from the islands that China is claiming; announcing 

administrative and even military districts in contested areas in the South China 

Sea; an unprecedented spike in risky activity by China's maritime agencies near 

the Senkaku Islands; the sudden, uncoordinated and unilateral imposition of 

regulations over contested airspace in the case of the East China Sea Air Defense 

Identification Zone; and the recent updating of fishing regulations covering 

disputed areas in the South China Sea. These actions have raised tensions in the 

region and concerns about China's objectives in both the South China and the East 

China Seas. 

There is a growing concern that this pattern of behavior in the South China Sea 

reflects an incremental effort by China to assert control over the area contained in 

the so-called "nine-dash line," despite the objections of its neighbors and despite 
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6 

the lack of any explanation or apparent basis under international law regarding the 

scope ofthe claim itself. China's lack of clarity with regard to its South China Sea 

claims has created lmcertainty, insecurity and instability in the region. It limits the 

prospect for achieving a mutually agreeable resolution or equitable joint 

development arrangements among the claimants. I want to reinforce the point that 

illlder international law, maritime claims in the South China Sea must be derived 

from land features. Any use of the "nine dash line" by China to claim maritime 

rights not based on claimed land features would be inconsistent with international 

law. The international conU11Unity would welcome China to clarifY or adjust its 

nine-dash line claim to bring it in accordance with the international law ofthe sea. 

We support serious and sustained diplomacy between the claimants to address 

overlapping claims in a peaceful, non-coercive way. This can and should include 

bilateral as well as multilateral diplomatic dialogue among the claimants. But at 

the same time we fully support the right of claimants to exercise rights they may 

have to avail themselves of peaceful dispute settlement mechanisms. The 

Philippines chose to exercise such a tight last year with the filing of an arbitration 

case illlder the Law ofthe Sea Convention. 

Both legal and diplomatic processes will take time to play out. The effort to reach 

agreement on a China-ASEAN Code of Conduct has been painfully slow. 

However, there are important steps that the relevant parties can take in the short 

ternl to lower tensions and avoid escalation. One line of effort, as I mentioned 

earlier, is to put in place practical mechanisms to prevent incidents or manage them 

when they occur. Another common-sense measure would be for the claimants to 

agree not to undertake new lmilateral attempts to change the status quo, defined as 

ofthe date ofthe signing of the 2002 Declaration of Conduct, that would include 

agreement not to assert administrative measures or controls in disputed areas. And 

as I have indicated, all claimants - not only China - should clarify their claims in 

terms of international law, including the law ofthe sea. 

Tn the meantime, a strong diplomatic and military presence by the United States, 

including by strengthening and modernizing our alliances and continuing to build 

robust strategic partnerships, remains essential to maintain regional stability. This 

includes our efforts to promote best practices and good cooperation on all aspects 

of maritime security and bolster maritime domain awareness and our capacity 

building programs in Southeast Asia. The Administration has also consistently 

made clear our desire to build a strong and cooperative relationship with China to 

advance peace and prosperity in the Asia-Pacific, just as we consistently have 

encouraged all cOlliltries in the region to pursue positive relations with China. And 
15


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7 

this includes working with all countries in the region to strengthen regional 

institutions like ASEAN and the East Asia SLUnmit as venues where countries can 

engage in clear dialogue with all involved about principles, values and interests at 

stake, while developing cooperative activities -like the Expanded ASEAN 

Seafarers Training initiative we recently launched - to build trust and mechanisms 

to reduce the chances of incidents. 

To conclude, this is an issue of immense importance to the United States, the AsiaPacific, and the world. And I want to reaffirm here today that the United States 

will continue to playa central role in underwriting security and stability in the 

Asia-Pacific. 

Mr. Chainnan, I thank you for this opportunity to appear before you today to 

discuss this important issue. I look forward to answering any questions you may 

have. 
16

Mr. CHABOT. Thank you very much for your testimony, and before I begin the questioning here, I’d be remiss if I didn’t recognize 

an old hand, somebody that served our institution for probably 20 

years or so, was chairman of the Intelligence Committee and 

served his district in Michigan very well, and that’s Congressman 

Pete Hoekstra. 

Pete, why don’t you stand up there? You deserve to be recognized. 

(Applause) 

Thank you for your service, and I’ll begin with myself. I recognize myself for 5 minutes. 

Mr. Russel, since the administration announced its policy to strategically rebalance toward the Asia-Pacific back in 2011, many said 

this strategic pivot was implemented as a way to contain China’s 

rise. China surely believes this to be the case and some believe this 

policy is the root cause of China’s sense of paranoia, which instigated the intensification of its provocative and aggressive actions 

in the maritime regions in that part of the world. 

At the end of the day, do you think the United States’ forward 

presence in the region is more escalatory than not? Have our efforts to increase our presence correlated with the increase in regional tensions? If not, then what other explanations do you give 

for the rise in tensions over the last few years? I think, as Congressman Salmon and I both indicated in our opening statements, 

we’re not interested in containing China. We do think that they 

need to act as a civilized nation, as a leader if they want to be 

treated as one and, unfortunately, their actions have been quite 

provocative. But what do you say about the rebalance or the pivot, 

whichever terminology one prefers? 

Mr. RUSSEL. Thank you very much for the thoughtful question, 

Mr. Chairman. 

I’d begin, if I may, by saying that when I was first secunded to 

the White House, to the National Security Council in January 2009 

I heard and saw from the President and from the senior administration officials a commitment to strategic rebalance to the AsiaPacific region based on U.S. interests. 

So the rebalance, certainly, dates back to 2009 to the very beginning of the administration and has, I would say, and has always 

had six basic lines of effort. First, to strengthen our alliances; second, to participate and to build up regional institutions; thirdly, to 

engage emerging powers including and especially China; fourth, to 

promote economic development that benefits the U.S. and the countries in the region; fifth, to champion the values that America cherishes, the values of democracy and to strengthen civil society in the 

region; and sixth, to diversify our engagement. In other words, use 

our soft power in addition to our strong military alliances and presence. 

That having been said, I am convinced that a diminution or a 

withdrawal of U.S. engagement and presence, to answer your question in the inverse, would be a major destabilizing factor in the region and it would——

Mr. CHABOT. Not to cut you off there—and I agree with you that 

it would be and we shouldn’t do that—but my question is the way 

17

China interprets this and it seems that they interpret it very differently than we intended and that’s really what I’m getting at. 

Do you think their actions in any way are a reflection of what 

we are doing—rebalancing allegedly from the Middle East to Asia? 

Mr. RUSSEL. I do not, Mr. Chairman. 

Mr. CHABOT. Okay. 

Mr. RUSSEL. I recognize that there are many in China who either 

believe or find it convenient to argue that the U.S. strategy of engagement in the Asia-Pacific region is in some fashion at odds with 

China’s own interests or, arguably, part of a containment strategy. 

It is not. Moreover——

Mr. CHABOT. Okay. Let me stop you there, if I can, because I’ve 

only got 2 minutes and I want to get one more question at least. 

The budget for the East Asia and Pacific Bureau is the second 

smallest of the bureaus at the State Department. Vying for funds 

with the Middle East is surely no easy task because despite troop 

withdrawals across that region much of the administration’s focus 

is centered on crises occurring in the Middle East and that part of 

the world. 

That being said, the Asia-Pacific region is the future. It’s the 

driver of the global economy and will make or break our geopolitical role in the world, I believe. Balancing the need to increase 

our level of engagement in the Asia-Pacific with budget constraints 

here in Washington, how do you propose that we best increase our 

presence while restraining the cost of that engagement? 

Mr. RUSSEL. Well, thank you, Mr. Chairman. 

Needless to say, you’re preaching to the choir. Secretary Kerry 

and, of course, I and my colleagues have been vigorous advocates 

for not only the State Department budget but for fully resourcing 

the strategic rebalance in the Asia-Pacific region, and against the 

backdrop of fiscal constraint as you alluded to we have seen important increases in other areas where our budget have been protected, certainly, relative to that of other agencies. 

The lines of effort that we’re pursuing in the State Department 

and as a government include activist diplomacy, include the clear 

and outspoken statements—a public assertion of our policy which 

it has an important effect and is influential in providing confidence 

to our partners and allies in the region; a robust military presence 

which must continue and that is enhanced greatly by our unique 

system of alliances and security partnerships; an aggressive effort 

to partner—to develop partner capacity including by strengthening 

maritime domain awareness and other forums that allow our partners to act and to operate; and importantly, Mr. Chairman, our active engagement in the multilateral institutions that serve to help 

rule setting. 

These are projects that our men and women in our Embassies 

and in our militaries are actively engaged in every day. 

Mr. CHABOT. Thank you very much. 

My time is expired. The ranking member, the gentlelady from 

Hawaii, Ms. Gabbard, is recognized for 5 minutes. Thank you. 

Ms. GABBARD. Thank you very much, Mr. Chabot. 

I’m going to pick up where he just left off. You know, obviously, 

coming from a state—Hawaii—that someone just told me this 

morning—I thought it was a great terminology—where we are the 

18

strategic point of the spear for our country’s focus on the Asia-Pacific region geographically so keep a very close eye and are very 

keenly aware of things that are happening on an ongoing basis but 

also aware of the opportunity that exists in the region, and it is 

a question that often arises both, you know, here at home but also 

from some of our allies in the region is are we really serious about 

this focus on the Asia-Pacific when numbers come out as they are—

the chairman pointed out your department’s budget being the second smallest in Department of State. 

In Hawaii, we have the East-West Center, which I think you’re 

keenly aware of, also has seen a reduction in funding this year. 

When is this priority going to start taking place or showing 

through in very real and practical ways? 

Mr. RUSSEL. Well, thank you for that question, Ms. Gabbard. 

We are committed and Secretary Kerry is committed not only to 

the Asia-Pacific region but to an active and effective presence, active and effective forms of engagement throughout the Asia-Pacific 

region. 

The East-West Center is an extremely important venue for us. 

President Obama, of course, has a personal connection there. I 

know the head of the East-West Center is in Washington and I’m 

scheduled to meet with him soon. 

The programs that we engage in not only in Hawaii but in the 

region are aimed at reaching out to governments, to civil society 

and to ensure that our connections with the countries in the region 

are more than simply professions of bilateral ties—that these are 

grass roots and people-to-people connections. 

So what Secretary Kerry, in terms of resource and in terms of 

direction, has focused on includes economic engagement, educational exchange, cooperative programs that pertain to energy, climate and other transnational issues and threats of common concern, economic development—everything from the Trans-Pacific 

Partnership to a range of commercial and other sorts of programs. 

Ms. GABBARD. No, I appreciate your talking about that and one 

of the assets that the East-West Center provides is at that grass 

roots level where you’re having that exposure and that engagement 

with people who go back to their countries who become leaders 

within their countries and takes a very proactive approach. 

I’d like to talk a little bit about—let’s see, I’ve got a lot of questions here. You talked about the effective code of conduct agreed to 

by the ASEAN nations and China. 

Could you just touch quickly on the progress of that and what 

the guidelines—kind of the framework is for that? 

Mr. RUSSEL. Well, in 2002, ASEAN and China reached agreement on a declaration of conduct that established certain principles 

and that also committed them to negotiate a code of conduct that 

would oversee the behavior of the parties in the region. 

The two elements to a code of conduct, which we see great value 

to, are, first, reaching consensus between ASEAN and China about 

acceptable forms of behavior among claimants and relevant parties 

in the South China Sea based on the principles of peaceful resolution, respect for international law, no unilateral changes to the status quo and so on. 

19

A second dimension of the code of conduct that we believe can 

be expedited—should be expedited is the development of practical 

mechanisms to prevent incidents that could trigger an escalatory 

cycle or to manage those incidents should they occur. 

The United States has abundant experience with procedures to 

prevent incidents at sea. We have put our experience and our expertise at the disposal of the ASEANs. We’re actively engaged in 

partnerships through a number of the ASEAN-related forum for 

maritime cooperation and maritime security. 

We think that there is no reason why a code of conduct can’t be 

negotiated quickly or that practical steps can’t be taken in the interim. 

Ms. GABBARD. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. CHABOT. Thank you. The gentlelady’s time has expired. 

The gentleman from Arizona, Mr. Salmon, is recognized, who is 

also the chairman of the Western Hemisphere Subcommittee of the 

Foreign Affairs Committee. 

Mr. SALMON. Thank you, Mr. Chairman. 

When I served in Congress back in the 90s, our Secretary of 

State delineated a policy with China that was very confusing. It 

was called strategic ambiguity, and it sounds like an oxymoron. 

I think that since that time as a country we’ve tried desperately 

to seek strategic clarity in dealing with China and we’ve expanded 

our trade relations with China. We’ve advocated for permanent 

normal trade relations, their ascension to the WTO, and we’ve, I 

think, acted every bit as a good partner should. 

But given the fact that in the last couple of years especially 

they’ve increased their antagonistic ways in the South and East 

China Seas, what more can we do? I mentioned in my opening 

statement that President Ma of Taiwan has recommended this 

East China Sea peace initiative. 

Mr. Russel, do you have any thoughts on that as far as—is that 

something we could pick up and run with? It doesn’t call for military action and it certainly opens the door for meaningful dialogue. 

But it has to happen with all interested parties and what role 

can the United States take in establishing that kind of a peace initiative? 

Mr. RUSSEL. Well, thank you very much, Mr. Salmon. 

In diplomacy, as in other aspects of life, timing is everything and 

I think it is unfortunate that President Ma’s peace initiative when 

it was announced did not fall on fertile soil or water, so to speak. 

There are a number of very important elements to that initiative. 

Others have made proposals including President Aquino, who similarly proposed a zone of peace and cooperation. 

When you break apart these initiatives and look at the key elements thereof, you find the principles that are at the heart of the 

U.S. strategy and the U.S. effort, namely, respect for international 

law and peaceful resolution of disputes. 

Our activist diplomacy, both bilateral and multilateral, at the 

Presidential level, at the Secretary’s level and at my level is aimed 

at seeking consensus, not just lip service but practical operational 

consensus around these principles including the principles of respect for international law. 

20

All of the claimants need to define their claims clearly in ways 

that are consistent with international law. This particularly applies 

to China. The ambiguity of China’s claim and the behavior of Chinese assets in asserting these claims is a destabilizing factor. 

We have made that point directly to the Chinese. I was recently, 

as I mentioned, in Beijing. This is something that Secretary Kerry 

has taken up directly, something that we have included in our 

clear public statement. 

Mr. SALMON. You know, I was one of the strongest advocates for 

passage of permanent normal trade relations because I believe that 

our further engaging with China in trade and opening up more and 

more doors for China to do business with the United States was a 

really, really good thing. 

I remember having to speak to a lot of my colleagues who were 

real reticent about it because of some of the horrendous human 

rights abuses in China and on and on and on. 

I mean, several issues—aggression toward Taiwan, and I advocated that that passage of the permanent normal trade relations 

would ultimately lead to better relations in the region and maybe 

an improvement in human rights. I’ve been really disappointed. 

I mean, I’ve been incredibly disappointed that China hasn’t 

taken the ball and run with it and it seems to me that they’re just 

playing a game of dare. 

You know, we’re going to see what we can get away with and if 

the U.S. has the guts, the cojones, to challenge us, and given the 

fact that, you know, this pivot that was supposed to happen but I 

don’t believe it really has happened has maybe kind of emboldened 

them, I’d just like to encourage us to maybe practice a little bit of 

tough love with them and let them know that we’re just not going 

to stand for or tolerate those kind of aggressive actions because 

some of those aggressive actions have actually materialized into violence and that’s just not tolerable. 

Mr. RUSSEL. Well, Congressman, let me make absolutely clear 

that the United States is committed to and is working to achieve 

a stable, constructive, cooperative relationship with China. The 

President, the Secretary, the members of the Cabinet have vigorously pursued that effort. 

But by the same token, we are also committed to a relationship 

that allows us to speak clearly and candidly to respond directly on 

areas of significant difference. 

We want and the region needs a China that embraces the rule 

of law. We need a China that is a net contributor to the stability 

and the security of the region. To achieve that, we have a deliberate and, I would say, sophisticated strategy that combines the 

search for practical cooperation on areas of genuine importance to 

both of our citizens and to the world as everything from climate 

change to North Korea. 

But it also enables us to address directly areas of difference, 

areas of concern and problem behavior even when, to the chagrin 

of the Chinese, that requires us to publicly call them out or impose 

reputational costs. 

The key to our China strategy, Congressman, is the strength of 

our partnerships and our security alliances in the Asia-Pacific. 

That is the underpinning that has allowed China to prosper, as you 

21

alluded to. That is the framework with which we will continue to 

work constructively with China. 

Mr. CHABOT. The gentleman’s time has expired. 

The gentleman from California who is also——

Mr. SHERMAN. The gentleman from Virginia first. 

Mr. CHABOT. Okay. The gentleman from Virginia, Mr. Connolly, 

is recognized for 5 minutes. 

Mr. CONNOLLY. I thank my colleague and I thank you, Mr. 

Chairman. 

Mr. Russel, of course, I’m listening to my colleague and I certainly consider what he’s saying but to assert something is not tolerable with respect to Chinese behavior in the South China Sea is 

fascinating, you know, to hear. I’m not quite sure what it translates into in terms of policy. 

What are we prepared to do to curb Chinese excesses as we perceive them in that region? 

Mr. RUSSEL. Well, thank you, Congressman. I’ll tell you a bit 

about what we are doing as a practical matter to address this. 

First and foremost, as I said, we are strengthening our alliances 

and our security posture. We are present and accounted for in our 

defense capacity in a significant and in a sustained and credible 

way. 

Secondly, we are working with a range of partner countries to 

help build local capacity, to develop their ability to monitor their 

own airspace, their own territorial waters and to acquire the 

wherewithal to defend themselves and their interests in a responsible way. 

This is something that the United States does bilaterally but it 

is something that we do also with our partners and through international fora. 

Thirdly, we engage with China directly as well as with the 

ASEANs and with neighbors including India, including Australia in 

the multilateral fora that we are attempting to strengthen. 

The regional architecture in the Asia-Pacific region is under developed and the decision in 2010 by President Obama to sign the 

treaty with ASEAN and to begin participating on an annual basis 

both U.S. ASEAN leaders meetings and in the East Asia Summit 

was a major milestone in terms of commitment to a U.S. presence 

that had a palpable impact on China’s calculus and China’s behavior. 

Mr. CONNOLLY. Thank you. 

One of the concerns I have in this whole situation talked about 

in a previous hearing is the space for miscalculation. One looks at 

what China is doing and one is concerned. 

It looks from a distance like it’s picking a fight with Vietnam, 

with the Philippines, with Japan, among others and one may not 

intend by declaring, you know, a Air Defense Identification Zone—

one may not intend to do something overtly provocative but the result might be just that. 

And the probability of an accidental military incursion or worse 

starts to rise, frankly, especially when you pick fights with more 

actors in the region and encompassing more of the region. 

What is the United States position on that? I mean, do we—is 

that a concern of ours and have we relayed that concern to the ChiVerDate 0ct 09 2002 14:23 Apr 08, 2014 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 F:\WORK\_AP\020514\86590 SHIRL
22

nese Government and what’s our reading of the Chinese Government? 

Have they thought that through, do you think, in a satisfactory 

way? I mean, is that of concern to them as well? 

Mr. RUSSEL. Well, thank you, Congressman. 

We are very mindful of the risk of unintended conflict or of accidents. No analyst that I know or respect believes that China or, 

frankly, other major players in the Asia-Pacific region have any desire for or intention to engage in conflict deliberately. But as Vice 

President Biden is fond of saying, there’s something worse than an 

intended conflict and that’s an unintended conflict. 

To that end, to avoid that two major lines of effort by the United 

States include the direct engagement with the Chinese and with 

the People’s Liberation Army on upgrade of mil-mil relations between the U.S. and China, which has enabled us to improve our 

ability to communicate. 

That doesn’t obviate occasions in which the U.S. and Chinese assets are at odds, as witnessed the case of the—recent case of the 

USS Cowpens. But it does allow for a level of communication that 

permits U.S. and Chinese officers to resolve issues peaceably, 

which was also the case with the Cowpens. 

The second line of effort is more broadly with our allies and with 

our partners whether it’s Japan, whether it’s the Philippines or 

whether it’s others. We are actively promoting regional mechanisms to prevent incidents and to manage them when they occur, 

everything from hot lines to rules of engagement. 

This is one important reason why the U.S. strongly supports the 

call by Japan for better communications and incident avoidance 

procedures in the East China Sea with China. 

Mr. CHABOT. The gentleman’s time has expired. 

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

thank my colleague, Mr. Sherman, for his courtesy. 

Mr. CHABOT. Thank you very much. 

The gentleman from North Carolina, Mr. Holding, is recognized 

for 5 minutes. 

Mr. HOLDING. Thank you, Mr. Chairman. 

You know, how the United States deals—decides to engage with 

the maritime conflicts or the air disputes in the East and South 

China Seas, you know, not only sends important messages to our 

allies as to how we take care of them but it says to other countries 

around the world that might not necessarily be an ally but someone that we have a strategic relationship with, and one nation that 

I know who’s been very, very close attention to how we handle 

these is India, and, you know, they watch any engagement we have 

with China and they watch it closely. 

So what would you say any potential action or inaction in the 

East and South China Seas that we undertake—you know, what do 

you think that means for our strategic relationship with India? 

Mr. RUSSEL. Well, thank you very much, Congressman. 

With the caveat that my personal area of responsibility in the 

State Department does not extend as far as India, I would say that 

India, including as an active member of the East Asia Summit, 

India, by virtue of its ‘‘look East’’ policy, India, as the world’s largest democracy and given its strategic place in the Indo-Pacific geogVerDate 0ct 09 2002 14:23 Apr 08, 2014 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 F:\WORK\_AP\020514\86590 SHIRL
23

raphy has an important role to play, an important contribution to 

make. 

We have a consultation with India, which I’m looking forward to 

undertaking as Assistant Secretary on the Asia-Pacific region, and 

I have been in touch on the margins of multilateral meetings with 

my Indian counterparts. 

Others of our Asian allies including and especially Japan have 

intense consultations as well. The Prime Minister of Japan was recently there. Fundamentally, the rules of the South China Sea and 

the East China Sea apply in the Indian Ocean and apply globally. 

The absolute requirement and a requirement that is incumbent 

on China to embrace to respect rules of the road, to accept that 

international law applies equally to big countries and small, to 

strong and weak, is a principle—a set of principles that I believe 

is essential to India, and that the efforts by the United States including in the multilateral forum to champion these principles have 

a significant impact and, I believe, the support of the Indian democracy. 

Mr. HOLDING. Well, you know, it’s hard to see how we can have 

a pivot to India without—a pivot to Asia without really thinking 

about India because India is a country where we have a very special strategic relationship with. 

We are bound by, as you pointed out, it’s the world’s largest democracy. We’re the world’s oldest democracy and, you know, the 

business relationships that we have between the United States and 

India are deep and far reaching and, you know, I think that India, 

you know, is a balance to China there. 

I mean, obviously those two, you know, look at each other all the 

time. And so do you think there are ways where we can better incorporate India into our pivot to Asia and perhaps use it as a foil 

of China—a balance to China? 

Mr. RUSSEL. Well, thank you, Congressman. 

You know, our strategy, as I said earlier, is not to contain China. 

Our goal is not to disadvantage China’s legitimate interests and we 

don’t—our policies are not aimed at any one country and we don’t 

use our relationships including our relationship with India as a 

lever or a bludgeon against China. 

However, the issues at stake are global issues. As democracies 

and as seafaring nations, India and the United States share a common interest in respect for international law, in protection of freedom of navigation and overflight and in the vigorous defense of 

unimpeded lawful commerce. 

India has—is a neighbor not only to China but also to Burma, 

Myanmar, and has an important East-West corridor of trade, a corridor that is important to India’s economic future because of the 

huge opportunities for economic growth in that very dynamic region of Southeast Asia. 

India is dependent on the sea lanes as so many of its neighbors 

and therefore the safety and the security of the seas, a safety and 

security that’s predicated not on coastal navies but on the respect 

for international law. 

Mr. HOLDING. Thank you. 

Mr. CHABOT. The gentleman’s time has expired. I thank the gentleman. 

24

The gentleman from California, Mr. Sherman, is recognized, who 

is also the ranking member of the Terrorism, Nonproliferation, and 

Trade Subcommittee of the Foreign Affairs Committee. 

Mr. SHERMAN. Thank you. 

China has land border disputes as well with India, perhaps Pakistan, Vietnam, perhaps Burma, Russia. Has China ever agreed to 

or suggested international arbitration or international litigation of 

any of its land or maritime border disputes? 

Mr. RUSSEL. Well, thank you, Congressman. 

As you pointed out, China has not only something like two dozen 

neighbors but something like two dozen border disputes. 

Now, China has at various times made progress in resolving and 

reconciling some of these disputes but does so——

Mr. SHERMAN. I know China has engaged in bilateral negotiations. Have they urged or agreed to the submission of any of these 

disputes to any international panel? 

Mr. RUSSEL. The Chinese position, particularly with regard to its 

territorial disputes in the—in Southeast Asia and in the East 

China Sea insists that the only satisfactory approach is bilateral 

negotiations. 

We do not agree and, moreover, in addition to bilateral and multilateral fora we respect and defend the right of all claimant states 

to avail themselves of legitimate international legal mechanisms. 

Mr. SHERMAN. Thank you. 

Mr. RUSSEL. The case in point is the Philippines. 

Mr. SHERMAN. I understand. Let me go on. 

The Senkaku Islands, as Japan calls them——

Mr. RUSSEL. Yes. 

Mr. SHERMAN [continuing]. They’ve got a claim and they—as I 

understand it, they have had an air notification system with regard 

to those islands in place for quite some time. Is that correct? 

Mr. RUSSEL. Correct. These islands——

Mr. SHERMAN. So when China—so when China announced that 

it wanted air notification they were simply putting themselves at 

the same position and claim that Japan had insisted upon for many 

years? 

Mr. RUSSEL. I would put it very differently, Congressman. 

In 1972 when Okinawa reverted from the U.S. to Japan, the administrative control of these islands, what the Japanese call the 

Senkakus, also reverted to Japan. 

Now, we don’t take a position on the ultimate sovereignty but the 

administrative control is there. With that administrative control 

came the Air Defense Identification Zone that the U.S. had created. 

To create or to claim, as China did, an Air Defense Identification 

Zone over an area that is administered by another country over an 

area that is so highly sensitive is not, in my view, putting itself on 

par with Japan. 

Mr. SHERMAN. But they did—they did just do what Japan was 

doing, albeit it’s the U.S. position that Japan is the proper administrator of these islands at the present time. I don’t think China necessarily accepts that but I want to go on to another question. 

I’m an old CPA. We have something in my field called cost accounting where you look at an enterprise, say, spending $600 bilVerDate 0ct 09 2002 14:23 Apr 08, 2014 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 F:\WORK\_AP\020514\86590 SHIRL
25

lion or $700 billion and allocate the expenditures to the various objectives and goals of the organization. It’s not an easy thing to do. 

I would allocate, for example, zero cents to defending Montana 

from Canadian invasion, though that is one of the responsibilities 

of our Pentagon. What portion of our overall military expenditures 

would you guess or what range would you apply to what portion 

is confronting China in maritime areas? 

Mr. RUSSEL. Well, Congressman——

Mr. SHERMAN. Because, I mean, if we weren’t doing—trying to 

achieve that goal we could save a lot of money but would that be 

a tenth? A quarter? What? 

Mr. RUSSEL. I’d be happy to consult with my colleagues in the 

Pentagon to try to get an answer for you. But I would take issue 

with the formula that we are devoting our defense—a portion of 

our defense budget to confront China. Our——

Mr. SHERMAN. Confront, deal with—in your response you’ll pick 

the right verb for whatever role we’re playing in the oceans off of 

China. I just want to get a feel. 

Now, Japan spends only 1 percent of its GDP on its military. It 

now has a confrontation with China over these islands. Is there 

any effort in Japan to spend anything close to 4.4 percent of its 

GDP on defense now that it believes its territory is being infringed 

upon? 

Mr. RUSSEL. The Japanese defense budget is below 1 percent and 

has been in that general area since, certainly, I served for, speaking of Montana, Ambassador Mansfield in the 1980s. 

Under the government of Prime Minister Abe and as a result of 

5 years of sustained effort in the U.S.-Japan alliance, not only have 

the Japanese—has the Japanese Government increased albeit marginally its actual defense spending but Japan has upped its strategic cooperation with the United States as an ally in ways that 

are hugely valuable to the U.S. 

The issue and the goal is not to contest territory with China. It’s 

not to confront China. Our common objective is an ally—as an alliance is to bolster the security and the stability in the entire region. 

Mr. SHERMAN. If I can just reclaim. I mean, I’ve met with Pentagon people who do research and they’ve said every research 

project is going to be focused on confronting China. We’re not interested in all the—doing the research that will help us develop weapons to do anything else, and that’s what they tell me privately. 

Mr. RUSSEL. With all due respect, Congressman, a very significant part of the Japanese defense budget and defense cooperation——

Mr. SHERMAN. Well, I’m saying about——

Mr. RUSSEL [continuing]. Is aimed at defense against North 

Korea. A very significant amount of that is engaged in developing 

the capacity of Pacific Island and Southeast Asian partners. 

Mr. CHABOT. The gentleman’s time has expired. 

We are going to go in a second round after Mr. Perry here, so 

if you want to, we can take that up or something else, for that matter. 

The gentleman from Pennsylvania, Mr. Perry, is recognized for 

5 minutes. 

26

Mr. PERRY. Thank you, Mr. Chairman, and Mr. Russel, thank 

you for your testimony and being here today. 

Just a couple things. It seems like, at least from my standpoint, 

we have an agreement on what should happen here but maybe I 

might disagree with how we’re going about it. 

I mean, I certainly understand toning down the rhetoric from our 

standpoint and trying to have a responsible conversation. The instruments of power that the United States is using and foremost 

in this regard is diplomatic and I would agree with that. 

My concern is is that while we are talking it seems to me like 

China is doing, and while we’re trying to bring down the tone and 

the rhetoric they continue to do and over a period of time certain 

things that have occurred will become the commonplace, the new 

standard, and that’s where we’ll be and maybe they’ll push it and 

maybe they won’t but they’ll have moved the ball. 

So when we talk about the ADIZ or the incident with the 

Cowpens, you know, these are unilateral actions and while we’re 

talking is there any measurable—is there anything tangible the 

United States is doing to move the needle in the other direction? 

Mr. RUSSEL. Well, thank you, Congressman. 

To your point, I am convinced that ultimately our most effective 

instrument with China is diplomatic and political. There is a significant backlash. 

There is a measurable reaction in the Asia-Pacific region to the 

perception of Chinese assertiveness to the incremental steps that 

you allude to to make assertions and create facts on the ground or 

on the water, and that translates into an intensified demand signal 

for U.S. military diplomatic economic engagement that many Chinese consider to be adverse to their interests. Our goal——

Mr. PERRY. So we’re hoping that our actions will have the desired effect from within China. That is our—that’s what I’m hearing. 

Mr. RUSSEL. We are using all the instruments of U.S. influence 

and particularly the diplomatic instruments to affect and shape 

China’s choices in the direction of responsible behavior in support 

of a stable region. 

Mr. PERRY. And I can appreciate that. I wonder if we know how 

far is too far. Have we established that? And I’m not asking you 

to tell me what that would be but have we established how far is 

too far in regard to China’s incursions? 

Mr. RUSSEL. Well, in this unclassified setting, Congressman, 

what I would say without getting into trip wires or milestones is 

that we have in no uncertain terms communicated through action 

as well as through high-level diplomacy to the Chinese our firm 

commitment both to honor our security commitments alliances, to 

defend our interests, to remain engaged and made clear in a number of ways that the behavior that the Chinese manifest with regard to their neighborhood has a direct impact on the prospects for 

U.S.-China relations. 

Mr. PERRY. Okay. I mean, I get all that. But so you tell me if 

I get a classified briefing I’m going to find out that there is a point 

where the United States will say that’s enough, enough is enough 

and we’re going to move to the next level. You’re telling me is—

in a classified setting is there that point established right now? 

27

Mr. RUSSEL. The way that I would put it, Congressman, is that 

we are committed and determined to shape China’s choices and influence China’s behavior through all means of national and collective power. 

Mr. PERRY. I mean, listen, I get it. It sounds like diplomatic 

mumbo jumbo to me and it’s just—you know, I almost fall asleep. 

No disrespect intended but I can’t get to an answer here that suits 

me as to we have a definitive line. 

Is there a classified strategy that I can see? Do we have one? 

Just yes or no. That you won’t mention here but is there a classified strategy that I might find elsewhere? 

Mr. RUSSEL. There is, Congressman, an abundance of classified 

strategy with respect to both China and to the South China Sea 

and there’s no time to——

Mr. PERRY. Okay. Let me ask you this. The treaty requirements 

and alliances we had were post-World War II or borne out of World 

War II at the end of World War II with our allies in the region and 

with maybe some of the other partners, China and otherwise. 

But that’s essentially the genesis of what we’re talking about regarding these incursions and unilateral actions whether it’s an 

ADIZ or what have you. That’s what we’re basing our foundation 

and our strategy on and our agreements. Am I right or wrong? I 

just want—I’m looking for clarification. 

Mr. RUSSEL. Our bilateral security commitments and alliances 

are one of the essential elements of our strategy, as I mentioned. 

Mr. PERRY. Okay. Thank you, Mr. Chairman. I yield back. 

Mr. CHABOT. Thank you. The gentleman’s time has expired. 

We’ll go into a second round now for anybody that might have 

any final questions. I’ll recognize myself for 5 minutes. 

Mr. Secretary, as you know, this year marks the 35th anniversary of the signing of the Taiwan Relations Act which has withstood the test of time and has proved to be one of the, I think, most 

significant policy instruments in the Asia-Pacific region over time. 

Last week, Taiwan received news that the U.S. Air Force plans to 

defund the Combat Avionics Program Extension Suite, or the 

CAPES program, which has huge implications for Taiwan. If continued, that program would upgrade 300 U.S. F–16s and 146 Taiwanese F–16s with top line avionics. If unfunded, then Taiwan will 

likely either turn to South Korea or face the detrimental possibility 

of no upgrades and an aging fleet of ABs. The other option is for 

the U.S. to release new F–16 CD fighters, or F–35s, but despite 

consistent support for many of us here in Congress, this has not 

happened yet. Since the administration continues to deny Taiwan’s 

request to buy F–16 CD fighters and is now cutting the CAPES 

program, what options does Taiwan have? 

What solution, a solution that’s affordable to Taiwan, does the 

administration intend to offer? If the U.S. is going to follow 

through on its rebalance objectives, ensuring the security of our allies and friends is critical. 

This is an important issue and I hope the administration takes 

finding a solution seriously. Could you comment on that? 

Mr. RUSSEL. Yes. Well, thank you very much for raising the 

issue, Mr. Chairman. 

28

We take our unofficial relations with Taiwan and we take our obligations under the Taiwan Relations Act very seriously. The 

Obama administration in less than 5 years notified something on 

the order of $10 billion or $11 billion worth of arms sales to Taiwan, which is quite formidable. 

In addition, we have a sustained and a robust dialogue on security and defense issues. Our policy is that arms sales and our contribution to Taiwan’s security contributes to cross strait stability 

and we are committed to helping to meet Taiwan’s legitimate security needs. 

Now, this all occurs in the context of a one-China policy consistent with three U.S.-China communiques as well as the Taiwan 

Relations Act that have been consistent over eight U.S. administrations. What is different now, I would assert, Mr. Chairman, are two 

things. 

One is that the continued military build-up on the mainland side 

of the straits is unabated and, as in the past, that contributes to 

a sense of insecurity that in turn inspires the Taiwanese to seek 

additional arms and security assistance. 

But the other thing that has changed since President Obama 

took office is the quality and the intensity of the cross strait dialogue themselves. There has been a stabilizing dynamic in the relationship between Taiwan and the mainland, something that we 

very much support and encourage and we hope to see continued 

progress toward reconciliation across the straits. 

Mr. CHABOT. Thank you very much. 

I’ve got two more questions and I’ve only got a minute so I’m 

going to boil them down pretty quickly and if you could answer relatively briefly on both. 

One of the main things I think we’ve talked about here this 

afternoon is China for lack of a better term, kind of throwing its 

weight around with its being provocative and aggressive with a lot 

of its neighbors and what should we do with our allies. 

And let me just touch on the Philippines. For quite some time, 

the most powerful nation that the world has ever known had a 

pretty significant military base there, specifically at Subic Bay, and 

the Philippine Government then decided that they no longer wanted that to be there and, of course, the Philippine people voiced 

their opinion relative to that. But could you comment on what the 

relationship is between the Philippines vulnerability to Chinese aggression and the absence of that base today? That’s the first question. 

The other question is when you go to Asia everybody talks about 

TPP. You know, that’s at the top. You don’t hear quite as much 

about it here in this country, unfortunately; but there it’s really 

big, very important, and I too think it’s important and we ought 

to talk about it more here. Obviously, in order to pass TPP, TPA 

is going to have to come first. How much of an effort is the President going to make to accomplish that? Because he’s going to need 

both Democratic support and Republican support if we’re going to 

do TPA and TPP. 

Mr. RUSSEL. Well, thank you. I’ll try to be brief, Mr. Chairman. 

29

On the topic of the Philippines, the U.S. is and remains fully 

committed to our mutual defense treaty and to the security of the 

Philippines. 

We are not looking for bases in the Philippines or elsewhere but 

what we are doing is working together to develop a framework 

agreement that will increase the U.S. access, will increase joint operations and this will contribute very directly to the security of the 

Philippines. 

Mr. CHABOT. Right. But that really wasn’t my question—what’s 

the relationship between the lack of that base and their vulnerability? Do those two sort of—those two things kind of go hand in 

glove, logically? 

Mr. RUSSEL. Again, I would tread carefully, not being a military 

person. 

Mr. CHABOT. Undiplomatic? 

Mr. RUSSEL. But—no, no. I don’t—I’m not representing the Pentagon. But the U.S. presence in the Asia-Pacific region is strong 

and formidable. We were able to deploy virtually instantly to the 

Philippines in response to the super typhoon Haiyan using our existing bases in Okinawa and elsewhere. 

Even without Clark and Subic we have, as the U.S., the capability. Clark and Subic were not going to make the Philippines a 

military superpower even if they had remained fully operational as 

joint bases to the this day. 

Mr. CHABOT. Okay. 

Mr. RUSSEL. If I might on the——

Mr. CHABOT. Well, I’ll answer my own question. I think their vulnerability is significantly related to the lack of that base there and 

I think that was a strategic mistake on their part and there wasn’t 

much we could do about it because they said get out. We got out. 

But on the TPP and TPA? 

Mr. RUSSEL. The President on down, the administration is absolutely committed to seeing through TPP. Negotiators have been 

hard at work and I think are expected to meet shortly, perhaps in 

the region at ministerial level, and the President I know has warmly welcomed the introduction of a bipartisan bill on TPA. 

Neither the U.S. nor any of the 11 members negotiating entered 

into this process with any intent other than to succeed in creating 

a high standard comprehensive agreement that is going to create 

jobs and open markets. The President is determined to get there. 

Mr. CHABOT. Excellent. Thank you. 

It’s going to take a real effort—joint effort both by the President, 

the administration and the Congress as well to get this done. 

Ranking member, the gentlelady from Hawaii, is recognized. 

Ms. GABBARD. Thank you, again, Mr. Chairman. I have two questions I hope to be able to get addressed briefly. 

Recognizing you’re not speaking at all for the DoD but also understanding that the overall strategy that the President is looking 

forward to in the Asia-Pacific region has a very strong integration 

of both military-to-military engagements as well as the diplomatic 

and economic engagements as well, this year—later this year it’ll 

be the first time that China was invited and has agreed to participate in the U.S.-led RIMPAC maritime exercise. 

30

I understand there have been arguments made by people who 

think that this kind of military-to-military engagement will benefit—will benefit our—what the President is trying to accomplish 

in the Asia-Pacific region and others say that providing this exposure to China could strengthen their war fighting capabilities. 

I’d like you to speak to that as to why this is the direction the 

President has decided to take. 

Mr. RUSSEL. Mm-hmm. Thank you. 

The participation of the Chinese in RIMPAC is, in the view of 

the administration, very much in the best interests of the United 

States and U.S. security as well as those of our regional partners. 

We have a—we have an interest and a stake in a professional 

Chinese military as compared to an unprofessional Chinese military. Moreover, China’s ability to engage constructively and as an 

active participant in multilateral exercises directly relates to the 

goal of China contributing as a net security provider, a net security 

contributor to the region, whether it is in connection with anti-piracy, patrolling sea lanes or securing international waters for the 

common good. 

The growth of and the intensity of mil-mil relations between the 

U.S. and China over the last 5 years but particularly in the last 

year is, in our view, a major contributor to long-term stability. The 

high level engagement helps the Chinese People’s Liberation Army 

understand what the U.S. is and isn’t all about. 

That is fundamentally a good thing in part because it is critical 

to debunk the mythology and the stereotypes widely held in the 

PLA——

Ms. GABBARD. Sure. 

Mr. RUSSEL [continuing]. That drive bad behavior. 

Ms. GABBARD. I hope to be able to be in Hawaii for those exercises later this year. Last month, you were quoted in a newspaper 

calling for a mechanism for crisis prevention or crisis management 

in the event that incidents could trigger an escalatory cycle. 

I’m wondering if you’d talk about, you know, what that trigger 

could be as well and what point the United States would really 

seek to implement this kind of crisis prevention or crisis management. 

Mr. RUSSEL. Well, the region has seen over the last few years but 

certainly recently as well a number of incidents—the tragic shooting of Taiwan fishermen by Philippines, the intersection of a Chinese fishing vessel with the Philippine naval vessel, cable cutting 

incidents between the Chinese coast guard and Vietnamese survey 

ships. 

The opportunities for some kind of incident for some sort of miscalculation are legion. In every case, it has been the ability to communicate that has been central to defusing incidents. 

Now, governments in these cases have ultimately communicated 

capital to capital. We also believe that ships themselves should be 

able to communicate bridge to bridge, and rather than making up 

on the spot solutions to problems, rather than delegating the decisions to junior officers in the heat of the moment to develop consistent rules to reach agreement on mechanisms, whether they are 

hot lines or whether they are standard operating procedures is 

going to play an important role in defusing——

31

Ms. GABBARD. So you’re kind of talking what in a combat setting 

we would talk about rules of engagement or something along those 

lines that would be standard within the area? 

Mr. RUSSEL. Right. Standardizing rules of engagement would be 

one element to a set of mechanisms that would help prevent or 

manage incidents should they occur. 

Ms. GABBARD. Thank you. 

Mr. CHABOT. Thank you. The gentlelady’s time has expired. 

The gentleman from California, Mr. Sherman, will wrap up for 

us here today. 

Mr. SHERMAN. Mr. Assistant Secretary, we’ve—at the end we 

were kind of talking over each other. I was making the point that 

the Pentagon was devoting more and more of its resources, particularly at the research level and the force—and designing its future 

force configuration, allocating—focusing on confronting China, particularly off the Chinese coast. 

You made the point, and I think it’s a good one, that Japan faces 

quite a number of national security concerns—North Korea, its 

need to provide regional assistance to its partners in its neighborhood and, of course, they’ve got territory that they have a dispute 

over and they see the Chinese taking almost military action. 

And yet Japan is able to deal with all of those national security 

concerns spending less than 1 percent of its GDP and relies in significant part for its defense on getting the American taxpayer to 

pick up a big chunk of that. 

I didn’t think this hearing was about trade. I’m delighted that it 

came up. The lion’s share of our worldwide trade deficit is in the 

East Asia region, which is your bureau. I’ve talked to foreign ministry—Foreign Ministers and Ambassadors from other countries 

and they say—I say, what’s your number one goal. It’s promoting 

exports. 

Mr. RUSSEL. Yes. 

Mr. SHERMAN. What—your bureau, again, the biggest trade—the 

lion’s share of the largest trade deficit in the history of the world 

is the U.S. trade deficit in your region. What’s the most successful 

and tangible and definitive success your bureau has had in promoting U.S. exports or reducing U.S. imports? 

Mr. RUSSEL. Well, the most recent and tangible success is the 

conclusion of the U.S.-Korea free trade agreement, which——

Mr. SHERMAN. I’ll reclaim my time and point out that our trade 

deficit with South Korea has accelerated substantially as a result 

of and shortly after the effective date of that agreement. 

There’s a tendency to say exports create jobs without ever mentioning that imports cost us jobs. Both are true, and in fact our imports to South Korea—from South Korea grew as a result of that 

agreement. Our exports eventually should go up, although in the 

first year they’ve declined. 

But, clearly, the trade deficit with South Korea has grown and 

grown substantially after that agreement. We have a huge trade 

deficit with Japan. Japan is asking us to defend them, as we have 

for over 60 years. 

Has Japan offered to make any concessions as to how much U.S. 

food they import or anything else in an effort to get us engaged in 

this island dispute they have or do they feel that their claim on the 

32

U.S. taxpayer is sacrosanct and doesn’t need to be encouraged 

through trade concessions? 

Mr. RUSSEL. Well, Congressman, as, of course, you know well, 

U.S. security assistance and commitment is not for sale. This is not 

something that we trade. The fact is that we’re engaged in negotiations with Japan right now in the context of the TPP in which the 

Japanese have made very significant concessions. 

Mr. SHERMAN. Only if we give them our auto market. But I’ll 

point out—okay. The deal with South Korea increased our trade 

deficit. What assurance do we have that the negotiations you’re referring to will not also increase our net trade deficit? 

Mr. RUSSEL. I was recently in Korea. I met with the American 

Chamber of Commerce and the representatives of a wide range of 

U.S. businesses including auto—U.S. auto manufacturers who 

are——

Mr. SHERMAN. Looking to offshore our jobs and close down U.S. 

factories to increase profits. How did you help them do that? That 

was—sorry for the facetious question. Go on. 

Mr. RUSSEL. U.S. businesses are reporting unprecedented access 

to the Korean market and significantly enhanced opportunities for 

exports, and we believe that the successful conclusion of the TransPacific Partnership by lowering barriers and by bringing high 

standards to countries like Japan, like——

Mr. SHERMAN. Mr. Secretary, I’ll reclaim my time and say the 

definition of insanity is to keep doing the same thing and expect 

another result. Our agreement—numbers don’t lie. I’m an old CPA. 

I look at the numbers, and our trade deficit with South Korea 

has grown very substantially after that agreement and if we do it 

again on a bigger scale we should expect the same results, only bigger. I yield back. 

Mr. CHABOT. Thank you. The gentleman’s time has expired so 

we’ll finish up the hearing with the definition of insanity here this 

afternoon. We greatly appreciate your testimony here this afternoon, Mr. Secretary. 

Members will have 5 legislative days to submit questions or revise their statements, and if there’s no further business to come before the committee, we’re adjourned. 

Thank you. 

Mr. RUSSEL. Thank you very much, Mr. Chairman. 

[Whereupon, at 4:28 p.m., the committee was adjourned.] 

(33)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE RECORD

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SUBCOMMITTEE HEARING NOTICE 

COMMITTEE ON FOREIGN AFFAIRS 

u.s. HOUSE OF REPRESENTATIVES 

WASHINGTON, DC 20515-6128 

Subcommittee on Asia and the Pacific 

Steve Chabot (R-OH), Chairman 

January 29, 2014 

TO: MEMBERS OF THE COMMITTEE ON FOREIGN AFFAIRS 

You are respectfully requested to attend an OPEN hearing of the Committee on Foreign 

Affairs, to be held by the Subcommittee on Asia and the Pacific in Room 2175 of the Rayburn 

House Office Building (and available live on the Committee website at 

Y'i\V}vJor~jgnatTajrshous'-U?ov). 

DAn:: 

TIME: 

SlJBJECT: 

WITNESS: 

Wednesday, February 5, 2014 

2.00 p.m. 

America's Future in Asia. From Rebalancing to Managing Sovereignty 

Disputes 

The Honorable Daniel R Russel 

Assistant Secretary 

Bureau of East Asian and Pacific Affairs 

Department of State 

*NOTE. Witnesses may be added. 

By Direction of the Chairman 

The Committee 011 FOr elgn ."'!-ff<llis seek:; to !/luke m/acilltles wccesslbie to persons with disabilities. ~(rou a, e I/J need c1 spec/ell accomlnodatlolJs, please call 

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35

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86590m.eps

COMMITTEE ON FOREIGN AFFAIRS 

MINUTES OF SUBCOMMITTEE ON~~~~~~~-,A..::sc.:;a:..:&::.:t:::"::.:eP:..:a=cl",!fi-=-C~~~~~~~ HEARING 

Day Wednesday Date~~~~2/.~:5~/2~O~1~4~~_Room.~~R1f,~~O~B~2~1~7~2~~ 

Starting Time i·aOnm Ending Time 4,'30pm 

Recesses I~." "_I <--to ~_) <--to __ ) <--to __ ) <--to __ ) <--to ~_) <--to ~ 

Presiding Membel'(s) 

ChaiJ'man Steve Chabot (R-OH) 

Check all o/the/ol/owillg that apply: 

Open Session 0 Executive (closed) Session D Televised 0 

TITLE OF HEARING: 

Electronically Recorded (taped) 0 

Stenographic Record [ZJ 

America's Future in Asia: From Rebalancing to Managing Sovel'eignty Disputes 

SUBCOMMITTEE MEMBERS PRESENT: 

Rep. Matt Salmon (R-AZ), Rep. GeoJ'ge Holding (R-NC), Rep. Tulsi Gabbard (D-Hl), Rep. Scott Pe/'ry (R-PA), 

Rep. Brad Shen11an (D-CA), Rep. Luke M,,'ser (R-IN), Rep. Mo Brooks (R-AL), Rep. Gerald Connolly (D-VA) 

NON-SUBCOMMITTEE MEMBERS PRESENT: (Mark with an * inhey are not members ~rflill committee) 

HEARING WITNESSES: Same as meeting notice attached? Yes [2J No 0 

(If "no ", please list be/olll and include title, agency, department, 01' organization.) 

STATEMENTS FOR THE RECORD: (List any statements submit/ed/or the record) 

George Holding's Statement/or the Record 

TIME SCHEDULED TO RECONVENE ~~~~ 

or 

TIME ADJOURNED ~_4,-,:-=-30",'P'-Cm,,---_ 
36

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STATEMENT FOR THE RECORD FROM THE HONORABLE GEORGE HOLDING INC-13) 

SUBCOMMITTEE ON ASIA AND THE PACIFIC, U.S. HOUSE OF REPRESENTATIVES 

"AMERICA'S FUTURE IN ASIA: FROM REBALANCING TO MANAGING SOVEREIGNTY DISPUTES" 

Fcbmary 5, 2014 

Opening Statement: 

Thank vou Chairman Chabot 

The world ,;vas a different place when the administration announced its plan to rebalance and pivot towards Asia 

Since that announcement it vI-auld seem our diplomatic efforts hayc been focused cvcryv;;hcrc but Asia - from 

negotiating a nuclear deal "\"lth Iran to going back and forth about \\hat to do about the brutal ci,·il v,'aT in Syria 

I thank the Assistant Secretary for his time today and hope we will hear about what concrete steps this 

administration is taking to fulfill its self-described piyot and what exactly their long-terrn goals arc for U.S. engagement in 

the region 

Thank you Mr. Chairman and I yield back 
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Question 

Questions for the Record Submitted to 

Assistant Secretary Daniel Russel by 

Representative Steve Chabot (1) 

House Committee on Foreign Affairs 

February 5, 2013 

As I stated in my opening statement, I think it's in the United States' best 

interest to balance China's rise, not contain. This means working to build a 

strong and stable U.S.-China relationship. Our economies and financial 

systems are so interconnected, that any direct confrontation would be 

detrimental to both sides. This is why the recent escalation of maritime 

tensions concerns me-not only because it challenges our presence and our 

allies' security interests, but because trying to reconcile how to enhance 

regional security and stability through our alliances, while also building a 

stable relationship with China is a difficult mission. What is the 

Administration doing to build tmst with China? Can the U.S. compel better 

behavior from China via quiet diplomacy versus public confrontation? 

Answer 

The United States and the international community benefit from a 

stable, peaceful, and prosperous China. A key component of the 

Administration's rebalance to the Asia-Pacific region is forging a positive 

and comprehensive relationship with China grounded in building tmst and 

expanding areas of cooperation. Toward that end, we will continue to use 

diplomacy and engagement with Chinese counterparts through the robust 

framework of dialogues we have established. Dialogues such as the U.S.-

China Strategic and Economic Dialogue (S&ED), the Strategic Security 
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Dialogue (SSD), and the Climate Change Working Group (CCWG) have 

enabled us to expand our cOlUltries' cooperation on issues of mutual interest 

and concern. The United States is also cOlIDTritted to building military-tomilitary relations with China characterized by sustained and substantive 

dialogue, a connnitment to risk reduction, and practical, concrete 

cooperation. In the 35 years since the nommlization of relations between the 

United States and the People's Republic of China, our countries, through 

increased engagement, have made great strides in reducing the strategic 

mistrust that once beleaguered the bilateral relationship. 

At the same time, we consistently speak out on issues of concem. 

Throughout our engagement and efforts to cooperate with China, the 

Administration has consistently rejected the belief that positive relations can 

only come at the expense of our values, the promotion of fundanlental 

freedoms, or support for our allies. We finnly believe that dealing directly 

and frankly with China on issues where we disagree, whether on human 

rights, cyber issues, or maritime territorial disputes, is a vital aspect of our 

effort to build a cooperative partnership with China. 
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Question: 

Questions for the Record Submitted to 

Assistant Secretary Daniel Russel by 

Representative Steve Chabot (2) 

House Committee on Foreign Affairs 

February 5, 2013 

During President Xi's visit to Sunnylands Estate in Califomia last year, the 

tone was set for improved relations and future discussions of each other's 

global visions. During the meeting, President Xi proposed forging a "new 

type of model of major power relations." How does the Administration plan 

to tum tlus concept into a practical effort to enhance bilateral cooperation 

with Cluna, rather than just coilung it as some slogan, like the failed "Reset 

button" with Russia? What does it mean to "operationalize a new type of 

model of major power relations," as quoted by National Security Advisor 

Susan Rice? 

Answer 

Senior Adn1inistration officials have long emphasized that the United 

States is committed to pursuing a positive, cooperative, and comprehensive 

relationship with China. Our concept ofa "new model" of relations with 

China entails deeper, concrete cooperation on significant issues where our 

countries' interests converge - for example, a denuc1earized Korean 

Peninsula, a peaceful resolution to the Iranian nuclear issue, climate change, 

and an end to the conflict in Sudan. There are also opportunities for us to 

work with Cluna to bolster peace and development in places like 

Afghanistan and sub-Saharan Africa, where sustainable growth would 
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deliver lasting benefits to local peoples. Establishing a "new model" also 

means improving the quality of our military-to-military relationship, 

including by institutionalizing chmmels of communication mld cooperating 

on issues such as counterpiracy. Greater military engagement and 

transparency can help our countries manage lingering mistrust mld 

competition. 

Operationalizing the "new model" will also require a frank handling 

of our differences with China around issues such as human rights, cyberenabled theft of intellectual property, and the maritime disputes in the South 

China Sea and East China Sea. Administration officials consistently make 

clear that we cmmot establish a new type of relationship by shying away 

from areas where real frictions still exist. Constructive management of these 

and other issues will be crucial to ensuring that the U.S.-China relationship 

can continue on a positive trajectory. 
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Question: 

Questions for the Record Submitted to 

Assistant Secretary Daniel Russel by 

Representative Steve Chabot (3) 

House Committee on Foreign Affairs 

February 5, 2013 

How does the Administration plan to compel China to provide more details 

about its 9-dash line-in terms of what it means and what its boundaries are? 

Answer: 

Under international law, maritime claims in the South China Sea must 

be derived from land features and any use of the nine-dash line by China to 

claim maritime rights not based on claimed land features would not be 

consistent with the United Nations Convention on the Law ofthe Sea. We 

have repeatedly pushed China, both privately and publicly, to clarity its 

maritime claims, and we have expressed to Chinese officials our serious 

concerns about China's extensive South China Sea maritime claims and the 

need to define them in a manner consistent with intemationallaw. 

We also encourage all parties in the region to clarify their maritime 

claims in manners consistent with international law and tmderscore that we 

oppose coercive acts that undermine regional stability or increase tension. 

We will continue to support the use of diplomatic and other peaceful means 

to manage and resolve disputes in the South China Sea, including the 
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Philippines availing itself of the arbitration and the dispute resolution 

mechanisms established by the UN Convention on the Law of the Sea. 

Intemational dispute settlement is in line with our long-standing position 

that all States should pursue their maritime claims peacefully and in 

accordance with intemationallaw, including as ref1ected in the Law of the 

Sea Convention. 
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Question: 

Questions for the Record Submitted to 

Assistant Secretary Daniel Russel by 

Representative Steve Chabot (4) 

House Committee on Foreign Affairs 

February 5, 2013 

During a joint hearing on maritime disputes that we held last month with the 

Armed Services Subcommittee on Seapower and Projection forces, Bonnie 

Glaser recommended that the US. impose "consequences on China when it 

violates intemationallaws and norms." She suggested the US. and Japan 

conduct joint nights; that the US. increase military cooperation between 

South Korea, Japan and the US; and that the US. adopt very targeted 

sanctions against certain sectors in China. Are any of these options viable? 

Answer: 

We closely consult with our allies and partners to develop 

comprehensive and appropriate responses to action by any nation that we 

judge to violate intemationally accepted nomlS. 

The United States does not take a position on the competing 

sovereignty claims over land features, but we do have a strong interest in 

peace and security in the Asia Pacific Region and in the way countries deal 

with their disputes. We also have a strong interest in whether countries' 

maritime claims, in the South China Sea, the East China Sea, and around the 

world, comport with intemationallaw, including the intemationallaw of the 

sea. 
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As 1 stated in my testimony to the House Committee on Foreign 

Affairs SUbcOlllillittee on Asia and the Pacific last month, the tensions 

arising from maritime and territorial disputes in the Asia-Paci±ic are of deep 

concern to us and to our allies, and we have consistently emphasized in our 

diplomacy in the region as well as in our public messaging the importance of 

exercising restraint, behaving safely and responsibly, and peacefully 

resolving territorial and maritime disputes in accordance with international 

law. 

Through private dialogue and in public remarks, we are increasing the 

clarity and frequency of our objections to advancing territorial and maritime 

claims though provocative actions. Our position is clear: we oppose 

intimidation, coercion, or the use of force to attempt to mrilaterally change 

the status quo. The United States continues to support the values and 

principles that undergird an international rules-based system, including the 

peaceful resolution of disputes. 

The United States enjoys strong relations with our treaty allies, Japan 

and the ROK, and our military cooperation has never been stronger. U.S. 

alliances and strategic partnerships in the Asia-Pacific materially advance 

efforts to: deter and defend against military and non-military threats to the 

region and the United States; resolve disputes peacefully; adopt common 
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positions on regional and global priorities; and confront emerging challenges 

that affect U.S. national interests. 
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Question: 

Question for the Record Submitted to 

Assistant Secretary Daniel Russel by 

Representative Mo Brooks (1) 

House Committee on Foreign Affairs 

February 5, 2014 

What concrete steps can the US government take to encourage a peaceful 

and comprehensive solution to the territorial dispute over a small group of 

lU1inhabited islands in the East China Sea, known as SenkakuJDiaoyutai? 

Answer: 

Northeast Asia is one of the key engines of the global economy. The 

United States, the region, and the world have an abiding interest in good 

relations between China and Japan. An escalation of tensions is not in any 

party's interests. 

The United States does not take a position on the question ofuItimate 

sovereignty over the Senkaku islands, but calls on all claimants to take steps 

to prevent incidents and manage such disputes through peaceful means. 

Diplomatic discussions to reduce tensions and manage this issue should be 

continued. We continue to call for restraint and meaningful dialogue in 

order to avoid the chance of a misunderstanding or miscalculation. To that 
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end, we believe that Japan and China should establish effective crisis 

cOlmnunication chalmels, at the highest levels, that Call be used to defuse 

tensions. It is essential for claimallts to adhere to intemationallaw alld 

accepted norms and principles in resolving their disputes, and we continue to 

make tIns clear. 
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Question: 

Questions for the Record Submitted to 

Assistant Secretary Daniel Russel by 

Representative Luke Messer (1) 

House Committee on Foreign Affairs 

February 5, 2013 

As the sovereignty disputes in the East China Sea and South China Sea have 

increased tension in this region, it is crucial that the U.S. promotes 

cooperation over conflict. T welcome President Ma's East Sea Peace 

Initiative that encourages peaceful resolutions of disputes through dialogue 

and with respect to intemationallaw. Taiwan has showed their commitment 

to this model by recently coming to a peaceful resolution with Japan 

concerning highly contested fishing regulations. However, despite the 

initiative's potential for fostering greater peace in the region, you said that 

Taiwan's East Sea Peace Initiative did not fall on fertile soil when 

rulliounced. 

What needs to change in the political climate so that such initiatives are 

legitimately taken into consideration by all parties? 

• In particular, you mentioned the need for reconciliation between China 

and Taiwan. To what extent would such discussions encourage greater 

dialogue within the region? 

Answer: 

President Ma advocated for many importrult principles that the United 

States strongly supports. We believe that in order to maintain and increase 

regional prosperity and goodwill, all parties should exercise restraint; 

maintain open channels of dialogue; respect the rule oflaw; and refrain from 

provocative, unilateral actions and the threat or use of coercion to advance 
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their claims. Safe and lmimpeded commerce, freedom of navigation and 

overflight, and respect for international law must be maintained for everyone 

in the region. 

The principles of resolving disputes peacefully and cooperating on 

resource exploration and development helped Taiwan finalize a fisheries 

agreement with Japan and enter into fisheries negotiations with the 

Philippines in 2013. We applaud these developments and think they can 

serve as a model for others. 

To the extent that Beijing and Taipei increase peaceful cooperation 

and find ways to interact and solve problems that are acceptable to both 

sides in the cross-Strait relationship, then the stability resulting from this 

cooperation can positively affect other parts ofthe region.