```

[Senate Hearing 118-494]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 118-494

                  A REVIEW OF THE PRESIDENT'S FISCAL YEAR 
                    2024 BUDGET REQUEST: INVESTING IN U.S. 
                    SECURITY, COMPETITIVENESS, AND THE PATH 
                    AHEAD FOR THE U.S.- CHINA RELATIONSHIP

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

                                HEARING

                               BEFORE THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            SPECIAL HEARING

                      MAY 16, 2023--WASHINGTON, DC

                               __________

         Printed for the use of the Committee on Appropriations
         
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]         

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

                               __________
                               
                       U.S. GOVERNMENT PUBLISHING OFFICE                    
57-409 PDF                  WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------                             
 
                    COMMITTEE ON APPROPRIATIONS

                    PATTY MURRAY, Washington, Chair
DIANNE FEINSTEIN, California         SUSAN M. COLLINS, Maine, Vice 
RICHARD J. DURBIN, Illinois              Chair
JACK REED, Rhode Island              MITCH McCONNELL, Kentucky
JON TESTER, Montana                  LISA MURKOWSKI, Alaska
JEANNE SHAHEEN, New Hampshire        LINDSEY GRAHAM, South Carolina
JEFF MERKLEY, Oregon                 JERRY MORAN, Kansas
CHRISTOPHER A. COONS, Delaware       JOHN HOEVEN, North Dakota
BRIAN SCHATZ, Hawaii                 JOHN BOOZMAN, Arkansas
TAMMY BALDWIN, Wisconsin             SHELLEY MOORE CAPITO, West 
CHRISTOPHER MURPHY, Connecticut          Virginia
JOE MANCHIN, III, West Virginia      JOHN KENNEDY, Louisiana
CHRIS VAN HOLLEN, Maryland           CINDY HYDE-SMITH, Mississippi
MARTIN HEINRICH, New Mexico          BILL HAGERTY, Tennessee
GARY PETERS, Michigan                KATIE BRITT, Alabama
                                     MARCO RUBIO, Florida
                                     DEB FISCHER, Nebraska

                     Evan D. Schatz, Staff Director
              Elizabeth McDonnell, Minority Staff Director
                           
                           C O N T E N T S

                              ----------                              
                                                                   Page

Opening Statement of Chair Patty Murray..........................     1
Statement of Vice Chair Susan M. Collins.........................     4
Statement of Hon. Lloyd J. Austin III, Secretary, Department of 
  Defense........................................................     6
    Prepared Statement...........................................     8
Statement of Hon. Antony J. Blinken, Secretary, Department of 
  State..........................................................    12
    Prepared Statement...........................................    15
Statement of Hon. Gina M. Raimondo, Secretary, Department of 
  Commerce.......................................................    16
    Prepared Statement...........................................    18
Statement of Senator Lindsey Graham..............................    27
Additional Committee Questions...................................    64
    Questions Submitted to Hon. Antony J. Blinken................    64
        Questions Submitted by:
            Senator Joe Manchin, III.............................    64
            Senator Martin Heinrich..............................    67
            Senator Jerry Moran..................................    67
            Senator John Hoeven..................................    68
            Senator Bill Hagerty.................................    68
            Senator Marco Rubio..................................    69
    Questions Submitted to Hon. Gina M. Raimondo.................    72
        Questions Submitted by:
            Senator Dianne Feinstein.............................    72
            Senator Tammy Baldwin................................    74
            Senator Joe Manchin, III.............................    75
            Senator Martin Heinrich..............................    80
            Senator Jerry Moran..................................    82
            Senator Marco Rubio..................................    90
    Questions Submitted to Hon. Lloyd J. Austin III..............    94
        Questions Submitted by:
            Senator Dianne Feinstein.............................    94
            Senator Tammy Baldwin................................    94
            Senator Joe Manchin, III.............................    95
            Senator Martin Heinrich..............................    96
            Senator Jerry Moran..................................    96
            Senator Bill Hagerty.................................    96
            Senator Marco Rubio..................................    97
Conclusion of Hearing............................................    97

 
A REVIEW OF THE PRESIDENT'S FISCAL YEAR 2024 BUDGET REQUEST: INVESTING 
  IN U.S. SECURITY, COMPETITIVENESS, AND THE PATH AHEAD FOR THE U.S.-
                           CHINA RELATIONSHIP

                              ----------                              

                         TUESDAY, MAY 16, 2023

                                       U.S. Senate,
                               Committee on Appropriations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:02 p.m. in room 
SD-106, Dirksen Senate Office Building, Hon. Patty Murray 
(chair), presiding.
    Present: Senators Murray, Durbin, Reed, Tester, Shaheen, 
Merkley, Coons, Schatz, Baldwin, Murphy, Manchin, Van Hollen, 
Heinrich, Peters, Collins, Murkowski, Graham, Moran, Hoeven, 
Boozman, Capito, Kennedy, Hyde-Smith, Hagerty, Britt, and 
Fischer.

                opening statement of chair patty murray

    Chair Murray. This hearing of the Senate Appropriations 
Committee will please come to order.
    We are here today to discuss the U.S.-China relationship 
and the investments that we need to keep our Nation secure, 
competitive, and strong, and maintain our leadership on the 
world stage.
    And let me make clear from the outset, when we talk about 
competing against China and countering Chinese influence, we 
are talking about competing against its government, not the 
Chinese people, or the millions of Chinese-Americans who help 
make our country great. I am glad to have Secretaries Austin, 
Blinken, and Raimondo here to discuss the all-of-Government 
approach we need to meet this challenge.
    And, as this is our first Full Committee hearing, I do want 
to thank Vice Chair Collins, as well as our Chairs and Ranking 
Members, Tester, Coons, Shaheen, Graham, and Moran, for working 
with us on this topic that I know every one of our members 
cares about. And I would like to thank all of my colleagues for 
their work in recent weeks to jumpstart our appropriations 
process, and hold more than 30, very substantive hearings on 
President Biden's budget request and critical issues. We have 
made important progress, but I hope we can keep things on track 
and mark up our bills soon.
    Vice Chair Collins and I had hoped that this Thursday would 
be our first Full Committee markup. She and I are working hard 
and will update all of our Committee Members on when we expect 
to have our first markup in the June work period. This week in 
the House, they are getting ready to mark up their own 
appropriations bills. It is my goal, and I know the goal of 
Senator Collins, to be marking up in a similar timeframe. What 
every Member in this room knows, too, is that the Senate must 
have its voice heard in this process. To that end, this 
Committee has received critical input from nearly all 100 
Senators to inform our work as we craft our spending bills that 
meet our Nation's needs. We owe it to our colleagues, and our 
communities, and most of all, our constituents, to put forward 
the shared priorities of this chamber in a slate of bipartisan 
spending bills.
    And this hearing offers a valuable opportunity to go in 
depth on one of those shared priorities: Making the investments 
that our Nation needs to stay ahead of the Chinese government 
and other competitors, who are doing everything they can to try 
and overtake America economically, militarily, and on the world 
stage. As I have said throughout our subcommittee hearings, 
keeping our country safe and competitive is not just about 
defense spending. Keeping our country safe means investing in 
diplomacy and development, to counter political and economic 
coercion, to promote stability, to stand up to autocrats, to 
support our allies, and advance our global leadership, instead 
of ceding ground to the governments of China and Russia.
    Keeping our communities safe means funding to stop deadly 
fentanyl from crossing our borders, and dangerous cyber-attacks 
that can decimate our infrastructure, our schools, our 
hospitals, and more. And it means funding to make sure our 
supply chains for drugs, food, baby formula, and more are safe, 
are stable, and not dependent on the whims of Beijing and 
others. And when it comes to keeping our competitive edge on 
the world stage, that means investing in American innovation, 
with funding for R&D (research and development), advanced 
manufacturing, like we passed in the CHIPS (Creating Helpful 
Incentives to Produce Semiconductors) and Science Act, clean 
energy jobs, cutting-edge biomedical research, emerging 
technologies, like AI (artificial intelligence), and more. It 
means investing in our economy at every level, supporting our 
farmers and small businesses, maintaining our ports, and our 
railways, and other infrastructure that we need for trade, 
strengthening and expanding our trade partnerships so we can 
sell American goods across the world, protecting our 
intellectual property. And, of course, we cannot be competitive 
with the Chinese government if we are not investing in the 
backbone of our economy, our working families. We cannot 
compete without investing in high quality public schools for 
our kids. We cannot compete without investing in higher 
education and workforce programs that help key industries find 
the workers they need. And we are stunting the efforts to 
rebuild American manufacturing, and so many other sectors of 
our economy, if we refuse to tackle the child care crisis that 
is keeping parents out of the workforce.
    And not only are these issues as important as our defense 
investments, they are connected. Make no mistake: China is 
pressing forward with an aggressive modernization and expansion 
of their military capabilities. As such, there are certain 
investments we absolutely must make to strengthen our own 
defensive and deterrence capabilities.
    The President's budget requests the largest ever amount of 
funding for the Pacific Deterrence Initiative, and that is 
critical. We need to ensure the Military has the resources it 
needs to stay ahead of China's Military modernization, 
strengthen logistical preparedness, and expand cyber 
capabilities, and more. However, as the Secretary of Defense 
has said repeatedly: Keeping our Nation safe requires a whole-
of-Government approach. After all, our weapons need chips, so 
making them ourselves and working with likeminded partners to 
secure our supply chains is a matter of national security.
    And this is key: We have to make sure we have a regular 
appropriations process so every Department, including DOD 
(Department of Defense), can plan for the year ahead. We cannot 
settle for CRs (continuing resolutions) that freeze our 
progress, result in year-over-year funding cuts, and seriously 
impair every single one of our agencies' abilities to fulfill 
their missions and move our country forward. The Chinese 
Communist Party does not govern by CRs, and they do not govern 
by cuts, and we cannot either, which is why it has been so 
important to me, and I know Senator Collins and so many others, 
to make sure we meet this moment, do our jobs, and get our 
bipartisan funding bills passed in a timely way.
    I am glad to say we have bipartisan agreement on the 
problem we are here to discuss today: Keeping ahead of the 
Chinese government and our competitors. And based on our past 
bipartisan efforts, I think we have a shared understanding that 
the solution here must be an all-of-Government approach.
    Just a few months ago, we passed an appropriations bill for 
this fiscal year that showed Congress can take this challenge 
seriously. Senators Shaheen and Moran worked together to 
increase funding for the National Science Foundation, and fund 
the Tech Hubs Program, building on our bipartisan CHIPS and 
Science Act, to invest in R&D, and innovation, and building a 
strong STEM (science, technology, engineering, and math) 
workforce. Senators Coons and Graham secured additional 
resources to advance U.S. global leadership, by growing our 
diplomatic footprint, especially in the Indo-Pacific, 
increasing funding for the Indo-Pacific strategy, and providing 
funding and flexibility for agencies like State, USAID (United 
States Agency for International Development), and the 
Development Finance Corporation to address emerging strategic 
priorities. Senators Murphy and Capito made critical funding 
increases to improve detection and seizures of narcotics like 
fentanyl, and related illicit contraband, and to dismantle and 
to disrupt transnational criminal organizations. Senators 
Feinstein and Kennedy worked together to increase funding for 
the Office of Science at the Department of Energy, and fund our 
National Labs, so we can develop clean energy solutions, and 
improve advanced manufacturing. Our funding bill and the 
Bipartisan Infrastructure Law also included critical 
investments to support infrastructure improvements to ensure 
our ports can ship goods around the world.
    I think it is safe to say, we showed just a few months ago, 
there is bipartisan support for an across-the-board effort to 
counter the growing influence of China's Communist Party. But 
if we want to stay competitive, if we want to stay ahead, we 
have to stay the course and build on those investments. Which 
is why I find the approach House Republicans have called for, 
dangerous; suggesting massive funding cuts across the 
Government at a pivotal moment. After years of bipartisan 
consensus for maintaining America's global leadership, that 
tactic will throw in the towel to our competitors, and give the 
Chinese government our spot as the global superpower of the 
21st century. Because let us be clear: House Republicans are 
not just proposing 1 year of cuts to R&D and diplomacy and 
workforce programs, essentially everything that keeps us 
competitive. They are demanding spending caps that will tie our 
hands and lock in even more cuts over the next decade.
    I worry that what is being proposed leads to a lost decade 
for America in a moment when we cannot afford it. So let us be 
clear: China is not debating whether to pay its debts or wreck 
its economy. China is not debating whether to invest in its 
future or cut and cap the investments that keep it competitive. 
And China does not operate on CRs. The more we play with 
default, and punt investments, and teeter on the edge of 
Government shutdowns, the more we prove China and our 
competitors are right, and helping them show the world that 
this is their moment to overshadow our leadership. And helping 
them demonstrate their core belief that totalitarianism is 
stronger than democratic values here at home and around the 
world.
    This is why it is critical for the Senate to make its voice 
heard on America's future. We have to show there is a 
bipartisan vision to strengthen our Nation's competitiveness 
and security by investing in American leadership across the 
board, and a bipartisan will to get it done. That is what I 
have been focused in all our subcommittee hearings. It is what 
I hope to hear about from our witnesses today. And it is why I 
want us to continue our work and mark up bipartisan spending 
bills soon.
    Because bottom line: We find ourselves at a real turning 
point, and this year's Government spending bills will determine 
whether or not we are prepared to compete with China, and 
whether or not we will stay ahead or fall behind. We cannot 
close our eyes or plug our ears when it comes to the threat the 
Chinese government poses. We have got to build on the progress 
we have made, keep our country safe and competitive, and invest 
in America's future. And as we decide what investments we do or 
do not make, the stakes could not be higher, and they could not 
be more serious.
    So I want to thank everyone who is here today. Thank our 
witnesses. We look forward to hearing your testimony today.
    And I will turn it over to Vice Chair Collins for her 
opening statement.

                statement of vice chair susan m. collins

    Vice Chair Collins. Chair Murray, thank you so much for 
holding this important hearing.
    Before I turn to my formal remarks, let me echo the Chair's 
determination to keep proceeding with the appropriations 
process in a way that will avoid a late, end of the year, 
gigantic continuing resolution that continues to fund programs 
that do not need funding, that prevents new programs from 
starting, and that makes it impossible for agencies to plan. It 
also ends up costing the taxpayer more money. So I share the 
Chair's determination to keep proceeding, and I look forward to 
beginning subcommittee markups in June.
    I would note that we have gotten off to a very fast start. 
Our subcommittees on both sides of the aisle have worked 
together to have a series of hearings that literally have held 
dozens of hearings on the President's budget request. And that 
is an essential start for this process.
    To our witnesses, I want to tell you that I am very much 
looking forward to your testimony on how we can work together 
to strengthen U.S. security and competitiveness regarding 
China. America's competition with China is an increasing 
challenge, but it is not a new one. Overlay China's modern 
economic successes with its 3,500 years of history, and today 
the world faces an authoritarian government that seeks to 
regain its hegemonic past and dismantle the international order 
created by the United States and our allies following World War 
II. To be clear, China's vision is to be the world's military 
and economic powerhouse, and it is well on its way. Today, 
China has the world's largest navy, the world's largest army, 
and the world's largest economy by purchasing power parity. 
Competition with China occurs in every domain, from the United 
Nations to cyberspace to Africa.
    Our focus with regard to our military competition with 
China must remain on deterrence, which is defined by the 
strength of our readiness, capacity, and capabilities, and that 
of our allies and partners. We must ask ourselves if the 
Pentagon and Taiwan have the weapons, munitions, and manpower 
necessary to credibly deter China from using force to 
accomplish its objectives. As Secretary Austin knows from our 
hearing last week, I believe that the administration could do 
better in this regard. Secretary Blinken's challenge is getting 
our bilateral, diplomatic relations with China on as stable a 
footing as possible. Given the inconsistent statements by the 
President on U.S. policy toward Taiwan, it would also be 
helpful if the Secretary were to clarify today if there has 
been any change in the One China Policy and the strategic 
ambiguity therein. America is only as strong abroad as we are 
at home, including the innovation and technology we can 
protect. I hope today that Secretary Raimondo will give us an 
update on efforts to prevent the theft of the intellectual 
property, to bolster U.S. leadership in advanced technologies, 
and to impede China from exploiting American technologies to 
advance its military interests.
    Finally, as one Department of Homeland Security official 
recently testified, the fentanyl crisis begins and ends in 
China. Many precursor chemicals originate in China, and Chinese 
criminal organizations launder the drug cartels' money, and 
source the pill pressers that facilitate the distribution of 
this deadly poison. Just last month, the employees at a 
restaurant in Auburn, Maine, opened a crate, expecting to find 
mugs that they had ordered. Instead, they found 14 kilograms of 
fentanyl. That is enough to kill five times the population of 
the entire State of Maine. Thankfully, the employees called 
local law enforcement, who seized the fentanyl, undoubtedly 
saving many lives. Addressing the fentanyl crisis must be at 
the top of this administration's agenda with China.
    Again, I look forward to discussing these significant 
issues with our witnesses this afternoon. Thank you.
    Chair Murray. Thank you, Vice Chair Collins. I will now 
briefly introduce today's witnesses, and move to testimony.
    I am very pleased, again, to welcome Secretary of Defense, 
Lloyd Austin; Secretary of State, Anthony Blinken; and 
Secretary of Commerce, Gina Raimondo. I am grateful to all 
three of our witnesses for the work they do every day to keep 
our communities safe and help us stay competitive. And I want 
to thank each one of you for taking time today to be with us, 
and to answer our questions.
    We will now move to opening remarks. And Secretary Austin, 
I will begin with you.
STATEMENT OF HON. LLOYD J. AUSTIN III, SECRETARY, 
            DEPARTMENT OF DEFENSE
    Secretary Austin. Chair Murray, Vice Chair Collins, Members 
of the Committee, thanks for the opportunity to testify about 
America's strategic competition with the People's Republic of 
China.
    I am glad to be joined by Secretary Blinken and Secretary 
Raimondo. We rely on each other every day, because to compete 
and succeed, we must use all the tools of American power. And I 
am grateful to Congress for recognizing the urgency of the 
China challenge, and taking bipartisan action to meet it.
    I would like to underscore five key points today about how 
the Department of Defense is tackling the security challenge of 
the PRC, in lockstep with our partners across the 
administration, around the world, and here in Congress.
    First, we are focusing the entire Department on continuing 
to out-pace the PRC (People's Republic of China). As the 
President's National Security Strategy notes, the PRC is our 
only competitor with both the intent and, increasingly, the 
capacity to reshape the international system to suit its 
autocratic preferences. Beijing has increased its bullying and 
provocations in the Indo-Pacific. It has embarked upon a 
historic military buildup, including in space and cyberspace. 
Of course, war is neither imminent nor inevitable, but we must 
face up to the PRC's growing assertiveness. The Department's 
mission is clear: To deter aggression that threatens our vital 
national interests. So we are investing more than ever in a 
formidable, innovative fighting force, and a more resilient 
force posture in the Indo-Pacific.
    Our budget includes a 40-percent increase over last year's 
request for the Pacific Deterrence Initiative, to an all-time 
high of $9.1 billion. We are delivering critical capabilities 
through more agile approaches to testing and acquisition. And 
we are developing novel operational concepts for how we employ 
the Joint Force.
    Our National Defense Strategy calls the PRC our pacing 
challenge. And we chose the word ``challenge'' carefully. The 
United States does not seek confrontation, conflict, or a new 
Cold War, but America has never shied away from competition, 
and we are working with both our rivals and our friends to 
strengthen the guardrails against conflict. To prevail in 
strategic competition, we must work together as one team. That 
is my second point. And that demands even closer cooperation 
with our colleagues at the Departments of State, Commerce, and 
elsewhere. We work with the Department of State to help prevent 
conflicts from breaking out in the first place. We protect the 
free and open trade lanes that drive the world economy. And we 
are supporting the Department of Commerce's leading role in 
implementing the CHIPS and Science Act. And we work closely 
with Commerce to advance our technological advantages.
    Third, we are determined to keep the Indo-Pacific free and 
open. Most countries in the region share a common vision of an 
open and inclusive Indo-Pacific free of bullying and coercion. 
We are proud to stand together with them. So we will continue 
to strengthen the rules-based international order by making 
clear the folly of aggression, and maintaining open lines of 
communication.
    Fourth, the whole administration is working to deepen ties 
with our network of alliances. We are working with our friends 
around the Indo-Pacific, and the world, through security 
cooperation and assistance, and through combined operations and 
exercises. We are also working to develop innovative new 
capabilities and deepen integrated deterrence.
    In recent months, that strategy has produced historic 
results. In Japan, we are forward-deploying more resilient and 
mobile assets. And that includes our plans to deploy the 12th 
Marine Littoral Regiment. We are pursuing major new force-
posture initiatives with Australia. And through the historic 
AUKUS (Australia, the United Kingdom, and the United States) 
Partnership, we will work with our Australian and British 
allies to help forge a more stable balance of power in the 
Indo-Pacific for generations. With our Philippine allies, we 
will have rotational access to four new locations under the 
Enhanced Defense Cooperation Agreement. And meanwhile, we are 
expanding our security cooperation with South Korea, India, 
Thailand, Singapore, and many others. We are deepening our ties 
with ASEAN (Association of Southeast Asian Nations) and the 
Quad, and I am pleased that the United States will soon provide 
significant additional security assistance to Taiwan through 
the Presidential Drawdown Authority that Congress authorized 
last year. This is part of our long-standing commitment to 
upholding our obligations under the Taiwan Relations Act and 
other U.S. policy, and to doing our part to maintain peace and 
stability in the Taiwan Strait.
    So we will need to remain--so we need to remain a reliable 
partner. That that brings me to my final point: The best way 
that Congress can ensure our strategic advantage is with an on-
time appropriation that supports the President's budget 
request. No amount of money can buy back the time that we lose 
when we are forced to operate under continuing resolutions. And 
reducing funding to fiscal year '22 levels across the 
Government would hamstring our ability to compete, even if the 
Defense Department is exempted from cuts. We succeed as a team, 
and the Department of Defense succeeds when our interagency 
partners succeed. We are not just shaping our military but 
America's entire strategy to compete and lead.
    And I look forward to working with all of you to continue 
that proud tradition of U.S. global leadership.
    Thank you, Madam Chair.
    [The statement follows:]
             Prepared Statement of Hon. Lloyd J. Austin III
Introduction
    Chair Murray, Vice Chair Collins, distinguished Members of the 
Committee: thank you for the opportunity to testify on American 
competition with the People's Republic of China (PRC).
    I also want to thank Secretary of State Blinken and Secretary of 
Commerce Raimondo, who are appearing alongside me. The Departments of 
State and Commerce are vital partners in America's whole-of-government 
effort to deter aggression and ensure a free and open Indo-Pacific 
region.
    The PRC has a very different view of the region's future. We see a 
pattern today of unceasing PRC efforts to coerce its neighbors. As 
President Biden has stated, the PRC is becoming our only global 
competitor with both the power and the intent to reshape the 
international system to suit its authoritarian preferences. And 
increasingly, the PRC is turning to its military in an attempt to 
advance its revisionist aims. For this reason, the National Defense 
Strategy (NDS) identifies the PRC as our ``pacing challenge'' and top 
priority.
    In recent months, the PRC has increased its provocative actions, 
including flying record numbers of warplanes near Taiwan on an almost-
daily basis and employing a military-grade laser against a lawfully 
operating Philippine vessel. The Chinese military has repeatedly 
conducted risky intercepts against U.S. and allied aircraft in the 
international airspace over the East and South China Seas, including 
harassing aircraft helping to enforce U.N. sanctions on North Korea. 
And we have also seen the People's Liberation Army (PLA) continue to 
engage in coercive behavior along the Line of Actual Control (LAC) with 
India.
    Meanwhile, the PRC has been rapidly building its military footprint 
in the Indo-Pacific region, expanding its nuclear arsenal, and 
extending its influence in space and cyberspace. The PRC is also 
considering providing lethal aid to Russia to fuel Russia's cruel war 
of choice against Ukraine.
    The Department of Defense is confronting the pacing challenge of 
the PRC with confidence and resolve, not pessimism and panic. As 
President Biden has made clear, the United States is not seeking a new 
Cold War. Rather, we are working to prevent conflict and advance an 
open international system in which all countries are free from coercion 
or bullying. We do not seek confrontation, and we are committed to 
maintaining open channels of communication with the PRC. As I have 
communicated to my counterparts, open channels of communication are 
critical for ensuring we resolve any misunderstanding or miscalculation 
to mitigate the risk of escalation.
    Tackling this challenge must be a whole-of-government effort. We 
will meet this historic task with core American strengths: our 
democratic values, our economic vitality, technological dynamism, 
diplomatic clout, and military might. As our NDS explains, the 
Department is committed to working closely with our partners across the 
U.S. Government to ensure that any potential foe understands the folly 
of aggression against the United States.
    The NDS also underscores the need to work with others to strengthen 
peace and stability in the Indo-Pacific region. We will work closely 
with our unmatched network of allies and partners in the region and 
around the world.
    The Department's mission is clear: to prevent conflict with the PRC 
through deterrence today, tomorrow, and into the future. So we are 
aligning our resources with our objectives to meet urgent challenges in 
the near-term as we increase our investments in deterrence and 
warfighting capabilities for the future.
    The support of Congress is vital to our success. Your leadership 
and oversight are critical to meeting the PRC's challenge, and they 
underscore the openness and partnership that are hallmarks of American 
democracy. Above all, the success of a whole-of-government PRC strategy 
will rely upon on-time resourcing. Conversely, a failure to provide 
adequate resources for our efforts will profoundly hamper our ability 
to compete in the 21st-century security environment. Thank you in 
advance for your attention and your continued support.
A Whole-of-Government Approach to the PRC Challenge
    Protecting the American people relies on our teamwork--across 
federal departments and agencies and branches of government, as well as 
with State and local governments. Our strategic competition with the 
PRC is no exception. And we cannot succeed unless all of our teammates 
have the resources and the authorities they need.
    Our State Department colleagues bolster our efforts in the Indo-
Pacific region by ensuring continued, close cooperation with our 
unparalleled network of Allies and partners. More broadly, meeting our 
National security objectives relies on our partnership with the State 
Department and on the professionalism and dedication of our diplomatic 
corps. We are committed to backing the vital work of America's 
diplomats with the hard power of the most formidable fighting force in 
history.
    Meanwhile, our work with the Department of Commerce tackles some of 
the biggest economic and industrial challenges that the United States 
faces. Together, we are focused on strengthening our defense industrial 
base; reducing reliance on foreign production and supply chains; and 
finding creative new ways to deepen our technological advantages. That 
includes supporting the Commerce Department's leading role in 
implementing the CHIPS and Science Act, which Congress passed and 
President Biden signed into law in 2022. This work will not only boost 
the American economy; it will also strengthen our National security.
The Importance of Allies and Partners
    The United States is far stronger because of our friends around the 
world who share our values and strategic goals. Our cooperation with 
our allies and partners is central to maintaining a free and open Indo-
Pacific region--and represents a strategic advantage that no rival can 
match. So, we are coordinating more on industrial exchanges, 
integrating our efforts to develop innovative new capacities, and 
making our military forces more interoperable.
The AUKUS Partnership
    This approach is especially clear in the historic AUKUS 
partnership. It breaks new ground by bringing together three proud 
democracies and highly capable allies--Australia, the United Kingdom, 
and the United States--to take on the challenges of the 21st century 
and promote a free and open Indo-Pacific region. As President Biden has 
said, we are building bridges among our partners in the Pacific and 
those in the Atlantic, and AUKUS sits at the center of that endeavor. 
This initiative will enhance our combined military capabilities, 
strengthen deterrence, and forge a more stable balance of power in the 
Indo-Pacific region for generations to come.
    On March 13, 2023, Australia, the United Kingdom, and the United 
States announced our plans for the first major initiative of AUKUS: 
providing Australia with conventionally armed, nuclear- powered 
submarines. Our phased, commitments-based approach will deliver this 
capability on the fastest possible timeline while upholding the highest 
standards for responsible nuclear stewardship and strengthening the 
nuclear nonproliferation regime.
    AUKUS is also enhancing our three countries' combined military 
capabilities in advanced- technology areas that will be critical for 
deterring 21st-century conflict. Our shared priority is delivering the 
cutting-edge capabilities that our warfighters need now while also 
investing in our long-term science and technology capacities. At the 
same time, each of our countries has committed to significant 
investments to strengthen our industrial bases. Finally, we will deepen 
our defense-industrial cooperation through enhanced sharing of 
information and technology.
Deepening U.S. Cooperation with Regional Allies and Partners
    Strengthening our peerless network of alliances and partnerships in 
the Indo-Pacific region is a top priority of the Biden administration. 
The progress that we have made with critical support from the 
Department of State in recent months, especially in improving our 
regional force posture, shows how this approach is making the region 
more stable and secure.
    We are working closely with Japan to deepen our alliance. The 
United States is forward-deploying more versatile, resilient, and 
mobile U.S. capabilities to Japan such as the 12th Marine Littoral 
Regiment, the Marine Corps' most advanced formation. We are also 
supporting Japan's historic efforts to bolster its own capabilities, 
including in counterstrike, unmanned vehicles, and counter-hypersonic 
weapons. We are also increasing trilateral cooperation among the United 
States, Japan, and Australia.
    Alongside our valued South Korean allies, we are working to ensure 
that our combined forces continue to deter the Democratic People's 
Republic of Korea (DPRK) and support peace and stability in Northeast 
Asia, including by increasing the scope and the scale of our combined 
defense exercises. We are taking important steps to strengthen our 
extended deterrence commitment to the Republic of Korea (ROK), 
including through the recently promulgated Washington Declaration and 
the establishment of the Nuclear Consultative Group. We are also 
advancing critical trilateral cooperation with the ROK and Japan to 
ensure we can collectively deter the DPRK.
    With Australia, we are continuing to rotate significant U.S. air, 
land, and sea capabilities through Australia, while working with our 
counterparts to identify additional locations to support enhanced U.S. 
presence. We have enhanced our alliance with ambitious, forward-looking 
initiatives on technology and advanced capabilities, including space 
cooperation and space domain awareness. And in 2022, we also announced 
that we will preposition munitions and fuel to support U.S. logistics 
capabilities in Australia.
    We are also modernizing our alliance with the Philippines by 
enhancing maritime cooperation and improving interoperability and 
information-sharing. We will have rotational access to four important 
new locations under the Enhanced Defense Cooperation Agreement to 
further support our combined training and exercises. These steps 
underscore our unwavering commitment to the Mutual Defense Treaty with 
the Philippines.
    We are continuing to strengthen our longstanding alliance with 
Thailand. Our annual Cobra Gold exercise, for example, is a major 
contribution to peace and security in the Indo-Pacific region, even as 
it helps to ensure that we are prepared to respond rapidly and 
effectively to humanitarian disasters.
    Meanwhile, we are launching a new chapter in U.S.-India ties. We 
are working with the world's most populous democracy to advance our 
Major Defense Partnership and to bolster India's ability to uphold a 
favorable balance of power across the wider Indo-Pacific region. We 
will continue to work closely with India to cooperate on technology, 
such as our Strategic Partnership with the initiative on Critical and 
Emerging Technology (iCET); deepen our interoperability across key 
domains, including space and cyberspace; and support the efforts of our 
broader network of Allies and partners, especially the Quad.
    The Defense Department will stay focused on growing and 
strengthening our alliances and partnerships in the Indo-Pacific 
region, and we're grateful for the State Department's support to 
advance this top priority.
The Resources for Strategic Competition with the PRC
    The Department of Defense is moving urgently to deter aggression 
today, while increasing investments in our future deterrence and 
warfighting capabilities. Our Fiscal Year (FY) 2024 budget is directly 
aligned to the imperatives of the NDS to ensure that we maintain the 
most combat-credible force to deter the pacing challenge of the PRC in 
the near-, medium-, and long- term.
Our FY 2024 Budget Request
    To ensure that our forces have what they need to meet today's 
challenges, our FY 2024 budget requests the largest procurement budget 
ever at $170 billion. We are continuing to modernize across all 
domains, including upgrading our ground formations, buying more of our 
premier surface-ship and submarine classes, and investing in additional 
fifth-generation fighter aircraft, as well as in continuous upgrades to 
these platforms. The FY 2024 budget also requests $146 billion to 
ensure a high level of readiness. We are increasing funding for flying 
hours and ship sustainment and investing in training so that our Joint 
Force is prepared to fight tonight. We are also buying offensive and 
defensive cyber tools to compete in the critical cyberspace domain.
    Meanwhile, through an all-time high investment of $9.1 billion in 
the Pacific Deterrence Initiative, we are enhancing our posture in the 
Indo-Pacific region and demonstrating our capability through joint 
exercises and campaigning (including in the First Island Chain), even 
while investing in logistical capabilities that will bolster our 
ability to project power and sustain distributed operations.
    One of the Department's biggest near-term priorities is munitions, 
and we are investing more than $30 billion in them in this budget. This 
includes expanding production capacity and buying the maximum number 
that industry can produce of munitions most critical to Indo-Pacific 
deterrence--such as the Tomahawk (including maximizing the Maritime 
Strike variant), the Long-Range Anti-Ship Missile, and the multi-
mission SM-6. The Department is also leveraging new authorities from 
Congress to pursue multi-year procurement contracts for several 
critical munition types, combined with novel approaches to maximize 
procurement efficiency, expand inventories, and improve supply chain 
resilience. This sends a clear and stable demand signal to industry and 
encourages further investment in this important supply chain.
    Over the medium-term, our budget request seeks to sustain our 
military advantage over the PRC by investing in integrated air and 
missile defenses and operational energy efficiency so that our forces 
can operate flexibly in the Western Pacific. This year's budget also 
requests $1.4 billion in research, development, technology, and 
evaluation (RDT&E) to advance the development of Joint All Domain 
Command and Control. We are laser-focused on expanding our data and 
information advantages, because the future battlefield in highly 
contested environments will belong to those who can act on the best 
information.
    The Department is also committed to maintaining and modernizing our 
nuclear triad in the face of a growing PRC nuclear arsenal. The FY 2024 
budget request, including an investment of $37.7 billion in FY 2024, 
fully funds the nuclear triad and nuclear command, control, and 
communications, demonstrating our commitment to maintain reliable and 
effective legacy systems while pursuing their timely replacements.
    The Department continues to invest in the next generation of 
advanced weapons. That includes a request of $11 billion to deliver a 
mix of hypersonic and long-range, subsonic missiles. By the end of this 
decade, we aim to have hypersonic weapons that can strike from land, 
air, and sea. We are also investing to make key parts of the defense 
supply chain more resilient, such as rare- earth elements, castings and 
forgings, batteries, and microelectronics.
    To compete over the long term, the Department of Defense's budget 
request includes the largest ever investment in research and 
development--a total of $145 billion in FY 2024. This includes more 
than $17 billion for basic science and technology research. These 
investments will lay the foundation for critical future weapons 
systems, including resilient space architectures, directed energy 
systems, and advanced autonomous and remotely crewed systems. At sea, 
Large Uncrewed Surface Vessels will enable the Navy to effectively 
distribute fires, while new Combat Collaborative Aircraft can 
revolutionize our pursuit of air dominance in the Western Pacific. In 
space, the Department is requesting $33 billion in resilient reliable 
communications, surveillance, and early warning systems, all while 
working with the commercial sector wherever possible.
    Finally, this budget request continues to responsibly make the 
transition away from systems that do not support our strategy, enabling 
us to invest in the maintenance and development of more advanced 
systems that provide greater combat power today and into the future.
Stronger Deterrence in the Taiwan Strait
    One of the Department's top priorities is supporting Taiwan's self-
defense capabilities. The United States has a vital national interest 
in preventing conflict across the Taiwan Strait. Indeed, the entire 
world has a stake in peace and stability in the Taiwan Strait, and we 
are committed to working with our Allies and partners to build our 
ability to operate together to deter conflict. U.S. leadership remains 
vital to upholding the status quo, and the United States continues to 
uphold our commitments under the Taiwan Relations Act (TRA) and to 
sustain our longstanding one-China policy, which is guided by the TRA, 
the three Joint Communiques, and the Six Assurances.
    To strengthen deterrence in the Taiwan Strait, the Department is 
doing more than ever to provide Taiwan with materiel and non-materiel 
support. Given the growing nature of the PRC threat, this will require 
a comprehensive, ``all-of-the-above'' approach. That means drawing on 
the statutory authorities and tools passed by Congress and signed into 
law by the President, including Presidential Drawdown Authority, 
Foreign Military Sales, and Foreign Military Financing, as well as 
third-party support and Taiwan's own indigenous capacity. We are 
focused on closing the critical gaps in Taiwan's self-defense 
capabilities, which will require that authorities are matched with 
sufficient resources.
The Importance of Congressional Support
    The single most important way that Congress can support our 
strategic competition with the PRC is to pass a full-year, on-time 
appropriation. Operating under continuing resolutions (CRs) handicaps 
us for months out of every year and stifles our ability to compete--
while the PRC is investing with single-minded focus.
    Under a CR, we are prohibited from undertaking new initiatives, 
which effectively freezes our efforts to transform our military to meet 
the PRC's challenge. Specifically, a CR would prevent us from spending 
$9.7 billion in our shipbuilding account. Production rate increase 
restrictions would prevent the award of the second Columbia Class 
Submarine and prohibit the start of new multi-year procurement 
contracts for Virginia Class. A CR would also delay new starts for 
Conventional Prompt Strike and preclude award of production increases 
to numerous critical munitions, including Guided Multiple Launch Rocket 
Systems (GMLRS), Tomahawks, Advanced Medium-Range Air-to-Air Missiles 
(AMRAAMs), and MK-48 Torpedoes. Within the Air Force and Space Force, a 
CR would inhibit high priority programs such as Sentinel, Battle 
Management Command and Control, Joint Strike Missile, and Combat 
Collaborative Aircraft development. A CR also delays the modernization 
of our nuclear triad, and we will lose valuable time in investing in 
our space-technology architecture. Meanwhile, CRs harm the readiness of 
our force by slowing our efforts to improve quality of life for service 
members and their families and delaying important investments in 
military infrastructure.
    In addition, the effects of CRs on the defense industrial base are 
profound. The absence of a full-year appropriation puts U.S. industry 
at a serious competitive disadvantage, especially in the race to field 
emerging technologies. A CR places supply chains at risk and leaves 
workers in limbo.
    Every failure to pass a full-year, on-time appropriation harms our 
National security. We must break this pattern. CRs cost us time as well 
as money, and no amount of money can buy back the time we lose.
    Additionally, reducing the Department's funding to the FY 2022 
appropriated level of $742.3 billion would be similarly damaging to our 
strategy. Such a reduction would constitute a cut of $73.7 billion 
relative to current funding and nearly $100 billion relative to the 
President's FY 2024 budget request. Cutting the current request to FY 
2022 levels would have profound consequences for our efforts to 
modernize the force and to take care of our people. Critical 
investments that would be jeopardized include the Pacific Deterrence 
Initiative, which remains the cornerstone of our defense efforts in the 
Indo-Pacific region; a reduction in our shipbuilding plan, with the 
elimination of at least two capital ships; and enormous reductions to 
funding for space-based missile warning and ground-based missile 
defenses critical to defending the homeland--along with many critical 
programs in every priority area for the Department.
    Finally, such budget reductions would significantly hamper our 
competition with the PRC even if the Department of Defense were to be 
exempted and the entire burden of these budget cuts were to fall on the 
non-defense departments and agencies. Meeting the PRC's challenge 
requires much more than military strength. It requires the entire U.S. 
Government to have the capabilities and the resources to focus on this 
generational challenge. I urge Congress to ensure that our teammates 
can continue to do their part to boost America's competitive advantages 
and protect the American people.
Conclusion
    The PRC's bullying behavior and military buildup pose a historic 
test--and in the face of it, America has shown extraordinary unity and 
resolve. Thanks to the support and the leadership of Congress, we have 
bolstered U.S. deterrence and expanded America's competitive 
advantages. We ask for your support to continue meeting this momentous 
challenge today, tomorrow, and in the decades to come.
    We remain committed to working with Congress to be responsible 
stewards of hard-earned American taxpayer dollars. Partnership with 
Congress has always been critical to a strong national defense. I look 
forward to working with all members of the committee to continue to 
keep America safe and to continue the proud American tradition of 
strong, principled, global leadership in the service of democracy and 
freedom.

    Chair Murray. Thank you, Secretary Austin.
    Secretary Blinken.
STATEMENT OF HON. ANTONY J. BLINKEN, SECRETARY, 
            DEPARTMENT OF STATE
    Secretary Blinken. Chair Murray, Vice Chair Collins, State 
and Foreign Ops Chair Coons, Ranking Member Graham, 
distinguished Members of the Appropriations Committee, thank 
you for this opportunity to testify before you today. Thank you 
for bringing us all together.
    I am very pleased as well to be here with Secretary Austin 
and Secretary Raimondo. This administration is committed to 
leading a bipartisan, whole-of-Government China Strategy that 
advances U.S. interests and values and delivers for the 
American people. And to your point, Chair Murray, I think we do 
stand at an inflection point. The Post-Cold War era is over. 
There is an intense competition underway to shape what comes 
next.
    China represents the most consequential geopolitical 
challenge that we face today; a country with the intent and, 
increasingly, the capability to challenge our vision for a 
free, open, secure, and prosperous international order. We 
cannot dictate Beijing's path. We cannot wait for China to 
change its trajectory. But we can put ourselves in a position 
of strength to compete intensely, to shape the broader 
strategic environment around China, and to advance our vision.
    We do not seek conflict with China, or a new Cold War, we 
are not trying to contain China. And in fact, the United States 
continues to have a comprehensive trade and investment 
relationship with China, as do most of our allies and partners. 
We are, however, resolutely for de-risking and diversifying, 
not decoupling. That means investing in our own capacities, and 
in a secure, resilient supply chain, pushing for a level 
playing field for our workers and companies, defending against 
harmful trade practices, and ensuring that the United States 
and allied technology is not used against us. We are also 
committed to working with allies and partners to advance a free 
and open Indo-Pacific, one that is at peace and grounded in 
respect for a rules-based International Order. When we talk 
about ``free and open'' what we mean is this: We mean countries 
being free to choose their own path and their own partners, and 
that problems will be dealt with openly, not coercively. Rules 
will be reached transparently and applied fairly. Goods, ideas, 
and people will flow lawfully and freely across the land, the 
seas, the skies, and cyberspace. The world is watching how we 
and Beijing manage this relationship, and it is in our best 
strategic interest to do so responsibly, in a way that promotes 
security and prosperity, and delivers solutions on shared 
challenges that matter to the American people, and to people 
around the world.
    Last year, I had an opportunity to set out the 
administration's comprehensive PRC strategy to invest, align, 
and compete. We have made historic investments here at home, 
including the Bipartisan Infrastructure Law, the CHIPS and 
Science Act, the Inflation Reduction Act, to strengthen our 
ability to compete. We have aligned our approach with key 
partners in Europe and Asia, and beyond, working methodically 
to elevate our engagement around the world, and as a result, we 
have achieved greater convergence on how to deal with the 
challenges that China poses than ever before. As we compete, we 
will work to maintain open lines of communication at all levels 
with the PRC to avoid miscalculation, to prevent competition 
from veering into conflict. Senior-level engagements over the 
past few weeks demonstrate that commitment. We will 
purposefully engage China, not as a favor, or with engagement 
as an end in and of itself, but in ways that reflect our 
values, and where we can find areas of cooperation that are in 
our mutual interest. That is what the world expects of 
responsible powers. So we will push for progress on priorities 
like the climate crisis, macroeconomic stability, public 
health. We will continue to press the need to curb the flow of 
precursors that exacerbate fentanyl, and synthetic opioids, and 
the crisis that they pose. And I very much appreciate the 
leadership of this Committee on this most urgent challenge for 
the United States.
    We have heard from Members in both parties, on both sides 
of the Hill, that this unprecedented challenge requires an 
ambitious resource strategy. We very much agree. That is what 
the President's proposed fiscal year 2024 State Department 
budget aims to do: To give us the resources and the agility to 
advance our strategy.
    This budget positions the United States to up our game in 
the Indo-Pacific, the frontline of our competition with China. 
The Indo-Pacific is the most dynamic and fastest-growing region 
in the world: 50 percent of the world's population; 60 percent 
of global GDP (gross domestic product); 8 of the top 15 U.S. 
export markets. It supports 3 million jobs here in the United 
States, provides about $900 billion in foreign direct 
investment to our country, and it has driven about 75 percent 
of global economic growth over the last 5 years.
    China, as it happens, invests a full 50 percent of its 
assistance and economic and diplomatic resources in the Indo-
Pacific. Our budget proposal will allow us to further deepen 
our diplomatic footprint in the Indo-Pacific from new missions 
in the Pacific Islands to a surge of new positions in the 
region and beyond, including in the areas of greatest 
contestation with Beijing like technology, economics, and 
regional and international organizations.
    Beijing understands that diplomacy is a critical tool, that 
is why it has invested heavily in building up its own 
diplomatic capacity, its own diplomatic reach, and in fact, it 
has increased its diplomatic budget last year at a faster rate 
than its military one. And today, it has more diplomatic posts 
around the world than the United States. If we are serious 
about this competition, we have to demonstrate the same 
diplomatic seriousness of purpose across the board.
    Now, we are not demanding that other countries choose 
between us and China, but rather, we aim to offer a more 
attractive choice. If we can spark a race to the top, so much 
the better, that would be to everyone's benefit. Our budget 
sets us up to work with likeminded partners to strengthen our 
offer, and ensure it is relevant and responsive to the needs 
and aspirations of people around the world.
    That is why the budget includes $2 billion in new 
investments in high-quality, sustainable infrastructure rather 
than low-quality, opaque, extractive projects that leave 
countries mired in debt. It would invest $2 billion to bolster 
Indo-Pacific economies and help the United States compete in 
areas where the PRC currently dominates, and in key priorities 
for the region, including maritime security, disease 
surveillance, clean energy, digital technology, undersea 
communications cables, critical mineral mining. And it contains 
over $7 billion to extend our economic engagement with the 
freely associated states via the Compacts of Free Association 
that is a critical component of our Indo-Pacific and National 
Security Strategy. Altogether, these funding streams ensure 
that we can meet a generational challenge and demonstrate our 
long-term commitment on issues that matter most to key 
countries in the region, so that the United States remains the 
partner of choice.
    During this decisive decade, our efforts and investments, 
together with our partners, will determine whether we succeed 
in advancing our shared affirmative vision for the 
international system, or whether the PRC can erode or replace 
the global rules and norms that guarantee peace, security, and 
stability in the world.
    I am grateful for this Committee's partnership to sustain 
the resources and policies required by this challenge and very 
much look forward to taking your questions. Thank you.
    [The statement follows:]

              Prepared Statement of Hon. Antony J. Blinken
    Chair Murray, Vice Chair Collins; State and Foreign Operations 
Chair Coons and Ranking Member Graham; distinguished members of the 
Senate Appropriations Committee: thank you for the opportunity to 
testify before you.
    I'm pleased to be here with Secretary Austin and Secretary 
Raimondo. This Administration is committed to leading a bipartisan, 
whole-of-government China strategy that advances U.S. interests and 
values and delivers for the American people.
    We stand at an inflection point. The post-Cold War era is over. 
There is an intense competition underway to shape what comes next.
    China represents the most consequential geopolitical challenge we 
face today: a country with the intent and, increasingly, the capability 
to challenge our vision for a free, open, secure, and prosperous 
international order.
    We of course cannot dictate Beijing's path. And we cannot wait for 
China to change its trajectory. But we can put ourselves in a position 
of strength to compete intensely to shape the broader strategic 
environment around China and advance our vision.
    We are not trying to contain China. And in fact, the United States 
continues to have a comprehensive trade and investment relationship 
with China, as do most of our allies and partners. We are for de-
risking and diversifying, not decoupling. That means investing in our 
own capacities and in secure, resilient supply chains; pushing for a 
level playing field for our workers and companies and defending against 
harmful trade practices; and ensuring that U.S. and allied technology 
isn't used against us.
    The world is watching how we--and Beijing--manage this 
relationship. And it's in our best strategic interest to do so 
responsibly, in a way that promotes security and prosperity and 
delivers solutions on shared challenges that matter to the American 
people and to people around the world.
    Last year, I set out the Administration's comprehensive PRC 
strategy to ``invest, align, compete.'' We've made historic investments 
at home--including the bipartisan infrastructure law, CHIPS and Science 
Act, and Inflation Reduction Act--to strengthen our ability to compete. 
We've aligned our approach with key partners in Europe, Asia, and 
beyond, working methodically to elevate our engagement around the 
world--and as a result, have achieved greater convergence to deal with 
the challenges China poses than ever before.
    As we compete, we will work to maintain open lines of communication 
at all levels with the PRC to avoid miscalculation and prevent 
competition from veering into conflict. Senior level engagements over 
the past few weeks demonstrate that commitment.
    We will purposefully engage with Beijing, not as a favor, or with 
engagement as an end unto itself, but in ways that reflects our values 
and where we can find areas of cooperation that are in our mutual 
interest. That's what the world expects of responsible powers.
    So, we'll push for progress on priorities like the climate crisis, 
macroeconomic stability, and public health. And we will continue to 
press the need to curb the flow of precursors that exacerbates the 
fentanyl and synthetic opioids crisis--and I appreciate the leadership 
of this committee on this most urgent challenge.
    We've heard from members in both parties, on both sides of the 
Hill, that this unprecedented challenge requires an ambitious 
resourcing strategy. We agree. That is what the President's proposed 
FY2024 State Department Budget aims to do: giving us the resources and 
agility to advance our strategy.
    This budget positions the United States to up our game in the Indo-
Pacific: the frontline in our competition with Beijing. The Indo-
Pacific is the most dynamic and fastest growing region in the world--
with 50 percent of its population, 60 percent of global GDP, and eight 
out the top 10 U.S. export markets. It has driven 75 percent of global 
economic growth over the past 5 years. China invests 50 percent of its 
assistance and economic and diplomatic resources there.
    Our budget proposal will allow us to further deepen our diplomatic 
footprint in the Indo-Pacific--with $140 million in discretionary 
funding for new missions in the Pacific Islands and a surge of new 
positions in the region and beyond, including in the areas of greatest 
contestation with Beijing like technology, economics, and regional and 
international organizations.
    Beijing understands that diplomacy is a critical tool. It's why it 
has invested heavily in building up its diplomatic capacity and reach, 
and in fact increased its diplomatic budget last year at a faster rate 
than its military one, and why it today has more diplomatic posts 
around the world than we do. If we're serious about this competition, 
we must demonstrate the same diplomatic seriousness of purpose across 
the board.
    We are not demanding that other countries ``choose'' between us and 
China--but rather, are offering a more attractive choice. If we can 
spark a race to the top, that would be to everyone 's benefit. Our 
budget sets us up to work with like-minded partners to strengthen our 
offer, and ensure it is relevant and responsive to the needs and 
aspirations of people around the world.
    That's why our budget includes $2 billion in new investments in 
high-quality, sustainable infrastructure, rather than low-quality, 
opaque, extractive projects that leave countries mired in debt.
    It would invest $2 billion to bolster Indo-Pacific economies and 
help the United States compete in areas where the PRC currently 
dominates and in key priorities for the region, including maritime 
security, disease surveillance, clean energy, and digital technology. 
This complements nearly $2.2 billion in discretionary funding for our 
Indo-Pacific partners to support critical investments in good 
governance, rule of law, clean energy, health security, security 
assistance, and vital regional institutions.
    And it contains over $7 billion to extend our economic engagement 
with the Freely Associated States via the Compacts of Free Association: 
a critical component of the Administration's Indo-Pacific and National 
Security Strategy.
    Altogether, these funding streams, including new and innovative 
mandatory funding to complement our ongoing investments with 
discretionary funding, ensure we can meet a generational challenge that 
is testing American diplomacy like few in recent memory and demonstrate 
our long-term commitment on issues that matter most to our partners in 
the region.
    During this decisive decade, our efforts and investments--together 
with our partners--will determine whether we succeed in advancing our 
shared affirmative vision for the international system, or whether the 
PRC can erode or replace the global rules and norms that guarantee 
peace, security, and stability in the world.
    I'm grateful for this committee's partnership to sustain the 
resources and policies required by this challenge. And I look forward 
to answering your questions today.

    Chair Murray. Thank you, Secretary Blinken.
    Secretary Raimondo.
STATEMENT OF HON. GINA M. RAIMONDO, SECRETARY, 
            DEPARTMENT OF COMMERCE
    Secretary Raimondo. Good afternoon. Good afternoon Chair 
Murray, Vice Chair Collins, and Members of the Committee. It is 
my pleasure to be here with you, with my colleagues, to have 
this opportunity to discuss President Biden's fiscal year 2024 
budget request; in our work as a whole-of-Government approach 
to protect America's national and economic security, and 
promote our competitiveness in the face of the very real and 
increasingly significant challenges from China.
    As has been said by my colleagues, and by Senator Murray, 
and Senator Collins, competing with China requires everyone on 
the field operating as a whole-of-Government, and working in a 
bipartisan way with Congress. It requires the use of the full 
extent of our economic, diplomatic, and military tools. And I 
am so honored to be here with my colleagues in doing this work 
together. And I look forward to working with you, on a 
bipartisan basis, with the Senate, as you develop additional 
legislation building on the CHIPS and Science Act, to ensure 
that we can compete and secure our economic future.
    The Commerce Department, in partnership with you, is 
leading the way in a bold domestic agenda, bringing advanced 
manufacturing, and critical industries back to the United 
States. And at the same time, we have never been more 
aggressive in using our Department's tools to address the 
threats from China. I want to say that again. This Commerce 
Department, under President Biden's leadership, has never been 
more aggressive in using our tools, than we have been in the 
past few years.
    Today, I would like to focus on three key areas of 
investment in the President's budget request for the Commerce 
Department that will strengthen our ability to out-compete 
China.
    First, this budget makes strategic investments in 
innovation, manufacturing, and supply chains. The fact of the 
matter is, without strong manufacturing, and the jobs, and 
innovation, and technological leadership that flow from it, we 
are at a disadvantage in the race to invent, and commercialize 
future technology. The numbers are in my written statement, but 
the budget supports funding for the National Institute of 
Standards and Technology, including the Manufacturing Extension 
Partnership and the International Trade Administration (ITA), 
which will improve American manufacturing capabilities, 
strengthen our supply chains, and improve our export capacity. 
Additionally, as has been mentioned today, thanks to the CHIPS 
and Science Act, the Department is investing over $50 billion 
to strengthen, revitalize, and re-shore domestic semiconductor 
manufacturing capacity, and critically, research and 
development. These investments, along with the Department's new 
Tech Hubs Initiative, which just on Friday, released its first 
funding opportunity, will supercharge tech ecosystems all 
across this country, and are absolutely crucial investments in 
order for us to compete and out-compete China.
    Second, the budget includes funding for the Bureau of 
Industry and Security to continue activities that strengthen 
U.S. national security, foreign policy, and our economy. 
Through our strategic use of export controls, including 
unprecedented restrictions imposed last October on China's 
access to advanced computing chips and semiconductor 
manufacturing equipment, BIS is preventing the use of U.S. 
technologies that enable China's military modernization, their 
human rights abuses, and other activities that are contrary to 
the United States national security and foreign policy 
interests. Currently, there are over 2,400 entities on the 
Entity List that face restrictions on export controls, and 
China and Russia represent the top two countries captured on 
the list. When we find conduct prohibited by our export 
controls, we take action. And I am very proud to say that last 
month the Commerce Department announced a $300 million civil 
penalty, the largest ever administrative penalty imposed by the 
Department against an American company, for selling hard disk 
drives to Huawei without a license.
    Third, and finally, the budget enables us to partner with 
our allies to advance our shared values and shape the strategic 
environment in which China operates, as Secretary Blinken just 
said. The budget includes funding for ITA, to ensure that U.S. 
businesses and commercial interests, have a robust advocate on 
foreign trade, and market access barriers. This funding will 
help us counter China's economic coercion, and enhance U.S. 
export competitiveness worldwide. The budget calls for 
increased funding for U.S. economic engagement in the Indo-
Pacific. So this budget request is absolutely critical to our 
economic and national security and without this funding, or 
with substantially reduced funding, make no mistake about it, 
we are putting both at risk.
    As has been said by Chair Murray, China is doubling down on 
its competition with the U.S. and investments, and we cannot 
afford to slow down now. So I look forward to the discussion we 
are having today.
    And I thank you for your time; and your efforts.
    [The statement follows:]

              Prepared Statement of Hon. Gina M. Raimondo
    Chair Murray, Vice Chair Collins, and members of the Committee, 
thank you for this opportunity to discuss the U.S. Department of 
Commerce's strategy to protect our national security and promote 
America's economic competitiveness in the face of challenges posed by 
the People's Republic of China (PRC).
    Over the past decade, the PRC's leaders have made clear that they 
do not plan to pursue political and economic reform and are instead 
pursuing an alternative vision of their country's future. The PRC is 
committed to constraining the free flow of capital and information, 
decoupling economically in several areas and accelerating efforts to 
fuse their economic and technology policies with their military 
ambitions.
    In the face of this dramatically transformed strategic environment, 
the priorities for the Department of Commerce are clear.
    We are bolstering our domestic capabilities and creating new ones 
to prevent the PRC from undermining our national security and 
democratic values. We are working with our allies and partners to 
advance our shared values and shape the strategic environment in which 
the PRC operates. And we are advocating for U.S. trade and investment 
and the benefits that come with it.
    The President's Budget requests $12.3 billion in discretionary 
funding and $4 billion in mandatory funding for the Department of 
Commerce. The investments proposed in this budget will enable the 
Department to continue fulfilling its mission to create the conditions 
for economic growth and opportunity for all communities and place our 
country on a stronger footing to outcompete the PRC.
    Today, I will focus on some of the key areas of investment by the 
Department that strengthen the position of the United States to 
outcompete the PRC.

    First, we are making transformational investments in American 
innovation, manufacturing, and people.

    Our economic competitiveness and national security depend on a bold 
domestic investment agenda. The Department is revitalizing U.S. 
domestic manufacturing, particularly advanced manufacturing. Over the 
past decades, communities across the country have seen manufacturing 
shut down, businesses close, and the local engines of innovation grind 
to a halt, as we exported jobs and manufacturing capacity to the PRC 
and the rest of Asia and reduced investment in the workforce 
development and infrastructure necessary to maintain our long-term 
competitiveness. Without manufacturing strength in the United States, 
and the innovation that flows from it, we are at a clear disadvantage 
in the race to invent and commercialize future generations of 
technology.
    In just the first twenty months of this Administration, we worked 
with Congress to enact the American Rescue Plan, the Bipartisan 
Infrastructure Law, the CHIPS and Science Act, and the Inflation 
Reduction Act. Taken together, they represent historic investments in 
America and a once-in-a-generation commitment to advancing innovation, 
technology, manufacturing, workforce training, supply chain resilience, 
and the infrastructure that we need to ensure our future 
competitiveness and national security.
    The Department of Commerce is investing $50 billion to strengthen 
and revitalize the U.S. position in semiconductor research and 
development and significantly increase domestic semiconductor 
manufacturing capacity to advance our national security and economic 
competitiveness. By 2030, we will be the premier destination in the 
world where new leading- edge chip architectures can be invented in our 
research labs, designed for every end-use application, manufactured at 
scale and packaged with the most advanced technologies. This 
combination of technological leadership, supplier diversity, and 
resiliency does not exist anywhere else in the world today and will 
reduce our reliance on the PRC for the microelectronics that drive our 
economy and power our national defenses.
    We are building innovation and manufacturing ecosystems in 
communities across America. At the Economic Development Administration 
(EDA), we launched the Build Back Better Regional Challenge and awarded 
21 coalitions with funds to leverage private capital and regional 
assets to create high quality jobs. In the coming weeks, EDA will 
launch the Regional Technology and Innovation Hub Program to ensure a 
strong foundation for U.S. global leadership in technologies critical 
to strengthening our national security and economic competitiveness in 
the decades to come.
    We are also investing in America's massive talent pipeline. EDA 
launched the Good Jobs Challenge to fund employer-led workforce 
training systems and partnerships to train and place American workers 
into high-quality jobs and support regional economies. The program was 
massively oversubscribed, with 12 times the demand for our $500 million 
in grants.
    The President's FY 2024 budget request builds on the foundation of 
these investments that enable innovation and resilient supply chains to 
ensure our economic prosperity and national security. The Budget 
requests $4 billion in mandatory funds and $50 million in discretionary 
funds to expand the Tech Hubs program. Additionally, it includes $100 
million for the Good Jobs Challenge.
    The Budget calls for $1.6 billion to support the work of the 
National Institute of Standards and Technology, or NIST, including $277 
million for the Manufacturing Extension Partnership, or MEP. The 
additional investment we propose in MEP for FY 2024 will enable our 51 
MEP centers to expand coordination with private sector manufacturers to 
narrow gaps in supply chains and adopt critical technologies to make 
U.S. manufacturers more resilient to global market disruptions.
    The Budget also includes $98 million to expand NIST's role in 
Manufacturing USA. With the funding requested in FY 2024, the 
Department will finance $60 million in new competitive awards to enable 
existing Manufacturing USA Institutes to promote domestic production of 
institute-developed technologies.
    The Budget also proposes $26 million for the International Trade 
Administration (ITA) to make the Department's supply chain resilience 
efforts more proactive. Of the $26 million, $21 million is to establish 
a supply chain resiliency office within ITA to identify and assess 
risks to supply chains; develop strategies to mitigate risks; and 
implement those strategies. The remaining $5 million is an increase for 
SelectUSA that will further allow that program to attract foreign 
direct investment to strengthen supply chain resilience. We are working 
with the private sector to re-shore or friend-shore core parts of our 
supply chains. And we are developing a near real-time ``common 
operating picture'' of global supply chains for critical industries so 
that we can address vulnerabilities as quickly as possible.

    Second, the Department of Commerce is laser focused on protecting 
U.S. technologies, capital, and expertise from the threats posed by the 
PRC.

    Outcompeting China to shape and lead the global economy of the 21st 
century demands that we move nimbly and quickly to harden our defenses 
against an array of emerging and ongoing practices that tilt the 
playing field against American workers and businesses and in some 
cases, threaten our national security.
    The PRC Government is deploying its military in ways that undermine 
the security of the United States and our allies and partners and free 
and fair international trade. It also seeks to dominate certain 
advanced technology sectors, while using many of those technologies to 
advance its military modernization and undermine fundamental human 
rights at home and abroad. Therefore, we are strengthening our efforts 
to safeguard our core technologies by strategically and continuously 
updating our export control policies and investment screening 
frameworks.
    The Bureau of Industry and Security (BIS) has long-maintained 
controls related to the PRC. Of the over 2,500 entities added to the 
Entity List for actions contrary to U.S. national security or foreign 
policy interests, nearly 700 or almost 30 percent, are based in the 
PRC. More than 200 have been added since the start of this 
Administration.
    These restrictions include license requirements for all military 
and spacecraft items under Commerce jurisdiction; all multilaterally-
controlled dual-use items; a large number of dual-use items with 
extensive commercial applications if the item is intended, entirely or 
in part, for a military end use or military end user in the PRC. 
Furthermore, restrictions apply to all items under our jurisdiction if 
the item is exported knowing it will be used in certain WMD programs or 
if it is intended, entirely or in part, for military-intelligence end 
uses or end users in the PRC.
    In addition, BIS controls prohibit certain U.S. person activities 
that would support WMD-related activities or military-intelligence end 
use or end users in the PRC absent authorization.
    However, as the Committee is aware, this is a dynamic environment 
and the Department is constantly evaluating existing authorities and 
updating our controls based on the evolving threat picture.
    In October, BIS released unprecedented restrictions that impose 
systematic and technology- specific export controls to limit the PRC's 
ability to purchase and manufacture certain advanced computing chips 
that are used to train large-scale artificial intelligence models, 
which in turn can improve the speed and accuracy of the PRC military's 
decisionmaking, planning, and logistics. The restrictions also impose 
export controls on China's ability to obtain semiconductor 
manufacturing equipment essential to producing advanced chips, which 
are vital to the development and production of advanced military and 
surveillance systems. BIS continues to work with interagency and allied 
partners to identify and restrict key technologies on a multilateral 
basis.
    When we find conduct prohibited by our export controls, we take 
action. Just last month, BIS announced a $300 million civil penalty--
the largest standalone administrative penalty we have ever imposed--
against an American company for selling items to Huawei without a 
license. BIS, along with the Department of Justice, also established a 
Disruptive Technology Strike Force in February to prioritize 
investigations of advanced technologies and impose criminal and 
administrative penalties against violators, in addition to adding 
companies to our Entity List, to safeguard U.S. technology. We will 
continue to take action to protect our advantage and maintain as large 
a lead as possible in technology sectors critical to national security.
    We also continue our review of inbound investment as a member of 
the Committee on Foreign Investment in the United States (CFIUS). Last 
year, the President issued a directive-the first of its kind since 
CFIUS was established decades ago--to sharpen CFIUS's focus on certain 
risk factors reflective of our modern economy, such as technological 
leadership, supply chain resiliency, and foreign access to our personal 
data.
    And together with Congress and the private sector, we are working 
to identify and mitigate the risks to our national security from 
outbound capital investments in critical technology sectors. As one 
example, we have prohibited companies receiving CHIPS funding from 
investing in leading-edge or advanced technology facilities in the PRC 
for ten years.
    Our request for FY 2024 includes funding for BIS and ITA to 
continue activities that advance U.S. national security, foreign 
policy, and economic interests. The Budget includes $6 million ($3 
million at BIS and $3 million at ITA) to continue supporting CFIUS 
examinations and $36 million to continue to develop the Information and 
Communications Technology and Services (ICTS) program within BIS to 
protect ICTS in the United States from foreign adversaries. The 
Administration is also considering the establishment of a program to 
address national security risks associated with outbound investments to 
prevent U.S. capital and expertise from financing advances in the 
critical sectors of countries of concern that could potentially 
undermine U.S. national security. The Budget includes $5 million to 
enable ITA to assist the Department of the Treasury in scoping and 
implementing such an outbound investment program.

    Third, the Department of Commerce is strategically addressing PRC's 
non-market economic practices, working with our allies and partners to 
advance our shared values, and shaping the strategic environment in 
which the PRC operates.

    We know that the PRC employs a range of economic practices that 
disadvantage U.S. and other foreign companies trying to compete in the 
Chinese market. The PRC also gives unfair advantages to its own 
industries in ways that displace American workers and businesses--and 
those of our allies and partners--from the global market. The 
Department will continue to press the PRC to address its non-market 
economic practices that result in an uneven playing field, such as its 
massive support--financial, regulatory, or otherwise--to its state-
owned and private firms, forced technology transfer, and egregious 
intellectual property theft.
    We are continuously working with our G7 allies on a shared approach 
to these issues. We are working with the Quad Critical and Emerging 
Technologies working group with Japan, Australia, and India, and we are 
leading working groups to align our approaches to secure supply chains, 
ICTS security, export controls, technology standards, and small and 
medium-sized businesses' access to digital tools through the U.S.-EU 
Trade and Technology Council, or TTC. Taken together, these 
multilateral engagements reflect the shared values of the United States 
and its partners and allies, amplify the power of the United States, 
and provide the basis for future global growth that is sustainable and 
inclusive.
    The Budget also includes $420 million for ITA's Global Markets 
program to ensure that U.S. businesses and commercial interests have a 
robust advocate and first line of engagement on foreign trade and 
market access barriers. This includes an additional $17 million for 
Global Markets to counter economic coercion by the PRC and enhance U.S. 
export competitiveness in strategic markets worldwide. The Budget also 
includes $3 million to proactively reaffirm U.S. economic engagement in 
the Indo-Pacific region, by tackling mutual challenges, promoting long-
term inclusive growth and stability, and advancing shared values 
through the Indo-Pacific Economic Framework for Prosperity, and $2 
million to expand the standards attache program in ITA.
    Robust funding for ITA helps create prosperity by strengthening the 
international competitiveness of U.S. businesses and workers, promoting 
trade and investment, and ensuring fair trade and compliance with trade 
laws and agreements--and this mission is more important than ever in 
the context of the U.S.-China relationship. Annual trade between our 
two countries has grown exponentially from $4.7 million in 1972 to more 
than $750 billion today. This trade provides revenues for American 
companies, jobs for American workers, and connectivity with the Chinese 
people.
    China is now our third largest export market, and those exports 
directly support 750,000 American jobs. The benefits from these exports 
go not only to our large multinationals but also to more than 25,000 
small and medium-sized enterprises (SMEs) that exported $33 billion to 
China in 2020. To support these smaller businesses, the Commerce 
Department recently launched an export promotion initiative around 
personal care products. We aim to boost exports by helping SMEs 
navigate the market, while ensuring that their intellectual property 
(IP) is protected. China is also the U.S.'s largest agricultural 
market, and our farmers are on track to export $36 billion in 
agricultural goods this year to China.
    The Department is committed to appropriately using its tools to 
protect our companies and counter unfair economic practices, including 
egregious IP theft by the PRC. For example, we maintain a team of IP 
experts in China that helps address our companies' needs while seeking 
to drive important changes to China's IP laws over the longer term.
    We seek fair competition--because no one can outcompete the U.S. if 
we are playing by the same rules.

                                 * * *

    These investments only scratch the surface of the Department's 
efforts to drive U.S. innovation and global competitiveness, foster 
inclusive capitalism and equitable economic growth, and expand 
opportunity and discovery through data.
    The effectiveness of all these investments would be threatened by a 
misguided return to FY 2022 enacted levels or a draconian 22 percent 
reduction to our spending in FY 2024. Either scenario would cause 
significant damage to our national security by, for example, reducing 
BIS's administration and enforcement of critical export controls, 
including those that keep sensitive goods and technology out of the 
hands of the PRC and other countries of concern. Furthermore, these 
cuts would weaken our economic competitiveness by reducing ITA's 
capacity to promote trade and investment and ensure fair trade and 
compliance with trade laws and agreements. In either funding scenario, 
we would also be forced to implement a hiring freeze and potentially a 
reduction in force. Our workforce is our great asset, and we need a 
strong, reliable Federal workforce to impartially, efficiently, and 
effectively oversee the Department's programs, services, and 
investments that strengthen our national security and economic 
competitiveness.
    I look forward to working with members of this Committee to enact 
the President's FY 2024 Budget and continue the important work of the 
Department to outcompete the PRC and lead the global economy of the 
21st century. I am happy to take your questions.

    Chair Murray. Thank you very much, Secretary Raimondo.
    We will now begin a round of 5-minute questions of our 
witnesses. And I do ask my colleagues to keep track of your 
time and stay within those 5 minutes.
    Each of you has testified about the importance of the 
investments the President's budget proposal makes in your 
agencies. I want to drill down for a minute and make clear to 
this Committee what the stakes really are. If we do not pass 
bipartisan spending bills, if we end up flat lining spending, 
and not making any policy decisions this year, under a 
continuing resolution, or if we cut non-defense spending back 
by billions, what can you say, in this open setting, about the 
worst impacts, and how far it will set us back in our ability 
to stay competitive with countries like China?
    And Secretary Austin, I will begin with you.
    Secretary Austin. Thank you, Chair Murray. As I said 
before, no amount of money can make up for lost time, and as 
you have said Chair Murray, PRC is not waiting. Our budget 
reflects our strategy. We went to great pains to make sure that 
we linked our budget request to the strategy, and so it without 
a budget, it is difficult to execute the strategy as designed. 
And we cannot execute new starts, severe impacts to 
procurement, and it will affect readiness and our ability to 
build out our infrastructure as well.
    Specifically, what that means, let us take shipbuilding, 
for example, but we could expect a $9.7 billion, or so, impact 
to shipbuilding, production rate increases, we will not be able 
to accomplish those, we will not be able to award the second--a 
contract for the second Columbia-class submarine; we will not 
be able to start the production on the Virginia-class 
submarines; it will delay our ability to get the critical 
munitions that we need for ourselves; and also to support our 
allies and partners as well. Munitions, like GMLRS (Guided 
Multiple Launch Rocket System), and Tomahawks, and AMRAAMs 
(Advanced Medium-Range Air-to-Air Missiles), and Mark 48 
torpedoes, just to name a few things, that you are--and again, 
the list is pretty extensive.
    Chair Murray. Thank you. Secretary Blinken.
    Secretary Blinken. Yes. Thank you very much. I will just 
say two things. First, if you look at this overall from our 
perspective, before drilling down on China, if we were to end 
up in that world, our ability to do things, that on a 
bipartisan basis Congress supports, including support for 
Ukraine and its neighbors, including countering harmful PRC 
influence, and resourcing our Indo-Pacific strategy, including 
maintaining our leadership in everything, from humanitarian 
assistance, to global food security, we would be severely 
hindered in doing that. We would also have real challenges when 
it comes to the investments that we need to make in security, 
and in upgrades, physical and cyber, leaving our personnel, 
leaving our facilities, leaving our cyber defense more 
vulnerable than it otherwise would be.
    More specifically, in this region, and with regard to 
China, we have in the budget, a number of items that are 
critical, in our judgment, to being able to effectively counter 
China's growing influence in virtually every region of the 
world. It would reduce our efforts to engage and build the 
kinds of partnerships we need to push back against that 
influence. To make sure that the United States remains the 
partner of choice.
    We have, among many other things, funding provided in the 
budget to make significant investments, and to enable us to 
catalyze private sector investment in critical infrastructure, 
in mining, critical materials, and rare earth materials, in 
making sure that we can help develop secure communications 
networks, undersea cables, and a secure cyberspace. And these 
and so many other ways, we would be significantly hindered. 
Beyond that, the investments that we need to make in our own 
personnel, expanding our missions in the Indo-Pacific, as we 
are in the process of doing, making sure that we attract and 
train, the most effective talent, particularly when it comes to 
dealing with China. All of that would be hindered.
    And finally, and it is hard to quantify this, I think we 
would be sending a broader message of retreat, at a very time 
when we need to be sending the opposite message around the 
world.
    Chair Murray. Secretary Raimondo. Do you want to turn on 
your----
    Secretary Raimondo. Oh. Excuse me. Can you hear me? Yes. 
The Commerce Department is involved in both our offensive 
strategy, which is to say, investing, and in our defensive 
strategy, which is to say, protecting our technology. So I 
would like to very quickly highlight three ways that we would 
be very significantly impaired in our ability to meet the China 
Challenge.
    First, BIS (Bureau of Industry and Security): So if we were 
to go back to 2022 levels that would be about 125 fewer people 
in BIS. That is 125 fewer people to do operations like end-use 
checks around export controls. Last year we did approximately 
1,100 end-use checks in 54 countries, the vast majority related 
to China. With 125 fewer people, we would not be able to do all 
we do, and U.S. technology would get into the hands of malign 
actors in China.
    ITA (International Trade Administration): We have Foreign 
Commercial Service Officers in 79 countries all over the world, 
we would have to cut at a time when China is expanding. We 
would not be present in Africa, and South America, in the Indo-
Pacific, in the way that we want to be.
    And finally, as it relates to investment, as you said, 
Senator Murray, we need to invest. NIST (National Institute of 
Standards and Technology) has the Federal Government's smartest 
minds around artificial intelligence and cyber. We need to be 
investing in that. We currently have a billion dollar backlog 
of deferred maintenance at NIST, at the same time China is 
investing in new facilities of their NIST equivalent. So I will 
stop there in the interest of time. But it is significant.
    Chair Murray. Thank you very much.
    Senator Collins.
    Vice Chair Collins. Thank you, Madam Chair.
    Secretary Blinken, what specifically is the State 
Department doing to deter China from continuing to send to 
Mexico the precursor ingredients, and the pill presses for 
fentanyl that eventually makes its way into the United States?
    Secretary Blinken. Thank you very much. To step back for 
one second; in 2019, China agreed to schedule fentanyl and 
fentanyl-related substances. The positive development there was 
that the export of fentanyl itself to the United States more or 
less ended. However, what emerged in its place is exactly what 
you have described, and that is the fabrication of precursor 
chemicals, many, if not all of them perfectly licit, but then 
illegally diverted to the production of fentanyl, often made in 
Mexico, and then, as you know, shipped into the United States.
    We have been, in every single engagement that we have had 
with China, pressing this issue, in particular pressing China 
to take action to get control of the illicit diversion of 
precursors into fentanyl, and other synthetic opioids. China's 
response has been a number of things, including their view that 
this is a demand problem for the United States, and that while 
they scheduled fentanyl, we have not, so this is an argument 
that they raised.
    We have also pressed them to not only do what they have 
already done, but again, to crack down on the diversion. In the 
absence of that, we have sanctioned Chinese individuals and 
Chinese entities that we have found taking part in this 
diversion. At the same time we are building an international 
coalition of countries on fentanyl and on synthetic opioids to 
make this a global challenge. And here is why, and here is how 
this will affect China. What we are seeing, because our market 
has tragically become saturated. We are seeing criminal 
enterprises push to make new markets in other parts of the 
world, in Europe and in Asia. As a result, the demand signal on 
China to take effective action, I am convinced, is going to 
grow, and not just from us, from other parts of the world.
    China is going to have to decide whether it wants to be 
responsive to that demand signal or whether it is going to 
continue to allow, one way or another, the diversion of these 
chemicals. We will continue to take resolute action wherever we 
find those who are engaged in the diversion, and at the same 
time we would be better off if we could secure genuine 
cooperation from China in helping us to deal with this problem.
    Vice Chair Collins. Do we have that now?
    Secretary Blinken. We do not have that now.
    Vice Chair Collins. Correct. I mean, China is not only 
providing the precursor chemicals, it is now providing the pill 
presses that are used by the cartels.
    Secretary Blinken. And the only thing, the only I would 
add, Chair, is that this, of course, is and has to be a 
comprehensive effort, starting with the actions that we are 
taking at home, moving to the work that we are doing on our 
border, then to the work that we are doing with Mexico, which 
is absolutely vital, and then the broader international 
community, to include, of course, China.
    Vice Chair Collins. Secretary Austin, last year, Congress 
authorized up to $1 billion to send existing DOD weapons to 
Taiwan, consistent with the Taiwan Relations Act. You have 
testified that the administration intends to exercise its 
authority, and there were press reports just last week that the 
administration was contemplating a $500 million package for 
Taiwan. Will the administration be requesting the necessary 
funding to backfill any U.S. weapons and munitions that are 
provided to Taiwan, as we have done with Ukraine, so that there 
is no net loss to the U.S. Military capability as a result of 
the package under consideration by the administration?
    Secretary Austin. Thanks, Vice Chair. First of all, let me 
thank Congress for what you have done to provide us with the 
authority to effect presidential drawdown. That is critical in 
our efforts to provide Taiwan what it needs for its self-
defense going forward. And you are correct. We are working on 
that initiative, and we hope to have an action forthcoming here 
in the near term.
    We will absolutely need to have the appropriations to 
replace those things, which we provide. And so, Vice Chair, we 
will not hesitate to come forward and ask for what we need to 
make sure that we maintain our stocks.
    Vice Chair Collins. Thank you.
    Chair Murray. Senator Shaheen.
    Senator Shaheen. Thank you, Madam Chair. And thank you, to 
each of you for being here.
    I have brought along with me two maps that I know you have 
seen before, Secretary Austin, because they are done by the 
Department of Defense.
    [The maps follow:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]    

    Senator Shaheen. And I brought them because I think it 
shows, very clearly, the challenge that we have these are of 
China's influence in Latin America, and in Africa. And if you 
look at the maroon color in Latin America, Central, and South 
America, everything that is in maroon, all of those countries 
are members of the Belt and Road Initiative; 21 of 31 countries 
in Central and South America members of the Belt and Road 
Initiative. In Africa, it also shows the challenge that we 
have.
    Now, Secretary Blinken, you said in your opening remarks 
that the PRC, People's Republic of China, has more diplomatic 
posts around the world than we do. We cannot effectively 
compete if we do not have qualified, confirmed ambassadors in 
place, and that is important not just for each country, but 
also for the multilateral bodies where China is busy building 
support, while in many cases, we do not have anyone serving.
    So I appreciate that the Biden administration has 
accelerated the announcement of key nominations in recent 
weeks, but we are still waiting on the appointment of a Special 
Envoy to Belarus, at a time when Lukashenko is making visits to 
China, the administration has not nominated an ambassador to 
Haiti or the Dominican Republic, and it only just appointed 
Ambassador Markell to serve in Italy which, of course, is 
welcome news, but it has taken over 2 years to get there. I 
recognize that the hold up here is largely in the Senate. I 
call on my colleagues, particularly those people who are 
holding, in masse, ambassadorial nominations from coming to the 
floor. But we also do not have an ambassador to the Arctic 
Region, where both Russia and China are looking to gain 
strategic foothold. We cannot get our ambassador to the African 
Union confirmed, and we are in the middle of a conflict in 
Sudan, and where China is expanding their Belt and Road 
Initiative. In countries like Montenegro and Georgia, China is 
seeking to make strategic investments while our nominees are 
being held on the Senate floor.
    So can you, Secretary Blinken, speak to how many 
ambassadorships are currently open and pending before the 
Senate? And then, whether there are specific important 
ambassadorships that we should be taking up as soon as 
possible, because we have strategic interests at stake?
    Secretary Blinken. Senator, thank you for raising that. As 
I mentioned, China now has a handful more diplomatic posts 
around the world than we do. We have 173 missions; they have 
roughly 180. Each one of theirs has a fully accredited 
ambassador. We currently have 14 nominees on the floor pending 
confirmation, many of whom have been in this process for a year 
or more. We have another 40 who are somewhere else in the 
process, going through their hearings, evaluation by the 
Committee. So we are acting at a deficit, at a disadvantage. 
China is able, not only to be present in more places, but it 
has got fully accredited ambassadors in each of them. And that 
makes a difference. As good as our charges are, as good as our 
DCMs (Defense Capabilities and Management) are--and they are 
terrific--it is simply not the same thing.
    What happens? And I have seen this time and again, is that 
a foreign leader, head of government, head of state, will 
engage with one of our Senate-confirmed ambassadors but may be 
more reluctant to engage with someone who is there filling in 
until an accredited ambassador could get there. That leaves a 
vacuum. And guess who fills the vacuum? Increasingly, it is 
China. So we are penalizing ourselves if we are not getting our 
full team on the field as quickly as possible. It is simply not 
a serious way to compete.
    Senator Shaheen. And what would you say to those people who 
say: I am very concerned about the PRC as a part of our great 
power competition, as we are looking at the challenges that we 
face, but I am not willing to vote for the ambassadors who are 
going to be there in countries to help us with this fight?
    Secretary Blinken. Well, I think there is a contradiction. 
And I would hope that everyone who has invested in making sure 
we can compete effectively, and I believe that is probably 
every Member of this body, in both parties, will take account 
of the impact of not having accredited ambassadors in every 
country that that we need them.
    And to your point, I am looking at your map, and we know, 
we see that China is active on every continent, seeking to 
advance its influence. Again, if we are not there, we are not 
competing.
    Senator Shaheen. Thank you. Thank you, Madam Chair.
    Chair Murray. Thank you.
    Senator Graham.
    Senator Graham. Thank you. I have a statement I would like 
to introduce in the record about what our subcommittee has done 
to deal with the China problem.
    Chair Murray. Without objection.
    [The statement follows:]
                  Statement of Senator Lindsey Graham
    For the past 20 years, the State, Foreign Operations, and Related 
Programs subcommittee has closely followed the rise of China and 
authored and included in its annual appropriations bills numerous 
provisions that seek to mitigate or counter China's power and 
influence, and strengthen the position of the United States abroad--
while at the same time ensuring that the Congress has a role in this 
paramount foreign policy and security challenge.
    These bipartisan provisions include:
  --restrictions on the use of funds for any project or activity that 
        supports or promotes the Belt and Road Initiative or any dual-
        use project of the PRC;
  --a requirement that funds be used to counter the establishment of 
        insecure communications and networks abroad, including 5G, 
        promoted by the PRC;
  --restrictions on the use of funds for any project that supports or 
        promotes technology, including biotechnology, digital, 
        communications, and cyber, developed by the PRC unless the 
        Secretary of State, in consultation with the heads of other 
        relevant agencies, determines that the use of such technology 
        does not adversely impact U.S. national security;
  --a prohibition on funds appropriated or otherwise made available for 
        any grant, contract, or cooperative agreement with the People's 
        Liberation Army (PLA) or any entity that the Secretary of State 
        has reason to believe is owned or controlled by the PLA;
  --a prohibition on funds for the Wuhan Institute for Virology; and
  --a directive that no funds should be used to create, procure, or 
        display any map that inaccurately depicts the territory and 
        social and economic system of Taiwan.
    The subcommittee has also prioritized funding to counter the PRC by 
establishing a floor for assistance to implement the Indo-Pacific 
Strategy and the Asia Reassurance Initiative Act of 2018 ($1.8 billion 
in FY 2023) and creating the flexible and discretionary Countering PRC 
Influence Fund, for which the Administration requested $400 million in 
FY 2024. The subcommittee has maintained predictable bilateral funding 
levels for countries targeted by the PRC; appropriately conditioned 
assistance on governments under the influence of Beijing; provided 
funds for democracy, human rights, and cultural preservation programs 
for Hong Kong and Tibet; and included specific funding directives for 
assistance for Taiwan, including $80 million in Foreign Military 
Financing Program funds in FY 2023 and loan authority.
    In addition, the subcommittee has consistently appropriated 
significant resources for the U.S. International Development Finance 
Corporation (DFC), including $1 billion in FY 2023. However, the DFC 
must do more to offer alternatives to strategic PRC infrastructure 
projects abroad, including through trilateral cooperation with our 
allies and partners like Japan, South Korea, and Australia.
    At the request of the subcommittee, the Congressional Research 
Service prepared a table illustrating the difference between the budget 
requests and actual appropriations for certain countries in Southeast 
Asia from FY 2002 to FY 2022. As we know, China has historically viewed 
Southeast Asia as firmly within its sphere of influence. As the data 
below shows, with the exception of a few fiscal years, funds 
appropriated for these countries have exceeded the budget requests of 
both Republican and Democrat administrations.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Congress has an important role to play in preparing and enabling 
the United States to compete against our adversaries--the PRC, Russia, 
Iran, and North Korea, in particular. The record shows that in some 
cases, such as Southeast Asia and with respect to the PRC, the 
Appropriations Committees has been forward leaning and in front of the 
Executive branch.

    Senator Graham. Thank you. Secretary Austin, I have been 
telling my constituents in South Carolina that if we fold in 
Ukraine and let Putin have his way, China is more likely to 
invade Taiwan. Do you agree with that?
    Secretary Austin. I agree, Senator. Not only China, but we 
will see other bad actors around the world try to do the same.
    Senator Graham. I could not agree with you more. So how we 
deal with other bad actors in the world matters. Do you believe 
our disastrous withdrawal from Afghanistan embolden our 
enemies, Secretary Austin?
    Secretary Austin. Senator, as you know, there were three 
things that happened in Afghanistan.
    Senator Graham. I do not have time for three things. Do you 
believe it emboldened our enemies, and if you do not, you have 
missed a lot?
    Secretary Austin. I do not, Senator.
    Senator Graham. Okay. Good. Well, you have missed a lot.
    Secretary Blinken, you said a couple months ago, that China 
was on the verge of supplying lethal aid to Russia. Was that 
accurate when you said it?
    Secretary Blinken. It was, Senator.
    Senator Graham. Okay. We all agree, we want China not to 
help Russia, right? Here is an idea: 100 U.S. Senators 
recommended to you that we declare Russia a state-sponsor of 
terrorism to deter people like China from giving them weapons. 
Here we are, months later, and nothing has happened.
    Mr. Secretary, I like you a lot, but you are never going to 
designate Russia as state-sponsor of terrorism, are you?
    Secretary Blinken. Never say never.
    Senator Graham. Well, I can pretty well say China sees all 
talk here. If you are really worried about China giving weapons 
to Russia, instead of picking up the phone and calling the 
Chinese--please do not do that--why do not you get 100 U.S. 
Senators to pass a law telling China if you give them one 
bullet, we are going to sanction the hell out of you?
    Secretary Blinken. Senator, could I just add to that, if I 
may.
    Senator Graham. Yes, please, very quickly.
    Secretary Blinken. I think China has taken account of the--
--
    Senator Graham. So do you think that they are deterred?
    Secretary Blinken [continuing]. Of the unprecedented, 
sanctions and export controls that we have wielded against 
Russia with many countries----
    Senator Graham. So you think making Russia a state-sponsor 
of terrorism would not send a stronger signal to China: Do not 
help the Russians.
    Secretary Blinken. I think the authorities that we have and 
we have used, which accomplished the same and have been very 
effective----
    Senator Graham. Well, I understand----
    Secretary Blinken [continuing]. That has sent a clear 
message to the Chinese----
    Senator Graham. Yeah, let us go to Iran. Is Iran a state-
sponsor of terrorism under U.S. law?
    Secretary Blinken. Mm-hmm----
    Senator Graham. Madam Secretary.
    Secretary Blinken. Sorry.
    Secretary Raimondo. Yes, I believe it is.
    Senator Graham. Okay. They are sanctioned to the hilt, 
right?
    Secretary Raimondo. Yes.
    Senator Graham. Okay. Do you realize Iran's oil revenue 
went up 20 percent last month?
    Secretary Raimondo. I believe--I know it is gone up 
because----
    Senator Graham. It has gone up 20 percent every month. Why? 
Because of China. So this idea that we have a strong China 
policy is a bunch of crap. It is not the budget that will deter 
China. It is our will to take on people like China. So I think 
we are in a real world of hurt.
    Let us talk about the Navy. You know, the Chairman 
criticized the House budget proposal, I quite frankly, 
understand some of your concerns. A CR would be disastrous, I 
agree.
    Secretary Austin, the CNO (Chief of Naval Operations) of 
the Navy said we needed 373 manned ships, and 150 unmanned 
ships to deal with the threats we face. Are you aware of that?
    Secretary Austin. I am aware that he said that we----
    Senator Graham. Would you agree with it?
    Secretary Austin. I agree with the plan that the Navy has 
outlined.
    Senator Graham. Well, here is what the Navy said: For us to 
get 373 ships, what we need, I would think the Navy is really 
important to deter China, that we would have to spend 5 percent 
over inflation to reach that goal. Are you aware of the fact 
that the budget you propose to this Committee spends 1.7 
percent under inflation?
    Secretary Austin. I am. It is under current rates, right, 
and you----
    Senator Graham. Okay. Well, I would say that you are never 
going to get the 373 ships if you got to spend 5 percent over 
inflation, and the budget is 1.7 below inflation. And here is 
what the Committee needs to know, under the budget proposed by 
the President we go from 296 ships this year to 291 in fiscal 
year '28. China has 340 ships, and by 2025 they will have 400, 
and we project by 2030 they will have 440 ships. So we are not 
doing what we need to be doing to let China know we are serious 
about playing in their backyard.
    So this idea of countering China cannot be looked in the 
budget vacuum; how many diplomats we have on the ground; 
everything we have done in the last 2 years, in my view, has 
made every bad actor more emboldened. And it started with 
Afghanistan. And the Iranians are making more money under 
sanctions, not less. And China is the biggest reason we are not 
doing a damn thing about it.
    We have a chance here in a bipartisan fashion to send a 
signal before it is too damn late. And when it comes to 
Ukraine, I appreciate this Committee's bipartisan action, but I 
am going to tell you right now, if the Department of Defense 
does not provide the ICC (International Criminal Court) with 
the evidence necessary to prosecute Russians, and you are 
holding it up, we are sending yet another signal that we are 
all talk when it comes to bad actors. So you may be pleased 
with what you are doing. But I am not.
    Chair Murray. Senator Coons.
    Senator Coons. Thank you, Chair Murray. Vice Chair Collins, 
thank you for the forbearance of my colleagues, given my timing 
demands. And thank you to our witnesses in front of us. Having 
the Secretary of Defense, Secretary of State, Secretary of 
Commerce jointly appear in front of us is a reinforcement of 
the need for a joint approach to reinforcing U.S. national 
security, our diplomacy, development, economic competitiveness, 
in the face of the very real challenge of the PRC.
    I will, just at the outset, repeat what we heard from the 
Chair, which is that we cannot default and we cannot fail to 
appropriate. Xi Jinping has assessed the United States as a 
flawed and failing political and economic system. Nothing we 
could do would reinforce that impression more than defaulting 
on our national debt or failing to appropriate. Let me turn to 
some of the investments asked for in this year's budget that 
will advance our joint goal.
    Secretary Blinken, Raimondo, you saw the posters that 
Senator Shaheen put up. In the Global South, whether in Latin 
America, Africa, the Pacific Island, Southeast Asia, we see 
that the Global South is increasingly aligning with Chinese 
economic and foreign policy, not because they fail to 
appreciate the risks of debt burden diplomacy, not because they 
perceive China's alternative governance model is better, but 
because they say over and over, the absence of an American 
presence. We have to show up. It is a challenge of presence and 
engagement, strategic communication, providing credible 
alternatives, particularly regarding economic investment.
    You are both on the Board of the Development Finance 
Corporation (DFC). It is a critical new resource to compete 
with the Belt and Road Initiative, and it is investing billions 
in development projects with key partners around the globe. 
Speak if you would to: What authorities and resources does the 
DFC need to maximize its impact to meet this moment? And what 
else are you proposing in this budget to address these critical 
challenges of engagement to push back on China's investment, 
globally?
    Secretary Blinken, if you would?
    Secretary Blinken. Thank you very much, Senator. And just 
before I get to that, just for the record, and I am sorry that 
Senator Graham is no longer here. But, you know, we have 
sanctioned 40 different entities for oil trade with Iran. Of 
the 40 that we have sanctioned, 17 were Chinese.
    With regard to these investments, Senator, I could not 
agree with you more, and it is vital for us to be able to 
compete, to compete effectively; and in particular, because 
this is our comparative advantage, to catalyze private sector 
investment. We are not going to match China dollar-for-dollar 
in state investment. The way we do it is by catalyzing private 
sector investment. The DFC is one of the most critical vehicles 
for doing that.
    What we have proposed in the budget is a mandatory 
allocation for the DFC, in addition to its regular budget, that 
would allow us to create and effect a new revolving fund that 
would boost equity investments in viable development to 
leverage private capital and also to counter some of the 
predatory lending that we see coming from China. This would, in 
a number of ways, support the very kinds of projects that both 
people want and need, and that advance our position 
strategically, mineral mining, and reprocessing, wireless 
networks, undersea cables, ports, roads, rails, medical 
manufacturing different parts of the world, water and 
sanitation.
    I will give you just one example, quickly, of something 
that is already in train. In fiscal year '22, we have a DFC 
investment of just $30 million that is allowing us to produce 
critical minerals mining, a platform to support nickel and 
cobalt mining in Brazil. Something that is essential to the 
technology of the century. In addition, airport in Sierra 
Leone, an African Investment Fund for digital infrastructure. 
It is a long way of saying, we need to make sure that the DFC 
is well capitalized, that it also has the flexibilities 
particularly to make equity investments. This is what our 
partners are most looking for.
    Senator Coons. Thank you, Mr. Secretary.
    Secretary Raimondo.
    Secretary Raimondo. Yes, thank you, Senator. And thank you 
for your leadership as it relates to the DFC. I agree with 
everything that Secretary Blinken has said. Our ability to 
counter China requires us to show up; it requires us to show up 
in embassies; and it requires us to show up on the ground with 
money. And that includes U.S. private capital.
    And so the DFC, I would argue, plays a more important role 
now and in the years to come than it ever has. It is, as 
Secretary said, critical minerals, but it is also basic 
infrastructure. You know, basic investments in infrastructure, 
roads and bridges, clean energy, clean infrastructure. And the 
DFC can provide concessional finance, for example, to draw 
forward a great deal of U.S. private capital. I can tell you 
this. In all of my travels--and I will be going this summer to 
Africa--in all of my travels, the United States is the source 
of choice over China, and the DFC working with us will help us 
to show up with the capital that is so sorely needed.
    Senator Coons. Thank you, both.
    Vice Chair Collins. Senator Moran.
    Senator Moran. Senator Collins, thank you. Secretaries, 
thank you for being here.
    Let me start with Secretary Raimondo, welcome back. You and 
I have had a chance to see some aviation and aerospace 
activities in our country. The RAND Corporation recently 
testified that for each three of the aviation categories--
military, commercial, and general--the United States is ahead 
of China and competitive with or better than the rest of the 
world. However, and I quote, ``China continues to close the gap 
with the United States.''
    Secretary Raimondo, aviation aerospace plays a critical 
role in both our economic and national security in light of the 
China continuing, closing the gap, their advances in this 
field, and the Chinese Communist Party's explicit intention to 
challenge U.S. dominance, what can policymakers do to ensure 
the U.S. remains a global leader in aviation, aerospace, and 
the innovation that is associated with both?
    Secretary Raimondo. Thank you, Senator, for your question. 
There are a number of things we can do, but one thing, in 
particular, that I will point to at the Department of Commerce 
that we are doing is investing in tech hubs. There are regions 
all around the country that have expertise in aviation, skills, 
R&D, talent, et cetera, not necessarily in New York City and 
San Francisco, and so by investing in tech hubs, all across 
America, and identifying areas of excellence, including an 
aerospace and aviation, making those investments which draw 
together the public sector, and the private sector, and 
research universities, that is the way we stay ahead, that is 
the way we stay ahead of China: Investing in R&D, investing in 
every nook and cranny of this country to tap into the full 
extent of our innovation and talent, and investing in our 
workforce.
    Senator Moran. Thank you, Secretary.
    Secretary Austin, anything you would add in regard to the 
value of technology, and capabilities in aerospace and 
aviation, generally, as a manufacturing component, as a 
research component of our country, what does it mean to our 
national defense?
    Secretary Austin. First of all, I absolutely agree with the 
Secretary. And that is why you see us asking to invest some 
$146 billion in RDT&E (Research, Development, Test and 
Evaluation). It is the largest request for research and 
development that we have ever made, and you also see us 
continuing to invest in our Air Forces.
    We are asking for some $60 billion plus to make sure that 
we maintain a dominant Air Force. And if you look at things 
that we are doing with respect to making sure that we maintain 
that edge, I think the Raider that we unveiled--the B-21 Raider 
that we unveiled in December is clear evidence of our focus on 
making sure that we remain out front, and we go after the 
capabilities that are necessary to support our war fighting 
concepts. So we will continue to do that. I think we are 
investing in the right thing, and we appreciate Congress' 
support.
    Senator Moran. Secretary Blinken, during your 
Appropriations Subcommittee hearing, I asked you about trade, 
and particularly the updated TPP (Trans-Pacific Partnership) 
Agreement that we are not a part of. And I would highlight this 
as well for Secretary Raimondo. Your answer, I do not mean that 
you were cavalier in your answer, but your answer was in part: 
TPP was a good agreement, but we have moved on since then; the 
world has changed. And I took those words and researched what 
many countries are saying. In fact, they are asking us to 
engage in this Trade Agreement, countries in the South Pacific, 
Australia, for example, Thailand. And I just would highlight 
again for both of you, Secretary Raimondo and Secretary 
Blinken, the importance of trade. We need the relationships 
that, perhaps, you have described, using diplomacy, and 
diplomats, and State Department officials, and relationships. 
But in my view, one of the pillars that is missing in this 
administration's efforts to connect the rest of the world and 
the United States together is trade agreements in which we are 
not negotiating and not pursuing. And I think it is a mistake 
for our country's economy, and I think it is a mistake for our 
country's national security. The rest of the world needs to see 
economic benefits by being aligned. And I can tell you China 
does an excellent job of demonstrating, at least upfront, 
temporarily, what an ally and supporter they are of other 
countries' economies.
    Secretary Blinken. Senator, I very much appreciate your 
perspective on this. Let me just say, very quickly, two things. 
First, some of the investments that we are talking about, and 
the vehicles for those investments financed in the President's 
budget, are actually critical to delivering what people are 
looking for and need in country after country around the world, 
and doing it in a way, as I said, that is a race to the top, 
not the race to the bottom that we sometimes see with 
investments coming from China.
    Second, we are very focused on putting in place and 
implementing the Indo-Pacific Economic Framework, IPEF. We have 
14 countries that have signed on to do that. It includes trade 
facilitation particularly with regard to digital trade; it 
includes supply chain diversification and resilience; it 
includes work on a clean economy that many of these countries 
are looking for including the financing, the development of 
such an economy; and it includes a pillar on combating 
corruption and other things that corrode the efforts to 
actually make trade investment work. We found great enthusiasm 
for that among the countries that have signed on. As I said, 
they are now 14, and we are working overtime to actually put 
that on the rails and make it work.
    Senator Moran. Mr. Secretary, China has requested to engage 
in that--to enter that agreement, and Great Britain has entered 
as well, other countries are finding the value that I wish we 
would see. Thank you.
    Vice Chair Collins. Senator Tester.
    Senator Tester. Thank you, Senator Collins. And I want to 
thank all three of you for being here today. We have heard, and 
we know some of the things that China is doing; what they are 
doing with their military; what they are doing with money 
manipulation; what they are doing with the precursors of 
fentanyl, with cyber-attacks, harmful trade policies, 
opposition to free and open pacific, and Senator Shaheen talked 
about the Belt and Road's Initiative; what they have done 
worldwide with rare earth; and what they are doing with 
technology theft.
    On the other side of the equation, we have got the United 
States of America, the greatest country on Earth, did not 
happen by accident because we had folks who came before us that 
made good decisions. Unfortunately, we are not in that boat. 
The folks here in Congress, I think, have forgot what our 
mission is. We are dealing with the debt ceiling on money that 
we have already spent, which will cause us to go in default, 
which will cause us to go into a depression, if not remedied, 
folk will lose retirement. We could even lose over to reserve 
currency. We are dealing with an individual who is holding all 
our flag, officers in the Military. I do not have to talk to 
Secretary, or ask about how negative that is. Senator Shaheen 
talked about the ambassadors that have been held on the floor, 
and we have got a situation where we are probably on the cusp 
of going to a CR, which I know the Chairman and Ranking Member 
of this Committee despise, as do I, but if we do not get our 
act together that is exactly where we are headed. That does not 
make us stronger, that makes China stronger. And it is not on 
any of you three that are sitting there. It is on the United 
States Congress. And so we need to wake up because this is a 
real threat.
    Secretary Austin, I want to ask you about weapons 
modernization; and how does our weapon modernization compare to 
China's efforts with weapon modernization?
    Secretary Austin. Thanks Senator. First of all let me tell 
you, that I truly maintain and believe that we have the 
competitive edge, and we are going to work to maintain that 
competitive edge going forward. And so that is why you see us 
looking to invest, not only in research and development, but 
also $60 billion to maintain the Air Force that we believe we 
need; another $48 billion to invest in maintaining the world's 
greatest Navy. And I will bet on our Navy versus any other Navy 
any day of the week. And also $11 billion to invest in long-
range fires, and that includes hypersonics.
    So we are pushing hard to make sure that that we are going 
after the right capabilities that will help us maintain the 
edge in the future, now and in the future. And that is why we 
are asking you for the budget that we are asking for.
    Senator Tester. Are there any areas that you would talk 
about in this type of a session where you would say we are 
behind from a technology standpoint, modernization standpoint?
    Secretary Austin. I would like to have a conversation--that 
conversation in a secure----
    Senator Tester. Very good. Thank you. Thank you for that. 
Look, I have heard directly from folks in Montana about the 
impression that Chinese is buying--or buying land in our great 
State. We have seen some reports out of North Dakota. And I 
think it is not only about food security, it is actually more 
even about the--it is national security, and both are pretty 
damn important.
    Look, I know this is not an easy nut to crack. I think 
there is 30 bills out there on--deals with foreign ownership of 
land, China, Russia, Iran, North Korea. I guess the general 
question is: Are you guys, in any of your capacities, and if it 
is not within your bailiwick that is fine, seeing any evidence 
that Chinese are buying land? And are they doing it themselves 
through Chinese companies, or are they potentially doing it 
through shell companies?
    I will start with you, Secretary Blinken.
    Secretary Blinken. So Senator, to put this in perspective. 
And again, not my area of expertise, but based on the facts as 
I believe them to be, I think about 3 percent of our farmland 
is foreign owned; and of that 3 percent, a very small 
percentage is owned by Chinese individuals or Chinese entities. 
Which does not mean there is not an issue because depending, 
for example, on where that farmland happens to be situated 
there may be an issue, but I wanted to put it in perspective; 
and we are well aware of a number of bills, both Federal and 
State, that would place restrictions of one kind or another on 
foreign ownership to include Chinese ownership of agricultural 
land. The Committee on Foreign Investment, CFIUS?
    Senator Tester. Yes.
    Secretary Blinken. Looks, as you know, at anything that 
might involve a strategic investment that could pose a threat 
to our security, I will leave that to them, that is in the 
province of the Treasury Department. Needless to say, we look 
very carefully at any investment from anywhere, but notably 
from China, that could pose a threat in one way or another to 
our security.
    Senator Tester. I am out of time, either one of you could 
respond to this in writing, unless you have got a real quick 
response. I would just say this, that there are a number of 
bills out there, and I think you are spot on. It is it not 
quantity, it is quality. And if it is the wrong site, we are in 
trouble. Thank you, all, very much.
    Chair Murray. Thank you.
    Senator Capito.
    Senator Capito. Thank you, Madam Chair, and Vice Chair. And 
thank you all for being here with us today and for your 
service.
    Secretary Blinken, I heard your response to Senator 
Collins's question on fentanyl. I come from the State that has 
the largest amount of overdose deaths per capita than any other 
State in the Union, and a lot of this is directly attributable 
to fentanyl. What I heard in your answer was highly 
insufficient because I do not have the impression that we are 
pressing hard enough. I do not know. We were in Mexico 
several--about a month ago, talking to the President there, to 
try to help with that. You said things going on at the border. 
We all know that this drug is flowing across our southern 
border.
    Can you give me a better answer here? And give us some hope 
that we can really clamp down on this illicit killer of a drug?
    Secretary Blinken. Thank you very much, Senator. And first 
of all, let me be very clear that I could not agree with you 
more----
    Senator Capito. Understand.
    Secretary Blinken [continuing]. On the imperative of this 
challenge. As you know very well, this is the number one killer 
of Americans aged 18 to 49.
    Senator Capito. Right.
    Secretary Blinken. And as we also know, last year, we 
seized enough fentanyl to kill every single American. That is 
what we seized; there is obviously a lot more out there. So, 
this is at the very top of our priority list. What I was trying 
to suggest earlier is that we have to deal with this, and we 
are across the entire spectrum of the issue. By which I mean 
this: There is obviously work that we are doing that is very 
significant in terms of what is happening here at home, 
including demand, treatment, recovery, that is a critical 
component.
    I was just in Denver visiting the--among other things--the 
Police Department of the Cities Summit of the Americas. We 
brought together 250 mayors from across our hemisphere. One of 
the things we focused on was fentanyl synthetic opioids, 
precisely because this is a problem that is coming to them as 
it has already come to us.
    The border is obviously critically important. The most 
important thing is this: 95 percent of the fentanyl that is 
coming into the United States from across the border is coming 
through legal ports of entry as best we can tell. That means 
that the technology, among other things, that we need to get to 
our border to screen for this, which we are doing, is a 
critical component. Mexico, you could not be more right, a 
vital, necessary partner in this. Now, I have spent, more 
important President Biden has spent, many hours with President 
Lopez Obrador on this issue, and I would say that we have seen 
both a glass half-full and glass half-empty. Glass half-full: 
We saw record levels of seizures of fentanyl by Mexican 
authorities last year. We have seen far more people dedicated 
to trying to interdict the fentanyl, to break up the labs, et 
cetera. We now have a cooperation agreement with them that goes 
not just to law enforcement but that also goes to their 
regulatory agencies. This is a critical component. But clearly, 
more effort and more resources need to be dedicated.
    Finally, the broad picture, sorry to come----
    Senator Capito. The China, the China piece?
    Secretary Blinken. China, yes. So as we were discussing 
before, the critical piece of this, right now, is the diversion 
of illicit precursors--actually licit precursors that turn into 
illicit fentanyl.
    Senator Capito. Right.
    Secretary Blinken. And right now China is the--or Chinese 
entities are the leading----
    Senator Capito. Are you communicating with them now, every 
day, on this?
    Secretary Blinken. We are communicating, every single 
engagement--I think I can say that without fear of 
contradiction, I think every single engagement that I have had 
with a Chinese counterpart----
    Senator Capito. When was your last engagement with them on 
this?
    Secretary Blinken. Last engagement was in Munich. This is a 
couple of months ago.
    Senator Capito. Right.
    Secretary Blinken. Yeah. Well, I am not the only one, every 
official that we have, who is engaged with China, including 
officials in my Department, this is at the top of the agenda. 
So we have one of two ways that this is going to work: Either 
we are going to elicit genuine cooperation from China on this. 
And as I said earlier, there is going to be a growing global 
demand for that cooperation because the problem that started 
here, as you know, is moving around the world.
    Senator Capito. Right.
    Secretary Blinken. So we are building, you will see in a 
few weeks, a coalition of countries coming together to work 
together on dealing with synthetic opioids, notably fentanyl. 
So that demand signal is going to grow stronger and stronger. 
In the absence, though, of the cooperation, we have already 
sanctioned a number of Chinese enterprises and entities, for 
engaging in the transfer of precursors for fentanyl.
    Senator Capito. We know if we can stop the ingredients from 
getting to where they are produced, much less the pill presses 
that I did not realize China is now sending into Mexico. If you 
look at methamphetamine, when it was--when it first came on to 
the drug scene, probably 20 years ago; what did our State 
governments do? Our State, you know, stopped the flow of 
Sudafed; you had to get it behind the counter because that was 
one of the ingredients, if you could--and guess what it will 
hurt. If you can get rid of the ingredients you can----
    Secretary Blinken. You are exactly right.
    Senator Capito [continuing]. Really make a huge difference 
here.
    Secretary Blinken. You are exactly right.
    Senator Capito. So whatever we can do, I think it is just 
horrifying what we see happening. I understand we have a demand 
issue; I understand we need to work on prevention--that stuff 
we can do and will do. But I would just press you, and I know 
you are pressing hard, but we have just got to press harder 
here because this is a national disaster. Thank you.
    Secretary Blinken. I share your concern. Thank you.
    Chair Murray. Senator Schatz.
    Senator Schatz. Thank you, Chair. Thanks to all of the 
Secretaries for being here.
    Secretary Blinken, the PRC remains the world's worst 
environment for Internet freedom, given its global influence 
the political advantages of a repressive use of technology and 
the PRC's relatively inexpensive products, there is concern 
that this could further increase the number of countries 
without a free Internet. How important are tools like the Open 
Technology Fund, which helps to create circumvention tools, in 
pushing free access to information?
    Secretary Blinken. Senator, there are a number of things 
that are critical, and that is one of them. Making sure that we 
are able to get in the hands of people, organizations around 
the world, the tools that that we have, and that are available 
to circumvent efforts to stifle their ability to communicate. 
It is something, by the way, that we have done in Iran since 
the protests broke out, and the efforts were made to crack down 
on the ability of people to communicate. So these are vital 
tools. But there is a--there is an even bigger picture that I 
think is vital, and that is the competition that we are engaged 
in to see who is going to actually build the communications 
networks of the future as well as the present.
    We have, across the board, countries that are investing in 
5G. We want to make sure that they use, as we call it in this 
business, ``trusted vendors'', not untrusted vendors, and our 
diplomacy has been intensely engaged in working with countries 
to do that. Part of that is getting countries to adopt 
investment screening mechanisms. We have had some success over 
the last couple of years in getting countries to do just that 
to make sure that they have the tools to detect someone who is 
trying to make an investment in their country, including in 
critical technologies and communications infrastructure, 
whether that is someone or an entity that they can trust.
    So the macro picture is very important, and then individual 
technologies that we can help get into the hands of people to 
circumvent suppression are important as well.
    Senator Schatz. A couple of Legislative matters I want you 
to comment on, please. I will just give them to you both, 
although they are not particularly related. How important would 
it be if we were able to ratify the Law of the Sea Treaty? And 
as Ambassador Yoon, hopefully, lands these negotiations of the 
Compact of Free Association with our brothers and sisters in 
the Pacific Islands, I am wondering if you can speak to the 
importance of implementing legislation and follow through with 
the COFA (Compacts of Free Association) nations?
    Secretary Blinken. So on the latter, we have made very 
significant progress in getting--in expanding and extending 
these agreements. They are vital to our Indo-Pacific Strategy, 
vital to our overall National Security Strategy. As you know 
very well, these Island Nations in the North Pacific are--
basically what stands between us and the further reaches of the 
Pacific. We have long-standing agreements with them. It would 
be vital to make sure that having negotiated their extension 
that we provide the resources necessary to do that.
    Senator Schatz. And Law of the Sea?
    Secretary Blinken. In Law of the Sea. Look, in my judgment, 
not being a part of that is a self-inflicted wound. We see 
again and again, country after country, in Southeast Asia, 
looking to, pointing to the Law of the Sea to assert their 
maritime rights as opposed to the rights that China is 
asserting that bear no relationship to the law. And when we 
point this out, when we call out China for making maritime 
claims that are not based on the law, they say: Well, you do 
not have much standing to speak about that because you have not 
ratified Law of the Sea. My response to them has been: It is 
true, we did not ratify it, but we abide by it, you ratified 
it, and you do not abide by it. Nonetheless, it would be 
tremendously helpful for----
    Senator Schatz. It is a good line. I think it is the best 
you can do.
    Secretary Blinken. That is about right.
    Senator Schatz. But the best we can is to ratify the Law of 
the Sea.
    Secretary Blinken. That is about right, yeah.
    Senator Schatz. Secretary Austin, could you take those two 
questions as well, the COFA question and the Law of the Sea?
    Secretary Austin. I agree with Secretary Blinken that these 
are partners that are really, really important to us. As you 
know, Senator, a significant portion of their residents 
actually have served in the military or are serving in the 
military so they are--they are very, very supportive. And where 
they are from a--in terms of geography, is absolutely critical. 
And so we are leaning into this and helping Secretary Blinken's 
people do everything that we can, as a team, to get this across 
the goal line. But to the point that he made is--I think it is 
absolutely critical. And I agree with Secretary Blinken that we 
are--we live by the Law of the Sea, and so it would make sense 
to ratify it, so.
    Senator Schatz. Thank you.
    Chair Murray. Senator Kennedy.
    Senator Kennedy. Thank you, Madam Chair. And thank you all 
for being here.
    Secretary Blinken, have you ever visited any of the 15 
Pacific Island nation states?
    Secretary Blinken. I have, yes.
    Senator Kennedy. They are wonderful people, aren't they?
    Secretary Blinken. I would agree.
    Senator Kennedy. And they have well-placed pride in their 
countries, do they not?
    Secretary Blinken. They do, right.
    Senator Kennedy. Can we agree that these 15 independent 
Pacific Island nation states, are just that, they are--they are 
independent countries? They are not just dots that some world 
leaders see out of their plane windows when they are traveling 
to meetings elsewhere?
    Secretary Blinken. That is correct.
    Senator Kennedy. And can we agree that China is making a 
concerted effort to try to bring these independent countries 
within the ambit of the Communist Party of China.
    Secretary Blinken. We can.
    Senator Kennedy. Can we agree that America should have a 
deeper--strike that. Let me rephrase that, Mr. Secretary. 
Putting China aside, do you agree with me that it is the 
prudent and moral thing to do to have deeper engagement with 
our fellow countries, in the Pacific, particularly in terms of 
trade and investment?
    Secretary Blinken. Very much so, Senator, yes.
    Senator Kennedy. Would you support showing the 15 Island--
15 Pacific Island nation states the respect and dignity that 
they deserve by creating an ambassadorship just for these 15 
Pacific Island nation states to be appointed by the President 
of the United States and confirmed by the United States Senate.
    Secretary Blinken. Senator, it is something that we are 
looking at. But let me just put this in context. As you rightly 
said, these are independent, sovereign countries which is 
exactly why we have been engaged in a very intense effort to 
actually get embassies and to have ambassadors in more of these 
countries. And as you know, right now, we have opened an 
Embassy in the Solomon Islands; we have opened one on Tonga; we 
have one pending in Kiribati; and we are also doing the same 
thing in Vanuatu. So having these bilateral ambassadors is 
critical. As you also know, President Biden----
    Senator Kennedy. Mr. Secretary, can I interrupt?
    Secretary Blinken. Yeah, please.
    Senator Kennedy. I am really sorry, but we have limited 
time.
    Secretary Blinken. Please.
    Senator Kennedy. And I have followed the efforts of the 
Biden administration in this regard. But what I am talking 
about is appointing, and not relying on other envoys or 
ambassadors. I am talking about creating a new ambassadorship 
for the 15 Pacific Island nation states appointed by the 
President and confirmed by the Senate, who would spend her or 
his time traveling to all of the island states talking about 
trade investment and listening?
    Secretary Blinken. So Senator, I say two things to that; 
one, I think it is important that we continue to engage these 
countries, independently, given their independence. But to your 
point, and I agree, this is important. We have not appointed a 
senior envoy to the Pacific Islands forum. This is the main 
body, as you know, that brings all of these islands together. 
We appointed someone who is a deeply experienced ambassador to 
serve----
    Senator Kennedy. But it is not created in law, is it, Mr. 
Secretary?
    Secretary Blinken. It is not. It is an appointment by the 
Secretary of State; that is correct.
    Senator Kennedy. Okay. So a new President could come in and 
say: We do not want to do this anymore?
    Secretary Blinken. That is correct.
    Senator Kennedy. Could she or he not?
    Secretary Blinken. That is correct.
    Senator Kennedy. What I am talking about, if the Pacific 
Island countries are so important, and I think they are, and I 
think I have heard you say they are. Let me ask you again: 
Would you support creating an ambassador, ambassador level 
status, I do not care what you call it, but it would be an 
ambassador level status appointed by the President and 
confirmed by the United States Senate; what is wrong with that?
    Secretary Blinken. I would just say, Senator, that first 
the Senior Envoy that we have, who is a former ambassador to 
several of these countries, in effect fulfills that that 
function, so that is important----
    Senator Kennedy. But he is not an ambassador; he is 
appointed by a President. I am talking about making this 
permanent. Why would you not----
    Secretary Blinken. Of course, a future President could 
decide not to appoint an ambassador at any given country.
    Senator Kennedy. Well, but why would you not want to--why 
would you not want to embed this in the law and give the 
Pacific Island countries the respect they deserve?
    Secretary Blinken. I would be happy to pursue this with 
you. I think what we are hearing----
    Senator Kennedy. I just happen to have a bill, Mr. 
Secretary.
    Secretary Blinken. Mm-hmm. Yeah. I am very happy to look at 
it and come back to you on it.
    Senator Kennedy. Would you?
    Secretary Blinken. Yes.
    Senator Kennedy. I really think that we have not given--I 
am not criticizing you or your team, I just think that we have 
not given these countries the respect they deserve, and the 
best way to do that, would be to give them a permanent 
ambassador.
    Secretary Blinken. I think we should pursue this 
conversation. I would really welcome doing that, what I am----
    Senator Kennedy. I am going to put you down as a ``yes.''
    Secretary Blinken. To talk about it, absolutely.
    Senator Kennedy. Thank you, Madam Chair.
    Secretary Blinken. Thank you.
    Chair Murray. Thank you.
    Senator Baldwin.
    Senator Baldwin. Thank you, Madam Chair and Ranking Member, 
for convening this very important hearing; and thank you to our 
Secretaries for being here today.
    Secretary Raimondo, I want to thank you for including in 
your testimony the importance of the Tech Hub Program, and you 
have also responded to a number of questions referencing the 
importance of that program. And I certainly appreciate your 
leadership at the Department of Commerce. As a member of both 
the Commerce Committee and this Appropriations Committee, I 
work both on the authorization side and the funding side of the 
Regional Tech Hub Program, and our Committee delivered an 
initial $500 million investment to get it started. So I look 
forward to working with you and my colleagues on this Committee 
to develop tech hubs in more geographically diverse parts of 
the country, which I agree is needed to ensure our economy can 
compete with China. Fiscal year '24, in this coming fiscal 
year, Congress needs to deliver additional funding for the 
program to help ensure U.S. global economic and technological 
leadership, and the only way we can get this done is by passing 
robust bipartisan appropriations bills in a timely manner.
    But my question for you is actually on a different priority 
under your purview at Commerce, and that is trade enforcement. 
As Secretary of Commerce, you are a member of the Forced Labor 
Enforcement Task Force which was established by the Uyghur 
Forced Labor Prevention Act. That legislation also specifically 
tasks the Secretary of Commerce along with the Director of 
National Intelligence with consulting on the development of a 
strategy to ensure U.S. supply chains are free of forced labor 
in China.
    So Secretary, could you both explain the nature of that 
undertaking, but also, importantly, the impact that reduced 
funding or even a continuing resolution would have on the 
important work being done at Commerce to combat forced labor in 
China?
    Secretary Raimondo. Thank you, Senator, and good afternoon. 
First, very briefly on tech hubs, I do want to reiterate that 
the CHIPS and Science Act authorized a $10 billion investment 
which I think is about right, and so a half-a-billion is, you 
know, barely a down payment. I am very grateful for half-a-
billion. We are hard at work; we are going to run a pilot 
program, I believe will be spectacular. However, you know, as 
you correctly say, we definitely need more money. The 
President's budget this year I believe calls for another 2 
billion--1.5 billion. With respect to trade, we take trade 
enforcement incredibly seriously, and in this regard I have 
always said America can out-compete China if we all play by the 
same rules. And China does not play by the same rules in trade. 
They flood our market with heavily subsidized goods and 
undercut our prices and undercut our industry, and as you say, 
there is often forced labor in the supply chain. And we should 
have zero tolerance for forced labor in the supply chain.
    Right now, one of the things that we do at the Commerce 
Department is at any given time we are enforcing between six 
and seven hundred countervailing duty, anti-dumping 
countervailing duty orders, many of which relate to China's 
unfair practices. Any cut in our funding would massively 
inhibit our ability to do that. You know, we barely have enough 
people to do it now, and that would affect the Uyghur issue, 
you say, but also anything else that China is doing to undercut 
any of our industries.
    Senator Baldwin. Thank you.
    Secretary Austin, in fiscal year 2023 the Committee 
supported--our Committee supported the establishment of an 
Industrial Base Expansion and Shipyard Infrastructure 
Initiative specific to the Constellation-class frigate, a ship 
that is currently being built in Wisconsin. This program will 
now be supported by a Workforce Development Initiative that 
will equip our workers with the specialized skills required to 
support the domestic shipbuilding base as well as keep the Navy 
on track to expand the fleet. This year I am, again, advocating 
for this program to continue to receive funding because we know 
that sustained investment is critical to the health and 
stability of our defense industry. Again, the only way we will 
get this done is by passing robust bipartisan bills on time.
    Secretary Austin, can you speak to how the workforce 
investments that we have been funding, like this program, keep 
our Nation competitive and secure?
    Secretary Austin. It goes without saying, Senator. Thanks 
for the question. But our workforce is absolutely critical, you 
know, as we, you know, we have--in our industrial base is one 
of our core strengths, and central to that core strength is the 
workforce. And as we have been challenged over the years in 
terms of being able to rapidly expand capacity and capability, 
some of those challenges are workforce challenges. So 
everything that we can do to train and empower our workforce, I 
think, is helpful; it is critical. And so I appreciate all that 
you are doing. I think it is the right thing, and would ask 
that we do more in that regard.
    Chair Murray. Senator Boozman.
    Senator Boozman. Thank you, Madam Chair.
    Thank all of you all for being here. We appreciate all your 
great work.
    Secretary Blinken, there is growing concern about the lack 
of communication between the U.S. and China. I believe you 
change the world through personal relationships, and then also 
you deescalate things as they occur. In visiting with some of 
our allies as we get out and about, there is concern from them, 
you know, that again, China and the United States are not 
communicating as well as we should. Can you talk a little bit 
about that, and what steps you take to reach out to your 
Chinese counterparts?
    Secretary Blinken. Thank you very much, Senator. When 
President Biden and President Xi met in Bali at the end of last 
year, one of the things that they agreed on was the importance 
of having these lines of communication, at the very least, so 
that we put a floor under the relationship or some guardrails 
on it. President Xi calls it a safety net. Take your pick of 
terminology, but it is important because as we have all talked 
about today, we are engaged in an intense competition with 
China across many areas, but it is not in our interest for that 
competition to veer into conflict, if we can do anything to 
avoid that, and we are determined to do that. That starts with 
communication. So I could not agree with you more.
    I think we have shown recently that there is more senior 
level engagement with China, most recently our ambassador in 
Beijing, and also the National Security Advisor, Jake Sullivan, 
meeting with his Chinese counterpart, Wang Yi, over a couple of 
days in Europe. And that is important because what we believe 
would be the right course is to now see more senior-level 
engagement in a--in a sustained way across our administration 
and theirs, precisely so that we can make sure that at the very 
least, we are--we are talking to each other, that we are making 
very clear what we stand for; what our intent is; what we are 
looking for as well as, where possible, finding areas of 
cooperation, including as we were just talking about, on 
something like synthetic opioids, on fentanyl.
    So I also think, Senator, that it is not only what is in 
our interest, but the rest of the world looks to us to manage 
this relationship responsibly. We are determined to do that.
    Senator Boozman. I appreciate that, and like I said that I 
think, you know, there has been concern amongst some of our 
allies in that part of the world, that that we can do a better 
job, certainly they can do a better job of making that work.
    Madam Secretary, we had a really good conversation the 
other day about trade. I know that you feel like it is 
important. We feel like it is important. Can you tell us what 
the challenge is, or obstacles, that you anticipate in facing 
and establishing additional trade? Many of the many of the 
potential partners in the region, they do not want to choose 
between us and China, but they want to hedge their bets as far 
as where they do business. What are the--what are some of the 
obstacles to getting additional trading opportunities going?
    Secretary Raimondo. Yes. Thank you, Senator. First, let me 
say--I want to echo something that Tony just said: the Commerce 
Department is very focused on export controls, and we will be 
vigilant and aggressive as possible. We will protect what we 
must, but we want to trade where we can, and that includes with 
China. You know, we have no interest to decouple. Many jobs in 
America depend upon trade with China, in things outside of 
technology, completely unrelated to our national security, and 
I do think it is important that you hear that from me, that we 
want to trade where we can. With respect to the----
    Senator Boozman. I agree, and I appreciate you stating 
that.
    Secretary Raimondo. Thank you. With respect to the rest of 
the region, I think there are a few things. First, it is 
showing up. The Commerce Department's budget, the President's 
budget calls for additional funding for Foreign Commercial 
Service presence in the Indo-Pacific. One of the most dynamic, 
fastest growing regions of the world, economically, we need to 
be there; we need to be doing business; we need to promote our 
own exports there.
    Secondly, as we have discussed, the Indo-Pacific Economic 
Framework, although not a trade agreement, as we have 
discussed, it is significant. If we are successful, I believe 
we will be, in getting 14 countries to sign on to a Supply 
Chain Cooperative Agreement, a Critical Minerals Cooperative 
Agreement, infrastructure agreement, it will bring more U.S. 
industry, trade, investment to the region. And I think that is 
all incredibly important.
    It is not so much obstacles because they want us in the 
region, it is a--you know, China does not want us, and we 
should not make these countries choose, by the way, but we 
should be their partner of choice, and I believe we will be 
when we show up in the way that we are, and need to continue 
to.
    Senator Boozman. All right. Thank you very much.
    Thank you, Madam Chair.
    Chair Murray. Thanks.
    Senator Murphy.
    Senator Murphy. Thank you, Madam Chair, and to the Vice 
Chair for this very important hearing. Thank you all for 
enduring a long afternoon.
    Listen, China is not 10 feet tall. They are tall; they are 
getting taller, but we still enjoy certain definitive 
advantages. One of those advantages is our story. Our story of 
participatory democracy and open economy is the story of the 
last 100 years, and can be the story of the next 100 years. And 
so I want to talk to you for just 1 minute, Secretary Blinken, 
about our investment in telling that story but also in making 
sure to push back against false narratives coming out of 
Beijing. It is hard to tell exactly how much money they are 
spending on their propaganda operation, but it is more than us. 
They are making a lot of mistakes with the information that 
they spread, so they are not flawless in the execution of their 
misinformation and propaganda operations. But they do threaten 
to dwarf ours over the next 10 to 20 years if we do not really 
get smart about spending more money and spending it in a more 
coordinated way.
    So you have proposed a 12-percent increase to the Global 
Engagement Center, which is the State Department's capacity, 
but that does not feel like a big enough number. And so I 
wonder if you could just say a word about the importance of 
that capacity; the importance of the other capacities that our 
agencies have? And, oh, by the way, we have to reauthorize the 
Global Engagement Center (GEC). We actually have to get that 
done by the end of the year in order to make sure that we can 
continue to push back against these narratives around the 
world.
    Secretary Blinken. Thank you for raising that, Senator. I 
think what we are seeing is a number of countries who are in 
the business of, in effect, trying to weaponize information as 
part of competition or, in some cases, adversarial relationship 
with us. And one of the reasons that we established the Global 
Engagement Center was precisely to be able to push back 
effectively on that, but with the truth, not with 
misinformation or disinformation. And so the GEC, as you know, 
is working with other Federal agencies to direct, to lead, to 
synchronize, and coordinate our efforts to understand the 
sources of the trends in foreign malign actors' efforts to 
spread disinformation and misinformation and also to compete in 
the information space even when it is not disinformation.
    With regard to China, the GEC plays, I think, a very, very 
important role. And just to give a few examples: In our own 
hemisphere, in the Western Hemisphere, where we see China being 
very active, it has supported journalism and research on the 
messaging tactics that China engages in. It has helped them 
assess their influence in the information environments in the 
Western Hemisphere, and we have helped them to build out 
regional expertise in Africa. We have engaged--the GEC has 
engaged in capacity building workshops with sinologists to help 
people better understand the influence that China is wielding, 
its ambitions, and to make those findings public.
    And one final thing, just because this is an important one, 
together with China House, the consolidated place that we have 
built in the Department to bring all of our China expertise 
together, we are engaged with the GEC in proactive, affirmative 
messaging to push back on something that is very interesting 
that China does and Russia also does. They provide, free of 
charge, their equivalent of the Associated Press to country 
after country. And so if you are getting up in the morning in 
dozens of countries and listening to the news or reading a 
newspaper, you are getting information that sounds like it is 
being locally produced but is, in fact, directly from The Wire 
Service of China or the Russian Federation. We are now making 
available to these countries the Associated Press, Reuters, and 
other objective sources of information.
    Senator Murphy. I think that is incredibly important 
information. Thank you for leading. Just give us one last piece 
of advice on Taiwan Policy to the extent that this gets brought 
into our discussions about appropriations. You have recommended 
significant changes in Taiwan Policy to bolster economic 
relations, security relations, cultural relations, but you have 
warned Congress against implicit security guarantees or 
implicit formal recognition of Taiwan, recognizing symbols of 
sovereignty. You have not seen the--you do not predict a return 
on investment related to U.S. security if we, essentially, 
overturn the One China Policy in the Taiwan Relations Act. Does 
that continue to be your recommendation to the Congress?
    Secretary Blinken. It does. The policy that administration 
after administration has pursued over 5 decades, Republican and 
Democrats alike, grounded in the One China Policy, the Taiwan 
Relations Act, of the Three Communiques, or Six Assurances, has 
done very well. Done very well for Taiwan, done well for us, 
and ironically, arguably done well for the PRC because it has 
preserved peace and stability. It has put in place an 
understanding by which, up until now, everyone refrains from 
taking unilateral action to try to change the status quo, and 
thus, potentially, creating a crisis that would have global 
effects. One of the concerns that we have going back some years 
is that Beijing no longer seems to accept the status quo in 
Taiwan and has been taking steps of various kinds to increase 
the pressure, to coerce Taiwan, and to contemplate perhaps the 
use of force at some point in the future.
    I think country-after-country around the world is 
increasingly making clear to Beijing that that would have 
catastrophic consequences for everyone. We have 50 percent of 
World Trade that goes through the straight every single day, 70 
percent or so of the semiconductors manufactured in Taiwan. If 
there were to be a crisis as a result of unilateral action 
taken by China with regard to Taiwan, we would have a global 
economic crisis on our hands that country after country would 
be affected by. But at the same time, we have been resolute, 
absolutely resolute in our support for Taiwan including its 
ability to defend itself to make sure that it has the ability 
to engage throughout the international system and with 
countries around the world.
    We have, ourselves, increased our engagement in a whole 
variety of ways with Taiwan because we take very seriously our 
commitments under the TRA, the Taiwan Relations Act, that, 
again, goes back many years. But I think the basic framework 
that has been in place for many decades, over many 
administrations, has served us well, and disrupting that status 
quo would actually not be in our interest.
    Senator Murphy. Thank you, Madam Chair.
    Chair Murray. Thank you.
    Senator Fischer.
    Senator Fischer. Thank you, Madam Chair. I have a number of 
issues I would like to touch on today, so I am going to try to 
not make a long statement. I hope all of you will answer with a 
short response as well.
    Secretary Austin, section 1262 of last year's NDAA 
(National Defense Authorization Act) required that both the 
Departments of Defense and State submit a comprehensive report 
on the Bilateral Access Agreements to Congress. These are the 
agreements with overflight basing agreements, agreements for 
logistics support, or refueling support, and that report is due 
in a couple weeks. Will it be on time?
    Secretary Austin. It will.
    Senator Fischer. Great. How many planned, cooperative 
security locations, forward operating locations, or fuel 
support points require access agreements that currently do not 
exist?
    Secretary Austin. Well, there are, as you know, a number of 
agreements that we continue to pursue and, of course, when the 
need arises, when an operation is being conducted, no matter 
what, even if we have agreements, we will have to go back in to 
that country and request those rights.
    We have done some things recently to increase our--the 
locations that we are operating with our allies and partners in 
the region, for example, the Philippines is a good example of 
that, we continue to work with countries like Japan and 
Australia to make sure that we can rotate forces in and out in 
Australia, for example. And so we are making significant 
progress----
    Senator Fischer. It would be really helpful to have those 
agreements in place before they are needed, correct?
    Secretary Austin. That is correct.
    Senator Fischer. Yeah. Thank you for the work you are doing 
on that.
    Secretary Blinken, are you coordinating with the Department 
of Defense on these agreements?
    Secretary Blinken. Absolutely.
    Senator Fischer. Thank you.
    Secretary Raimondo, when you were before the CJS (Commerce, 
Justice, Science, and Related Agencies) Subcommittee, we 
brought up--I brought up, and we had a discussion over Rip and 
Replace being an emergency that we have to be aware of, with 
the Huawei that is installed, and being able to have that 
funded. Do you believe that Congress needs to consider all the 
legislative options on the table, right now, in order to 
address this emergency?
    Secretary Raimondo. I certainly believe it poses national 
security risk if Huawei remains in American networks, including 
near military bases, and I think that Congress should fully 
fund the FCC's Rip and Replace Program.
    Senator Fischer. Okay. Thank you. I am going to quote 
Senator Kennedy, ``I happen to have a bill for that,'' and I 
hope my colleagues will consider that Senator Hickenlooper and 
I have been working on a bill, and hopefully we can use some of 
those unobligated COVID-19 funds to fill that gap that exists 
there.
    Secretary Austin, I appreciate the prior discussions we 
have had about the Department's fiscal year 2024 budget request 
and how it addresses munitions production issues that we are 
facing in this country. And I agree that the current request is 
a step in the right direction, but I also think there is more 
that we can do, and I think there is more that we have to do. 
From your perspective, would it be useful to be able to add 
additional munitions multiyear procurement authority and help 
us to remove some of the low-value, I would say, contracting 
requirements that are out there when we are setting up these 
future contracts?
    Secretary Austin. It very much would, Senator. And let me 
thank you for what Congress is doing, has done, and I hope we 
will do in terms of granting us authorities for multi-
procurement actions here. That has been very, very helpful. And 
as you know, we are going that--we are asking for some $30 
billion to invest in munitions, which is just about the limit 
of what the--what industry can produce in this next year.
    Senator Fischer. You know I have been very concerned about 
our munitions requirements that we have for ourselves for the 
security of our Nation, but we also obviously have contracts 
and supply to other nations as well.
    Secretary Blinken, you testified recently that the long 
pole in the tent in providing equipment to Taiwan to defend 
itself is the production capacity. Do we have the same issue 
with foreign military sales to other nations as well, besides 
Taiwan?
    Secretary Blinken. We do. I think--let me put it this way, 
in my capacity as Secretary of State, I have signed out more 
cases for Taiwan than any of my predecessors, and we are 
looking at ways to make our Department even more efficient. And 
I know that our colleagues at DOD are doing the same thing. But 
if you actually look at the calendar, the schedule of these 
things, where we have a challenge is on the production end. And 
there are a whole variety of reasons, as you know, for that. 
That is actually changing. It is changing as a result of 
intense engagement with industry. It is changing as a result of 
the fact that, in part, because of Ukraine and the Russian 
aggression. There is a growing demand around the world that is 
getting production lines that had been dormant moving again, 
but unfortunately, it is not flipping a light switch. But we 
are intensely focused on that. And the Secretary of Defense, 
obviously, is doing this every day.
    Senator Fischer. Thank you.
    Thank you, Madam Chair.
    Chair Murray. Senator Peters.
    Senator Peters. Thank you, Madam Chair. And first of all, I 
want to thank the panel. Thank you for being here today and 
discussing U.S. economic competitiveness especially with 
respect to China.
    You know, I am particularly focused on ensuring that we are 
competing and winning at every single level of our economy, 
that means both in attracting and retaining talent in STEM and 
technology innovation, including AI, as well as making sure 
that America's manufacturing sector remains the best in the 
world by, obviously, first off supporting a strong workforce on 
the shop room floor, but also just making sure we are making 
things in our country. I do not believe you can really be a 
great country unless you actually make things, which is why 
manufacturing is absolutely essential to that.
    One example of this dual competitiveness imperative, I 
believe, is autonomous vehicles. That technology is represents 
the future for mobility in the auto industry, and if the U.S. 
is going to be a leader in the future of the automotive 
industry, we have to find ways to, not only develop autonomous 
vehicle technology here in America, but we actually have to 
manufacture it here in America and deploy it in our country as 
well.
    That is why I have worked along on legislation to ensure 
that America can manufacture this cutting-edge technology so we 
do not lose the race with China. China is investing massive 
amounts of money in this technology, and we believe this 
technology represents, in some ways, the ``moonshot'' for 
artificial intelligence because of the complexity of it. And I 
do not want to be in a position where we are playing catch-up 
for years, like we are, or we have been in areas like 
semiconductor chips.
    So Madam Secretary, Secretary Raimondo, my question is for 
you. How is the Department of Commerce working to ensure that 
its strategy on economic competitiveness, particularly with 
China, reflects strong support, not only for just research and 
development and innovation, but actually the making of things 
and manufacturing with American workers here in the United 
States.
    Secretary Raimondo. Thank you, Senator. Good afternoon. I 
wholeheartedly agree that we need to get back into the business 
of making more things in America. And as my colleagues know, no 
one believes that more than President Biden. And so we are 
doing a number of things ensuring that we can regain our--
rejuvenate our manufacturing sector. First and foremost is the 
CHIPS Act, obviously we will create hundreds of thousands of 
manufacturing jobs. This budget calls for increased investments 
in the Manufacturing Extension Partnership (MEP) which will 
provide technical assistance to small manufacturers which is 
the majority of manufacturers, even in Michigan, you know, I 
know big auto, but all the small suppliers MEP will help them 
to become more digitized, to do training, et cetera. We are 
also investing a great deal of money in job training and 
apprenticeship initiatives with the focus on manufacturing. So 
in the interest of time, I will simply say, we took our eye off 
the ball as a country on manufacturing; we thought we could, in 
search of cheap labor, outsource everything. And now we have 
problems in our supply chain. We are overly dependent, and it 
is a national security risk. And so we have to improve that.
    The final thing I will say is this: In the budget that we 
propose, we are asking for additional funding to establish a 
supply chain office at the Commerce Department so that we can 
be in the business of proactively monitoring and predicting 
supply chain challenges before they happen, and not just be 
reactive, and that will be immensely helpful to us to 
rejuvenate manufacturing.
    Senator Peters. Thank you. Certainly all of you know, China 
is persistent, and ever-evolving cyber security threat to our 
Nation, as well as our Federal Government systems, and yet 
despite this, our main Federal Cyber Security Law, the Federal 
Information Security Management Act, FISMA, has not been 
updated for a decade.
    Secretary Austin, I want to ask this question, for you, is 
that given DOD's position in both countering the Chinese 
government through Cybercom, as well as protecting DOD systems 
from cyber-attack, could you discuss how the DOD's empowers and 
benefits from the Department of Homeland Security's (DHS) 
mission to protect Federal civilian systems as well as critical 
infrastructure here in the homeland and how this Committee can 
support that effort?
    Secretary Austin. Well, thank you, Senator. First of all, 
let me agree with what you said in terms of China being a 
persistent cyber threat. It is absolutely the case. As you very 
well know, DOD and DHS have overlapping equities, and we 
continuously collaborate, and share information in order to be 
able to better protect our information domestically. But not 
only do we share intelligence, we actually coauthor advisories 
when the time--when an occasion presents itself, and we also 
share best practices, so this is, we are very, very tightly 
connected, but again, the ability to help even more would be 
welcome. And so to your point, everything that we can do to 
ensure or that we have the freedom to do that, or the ability 
to do that, would be helpful.
    Senator Peters. Great. Thank you. Thank you.
    Thank you, Madam Chair.
    Chair Murray. Senator Murkowski.
    Senator Murkowski. Thank you, Madam Chair. And thank you to 
Senator Britt for deferring, appreciate that. Thank you for 
your leadership. I appreciate it. I am going to talk about the 
Arctic.
    Secretary Austin, you noted yourself on a trip to Alaska in 
'21, you said, ``Here in Alaska, we are where the Indo-Pacific 
Nation and us, as an Arctic nation, intersect, these two 
critical regions intersect. This is where we can project power 
in both regions, and where we must be able to defend ourselves 
from threats coming from both places. It is also where we can 
better posture ourselves and prepare for climate changes that 
will impact our future.''
    Secretary Blinken, you were in Anchorage conducting a 
summit with China, just recognizing the geostrategic location 
that that plays there. We had a classified brief this morning 
with General VanHerck, NORTHCOM, NORAD. And General VanHerck is 
very, very upfront in saying that our direct investment in 
Arctic-capable platforms, training, and infrastructure 
continues to lag. He repeated that again this morning.
    And so I want to move us, because when we talk about the 
Indo-Pacific, it is not just the islands that Secretary--that 
Senator Kennedy was talking about, I think we recognize that it 
extends all the way up North.
    And when we are thinking about China and where China is 
partnering right now and where Russia is gaining advantage even 
at a time of sanctions coming at them because of this awful war 
in Ukraine, the two of them are partnering in bilateral 
relationships with everything from what is going on in the 
water, to moving oil from Russia, to evade those sanctions, to 
help out China there, and fund Putin's War.
    Last year, we saw a flotilla coming across the Gulf of 
Alaska, with Chinese and Russian ships, warships. You know, 
they were 75 miles from Alaska. We are nervous about all that 
is happening there. And I think you all probably would agree 
that we have reason to be nervous. So what we do in sending 
that that message, it comes down to policies, it comes to 
personnel. To Senator Shaheen's point, the President has named 
an Arctic Ambassador-at-Large. We need to get that moving. 
Thank you for that. We have put in place some additional 
personnel to help on the personnel side. Policies, we need to 
know that, Secretary Austin, you guys are right there with us 
in acknowledging that we need to have a deep water port in the 
Arctic, now needs to move forward.
    Senator Britt and I were down in Mississippi and Alabama 
checking on the Polar Security Cutters, they are coming, but 
they are not coming fast enough. We need a commercially 
available icebreaker up there soon, because we are not going to 
see our Polar Security Cutters for 3, 4 years and probably 
longer than that because they are going to be down in 
Antarctica. So we are exposed up there. And so when we are 
talking about--about the U.S.-China relationship, let us 
remember how it kind of comes together, unfortunately, because 
of Russia and our proximity there.
    So I want to ask you, Secretary Austin: We have 
acknowledged that we have updated our Arctic strategies that is 
so important from all branches of the Department, but I think 
we all recognize that strategy without action is just a piece 
of paper; when I look at the MILCON projects that the 
President's budget has submitted, only seeking funding for two 
MILCON projects in one of the most strategic locations in our 
country. Now, we have talked about what is on the unfunded 
priority list, and there is a lot of things for the Arctic 
there, but it causes me to question whether or not we are 
appropriately resourcing what we need to do in order to have 
the level of preparedness, the level of deterrence, that I 
think we would--we would hope to see. So Secretary?
    Secretary Austin. As you well know, Senator, we have some 
of our most valued assets in Alaska. We have F-22s, F-35s----
    Senator Murkowski. More fifth-generation fighters and we 
are happy about it.
    Secretary Austin. That is right. And you are taking really 
good care of them up there. We have just stood up the 11th 
Airborne which is--that is going to continue to provide great 
capability.
    I asked to invest this year some $500 million in Over-the-
Horizon Radars which will increase our domain awareness. Last 
year, I asked for $373 million to invest. So we are going to 
continue to invest, to increase domain awareness. We are going 
to continue to do things, the kinds of things that we are 
doing, as we speak.
    As you know, we have an exercise ongoing in Alaska, up in 
the Great North. We need more of that with allies and partners, 
to make sure that we can operate efficiently and effectively in 
that environment. So we will look to continue to invest, but 
your point is well taken on MILCON.
    Senator Murkowski. Thank you. And I am out of time, but, 
Secretary Blinken, acknowledging that we can always do more on 
the personnel side, we would like to make sure that we are 
paying attention to that as well.
    Secretary Blinken. Welcome, as always, working with you on 
that.
    Senator Murkowski. Thank you.
    Secretary Blinken. Thank you.
    Senator Murkowski. Thank you, Madam Chair.
    Chair Murray. Senator Merkley.
    Senator Merkley. Thank you, all. And Secretary Blinken, we 
have China engaged in slave labor with the kind of a million 
Uyghurs; we have them taking away the Tibetan children to 
boarding schools when they are just 5 or 6 years old; we have 
China stripping the political rights out of out of Hong Kong. 
Is it fair to say that China is a massive human rights 
violator?
    Secretary Blinken. Yes.
    Senator Merkley. Is this alone a reason to encourage our 
companies to develop supply chains elsewhere?
    Secretary Blinken. In and of itself, I think that companies 
that do not want to perhaps face the moral hazard of engaging 
in that way would see it that way, yes.
    Senator Merkley. And we have seen under Xi, that China is 
flexing its muscles very much in the Indo-Pacific region in a 
whole host of ways. In that context, I want to thank you for 
visiting Vietnam, you visited the week right after I led a 
Congressional Delegation there. How important is Vietnam and 
other ASEAN nations as a counterweight to China in the region?
    Secretary Austin. Well first, ASEAN itself is vital because 
it brings together, as you know, all the Southeast Asian 
nations. And in many ways, they sometimes feel more comfortable 
tackling a challenging issue, collectively, as opposed to 
individually.
    But for us the bilateral relationships, as well as the 
relationship with ASEAN, are of increasing importance. As you 
mentioned, we have I think a good and growing relationship with 
Vietnam. We just had the President of the Philippines here, 
President Marcos, for a very important visit. The work the 
Secretary of Defense has done there, as well as the work that 
my Department has done in strengthening our engagement the 
Philippines is vital. And I could go down the list of countries 
in Southeast Asia as well.
    Senator Merkley. I just wish it did not take 2 days to get 
a Congressional Delegation halfway around the world to start 
those meetings. It gets hard to--for the legislators to hold as 
many direct conversations in the region. But it means a lot if 
we go, it means obviously a lot if members of the 
administration----
    Secretary Blinken. No, I really--I strongly applaud and 
also encourage what you and other Members of this Committee and 
other committees are doing. I think that Congressional 
engagement is absolutely vital. And it is really important that 
our counterparts hear from you directly, of the concerns, the 
prerogatives of Congress.
    Senator Merkley. Secretary Raimondo, you noted that in 
search of cheap labor, we lost manufacturing jobs in the United 
States as supply chains moved overseas and, of course, it is 
particularly true, primarily true in China. And that effort 
really gave--well, I guess I will put it this way: Do you agree 
that trade relationship with China and the enormous number of 
supply chain factories that moved from the U.S. to China helped 
accelerate China's path to wealth and power?
    Secretary Raimondo. In some ways, yes, I would agree.
    Senator Merkley. Yeah. Well, in many ways because they ran 
huge surpluses that allowed them to invest massively, including 
helping the Belt and Road Initiative. As we look at the way 
China behaves in the world and the factors of competition, 
should we be encouraging our companies develop and move their 
factories to other countries in the region?
    Secretary Raimondo. I think that companies--there are 
certainly increased risks with operating in China. In fact, you 
are seeing it. You are seeing in recent months Chinese 
officials, without notice, raiding American companies. So I 
think every company has to make these decisions. And as 
Secretary Blinken said, there are risks associated with it. 
What we are doing in our work, especially in the Indo-Pacific, 
and I was recently in India, and, of course, the President is 
hosting Prime Minister Modi; is working with those countries to 
increase our economic relationship and partnership, but also 
working to help American companies re-shore workers to America.
    Senator Merkley. Thank you. I love the word ``re-shore'', 
thank you. But I have one more question I wanted to get in 
before my time is up. But appreciate that. I just want to 
acknowledge that even as we are sitting here worried about the 
wealth and power of China, their wealth and power continues to 
grow, in part, because of the massive amount of products that 
we buy from China which is, in my mind, reason to encourage and 
remove.
    Secretary Austin, I have heard two strategies in relation 
to Taiwan. One is: Hey, the Taiwan Strait is a very difficult 
piece of water to cross, and we can do a massive amount to turn 
Taiwan into a porcupine with inexpensive weapons that can take 
out expensive weapons, and that lays out a whole strategy, and 
is important in the context of Xi's argument, he wants to be 
militarily prepared to take Taiwan by 2027.
    And then I have heard the other argument being: We need to 
greatly enhance our ability to conduct war directly against 
China including pre-positioning tons of material, armaments, 
weapons, so forth. And those are two very different strategies. 
Which strategy do you think is most important?
    Secretary Austin. Actually, Senator, thanks; I think they 
are both important. Number one, we have learned a number of 
important lessons from Ukraine's War with Russia, and one of 
those lessons is that, you know, with asymmetric capabilities 
and asymmetric tactics and techniques, a smaller force can do a 
really good job in defending themselves against a larger 
force--to use your words, turn themselves almost into a 
``porcupine''--make it difficult for that larger force to 
digest that. But in terms of, you know, the China problem set, 
writ large, you know, my mandate is to make sure that we 
continue to deter China on a daily basis. And the way you deter 
another force is by making sure that you have combat-credible 
capability. And in investing in the things that we know that 
will provide us the edge in any kind of contest, is the right 
things to do--the right thing to do; and that includes, in some 
cases, moving things forward in theater, prepositioning things. 
And so I think it takes both of those--both of those approaches 
to have a complete deterrent capability.
    Senator Merkley. Thank you. A lot to explore there. My time 
is out. Thank you.
    Chair Murray. Senator Britt.
    Senator Britt. Thank you, Chair Murray.
    Thank each of you for being here today, I greatly 
appreciate it. Secretary Blinken, Secretary Raimondo, thank you 
for the time you have given us over the last few weeks on this 
important issue, and particularly the issue of fentanyl. I hope 
to be able to dive into that more today.
    Secretary Austin, I am actually going to start with you; a 
special welcome, and a War Eagle, to a fellow War Eagle, you go 
to a fellow Alabamian, and an Auburn University postgraduate. 
Secretary Austin, I truly believe we achieve peace through 
strength. I grew up outside the gates of Fort Rucker that, you 
know, has more recently been renamed Fort Novosel. I saw, 
firsthand, the sacrifice of our Service men and women. And I 
saw that that sacrifice was not just theirs, it was that of 
their entire family giving so that our country could remain 
safe and strong. I have a deep appreciation for our men and 
women in uniform and for the families who also serve.
    As I think about DOD's modernization efforts, Alabama has 
played and continues to play a vital role. Across our great 
State, our defense industrial base is leading efforts ranging 
from hypersonics, direct energy, modernization of our Rotary 
Wing aircraft, National Security Space Launch, contested 
logistics, and manufacturing and assembling in key missile 
programs such as Javelin, THAAD (Terminal High Altitude Area 
Defense), JASM (Joint Aquatic Sciences Meeting), and JAGM 
(Joint Air-to-Ground Missile).
    This is just a sampling of what Alabama's talent, 
synergies, and capabilities provide to the Defense and National 
Security community as we face in pending threats from the PRC.
    Secretary Austin you have been in this seat now for nearly 
2= years. On a scale of A to F, what grade would you give 
yourself on aligning the DOD to the National Defense Strategy 
and ensuring the Joint Force is able, willing, and ready to 
address the multi-domain threat that is posed by China?
    Secretary Austin. I would give my team a very high mark--
high grade because, as you have heard me say a couple of times 
today, Senator, everything that we do is focused on our 
National Defense Strategy. We have gone--we specifically 
aligned our budget requests to that strategy, the capabilities 
that we are going after will provide us the capability to 
support our warfighting concepts.
    And so everything that--that we do is aligned with this 
strategy. So I would--number one, I think it is the right 
strategy. Number two, I think that we are very much focused on 
the execution of that strategy.
    Senator Britt. Well, thank you for that answer. I think we 
owe it to the American people that you have the resources to 
ensure that we have the most lethal and best equipped military 
in the world.
    Secretary Austin, I would be remiss if I did not touch on 
one more topic. As we consider the multi-domain threat, land, 
sea, airspace, that is posed by the PRC, particularly from a 
space perspective, as the leader of the Department of Defense, 
I implore you to cut through the politics and make a final 
basing decision for the U.S. Space Command Headquarters. As you 
know, Huntsville's Redstone Arsenal finished first in both the 
Air Force's evaluation phase and the selection phase, that 
leaves no doubt that the Air Force's decision to choose 
Redstone as the preferred basing location was correct, and it 
was done on the merits. That decision should remain in the Air 
Force's purview. Media reports have said that the President, 
and those in the White House, are preparing to prioritize 
partisan political considerations at the expense of our 
national security, our military modernization, and our Force 
readiness, and for me, that is deeply disturbing. When you look 
at this, you said earlier: In order to compete and succeed 
against China, we must use all of our tools. When you look at 
that, we know that those tools are there at Redstone Arsenal. 
When you look at the City of Huntsville in the past 2 years, 
they have been ranked by U.S. News and World Report as number 1 
and number 2 place to live in the United States. The city has 
also been ranked number 3 and most-affordable places to live in 
the country. It was number 3 in the cities' nationwide search 
for best quality of life and number 4 as the most prosperous 
place in America. I could go on and on about the actual City of 
Huntsville, and the accolades that have been rightfully given 
to them, but the bottom line is, not only is Huntsville's 
workforce the best prepared to support Space Command's mission, 
but also the City of Huntsville is the best place for that 
workforce to thrive and to live the American dream. Locating 
the permanent Space Command Headquarters on Redstone Arsenal, 
undoubtedly, remains in the best national security interest of 
the United States. You referenced earlier in your remarks the 
buildup of China in both space and cyberspace.
    My colleague across the aisle said Xi Jinping says that the 
U.S. has a flawed and failing political system. Do not prove 
him right. Urge the President to take the politics out of this. 
Do what is best for making sure that we are ready and capable 
to face China on all fronts. Urge him to allow the Air Force to 
do their job; it is certainly, in my opinion, past time. Thank 
you.
    Chair Murray. Senator Manchin.
    Senator Manchin. If I can follow that. Very good. First of 
all, so I want to thank you all for your tremendous service to 
our country, all three of you. And just a few things; 
everything has been said so well and stated our challenges that 
we have, and where we are doing well and where we can improve, 
and all of us agree.
    I have my differences with administration on the fast -- 
the speed of which they are trying to put electric vehicles 
that we cannot supply this support that we need. We do not have 
access to all the critical minerals; we do not have the 
processing; we do not have the anodes and cathodes, but by God, 
they are hell and determined to put electric vehicles out and 
be reliant on China for that. So I have tremendous concerns 
there, and they know it, and they will work through that.
    The thing I want to bring up is that, whether it be the 
ships, or the missiles, or the guns, and the bullets, and 
everything else that we have to do, and what Ukraine has shown 
us and the world, I have been thinking about one thing that 
makes us different than everyone else, it is our allies that 
trust us, believe in us. More than that is the compassion of 
humanity that we have, the aid. With all my disagreements I 
have here, lately, with the administration, I want to thank you 
all for increasing the aid budget to our allies and our friends 
and people in need.
    My grandmother used to say, ``Joe, the best thing you can 
do is feed somebody.'' It changes everything, changes 
everything. And for that, does any other country do what we do 
in human aid? As I am understanding that, we have never put a 
condition on food or health care or any of that; have we?
    Secretary Blinken. Senator, we have not. And you are 100 
percent right. If you just take one very quick example. World 
Food Program, critical. The United States provides more than 40 
percent of its budget; China and Russia each provide less than 
1 percent of its budget. I could go down the list of----
    Senator Manchin. Right, right.
    Secretary Blinken [continuing]. Organizations that are 
providing vital----
    Senator Manchin. Secretary Blinken, I really think all of 
us--we have not even talked about aid. I have been here for a 
couple hours, and we have not talked about the strength that we 
have as the United States of America. It is the heart and soul; 
it is the humanitarian; it is just everything that we are. And 
so when I go to another country and I say: When things get 
tough, man, you have got to depend on someone, it is going to 
be the U.S. or ain't nobody coming. And I think they want to 
do. We can have all the military might in the world, and we 
have to be able to be competitive, but with that and having our 
allies that are willing to rally behind us and fight for us, to 
me that means almost everything, and I say: That makes us 
different. And as long as we do that, and continue that aid, 
and I think you all shown a little bit of a budget increase, 
about $3 billion, but it is money well invested. We are not 
spending it; we are investing it. Anything that you think that 
we can do along those lines there with the food and health care 
necessities that people have around the world in developing 
nations.
    Also, I do not think that we get credit enough unless our 
military is involved or we have strict oversight of how this 
food and all this humanitarian aid is distributed. I feel good 
when I say our military distributing it, General, but sometimes 
I know in some of the well--well-meaning programs that are 
doing it, and aid does not seem to get to the right people, or 
we get credit for it as a country.
    Secretary Blinken. Yeah. And Senator, again, I could not 
agree with you more. One of the things we did during COVID, in 
providing vaccines free of charge with no political strings 
attached to country after country around the world through an 
international entity called COVAX is we also made sure that it 
was branded, and so that people knew, in a variety of ways, 
that when they were getting vaccines that were saving their 
lives, it was coming from the United States.
    Senator Manchin. Yeah.
    Secretary Blinken. And as I was traveling around the world, 
country after country has thanked us profusely for coming to 
their aid in that moment of need and in a way different than 
any other country on Earth.
    Senator Manchin. Well, if we can just get our act together 
on the other things that we are trying to compete not being 
relying on until we are able to produce it ourselves. And the 
only thing I have said, we cannot change; we cannot change the 
values of other countries that do not have our same values. And 
that is basically the love of family and the love of our 
religious freedoms and the love of democracy. We cannot change 
that. We get caught up in some of this sometime, and I hope we 
do not.
    And I will say this, and I will close on this. I have been 
around long enough to remember that if we did not fight in 
Vietnam, the Communists were coming to this country. I 
remember, basically, the Gulf War that if we did not go over 
there and protect Kuwaiti oil that would disrupt the economic 
markets. I remember the Iraq War, if we did not fight, declare 
war in Iraq that we would have weapons of mass destruction used 
on us. In my lifetime, this is the only support or involvement 
that we have been with a war that is the most just cause I have 
ever seen. Exactly what the United States of America should be 
is that light on that beaming mountain, basically, shining 
brightly; saying that we will defend democracy wherever people 
seek it, and we will make sure that we do not leave them. And I 
hope that we maintain that posturing, especially Ukraine.
    My grandfather used to say, when I got in trouble, he says, 
``Honey, I will be behind you until your back hurts -- until 
your chest hurts--I am sorry--until your chest hurts.'' I said, 
``Papa, that is all I need; you will always be behind me.'' If 
the United States stays behind Ukraine until their chest hurts, 
they will know we are with them forever. We have got to win 
that, and we have got to continue to be committed, and our 
allies.
    So I thank you, all of you, all three of you for your 
services. And Secretary Raimondo, I know you lost your mother, 
and I have been thinking about that, and it is very difficult. 
I hope you all are getting through this. All you have is the 
memories, and they have got to be beautiful.
    But thank you, all.
    Secretary Raimondo. Thank you.
    Chair Murray. Senator Hoeven.
    Senator Hoeven. Thanks, Madam Chair; and thanks to the 
Ranking Member for holding this hearing today. Thanks to all of 
you for being here.
    Secretary Austin, the Chinese are--the PRC is dramatically 
building its nuclear capabilities. Are you committed to making 
sure that we continue to modernize our nuclear Forces?
    Secretary Austin. I am, Senator. And as you can see from 
our budget requests, the funds to continue that modernization 
effort are reflected in the budget.
    Senator Hoeven. Thank you. I appreciate that support, I 
think it is vitally important for the Nuclear Triad. For both 
you, Secretary, and also for Secretary of State Blinken, are we 
providing the weapons that the Ukraine needs to end the war, to 
win the war, however you define that, rather than stalemate? 
There have been talks of F-16s, certain long-range artillery, 
and so forth, tanks. Are they getting the weapon systems they 
need so that we end this conflict, and they do not end up in 
stalemate?
    Secretary Austin. Yes. I believe they are, and this is 
something that the Minister of Defense and the Ukrainian 
Minister of Defense and I talk about--on a near-weekly basis, 
and certainly we meet every month, along with some -- the 
Ministers of Defense of some 50 countries and discuss what 
their needs are, and we mobilize the support to provide to 
them. Most recently, you know, you have heard us talking about 
the requirements for air defense and that was the thing that 
they needed most. What we have seen here in the last couple of 
days is, you know, that focus on air defense has been very, 
very helpful for the Ukrainians as we saw the latest barrage 
from Russia. And they defended their skies very skillfully. So 
I think we are, and I think, you know, going forward, we will, 
hopefully, see the Ukrainians begin to change the dynamics on 
the battlefield.
    Senator Hoeven. And can they do that with air-to-ground as 
well as Patriot systems and that kind of thing versus more 
aircraft?
    Secretary Austin. Well, right now the skies on both sides 
are just--it is absolutely lethal. So anytime that you put any 
meaningful number of aircraft in the sky, one or the other is 
going to shoot it down. And so I think that capability will 
continue to evolve in terms of what Ukraine has for----
    Senator Hoeven. No. I understand where you are going with 
this.
    Secretary Austin. Yeah. Yeah.
    Senator Hoeven. Secretary Blinken, ending the war, winning 
the war versus stalemate?
    Secretary Blinken. I also very much agree with the 
Secretary of Defense. And let me just add one element, if I 
could, Senator. One of the things that I have heard my 
colleagues say from the beginning; and by the way if you go 
back to before the beginning, we did drawdowns of critical 
equipment well before the Russian aggression, because we saw it 
coming, to make sure that the Ukrainians had in hand what they 
needed to repel that aggression. We did a draw down Labor Day 
before the war started--the aggression started. We did another 
one Christmas. We did it quietly so as not to give the Russians 
some excuse, but we did it. And as a result, the Stingers, the 
Javelins that they had in hand that allowed them to repel the 
attack against Kiev and that whole area was very successful. 
What we have done every single step along the way is to try to 
adjust to where the war was, where the aggression was, to give 
the Ukrainians what they need to take back, yes to take back 
the land that had been seized from them. But the other critical 
element that the Secretary of Defense talks about on a regular 
basis is, the weapon systems are critical, but as critical the 
training because if they do not know how to use them, it does 
not do you a lot of good to give them the best system in the 
world, the maintenance if the thing is going to fall apart in a 
week because they cannot maintain it, does not do you a lot of 
good.
    And, of course, the tactics for bringing all of these 
different systems together, all of that is something that--that 
Secretary, the Chairman of the Joint Chiefs have been deeply 
focused on, and that is how you have, I think, a winning 
strategy. And yes, the Ukrainians need to be able to get back 
the land that has been seized from them.
    Senator Hoeven. As Secretary of State, talking about an end 
game winning strategy with the Ukrainians--to the American 
people, I think would be helpful in terms of the support for--
as well as our allies--in terms of the support for what we are 
doing over there. I think that is important, and I think you 
need to really be out there explaining that to the American 
people as part of that support effort.
    Secretary Blinken. Appreciate that.
    Senator Hoeven. I was recently in both South Korea and 
Taiwan, one of the things that I am hearing in both cases, but 
certainly from Taiwan, is they have ordered about $19.5 billion 
worth of military hardware, very advanced hardware, back to the 
``porcupine strategy'', they need that sooner than later. We 
also have, you know, a situation in Ukraine. We also have our 
own domestic needs. How do we get the Military Industrial 
Complex to be able to produce these weapons, particularly, the 
ones we need in these key situations sooner? You know, how do 
we help them get that done, Secretary Austin?
    Secretary Austin. The high-end capabilities, the hardware 
that you are talking about, some of that is aircraft and, you 
know, we came in the door----
    Senator Hoeven. Right. F-16s in the case of Taiwan.
    Secretary Austin. Right.
    Senator Hoeven. Ordered, paid for, agreed to.
    Secretary Austin. Right. We leaned into that, right away I 
put a group of senior people together to look at where the 
bumps in the road were, you know, where the friction was. And 
so we did that, and we continually tried to eliminate all the 
friction points that we possibly can. This is a--there are 
multiple elements that go into this equation, Senator, as you 
well know. And we have worked with State to see what we can do 
to compress timelines. But coming out of 2 years of COVID, 
there were parts of the industry that were challenged. And some 
of that--because of that some of those--some things are going 
to take a bit longer. In terms of weapon systems, and we 
continue to engage industry leadership, you know, I talk to 
CEOs, my Deputy talks to CEOs, to not only work with them to 
expand their capacity, or capability, but also to begin to 
shrink the amount of time that is necessary to produce a 
particular product. And in some cases we have been--I think we 
have been very successful. Some things are sophisticated to the 
point where we are not quite there yet, but we will continue to 
work at this. So PGMs, for example, precision guided munitions, 
takes a long time, typically, to make one. I think there are 
things that we can do as we look at how we produce those to 
begin to shorten that process--those processes as well.
    Senator Hoeven. Thank you.
    Thank you, Madam Chair.
    Chair Murray. Senator Van Hollen.
    Senator Van Hollen. Thank you, Madam Chair. And thank all 
of you for your testimony and for your service.
    Secretary Austin, thank you for being one of a long line of 
Secretaries who recognizes that in addition to getting a robust 
defense budget to do the work that you and your team at the 
Defense Department do, we need to adequately fund other 
elements of our national security, like the State Department, 
diplomacy and development, like the Secretary of Commerce and 
her team. And I am fairly satisfied that at the end of the day 
here we will have a budget that meets the needs of the Defense 
Department, but I am really worried about what we are seeing 
coming out of the House of Representatives right now in terms 
of its impact on other critical elements of our national 
security budget.
    So I want to ask a couple questions, starting with 
Secretary Raimondo. And I also want to say we are sorry about 
the loss of your mom. I know she was proud of the work you are 
doing. And let me ask you about that.
    Because President Biden laid out a really important vision 
about the need to invest in innovation, and to invest in 
rejuvenating our manufacturing base. The CHIPS and Science Act 
was a big part of that, as you said. We have done a big piece 
of funding on the CHIPS part, but we had better follow through 
on the Science part, that is the AI, that is the quantum 
computing, that is other critical elements of technology where 
China has said that they intend to try to dominate by the year 
2025 and beyond. I know that if we do what we need to do in 
this country, we will continue to have our competitive edge, 
but not if we do not.
    So that is one element. The other element, and you have 
spoken to this in your testimony, is we want to make sure that 
as we develop very advanced technologies, including in 
semiconductors and the equipment to manufacture semiconductors. 
We do not want it to fall in the hands of the PRC Military, and 
that is why we have worked with our allies and partners, you 
and Secretary Blinken and others, have worked with our partners 
to make sure that we get an agreement to prevent that from 
happening.
    The agency in government that really focuses on 
implementing that is the BIS, right; the Bureau of Industry and 
Security. And could you just describe in a little more detail 
what will happen if we go back to 2022 funding levels for this 
Department? It seems to be an entity that fights way above its 
weight, and it is essential in this effort. Can you speak to 
the impact on keeping our technologies out of the hands of 
China's Military? And the importance in terms of the impact on 
imposing pain on Russia's economy, and slowing down Putin's War 
machine?
    Secretary Raimondo. Yes. Thank you, Senator. Good 
afternoon, and thank you for your sympathy. My family and I 
appreciate that.
    So first, let me say that our competition with China 
increasingly revolves around technology. The United States of 
America, our innovation ecosystem, our entrepreneurship, are 
the envy of the world, and we need to keep it that way, and 
that means investing, investing in talent, investing in 
research and development, investing in NIST. I said earlier, 
NIST has a billion dollar backlog in deferred maintenance. NIST 
is the crown jewel in the United States Government as it 
relates to artificial intelligence, quantum, cyber, et cetera. 
At the same time, we are behind a billion dollars, China is 
massively investing in their Metrology Institutes, their 
equivalent of NIST. So I strongly believe, as you say, that we 
have to lean into research and development and invest in 
science, chips is an excellent beginning, but it is not just 
chips, it is bio manufacturing, it is critical minerals, it is 
other areas of advanced manufacturing, and we will not be able 
to compete--we lead China now in AI, we lead China now in 
semiconductors, and we have to continue to invest and maintain 
the lead.
    BIS, I appreciate you saying, we punch above our weight, I 
happen to agree. There is only about 500 and some-odd people 
that work in BIS which is, obviously, quite small. If we were 
to go back to fiscal year '22 funding levels, we would be down 
125 slots. As a percent of what, you know, the 583 FTEs (full-
time employees), that is crushing. Within days of--you 
mentioned Russia and Ukraine--within days of the invasion the 
Commerce Department, working with the Interagency, led a more 
than 30-country coalition to enact sweeping export controls 
that, to this day, you know, reduces Russia's ability to 
continue their war.
    With respect to China, last year we did, you know, hundreds 
of end use checks related to the PRC. I mean in October we put 
forth the most sweeping semiconductor export controls ever in 
our country's history. Just last month, we did a $300 million 
penalty on a company because they were improperly selling hard 
disks to Huawei and on and on and on.
    So I will--we are out of time, so I will stop. But it is a 
very real risk for our national security to cut the funding of 
BIS. And I--you know, I think, I think Secretary Austin and my 
colleagues would agree.
    Senator Van Hollen. Well, thank you. And I see time is out. 
I do want to say, Secretary Blinken, thank you for all your 
efforts, your testimony on the Indo-Pacific. I was going to ask 
you about the maritime security issue which President Marcos, 
when he was here, emphasized and in a trip I took with Senator 
Merkley to Vietnam and Indonesia, it was clear they want to 
protect their territory waters, their EEZs, their fisheries, 
and their resources. And we are on the same page here, and if 
we cut that budget we will not be able to meet our commitments.
    So I want to thank you and your team as well.
    Secretary Blinken. And thank you for your engagement and 
leadership on this. It is making a big difference. And one of 
the things that we are working very hard on with allies and 
partners in the region, is to increase what we call their 
``maritime domain awareness'' so that they know what is going 
on in the seas and waters around them, which are so vital to 
those countries. And that is part of our budget, we do not want 
to shortchange that either.
    Senator Van Hollen. Thank you. Thank you, Madam Chair.
    Chair Murray. Senator Hyde-Smith.
    Senator Hyde-Smith. Thank you, Madam Chairman, and I want 
to thank our distinguished panel today for the willingness to 
serve, and the willingness to step up. We certainly appreciate 
that.
    You know, I am from Mississippi, and we are just very proud 
that Mississippi has played such a significant role in 
contributing to our Nation's defense capabilities. From 
shipbuilding to aerospace technology, we have a tremendous, 
talented, workforce in Mississippi. In Pascagoula, Mississippi, 
we have families that have worked in that shipyard for 
generations. And we just do this very well and, you know, it 
does demonstrate our ability to have high-quality defense 
systems to protect our servicemen and our servicewomen.
    But the rapid and unprecedented modernization of China's 
military and naval fleet, specifically, is of great concern as 
many of the members here have demonstrated today and asked 
questions about.
    Secretary Austin, this question is going to be for you. The 
security of our national interest and those of our allies will 
rely on ensuring the United States maintains air dominance as 
part of its potential future conflict in the Pacific region. As 
part of our air dominance strategy, will you describe the 
Department's efforts to modernize the KC-135 Fleet with the KC-
46 Fleet? And will you also explain the role and significance 
of the Air National Guard and refueling missions in the Pacific 
region?
    Secretary Austin. Thanks, Senator. First of all, our 
refueling capability is rivaled by none. That is a strategic 
advantage that I think gives us the reach, gives us the ability 
to project power in ways that no other country even comes close 
to. So as you have seen from our budget request, you know, some 
$60 billion to invest in aircraft, and to modernize aircraft 
across the board, we want to make sure that we are able to go 
after the capabilities that we need. And also not have to carry 
capabilities that we do not need any longer which will prevent 
us from modernizing the fleet. But we are going to continue to 
invest in platforms that help us maintain that edge that that I 
just talked about, but our tanker fleet is truly amazing. And 
so our National Guard, obviously, punches above its weight 
class in every endeavor, and certainly they add significant 
value to this effort as well.
    Senator Hyde-Smith. Thank you for that. And do you 
anticipate any roadblocks in ensuring that current Air National 
Guard Refueling Units, such as the 186th Air Refueling Wing in 
Mississippi, receive the KC-46 and that we have funded that 
process adequately?
    Secretary Austin. Well, I would certainly, you know, work 
with the Secretary of the Air Force to visit his plans, his 
specific plans on that unit going forward. And we will get back 
to you on--with a detailed answer on the plans.
    Senator Hyde-Smith. Okay. And I have another minute-and-a-
half left that I am going to take advantage of before we end 
this very long day. But Secretary Austin, the rate at which the 
Biden administration and your Department are requesting funding 
to modernize our Naval Surface Fleet is being significantly 
outpaced by China as we well know. If this Committee were to 
provide additional funding towards ship procurement, how would 
your Department use it to address the growing threats from 
China in the Indo-Pacific region?
    Secretary Austin. Well, certainly, I truly believe that we 
have gone after those capabilities that help us conduct this 
or--yeah, conduct the strategy that we have laid out for 
ourselves. And I think, you know, comparing numbers is part of 
the equation, but not the whole equation. Capability, having 
the right capabilities, the right mix of capabilities is, you 
know, the major issue here. If you look at our Navy, we are the 
most combat credible Navy on the face of the planet, I am going 
to work to keep it that way, and I think we are investing in 
the in the right things. Nine battle force ships we are asking 
for in this budget. And we are going to--we are going to go 
after the capabilities that that industry can produce for us.
    We are also going to continue to invest in the 
infrastructure in the industrial base. So we have asked you for 
$4 billion to do that this year, 2.7 in PSYOP, and then another 
$1.2 billion in the Submarine Industrial Base.
    And I would end by saying, as you know, our underwater 
capability is matched by none on the planet. We continue to 
invest in our submarines, a Columbia-class, in this budget, two 
Virginia-class submarines, and I think that will help us 
maintain the edge.
    Senator Hyde-Smith. All right, thank you for that answer. 
Thank you, Madam Chair.
    Chair Murray. Thank you very much. That concludes our 
question and answer period.
    Senator Collins would you like to make any closing remarks?
    Vice Chair Collins. Thank you, Madam Chair. I just want to 
thank our witnesses for asking--for answering our questions 
today. There will be additional questions I am sure for the 
record. But thank you for your presence.
    Chair Murray. Thank you. And I want to thank Vice Chair 
Collins and all of my colleagues, a really good turnout today 
for such a thoughtful discussion.
    And I especially want to thank our witnesses, Secretary 
Austin, Secretary Blinken, Secretary Raimondo, for sharing your 
time and knowledge with us today.
    I look forward now to talking with all my colleagues to 
take what we have learned today and make sure that we do, 
quickly, mark up spending bills that make the investments that 
we need to compete with the Chinese government.
    Let us not parse words here. The PRC poses a serious and 
growing challenge, economically, and in terms of our national 
security. So we have to be clear that tackling this challenge 
is not just about how much we spend on our military, because if 
we choose to only plus up defense spending, and undercut other 
critical programs across Government, we are setting ourselves 
up to lose the 21st century to China.
    Building semiconductors here at home, for example, is a 
matter of urgent national security that requires investments in 
R&D, advanced manufacturing, reliable supply chains, and trade 
partnerships, and the skilled workforce that relies on things 
like child care, higher education, and workforce investments, 
and more.
    We need to make sure that we invest in America across the 
board; that means, yes, investing in defense priorities, but 
also our families and communities here at home, our diplomacy 
across the world, and our ability to compete globally.
    So I will say it again, China does not operate on CRs. I 
hope it is plain to members on both sides of the aisle that the 
single strongest way we can send a message to the PRC, saying 
that America is serious about winning the 21st century, is to 
pass robust, bipartisan, and on-time, full-year Appropriations' 
bills.
    And before I end, I do want to reiterate something that 
Secretary Austin spoke to this afternoon when he testified, 
that he did not seek conflict with the government of China as 
necessary, or inevitable, it is our shared goal that we work 
together to have a productive relationship with China. So I 
appreciate all of our witnesses for their work to make that a 
reality.

                     ADDITIONAL COMMITTEE QUESTIONS

    Chair Murray. That will end our hearing today. And for any 
Senators who do wish to ask additional questions, questions for 
the record will be due in seven days, on Tuesday, May 23rd, at 
5:00 p.m. The hearing record will also remain open until May 
23rd for members who wish to submit additional materials for 
the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Departments for response subsequent to 
the hearing:]
             Questions Submitted to Hon. Antony J. Blinken
            Questions Submitted by Senator Joe Manchin, III
    Question. As the superpower of the world, we are reliant on China, 
Russia, and other foreign adversaries for far too many of our energy 
needs--whether it be oil, solar wafers, nuclear fuel, or, increasingly, 
electric vehicles. These are all things we can and should be producing 
from start to finish in North America or sourcing from our allies. 
Unfortunately, China dominates the lithium ion battery to EV supply 
chain, controlling 76 percent of lithium-ion battery production, 
including 74 percent of the world's cathode production and 92 percent 
of the world's anode production. These numbers are alarming and should 
be a wake-up call that if we throw caution to the wind and move too 
quickly toward EVs without strengthening our domestic supply chain, we 
will be forced to rely on China for decades to come. Unfortunately, at 
every turn, this administration has made it clear that they care more 
about getting EVs on the road than they do about the energy security of 
this Nation. How would you rate our competitiveness with China on 
battery manufacturing and electric vehicles, particularly with respect 
to the supply chain for both?
    Answer. There is no question we have ground to make up in building 
out our own supply chains for batteries and electric vehicles. That is 
why the Administration has focused on increasing reliable production 
capacity, across battery supply chains from raw material mining to cell 
production. The Inflation Reduction Act, coupled with efforts to 
increase domestic production and work with our friends and allies 
through such initiatives as the Partnership for Global Infrastructure 
and Investment and the Minerals Security Partnership are aimed at and 
making progress on this objective.
    Question. Given the statistics, are we too far behind to catch up?
    Answer. No. We should never underestimate the ingenuity of our 
private sector and its ability to innovate technologies like novel 
battery chemistries or synthetic materials that impact our reliance on 
key materials, create domestic job opportunities, and allow us to 
leapfrog clean energy market competitors. The Partnership for Global 
Infrastructure and Investment and the Minerals Security Partnership 
work with allies and partners on this.
    The demand for critical minerals, battery manufacturing, and clean 
energy facilities will increase dramatically over the next few years, 
and the massive private sector investments that followed passage of the 
Inflation Reduction Act demonstrate how quickly things can shift in 
this space.
    Question. Do you think being reliant on China for our 
transportation sector is a national security risk?
    Answer. Reliance on any country for our transportation sector is a 
national security risk. That is why we are de-risking and diversifying 
our transportation sector by investing in our own capacities and in 
secure, resilient supply chains. The Administration is making historic 
investments in domestic industrial capacity including in transportation 
sectors such as EV manufacturing, airport infrastructure, and port 
improvement. We are also engaging broadly to improve transportation 
sector supply chain diversity, transportation technology security, and 
multi-modal transportation security.
    Question. For years, the Chinese government has engaged in the 
illegal trade practices of transshipment and dumping to circumvent U.S. 
trade laws, avoid American tariffs, and give Chinese firms an unfair 
advantage over West Virginian and American companies. These practices 
are especially concerning when they target our critical industries, as 
China seeks to create bottlenecks of critical materials and control 
supply chains. In particular, I want to highlight the dangers of these 
Chinese practices as they affect American energy security. We have 
relied on foreign nations for the resources and materials we need to 
power our Nation for too long. That's why I was proud to cosponsor the 
Senate Resolution reversing President Biden's 2-year pause on solar 
import tariffs. We cannot continue to let China get away with 
laundering solar energy components through other nations with 
absolutely no consequences. Let me be clear: America will never be 
energy secure or independent if we can't provide the resources we need. 
American manufacturers--some of the most innovative in the world--are 
more than ready to rise to the occasion and help realize the goals of 
the Bipartisan Infrastructure Law and the Inflation Reduction Act to 
onshore our energy supply chains. What is being done to ensure 
America's energy supply chains are reliable and safe?
    Answer. The Inflation Reduction Act and Bipartisan Infrastructure 
Law are unleashing a clean energy manufacturing boom and delivering 
more secure, resilient energy supply chains, critical to our economic 
and national security.
    However, domestic action is not enough. That is why the State 
Department is working with allies and partners through the Partnership 
for Global Infrastructure and Investment and the Minerals Security 
Partnership to accelerate the development of clean energy supply 
chains, deliver the increased volume of materials for our transition, 
reduce overreliance on a single supplier, and improve our energy 
security.
    Question. Can you speak to how American energy security is critical 
to our geopolitical positioning on the world stage, and how it allows 
us to better help our allies?
    Answer. Secure, reliable energy supplies are vital for our 
prosperity and national security and those of our allies. America's 
energy abundance and leadership in the energy transition are key 
components of our national power. We've seen the risks of 
overdependence on a single energy source in Russia's war against 
Ukraine. Nearly 80 percent of clean energy supply chains run through 
the People's Republic of China. The Inflation Reduction Act; Bipartisan 
Infrastructure Law; and strategic coordination with allies through the 
Minerals Security Partnership, the Partnership for Global 
Infrastructure and Investment, and other initiatives, de-risk mineral 
supply chains, increase energy production, and boost clean energy 
manufacturing.
    Question. Artificial Intelligence (AI) has received quite a lot of 
attention lately, and I'm proud to see it. Senator Rounds and I have 
been promoting development of this technology for years from the 
Cybersecurity Subcommittee on Armed Services. One of our main partners 
in this endeavor has been the leadership of the National Security 
Commission on Artificial Intelligence, specifically Dr. Eric Schmidt 
(former Google CEO), Bob Work (former Deputy Secretary of Defense), and 
Dr. Jason Matheny (current CEO of RAND Corporation). This Commission 
released a classified report detailing programs and funding our 
government should be investing in, but I worry that these 
recommendations have not been widely shared. I've also been working 
with our partners in the private industry, including Alex Wang (Scale 
AI), Alex Karp (Palantir), and Josh Lospinoso (Shift5) to ensure we're 
putting guardrails in place to effectively regulate and protect our 
development of AI for national security usage. Have each of you 
received this classified briefing from the Commission? If not, can I 
get your commitment to receive the briefing?
    Answer. The national security dimensions of AI are central to our 
overall approach to AI from our export controls on advanced AI training 
chips to our efforts to shape responsible uses of AI for military 
purposes, and ensuring our own applications of AI are innovative, 
secure, and governed responsibly. My team has worked closely with the 
former National Security Commission on Artificial Intelligence, and I 
delivered keynote remarks at the NSCAI Summit in July 2021. I have 
previously received this classified briefing from the National Security 
Commission on Artificial Intelligence, and I will ensure our AI team is 
fully appraised of its findings and the evolving national security 
implications of AI inform our international AI policy.
    Question. How are each of you thinking about protecting the 
investments we're making in AI, and ensuring AIs are used ethically?
    Answer. The Department of State has made significant contributions 
to this Administration's efforts to protect U.S. investments in 
artificial intelligence (AI). This includes updates to our export 
controls to restrict the People's Republic of China's (PRC) ability to 
purchase and manufacture high-end chips for military applications, 
aligning allies and partners with the U.S. approach, an Executive Order 
on outbound investment, and sustained diplomacy with allies and 
partners. To ensure AI is used ethically, we have worked through the 
G7, United Nations, and other international venues to ensure 
international AI governance reflects U.S. policy and is anchored in the 
ethical principles articulated in the White House Executive Order on 
artificial intelligence, the NIST Risk Management Framework, and the 
Blueprint for the AI Bill of Rights.
    Question. Multiple sources, including retired general officers, the 
National Defense Industrial Association, the American Enterprise 
Institute, and the Pentagon itself have all recognized the damage 
failing to pass a budget on time has on both our national security and 
the taxpayer. The American Enterprise Institute threw out a rough 
estimate of $200 million per day under the latest Continuing Resolution 
that covered the start of Fiscal Year 2023, that's a total of $18 
billion. The DoD Comptroller noted that from Fiscal Year 1911 to 2010 
the average delay for defense appropriations was 29 days, and that has 
since ballooned out to 118 days, 4 months. I have repeatedly asked the 
Pentagon for as concise a number as possible to put a figure on the 
damage these delays are causing to our national security and wasted 
taxpayer money, but we've been unable to nail down these estimates. Can 
I have each of your commitments to get Congress as accurate an estimate 
as possible on the financial impact previous CRs have had on your 
Departments?
    Answer. Continuing Resolutions (CRs) are preferable to any lapse of 
appropriations. Nevertheless, as GAO has found, they impede the 
rational, efficient use of taxpayer dollars. Delays in annual 
appropriations compress our ``actual'' fiscal year to 9 months or less 
to execute resources, delaying implementation of new programs and 
hindering long-term planning efforts. CRs may create operational risks, 
including meeting our payroll in the event final year appropriations 
are lower than the previous fiscal year. CRs may also increase contract 
costs by requiring short-term extensions that can only be partially 
renewed during the CR.
    Question. The Compacts of Free Association are a crucial component 
to outcompete China and strengthen our alliances in the Indo-Pacific. 
It is imperative that Congress work to swiftly renew these Compacts, as 
they are set to expire on September 30 for the Marshall Islands and 
Micronesia, and next year for Palau. That's why I was pleased to see 
the President's Budget Request included $7.1 billion over the next 20 
years for the Compacts with the three Freely Associated States, 
including $3.3 billion for Micronesia, $2.1 billion for the Marshall 
Islands, and $800 million for Palau, in exchange for continued U.S. 
defense rights and exclusive military access. Can you discuss why the 
renewal of the Compacts of Free Association is so important, 
particularly in countering China's tactics in Micronesia, the Marshall 
Islands, and Palau?
    Answer. Extending Compacts of Free Association (COFA) assistance is 
a critical component of the Administration's Pacific Partnership, Indo-
Pacific, and National Security Strategies. The President's FY 2024 
Budget includes the COFA as part of a broader mandatory proposal to 
fund new and innovative ways to out-compete the PRC globally. While the 
COFAs themselves do not expire, to maintain our status as a committed 
preferred partner in the Pacific, we must enhance our enduring 
relationships, especially with the Freely Associated States (FAS). The 
total $6.5 billion for direct economic assistance to the FAS is a 
critical investment in ensuring the stability and prosperity of our 
closest Pacific Island neighbors, and sends an important signal to our 
allies, partners, and competitors the U.S. commitment to the FAS is 
iron-clad.
                                 ______
                                 
             Question Submitted by Senator Martin Heinrich
    Question. New Mexico ranks 11th in the Nation for opioid overdose 
deaths, and fentanyl is the leading cause. The Department of State 
plays a critical role in addressing the threat that illicit fentanyl 
poses to national security and public safety, and its devastating 
impacts on our communities. I know the Department has several 
initiatives to combat the illicit manufacturing and trafficking of 
fentanyl--which is primarily coming from China. How will a continuing 
resolution effect the success of these initiatives?
    Answer. Countering illicit synthetic drugs is among the highest 
priorities for the Department, which puts significant effort toward 
combatting fentanyl worldwide through drug supply and demand reduction 
and other programs. TheFY 2024 Congressional Budget Justification (CBJ) 
includes $102.5 million in International Narcotics Control and Law 
Enforcement (INCLE) assistance for these programs. Operating under a 
continuing resolution would significantly affect our ability to 
effectively plan, implement, and execute these worldwide efforts to 
address synthetic drug threats.
                                 ______
                                 
               Questions Submitted by Senator Jerry Moran
    Question. It is clear that our adversaries have used trade and 
investment to influence the governments of many African countries. Now 
the continent's largest trading partner, China has used loans and debt 
to gain leverage over developing countries and demand military bases 
and the rights to critical minerals. During your most recent trip to 
Africa, you highlighted how pro-economic growth policies can add to 
investment in local communities in Sub-Saharan Africa, while bolstering 
ties with the U.S. The African Growth and Opportunity Act, our trade 
agreement involving nearly all African countries, will soon need to be 
reauthorized. In your view, how important is AGOA to America's role in 
Africa?
    Answer. AGOA is the cornerstone of the United States' economic 
engagement with sub-Saharan Africa but its value is about more than 
just trade. AGOA supports our affirmative agenda to demonstrate the 
benefits of our governance and economic models and to reduce partner 
nations' reliance on PRC initiatives. As our adversaries work to gain a 
foothold on the continent, continuing our positive economic agenda with 
our African partners is more important than ever, which is why the 
Biden-Harris Administration supports a timely reauthorization of this 
legislation.
    Question. Similarly, if Congress were to fail to negotiate a 
comprehensive economic approach for the continent, how would that harm 
our strategic goals?
    Answer. The African Growth and Opportunity Act (AGOA) is one 
valuable tool among many to deepen engagement with sub-Saharan Africa. 
Failing to reauthorize this legislation could be viewed by our African 
partners as stepping back from cooperation, contradicting our message 
of partnership from the 2022 U.S.-Africa Leaders Summit. It would also 
hurt businesses, including American companies investing in Africa. AGOA 
also encourages African leaders and civil societies to push back on 
corrupt or coercive practices and instead promote open and transparent 
market practices.
                                 ______
                                 
               Questions Submitted by Senator John Hoeven
    Question. I have long been involved in North Dakota's trade 
relationship with Taiwan, and have recently visited the country along 
with South Korea. I am interested in promoting collaboration with Indo-
Pacific partners for stability, mutual defense, and prosperity. Can you 
describe initiatives underway to promote trade relations between our 
allies in East Asia (particularly South Korea, Japan, and Taiwan) in 
furtherance of U.S. national security interests?
    Answer. The United States collaborates with Japan and the Republic 
of Korea (ROK) across bilateral mechanisms on supply chain initiatives 
that monitor potential trade disruptions. We are making important 
progress on the U.S.-Taiwan Initiative on 21st Century Trade under the 
auspices of AIT and the Taipei Economic and Cultural Representative 
Office in the United States (TECRO) toward ambitious outcomes in 11 
important areas to deepen our trade relations. During our Asia-Pacific 
Economic Cooperation (APEC) 2023 host year, we worked closely with 
Japan, the ROK, and Taiwan, known as Chinese Taipei in APEC, to advance 
trade and investment facilitation.
    Question. What are the major barriers to deepening trade relations 
between the U.S. and Taiwan?
    Answer. Taiwan is a critical investment and trading partner. It 
plays a crucial role in our efforts to strengthen the semiconductor 
supply chain and create jobs through investment in the United States. 
The Administration continues efforts to deepen our unofficial economic 
and trade relationship such as through the U.S.-Taiwan Initiative on 
21st Century Trade and the U.S.-Taiwan Economic Prosperity Partnership 
Dialogue.
    Question. Are there opportunities for promoting industry-to-
industry engagement between us and our East Asian allies and partners 
outside the structured Foreign Military Sales process?
    Answer. The State Department advocates for coordinated efforts 
between industries to support our allies and partners throughout the 
Indo-Pacific region. To do so, the Administration utilizes a robust set 
of economic and diplomatic tools in addition to the foreign military 
sales process. We partner with organizations such as the U.S. Chamber 
of Commerce, Business Council for International Understanding, the 
U.S.-Association of Southeast Asian Nations (ASEAN) Business Council, 
and others to convene the private sector, brief them on our work, and 
involve them directly in our efforts to open opportunities abroad.
    Question. What steps are you taking to facilitate stronger economic 
relations with our allies and partners in the region outside of formal 
trade treaties?
    Answer. The United States has dramatically increased economic 
engagement with the Indo-Pacific. Our primary tools in this effort are 
the Asia-Pacific Economic Cooperation forum (APEC), the Indo-Pacific 
Economy Framework for Prosperity (IPEF), the Quad, and cooperation with 
Association of Southeast Asian Nations (ASEAN). Our work with these 
regional institutions, combined with bilateral efforts, has expanded 
our economic engagement on infrastructure development, the digital 
economy, health and food security, clean energy, supply chain 
resilience, and anti-corruption to unprecedented levels.
                                 ______
                                 
              Questions Submitted by Senator Bill Hagerty
    Question. This Committee has gathered to review the path ahead for 
the U.S.-China relationship. Let's review the path this Administration 
is taking us on. On May 11, Reuters cited internal emails indicating 
that you delayed U.S. countermeasures against China in response to the 
spy balloon incident. Secretary Blinken, is that true?
    Answer. While we do not share internal deliberations, we do not 
pull our punches with the PRC. Our competitive actions are designed to 
have maximum effect. We have taken significant, purposeful, and 
strategic steps to invest at home, deepen our alignment with allies and 
partners around the world, and harness those two sources of strength to 
compete with the PRC. We are clear-eyed about the challenge and focused 
on ensuring the United States maintains an enduring competitive edge.
    Question. This Reuters article reports that, after the balloon 
incident, the State Department has held back human rights-related 
sanctions, export controls and other sensitive actions to limit damage 
to the U.S.-China relationship, according to four sources and internal 
emails. Is that true?
    Answer. While we do not share internal deliberations, the 
Administration has shown it takes extremely seriously issues related to 
the PRC's ongoing genocide and crimes against humanity in Xinjiang. 
This Administration has utilized, and will continue to utilize, a wide 
range of tools and diplomatic tactics to promote accountability for PRC 
officials' and entities' involvement in atrocities in Xinjiang, and for 
human rights violations and abuses in Tibet, Hong Kong, and elsewhere 
in the PRC.
    Question. Furthest, according to an April 14 Financial Times 
report, China is refusing to allow a high level visit to Beijing if the 
FBI releases its report regarding the Chinese spy balloon and its 
violation of U.S. sovereignty. Secretary Blinken, do you support the 
release of this FBI report on the Chinese spy balloon to Congress and 
the American people?
    Answer. During his February meeting with CCP Central Foreign 
Affairs Office Director Wang Yi, Secretary Blinken stated the 
unacceptable violation of U.S. sovereignty and international law by the 
PRC high-altitude surveillance balloon in U.S. territorial airspace 
must never again occur. The Secretary also made clear the PRC's high-
altitude surveillance balloon program had been exposed to the world. 
The PRC still has not offered a credible explanation for their 
intrusion into our airspace and the airspace of over 40 countries 
across five continents. We have shared information with countries 
around the world on the PRC's surveillance balloon program.
                                 ______
                                 
               Questions Submitted by Senator Marco Rubio
    Question. Last week, Reuters broke a story that indicated the State 
Department has been delaying its ``competitive actions'' calendar, a 
list of steps the Biden Administration has on paper to counter Beijing, 
for fear of alienating the CCP. Moreover, it seems that Deputy 
Assistant Wendy Sherman--who has announced plans for retirement--has 
been running China policy and lobbied against revoking Huawei-related 
export control licenses. Apparently, the State Department also pushed 
off sanctions against Chinese officials, including some at the United 
Front Work Department bureau responsible for human rights violations in 
Xinjiang, in order to ``keep channels open,'' even though China has 
consistently refused to speak to you all and your subordinates. Do you 
support slowing down action against Beijing in order to smooth things 
over so you can visit China?
    Answer. Through efforts to invest at home and strengthen ties with 
allies abroad, the Administration has put the United States in the best 
position to compete with the PRC in decades. Our competitive actions 
protect our critical technology, uphold our national security 
interests, and protect basic human rights. This work is sensitive and 
complex, and sequencing is essential to maximize impact and make sure 
messaging is clear and lands precisely. We have continued to carry out 
regularly a series of competitive actions, and we do not, and will not, 
pull our punches.
    Question. Have you, Deputy Secretary Sherman, or anyone else under 
your leadership delayed or stopped congressionally-mandated sanctions--
including my Uyghur Forced Labor Prevention Act (UFLPA) or my Uyghur 
Human Rights Policy Act (UHRPA)?
    Answer. The Administration takes atrocities and human rights abuses 
and violations committed by PRC officials and entities extremely 
seriously. This Administration has used, and is using, a variety of 
tools and tactics to promote accountability for ongoing genocide, 
crimes against humanity, and other human rights abuses and violations 
in Xinjiang, including Global Magnitsky designations, section 7031(c) 
visa restrictions, Commerce Bureau of Industry and Security Entity 
Listings, implementation of the Uyghur Forced Labor Prevention Act, and 
Treasury Chinese Military Industrial Complex investment restrictions.
    Question. Did you or anyone else under your leadership provide 
guarantees to Chinese officials that the United States would not pursue 
or deploy any actions--including sanctions related to human rights 
abuses in Xinjiang--that would potentially disrupt or embarrass the 
Chinese Communist Party's 20th Party Congress that took place October 
16-22, 2022?
    Answer. The Administration is fully committed to implementing 
statutory requirements, including as they relate to human rights. The 
Administration has shown it takes extremely seriously issues related to 
the PRC's ongoing genocide and crimes against humanity in Xinjiang. 
This Administration has utilized, and will continue to utilize, a wide 
range of tools and diplomatic tactics to promote accountability for PRC 
officials' and entities' involvement in atrocities in Xinjiang, and for 
human rights violations and abuses in Tibet, Hong Kong, and elsewhere 
in the PRC.
    Question. Did you or anyone else under your leadership delay 
congressionally-mandated sanctions in order to not to disrupt President 
Biden's scheduled meeting with CCP General Secretary Xi Jinping in Bali 
on November 14, 2022?
    Answer. While we do not share internal deliberations, the 
Administration has shown it takes extremely seriously issues related to 
the PRC's ongoing genocide and crimes against humanity in Xinjiang. 
This Administration has utilized, and will continue to utilize, a wide 
range of tools and diplomatic tactics to promote accountability for PRC 
officials' and entities' involvement in atrocities in Xinjiang, and for 
human rights violations and abuses in Tibet, Hong Kong, and elsewhere 
in the PRC.
    Question. Have you, or anyone in the Department of State, delayed 
congressionally-mandated sanctions against Chinese officials for their 
role in human rights abuses in Xinjiang?
    Answer. The Administration takes the atrocities and human rights 
abuses and violations committed by PRC officials and entities extremely 
seriously. This Administration has used, and is using, a variety of 
tools and tactics to promote accountability for ongoing genocide, 
crimes against humanity, and other human rights abuses and violations 
in Xinjiang, including Global Magnitsky designations, section 7031(c) 
visa restrictions, Commerce Bureau of Industry and Security Entity 
Listings, implementation of the Uyghur Forced Labor Prevention Act, and 
Treasury Chinese Military Industrial Complex investment restrictions.
    Question. General Secretary Xi Jinping is correctly regarded as the 
most ideological CCP leader since Mao Zedong. He has personally tasked 
the Party with ``liberating all of humanity'' and to serve as the 
``gravediggers of capitalism.'' This March, in his keynote speech at 
China's ``Two Sessions,'' Xi explicitly singled out the United States 
as China's adversary. Do you think General Secretary Xi is a partner 
for the U.S.?
    Answer. In March 2023, the Director of National Intelligence 
testified that ``the CCP represents both the leading and most 
consequential threat to U.S. national security and leadership 
globally.'' Under President Xi, the CCP has become more repressive at 
home and more aggressive abroad, seeking to undercut U.S. influence and 
alliances. We will continue to defend our interests and values and 
secure an enduring competitive edge in the face of our strategic 
competition with China.
    Question. The Biden Administration has touted its ``China House'' 
strategy as a way to counter Beijing's malign influence. In practice, 
this has led to regional bureaus and individual embassies not being 
forced to consider implications of global competition with China in 
their daily work. In the department's launch of China House, you said 
that it would act as a ``clearinghouse'' for officials across the 
department to share information on China. In repeated briefings with 
State, I have seen instead that this has led to creating a silo in the 
department for China policy, leading other regional teams to believe it 
is not their job to consider China as a factor in diplomatic work 
outside of China. Why would you choose to silo off China policy from 
other bureaus?
    Answer. A centerpiece of our modernization agenda, the Office of 
China Coordination is focused on equipping and empowering the 
Department to meet the challenges and seize the opportunities of the 
decade ahead. It signaled to the entire Department the critical 
coordination role China House plays and enabled it to draw on the 
strength of the full enterprise, including expertise from regional and 
functional bureaus. The Department continues to work to focus, elevate, 
and integrate the tools of U.S. diplomacy to meet the generational 
challenge posed by the PRC, and China House is critical in this effort.
    Question. Your FY24 budget request identifies implementation of 
Indo-Pacific strategy to strengthen alliances and partnerships and out-
competing the CCP by providing alternatives to the CCP's predatory and 
coercive practices as two of the department's top priorities. Taken 
together, the department asks for $4 billion to address this priority. 
In contrast, you have requested $6.4 billion for what can only be 
called pet social policy projects that only a narrow section of 
American society supports, such as LGBTQI advocacy initiatives, the 
U.N. Green Climate Fund, a Clean Technology Fund, and Family Planning 
and Reproductive Health--most of which is essentially abortion 
advocacy. This disparity highlights where the Administration's 
priorities truly are: progressive social policy over American 
prosperity and our stated national security priorities. This 
Administration's obsession with promoting a woke agenda is destructive 
in its own right, but is a dereliction of duty when placed in the 
context of great power competition. Currently your department has 
multiple vacant and unfilled Foreign Service Generalist and Specialist 
positions in the Indo-Pacific. How many Foreign and Civil service staff 
are currently employed in the Diversity offices of State and USAID, and 
how many do you anticipate in the future?
    Answer. As noted in our FY 2024 Congressional Budget Justification, 
the Secretary's Office of Diversity and Inclusion (S/ODI) has 13 U.S. 
direct hire FTE for FY 2023 and FY 2024, including the Chief Diversity 
and Inclusion Officer. The makeup of the direct-hire positions are four 
Foreign Service and nine Civil Service. USAID's Office of the Chief 
Diversity, Equity, Inclusion, and Accessibility Officer comprises three 
Foreign Service and eight Civil Service direct hire FTEs.
    Question. The FY24 budget request proposes 56 new positions for 
State in the Indo-Pacific. Why should Congress authorize additional 
positions when a) you cannot fill current positions and b) when the 
department fills Diversity offices ahead of staffing a region the 
President and yourself have stated is the priority?
    Answer. The President's budget seeks critical resources to help us 
deliver on the objectives of our Indo-Pacific Strategy. The Department 
assesses and aligns resources where they will have the greatest impact 
on strategic priorities. Our success in the Indo-Pacific also depends 
on infusing diversity, equity, inclusion, and accessibility principles 
into our organizational culture while sustaining operational 
excellence. Projected FY 2024 Foreign Service intake assumes robust 
hiring well above attrition to continue to close existing staffing 
gaps.
    Question. Earlier this month, the Special Presidential Envoy for 
the Climate, John Kerry, said that he has been invited to China for 
dialogue. Meanwhile, Secretary Austin is still seeking a meeting with 
the Chinese defense minister-even though he should insist on meeting 
with the Vice Chairmen of the Central Military Commission, his real 
counterparts. Suffice it to say, it is notable that the 
administration's climate czar is getting more access to Chinese 
interlocutors than any other high-ranking Biden official. Can you 
confirm if Mr. Kerry will be visiting China this year? If so, what will 
the dialogue pertain to?
    Answer. Yes, Special Presidential Envoy for Climate John Kerry 
intends to travel to the People's Republic of China (PRC) in 2023. 
Secretary Kerry will engage with the PRC on addressing the climate 
crisis, including with respect to increasing implementation and 
ambition and promoting a successful COP 28.
    Question. Are you concerned that by prioritizing climate 
discussions with this genocidal regime, other issues--such as human 
rights and Taiwan--will get sidelined?
    Answer. The United States will continue diplomacy with the PRC on 
global and transnational issues, such as climate and counter-narcotics, 
when it is in our interest to do so. As I have said, this is not as a 
favor to us or anyone else--and is never in exchange for walking away 
from our principles, including our democratic values and defense of 
human rights around the world--but is what the world expects. Diplomacy 
on climate, which is a global and existential threat, does not preclude 
intense diplomacy or competition in other areas. We will continue to 
hold the PRC accountable for its human rights abuses, and we will 
continue to work assiduously to maintain peace and stability in the 
Indo-Pacific, including across the Taiwan Strait.
    Question. I recently sent you a letter regarding U.S. Ambassador to 
Indonesia, Sung Kim, celebrating Ford Motor Company's participation in 
a joint venture with Zhejiang Huayou Cobalt Company and PT Vale 
Indonesia. Huayou Cobalt is an active participant in the Belt and Road 
Initiative (BRI). Vale, a Brazil-based company, has a long history of 
supporting the BRI and cooperating with China and CCP-controlled 
companies. Of note, Ford published a statement on its website where 
Huayou's senior vice president praised the joint venture as a 
``flagship project'' of the BRI. Were you aware of Ambassador Kim's 
participation in this event?
    Answer. I am aware Ambassador Kim participated. Indonesia is a 
strategic partner in the Indo-Pacific and home to the world's largest 
nickel reserves, a mineral essential to a clean energy transition. 
Ford's investment reduces PRC control of Indonesia's nickel industry 
and brings world-class labor and environmental standards to Indonesia. 
Supporting U.S. investment in Indonesia benefits our economy and 
supports American jobs. I assure you we continue to compete with the 
PRC in a way that protects our strategic interests and contributes to 
the prosperity of the American people.
    Question. I remain skeptical over your planned trip to Beijing. 
Should it be rescheduled, this Administration would be perceived as 
bailing out General Secretary Xi Jinping, providing him with an 
audience after he just received an unprecedented third term after the 
20th Party Congress. Do you still plan to visit Beijing?
    Answer. We are clear eyed about the challenges in the relationship, 
but that does not mean we should stop talking to the PRC when it is in 
our interest. Diplomacy is in our interest to manage tensions and 
prevent competition from veering into conflict, as well as to deliver 
on key priorities for the American people, such as curbing the flow of 
fentanyl. Diplomacy does not preclude competition, and we are focused 
on ensuring the United States maintains an enduring competitive edge.
    Question. If a trip is back on the table, do you pledge to use it 
to hold the Chinese Communist Party accountable for its wrongful 
detention of U.S. citizens (such as David Lin, Mark Swidan, and 
Harrison Li), use of slave labor, unfair trade practices, and military 
aggression against U.S. allies and partners?
    Answer. In our diplomacy with the PRC, we will continue to be 
resolute in defending our interests and values. The Department of State 
has no higher priority than the safety and welfare of U.S. citizens 
detained abroad. It remains a priority for the United States to resolve 
the cases of U.S. citizens who are wrongfully detained or arbitrarily 
subject to exit bans in China. At every high-level meeting, we focus on 
bringing wrongfully detained U.S. citizens home, as well as advancing 
other U.S. interests and values.
    Question. As you know, the CCP threat to Taiwan grows daily. 
Beijing has not backed down from its aggressive behavior towards the 
island, and it will continue to ramp up as Taiwan approaches its next 
presidential election. President Biden himself has said that the U.S. 
will defend Taiwan in the face of Chinese military aggression, though 
this pledge has been walked back by his minders. Congress, last year, 
passed the Taiwan Enhanced Resilience Act, which I supported. The bill 
is historic and authorizes $2 billion in foreign military financing and 
foreign military sales to Taiwan. Why didn't the State Department 
include this $2 billion in FMF for Taiwan in the Fiscal Year 2024 
budget request, even though the President signed the Taiwan Enhanced 
Resilience Act into law?
    Answer. The Department appreciates the provisions in the Taiwan 
Enhanced Resilience Act and authority granted under the FY 2023 
National Defense Authorization Act (NDAA). The Administration continues 
to explore all options to resource Taiwan's self-defense capabilities, 
including requesting $113 million in FMF for global priorities in the 
FY 2024 President's Budget, which could make FMF available for Taiwan.
    Question. Last week, the European Union submitted draft language 
that would sanction eight Chinese companies it has determined provided 
Russia with dual-use goods that could be used to build weapons systems 
in its war against Ukraine. Earlier this year, analysis by C4ADS found 
that Chinese companies delivered parts to repair Su-35 jets and other 
military equipment to Russia. Is the Administration committed to 
weakening Vladimir Putin's war machine and helping Ukraine beat back 
Russia's assault?
    Answer. Putin initiated his unprovoked full-scale invasion of 
Ukraine in 2022. I am committed to degrading Russia's ability to wage 
this war and supporting Ukraine's defense of its sovereignty for as 
long as it takes. I will continue to work with our Allies and partners 
to promote accountability for Russia's actions, to impose costs on 
Russia, and to ensure the Kremlin is deterred from taking aggressive 
actions against any other country. As long as Russia's war of 
aggression continues, the United States will continue to escalate the 
costs for Putin's regime.
    Question. Chinese banks continue to provide financing to Russian 
companies that are now shut out of the international financial system, 
including by standing up an alternative to SWIFT, the Cross-Border 
Interbank Payment System (CIPS). Is the creation of a SWIFT alternative 
detrimental to the impact of U.S. sanctions?
    Answer. The Department of State is concerned alternatives to SWIFT, 
such as CIPS, could be used to evade U.S. sanctions. Nevertheless, at 
the current time, CIPS relies heavily on SWIFT to process most of its 
transactions and it will take years before CIPS could provide a 
meaningful alternative to SWIFT. We will continue to employ our 
existing sanctions authorities to target those who seek to evade U.S. 
sanctions and engage with financial institutions to communicate legal 
and reputational risks involved with payments networks such as CIPS.
    Question. Should we bar banks and companies that use CIPS and other 
systems from accessing the U.S. financial market?
    Answer. We are monitoring the use of CIPS closely. Its use remains 
limited, and we do not assess it is at a level at which barring banks 
and companies that use CIPS from accessing the U.S. financial system 
would provide benefits that outweigh the drawbacks of such a step. CIPS 
facilitates normal course-of-business renminbi-denominated payments for 
many non-PRC financial institutions, including some U.S. banks. While 
using CIPS in and of itself does not constitute or suggest 
inappropriate activity, we will continue to monitor the use of CIPS and 
take appropriate steps as necessary.
                                 ______
                                 
              Questions Submitted to Hon. Gina M. Raimondo
            Questions Submitted by Senator Dianne Feinstein
    Question. Secretary Raimondo, last year, I sent you a letter along 
with Senator Toomey asking you to eliminate the U.S. tariff on steel 
from Ukraine, as one small but significant way to help that country out 
during its time of need. I thank you for responding by suspending that 
tariff for 1 year, which I gather has been helpful to Ukraine. Do you 
intend to extend the tariff suspension beyond 1 year when the original 
suspension expires later this month?
    Answer. The Department of Commerce is committed to Ukraine's 
security and prosperity. On May 9, 2022, the Commerce Department 
announced that the United States is temporarily suspending tariffs 
under Section 232 of the Trade Expansion of 1962, as amended, on 
Ukrainian steel imports for 1 year. The Department took this action 
because Ukraine's steel industry is uniquely important to the country's 
economic strength. Some of Ukraine's largest steel communities have 
been among those most adversely impacted by the Russian military's 
barbarism. Creating export opportunities for Ukraine's steel mills is 
essential to their ability to continue employing their workers and 
maintaining one of Ukraine's most important industries. On May 31, 
2023, the Department extended this tariff suspension for another year, 
highlighting the Biden Administration's steadfast commitment to Ukraine 
and its people.
    Question. Secretary Raimondo, in 2022 the Congress passed the 
bipartisan CHIPS and Science Act, which recognized the need for 
critical investments in the U.S. semiconductor industry in order to 
compete with China and ensure our economy continues to lead in this 
vital industry. Do either of you see other industries such as 
shipbuilding, where we in Congress might consider a similar approach 
and make new strategic investments?
    Answer. To outcompete the People's Republic of China (PRC), we need 
bold domestic investments and innovation ecosystems that bring 
manufacturing in critical technologies and industries back to the 
United States. Without manufacturing strength in the United States and 
the innovation that flows from it, we risk falling behind the PRC in 
the race to invent and commercialize future generations of technology. 
President Biden has done more than any other president to revitalize 
American manufacturing and innovation, and the CHIPS for America 
program is central to those efforts.
    Diverse, resilient, and sustainable supply chains are critical for 
national security and economic competitiveness, and a key element of 
this effort is revitalizing domestic manufacturing, reducing our 
reliance on the PRC, and positioning ourselves to be proactive instead 
of reactive. The National Institute of Standards and Technology (NIST) 
Manufacturing Extension Partnership (MEP) helps businesses narrow gaps 
in our supply chains and make manufacturing more resilient. NIST's 
Manufacturing USA program intends to make available competitive awards 
to enable existing Manufacturing USA institutes to promote domestic 
production of technologies developed at the institutes. In addition, 
the Economic Development Administration's Regional Technology and 
Innovation Hubs (Tech Hubs) program is working to create regional 
innovation centers across the country by bringing together industry, 
higher education institutions, State and local governments, economic 
development organizations, and labor and workforce partners to 
supercharge ecosystems of innovation for technologies that are 
essential to our National security and economic competitiveness. The 
program was authorized by the CHIPS and Science Act and is a key part 
of President Biden's Investing in America agenda, stimulating private 
sector investment, creating good-paying jobs, revitalizing American 
manufacturing, and ensuring no community is left behind by America's 
economic progress.
    Altogether, these investments in critical technologies and regions 
are essential to maintaining American technological leadership in the 
world and outcompeting the PRC in the 21st century global economy.
    Question. Secretary Raimondo, 2 years into your administration, it 
is still not clear to me what our trade policy is vis-`-vis China. 
Could you go into more depth about what our specific trade goals are 
with China, and the status of our discussions with China to make 
progress on that relationship? Has the Administration made specific 
requests to China on changing their unfair trade practices and, if so, 
what has been their response?
    Answer. While the Office of the U.S. Trade Representative (USTR) is 
charged with administering America's trade policy, the Department of 
Commerce believes that engagement with the PRC, including trade, is 
essential to our efforts to strengthen our National security and 
economic competitiveness. We are not decoupling our economy from that 
of the PRC's. The Department of Commerce employs both an ``offense'' 
and ``defense'' strategy with respect to the PRC--we protect what we 
must, and we promote what we can. Earlier this year, senior Commerce 
Department officials traveled to the PRC to meet with our Foreign 
Commercial Service officers stationed on the ground, PRC government 
officials, and U.S. companies to discuss opportunities for U.S. 
businesses in the PRC. Annual trade between our two countries is in the 
hundreds of billions, and this trade provides revenues for American 
companies, jobs for American workers, and connectivity with the Chinese 
people. The PRC is our third largest export market, those exports 
directly support American jobs, and the benefits from these exports 
range from our large multinational companies and to small and medium-
sized enterprises.
    The Department's engagement with PRC officials is focused on 
economic policies that benefit American workers and businesses as well 
as raising U.S. concerns about the PRC's unfair economic policies, the 
need to level the playing field for U.S. companies, and the importance 
of protecting sensitive U.S. technology from illicit transfer. On May 
25, 2023, as part of the Department's ongoing efforts to maintain open 
lines of communication and responsibly manage the relationship with the 
PRC, I met with PRC Minister of Commerce Wang Wentao. We had a candid 
and substantive discussion on issues relating to the U.S.-China 
commercial relationship, including the overall environment in both 
countries for trade and investment and areas for potential cooperation. 
I also raised concerns about the recent spate of PRC actions taken 
against U.S. companies operating in the PRC and expressed the 
Department's commitment to continuing to build on the engagement 
between President Biden and President Xi in Indonesia in November 2022.
                                 ______
                                 
              Questions Submitted by Senator Tammy Baldwin
                             supercomputing
    The US is currently maintaining its leadership position in 
supercomputing and AI at scale globally, sitting atop the HPC Top 500 
list with the Frontier system at Oak Ridge National Laboratory, which 
was manufactured in my home state of Wisconsin. However, China is 
making unprecedented investments in supercomputing and AI in an attempt 
to dominate the next generation of technologies. In 2012, the United 
States had 250 supercomputing systems on the TOP500 list 
(www.top500.org) compared to China, which had 72 systems. The top 5 
companies were 4 US and 1 European (IBM, HPE, Cray, Atos, and Dell). 
The most recent TOP500 list from 2022 had China with 162 systems and 
the US with 127 systems. The top 5 companies were 3 Chinese, 1 US, and 
1 European (Lenovo, HPE, Inspur, Atos, and Sugon).
    Question. How can the US continue to out-innovate in these key 
areas and beyond to ensure US national and economic security and what 
is your agency's strategy for adopting and leveraging US 
supercomputing?
    Answer. The Department of Commerce, through the National Institute 
of Standards and Technology (NIST), is working to expand its efforts to 
address emerging research and standards development challenges 
surrounding Artificial Intelligence (A.I.), upon which supercomputing 
relies. Our vision is to help manage A.I. risks, harness the benefits, 
and responsibly accelerate A.I. technology adoption and deployment and 
create an expanded commercial marketplace. NIST's programs include 
fundamental research on A.I. systems to measure and enhance security, 
explainability, and trustworthiness of A.I. systems, and to explore the 
capabilities and limitations of A.I. NIST is also applying A.I. to 
research programs across our broad laboratory portfolio, from 
autonomous advanced materials discovery to robotic systems in 
manufacturing environments, and more.
    In January of 2023, NIST released the A.I. Risk Management 
Framework (AI RMF 1.0) as outlined in the National Artificial 
Intelligence Initiative Act of 2020. More than 240 organizations were 
involved in the development of the A.I. RMF, and the public and private 
sector response has been overwhelmingly positive. The A.I. RMF is 
intended for voluntary use to improve the ability to incorporate 
trustworthiness considerations into the design, development, use, and 
evaluation of A.I. products, services, and systems. NIST also publishes 
other tools to help individuals and organizations better manage risks 
associated with the use of A.I., including a ``Playbook.'' The Playbook 
provides suggested actions for achieving the outcomes laid out in the 
A.I. Risk Management Framework. The NIST Trustworthy & Responsible 
Artificial Intelligence Resource Center (AIRC) supports all A.I. actors 
in the development and deployment of trustworthy and responsible A.I. 
technologies. AIRC supports and operationalizes the NIST AI Risk 
Management Framework (A.I. RMF 1.0) and accompanying Playbook and will 
grow with enhancements to enable an interactive, role-based experience 
providing access to a wide range of relevant A.I. resources.
    Heterogenous integration, chiplets, and advanced packaging are 
expected to be key technology enablers and sources of innovation for 
semiconductor design and manufacturing for the next decade. 
Supercomputing capabilities would be critical in modeling and 
simulating complex multiscale, multilength, and multi-physics problems 
posed by the heterogenous integration of different devices and 
materials systems needed for advanced packaging. Leveraging 
supercomputing capabilities will enable the CHIPS R&D advanced 
packaging program to develop solutions that will allow U.S. technology 
leadership in the post Moore's law era.
                       rapid acquisition programs
    Rapid acquisition programs, like Other Transaction Authorities 
(OTAs), were created to give Department of Defense (DoD) the 
flexibility necessary to adopt and incorporate business practices that 
reflect commercial industry standards and best practices into its award 
instruments, and have become a core element of the DoDs approach to 
technology acquisition.
    Question. Though NIST and NOAA have limited OTA and rapid 
acquisition authorities, are there other rapid acquisition programs 
that you have either implemented or are seeking that will help get 
appropriated dollars invested in new technologies faster and more 
efficiently?
    Answer. The Department recognizes the importance of removing 
obstacles, empowering entrepreneurs, attracting private investment and 
accelerating inventions from the laboratory into the marketplace in 
order to unleash American innovation and strengthen U.S. national 
security and economic competitiveness. The National Technical 
Information Service (NTIS) joint venture partnership authority is 
another rapid acquisition authority that has been implemented within 
the Department of Commerce. Through that authority, NTIS leverages 
leading, innovative companies, academia, and non-profits to help solve 
complex data challenges within the Federal Government. The Department 
is happy to work with Congress on ways to streamline the process for 
commercializing investments in critical technologies.
                                 ______
                                 
            Questions Submitted by Senator Joe Manchin, III
    Question. As the superpower of the world, we are reliant on China, 
Russia, and other foreign adversaries for far too many of our energy 
needs--whether it be oil, solar wafers, nuclear fuel, or, increasingly, 
electric vehicles. These are all things we can and should be producing 
from start to finish in North America or sourcing from our allies. 
Unfortunately, China dominates the lithium ion battery to EV supply 
chain, controlling 76 percent of lithium-ion battery production, 
including 74 percent of the world's cathode production and 92 percent 
of the world's anode production. These numbers are alarming and should 
be a wake-up call that if we throw caution to the wind and move too 
quickly toward EVs without strengthening our domestic supply chain, we 
will be forced to rely on China for decades to come. Unfortunately, at 
every turn, this administration has made it clear that they care more 
about getting EVs on the road than they do about the energy security of 
this nation.
  --How would you rate our competitiveness with China on battery 
        manufacturing and electric vehicles, particularly with respect 
        to the supply chain for both? Given the statistics, are we too 
        far behind to catch up?
  --Do you think being reliant on China for our transportation sector 
        is a national security risk?
    Answer. To outcompete the People's Republic of China (PRC), we need 
bold domestic investments and innovation ecosystems that bring 
manufacturing in critical technologies and industries back to the 
United States. Without manufacturing strength in the United States and 
the innovation that flows from it, we risk falling behind China in the 
race to invent and commercialize future generations of technology. 
Diverse, resilient, and sustainable supply chains are critical for 
national security and economic competitiveness, and a key element of 
this effort is revitalizing domestic manufacturing, reducing our 
reliance on the PRC, and positioning ourselves to be proactive instead 
of reactive.
    The Inflation Reduction Act (IRA) is a major achievement for clean 
energy, energy security, and climate ambition, representing the largest 
investment in climate and clean energy solutions in U.S. history. This 
law makes a historic investment in climate and clean energy solutions, 
delivered through a combination of innovative tax incentives, grant 
programs, and loan guarantees. The clean energy investment and 
production provisions in the IRA will incentivize investments across 
the clean energy supply chain including solar, wind, geothermal, 
hydrogen, critical minerals and battery technologies, tidal and wave 
energy, carbon capture and sequestration, and civil nuclear, among many 
others.
    Combined with the CHIPS and Science Act and the Infrastructure 
Investment and Jobs Act, the IRA is a gamechanger for clean energy 
investment, and we are already seeing many signs of progress. Since the 
passage of IRA, the private sector has already announced at least $75 
billion in clean energy investments and more than $90 billion in new 
investments up and down the battery supply chain since President Biden 
took office.
    The United States has a target to make 50 percent of new light-duty 
vehicle sales electric by 2030, a goal several other countries have 
also adopted. The IRA provides opportunities for investors in the EV 
manufacturing sector and across the EV battery supply chain. IRA 
amendments to the section 30D Clean Vehicle credit incentivize 
investment in U.S. clean vehicle manufacturing, battery assembly, and 
critical minerals. In addition, the IRA's section 45X Advanced 
Manufacturing Production credit incentivizes domestic production of 
battery components and critical minerals.
    Analyzing critical supply chains to identify potential chokepoints 
before they become crises -going from reactive to proactive--should be 
prioritized. This is why the FY 2024 Budget Request seeks $21 million 
to establish a supply chain resiliency office in the International 
Trade Administration's (ITA) Industry and Analysis unit. This new 
program will build on the work already being done in ITA and strengthen 
the bureau's ability to: (1) identify economic and national security 
risks to supply chains; (2) execute strategies and provide analysis and 
recommendations to support policymaking to strengthen supply chains; 
(3) provide the U.S. Government with guidance to help identify and 
secure investments in strategic emerging and legacy industries; and (4) 
support U.S. industries' ability to commercialize opportunities and 
expand exports (creating jobs in the United States).
    ITA is also seeking to expand SelectUSA services to coordinate 
supply chain priorities with state Foreign Direct Investment (FDI) 
attraction efforts and recruit high-value investment targets in 
alignment with supply chain strategies. The FY 2024 Budget seeks $4.75 
million for ITA to expand its investment promotion tool kit to target 
high-value investment targets in coordination with U.S. States, which 
would dramatically improve SelectUSA's ability to increase investment 
in the United States. In addition, ITA will do the analysis required to 
use the specialized expertise and firm-level data needed to develop 
better strategies for attracting specific individual firms to the 
United States. Lastly, the requested funds will bolster the Advocacy 
Center, reflecting the importance of global market access to 
maintaining the viability of key domestic suppliers.
    This request is the Global Markets component of an ITA joint 
proposal with the Industry and Analysis business unit. Global Markets 
will leverage the analysis, strategies, and recommendations produced by 
Industry and Analysis under its complementary request to better target 
FDI toward reducing critical, national supply chain risks.
    The National Institute of Standards and Technology (NIST) 
Manufacturing Extension Partnership (MEP) helps businesses narrow gaps 
in our supply chains and make manufacturing more resilient. NIST's 
Manufacturing USA program intends to make available competitive awards 
to enable existing Manufacturing USA institutes to transition 
technologies developed at the institutes into domestic production. In 
addition, the Economic Development Administration's Regional Technology 
and Innovation Hubs (Tech Hubs) program is working to create regional 
innovation centers across the country by bringing together industry, 
higher education institutions, State and local governments, economic 
development organizations, and labor and workforce partners to 
supercharge ecosystems of innovation for technologies that are 
essential to our National security and economic competitiveness. The 
Tech Hubs program was authorized by the CHIPS and Science Act and is a 
key part of President Biden's Investing in America agenda, stimulating 
private sector investment, creating good-paying jobs, revitalizing 
American manufacturing, and ensuring no community is left behind by 
America's economic progress.
    Altogether, these investments in critical technologies and regions 
are essential to maintaining American technological leadership in the 
world and outcompeting the PRC in a 21st century global economy.
    Question. For years, the Chinese government has engaged in the 
illegal trade practices of transshipment and dumping to circumvent U.S. 
trade laws, avoid American tariffs, and give Chinese firms an unfair 
advantage over West Virginian and American companies. These practices 
are especially concerning when they target our critical industries, as 
China seeks to create bottlenecks of critical materials and control 
supply chains. In particular, I want to highlight the dangers of these 
Chinese practices as they affect American energy security. We have 
relied on foreign nations for the resources and materials we need to 
power our Nation for too long. That's why I was proud to cosponsor the 
Senate Resolution reversing President Biden's 2-year pause on solar 
import tariffs. We cannot continue to let China get away with 
laundering solar energy components through other nations with 
absolutely no consequences. Let me be clear: America will never be 
energy secure or independent if we can't provide the resources we need. 
American manufacturers--some of the most innovative in the world--are 
more than ready to rise to the occasion and help realize the goals of 
the Bipartisan Infrastructure Law and the Inflation Reduction Act to 
onshore our energy supply chains.
  --What is being done to ensure America's energy supply chains are 
        reliable and safe?
  --Can you speak to how American energy security is critical to our 
        geopolitical positioning on the world stage, and how it allows 
        us to better help our allies?
    Answer. The U.S. trade laws are a critical component of U.S. 
economic competitiveness and key to supporting a viable domestic 
manufacturing base. I am firmly committed to strong enforcement of our 
trade laws with respect to imports that are unfairly dumped and/or 
subsidized and that cause harm to the U.S. industry and its workers. 
And we remain committed to vigorously addressing the highly distortive 
practice of circumvention given its negative impacts which seriously 
undermine the relief from unfair trade obtained for our companies and 
workers.
    Diverse, resilient, and sustainable supply chains are critical for 
national security and economic competitiveness, and a key element of 
this effort is revitalizing domestic manufacturing, reducing our 
reliance on the PRC, and positioning ourselves to be proactive instead 
of reactive.
    Analyzing critical supply chains to identify potential chokepoints 
before they become crises -going from reactive to proactive--should be 
prioritized. This is why the FY 2024 Budget Request seeks $21 million 
to establish a supply chain resiliency office in ITA's Industry and 
Analysis unit for FY 2024. This new program will build on the work 
already being done in ITA and strengthen the bureau's ability to: (1) 
identify economic and national security risks to supply chains; (2) 
execute strategies and provide analysis and recommendations to support 
policymaking to strengthen supply chains; (3) provide the U.S. 
Government with guidance to help identify and secure investments in 
strategic emerging and legacy industries; and (4) support U.S. 
industries' ability to commercialize opportunities and expand exports 
(creating jobs in the United States).
    ITA is also seeking to expand SelectUSA services to coordinate 
supply chain priorities with state Foreign Direct Investment (FDI) 
attraction efforts and recruit high-value investment targets in 
alignment with supply chain strategies. The FY 2024 Budget seeks $4.75 
million for ITA to expand its investment promotion tool kit to target 
high-value investment targets in coordination with U.S. States, which 
would dramatically improve SelectUSA's ability to increase investment 
in the United States. In addition, ITA will do the analysis required to 
use the specialized expertise and firm-level data needed to develop 
better strategies for attracting specific individual firms to the 
United States. Lastly, the requested funds will bolster the Advocacy 
Center, reflecting the importance of global market access to 
maintaining the viability of key domestic suppliers.
    This request is the Global Markets component of an ITA joint 
proposal with the Industry and Analysis business unit. Global Markets 
will leverage the analysis, strategies, and recommendations produced by 
Industry and Analysis under its complementary request to better target 
FDI toward reducing critical, national supply chain risks.
    The NIST MEP helps businesses narrow gaps in our supply chains and 
make manufacturing more resilient. NIST's Manufacturing USA program 
intends to make available competitive awards to enable existing 
Manufacturing USA institutes to transition technologies developed at 
the institutes into domestic production. In addition, the Economic 
Development Administration's Regional Technology and Innovation Hubs 
(Tech Hubs) program is working to create regional innovation centers 
across the country by bringing together industry, higher education 
institutions, State and local governments, economic development 
organizations, and labor and workforce partners to supercharge 
ecosystems of innovation for technologies that are essential to our 
National security and economic competitiveness. The program was 
authorized by the CHIPS and Science Act and is a key part of President 
Biden's Investing in America agenda, stimulating private sector 
investment, creating good-paying jobs, revitalizing American 
manufacturing, and ensuring no community is left behind by America's 
economic progress.
    The Department believes it is critical to build up the domestic 
manufacturing base required to deploy clean energy across the United 
States. The Biden-Harris Administration has prioritized investments 
that will create good-paying jobs and build secure solar supply chains 
in the U.S., including through tax credits in the Inflation Reduction 
Act (IRA) such as increased tax benefits for taxpayers who meet the 
prevailing wage and apprenticeship requirements and domestic content 
bonus. Thanks to the President's Investing in America agenda, more than 
90 Gigawatts (GW) of private-sector investments in U.S. solar 
manufacturing have been announced since the President took office, with 
about half of that coming in just the 7 months since the passage of the 
IRA. America is now on track to increase domestic solar panel 
manufacturing capacity eight-fold by the end of the President's first 
term.
    Additionally, through SelectUSA, the U.S. government program housed 
within the Commerce Department which focuses on facilitating and 
promoting foreign investment into the United States, solar energy has 
been a key focus. Since the passage of the IRA, SelectUSA has 
facilitated clean tech investments into the United States worth over 
$10.2 billion.
    In May 2023, SelectUSA assisted Enel North America to choose Inola, 
Oklahoma as the location to build its new industrial-scale 
manufacturing facility for innovative, sustainable and American-made 
photovoltaic (PV) cells and modules. The factory, which is expected to 
have an annual production capacity of 3 gigawatts (GW), represents an 
initial investment in excess of $1 billion dollars and is anticipated 
to create 1,000 new direct permanent jobs by 2025. The project includes 
the potential for a second phase that would scale the factory to reach 
6 GW of annual production, creating an additional 900 new direct jobs. 
SelectUSA also assisted Philadelphia Solar, a Jordanian based solar 
panel company that announced investment plans in November 2022 after 
passage of the IRA. Initial investment plans include $100 million to 
install a 1.2GW manufacturing line for US-made mono-PERC modules by 
2024, with plans to invest in state-of-the-art cells production line by 
2025 to support over 400 anticipated jobs. And in October 2022, 
Japanese automotive manufacturer Honda and South Korean electric 
vehicle battery manufacturer LG Energy Solutions announced a $4.2 
billion investment to open a new EV battery plant and expand existing 
plants in Ohio, which is expected to create 2,527 jobs.
    The United States is also committed to building a coalition of 
allies and partners to invest in the creation of strong, independent, 
and reliable clean energy supply chains that puts the free world in 
charge of its own clean energy future. For example:
  --Through the Clean Economy pillar (Pillar 3) of the Indo-Pacific 
        Economic Framework for Prosperity (IPEF), we are working with 
        13 other partners to grow U.S. exports for clean energy tech 
        and help ensure that partners in the region work together, 
        rather than turn to the PRC for their financing and 
        technologies.
  --On May 20, 2023, the Quad (consisting of the U.S., Australia, 
        India, and Japan) announced that it will work together to 
        identify and address gaps in our manufacturing capacity for 
        critical clean energy materials and technologies. In 
        particular, the program will focus on the supply chains for 
        solar PVs, hydrogen electrolyzer, and electric vehicle battery 
        technologies. Quad partners are contributing funding, technical 
        expertise, and in-kind support to the supply chain assessment 
        efforts and subsequent investment decisions. The Quad also 
        established joint principles for clean energy supply chains.
  --Also on May 20, 2023, the United States and Australia signed a 
        Statement of intent to advance our climate cooperation through 
        the Australia-United States Climate, Critical Minerals, and 
        Clean Energy Transformation Compact, including coordination to 
        spur the diversification and expansion of clean energy supply 
        chains.
  --At the Clean Energy Ministerial, the United States co-leads a new 
        initiative to foster the adoption of policies that transform 
        the global solar supply chain to be more diverse, transparent, 
        and environmentally and socially responsible.
    Question. Artificial Intelligence (AI) has received quite a lot of 
attention lately, and I'm proud to see it. Senator Rounds and I have 
been promoting development of this technology for years from the 
Cybersecurity subcommittee on Armed Services. One of our main partners 
in this endeavor has been the leadership of the National Security 
Commission on Artificial Intelligence, specifically Dr. Eric Schmidt 
(former Google CEO), Bob Work (former Deputy Secretary of Defense), and 
Dr. Jason Matheny (current CEO of RAND Corporation). This Commission 
released a classified report detailing programs and funding our 
government should be investing in, but I worry that these 
recommendations have not been widely shared. I've also been working 
with our partners in the private industry, including Alex Wang (Scale 
AI), Alex Karp (Palantir), and Josh Lospinoso (Shift5) to ensure we're 
putting guardrails in place to effectively regulate and protect our 
development of AI for national security usage.
  --Have each of you received this classified briefing from the 
        Commission? If not, can I get your commitment to receive the 
        briefing?
  --How are each of you thinking about protecting the investments we're 
        making in AI, and ensuring AIs are used ethically?
    Answer. The Department of Commerce is committed to working across 
the Federal Government to develop artificial intelligence (A.I.) policy 
that is premised on the responsible use of A.I. technology that 
accounts for the risks, harnesses the benefits, and promotes 
innovation. The Department engages with a variety of stakeholders, 
including but not limited to academia, civil society, and industry, to 
better understand the current A.I. landscape and where government can 
be helpful.
    The Department is undertaking multiple lines of effort related to 
A.I. policies and practices. The National A.I. Advisory Committee 
(NAIAC), whose members are appointed by the Secretary of Commerce, 
advises the President and the National AI Initiative Office on matters 
related to the National AI Initiative. The Committee's first-year 
report, required under the National AI Initiative Act of 2020, contains 
recommendations that include adequately funding programs under the 
National Artificial Intelligence Initiative Act and the National 
Institute of Standards and Technology (NIST) Trustworthy and 
Responsible A.I. Program. Additionally, in April 2021, I received a 
briefing from Dr. Eric Schmidt and Bob Work, along with Commission 
staff, on the final report of the National Security Commission on 
Artificial Intelligence.
    Moreover, NIST released an A.I. Risk Management Framework, which is 
a voluntary tool to help individuals and organizations manage risks 
associated with A.I. NIST's work is ongoing to assess A.I. risk 
management, the creation of technical standards, building A.I. 
trustworthiness, and measurement and evaluation.
    On April 11, 2023, the National Telecommunications and Information 
Administration (NTIA) released a Request for Comment (RFC) inviting 
academic, industry, civil society, government stakeholders, and the 
public to comment on what the Federal Government should be doing to 
promote a robust accountability ecosystem for A.I. and ensure that A.I. 
systems are implemented fairly and safely. The RFC sought feedback on 
policies that can support the development of A.I. audits, assessments, 
certifications, and other mechanisms to create responsible and trusted 
A.I. systems. It further asked whether different approaches are 
warranted for different industries and what other policy responses 
might be appropriate.
    Last year, ITA issued a RFC on Artificial Intelligence Export 
Competitiveness, exploring foreign regulations and potential trade 
barriers.
    In October 2022, the Commerce Department's Bureau of Industry and 
Security (BIS) imposed unprecedented restrictions on the PRC's access 
to advanced semiconductor manufacturing equipment, chips and other 
items needed to develop A.I. and prohibited U.S. persons from 
supporting chip development and production that power A.I. systems at 
certain semiconductor fabrication facilities located in the PRC or 
Macau without a license. BIS continues to assess technologies within 
the A.I. ecosystem to identify technologies necessary for control to 
ensure the National security of the United States.
    U.S. Patent and Trademark Office (USPTO) is currently studying how 
A.I. affects the patent system and intellectual property (IP). To this 
end, the agency created an A.I. and Emerging Technology Partnership, an 
ongoing cooperative effort between the USPTO and the AI/ET community, 
including academia, independent inventors, small businesses, industry, 
other government agencies, nonprofits, and civil society. Additionally, 
the agency has issued two reports on the intersection of IP and A.I., 
including Public Views on AI and IP Policy, and Inventing AI--Tracing 
the diffusion of AI within U.S. Patents.
    Finally, as we work with other Federal agencies to promote the safe 
and responsible development of A.I. here at home, we are also 
supporting Biden Administration efforts with likeminded allies and 
partners who share our values, such as anti-discrimination, privacy, 
and human rights.
    Question. Multiple sources, including retired general officers, the 
National Defense Industrial Association, the American Enterprise 
Institute, and the Pentagon itself have all recognized the damage 
failing to pass a budget on time has on both our National security and 
the taxpayer. The American Enterprise Institute threw out a rough 
estimate of $200 million per day under the latest Continuing Resolution 
that covered the start of Fiscal Year 2023, that's a total of $18 
billion. The DoD Comptroller noted that from Fiscal Year 1911 to 2010 
the average delay for defense appropriations was 29 days, and that has 
since ballooned out to 118 days, 4 months. I have repeatedly asked the 
Pentagon for as concise a number as possible to put a figure on the 
damage these delays are causing to our National security and wasted 
taxpayer money, but we've been unable to nail down these estimates.
  --Can I have each of your commitments to get Congress as accurate an 
        estimate as possible on the financial impact previous CRs have 
        had on your Departments?
    Answer. The President negotiated a bipartisan budget agreement that 
keeps non-defense spending roughly flat with current (FY 2023) levels 
in 2024 when factoring in agreed-upon appropriations adjustments. The 
Commerce Department's mission is to create the conditions for economic 
growth and opportunity for all communities. Assuming enactment of 
appropriations consistent with the agreement, this agreement preserves 
the investments made by the Department that protect our National 
security, promote our economic competitiveness, and strengthen our 
position to outcompete the PRC in the 21st century global economy.
    The Department is happy to work with your office to illustrate the 
adverse impacts of Continuing Resolutions on our ability to carry out 
our mission.
    Question. I'd like to turn to an issue that has been getting a lot 
of attention in Congress these days, and that's TikTok. As you know, 
the encroachment of foreign adversaries on American internet 
infrastructure, including social media platforms like TikTok, poses 
serious risks to our Nation's economic and national security. That's 
why I'm a cosponsor of bipartisan legislation called the RESTRICT Act 
that would codify and improve a set of rules created under the Trump 
Administration and expanded upon by the Biden Administration to allow 
the Secretary of Commerce to review foreign technology products and 
mitigate any risks they pose to the United States. As Chairman of the 
Senate Armed Services subcommittee on Cybersecurity, I will continue 
working with my colleagues on both sides of the aisle to get critical 
legislation like this across the finish line.
  --Do you believe that TikTok poses a threat to our National security?
  --Does the Department of Commerce have the ability to ban apps that 
        might pose a national security threat under its existing 
        authorities?
    Answer. The Administration takes seriously the National security 
risks related to certain technology products and services from China 
and other countries of concern. Information and Communication 
Technology Services (ICTS) that originate in foreign adversary 
countries, including connected software applications, raise particular 
concerns. The Administration will use every tool at its disposal to 
address the National security risks presented by these threats--
including the National security risks associated with TikTok.
    The Department's ICTS program received its first substantial 
funding in December 2022. The program is ramping up hiring, to prevent 
undue or unacceptable risks from the use or storage of personal 
information and data critical to national security.
    To put ICTS-related measures on the strongest possible footing, the 
Administration has consistently called for legislation that would 
codify in statute the ICTS authorities outlined in Executive Orders 
13873 and 14034. Such legislation would strengthen and reinforce the 
Federal Government's ability to combat current and evolving threats, to 
safeguard the security and integrity of our ICTS supply chain, and to 
protect the American people. In that regard, the Department welcomes 
the opportunity to work with Congress on legislation that would address 
ICTS threats in a comprehensive way and protect our National security.
                                 ______
                                 
             Questions Submitted by Senator Martin Heinrich
    Question. Since the Inflation Reduction Act was passed, we have 
seen the most dramatic reshoring of American energy related 
manufacturing capacity in many decades. 46 factories representing $150 
billion and 18,000 jobs in less than a year. House Republicans have 
proposed repealing the IRA. What would that mean for our 
competitiveness with the PRC?
    Answer. In the first 2 years of the Biden-Harris Administration, 
the Commerce Department worked with Congress to enact the American 
Rescue Plan, the Infrastructure Investment and Jobs Act (IIJA), the 
CHIPS and Science Act, and the Inflation Reduction Act (IRA). Taken 
together, they represent historic investments in America and a once-in-
a-generation commitment to advancing innovation, technology, 
manufacturing, workforce training, supply chain resilience, and the 
infrastructure that we need to ensure our future competitiveness and 
national security. These investments drive innovation, job creation, 
and economic growth that strengthen our position to outcompete the 
People's Republic China (PRC), and their effectiveness would be 
threatened by repealing or under-resourcing the laws enacted by 
Congress.
    The passage of IIJA and IRA has created strong incentives along the 
clean energy continuum--from technology innovation to deployment and, 
thanks to the IRA, incentives for clean energy manufacturing investment 
and production. Other nations have taken note of the clean energy 
ecosystem successes resulting from the IRA--as evidenced by 
announcements of gigafactory production lines in solar and hydrogen 
energy sectors--and are now establishing similar legislation to 
simultaneously stimulate manufacturing and combat climate-change. 
Repealing or under-sourcing the incentives would result in (1) a step 
backwards from a less aggressive approach to combating climate change; 
(2) decreased production of American-made parts, components and 
technologies exported to the international market; and (3) a potential 
reliance on imported parts, components and technologies that could 
impede the United States' ability to meet clean tech deployment goals.
    Analyzing critical supply chains to identify potential chokepoints 
before they become crises should be prioritized. This is why the FY 
2024 Budget Request seeks $21 million to establish a supply chain 
resiliency office in the International Trade Administration's (ITA) 
Industry and Analysis unit for FY 2024. This new program will build on 
the work already being done in ITA and strengthen the bureau's ability 
to: (1) identify economic and national security risks to supply chains; 
(2) execute strategies and provide analysis and recommendations to 
support policymaking to strengthen supply chains; (3) provide the U.S. 
Government with guidance to help identify and secure investments in 
strategic emerging and legacy industries; and (4) support U.S. 
industries' ability to commercialize opportunities and expand exports 
(creating jobs in the United States).
    ITA is also seeking to expand SelectUSA services to coordinate 
supply chain priorities with state Foreign Direct Investment (FDI) 
attraction efforts and recruit high-value investment targets in 
alignment with supply chain strategies. The FY 2024 Budget seeks $4.75 
million for ITA to expand its investment promotion tool kit to target 
high-value investment targets in coordination with U.S. States, which 
would dramatically improve SelectUSA's ability to increase investment 
in the United States. In addition, ITA will do the analysis required to 
use the specialized expertise and firm-level data needed to develop 
better strategies for attracting specific individual firms to the 
United States. Lastly, the requested funds will bolster the Advocacy 
Center, reflecting the importance of global market access to 
maintaining the viability of key domestic suppliers.
    This request is the Global Markets component of an ITA joint 
proposal with the Industry and Analysis business unit. Global Markets 
will leverage the analysis, strategies, and recommendations produced by 
Industry and Analysis under its complementary request to better target 
FDI toward reducing critical, national supply chain risks.
    Question. The National Oceanic and Atmospheric Administration 
counters illegal, unreported, and unregulated fishing sponsored by the 
People's Republic of China. This work ensures that the fish and seafood 
that Americans eat is not contributing to fishery collapse and human 
rights abuses. How would these efforts be impacted by a long-term 
continuing resolution?
    Answer. On June 27, 2022, President Biden issued the Memorandum on 
Combating Illegal, Unreported, and Unregulated (IUU) Fishing and 
Associated Labor Abuses. The Memorandum observes that, if unchecked, 
IUU fishing and associated labor abuses threaten the livelihoods and 
human rights of fishers around the world and will undermine U.S. 
economic competitiveness, national security, and fishery 
sustainability. These practices also exacerbate the environmental and 
socioeconomic effects of climate change. The Department of Commerce, 
through NOAA, is committed to combating IUU fishing, seafood fraud, 
forced labor, and other labor abuses.
    The President negotiated a bipartisan budget agreement that keeps 
non-defense spending roughly flat with current (FY 2023) levels in 2024 
when factoring in agreed-upon appropriations adjustments. Assuming 
enactment of appropriations consistent with the agreement, this 
agreement preserves NOAA's ability to counter IUU fishing enabled by 
the PRC.
    Question. Congress passed the CHIPS and Science Act to invest in 
science and technology to help the United States compete with the 
People's Republic of China. That bill included funding that was 
particularly important to me--to grow U.S. leadership in semiconductor 
research, design, engineering, and advanced manufacturing.
    Last August, I wrote a letter to you and Secretary Granholm 
expressing the New Mexico delegation's strong support for our state as 
a potential site for the National Semiconductor Technology Centers and 
National Advanced Packaging Manufacturing Program, both established 
under the CHIPS and Science Act.
    How would a continuing resolution impact efforts to implement the 
important provisions in the CHIPS and Science Act, including the effort 
to establish a national semiconductor technology center?
    Answer. The Department's ability to use the already-authorized 
funding to implement research and development provisions of the CHIPS 
and Science Act is dependent on the enactment of an annual 
appropriations act, which makes available a new tranche of funding for 
obligation in each fiscal year.
    The Commerce Department's CHIPS for America program, funded by the 
CHIPS and Science Act, is focused on unleashing the next generation of 
American innovation, protecting our National security, and preserving 
our global economic competitiveness. In April of this year, the 
Department released a Vision & Strategy paper outlining its plans to 
strengthen domestic research and development through the National 
Semiconductor Technology Center (NSTC), which is the centerpiece of our 
efforts to develop chips and lead in next-generation semiconductor 
technologies, including quantum computing, artificial intelligence, and 
other technology areas of the future. The NSTC will be the focal point 
for research and engineering throughout the semiconductor ecosystem, 
will shorten the runway required to move from design to 
commercialization, reduce the costs needed for this progress, and will 
help us scale up the semiconductor workforce. The NSTC budget is 
provided by a no-year appropriation, but the entire appropriation is 
not immediately available for obligation. Partial funding is made 
available on a yearly basis in each fiscal year from FY 2022--FY 2026 
via the annual appropriations act, until all of the funds are available 
by FY 2026. Furthermore, the program is more than just building 
facilities, the NSTC will also be a major contributor to the workforce 
development ecosystem.
                                 ______
                                 
               Questions Submitted by Senator Jerry Moran
    Question. We share a concern about the threat posed by CCP-
influenced companies operating around the world. In February, news 
reports indicated that Huawei Export Licenses could be revoked. There 
has been no announcement or change for 3 months since.
  --Can you please provide an update on what actions the Administration 
        has taken to prevent stockpiling of critical technologies in 
        the months following these reports?
  --Has the Administration halted the issuance of new export licenses 
        for Huawei?
    --If yes, what is the reason for halting? Is BIS in compliance with 
            the laws regarding timely review and notification of 
            license applications?
    --If no, why is the administration allowing Huawei to continue to 
            grow and spend on next generation technologies? It is clear 
            that Huawei is receiving funding from the CCP and using 
            that capital to undercut American businesses around the 
            globe.
    Answer. Huawei Technologies Co., Ltd. (Huawei) remains on the 
Entity List and no changes to its licensing policy have been made at 
this time. Currently, the licensing policy for exports to Huawei is a 
presumption of denial for any item subject to Bureau of Industry and 
Security (BIS) jurisdiction, unless it is for items that can only 
support telecommunications systems, equipment, and devices below the 
5G-level, in which case the U.S. government will review such license 
applications on a case-by-case basis. Information in connection with 
licenses and license applications for exports of items under Commerce 
jurisdiction is prohibited from disclosure by BIS under section 1761(h) 
of the Export Control Reform Act of 2018 (50 U.S.C. 4820(h)) absent a 
written request on letterhead of a chair or ranking member of a 
Congressional committee or subcommittee of appropriate jurisdiction.
    BIS is engaging in an ongoing assessment of our export control 
policies related to the People's Republic of China (PRC), including the 
existing licensing policy for license applications involving Huawei, 
and calibrating them based on the evolving threat environment. 
Additionally, BIS regularly consults with allies and partners to share 
information and coordinate our technology protection strategies.
    Question. Regarding spectrum:
  --Do you believe the Federal Government is efficiently using its 
        spectrum holdings?
  --Can you share NTIA's latest analysis of the efficiency of the 
        Federal spectrum holdings, if this is something the agency has 
        previously undertaken?
    --If the agency has not undertaken such analysis, would the agency 
            consider conducting such analysis?
    Answer. A wide array of Federal agencies use spectrum effectively 
to perform critical missions in service to all Americans--from national 
defense, to weather forecasting, to scientific observation, and more. 
The National Telecommunications and Information Administration (NTIA) 
has a dual imperative built into its statutory role. NTIA is both the 
manager of Federal spectrum resources and the President's primary 
advisor on spectrum-related issues. In its statutory Federal spectrum 
management role, NTIA helps ensure the efficient use of spectrum by 
tailoring frequency assignments to demonstrated agency spectrum 
requirements. Significantly, most spectrum bands with Federal 
operations are shared, accommodating access by multiple--often many--
agencies. Spectrum used for Federal missions is also often shared with 
the private sector uses, and NTIA recognizes the need to make 
additional spectrum available for commercial use. Given NTIA's dual 
roles, NTIA is focused both on ensuring that Federal agencies have the 
spectrum necessary to carry out their missions and ensuring that there 
is sufficient spectrum for private sector use to maintain U.S. global 
leadership in wireless technology and services.
    In August 2022, NTIA and the Federal Communications Commission 
(FCC) announced an updated Memorandum of Understanding (MOU) between 
our agencies on spectrum coordination. This was the first update to the 
MOU in nearly 20 years, and it is already paying dividends as the two 
agencies navigate complex issues together.
    Significantly, NTIA, in coordination with the FCC, and Federal 
Departments and Agencies through the Policy and Plans Steering Group, 
is crafting a National Spectrum Strategy (NSS) to develop a roadmap to 
make spectrum resources available to continue U.S. leadership in 
advanced wireless technology and services; establish data-driven 
processes for long-term spectrum planning and coordination; promote the 
development of emerging spectrum management technology; and develop an 
enduring and scalable mechanism for managing shared spectrum access for 
the Federal Government. The NSS will, among other things, identify at 
least 1500 megahertz of spectrum to study in the next 2 years to 
determine if future repurposing is feasible.
    We must find ways to allow for more intensive use of this finite 
resource and do this in a coordinated fashion. We must account for the 
existing uses and future needs of relevant stakeholders and ensure that 
new spectrum uses are balanced with existing and future Federal agency 
operations and that we do not compromise national security or public 
safety.
    Question. I have a few questions about artificial intelligence 
(AI).
  --How does the Department of Commerce and its agencies currently use 
        AI? Does the Department of Commerce and its agencies have plans 
        to expand AI use?
    --If AI is used by the Department, what guidance governs the 
            Department's use of AI?
    --If AI is used by the Department, what oversight of its use is 
            conducted?
    --If AI is used by the Department, does its use align with the NIST 
            AI Risk Management Framework (RMF)?
    --Are you aware of use of Chat GPT, Google Bard, or Bing AI 
            ``chatbots'' at the Department of Commerce or its agencies?
  --Generally speaking, what are your primary concerns regarding the 
        Federal Government's use of AI?
    --What do you see as potential benefits of AI use?
  --Can you talk about the importance of the NIST AI RMF and how it can 
        be used by businesses, governments, and other organizations?
    --How can the Department of Commerce and Congress promote the use 
            of this RMF, as AI use becomes more pervasive and more 
            powerful?
    --What is the future of the NIST AI RMF? Is there anything Congress 
            can do to improve its usefulness?
    Answer. In May of this year, I joined Vice President Harris and 
senior Biden-Harris Administration officials for a meeting with the 
Chief Executive Officers (CEOs) of four American companies that are at 
the forefront of Artificial Intelligence (A.I.) innovation to discuss 
advancing responsible A.I. innovation. This technology can have 
tremendous benefits, but there are significant risks as well, and 
companies have a responsibility to make sure their products are safe 
and secure before they are deployed. Clearly, A.I. systems and 
technologies are already shaping our world, and as they continue to 
evolve, they may bring great benefits but also great risks to the 
Nation's economic and national security.
    As this critical and emerging technology continues to rapidly 
evolve, the Commerce Department, through the National Institute of 
Standards and Technology (NIST), is championing the development of A.I. 
systems that are trustworthy and responsible in practice and use and 
has positioned itself as a domestic and international leader in 
cultivating trust in the design, development, use, and governance of 
A.I systems. In January 2023, NIST released Version 1.0 of the A.I. 
Risk Management Framework (A.I. RMF 1.0) to help manage risks 
associated with A.I. to individuals, organizations, and society. The 
A.I. RMF 1.0 was a result of efforts begun in 2021, including NIST 
engagements with A.I. stakeholders through Requests for Information, 
draft frameworks for public comments, and workshops. NIST also supports 
other tools to help individuals and organizations better manage risks 
associated with the use of A.I., including a Playbook. The Playbook 
provides suggested actions for achieving the outcomes laid out in the 
A.I. RMF. The NIST Trustworthy & Responsible Artificial Intelligence 
Resource Center (AIRC) supports all A.I. actors in the development and 
deployment of trustworthy and responsible A.I. technologies. AIRC 
supports and operationalizes the NIST A.I. RMF 1.0 and accompanying 
Playbook and will grow with enhancements to enable an interactive, 
role-based experience providing access to a wide range of relevant A.I. 
resources.
    Currently A.I. use within the Department of Commerce is regulated 
by Executive Order (EO) 13960 and follows the practices identified by 
NIST's A.I. RMF 1.0. The Department is awaiting OMB's release of 
additional guidance in this space and working on its own guidance 
regarding usage of Generative A.I. tools such as ChatGPT, Google Bard 
and Bing A.I. Usage of A.I. at the Department is being monitored and 
overseen by the bureaus with current active deployments and subject to 
the guidance from EO 13960 and A.I. RMF 1.0.
    NIST is a global A.I. leader, participating in conversations about 
A.I. policies and legislation in several international bodies. For 
example, NIST serves as the vice chair of the Working Party on A.I. 
Governance within the Organization for Economic Co-operation and 
Development and also developed a Joint Roadmap on Evaluation and 
Measurement Tools for Trustworthy A.I. and Risk Management with the EU 
as part of the Trade and Technology Council ministerial in 2022.
    These developments in A.I. are just a few examples of how NIST uses 
its expertise and role to anticipate emerging technological and 
standardization challenges and then proactively respond to those 
challenges. As these challenges multiply in the coming years and 
decades, NIST will need additional resources to keep America ahead of 
the curve.
    Question. There has been some discussion in Congress about whether 
a second round of mandatory funding for programs authorized under the 
CHIPS and Science Act is warranted. Before considering that step, 
however, I want to ensure that the currently funded programs are being 
implemented in an efficient manner that evinces good stewardship of 
taxpayer dollars.
  --How are you ensuring that the critical programs in your Department, 
        including the CHIPS program and the Regional Tech Hubs program 
        in particular, do not have onerous program rules that increase 
        costs to participate and decrease program effectiveness?
    --Increasing geographic diversity in research and development is a 
            key goal of Congress. Can you please update this committee 
            on how Commerce is ensuring that it meets those 
            expectations?
    Answer. The Department of Commerce is committed to being good 
stewards of taxpayer dollars. The CHIPS and Science Act represents a 
historic public investment in private industry without recent 
precedent, and taxpayers deserve transparency and accountability. Above 
all, we are looking for projects that advance U.S. economic and 
national security. Among other things, we are looking at whether 
projects build sustainable domestic capacity that reduces U.S. reliance 
on vulnerable or overly concentrated production. We have also 
articulated additional criteria that we are using to evaluate projects, 
including a project's commercial viability, an applicant's financial 
strength, and an applicant's commitment to workforce development. It is 
vitally important that our funding creates good-paying jobs and leads 
to long-term, inclusive economic growth. Other criteria we are looking 
at include project technical feasibility and readiness, as well as 
broader community impacts.
    In February of this year, the CHIPS for America program launched 
our first Notice of Funding Opportunity (NOFO) for CHIPS funds under 
the section 9902 Incentives Program, focused on commercial 
manufacturing facilities. In response to the first NOFO, so far, we 
have received more than 500 Statements of Interest (SOIs) from 
potential applicants seeking incentives for commercial fabrication 
facilities, packaging facilities, material suppliers and equipment 
manufacturers, and R&D facilities. The SOIs describe projects in 42 
States and span the entire semiconductor ecosystem. It is clear the 
private sector is eager to continue investing in America and is 
ambitious about scaling up semiconductor production across the country. 
We do not want to rely on a single company or a single geographic area, 
which is why we are aiming for at least two leading-edge clusters 
(e.g., geographically compact areas with multiple fabrication 
facilities), in the United States. We expect that the investments we 
make will occur across a wide-range of geographic regions.
    The Economic Development Administration's (EDA) Regional Technology 
and Innovation Hubs (Tech Hubs) program is working to create regional 
innovation centers across the country by bringing together industry, 
higher education institutions, State and local governments, economic 
development organizations, and labor and workforce partners to 
supercharge ecosystems of innovation for technologies that are 
essential to our National security and economic competitiveness. We 
have the greatest research institutions on the planet--many of them in 
America's heartland, far from the coasts, and we need to create 
ecosystems of tech innovation in more communities around the country, 
especially those that have historically been overlooked. The Department 
of Commerce, through EDA, will focus on geographic diversity, 
throughout the continuum of rural and urban areas. The program was 
authorized by the CHIPS and Science Act and is a key part of President 
Biden's Investing in America agenda, stimulating private sector 
investment, creating good-paying jobs, revitalizing American 
manufacturing, and ensuring no community is left behind by America's 
economic progress.
    Question. As we continue to see China's economic and military 
influence expand, what specific measures are you taking as Secretary of 
Commerce to combat China's unfair trade practices and protect American 
businesses and workers?
    --How do you plan to address China's increasing control over 
        critical supply chains and technology and ensure that the 
        United States remains a leader in innovation and technological 
        advancement?
    Answer. The Commerce Department is committed to appropriately using 
its tools to protect our companies and counter unfair economic 
practices by the PRC, because no one can outcompete the United States 
if we are playing by the same rules. On May 25, 2023, as part of the 
Department's ongoing efforts to maintain open lines of communication 
and responsibly manage the relationship with the PRC, I met with PRC 
Minister of Commerce Wang Wentao. We had a candid and substantive 
discussion on issues relating to the U.S.-China commercial 
relationship, including the overall environment in both countries for 
trade and investment and areas for potential cooperation. I also raised 
concerns about the recent spate of PRC actions taken against U.S. 
companies operating in the PRC and expressed the Department's 
commitment to continuing to build on the engagement between President 
Biden and President Xi in Indonesia in November 2022.
    The Department of Commerce employs both an ``offense'' and 
``defense'' strategy with respect to the PRC--we are working to protect 
what we must, and promote what we can by employing export controls and 
trade enforcement authorities to defend U.S. technologies and 
industries, while also employing the resources from the CHIPS and 
Science Act, Infrastructure Investment and Jobs Act, and Inflation 
Reduction Act to promote American innovation, job creation, and 
economic resilience across many critical sectors. We are also working 
with international allies and partners to strengthen our global 
networks and promote our shared vision for a prosperous rules-based 
order.
    The Department's trade enforcement work is critical to protecting 
American businesses and workers from unfair pricing practices and trade 
distorting subsidies that undercut those businesses. Commerce currently 
enforces approximately 668 anti-dumping and countervailing duty (AD/
CVD) orders on unfairly traded imports from approximately 59 
countries--which are all-time highs. Of these approximately 668 AD/CVD 
orders, nearly 35 percent of them are on unfairly traded imports from 
the PRC. On May 9, 2023, Commerce also issued a proposed rule to 
address transnational subsidies through third-party countries, which 
would be a key tool to address the PRC's Belt and Road Initiative.
    Diverse, resilient, and sustainable supply chains are critical for 
national security and economic competitiveness, and a key element of 
this effort is revitalizing domestic manufacturing, reducing our 
reliance on the PRC, and positioning ourselves to be proactive instead 
of reactive.
    Analyzing critical supply chains to identify potential chokepoints 
before they become crises should be prioritized. This is why the FY 
2024 Budget Request seeks $21 million to establish a supply chain 
resiliency office in the International Trade Administration's Industry 
and Analysis unit for FY 2024. This new program will build on the work 
already being done in ITA and strengthen the bureau's ability to: (1) 
identify economic and national security risks to supply chains; (2) 
execute strategies and provide analysis and recommendations to support 
policymaking to strengthen supply chains; (3) provide the U.S. 
Government with guidance to help identify and secure investments in 
strategic emerging and legacy industries; and (4) support U.S. 
industries' ability to commercialize opportunities and expand exports 
(creating jobs in the United States).
    ITA is also seeking to expand SelectUSA services to coordinate 
supply chain priorities with state Foreign Direct Investment attraction 
efforts and recruit high-value investment targets in alignment with 
supply chain strategies. The FY 2024 Budget seeks $4.75 million for ITA 
to expand its investment promotion tool kit to target high-value 
investment targets in coordination with U.S. States, which would 
dramatically improve SelectUSA's ability to increase investment in the 
United States. In addition, ITA will do the analysis required to use 
the specialized expertise and firm-level data needed to develop better 
strategies for attracting specific individual firms to the United 
States. Lastly, the request will bolster the Advocacy Center, 
reflecting the importance of global market access to maintaining the 
viability of key domestic suppliers.
    This request is the Global Markets component of an ITA joint 
proposal with the Industry and Analysis business unit. Global Markets 
will leverage the analysis, strategies, and recommendations produced by 
Industry and Analysis under its complementary request to better target 
FDI toward reducing critical, national supply chain risks.
    The Committee on Foreign Investment in the United States (CFIUS) 
uses its authority to protect U.S. national security, including when it 
involves national security risks arising from effects on U.S. supply 
chains and technological innovation. In September 2022, President Biden 
issued an Executive Order (EO), on ``Ensuring Robust Consideration of 
Evolving National Security Risks by [CFIUS],'' to ensure that CFIUS's 
review remains responsive to evolving national security risks. As 
highlighted in the EO, CFIUS considers whether a foreign investor has 
``a demonstrated or declared strategic goal of acquiring a type of 
critical technology or critical infrastructure that would affect United 
States leadership in areas related to national security.''
    Based on the EO's guidance, CFIUS agencies, including Commerce, are 
focused on thoroughly reviewing transactions for national security 
risks arising from potential impacts on supply chain resiliency and 
security in certain manufacturing capabilities, services, critical 
mineral resources, and technologies that we consider fundamental to 
U.S. national security. These priority sectors include (1) 
microelectronics, (2) artificial intelligence, (3) biotechnology and 
biomanufacturing, (4) quantum computing, (5) advanced clean energy 
(such as battery storage and hydrogen), (6) climate adaptation 
technologies, (7) critical materials (such as rare earth elements), and 
(8) elements of the agricultural industrial base impacting food 
security, among others.
    Commerce is also leveraging its broad industry expertise to provide 
analysis that identifies and forecasts supply chain factors that could 
impact U.S. national security, including as it relates to technological 
leadership. Our team evaluates company-level supply chain exposures, 
both on the supplier and customer end, and aggregate-level trends of 
cumulative transactions by foreign acquirers in the relevant industry.
    NIST's Manufacturing Extension Partnership (MEP) helps businesses 
narrow gaps in our supply chains and make manufacturing more resilient. 
NIST's Manufacturing USA program intends to make available competitive 
awards to enable existing Manufacturing USA institutes to promote 
domestic production of technologies developed at the institutes.
    In addition, EDA's Regional Technology and Innovation Hubs program 
is working to create regional innovation centers across the country by 
bringing together industry, higher education institutions, State and 
local governments, economic development organizations, and labor and 
workforce partners to supercharge ecosystems of innovation for 
technologies that are essential to our National security and economic 
competitiveness. The program was authorized by the CHIPS and Science 
Act and is a key part of President Biden's Investing in America agenda, 
stimulating private sector investment, creating good-paying jobs, 
revitalizing American manufacturing, and ensuring no community is left 
behind by America's economic progress.
    Question. What steps do you believe the United States should take 
to address China's unfair trade practices, such as intellectual 
property theft and forced technology transfer?
    --Emerging technologies, including artificial intelligence and 5G 
        networks, are having an effect on global competition. How can 
        the United States ensure a level playing field for American 
        businesses and protect our innovation in these areas?
    Answer. The Commerce Department is committed to appropriately using 
its tools to protect our companies and counter unfair economic 
practices by the PRC, because no one can outcompete the United States 
if we are playing by the same rules. On May 25, 2023, as part of the 
Department's ongoing efforts to maintain open lines of communication 
and responsibly manage the relationship with the PRC, I met with PRC 
Minister of Commerce Wang Wentao. We had a candid and substantive 
discussion on issues relating to the U.S.-China commercial 
relationship, including the overall environment in both countries for 
trade and investment and areas for potential cooperation. I also raised 
concerns about the recent spate of PRC actions taken against U.S. 
companies operating in the PRC and expressed the Department's 
commitment to continuing to build on the engagement between President 
Biden and President Xi in Indonesia in November 2022.
    The Department maintains programs to assist U.S. rights holders to 
avoid and address instances of intellectual property theft and forced 
technology transfer, as well as a team of Intellectual Property (IP) 
experts in the PRC that help address our companies' needs while working 
to drive changes to PRC's IP laws over the longer term. ITA's 
interagency STOPfakes program website and USPTO's website contain a 
wealth of industry-specific and country-specific information on ways 
that U.S. companies can protect intellectual property, including in the 
PRC. We are working with the Office of the U.S. Trade Representative 
(USTR) to assess the effectiveness of the tariffs leveled under Section 
301 of the Trade Act of 1974 to thwart IP theft and forced technology 
transfer, and we are working with the Justice Department and other law 
enforcement agencies to hold PRC and other actors accountable when they 
violate U.S. laws through their infringement of our companies' IP 
rights. Moreover, our Foreign Commercial Service officers are working 
constantly in the Indo-Pacific and other regions of the world to 
eliminate barriers to our companies' ability to compete effectively in 
foreign markets, and our Enforcement and Compliance unit monitors the 
operation of U.S. trade agreements and ensures that foreign countries 
honor their commitments for the benefit of our firms.
    The Commerce Department is also working to address strategic 
competition from the PRC in international standards development and to 
counter efforts that could undermine the integrity of longstanding 
standards development processes or allow the PRC to dominate future 
markets at the expense of U.S. interests. In May of this year, the 
Administration released the United States Government National Standards 
Strategy for Critical and Emerging Technology (Strategy), which will 
strengthen both the United States' foundation to safeguard American 
consumers' technology and U.S. leadership and competitiveness in 
international standards development. The Strategy emphasizes that the 
U.S. Government will work closely with the private sector to promote 
the adoption and use of industry-led international standards developed 
in accordance with core principles of standardization. We will work 
with like-minded allies and partners in bilateral, regional, and 
international forums to promote the integrity of the international 
standards system and ensure that international standards are based on 
technical merit and developed through fair processes. The Strategy sets 
a whole of government approach to protect our innovation and level the 
playing field.
    With respect to forced technology transfers, when an entity seeks 
to transfer technology to the PRC that is subject to Bureau of Industry 
and Security (BIS) regulations, it must comply with our regulations or 
risk civil and criminal penalties. BIS has long restricted the PRC's 
access to dual-use items, which includes commodities, software, and 
technology. BIS also controls low-level technologies to preclude 
exports to untrusted end users, PRC military end uses and end users, 
and weapons of mass destruction (WMD) programs. This includes the 
imposition of license requirements for exports to the PRC involving: 
all military and spacecraft items under our jurisdiction; all 
multilaterally-controlled dual-use items; a large number of dual-use 
items with extensive commercial applications if the item is intended, 
entirely or in part, for a military end use or military end user in the 
PRC; and all items under our jurisdiction if the item is exported 
knowing it will be used in certain WMD programs or if it is intended, 
entirely or in part, for military-intelligence end uses or end users in 
the PRC. In addition, BIS controls prohibit certain U.S. person 
activities that would support WMD-related activities or military-
intelligence end uses or end users in the PRC absent authorization.
    The Bureau of Industry and Security (BIS), with its interagency 
partners, reviews all of the license applications for the PRC to 
determine a risk of diversion to military end uses or end users, WMD 
end uses, or violation of human rights. We evaluate license 
applications-taking into account open source and intelligence 
information-based on the technology at issue, the country at issue, the 
entity using the item, other parties involved in the transaction, and 
how the item will be used. One of the primary factors we consider is 
the risk of diversion of the technology from the transaction details 
laid out in the license application instead to a country, end user, or 
end use of concern.
    The Department of Commerce, through BIS, continues to evaluate the 
threat environment, technological advancements in a variety of 
industries and sectors, and other factors and will update controls as 
appropriate to protect U.S. national security. Take for example the 
controls announced on October 7, 2022, that seek to address concerns 
posed by the PRC's efforts to develop high performance computing 
capacity to train A.I. and related data and communications technologies 
that can be employed for military modernization and human rights 
abuses. BIS restrictions related to advanced semiconductor 
manufacturing equipment, high performance chips and related items, and 
other measures outlined in those rules restrict the PRC's ability to 
obtain the tools and capabilities they desire for these activities and 
represent an expansion of BIS controls based on the present threat 
environment.
    The National Telecommunications and Information Administration 
(NTIA) administers the $1.5 billion Public Wireless Supply Chain 
Innovation Fund--authorized by the FY 2021 National Defense 
Authorization Act and funded by the CHIPS and Science Act of 2022--to 
drive wireless innovation, foster competition, and strengthen supply 
chain resilience. Demonstrating the viability of new, open-architecture 
approaches to wireless networks will help to ensure that the future of 
5G and next-gen wireless technology is built by the United States and 
its global allies and partners-not vendors from nations that threaten 
our National security.
    Artificial Intelligence systems and technologies are already 
shaping our world, and as they continue to evolve, they may bring great 
benefits but also great risks to the Nation's economic and national 
security. On April 11, 2023, NTIA released a Request for Comment (RFC) 
inviting academic, industry, civil society, government stakeholders, 
and the public to comment on what the Federal Government should be 
doing to promote a robust accountability ecosystem for A.I. and ensure 
that A.I. systems are implemented fairly and safely. The RFC sought 
feedback on policies that can support the development of A.I. audits, 
assessments, certifications, and other mechanisms to create responsible 
and trusted AI systems. It further asked whether different approaches 
are warranted for different industries and what other policy responses 
might be appropriate.
    Question. The COVID-19 pandemic highlighted vulnerabilities in 
supply chains and exposed the risks of overreliance on certain 
countries for critical goods and services.
  --How can the Bureau of Industry and Security (BIS) support efforts 
        to diversify and strengthen supply chains while protecting 
        national security and promoting economic growth?
    Answer. Diverse, resilient, and sustainable supply chains are 
critical for national security and economic competitiveness, and a key 
element of this effort is revitalizing domestic manufacturing, reducing 
our reliance on the PRC, and positioning ourselves to be proactive 
instead of reactive.
    The supply chain constraints triggered by the COVID-19 pandemic 
have led to an increased focus on the Title I priorities and 
allocations authority of the Defense Production Act (DPA), which BIS 
helps administer through its Defense Priorities and Allocations System 
(DPAS) regulation. In Fiscal Year (FY) 2022, BIS processed 
approximately 39 official actions under the DPAS to provide persons 
with DPAS rating authorization to support national defense programs, 
which was the highest number since FY 2008. Among the official actions 
undertaken by BIS, approximately 12 DPAS rating authorizations were in 
response to Special Priorities Assistance (SPA) requests where 
semiconductor supply chain issues were identified, including five DPAS 
rating authorizations to four U.S. Government agencies, four DPAS 
rating authorizations to U.S. companies, and three DPAS rating 
authorizations to foreign companies supporting allied defense partners.
    BIS is also partnering with the Department of Health and Human 
Services, including the Administration for Strategic Preparedness and 
Response (ASPR), to conduct a series of public health industrial base 
assessments related to U.S. healthcare and public health preparedness 
and response capabilities. The assessments are being conducted in three 
phases, focusing on (1) influenza vaccine, (2) Food and Drug 
Administration-designated essential medicines, and (3) active 
pharmaceutical ingredients, respectively. These assessments are 
gathering data from U.S.-domiciled organizations affiliated with the 
U.S. healthcare market. The data will be utilized to assess the health 
and competitiveness of the U.S. healthcare supply chain network and 
ensure visibility into the organizations supporting critical U.S. 
healthcare infrastructure.
    The Bureau of Industry and Security (BIS) is also employing its 
survey authority under the DPA related to the U.S. microelectronics 
supply chain, as well as a comprehensive assessment of the the U.S. 
commercial space industrial base in partnership with the National 
Aeronautics and Space Administration (NASA) and the National Oceanic 
and Atmospheric Administration (NOAA). These assessments will help to 
inform policymakers' consideration of additional measures that can be 
taken to further bolster U.S. supply chains in these critical sectors.
    Analyzing critical supply chains to identify potential chokepoints 
before they become crises--going from reactive to proactive--should be 
prioritized. This is why the FY 2024 Budget Request seeks $21 million 
to establish a supply chain resiliency office in ITA's Industry and 
Analysis unit for FY 2024. This new program will build on the work 
already being done in ITA and strengthen the bureau's ability to: (1) 
identify economic and national security risks to supply chains; (2) 
execute strategies and provide analysis and recommendations to support 
policymaking to strengthen supply chains; (3) provide the U.S. 
Government with guidance to help identify and secure investments in 
strategic emerging and legacy industries; and (4) support U.S. 
industries' ability to commercialize opportunities and expand exports 
(creating jobs in the United States).
    NIST's Manufacturing Extension Partnership (MEP) helps businesses 
narrow gaps in our supply chains and make manufacturing more resilient. 
NIST's Manufacturing USA program intends to make available competitive 
awards to enable existing Manufacturing USA institutes to promote 
domestic production of technologies developed at the institutes. In 
addition, EDA's Regional Technology and Innovation Hubs (Tech Hubs) 
program is working to create regional innovation centers across the 
country by bringing together industry, higher education institutions, 
State and local governments, economic development organizations, and 
labor and workforce partners to supercharge ecosystems of innovation 
for technologies that are essential to our National security and 
economic competitiveness. The program was authorized by the CHIPS and 
Science Act and is a key part of President Biden's Investing in America 
agenda, stimulating private sector investment, creating good-paying 
jobs, revitalizing American manufacturing, and ensuring no community is 
left behind by America's economic progress.
    Question. The Bureau of Industry and Security (BIS) is important to 
advancing U.S. national security and economic interests through the 
regulation of exports and trade.
  --How does the FY2024 budget request propose to streamline and 
        modernize export control processes within the regulatory 
        framework while balancing the need to facilitate innovation 
        without compromising our National security interests?
    As the BIS implements and enforces export control regulations to 
prevent sensitive technologies from falling into the wrong hands.
  --Does the FY2024 budget request include adequate resources to 
        strengthen the BIS's capabilities to address emerging threats 
        and evolving technologies, such as artificial intelligence, 
        advanced manufacturing, and quantum computing?
    Answer. The President's FY 2024 Budget request allows BIS to 
sustain its important efforts to protect U.S. national security and 
foreign policy interests while also advancing U.S. technological 
leadership. These funds will enhance BIS's ability to carry out its 
mission to protect U.S. national security and foreign policy interests. 
BIS ensures that we play solid 'defense' through export controls--BIS's 
administration and enforcement of these controls prevent the use of 
U.S. technologies to support the militaries and destabilizing actions 
of countries and entities of concern.
    Question. Small and medium-sized enterprises ((SME), pronounced as: 
S-M-E's) play a significant role in driving economic growth and 
innovation. However, we need to ensure that they can navigate export 
control regulations effectively and contribute to the Nation's economic 
competitiveness.
  --What initiatives are included in the FY2024 budget request that 
        will provide such support and resources to S-M-Es?
    Answer. The Commerce Department's mission is to create the 
conditions for economic growth and opportunity for all communities. The 
2024 Budget supports small and medium-sized enterprises (SMEs) across 
the Department in myriad ways. For example, the Manufacturing Extension 
Partnership (MEP) program administered by NIST is a public-private 
partnership with centers in every State that helps advise small and 
medium-sized businesses in order to narrow gaps in our supply chains, 
develop a skilled and diverse workforce, and make our manufacturing 
sector more resilient. The FY 2024 Budget request includes over $100 
million for efforts that strengthen U.S. manufacturing and empower 
small and medium-sized manufacturers (SMMs). That funding will help MEP 
prop up a National Supply Chain Optimization and Intelligence Network 
that scales supply chain expertise and proven solutions that deliver 
value to SMMs in every MEP Center and will help build new capabilities 
for MEP Centers to support emerging technologies of national 
importance, such as semiconductors, by developing advance packaging 
(AP) mapping and services and assisting SMMs to pivot and provide 
ancillary services for AP activities.
    ITA is working to strengthen small businesses in underserved 
communities by helping them be successful exporters through technical 
assistance. ITA's U.S. Commercial Service focuses on promoting U.S. 
exports, including by connecting U.S. companies, particularly SMEs, to 
foreign markets and buyers. Many U.S. companies do not possess 
international business expertise in critically important functional 
areas, such as marketing, global logistics, international strategy 
development and export promotion. ITA's trade specialists help identify 
opportunities for U.S. exporters, develop international marketing 
strategies, find partners, overcome a range of exporting hurdles, 
clarify foreign regulations and standards, provide support to clients 
who have business disputes abroad or encounter foreign market barriers, 
and advise U.S. companies on the best strategies to succeed in overseas 
markets. In FY 2022, ITA responded to approximately 200,000 inquiries 
from over 42,000 U.S. exporters, 85 percent of which were SMEs. The FY 
2024 Budget request includes over $16 million to increase U.S. export 
competitiveness, counter unfair trade practices and economic coercion 
by the People's Republic of China, and other efforts. With that 
funding, ITA would increase the number of international trade 
specialists at U.S. Export Assistance Centers across the United States 
by nine (9) and at ITA's Global Markets headquarters by three (3) to 
improve support for small and medium-sized enterprises as they seek to 
grow through engagement in international trade, including an emphasis 
on underserved economic areas.
    The Department's Minority Business Development Agency (MBDA) is 
strengthening its national network of business centers, which include 
export centers. MBDA's business centers provide technical assistance 
and business support services to minority business enterprises in 
access to capital, contracting opportunities, and global markets. The 
FY 2024 Budget request includes $16.6 million to scale the MBDA Rural 
Business Center Program, which will provide a range of technical 
assistance and business development services to address critical 
business development areas. This technical assistance will position 
rural minority owned enterprises to capture manufacturing 
opportunities, secure financial capital, create jobs, and fill supply 
chain gaps in critical supplies and essential goods and services.
    BIS offers training seminars which are generally available to small 
and medium-sized businesses and provide the opportunity to learn first-
hand from experienced U.S. Government officials about export control 
policies, regulations and procedures. BIS also offers an extensive 
library of online training modules and prerecorded webinars which 
businesses can access and study at their convenience. The FY 2024 
Budget request will enable BIS to perform expanded outreach to both 
domestic and international companies impacted by export controls to 
increase their knowledge of the Export Administration Regulations (EAR) 
and enhance their compliance efforts.
    These are only some examples of the way that the Department is 
assisting SMEs, and this work continues to be at the heart of our 
mission.
                                 ______
                                 
               Questions Submitted by Senator Marco Rubio
    Question. Last week, Reuters broke a story that indicated the State 
Department has been delaying its ``competitive actions'' calendar, a 
list of steps the Biden Administration has on paper to counter Beijing, 
for fear of alienating the CCP. Moreover, it seems that Deputy 
Assistant Secretary Wendy Sherman-who has announced plans for 
retirement-has been running China policy and lobbied against revoking 
Huawei-related export control licenses. Apparently, the State 
Department also pushed off sanctions against Chinese officials, 
including some at the United Front Work Department bureau responsible 
for human rights violations in Xinjiang, in order to ``keep channels 
open,'' even though China has consistently refused to speak to you all 
and your subordinates. Do you support slowing down action against 
Beijing in order to smooth things over so Secretary Blinken can visit 
China?
    Answer. The Commerce Department is guided by protecting our 
National security and understands that export controls must stay ahead 
of an evolving threat environment. National security is a team effort, 
and we value the close partnership with our interagency colleagues, 
including the State, Defense, and Energy Departments. BIS is vigilant, 
in coordination with our interagency partners, in reviewing different 
sources of information, including classified, business proprietary, and 
open source information, to appropriately update our export controls to 
address the threats posed by the PRC.
    Question. General Secretary Xi Jinping is correctly regarded as the 
most ideological CCP leader since Mao Zedong. He has personally tasked 
the Party with ``liberating all of humanity'' and to serve as the 
``gravediggers of capitalism.'' This March, in his keynote speech at 
China's ``Two Sessions,'' Xi explicitly singled out the United States 
as China's adversary. Do you think General Secretary Xi is a partner 
for the U.S.? Please explain.
    Answer. Protecting our economic and national security, as well as 
fundamental democratic values, is our number one priority--and our 
commercial activities must be consistent with those values. The 
Commerce Department believes that identifying and maintaining channels 
of communication--including those to navigate issues related to trade--
is important. We have an active set of discussions on intellectual 
property rights and are prepared to find ways to press the People's 
Republic of China (PRC) to level the playing field for our companies. 
The Department of Commerce believes that engagement with the PRC, 
including trade, is essential to our efforts to strengthen our National 
security and economic competitiveness. We are not decoupling our 
economy from that of the PRC's. The Department of Commerce employs both 
an ``offense'' and ``defense'' strategy with respect to the PRC-we 
protect what we must, and we promote what we can. Earlier this year, 
senior Commerce Department officials traveled to the PRC to meet with 
our Foreign Commercial Service officers stationed on the ground, PRC 
government officials, and U.S. companies to discuss opportunities for 
U.S. businesses in the PRC. Annual trade between our two countries is 
in the hundreds of billions, and this trade provides revenues for 
American companies, jobs for American workers, and connectivity with 
the Chinese people. The PRC is our third largest export market, those 
exports directly support American jobs, and the benefits from these 
exports range from our large multinational companies and to small and 
medium-sized enterprises.
    The Department's engagement with PRC officials is focused on 
economic policies that benefit American workers and businesses as well 
as raising U.S. concerns about the PRC's unfair economic policies, the 
need to level the playing field for U.S. companies, and the importance 
of protecting sensitive U.S. technology from illicit transfer. On May 
25, 2023, as part of the Department's ongoing efforts to maintain open 
lines of communication and responsibly manage the relationship with the 
PRC, I met with PRC Minister of Commerce Wang Wentao. We had a candid 
and substantive discussion on issues relating to the U.S.-China 
commercial relationship, including the overall environment in both 
countries for trade and investment and areas for potential cooperation. 
I also raised concerns about the recent spate of PRC actions taken 
against U.S. companies operating in the PRC and expressed the 
Department's commitment to continuing to build on the engagement 
between President Biden and President Xi in Indonesia in November 2022.
    Question. TikTok has routed the personal data of American citizens 
to servers held by its parent company in China, where, by law, that 
data can be accessed by the Chinese government. TikTok collects 
biometric data on its users, including pictures of their faces and 
recordings of their voices. And it logs their keystrokes and searches. 
Your department has the power to ban TikTok. Yet, you seem unwilling to 
do so. Or as you said, ``passing a law to ban a single company is not 
the way to deal with this issue,'' and ``the politician in me thinks 
you're gonna literally lose every voter under 35, forever.'' Do you 
believe TikTok poses a national-security risk to the United States?
    Answer. The Administration takes seriously the National security 
risks related to certain technology products and services from China 
and other countries of concern. Information and Communication 
Technology Services (ICTS) that originate in foreign adversary 
countries, including connected software applications, raise particular 
concerns. The Administration will use every tool at its disposal to 
address the National security risks presented by these threats--
including the National security risks associated with TikTok.
    The Department's ICTS program received its first substantial 
funding in December 2022. The program is ramping up hiring, to prevent 
undue or unacceptable risks from the use or storage of personal 
information and data critical to national security.
    To put ICTS-related measures on the strongest possible footing, the 
Administration has consistently called for legislation that would 
codify in statute the ICTS authorities outlined in Executive Orders 
13873 and 14034. Such legislation would strengthen and reinforce the 
Federal Government's ability to combat current and evolving threats, to 
safeguard the security and integrity of our ICTS supply chain, and to 
protect the American people. In that regard, the Department welcomes 
the opportunity to work with Congress on legislation that would address 
ICTS threats in a comprehensive way and protect our National security.
    Question. Is the Biden Administration afraid to ban TikTok because 
of the political costs to the Democratic Party, or as you put it, 
``lose every voter under 35 forever''?
    Answer. No. Since I took this job, my focus has been clear: we are 
focused on protecting our National security against threats from China. 
The Department believes it is important to address technology-based 
threats to our country from foreign adversaries. This is about 
comprehensively addressing the threats from information and 
communications technology products and services (ICTS) in the U.S. that 
are linked to foreign adversaries.
    Question. What steps are you taking to protect American's privacy 
and safety from the CCP?
    Answer. The Department of Commerce believes it is important to 
strategically address the threats posed by the entire ecosystem of 
information and communications technology products and services 
operating in the United States and linked to certain foreign 
governments that pose risks to Americans' sensitive data and our 
National security. To put ICTS-related measures on the strongest 
possible footing, the Administration has consistently called for 
legislation that would codify in statute the ICTS authorities outlined 
in Executive Orders 13873 and 14034. Such legislation would strengthen 
and reinforce the Federal Government's ability to combat current and 
evolving threats, to safeguard the security and integrity of our ICTS 
supply chain, and to protect the American people. In that regard, the 
Department welcomes the opportunity to work with Congress on 
legislation that would address ICTS threats in a comprehensive way and 
protect our National security. In the meantime, the Department's ICTS 
supply chain program is ramping up hiring, to prevent undue or 
unacceptable risks from the use or storage of personal information and 
data critical to national security.
    The Department also recognizes the importance of the Federal 
Communications Commission's Secure and Trusted Communications Networks 
Reimbursement Program (i.e., ``rip and replace'') to address the costs 
of removing, replacing, and disposing of insecure equipment and 
services in U.S. networks that pose a threat to national security.
    Question. How can you promise to protect Americans' privacy and 
data security if you continue to let a compromised app, like TikTok, 
operate in the U.S.?
    Answer. The Administration takes seriously the National security 
risks related to certain technology products and services from China 
and other countries of concern. Information and Communication 
Technology Services (ICTS) that originate in foreign adversary 
countries, including connected software applications, raise particular 
concerns. The Administration will use every tool at its disposal to 
address the National security risks presented by these threats--
including the National security risks associated with TikTok.
    The Department's ICTS program received its first substantial 
funding in December 2022. The program is ramping up hiring, to prevent 
undue or unacceptable risks from the use or storage of personal 
information and data critical to national security.
    To put ICTS-related measures on the strongest possible footing, the 
Administration has consistently called for legislation that would 
codify in statute the ICTS authorities outlined in Executive Orders 
13873 and 14034. Such legislation would strengthen and reinforce the 
Federal Government's ability to combat current and evolving threats, to 
safeguard the security and integrity of our ICTS supply chain, and to 
protect the American people. In that regard, the Department welcomes 
the opportunity to work with Congress on legislation that would address 
ICTS threats in a comprehensive way and protect our National security.
    Question. The CCP also uses TikTok for its censorship and 
propaganda campaigns. The Justice Department labeled one of the app's 
founders, Zhang Yiming, a ``mouthpiece'' of the CCP. TikTok content 
moderators have censored videos that mention the Tiananmen Square 
Massacre and banned religious groups from posting content. Do you 
believe that TikTok is censoring content in accordance with the CCP's 
propaganda aims?
    Answer. Based on my understanding of the available information, 
yes.
    Question. What are you doing to keep Americans safe from the CCP's 
foreign influence and propaganda campaigns?
    Answer. Addressing the PRC's malign influence campaigns that target 
Americans is a critical effort across multiple Federal agencies and 
involves multiple regulatory, policy, and enforcement tools. The 
Department of Commerce, along with other Federal agencies, have 
recognized that certain PRC companies are subject to the control, 
direction, and jurisdiction of the PRC government and present national 
security concerns for the United States.
    The Department's ICTS supply chain security program received its 
first substantial funding in December 2022. The program is ramping up 
hiring, to prevent undue or unacceptable risks from the use or storage 
of personal information and data critical to national security.
    The Department also recognizes the importance of the Federal 
Communications Commission's Secure and Trusted Communications Networks 
Reimbursement Program (i.e., ``rip and replace'') to address the costs 
of removing, replacing, and disposing of insecure equipment and 
services in U.S. networks that pose a threat to national security.
    Question. On October 7, 2022, your department issued an interim 
rule to block advanced semiconductors from going to China. It has been 
8 months and we haven't seen a final rule. But, we have seen reports 
that chips companies are circumventing your interim rule, and that 
China is still making progress in technology like Artificial 
Intelligence (AI), which it wants to use to build its military and 
subjugate its people. When will we see a final rule on export controls 
for advanced semiconductors?
    Answer. The October 7, 2022 advanced computing and semiconductor 
equipment rule imposed unprecedented restrictions on the PRC's access 
to advanced semiconductor manufacturing equipment, chips and other 
items needed to develop A.I. and prohibited U.S. persons from 
supporting chip development and production that power A.I. systems at 
certain semiconductor fabrication facilities located in the PRC or 
Macau without a license.
    The rule was an interim final rule and is in effect. According to 
public reporting, the regulation has restricted the PRC's ability to 
indigenously produce advanced semiconductors. However, we know that the 
PRC is looking for ways to continue accessing these high-end chips and 
are aware of public reporting regarding purported advances by a PRC 
company in certain chips. In this evolving technological landscape and 
threat environment, the Bureau of Industry and Security (BIS) continues 
to review different sources of information, including classified, 
business proprietary, and open source information, to understand the 
character and composition of any purported advances in PRC companies' 
production of certain chips, address circumvention attempts, to track 
the impact of its controls and to be proactive and nimble.
    The rule sought public comments, which BIS is reviewing to assess 
whether additional changes to the regulations are necessary.
    Question. Will you commit to strengthening those export controls in 
the final rule, to slow China's advance in AI?
    Answer. The Commerce Department's Bureau of Industry and Security 
(BIS) imposed unprecedented restrictions on the PRC's access to 
advanced semiconductor manufacturing equipment, chips and other items 
needed to develop A.I. and prohibited U.S. persons from supporting chip 
development and production that power A.I. systems at certain 
semiconductor fabrication facilities located in the PRC or Macau 
without a license. The rule was an interim final rule and is in effect. 
According to public reporting, the regulation has restricted the PRC's 
ability to indigenously produce advanced semiconductors. However, we 
know that the PRC is looking for ways to continue accessing these high-
end chips and are aware of public reporting regarding purported 
advances by a PRC company in certain chips. In this evolving 
technological landscape, BIS continues to review different sources of 
information, including classified, business proprietary, and open 
source information, understand the character and composition of any 
purported advances in PRC companies' production of certain chips, 
address circumvention attempts, to track the impact of its controls and 
to be proactive and nimble. The rule sought public comments, which BIS 
is reviewing to assess whether additional changes to the regulations 
are necessary.
    Question. I have long been concerned about the Bureau of Industry 
and Security (BIS) granting licenses to companies that allow them to 
export items to companies on the entity list, like Huawei. While 
Commerce has reportedly paused new licenses, I am concerned that 
existing licenses may be keeping Huawei on life support and depriving 
American companies of access to scarce components. How many export 
licenses to sell to Huawei still exist?
    Answer. Information in connection with licenses and license 
applications for exports of items under Commerce jurisdiction is 
prohibited from disclosure by BIS under section 1761(h) of the Export 
Control Reform Act of 2018 (50 U.S.C. 4820(h)) absent a written request 
on letterhead of a chair or ranking member of a Congressional committee 
or subcommittee of appropriate jurisdiction.
    Placing foreign companies on the Commerce Department's Entity List 
allows the U.S. government to control their access to U.S. technology, 
including commercial products. The Entity List is not an embargo-it is 
a regulatory tool to assess export transactions involving various 
parties that have been added to the Entity List for various reasons. 
The policy for reviewing license applications for each party is public 
and determined by the Departments of Commerce, Defense, State, and 
Energy based on national security and foreign policy considerations.
    BIS, in collaboration with its partners from the Departments of 
Defense, Energy, and State, continues to assess the existing licensing 
policy for license applications involving Huawei Technologies Co., Ltd. 
(Huawei). Huawei remains on the Entity List and no changes to its 
licensing policy, which was put in place by the prior Administration in 
2019, have been made at this time. Currently, the licensing policy for 
Huawei is a presumption of denial for any item subject to BIS 
jurisdiction, unless it is for items that can only support 
telecommunications systems, equipment, and devices below the 5G-level, 
in which case the U.S. government will review such license applications 
on a case-by-case basis.
    Any license applications approved for exports to Huawei since 2019 
were approved according to these guidelines based on the National 
security assessments, and concurrence, of Commerce as well as our 
interagency partners. In assessing Huawei license applications, as well 
as the Huawei licensing policy, BIS is utilizing different sources of 
information, including classified, business proprietary, and open 
source information.
    Question. Is it true that some export licenses to sell to Huawei 
are based on monetary value and may continue for many years unless they 
are terminated?
    Answer. As a general matter, approved export licenses for items 
under the Export Administration Regulations (EAR) are valid for 4 
years. Those licenses are issued by Commerce, with the review and 
approval of interagency colleagues at the Departments of Defense, 
State, and Energy, following a vigilant review to ensure national 
security and foreign policy concerns are addressed. License 
applications, if approved, often contain multiple conditions during the 
4-year validity period to address those concerns. In applying for a 
license, applicants are required to provide, among other things, a good 
faith estimate of the value of proposed exports over the duration of 
the licenses. If a company reaches that estimated value before the 4-
year validity period is over, the company must apply for a new license.
    In addition, licenses are subject to revision, suspension, or 
revocation, in whole or in part, without notice, consistent with U.S. 
national security or foreign policy interests.
    Question. What is the cumulative monetary value of existing 
licenses to export items to Huawei?
    Answer. Information in connection with licenses and license 
applications for exports of items under Commerce jurisdiction is 
prohibited from disclosure by BIS under section 1761(h) of the Export 
Control Reform Act of 2018 (50 U.S.C. 4820(h)) absent a written request 
on letterhead of a chair or ranking member of a Congressional committee 
or subcommittee of appropriate jurisdiction.
    Question. Has Commerce evaluated whether the licenses it has 
granted to sell items to Huawei have aided Huawei in penetrating the 
telecommunications networks of our allies or other strategically 
important countries?
    Answer. BIS, in collaboration with its partners from the 
Departments of Defense, Energy, and State, continues to assess the 
existing licensing policy for license applications involving Huawei. 
Huawei remains on the Entity List and no changes to its licensing 
policy have been made at this time.
    Currently, the licensing policy for exports to Huawei is a 
presumption of denial for any item subject to BIS jurisdiction, unless 
it is for items that can only support telecommunications systems, 
equipment, and devices below the 5G-level, in which case the U.S. 
government will review such license applications on a case-by-case 
basis. In assessing Huawei license applications, as well as the Huawei 
licensing policy, BIS is utilizing different sources of information, 
including classified, business proprietary, and open source 
information. Additionally, BIS regularly consults with allies and 
partners to share information and coordinate our technology protection 
strategies.

                                 ______
                                 

    [The following questions were submitted to the Department of 
Defense, but the questions were not answered by press time.]
            Questions Submitted to Hon. Lloyd J. Austin III
             Question Submitted by Senator Dianne Feinstein
    Question. Secretary Austin, in 2022 the Congress passed the 
bipartisan CHIPS and Science Act, which recognized the need for 
critical investments in the U.S. semiconductor industry in order to 
compete with China and ensure our economy continues to lead in this 
vital industry. Do either of you see other industries such as 
shipbuilding, where we in Congress might consider a similar approach 
and make new strategic investments?
                                 ______
                                 
              Questions Submitted by Senator Tammy Baldwin
                             supercomputing
    The U.S. is currently maintaining its leadership position in 
supercomputing and AI at scale globally, sitting atop the HPC Top 500 
list with the Frontier system at Oak Ridge National Laboratory, which 
was manufactured in my home state of Wisconsin. However, China is 
making unprecedented investments in supercomputing and AI in an attempt 
to dominate the next generation of technologies. In 2012, the United 
States had 250 supercomputing systems on the TOP500 list 
(www.top500.org) compared to China, which had 72 systems. The top 5 
companies were 4 U.S. and 1 European (IBM, HPE, Cray, Atos, and Dell). 
The most recent TOP500 list from 2022 had China with 162 systems and 
the U.S. with 127 systems. The top 5 companies were 3 Chinese, 1 U.S., 
and 1 European (Lenovo, HPE, Inspur, Atos, and Sugon).
    Question. How can the U.S. continue to out-innovate in these key 
areas and beyond to ensure U.S. national and economic security and what 
is your agency's strategy for adopting and leveraging U.S. 
supercomputing?
    Question. Does the Department of Defense have an integrated 
strategy and game plan to ensure defense agencies will have continued 
access to cutting edge supercomputing over the next 10 years?
                                 ______
                                 
            Questions Submitted by Senator Joe Manchin, III
    Question. As the superpower of the world, we are reliant on China, 
Russia, and other foreign adversaries for far too many of our energy 
needs--whether it be oil, solar wafers, nuclear fuel, or, increasingly, 
electric vehicles. These are all things we can and should be producing 
from start to finish in North America or sourcing from our allies. 
Unfortunately, China dominates the lithium ion battery to EV supply 
chain, controlling 76% of lithium-ion battery production, including 74% 
of the world's cathode production and 92% of the world's anode 
production. These numbers are alarming and should be a wake-up call 
that if we throw caution to the wind and move too quickly toward EVs 
without strengthening our domestic supply chain, we will be forced to 
rely on China for decades to come. Unfortunately, at every turn, this 
administration has made it clear that they care more about getting EVs 
on the road than they do about the energy security of this nation.
  --How would you rate our competitiveness with China on battery 
        manufacturing and electric vehicles, particularly with respect 
        to the supply chain for both? Given the statistics, are we too 
        far behind to catch up?
  --Do you think being reliant on China for our transportation sector 
        is a national security risk?
    Question. For years, the Chinese government has engaged in the 
illegal trade practices of transshipment and dumping to circumvent U.S. 
trade laws, avoid American tariffs, and give Chinese firms an unfair 
advantage over West Virginian and American companies. These practices 
are especially concerning when they target our critical industries, as 
China seeks to create bottlenecks of critical materials and control 
supply chains. In particular, I want to highlight the dangers of these 
Chinese practices as they affect American energy security. We have 
relied on foreign nations for the resources and materials we need to 
power our Nation for too long. That's why I was proud to cosponsor the 
Senate Resolution reversing President Biden's 2-year pause on solar 
import tariffs. We cannot continue to let China get away with 
laundering solar energy components through other nations with 
absolutely no consequences. Let me be clear: America will never be 
energy secure or independent if we can't provide the resources we need. 
American manufacturers--some of the most innovative in the world--are 
more than ready to rise to the occasion and help realize the goals of 
the Bipartisan Infrastructure Law and the Inflation Reduction Act to 
onshore our energy supply chains.
  --What is being done to ensure America's energy supply chains are 
        reliable and safe?
  --Can you speak to how American energy security is critical to our 
        geopolitical positioning on the world stage, and how it allows 
        us to better help our allies?
    Question. Artificial Intelligence (AI) has received quite a lot of 
attention lately, and I'm proud to see it. Senator Rounds and I have 
been promoting development of this technology for years from the 
Cybersecurity subcommittee on Armed Services. One of our main partners 
in this endeavor has been the leadership of the National Security 
Commission on Artificial Intelligence, specifically Dr. Eric Schmidt 
(former Google CEO), Bob Work (former Deputy Secretary of Defense), and 
Dr. Jason Matheny (current CEO of RAND Corporation). This Commission 
released a classified report detailing programs and funding our 
government should be investing in, but I worry that these 
recommendations have not been widely shared. I've also been working 
with our partners in the private industry, including Alex Wang (Scale 
AI), Alex Karp (Palantir), and Josh Lospinoso (Shift5) to ensure we're 
putting guardrails in place to effectively regulate and protect our 
development of AI for national security usage.
  --Have each of you received this classified briefing from the 
        Commission? If not, can I get your commitment to receive the 
        briefing?
  --How are each of you thinking about protecting the investments we're 
        making in AI, and ensuring AIs are used ethically?
    Question. Multiple sources, including retired general officers, the 
National Defense Industrial Association, the American Enterprise 
Institute, and the Pentagon itself have all recognized the damage 
failing to pass a budget on time has on both our National security and 
the taxpayer. The American Enterprise Institute threw out a rough 
estimate of $200 million per day under the latest Continuing Resolution 
that covered the start of Fiscal Year 2023, that's a total of $18 
billion. The DoD Comptroller noted that from Fiscal Year 1911 to 2010 
the average delay for defense appropriations was 29 days, and that has 
since ballooned out to 118 days, 4 months. I have repeatedly asked the 
Pentagon for as concise a number as possible to put a figure on the 
damage these delays are causing to our National security and wasted 
taxpayer money, but we've been unable to nail down these estimates.
  --Can I have each of your commitments to get Congress as accurate an 
        estimate as possible on the financial impact previous CRs have 
        had on your Departments?
    Question. One of the best briefings I've received as a Senator was 
the DARPA briefing on Assault Breaker II. This program underpins our 
entire strategy in the Pacific, and that is why I joined Senators 
Cotton, Hirono, Kaine, and Gillibrand is supporting additional funding 
of the $120 million to expedite it. I would encourage my colleagues to 
get the full briefing on this program and Project Janus as soon as 
possible to ensure we're ready to fight and win if we're forced to.
  --Can you give the Members who were not at that hearing the elevator 
        pitch?
    Question. I would like to talk about a technology that gets a lot 
of lip service, but I don't believe DoD leadership takes seriously, and 
that is the development of small modular reactors. This reactor is 
housed in one 20-foot shipping container, and provides 3.4 megawatts of 
power. In comparison, you would need six diesel generators, also in 
their own 20-foot shipping containers, to supply that amount of power. 
Pele only needs to be refueled every 3 years. In comparison, those six 
diesel generators require over 3 million gallons of fuel annually, and 
that is logistically crippling areas like Guam.
  --Do you believe the Project Pele would improve our logistics in the 
        Pacific?
                                 ______
                                 
             Questions Submitted by Senator Martin Heinrich
    Question. New Mexico is home to public and private industry that 
has played a role in supplying Ukraine, through the Department of 
Defense, with much needed capabilities as they continue to combat 
Russia. The People's Republic of China has taken notice of this, and 
our stockpile use. How would a continuing resolution impact our ability 
to replenish our capabilities--especially as the PRC continues to 
bolster theirs?
    Question. The Department of Defense has played an important role in 
the United States' efforts to counter illegal, unreported, and 
unregulated fishing, and other forms of exploitive resource extraction 
practiced around the world by the People's Republic of China. How would 
those efforts be impacted by a continuing resolution?
                                 ______
                                 
               Question Submitted by Senator Jerry Moran
    Question. Cooperation with allies and partners is crucial to US 
interests as we monitor and understand the impacts of increased 
activity by the PRC. How does your FY2024 budget request prioritize and 
strengthen alliances with countries in the Indo-Pacific region and to 
understand the China's intentions and the impacts of its influence? In 
your response, please include how the U.S. Army Operation Pathways 
specifically lends can be leveraged to promote a balance in the region?
                                 ______
                                 
              Questions Submitted by Senator Bill Hagerty
    Supercomputing leadership and capabilities play a critical role in 
national security. International investments into those capabilities 
have increased dramatically over the last 10 years, putting today's 
U.S. leadership in supercomputing or high performance computing (HPC) 
at risk. Moreover, the combination of large-scale market changes, 
uncertainty in technology directions and workforce challenges is 
requiring us to fundamentally rethink U.S. strategy for supercomputing 
if we want to maintain leadership over the next 10 years. The National 
Academies of Sciences, Engineering, and Medicine focused on this topic 
in its recent report, ``Charting a Path in a Shifting Technical and 
Geopolitical Landscape: Post-ExascaleComputing for the National Nuclear 
Security Administration.''
    The Department of Defense greatly relies on U.S. high-performance 
computing capabilities for scientific and technological advances, 
improving weapons systems development, advancing artificial 
intelligence capabilities at scale, and other purposes.
    Question. Will the Department of Defense consider the 
recommendations of the National Academies report, ``Charting a Path in 
a Shifting Technical and Geopolitical Landscape: Post-Exascale 
Computing for the National Nuclear Security Administration'' as it 
applies to the Department of Defenseagencies?
    Question. Rapid acquisition programs, like Other Transaction 
Authorities (OTAs), were created to give Department of Defense (DoD) 
the flexibility necessary to adopt and incorporate business practices 
that reflect commercial industry standards and best practices into its 
award instrumentsand have become a core element of the DoDs approach to 
technology acquisition. Recently, the Deputy Assistant Secretary of the 
Air Force for Acquisition said that China was acquiring new weapons and 
technology systems ``five to six times'' faster than the United States 
and for $1 to every $20 we spend to gain similar capabilities. What 
other rapid acquisition programs that you have either implemented or 
are authorities are you seeking that will help get appropriated dollars 
invested in new technologies faster and more efficiently?
    Question. Does the Department of Defense have an integrated 
strategy to ensure defense agencies will have continued access to 
cutting edge supercomputing for modeling and simulation and AI at scale 
over the next 10 years?
                                 ______
                                 
               Questions Submitted by Senator Marco Rubio
    Question. Last week, Reuters broke a story that indicated the State 
Department has been delaying its ``competitive actions'' calendar, a 
list of steps the Biden Administration has on paper to counter Beijing, 
for fear of alienating the CCP. Moreover, it seems that Deputy 
Secretary Wendy Sherman-who has announced plans for retirement-has been 
running China policy and lobbied against revoking Huawei-related export 
control licenses. Apparently, the State Department also pushed off 
sanctions against Chinese officials, including some at the United Front 
Work Department bureau responsible for human rights violations in 
Xinjiang, in order to ``keep channels open,'' even though China has 
consistently refused to speak to you all and your subordinates. Do you 
support slowing down action against Beijing in order to smooth things 
over so Secretary Blinken can visit China?
    Question. General Secretary Xi Jinping is correctly regarded as the 
most ideological Chinese Communist Party (CCP) leader since Mao Zedong. 
He has personally tasked the Party with ``liberating all of humanity'' 
and to serve as the ``gravediggers of capitalism.'' This March, in his 
keynote speech at China's ``Two Sessions,'' Xi explicitly singled out 
the United States as China's adversary. Do you think General Secretary 
Xi is a partner for the U.S.? Please explain.
    Question. The return of great power competition with China also 
comes the striking reality that the U.S. military--notably the U.S. 
Navy--remains woefully underprepared for a potential conflict with 
China. I remain concerned that supply chain issues, lack of dedicated 
funding streams, and inadequate budgets continue to plague the defense 
industrial base in delivering needed capabilities to the U.S. Navy. 
These capabilities allow our forces to deter an aggressive Beijing who 
seeks to disrupt international norms in the maritime domain through 
restriction of international trade in the South China Sea, buildup of 
artificial islands, and other illegitimate territorial claims in the 
region. Beijing's intent is clearly seen through People's Liberation 
Army (PLA) writings on the need to focus its effort on countering the 
U.S. as the ``powerful enemy adversary.'' Yet, this administration's 
budget request appears blind to all of these obvious blinking signs 
that Beijing seeks to surpass the U.S. as the preeminent global naval 
power. As your department has identified China as the pacing challenge 
for the U.S. government, it concerns me when I read headlines such as 
``US shipyards can't build destroyers fast enough; can't even build 2 a 
year.'' What does this administration believe is an appropriate posture 
to counter Beijing and ensure U.S. Naval supremacy in the Pacific and 
beyond?
    Question. The Biden Administration seems committed to speaking 
loudly and carrying a small stick. Is the department committed to 
safeguarding U.S. naval preeminence and providing the industrial base 
with the tools needed to bolster production rates of critical naval 
capabilities?
    Question. Do you believe that your department's budget request 
accomplishes that goal?

                         CONCLUSION OF HEARING

    Chair Murray. Again, thank you so much to all of our 
witnesses today.
    The Committee stands adjourned.
    [Whereupon, at 4:51 p.m., Tuesday, May 16, the hearing was 
concluded, and the committee was recessed, to reconvene subject 
to the call of the Chair.]

                                  [all]
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