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INVESTIGATING THE CHINESE THREAT, PART I:

MILITARY AND ECONOMIC AGGRESSION

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

MARCH 28, 2012

Serial No. 112–137

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 

ILEANA ROS-LEHTINEN, Florida, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

STEVE CHABOT, Ohio 

RON PAUL, Texas 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

GUS M. BILIRAKIS, Florida 

JEAN SCHMIDT, Ohio 

BILL JOHNSON, Ohio 

DAVID RIVERA, Florida 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ANN MARIE BUERKLE, New York 

RENEE ELLMERS, North Carolina 

ROBERT TURNER, New York 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

BRAD SHERMAN, California 

ELIOT L. ENGEL, New York 

GREGORY W. MEEKS, New York 

RUSS CARNAHAN, Missouri 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

DENNIS CARDOZA, California 

BEN CHANDLER, Kentucky 

BRIAN HIGGINS, New York 

ALLYSON SCHWARTZ, Pennsylvania 

CHRISTOPHER S. MURPHY, Connecticut 

FREDERICA WILSON, Florida 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

YLEEM D.S. POBLETE, Staff Director 

RICHARD J. KESSLER, Democratic Staff Director 

(III)

C O N T E N T S 

Page

WITNESSES 

Mr. Dean Cheng, research fellow, Asian Studies Center, The Heritage Foundation .................................................................................................................... 8

Mr. John J. Tkacik, Jr., senior fellow and director of the Future Asia Project, 

International Assessment and Strategy Center ................................................ 25

Larry M. Wortzel, Ph.D., Commissioner, United States-China Economic and 

Security Review Commission .............................................................................. 70

Taylor Fravel, Ph.D., associate professor of political science, Security Studies 

Program, Massachusetts Institute of Technology .............................................. 81

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Mr. Dean Cheng: Prepared statement ................................................................... 10

Mr. John J. Tkacik, Jr.: Prepared statement ........................................................ 27

Larry M. Wortzel, Ph.D.: Prepared statement ...................................................... 72

Taylor Fravel, Ph.D.: Prepared statement ............................................................ 83

APPENDIX 

Hearing notice .......................................................................................................... 112

Hearing minutes ...................................................................................................... 113

(1)

INVESTIGATING THE CHINESE THREAT, PART 

I: MILITARY AND ECONOMIC AGGRESSION 

WEDNESDAY, MARCH 28, 2012

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

The committee met, pursuant to notice, at 10 o’clock a.m., in 

room 2172 Rayburn House Office Building, Hon. Ileana RosLehtinen (chairman of the committee) presiding. 

Chairman ROS-LEHTINEN. The committee will come to order. 

Welcome to my fellow members on the committee and to our distinguished panel of witnesses who are joining us today. 

If they could take their spots, thank you so much. 

After recognizing myself and my friend, Mr. Berman, the ranking 

member, for 7 minutes each for our opening statements, I will recognize the chairman and the ranking member of the Subcommittee 

on Asia and the Pacific for 3 minutes each for their opening statements, followed by 1-minute opening statements for all other members wishing to speak. 

We will then hear from our witnesses. I would ask that you summarize your prepared statements to 5 minutes each before we move 

to the questions and answers with members under the 5-minute 

rule. 

As Mr. Wilson, Mr. Bilirakis, and Mr. Duncan were unable to 

ask questions during the hearing with the Secretary of State, I had 

said publicly toward the end that I will be recognizing them, when 

they come, first by seniority for questions before returning to the 

regular order of questioning for the majority side. 

So, without objection, the witnesses’ prepared statements will be 

made a part of the record. 

Members may have 5 days to insert statements and questions for 

the record, subject to the length limitation and the rules. 

The Chair now recognizes herself for 7 minutes. 

Napoleon once famously remarked that ‘‘China is a sleeping 

dragon. Let her sleep, for when she awakes, she will shake the 

world.’’

The 21st century is the era of China’s awakening. The decades 

to come will test whether China will truly shake the world. 

This hearing is a first in a series to examine the range of threats 

to U.S. national security, our interests, and allies, posed by a rising 

China and, also, to receive recommendations on how to counter 

such threats. Today we will examine recent military and economic 

actions taken by the People’s Republic of China and evaluate what 

they mean for United States interests and those of our allies. 

2

In advance of his transition to the presidency of China, China’s 

Vice President visited the United States last month. The White 

House went to great lengths to ensure that the visit went smoothly, 

reiterating a commitment to a peaceful and stable relationship. The 

actions taken may have included a turning-away of a high-level 

asylum-seeker at a consulate in China and included Vice President 

Biden’s dismissal of a meeting request from the spouse of one of 

China’s most prominent dissidents. 

With respect to Mr. Wang, the reported defector, China’s dissent 

news service posted an audio broadcast of a Chinese official who 

read the report from the Chinese Party of China, CPC, Central 

Committee on Mr. Wang. Allegedly, the report stated that Wang 

entered the U.S. Consulate in Chengdu on February 6th, spoke to 

U.S. officials about ‘‘relevant exchange and cooperation projects, 

then asked for asylum.’’

The report allegedly goes on to say that, at the request of U.S. 

personnel, Wang filled out an application for political asylum, but 

late the next day, on February 7th, after ‘‘a face-to-face talk with 

a comrade directly dispatched from the CPC Central Committee,’’ 

Wang agreed to leave the U.S. Consulate. 

The possibility that the administration turned away an asylumseeker, and possibly a high-value intelligence source, raises a number of serious questions that require immediate answers. I have a 

pending request with the Department of State for specific information on this matter. 

Generally, the administration’s overtures have failed to alter Beijing’s behavior or its policies. China continues the artificial depreciation of its currency, which steals American jobs away. China 

continues to undermine the U.S. technological edge through all 

available means, including circumvention of U.S. export controls 

and by hacking into private and governmental computer systems. 

China’s ongoing participation in industrial espionage is evidenced 

by a recent criminal indictment of individuals charged with stealing trade secrets from the DuPont Corporation. 

Also, piracy of intellectual property rights remains a significant 

problem for U.S. companies doing business in China, such as the 

Illinois-based paper shredder manufacturer Fellowes, Incorporated. 

Through such illegitimate means, China has made tremendous 

advances in the modernization of its military with a budget that 

some experts expect by the year 2015 will surpass the totality of 

all 12 of its Asia-Pacific neighbors. Along with increased maritime 

capacity, Chinese aggression has manifested itself in its broad territorial claims throughout the South China Sea, the East China 

Sea, and the Yellow Sea. 

Last November, the White House finally acknowledged Beijing’s 

bullying of its neighbors and President Obama announced a pivot 

to emphasis the U.S. strategic and economic interests in the AsiaPacific region. In reaction to President Obama’s pivot, one People’s 

Liberation Army general wrote a commentary which quickly spread 

across Chinese Web sites. The general said, ‘‘This is aimed at 

China, to contain China. The United States has committed a fatal 

strategic error. It has misjudged its foes.’’

Among the expert panel of witnesses today is Dr. Larry Wortzel, 

Commissioner of the U.S.-China Economic and Security Review 

3

Commission, who will testify that China has prepared for cyber 

warfare. According to the Commission’s latest report, the PLA has 

the cyber attack capacity to cripple computer networks in the U.S. 

Pacific Command. 

China also remains a significant benefactor of other authoritarian regimes, providing missile defense, missile-related technology to Iran, investing heavily in Iran’s energy sector, blocking 

strong action in Syria, expanding its relations with and seeking energy resources from Sudan, Venezuela, and Cuba. And Beijing has 

supplied Castro with a massive $750-million oil rig designed to extract offshore oil from sites near the United States. Any future accident would risk a nasty oil spill into Florida’s coastline. 

China’s refusal to cooperate with sanctions contributed to North 

Korea’s acquisition of nuclear weapons. Although North Korea’s 

new leader recently announced that he would suspend nuclear 

tests and allow inspections in exchange for food, North Korea 

shortly followed up by announcing that it would launch a satellite 

in April. This would be in violation of U.N. Security Council resolutions. 

China is North Korea’s major supplier of food, energy, and weaponry, but Beijing does nothing in the face of North Korea’s threatened missile launch. The Nuclear Security Summit, which President Obama recently attended in South Korea, does not seem to 

have affected the North Korean decision. In fact, Pyongyang responded to the President’s warnings by moving the missile to the 

launch pad. When push comes to shove, Beijing always sides with 

its authoritarian allies, be they in Damascus, Havana, Tehran, or 

Pyongyang. 

The Obama administration spent its first 2 years seeking accommodation with Beijing with little in return. Having failed with 

charm, the administration has come belatedly to seeking a more realistic approach to the China issue. Hopefully, it is not too little too 

late. 

Now I am pleased to turn to the distinguished ranking member 

for his opening statement. Mr. Berman is recognized. 

Mr. BERMAN. Thank you very much, Madam Chairman, for calling this hearing. 

It was 40 years ago last month that President Nixon undertook 

his historic trip to China, a visit that changed the course of world 

events and continues to reverberate today. That trip and the establishment of diplomatic relations with China were rooted in a Cold 

War strategic context in which the ultimate goal was to prevent Soviet expansionism. 

In the early years of the U.S.-China relationship, the interactions 

between our two nations were narrowly-focused and took place almost exclusively at the government-to-government level. Today, 

four decades later, the bilateral U.S.-China relationship has its 

own strategic rationale that is global in scope. In addition to the 

ties between our two governments, the two countries have formed 

deep and wide economic, educational, and cultural connections that 

resonate not only in Washington and Beijing, but in the farmlands 

of Iowa and rural China. 

At the time of the Nixon visit, China was a poor and isolated nation. Today, after decades of astonishing economic growth, hunVerDate 0ct 09 2002 14:08 May 31, 2012 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\WORK\FULL\032812\73536 HFA PsN: SHIRL
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dreds of millions of Chinese citizens have been lifted out of poverty; 

a large middle class is forming. 

China has become the world’s second-largest economy and plays 

an integral role in the international system. With China’s rise as 

a global power, Chinese influence can be seen and felt all over the 

world, from the boardrooms in the world’s major financial centers 

to the back roads of Africa. 

There are some in this country, and some on this committee, who 

argue that a rising China poses a significant threat to the United 

States, that China is looking to supplant America’s leadership role 

in the world. And in China, some believe that the United States 

is in decline and determined to contain China and curb its rise. 

However, many others, including on this committee, believe that 

U.S. cooperation with a rising China is both possible and desirable, 

and that a bitter and acrimonious rivalry between our two countries would have detrimental impact on global stability. As Henry 

Kissinger recently wrote in Foreign Affairs, ‘‘The U.S.-China relationship should not be considered a zero-sum game, nor can the 

emergence of a prosperous and powerful China be assumed in itself 

to be an American strategic defeat.’’

Even if the U.S. and China are able to work together on a positive basis to address regional and global issues—and I hope that 

we are—there will inevitably be disagreements and points of friction in our bilateral relationship. When those arise, the United 

States must never hesitate to speak out and take action, particularly when American interests and those of our allies and partners 

are at stake. 

This means calling on China to end its discrimination against 

U.S. companies, stop the theft of U.S. intellectual property, cease 

its unfair currency practices. It means shining the spotlight on Beijing’s appalling lack of respect for human rights, democracy, and 

rule of law. It means calling on China to renounce the military option in resolving its ongoing political dispute with Taiwan. And it 

means demanding that China explain its rapid military buildup, 

abide by international maritime laws and norms, cooperate with 

the international community to end violence in places like Syria 

and Sudan, and work with the United States and others to solve 

the North Korean and Iranian nuclear problems. 

It remains to be seen how China will ultimately address these 

issues, what kind of role Beijing wants to play on the world stage, 

as it continues its economic growth and geopolitical rise. At times, 

China seems to want to be treated like a great power. Yet, it often 

ducks the responsibility that comes from being a leading player or, 

even worse, as we saw in the Chinese veto of the U.N. Security 

Council resolution on Syria, blocks the rest of the world from doing 

the right thing. 

China has benefitted greatly and achieved prosperity for its citizens from an open international economic system. Yet, China has 

engaged in mercantilist behavior, sometimes ignored rules of the 

global economy, and constructed a playing field for non-Chinese 

companies in China that is unfair, opaque, and corrupt. 

All of this boils down to a choice for China. Will it use its growing power and newfound standing in the world solely for its own 

5

benefit or will it pursue a constructive path that strengthens the 

global order for the benefit of all nations? 

I thank the panel of witnesses for being here today and look forward to hearing their views on the future of the U.S.-China relationship, and yield back the balance of my time. 

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

for your opening statement. 

And the Chair wishes to send greetings to that heckler in the 

back, Harry Wu, a wonderful friend of our committee, and who understands a thing or two about China’s brutality. 

Mr. Smith is recognized for 1-minute opening statements, and we 

will recognize everyone to speak for 1 minute. 

Mr. SMITH. I thank you very much, Madam Chair, and I would 

ask unanimous consent to have my full statement made a part of 

the record. 

Chairman ROS-LEHTINEN. Without objection. 

Mr. SMITH. China’s declared defense budget, already the secondhighest in the world, will increase by 11.2 percent this year to 

$106.4 billion. This follows a nearly unbroken string of double-digit 

increases over the last two decades. 

As Beijing has escalated its military buildup, China has also expanded its geopolitical ambitions and increased its claim within the 

South China Sea. China’s Asian neighbors have started to 

strengthen their own defenses and sought new security ties with 

the U.S. and other partners. 

The challenges of China that it presents are not limited to any 

corner of the globe. China continues to advance its capabilities to 

initiate cyber attacks and exploit U.S. cyber security 

vulnerabilities, which present grave threats to U.S. national security and economic interests. 

Finally, China’s economic investments into Africa and other 

parts of the world also pose significant threats, such as locking up 

the supply of strategic minerals or rare earth elements used in 

high-tech products, including smart bombs, and offering a poor policy example of the respect for human rights to its partners. 

Tomorrow I will chair my fourth hearing on China’s growing influence in Africa and the bad governance model that it is exporting 

to African countries like Sudan and elsewhere. 

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

Smith. 

Mr. Sherman is recognized. 

Mr. SHERMAN. If we had balanced trade with China, our unemployment rate would be under 5 percent and the cost of containing 

China’s aggressiveness in its region would be far less. But there 

are high, enormous profits available by maintaining the present 

trade system. 

And so, a huge propaganda effort is deployed to convince the 

American people that our current trading system is both fair and 

beneficial. We have a choice between two roads. One is to renounce 

the current MFN treatment of China and demand the negotiation 

of a balanced trade agreement, with a voucher system perhaps, 

that you need a voucher to import anything from China. 

But the road more traveled is to keep repeating empty criticisms 

of China, in order to lull the American people to sleep, as if such 

6

repetitions for decades are going to cause a change in Beijing’s policy, and to leave us with an aggressive China, unemployed Americans, and a highly-contempted foreign policy and economic establishment. 

I yield back. 

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

Ms. Schmidt is recognized. 

Ms. SCHMIDT. Thank you, and I want to thank you for this hearing. 

I am increasingly concerned about this administration’s approach 

with China, be it its relationship with Taiwan, the issue with the 

Dalai Lama, and, most importantly, the issue currently about 

AsiaSat, which is an issue whether the administration is agreeing 

to transfer communications satellite to munition controls for China. 

And that concerns me greatly. So, I hope we touch on those issues 

in this hearing. 

Chairman ROS-LEHTINEN. Thank you very much, Ms. Schmidt. 

Mr. Sires is recognized. 

Mr. SIRES. Thank you, Madam Chairlady, and thank you for 

being here today. 

You know, I have many concerns with China: Their abysmal 

human rights record, their increase in defense budget, their disregard for total international norms. So, I just want to hear what 

you have to say about some of those concerns that I have about 

China. 

Thank you very much for being here. 

Chairman ROS-LEHTINEN. Thank you very much. 

Mr. Chabot is recognized. 

Mr. CHABOT. Thank you, Madam Chair, for pulling together such 

a distinguished panel here as you have this morning. 

Having been one of the founding chairs of the Congressional Taiwan Caucus, and having served as co-chair of that for about a decade, I do hope that our witnesses will take at least some time today 

to focus on China’s military threat to our long-time friend and ally, 

Taiwan. 

I remember when I first came to Congress back in 1995, I 

learned at that time that China had approximately 100 missiles, 

and every year it would go up. There would be a few hundred more 

and a few hundred more and a few hundred more. Now they are 

up to approximately 1,600 missiles, both medium-range and shortrange ballistic missiles aimed at Taiwan. So, I hope during the 

hearing that we can focus some time on that. 

I know Mr. Tkacik and I have discussed the threat to Taiwan 

many times. So, I particularly look forward to hearing his testimony and the other members as well. 

And I yield back. 

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

Ms. Bass is recognized. 

Ms. BASS. Thank you, Madam Chair and Ranking Member Berman. 

I do look forward, as the chair of the Subcommittee on Africa 

mentioned a few minutes ago, tomorrow we are going to have a 

committee hearing on China’s role in Africa, and I look forward to 

that. Also, perhaps some of the panelists might comment on that 

7

relationship as well. Specifically, I am interested in the labor issue, 

so when the Chinese go into African nations, bringing Chinese 

labor with them as opposed to hiring the local population. 

As China continues down a path of growth, there are important 

questions that must be answered regarding China’s military power, 

its foreign exchange policies, human rights, cyber espionage, China/

Taiwan relations. While China’s ascent can neither be stopped nor 

ignored, we must continue to focus attention on ensuring responsible Chinese policies and practices that promote peace, growth, 

and opportunity. 

Thank you. 

Chairman ROS-LEHTINEN. Thank you very much, ma’am. 

Mr. Connolly is recognized. 

Mr. CONNOLLY. Thank you, Madam Chairman, and thank you for 

holding this hearing. 

The U.S.-China relationship is absolutely one of the most important, obviously, in the world, and it is a relationship that must be 

worked out. But the United States has to insist on its interests in 

this relationship; otherwise, it is one of unequal partners. 

And we need to focus, obviously, on our human rights values, as 

we interact with the Chinese, and we also have to insist economically on the increasing pressure of intellectual property rights. Intellectual theft is epidemic in China, and it must be addressed as 

we move forward in this relationship on behalf of not only our interests and our business interests, but, frankly, for the future maturation of China itself as an interest of the family of nations. 

I thank the chair. 

Chairman ROS-LEHTINEN. Thank you. I thank all the members 

for their opening statements. 

And now, the Chair is pleased to welcome our witnesses. 

First, Dean Cheng, who is currently the research fellow for Chinese Political and Military Affairs at the Heritage Foundation. 

Prior to joining the Heritage Foundation, he was the Senior Analyst with the China Studies Commission and also served with the 

Science Applications International Corporation. 

Welcome. 

Next, I would like to welcome John Tkacik, a senior fellow and 

director of the Future Asia Project at the International Assessment 

and Strategy Center. Mr. Tkacik is a retired Foreign Service officer 

who has devoted over 20 years of government service to Chinese/

Taiwanese affairs. From the years 2001 to 2009, Mr. Tkacik was 

also a research fellow on China at the Heritage Foundation. 

We welcome you, sir. 

And we are also pleased to welcome Larry Wortzel, the Commissioner of the United States-China Economic and Security Review 

Commission. Dr. Wortzel was reappointed by Speaker Boehner for 

a 2-year term, expiring on December 31, 2012. He has a distinguished career in the U.S. Armed Forces, which included two tours 

of duty as a military attache ́ at the American Embassy in China. 

And he likes to go bass fishing in my home state of Florida. 

And finally, I would like to welcome Taylor Fravel. He is associate professor of political science and member of the Security 

Studies Program at MIT. Dr. Fravel studies international relations 

with a focus on international security, China, and East Asia, and 

8

is currently completing a study of China’s military doctrine since 

1949. 

A wonderful set of panelists. I welcome you all. I ask that you, 

again, keep your presentation to no more than 5 minutes. And 

without objection, your prepared statements will be made a part of 

the record. 

So, Mr. Cheng, please proceed. 

STATEMENT OF MR. DEAN CHENG, RESEARCH FELLOW, ASIAN 

STUDIES CENTER, THE HERITAGE FOUNDATION 

Mr. CHENG. Thank you, Chairman Ros-Lehtinen, Ranking Member Berman, and distinguished members of the committee, for the 

opportunity to be here this morning. 

The views I express in this testimony are my own and should not 

be construed as representing any official position of the Heritage 

Foundation. 

My comments today will focus on the military aspect of the 

threat from the People’s Republic of China, but I would like to emphasize that the Chinese concept of national security is a holistic 

one, rooted in the idea of comprehensive national power, which includes not only military capabilities, but economic capacity, level of 

science and technology, diplomatic respect, and even culture. 

The Chinese People’s Liberation Army is the most visible aspect 

of China’s comprehensive national power. China fields the world’s 

largest military and has enjoyed double-digit increases in its defense budget for the last two decades. China’s official defense expenditure, generally seen as understating actual defense spending, 

has now passed the $100 billion mark. 

These expenditures have funded what Jiang Zemin termed ‘‘the 

two transformations’’ involving a shift from quantity to quality and 

emphasizing the ability to fight high-tech wars, what the Chinese 

now call informationized wars. In short, this is not your father’s or 

your grandfather’s PLA. 

Chinese military writings regularly note that future warfare will 

require networks of sensors and communications in order to win 

the contest between systems of systems. So, China is building, for 

example, a constellation of high-resolution, multi-spectral earth observation satellites to support its new fighters, tankers, submarines, and missiles. At the same time, Chinese tests of anti-satellite capabilities in 2007 and again in 2010 underscore the growing ability of the PLA to deny opponents C4ISR capabilities. 

To be fair, it is important to recognize that China, as the world’s 

most populous country and second-largest economy, is bound to 

have a very large military, given its expanding economic interest 

and substantial manpower pool. And it is wishful thinking to expect that China will follow the Soviet path and bankrupt itself on 

defense spending. And indeed, the Chinese leadership regularly 

emphasizes that national economic construction is higher priority 

than army-building. 

But while weapon systems are important, how the Chinese think 

about employing them is vital. And one of the great concerns that 

should worry us is that the Chinese do not necessarily think the 

way we do, especially in terms of deterrence and crisis management. 

9

The American outlook has been heavily shaped by the Cuban 

missile crisis, itself affected by President Kennedy’s lessons drawn 

from World War I. This has focused American attention on avoiding inadvertent escalation and accidental war. 

By contrast, the PRC chose to precipitate a conflict with the 

USSR in 1969, when both nations were nuclear-armed. And this 

different attitude is also reflected in the Chinese refusal to talk 

about creating maritime rules of the road. In the Chinese view, 

such rules allow both sides to feel safe when operating in close 

proximity, but the Chinese have very little interest in making the 

United States feel safe in the western Pacific in disputed waters, 

when they are engaging in what Beijing sees as illegitimate activities. The solution to avoiding accidents or crises, in their view, is 

for the United States to pull back. 

This fundamentally different perspective on deterrence and crisis 

management is symptomatic of the reality that China is different 

from Iraq, Serbia, or Afghanistan. China has a substantial indigenous military industrial base. It possesses space and cyber capabilities on a rough par with the United States, as well as its substantial nuclear arsenal. The Chinese pose a fundamentally different 

scale of threat than have other states in the past or even North 

Korea or Iran would in any calculation in the future. 

These differences are exacerbated by what U.S. analysts have 

termed China’s anti-access/area denial strategy. As the PRC takes 

a holistic view toward assessments of national power, so Chinese 

efforts to prevent the United States from readily deploying to the 

western Pacific involve strategic and operational as well as tactical 

elements. 

At the strategic level, the Chinese pursue a range of political 

warfare measures, including the so-called warfares of legal warfare, public opinion warfare, and psychological warfare, all of which 

seek to influence domestic, adversary, and third-party audience 

perceptions and attitudes by undermining legitimacy, strengthening friendly will, and arousing sympathy. 

At the operational level, Chinese military writing suggests an 

emphasis on establishing information superiority or dominance 

over an opponent, which, in turn, involves securing space and cyber 

dominance, thereby preventing an opponent from coordinating their 

forces or targeting their weapons. 

When coupled with tactical systems, such as anti-ship ballistic 

missiles, we then see a unified approach that links tactical to operational to strategic, the objective being to allow the Chinese leadership to dissuade local states from supporting the United States for 

allowing it to operate in its area. 

The Chinese have a consistent approach with persistent actions. 

The challenge from Beijing seems clear. It is up to us to respond. 

[The prepared statement of Mr. Cheng follows:]

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Chairman ROS-LEHTINEN. Thank you very much. 

Mr. Tkacik, did I get your name, more or less? Nailed it? 

You are recognized, sir. Thank you. 

STATEMENT OF MR. JOHN J. TKACIK, JR., SENIOR FELLOW 

AND DIRECTOR OF THE FUTURE ASIA PROJECT, INTERNATIONAL ASSESSMENT AND STRATEGY CENTER 

Mr. TKACIK. Madam Chairman, Ranking Member Berman, distinguished members, thank you for giving me the opportunity to 

appear here today. 

I have submitted extensive written remarks, and I appreciate the 

chairman’s offer to put them in the record. 

Let me say at the outset, China, since 1989, and, indeed, since 

the collapse of the Soviet Union in 1992, has assumed an adversarial posture toward the United States, Europe, and Japan, and 

others, in a variety of foreign policy and war-fighting areas. 

As one Chinese strategist puts it, ‘‘In the world today, virtually 

every one of America’s adversaries are China’s friends.’’ This is not 

a coincidence. China’s leadership sees the United States as a challenge to the legitimacy of the regime. And indeed, across the board, 

from nuclear and missile proliferation to human rights, to global 

climate change, and fisheries, China adopts a diametrically-opposite policy to the United States. 

And even during the Iran and Iraq wars—or excuse me—the Iraq 

and Afghanistan wars, China has gone out of its way to provide 

weapons and explosives, and I would argue computer network assistance, to hostile states and insurgents in direct combat with U.S. 

coalition and NATO forces. 

My job is to look out into the future of Asia 20 years or so and 

calculate what we are likely to see. Basically, I am following 

straight-line trends over the past 20 years, and I will project them 

into the next 20 years. What we have is not reassuring. 

When you try to integrate multiple trend lines and aggregate the 

results, the margins for error grow and the conclusions are necessarily speculative. But if 20 years ago one had done a straightline projection of China’s previous decade of economic and population growth, or for military spending, or even foreign exchange 

reserves growth, your projections 20 years later in 2012 would be 

low. They would be sort of on the mark, but they would have been 

low. China is now the largest industrial power on earth. China’s industrial sector has overtaken America’s. 

Now, many of the international threats that the United States 

faces around the world are discrete military, transnational terrorism, et cetera, but, as such, analyzing them is more or less 

straightforward. Not so with China. China poses a direct, multidimensional matrix of threats and approaches it with a strategy 

which I believe the Beijing leadership has thought through in great 

detail over the past two decades. China is now clearly following a 

broad national strategy of state mercantilism which has scant regard for international norms, intellectual property. It has an immense industrial spying apparatus. And in fact, any tools that expand China’s wealth are utilized without regard to legality, proprietary, or convention. 

26

The threats are economic. They are industrial. They are commercial and financial. They are technological, scientific, territorial, and 

political. They involve transnational crime and environmental challenges. There are also colossal demographic challenges that, too, 

can turn into threats on very short order. The military threats 

posed by China are intensely more complicated by the non-military 

dimensions. And all these threats can blow up in America’s face in 

a moment’s notice. 

My written remarks are quite extensive, but they only touch 

upon a few areas where America’s national security is already in 

jeopardy. Let me start with the economic threats from China. 

They include trade, financial, industrial, and technological factors and the Chinese strategies that underpin them. There’s no 

question but that the cyber threat is the single greatest threat to 

the United States, and to be a bit dramatic, to the entire rulesbased international system that China now has approached. 

Chinese intelligence and the entire Chinese state have access to 

everything in everyone’s computers. I wish I were exaggerating, 

but, alas, I am not. Imagine what you could do with complete, unfettered access to the emails of your political rivals, your economic 

rivals, your banks, your news organizations, the personal emails of 

anybody you wanted, all of the Fortune 500 companies of America, 

the Fortune 1,000 across the world. That is precisely the threat. 

In my written submission, I will also touch upon China’s territorial sea claims, but not its threats to its continental neighbors because those are penumbral to America’s core interest and to those 

of our treaty allies. Suffice it to say that China’s territorial sea 

claims in the South China Sea, the Taiwan Strait, the East China 

Sea are absolute. They brook no challenge. 

China’s own legislation, its supreme national law, permits only 

the intrusion on these waters of foreigners who ‘‘abide by Chinese 

law.’’ And I must say, recent Chinese statements that no country 

claims the entire South China Sea are true, except that China 

claims 1.5 million square kilometers of it. The rest of it is negotiable. 

I will leave that as my oral presentation. I would like to get into 

the issues of Taiwan and others in the questions and answers. 

Thank you. 

[The prepared statement of Mr. Tkacik follows:]

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Chairman ROS-LEHTINEN. Thank you very much, sir. Thank you. 

Dr. Wortzel? 

STATEMENT OF LARRY M. WORTZEL, PH.D., COMMISSIONER, 

UNITED STATES-CHINA ECONOMIC AND SECURITY REVIEW 

COMMISSION 

Mr. WORTZEL. Madam Chairman, Ranking Member Berman, 

committee members, thank you for the opportunity to appear 

today. 

On March 7th, the U.S.-China Economic and Security Review 

Commission released a report on Chinese capabilities for cyber espionage and cyber warfare. The report concluded that the People’s 

Liberation Army has developed information warfare capabilities to 

defend military and civilian computer networks while seizing control of an adversary’s information system. In peacetime, cyber espionage is a cornerstone of China’s intelligence-collection operations. 

Cyber attacks are appealing to China because they leave no clear 

fingerprints, and such attacks would be preemptive. The PLA calls 

its strategy for cyber attacks ‘‘Integrated Network Electronic Warfare.’’

And I would like to depart from my role as a commissioner for 

a minute and give you my personal views on this war-fighting doctrine. During the Cold War, the Soviet military planned to start a 

war with radio electronic combat, a combination of electronic warfare with artillery, aircraft, and missile strikes. The Soviets expected to degrade an enemy’s combat capability by 60 percent before a shot was fired. 

The PLA’s Integrated Network Electronic Warfare doctrine is Soviet doctrine on Chinese steroids. INEW added computer network 

attacks and space attacks on satellites. 

The commission’s report also expresses concerns about some of 

China’s largest telecommunications firms. These firms benefit from 

a network of state research institutes and government funding and 

programs that have the sponsorship of the military. Also, Chinese 

Government research organizations and universities are working 

on national programs for research on cyber technology. 

The report notes that the U.S. military’s NIPRNET, or Non-Secure Internet Protocol Routing Network, is particularly vulnerable 

to computer attack and exploitation, and any assistance to Taiwan 

in a crisis could be disrupted. 

Finally, the report documents vulnerabilities in the U.S. telecommunications supply chain where backdoors built into hardware 

or coded into software may give unauthorized access to systems. 

The U.S. Army ordered a large number of computers from a Chinese company for installation on our NIPRNET-based logistics system. Army officials believe that they can only exclude purchases 

from foreign firms for equipment controlled on the United States 

Munitions List, but not for the whole Army. It seems to me that 

the entire enterprise information architecture of the Department of 

Defense, if not the whole government, should be a national security 

concern. 

If existing legislation cannot be interpreted differently, then new 

legislation may be required. Congress should consider directing the 

Executive Branch to maintain a classified list of countries, people, 

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and companies that pose a serious cyber threat to our Government 

and industry. Such a list should be validated across the intelligence 

community and vetted by the Foreign Intelligence and Surveillance 

Court. During the procurement process, cleared government officials should be required to consult that list and to exclude people 

or companies on the list from introducing hardware or software 

into government networks. 

When our security officials can attribute an attack to a foreign 

person, in a closed Federal court, such as the Foreign Intelligence 

and Surveillance Court, they should be able to seek a warrant for 

arrest. And in the case of a foreign company, there should be a 

statutory prohibition on a company judged to be involved in cyber 

espionage from doing business in the United States. And we should 

encourage our allies to do the same. The Australian Government 

just barred Huawei, a Chinese company, from work on Australia’s 

national infrastructure, cyber infrastructure. 

The United States also should have a clear policy that it declares 

that attacks in cyber space are acts of war and a cyber attack may 

generate a weapons strike and a state of war. 

Thank you for the opportunity to testify today, and I welcome 

any questions you may have. 

[The prepared statement of Mr. Wortzel follows:]

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Chairman ROS-LEHTINEN. Thank you, sir. 

Dr. Fravel is recognized. 

STATEMENT OF TAYLOR FRAVEL, PH.D., ASSOCIATE PROFESSOR OF POLITICAL SCIENCE, SECURITY STUDIES PROGRAM, MASSACHUSETTS INSTITUTE OF TECHNOLOGY 

Mr. FRAVEL. Madam Chairman, Congressman Berman, and esteemed members of the committee, thank you for inviting me to 

participate in today’s important discussion. 

I would like to discuss one particular challenge that China poses, 

its behavior in the territorial and maritime disputes in the South 

China Sea. Orally, I would like to make four points. 

My first point, first, between 2007 and 2011, China adopted a 

much more assertive approach toward the disputes in the South 

China Sea. During this period, China challenged, and in some 

cases threatened, foreign oil companies, including American ones, 

investing in Vietnam’s offshore oil and gas blocks, emphasized its 

own expansive claims in these waters, detained hundreds of Vietnamese fishermen near the Chinese-held Paracels Islands, and harassed Vietnamese and Philippine vessels conducting seismic surveys in waters that Beijing claims. 

China adopted this more assertive approach for several reasons. 

First, China was often reacting to efforts by other claimants, especially Vietnam, to strengthen their own position in the South China 

Sea. As there are some conflicts, territorial disputes are prone to 

negative spirals of instability because one state’s efforts to defend 

its claims will be viewed by others as a challenge that requires a 

response. 

Second, more generally, China’s leaders were more willing to assert interest in the region after successfully hosting the Olympics 

and weathering the financial crisis in 2008. 

Third, various Chinese maritime agencies competing with each 

other for greater authority and resources also played a role in China’s behavior. 

The second point: Since June 2011, China has adopted a less-assertive approach in the South China Sea disputes. China has 

stopped the most confrontational aspects of its assertive approach, 

especially the frequent detention of Vietnamese fishing vessels and 

the harassment of oil and gas exploration activities in waters that 

China claims. 

In addition, China’s new approach has several components, including reaffirming cooperation through joint development, holding 

summits with leaders from the Philippines and Vietnam, reaching 

agreements for managing tensions with the association of Southeast Asian nations and with Vietnam, and directly engaging other 

claimants, for example, by establishing a $70 million Maritime Cooperation Fund. 

China adopted a less-assertive approach because it realized that 

it had overreached and overreacted. By threatening other claimants, China tarnished the cooperative image that it had sought to 

cultivate since 2000, created a common interest among these states 

encountering China, and created strong incentives for states in the 

region to improve their ties with the United States. 

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Central to the change in China’s behavior was the firmness displayed by both states in the region and the United States, especially when Secretary of State Clinton declared a U.S. national interest in the South China Sea in July 2010. In sum, China’s actions 

had undermined its broader grand strategy, which emphasizes 

maintaining good relations with both its immediate neighbors and 

with great powers like the United States. 

My third point: China’s recent behavior in the South China Sea 

has important implications for understanding China’s foreign policy 

today. In the South China Sea, China’s assertiveness has sought to 

deter other states from acting against Chinese interest and claims. 

China has not acted to compel states to accede to China’s claims, 

however. The emphasis on deterrence in China’s foreign policy is 

consistent with the emphasis on deterrence in China’s military 

strategy today. 

Although China is actively modernizing its armed forces, it remains reluctant to use them in many political and military issues. 

In the South China Sea, for example, China has relied primarily 

on civilian maritime law enforcement agencies to assert and defend 

its claims, not the Chinese navy. 

With 14 neighbors on land and eight at sea, China’s foreign policy remains constrained by its external security environment. 

China has limited room for maneuver and must seek to maintain 

good relations with neighboring states, especially when faced with 

resistance to China’s policies from its neighbors and from states 

like the United States. 

My final point concerns several brief policy recommendations: 

First, the United States should maintain and consolidate its military and diplomatic presence in East Asia currently being undertaken as part of the rebalancing of American strategic priorities. 

Second, the United States should continue to underscore its national interest in international norms that are threatened by China’s more assertive policies, especially freedom of navigation and 

the peaceful resolution of disputes. 

Third, the United States should maintain its longstanding principle of neutrality in territorial disputes of other countries to prevent transforming them into bilateral conflicts between the United 

States and China. 

Fourth, the United States should ratify the Convention on the 

Law of the Sea to increase the effectiveness of U.S. efforts to pursue a rules-based approach to managing and resolving disputes 

over maritime jurisdiction. 

Madam Chairman, thank you. 

[The prepared statement of Mr. Fravel follows:]

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Chairman ROS-LEHTINEN. Thank you very much. Thank you to 

all of our panelists for excellent testimony. 

I would like to ask you gentlemen about China’s relations with 

North Korea and with Iran. I know that we don’t have much time. 

But China’s enablement of North Korea’s nuclear development program has allowed Pyongyang to become a de facto nuclear power. 

Does Beijing really desire a nuclear-free Korean peninsula or does 

China prefer a situation where an erratic and unpredictable North 

Korea ties down the United States and their East Asian allies 

while China pursues its own regional ambitions in the South China 

Sea and elsewhere? 

And on Iran, news reports of Beijing supplying Tehran with surveillance equipment to spy on Iranian citizens is only the latest example of extensive Chinese/Iranian security links. There have been 

reports of Chinese military cooperation with Tehran in the upgrade 

of Iranian fighters, missile technology, and production of speed 

boats to patrol the Gulf and the Strait. Have the U.N. sanctions 

against Iran, including an arms embargo, diminished Beijing’s supply of weapons and missile technology to Tehran? 

A former Los Alamos nuclear engineering analyst said that Beijing’s nuclear cooperation with Iran ‘‘created the foundation of the 

Iranian nuclear program today.’’ Would you agree with that assessment? 

So, North Korea and Iran, we will start. 

Mr. CHENG. It is obviously difficult to determine what China prefers, given the opacity of Chinese decision making. But I would 

suggest that China prefers neither a nuclear-free North Korean nor 

necessarily an erratic and unpredictable North Korea. 

Instead, at the moment, given the leadership transition that is 

ongoing in China, it would seem most likely that the Chinese 

would prefer, frankly, that just somebody else deal with the North 

Korean situation, most likely the United States, while China deals 

with its internal power shift. 

Now, in the longer-term, China would most prefer a docile North 

Korea that it can control and manipulate, which it currently does 

not necessarily have. Given the unlikelihood of this situation, it 

would prefer a North Korea that does not precipitate a war on the 

peninsula, but which would not be reunified with the South, and 

which would focus American attention elsewhere away from Beijing. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. TKACIK. One has to remember that North Korea is China’s 

oldest, and I think right now still the only, treaty ally in a military 

mutual defense treaty. I have watched China/North Korea for 20 

years, and I have come to the conclusion that China seems, indeed, 

to want North Korea to behave the way it does. China has pretty 

much total control in North Korea, both by virtue of its economic 

and trade relationship and the military treaty. And it seems evident from the latest succession that China was absolutely critical 

in giving the benediction to the ascension of Kim Jong Un. 

In late 2010, a senior American nuclear weapons specialist, 

Sigfried Hecker, went and visited North Korea and was taken to 

the uranium enrichment plant in Yongbyon that had just opened 

92

up within the previous several months. Hecker said that this was 

the most modern thing that he had ever seen. 

Chairman ROS-LEHTINEN. Thank you. 

Let me just give—I have got 1 minute left. Thank you. 

Mr. WORTZEL. Madam Chairman, I see, and have seen, despite 

the rhetoric out of Beijing, I have seen nothing in Chinese nuclear 

doctrine writings other than the position that a weaker country 

threatened by a hegemonic state—and that means the United 

States—ought to be able to deter aggression with nuclear weapons. 

So, they have no problems with a nuclear-armed North Korea. 

They have no problems with nuclear-armed Pakistan. They pretty 

much encourage that. They left behind the infrastructure that 

helped Iran with its nuclear program. 

And I will just conclude with that. 

Chairman ROS-LEHTINEN. Thank you. 

Mr. FRAVEL. Very quickly, I will just echo some of the comments 

that my colleagues have made. I think that China prefers above either a nuclear-free peninsula or erratic DPRK behavior, a divided 

peninsula in which the DPRK continues to exist as an independent 

state. I don’t think that they are actively encouraging erratic behavior by the DPRK because, ultimately, it causes more problems 

for them than it solves. 

Thank you. 

Chairman ROS-LEHTINEN. Thank you very much. 

Mr. Berman? 

Mr. BERMAN. Yes, I would like to get responses to three questions without using all my time to ask the questions. 

First, to Dr. Fravel, the Director of the National Intelligence sort 

of confirmed your analysis or shared your analysis regarding China’s less-assertive behavior over the last 10 months in the South 

China Sea. Do you think this was a deep change or a tactical 

change on the part of China? And how do we turn it into a longterm change in behavior rather than just a shift that shifts back 

into a reactionary cycle that could lead to open conflict? 

Second, I would be curious if one of you could address the question of whether, in your opinion, the upgrade program for Taiwan’s 

F–16s is sufficient for Taiwan’s self-defense in the near-term as 

well as the long-term. 

And finally—and I think, Dr. Wortzel, you touched on this—regarding Iran, it seems to me the odds of our current policy achieving its goal may be very dependent on the extent to which China 

becomes a cooperating partner in the sanctions leading to a diplomatic resolution strategy that we are now pursuing. 

What would the likely impact on U.S.-China relations be if Chinese energy companies involved in Iran were to be sanctioned by 

Washington? While China may not have any naturally-negative 

view of another country having nuclear weapons to deter a ‘‘hegemonic power,’’ us, why wouldn’t China’s fear of a military confrontation and its impact on its need for reliable and relativelycheap energy be enough of an incentive to get them to join that? 

Dr. Fravel, first, as quickly as possible in the 21⁄2 minutes left. 

Mr. FRAVEL. Thank you very much. 

Very quickly, I would say that China’s change in behavior in the 

South China Sea was initially a tactical shift, but I believe it has 

93

a strategic logic and has the potential to endure for a period of 

time, although it will certainly not resolve the underlying conflicts 

in the region. It has a strategic logic because, from Beijing’s perspective, the goal is to limit sort of states in the region from pursuing deeper security ties with the United States. And the way to 

do that, from Beijing’s perspective again, is to try to address some 

of the concerns that the states in the region have about China’s behavior. 

So, I think it has some likelihood of enduring for some period of 

time, but, ultimately, what would be needed is a much longer-term 

solution that would address the conflicting claims in the region. 

Thank you. 

Mr. BERMAN. Thank you. 

Taiwan, and then Iran. 

Mr. CHENG. Sir, on the issue of the Taiwan upgrades, the upgrades are to a series of aircraft that are already 20 years old. 

Every aircraft that is being upgraded is pulled off the line for an 

extended period of time, which means the net number of aircraft 

that Taiwan can put in the air is reduced. 

The proposed sale of F–16C/Ds would replace aircraft that were 

designed in the 1950s. Not doing so, basically, means that Taiwan 

has an air force that, through sheer attrition and age, will be reduced over time without China having to do anything. 

Mr. WORTZEL. Mr. Berman, first of all, I think the upgrade helps, 

but it is insufficient for Taiwan. 

On Iran, I think that if energy companies were sanctioned, it 

would certainly help if Chinese energy companies were sanctioned. 

They are still very dependent on Iran and very reluctant to do anything to sever that. Obviously, Russia is part of that equation. 

Mr. BERMAN. But why wouldn’t the fear of the exercise of a military option to set back Iran’s nuclear program and the consequences of that on China’s energy needs become a more dominant factor? 

Mr. WORTZEL. One would think it would, but, first of all, it 

hasn’t——

Mr. BERMAN. So far. 

Mr. WORTZEL [continuing]. Obviously, so far. And second, if you 

are going to conduct surgical strikes on that nuclear program, you 

really haven’t affected the pumping in the ports. It would have to 

be a completely different form of warfare. And so far, nobody is 

contemplating that, and they are probably aware of that. 

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

Berman. 

Mr. Smith is recognized. 

Mr. SMITH. Thank you very much. 

Dr. Wortzel, tomorrow Carolyn Bartholomew, your fellow commissioner, will testify at our hearing on the impact of China on Africa. But let me ask a question. China’s population control has been 

employed as a weapon of mass destruction imposing a devastating 

impact on women and death to children, especially the girl children. Last September, in yet another hearing on these crimes 

against humanity, and a look at possible consequences, two consequences that are grossly, I think, under focused on were brought 

out during the hearing. 

94

There is a book—many of you or all of you may have read it—

Valerie Hudson’s book called the ‘‘Bare Branches: The Security Implications of Asia’s Surplus Male Population.’’ In that book—and 

she testified at our hearing and updated her information—her argument is that the one-child-per-couple policy has not enhanced 

China’s security, but demonstrably weakened it. 

She points out, as Nick Eberstadt famously phrased it, ‘‘What are 

the consequences for a society that has chosen to become simultaneously both more gray and more male?’’ She points out that, by 

2030, the ratio for seniors-to-workers will be 2.5, and 1.6 workers 

for senior citizens in 2050; and also, that the number of boys, 118 

boys for every 100 girl babies, and the ratio may be as high as 122. 

She points out that these surplus males, as she calls them, and 

others have called them, the bare branches, a colloquial Chinese 

expression, will disproportionately be poor and less-educated Chinese young men, and the possibility for destabilizing China itself. 

Certainly the corresponding propensity or invitation to the Chinese 

Government to expand, to use international aggression as a safety 

valve, is laid out both historically in her book and her testimony 

as something that might happen. 

And she says, and I will ask you the question then, ‘‘When we 

look at global aging, China is aging, and the likely economic effects 

of aging, and combine them with the analysis of the effects of abnormal sex ratios on society, the synergistic effects are likely to be 

quite dangerous for the Chinese Government.’’ And again, she talks 

about the possibility of war with Japan and certainly Taiwan and 

others in the crosshairs. 

Your thoughts? 

Mr. WORTZEL. Mr. Smith, I know Nick’s work very well, Nick 

Eberstadt, and he has documented these problems very well. I 

don’t subscribe to the theory that a surplus of males necessarily 

leads to a Spartan state. It leads to a lot of problems in getting 

people in the military, but, I mean, this is an authoritarian country; they will get who they need. And it does lead to potential instability, but not a Spartan state necessarily. 

Mr. SMITH. Well, I wasn’t saying Spartan state. I was saying——

Mr. WORTZEL. Well, I mean, it doesn’t necessarily, when I say a 

Spartan state, I mean to aggression as a channel. The thing it certainly does lead to is an awful lot of prostitution. It leads to a lot 

of trade in persons, and women from Southeast Asia and Korea 

and Mongolia suffer because of that. 

Mr. SMITH. Yes? 

Mr. TKACIK. No, I agree with that. I think that the demographic 

challenge of a male population I think does mean that China’s military will be, I think, more disciplined. And, No. 2, there will be a 

tremendous demographic aggression against Chinese neighbors 

where populations in the periphery are out looking for women to 

bring into China as wives. It will cause instability. 

I don’t think, if there is a war, China is going to lose it, though. 

Mr. SMITH. I wasn’t just saying it would lose it. It is that it 

would be a safety valve. That is what the thesis of her book, in 

part, was all about. 

Mr. TKACIK. Yes. 

95

Mr. SMITH. And I did ask her whether or not the Pentagon has 

shown any interest. It ought to be factored into at least their thinking. And she said——

Mr. TKACIK. I have not seen any interest. No, I think people 

think about this, but when you consider that the main concern of 

the Chinese Communist Party is economic growth and stability, 

that sort of aggression reverses that. So, I mean, one thinks they 

might think that through. 

Mr. SMITH. Yes? 

Mr. CHENG. Sir, two other considerations. One is in a post-war 

environment, what happens to the parents and grandparents of the 

casualties? Since currently they are supported by the children, assuming that China is not able to fight an immaculate war with no 

casualties, you wind up with political consequences afterwards. 

The flip side to that is that there is also an inherent public 

health issue with the growth in prostitution, issues like that. 

Things like AIDS, et cetera, can spread like wildfire through the 

Chinese surplus male population. 

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

Mr. Connolly? 

Mr. CONNOLLY. Thank you, Madam Chairman. 

An observer listening to you all on this panel, and to our byplay 

with you, could, if you landed from Mars not knowing much about 

this relationship, conclude all is dark and the relationship is 

unrelentingly hostile; we are dealing with a growing and powerful 

adversary in the People’s Republic of China from intellectual property issues to military posture, to actually countering U.S. foreign 

policy issues on nuclear proliferation, North Korea, Syria, their 

own hegemony in the Pacific Basin and military posture to onechild-per-family policies, to all kinds of things. 

I wanted to give panelists an opportunity to comment on that because surely there is more to the relationship, though these are 

very serious issues and cannot be swept under the carpet. But I 

haven’t heard you talk much about how we move forward and what 

is at stake in trying to work out some kind of—forgive me again, 

Madam Chairman—modus vivendi with this——

Chairman ROS-LEHTINEN. You are going to start getting penalized for that. 

Mr. CONNOLLY. I’m sorry. 

Dr. Wortzel, do you want to start? 

Mr. WORTZEL. I would be happy to. Thank you for the question, 

Mr. Connolly. 

First of all, as our 2011 report on the commission pointed out, 

things have gotten worse. 

Mr. CONNOLLY. Worse? Worse? 

Mr. WORTZEL. It may not be dark, but it is pretty cloudy. I think 

what we have to do is work with friends and allies to reinforce rule 

of law in China and to reinforce the observation of international 

common practice by China, because they don’t. And we have to 

work with allies and friends to make sure they do and that they 

comply with their WTO obligations. They have really backed away 

from many of them. 

Mr. CONNOLLY. Let me ask you, if I may, Dr. Wortzel, to expand. 

What is U.S. leverage and how well do you think we use it? 

96

Mr. WORTZEL. I think, first of all, our leverage is weakened 

slightly now by the economic relationship and the need for vestment in Europe from China. So, it is less leverage. 

But I think the big leverage we have is the fact that we have a 

strong economy and that the Chinese really do want to take advantage of that for their own exports in the near-term. There are a lot 

of problems to resolve with respect to that, but that is our primary 

leverage. 

Our secondary leverage, well, perhaps as important is, frankly, 

our ability to prevent a state that sees itself culturally as the center of at least Asia, if not the world, from exercising the coercion 

against its neighbors that it traditionally has as a regional suzerain surrounded by vassal states. 

Mr. FRAVEL. One perspective might be to look at the exchanges 

between our two countries. I believe the U.S. Embassy in Beijing 

is now the second-largest diplomatic post after the Embassy in 

Baghdad. That sort of reflects the fact that in all segments of society there are close relations between many Chinese and many 

Americans, especially at the person-to-person level, not necessarily 

the government-to-government level. 

Just as a quick anecdote, when I started studying Chinese in the 

fall of 1989 at a small liberal arts college in Vermont, there were 

seven students in my class. Today at that same small liberal arts 

college in first-year Chinese there are now 55 or 60 students. 

And so, I think, despite all the challenges that Larry has laid out 

and that other panelists have laid that, the fact that there are 

greater exchanges at the people-to-people level is arguably one 

source of optimism in the much longer-run. But, again, I certainly 

recognize and acknowledge the challenges. 

Thank you. 

Mr. TKACIK. I would point out that China is a rising power, and 

that the United States, Europe, Japan are status-quo powers. 

There is a grave potential for collision as the international systems 

enter into a power transition phase. 

I think the University of Chicago’s John Mearsheimer pointed 

out in 2008 that, as history shows, powerful states on the rise often 

fight wars with other major powers. Now this is a replay of 100 

years ago in Europe, 100 years ago in Japan, 50–60 years ago in 

Central Europe. 

I have a feeling that what we are looking at is a historical problem, and we have not yet dealt with it. 

Mr. CONNOLLY. Thank you, Madam Chairman. 

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

Mr. CONNOLLY. I’m sorry, Mr. Cheng, my time is up. 

Chairman ROS-LEHTINEN. Thank you. 

Ms. Schmidt? 

Ms. SCHMIDT. Thank you. 

I actually have two questions. I will deliver them both and allow 

the experts to answer them. 

The first deals with George Friedman’s book, ‘‘The Next 100 

Years,’’ and his assessment of where we will be militarily in 2050. 

He believes that we will be engaging more through satellites and 

space more than with men on the ground. 

97

Given that, and given the position of this administration to sell 

restricted satellite technology, the AsiaSat issue, what risks do you 

see for the U.S. in doing this, not just now, but in the future? 

And the second deals with Taiwan. When President Mao was 

elected in Taiwan, he began a closer relationship and tie with 

China, especially with the Olympics and getting the ability of people to get in and out of China more easily. That, I believe, has put 

a seemingly larger presence of China into Taiwan’s economy. 

Given that, and the issue with the waterway issue between 

China and Taiwan, how real do you see the economic/maritime 

threat to Taiwan with China? And what resolution would you see 

for it? 

Mr. CHENG. On the issue of space warfare, I think it is very important to recognize that PLA writings make very clear that one 

of the essential aspects to successfully fighting what they term a 

local war under informationized conditions is the ability to secure 

space dominance. The Chinese ASAT test in 2007 was the single 

worst debris-generating event in all of history. People forget that 

afterwards China conducted another ASAT test in 2010. 

I would suggest that the current administration’s efforts to implement an international space code of conduct in the hope of getting the Chinese to then sign on, when China and other space 

faring countries have already said that they will not do so, is perhaps the ultimate triumph of hope over experience. 

And in this regard, I think that the announcement that we are 

thinking of selling space technology to China, when the administration has repeatedly said that export control reforms, which arguably are necessary, will not affect our controls on China, raises real 

questions about what direction the administration thinks it is 

heading in. 

Mr. TKACIK. I would point out that, Congresswoman Schmidt, 

you are absolutely correct. The new Taiwan President has adopted 

a policy of accommodating China. Just in the last several months, 

we have seen an entire new change in the political posture of Taiwan, which basically agrees that Taiwan is part of China. I think 

once Taiwan has made that choice, then you are now looking at 

Taiwan moving out of the column of the Western democracies and 

the community of democracies in East Asia and moving into the 

column of the sphere of China’s security interests. 

The thing you have to remember is that Taiwan still has a sophisticated basing structure. It has phased-array radars mounted 

high up in Taiwan’s mountains which used to be or which are designed to scan the Chinese mainland for ballistic missile launches, 

and now will be turned out into the western Pacific to scan for the 

U.S. 

Taiwan’s deepwater ports, submarine bases in eastern Taiwan, 

just a few dozen miles from Japanese territory, which had enabled 

friendly submarines to slip undetected into one of the deepest maritime trenches in the Pacific, they will likely give Chinese diesel/

electric submarines home in the future. 

There is also a possibility of China and Taiwan cooperation 

against Japan and the United States in the East China Sea. The 

importance of the Senkakus for defining East Asia’s and Japan’s 

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and the United States’ maritime depth opposite the new Chinese 

superpower I think cannot be overstated. 

And all this may result—I think this is what we are looking at, 

is that Ma Ying-jeou, the President of Taiwan, now has a very clear 

China policy. What is also clear is that he does not have an America policy. 

Mr. WORTZEL. I would only say that I fundamentally disagree 

with Friedman, that until we get space-based weapons or rods from 

God—and that is not real likely—no part of a maritime domain 

was ever controlled from space. Space is fundamentally important 

to our military operations. We have a very powerful Navy, a powerful Air Force, and troops that can go in and put boots on the 

ground. 

Chairman ROS-LEHTINEN. Thank you, Ms. Schmidt. 

Mr. Sherman is recognized, unless you would like to have a few 

minutes. Then, we can go to Mr. Chabot. Mr. Chabot is recognized. 

Mr. CHABOT. Okay. Thank you, Madam Chair. 

Could I hear the other members of the panel? We had a meeting 

in back and just got in, but I heard Mr. Tkacik discussing Taiwan. 

Well, let me go to you first, Mr. Tkacik, again, and then to the 

others. 

Is what I just heard you say about Taiwan and the shift under 

President Ma, the direction that he has gone, do you think that is 

irreversible at this point? Or what is your opinion there? 

Mr. TKACIK. Well, I don’t think it is irreversible. I think what 

has happened is that, over the last, I have to admit, the last two 

administrations, the Bush administration and the Obama administration, basically, we have cut Taiwan loose. Taiwan is now in a 

phase where they basically feel they have no support in the United 

States, that the U.S. Government, the U.S. administrations are not 

supporting a Taiwan that is part of the network of Asian democracies that comprises island Asia as opposed to mainland Asia. 

When you are faced with that kind of a situation, the Taiwanese 

voters basically say, ‘‘There’s no sense in me voting for any kind 

of government that is going to challenge China because we are not 

going to get any support.’’ I think that in 2000 they thought they 

were going to get support, and in 2004 I think the Taiwanese voters thought they were going to have the support of the United 

States, but no more. 

Now, if that were to change, I think, yes, it would make a big 

difference in Taiwan’s electoral process. But, right now, the policies 

that the government in Taipei are adopting are moving inexorably 

toward the Chinese sphere of security responsibility. 

Mr. CHABOT. Would the other members of the panel like to comment on that? Mr. Cheng or Dr. Wortzel? 

Mr. WORTZEL. I certainly would, and I thank you for the opportunity to do so. 

I think John, Mr. Tkacik, is right. But the operative word he 

used is the elections and the voters. So, it is not like Ma Ying-jeou 

has just come up with this policy that has no support. And the legislature hasn’t helped either Taiwan or itself or the United States 

when they had a good armed sales package. So, part of that is partisan politics on Taiwan. 

99

Mr. CHABOT. And let me stop you there for a second, Doctor. By 

that, my recollection is that the United States was trying to get the 

needed weaponry into their hands. The legislature at that time, for 

political reasons or whatever, was so divided that they couldn’t get 

their act together enough to approve much of——

Mr. WORTZEL. That’s exactly right. The legislature was and still 

is divided. I think much of the populace was divided, and that is 

reflected in the legislature. 

And then, finally, in my personal view, Taiwan’s military 

piecemealed a little bit of a whole bunch of good things, instead of 

going for a major defensive architecture that would have allowed 

them to engage in cooperative target engagement with all their 

ships and aircraft and ground systems. So, that was mismanaged, 

too. 

Mr. CHABOT. Okay. Mr. Cheng? 

Mr. CHENG. Representative, I think that I am certainly not in 

any kind of position to give advice on Taiwan because they are a 

democracy and they make their own choices. All I can say is that, 

for the United States with regard to Taiwan, and throughout the 

region, what we need is a consistent strategy and persistent actions, a consistent strategy of defending our interest in standing up 

for our principles, persistent actions that are consistent with that 

strategy, whether it is the sale of needed arms under the legal 

terms of the Taiwan Relations Act, not simply upgrades, as has 

been inquired about, or whether it is the commitment of American 

forces on a persistent basis, unlike the vast relation we saw with 

the George Washington Battle Group back in 2009. Our failure to 

do so I do believe has political repercussions, including in democracies like Taiwan. 

Mr. CHABOT. Thank you. 

And I have limited time. So, let me make just a comment real 

quickly here. 

I think the fact that the Taiwanese Government has decided to 

move itself in the direction of the criminalization of politics is unfortunate as well. Their previous President, President Chen, still is 

behind bars. I think for an administration to come and essentially 

jail the previous administration is a tragedy, and I think that they 

ought to deal with that sooner rather than later. 

I yield back. 

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

Mr. Sherman is recognized. 

Mr. SHERMAN. Thank you. 

I ask anyone on the panel to comment. Is there serious discussion in Taiwan of developing an independent nuclear weapons capacity? And would they have the capacity to do so within a few 

years? 

Mr. TKACIK. I think the answer is absolutely no. Taiwan did have 

a fairly robust nuclear weapons research campaign in the 1970s 

and again right up until January 1988. Probably, if they had been 

successful, we wouldn’t be discussing this now. 

But both the major political parties in Taiwan I think are adamant against any such thing now. The ruling party is called the 

Chinese Nationalist Party, and it supports Taiwan’s eventual reunification with China. 

100

The opposition party, the Democratic Progressive Party, is adamantly anti-nuclear. So, there is just no——

Mr. SHERMAN. Thank you. I would like to go on to another question. 

Mr. WORTZEL. Well, I would like to add to that, if I may. 

Mr. SHERMAN. But I am sorry, I——

Mr. WORTZEL. They don’t have the strategic depth to confront 

China with nuclear weapons. 

Mr. SHERMAN. I would like to move on to another question. We have a toxic trade relationship with China, a $300-billion trade deficit. What that means is they send us $300 billion of stuff every 

year and we send them $300-billion worth of paper. 

I can understand why Americans like this. It produces huge profits, helps consumers. With this ideology of free trade, we can simply ignore that the Chinese Government controls import decisions, 

not through tariffs but through other means. And so, it fits our theoretical model of the way the world should work. So, that provides 

us with an intellectual underpinning to support the huge profits 

and the wonderful stuff we get. What I don’t understand is China. Every year they ship us $300-

billion worth of fine things, and they get bonds. Can anyone here 

explain the bond fetish of the People’s Republic of China? 

Mr. WORTZEL. Well, I personally can’t. I can say that our commission’s reports over a series of about 4 years and a number of 

hearings that we have held make it pretty clear that the United 

States treasuries market and bond market remains still the most 

stable place to park that money and to get it back, and that the 

undervalued currency and the continued undervaluation of that 

currency is based on the ownership of those treasuries. 

Mr. SHERMAN. Yes, I can understand that, if you are going to 

save money, U.S. Treasury bonds are a wonderful place to put it. 

What I don’t understand is why a developing country insists upon 

saving several hundred billion dollars a year rather than importing. 

Let me move on to another question. Germany has a balanced 

trade relationship with China. So, we could reach the conclusion 

that German workers and entrepreneurs are better than their 

counterparts in the United States or that the foreign policy establishment in Germany is doing a better job for the German people 

than the foreign policy establishment in our country. 

How has Germany conditioned access to its market on fair access 

for its exporters to China? Dr. Wortzel or anyone else may answer. 

Mr. WORTZEL. Well, I don’t know the answer to that, but I can 

tell you, from having dealt with German defense and high-technology firms and their relationships with China, they take a very 

different approach to transferring technology. They recognize it will 

be stolen. They don’t worry about sales and transfers. But what 

they do is take already outmoded technology for them and manufacturing and are quite willing to sell it and transfer it with the 

idea that their research and development is far ahead. 

Mr. SHERMAN. Does anyone else have a view as to why Germany 

is able to have a balanced trade relationship with China? 

Mr. TKACIK. Well, the Germans have a robust industrial infrastructure. They produce very good——

101

Mr. SHERMAN. So do we. 

Mr. TKACIK. Well, I don’t know if we do any more. I think that 

in the last 10 years I think——

Mr. SHERMAN. So, you would blame the American worker and 

manufacturing companies rather than the foreign policy——

Mr. TKACIK. I would blame a political decision in China not to buy American goods. I would point out that, while we have a $300-

billion trade deficit with China, China basically, all told, has a 

$100-billion trade surplus. So, they are using American money to 

buy other people’s goods and other people’s resources and commodities. It seems to be a conscious economic decision on the part of 

China not to buy American. 

Mr. SHERMAN. I agree. 

Chairman ROS-LEHTINEN. Thank you. Thank you very much. 

Mr. Royce is recognized. 

Mr. ROYCE. Thank you, Madam Chairman. 

My subcommittee held a hearing on China’s so-called indigenous 

innovation policy, and indigenous innovation is just basically the 

concept for the Chinese Government extortion of U.S. technology, 

in the view of many. 

For years, American businesses were afraid to speak out on this 

issue. I think they feared they would be shut out of the Chinese 

market. But now we have a different attitude. Now, at long last, 

you see U.S. businesses speaking out long and hard about this indigenous innovation issue. 

I would like your views on these policies, the forced transfer of 

U.S. technology over to the government in China. I would just like 

to underscore that this is some of the most valuable technology 

that U.S. companies possess. 

I should add that Mr. Connolly and I have legislation coming out 

of that hearing that we held that I introduced changing these practices. That is H.R. 2271. 

But let me just get your thoughts on the record. 

Mr. CHENG. Representative, I think that it is important to put 

all this in the context of the Chinese emphasis on comprehensive 

national policy, the idea that a nation’s position is a reflection of 

science and technology and industry. 

In this regard, then, the emphasis is on technological development as a means of bringing China up the value chain to get it out 

of making the low-end items, becoming more of a manufacturing 

power and a post-industrial set of capabilities. This is consistent 

with what the Chinese have termed the two bombs/one satellite 

policies, which also emphasize domestic development, partly a fear 

that it would be cut off, as it was after the Sino-Soviet split, from 

foreign technology. But, also, partly the idea that you want to obtain foreign R&D which is, therefore, going to be lower cost, and 

the creation of state champions to create better. 

The aspect of indigenous innovation should also be seen in the 

context of cyber warfare, in the sense of, if I can’t get you to invest 

here, I may be willing to use cyber methods to try to, frankly, steal 

it from you. 

Mr. ROYCE. And some argue that they are not that great at innovation, and that is why they steal. That is why they steal it. 

But go ahead. 

102

Mr. WORTZEL. Well, I mean, there are cultural impediments to 

creating new ideas, and there are structural because of the Communist Party organization, and they recognize that. 

But I have to say our commission looked at—I haven’t seen your 

legislation, sir, but we looked last year at Mr. Webb’s suggestion, 

Senator Webb’s suggestion. We were not able to come to an agreement on it. 

But I will give you, if I might, the position that I suggested on 

this issue. That is, you take a look—somehow pharma for me is a 

decent model. I mean, you don’t want to limit the transfer of technologies that may have been developed with government funding 

and research or taxpayer-funded research and development to 

China. But, after a while, it doesn’t always pay to control it. You 

know, the M1911A1 pistol was 1911. 

But pharma for me, because there is this sort of 5-year window, 

7-year window, where the patents then go away, and other companies can use it, is a reasonable model to think about. The taxpayers 

deserve some return and not to lose what they funded certainly for 

a fixed period of time. But how far that should go, we couldn’t 

agree. 

Mr. TKACIK. I mean, I would add that the Chinese have gone out 

of their way to steal America’s most advanced technologies. They 

have done this to Applied Materials. They have done it Cisco Systems. They have done it to Google. They have done it to Microsoft. 

And just in the last week, we saw a very interesting report from, 

I guess it was, Business Week, on how the Chinese stole the software and blueprints from American Superconductor, a Massachusetts company, basically, leaving American Superconductor with 

$700 million in unpaid equipment bills. And the Chinese basically 

turned around and said, ‘‘That we don’t need anymore. We can 

build this ourselves.’’ It was breathtaking. 

The problem I have, though, is that when the Chinese go and 

steal this technology from us, after a while they do begin to develop 

an indigenous research and development capability that——

Mr. ROYCE. Let me make one last point. Last year, the DoD’s annual report on the Chinese military reported an extensive tunnel 

network underneath China designed to hide its nuclear weapons. 

It could be 3,000 miles long, as I understand it. That would imply, 

they say, that the often-cited 300 to 400 weapons may, in fact, be 

many times that. Yes or no? 

Mr. TKACIK. The answer is yes. 

Mr. ROYCE. Thank you. 

I yield back, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you so much. 

Mr. Manzullo is recognized. 

Mr. MANZULLO. I am always intrigued by how Americans try to 

work with Chinese based upon an American model of thinking. 

Mr. Cheng, I commend you in your paper for talking about something that most people don’t even imagine, and that is the manner 

in which the Chinese approach something. If I could call your attention to page 5 of your testimony, you make the statement, paragraph 3, line 3, ‘‘The first issue is that the Chinese do not think 

the way we do.’’ Then, you point that out by way of various examVerDate 0ct 09 2002 14:08 May 31, 2012 Jkt 000000 PO 00000 Frm 00106 Fmt 6633 Sfmt 6633 F:\WORK\FULL\032812\73536 HFA PsN: SHIRL
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ples. Also, the same pattern appears in Mr. Tkacik’s testimony and, 

actually, across the board. 

I was at a remarkable meeting of the U.S.-China Business Council on April 22, 2004. I wrote this down, keep it in my BlackBerry, 

as quoting Madam Wu Yi, at the time who I guess was the equivalent of the Secretary of Treasury perhaps. 

She said that China has a ‘‘market-based, managed, unitary 

floating exchange rate.’’ I wrote that down, and I said this can’t be. 

And then, my aide there said, well, this is in the official English 

translation of what she said in Chinese. 

What is particularly bothersome is the fact that we tend to deal 

with the Chinese based upon Western thinking. I just want to 

throw that out to Mr. Cheng and other members of the panel. I 

know you agree with me on that, but talk about it and the impact 

it has on American diplomacy with China. 

Mr. CHENG. In brief, sir, I would submit the following: That in 

many ways we tend to think of China as a rising power. We think 

of ourselves as a status-quo power, which is hardly surprising 

given that we are happy with where we are after about 250 years 

of history. 

I would suggest that China actually thinks of itself as a statusquo power. The problem is how you define the status quo. For us, 

in our history, China has always been a weak power and only now 

has been rising over the last, say, 20 years. For China, with its 3-

, 4-, 5,000 years of history, it has almost always been the dominant 

power in Asia and, therefore, the known world for them. 

China, therefore, is seeking to re-establish itself. This is not Germany in 1900 newly-unified. This is a country that sees itself as 

returning to the world stage in its proper place. That is a very different perspective. 

Mr. MANZULLO. Anybody else want to comment on that? Dr. 

Fravel? 

Mr. FRAVEL. Well, just a different example would be Chinese negotiating behavior. So, for example, many Chinese negotiations, the 

Chinese will want to first talk about principles and get agreement 

upon principles and, then, sort of establish a friendship or reach an 

agreement; whereas, I think the Americans approach it sort of the 

opposite. You reach the agreement first and, then, you sort of become friends afterwards. 

And so, I think it creates a lot of challenges in negotiations with 

China. I think it is very important to understand what these differences are and how they will affect various aspects of U.S. foreign 

policy. 

Mr. MANZULLO. Dr. Wortzel? 

Mr. WORTZEL. Well, I think that we want to stick to a Western 

viewpoint because essentially those are the legal norms and the 

international norms by which the world conducts itself, conducts 

warfare and trade. I think the mistake that we sometimes make 

is to think that Chinese perceptions and policy mirrors our way of 

looking at it. 

So, I think it is very important to understand, as Dr. Cheng did, 

how the Chinese—or Mr. Cheng—how the Chinese think about 

things. But I don’t think we should depart from a Western viewVerDate 0ct 09 2002 14:08 May 31, 2012 Jkt 000000 PO 00000 Frm 00107 Fmt 6633 Sfmt 6633 F:\WORK\FULL\032812\73536 HFA PsN: SHIRL
104

point. The goal of our policy in the World Trade Organization is to 

get them to adopt that or at least live by it. 

Mr. MANZULLO. Mr. Tkacik? 

Mr. TKACIK. Tkacik. 

Mr. MANZULLO. Tkacik. 

Mr. TKACIK. I would just say that China is no longer a ruletaker. China is now a rule-maker in the international system. And 

imagine what the world is going to be like when China makes the 

rules. 

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

Manzullo. 

Mr. Rohrabacher is recognized. 

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

and thank you for holding this hearing, providing this kind of leadership to focus our attention on some real threats to our prosperity 

and to our security. 

Let me just note for the record, Madam Chairman, that when we 

refer to China, we are not referring to the people of China. We are 

referring to the regime that controls the people of China and its entourage. But the people themselves are not responsible for the policies that we are talking about because China is the world’s largest 

dictatorship and human rights abuser, to the degree that we are 

upset by the way the Chinese are setting up the rules on how they 

relate to us. One can only imagine the horror of having to live 

under a regime as arrogant and as oppressive as they do in China. 

So, let us reach out to the Chinese people. 

What we have seen is the greatest transfer of wealth and power 

in the history of the world. In the last 30 years, we have seen a 

transfer of wealth from the United States and other Western countries, but especially the United States, to China, to a China that, 

as I say, is governed by the world’s worst human rights abuser/dictatorship. 

This transfer of wealth, it should be no surprise. You know, are 

we really astonished that this has happened? No. We have seen it 

going on, and it is a result of specific policies that we have had in 

our Government, policies that we have not been able to change 

here in Congress because we have a business elite in the United 

States who are making profit for themselves, for the elite, off this 

policy, even though it may transfer wealth away from the rest of 

us, and, of course, a policy that has been also supported by people 

in the Executive Branch, for whatever their grandiose schemes of 

trying to make China a more peaceful country, a less dictatorship, 

because we are going to make them more prosperous. 

That theory, of course, the what I call a ‘‘hug-a-Nazi/make-a-liberal theory,’’ has not worked. And surprise, surprise, they are still 

the world’s worst human rights abuser, but now they have all of 

our technology and they are building high-tech weapons based on 

what we have given them, the wealth as well as the technological 

capabilities. 

And, of course, they are the ones responsible, Madam Chairman, 

for the greatest and just most blatant theft of American technology 

and the investment that it took to create that technology of anything that any of us have witnessed in our lifetime. 

105

And for the record, it has been reported that the head of the EU 

Space Agency recently met with the Chinese in order to see if it 

is possible we can permit them to be partners and dock their rockets onto the International Space Station. 

I was a little late for today’s hearing. I was at a meeting of the 

Science Committee. I will put on the record here as well: The 

United States should not in any way agree to having Chinese rockets and Chinese participation in the International Space Station. 

Of course, the rockets are made up of technology that they have 

stolen from us. Thus, they have no R&D cost, which has drained 

our money and our resources. To permit them now to participate 

in the International Space Station would be adding much harm 

and much insult to already something where there is harm and insult. 

I noticed that Ambassador Gary Locke, our Ambassador to 

China, in a recent speech indicated that the Obama administration 

expects to loosen export controls ‘‘that will enable more high-tech 

goods to be exported to China.’’

There has been a recent, for example, loosening of those export 

controls by a company called AsiaSat, which now has been given 

an export license. It is a Hong-Kong-based company. But it has got 

tremendous and very identifiable roots and contacts and controls 

by the Beijing regime. 

And Ambassador Locke disclosed that China has submitted a list 

of 141 high-tech items that they want from the United States. 

Madam Chairman, I would request that this committee ask for 

that list. And Ambassador Locke has indicated that 46 of those 

items are readily available and could almost go without any controls. I would ask that this committee request——

Chairman ROS-LEHTINEN. I will be glad to make that request, 

and we will put it in writing and make sure that he receives it. 

Thank you. The gentleman’s time is up, if you want to conclude 

with some——

Mr. ROHRABACHER. Thank you, gentlemen. I am sorry, but I 

needed to put that on the record. 

Chairman ROS-LEHTINEN. Thank you. We will make that request, and thank you so much. 

Mr. Kelly is recognized. 

Mr. KELLY. Thank you, Madam Chairman, and I thank the panel 

for being here. 

Now China is the world’s most active and persistent perpetrator 

of economic espionage. Every day U.S. businesses are targeted by 

China for cyber exploitation and theft, resulting in huge losses of 

valuable intellectual property and sensitive information. 

So, China has stolen a wealth of IP from companies such as 

Google, which somebody talked about; Yahoo, Northrop Grumman, 

as well as a number of smaller companies that are afraid of speaking up, lest they provoke even further attacks from China. 

U.S. companies have reported an onslaught of Chinese cyber intrusions that steal sensitive information like client lists, merger 

and acquisition data, pricing information, and the results of research and developmental efforts. This information is used to give 

Chinese companies an unfair competitive advantage against our 

American companies from whom it was stolen. 

106

Now while these hackers continue to steal intellectual property, 

they take new high-paying jobs from American workers right along 

with it. Estimates of this loss and economic espionage are hard to 

make, but they range anywhere from $2 billion to $400 billion a 

year. Just as important, many of these same vulnerabilities used 

to steal intellectual property can also be used to attack the critical 

infrastructures we depend on every day. 

My question is, what is your assessment of this administration’s 

actions in light of its solemn duty to protect U.S. businesses and 

infrastructure from cyber exploitation and theft? In fact, we even 

have a clearly-defined policy. Any of the folks on the panel? 

Mr. WORTZEL. I think the administration’s approach has improved and is improving. I think having a U.S. Cyber Command 

and I think the great work by the Department of Justice and the 

Federal Bureau of Investigation in notifying U.S. industry—94 percent of the penetrations of American industry are discovered by 

agencies of the U.S. Government, not those industries. It is the 

government that tells them. Unfortunately, sometimes it takes 400 

days or so for that to happen. So, they can use more assets. But 

I think they have a very good effort. 

If you look at espionage convictions, if you look at convictions for 

violations of the Arms Export Control Act, the Export Administration Act, and the Industrial Espionage Act, Economic Espionage 

Act, I think Justice has done an excellent job over the past 6 or 

8 years in bringing people to justice. 

What we lack in the cyber arena are the things that I actually 

put into my testimony. We don’t have a way to take a Chinese company to task or a Chinese actor and prohibit them from entering 

the U.S. market. I have suggested ways to do that. I think they are 

practical and reasonable. 

Our commission held a hearing on this same subject on Monday. 

We had a couple of very good suggestions from cyber specialists 

who suggested companies adopt annual audits, in addition to defenses. And that with these annual audits, instead of waiting for 

the FBI or the Department of Homeland Security to tell them they 

have been penetrated, they will discover it. 

General Cartwright, the former vice chairman of the Joint Chiefs 

of Staff, made an excellent suggestion, in fact, cited times of cooperation when the United States Government found penetrations 

by China. They went right to the Chinese Government. 

Mr. KELLY. Well, let me ask, because time is of the essence in 

all of this. As you said, sometimes it takes 400 days. 

Mr. WORTZEL. Yes. 

Mr. KELLY. So, what kind of a price are U.S. businesses paying 

on this and the workers and the rest of the people that are involved in this theft? It just seems to me that, while we may have 

some policy, we don’t have a clearly-defined policy. Where I am 

from in northwest Pennsylvania, we are losing jobs all the time 

and people are wondering, what are you going to do to stop this? 

Mr. WORTZEL. Network monitoring is extremely important. 

Mr. KELLY. But in terms of losses, what do you think we have 

lost? 

107

Mr. WORTZEL. Well, again, you have to document it. You have to 

have a legal mechanism to go after it and get it back. I mean, it 

is a legal problem. 

Mr. TKACIK. I would just add one thing, that it was very unsettling to me that the one agency in the entire U.S. Government that 

knows what it is doing in cyber penetration was not given the lead 

in America’s cyber penetration strategy by the Obama administration. I think NSA has to be in the lead because they are the only 

ones that know what they are doing. 

I had one other profound thought, and it slipped my mind. So, 

I will just——

Chairman ROS-LEHTINEN. I have had those senior moments so 

often. [Laughter.] 

Mr. KELLY. Thank you, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you very much. 

Mr. Burton is recognized. 

Mr. BURTON. First of all, I want to apologize for my tardiness. 

I had another meeting I had to go to. So, I am sorry I missed a 

lot of your testimony. And if my questions sound redundant, please 

forgive me. 

The first thing I want to ask is, when I walked in, I heard you 

say there is 3,000 miles of tunnels in China that are used to conceal weaponry. First of all, why would they be doing that? I don’t 

understand it. They are a nuclear power. We all know their nuclear 

capability. They have enough nuclear warheads and delivery systems to annihilate almost everybody on earth. Why in the world 

would they want to have 3,000 miles of tunnels to conceal more 

weaponry when they have already got enough? Anybody? 

Mr. WORTZEL. First of all, there probably are about 3,000 miles 

of tunnels. They are not all storing nuclear weapons. There are underground national command centers, command-and-control equipment. There are military stores. There are civil defense stores in 

there. So, there are logistics and petroleum and ammunition in 

there. 

But all of China’s nuclear doctrine, so far as I understand it—

and I think I do—is that if they are attacked, and it is unclear 

whether that would be a conventional or a nuclear attack, but if 

they suffer a very strong attack, they want their nuclear forces to 

be able to emerge even 2 to 4 days later and fire a very, very devastating second strike. 

Mr. BURTON. Wow. 

Mr. WORTZEL. So, part of this is denial and deception. 

Mr. BURTON. Maybe I should check and ask the question, what 

do we have in response to that? 

Mr. FRAVEL. One other element to add here is that the building 

of the tunnels in China began, actually, in the 1960s when China 

was very worried about whether or not it would have a secure 

strike capability because many of its missiles were quite vulnerable 

to first strike. And so, these tunnels have a very long history, primarily, as Larry just mentioned, in terms of ensuring some secondstrike capability. And then, they are also used for other purposes 

in terms of storage of supplies, and so forth. 

But it is not a new, the point I want to make, it is not a new 

phenomenon. It is part of a very sort of longstanding practice. 

108

Mr. BURTON. But it may be, but to build 3,000 miles of tunnels 

is going to take more than a week anyhow. 

Mr. FRAVEL. It has taken about four decades. 

Mr. BURTON. Sure, it took more——

Mr. TKACIK. I would add that a Georgetown study, which I 

thought was very good, documented that I think at least half of the 

tunnels had been built since the mid-1990s. 

The other thing is that we do have a good sense of what China’s 

fissile material production capacity is. They absolutely refuse to 

discuss fissile material cutoff and any kind of enforcement or inspection. 

Mr. BURTON. Okay. 

Mr. TKACIK. So, we don’t know. 

Mr. BURTON. The other thing I would like to ask—and you may 

have already answered this question—when Mr. Wang went into 

our Embassy and was there for some time and he was refused asylum, and he was a real potential source of intelligence information, 

I would like to get your take on why we would even consider letting 

him out and letting him be captured by the Chinese. 

Mr. TKACIK. Well, I think China——

Mr. BURTON. Well, just 1 second. And I understand that we had 

the Vice President of China coming in, and that might be part of 

it. 

And the other thing is, I read in my preparation here that there 

are some instability prospects in China and there is a possibility 

that there might be some kind of a coup. 

So, if you could comment on those two things in the remaining 

time I have, I would appreciate it. 

Mr. TKACIK. In my days in the State Department, I had to deal 

with a couple of walk-ins, three separate walk-ins. I have to say 

that the State Department doesn’t really train you in how to deal 

with these things. You sort of learn about it by experience. I think, 

by the last one, we figured it out. 

But in the case of Wang Lijun, who seems to have gone into the 

American Consulate, I really don’t know if the reports that he filled 

out an application form for asylum are correct. I am not sure that 

that is——

Mr. BURTON. Well, my goodness, he was there for 24 hours. 

Mr. TKACIK. Well, he was there for——

Mr. BURTON. I mean, I can’t imagine him just saying, ‘‘I want 

asylum. I am a high-level person in the Chinese Government. I am 

here. I want to stay. I have got information for you,’’ and we say, 

‘‘Oh, we haven’t filled out the forms. We are going to keep you.’’

Mr. TKACIK. Yes, I don’t think that is—I think what had happened is that he actually did fear for his life. My understanding is 

that he approached the British Consulate in Chongqing first, and 

this whole mystery surrounding the death of a British citizen in 

Chongqing last November really heightens this enigma. I think he 

went to the American Consulate because he thought that was the 

only place he wouldn’t be killed. 

My hypothesis is that what we had was that he probably was negotiating with the Chinese Government for his life. It is basically 

up to maybe the committee here or the Intelligence Committee to 

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get a briefing from the State Department on what actually happened. But we just don’t have enough information. 

I mean, I would also add that, if this guy wanted asylum, going 

to the American Consulate in Chengdu is probably the last place 

he should have gone. We, I think, believe that if he had really 

wanted asylum, he knew that he had to get out of China first before he applied for asylum and not apply for it inside. 

Chairman ROS-LEHTINEN. We will make the proper inquiries, 

Mr. Burton. Thank you for bringing that case up. 

Mr. BURTON. Thank you, Madam Chairman. 

Chairman ROS-LEHTINEN. And our Part II of this China hearing 

will be on human rights. And so, I am sure that we will consider 

his case at length. 

Thank you, gentlemen, for joining us. Thank you to the audience 

and to the press who is here. Thank you most especially to our 

members. And with that, the hearing is adjourned. Thank you. 

[Whereupon, at 11:55 a.m., the committee was adjourned.] 

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