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Sen. Mark R. Warner — Remarks on U.S.

-China Competition
United States Institute of Peace
23 September 2019
as prepared for delivery


Thanks to Nancy Lindborg and the U.S. Institute of Peace for hosting me today to discuss U.S.-
China relations. I want to commend the Institute for the important work you do on key foreign
policy challenges.

Today, there is a widespread understanding that confronting a rising China is the great foreign
policy challenge of our time.

China is a global competitor of 1.4 billion people living under an authoritarian system of
government that is vying for economic, political and military influence globally. It is governed
by the Chinese Communist Party, whose view of individual liberty, rule of law, and democratic
values is starkly different from our own.

On all of these points, there is broad, bipartisan agreement. However, there is far less agreement
on what our response to these realities should look like: How do we enact a strategy that
continues to protect U.S. interests and international institutions, while staying true to our values?

Values as Strength

I believe we can retain our leadership and global competitive advantage by embracing those
defining characteristics that have made America the leader of the free world — our belief in the
rule of law, our checks and balances against government over-reach, and our respect for the
rights of the individual, especially when those rights come into conflict with the government, or
a majority faction. These values are the foundation of our international success, and of our
strongest alliances.

Today China is offering a different model to the world. It has achieved a meteoric rise while also
rejecting these values.i

I want to make one thing clear at the outset; my beef is with the policies of President Xi Jinping
and the Chinese Communist Party — not the Chinese people, and especially not with Americans
of Chinese descent.

But the truth is, the Chinese Communist Party today is intent on fundamentally reshaping the
norms and values that have underwritten decades of global stability, security, and prosperity.ii

The question is how we respond. Do we engage China in a head-to-head Cold War, on multiple
fronts? Or do we embrace our leadership role and strengthen the international order that Beijing
is attempting to upend?

I would argue that this second approach — of offering a better model to the world, one rooted in
freedom and opportunity — is both consistent with our values and it is the approach most likely
to succeed.

Evolving Perspective on China

First, I want to talk briefly about how we got here. In many ways we’re having conversations
like this because the conventional wisdom has changed rapidly over the past few years.

Until recently, conventional wisdom told us the U.S. and China would rise together — two
nations intertwined through partnerships in trade, business, and education. Like many, I hoped
that the PRC’s greater global integration would lead to a more open, prosperous, and potentially,
more democratic China — and that a rising China could be good for the world.

Today it is clear that the aims of President Xi Jinping and the Chinese Communist Party do not
align with this vision. Instead, the Chinese government has worked to challenge the rules-based
international system and expand its brand of global influence, military presence, and economic

It is time to wake up to the fact that Beijing is pursuing a strategy to not only strengthen China,
but also to explicitly diminish U.S. power and influence globally. To do this, the Communist
Party is exploiting all elements of state power to strengthen China’s position in the world. And
they’re doing this at the expense of human rights and human dignity.

And the way I see it, these efforts fall into four buckets: military strategy, influence campaigns,
economic ambition, and science and technology policy.

PRC Military Approach

First, on the military front… The People’s Liberation Army (PLA) is expanding both its own
domestic bases, and starting to establish bases overseas. China’s Naval Forces are now able to
conduct operations farther from home — in the Indian Ocean, the waters around Europe, and the
Western Pacific.iv

Under the doctrine of “military-civil fusion,” Beijing has pursued a set of cutting-edge
technologies such as AI, unmanned systems, and hypersonic, which will be essential to 21st
century warfighting.v And the PLA is modernizing its military at a fraction of the cost.vi
They’re effectively skipping a generation of expensive R&D by adopting platforms from foreign
militaries, sometimes stealing intellectual property to do so.

Contrast that with the United States, which continues to spend $750 billion on defense, including
expensive updates to legacy military systems and platforms.vii

To compound this, China is focusing its efforts on the tools of asymmetric warfare…like cyber,
space, and misinformation/disinformation. U.S. defense and intelligence officials are
increasingly concerned that the PLA now threatens the United States in specific domains such as
cyber and space… and that China even leads in specific military technologies such as hypersonic

Former DNI Coats and others have warned of China’s ability to target critical
infrastructure…like our electric grid …using cyberattacks.ix I worry as well about the PLA’s
willingness to use cyber theft for economic espionage.x

The truth is, China is demonstrating that future wars with near-peer competitors may no longer
be contained to a traditional military-to-military conflict…

For the U.S. and our allies, it’s becoming increasingly clear that cyber deterrence and other
asymmetric capabilities will be just as critical as traditional military might going forward.

PRC Influence Campaigns

The second aspect of China’s strategy deals with its efforts to wage influence campaigns beyond
its borders.

The PRC has tried to dictate how foreign entities characterize sensitive topics, like the Dalai
Lama or Tiananmen Square.xi Beijing has often forced global businesses to conform to its world
view in order to maintain access to the Chinese market — for instance, dictating how U.S.
airlines are to label Taiwan on their route maps.xii

On college campuses, we have seen China use student groups and Confucius Institutes to shape
and stifle debate. More broadly, the Chinese Communist Party relies on a network of think tanks,
newspapers, and aligned business and political leaders to shape perceptions of China and the

They have also used their economic investments abroad as leverage to pressure other nations to
support their diplomatic agenda. Just recently, a number of countries, including majority Muslim
countries, signed a letter expressing support for China’s tactics with the Uighur population.xiv

And the Chinese government has pursued an extensive social media disinformation campaign,
exploiting the continued vulnerabilities of YouTube, Facebook and Twitter — all sites banned in
mainland China — to spread propaganda abroad.xv

The Party also dominates Chinese-language services like WeChat…expanding control of the
flow of information not only within its borders, but within its expat communities, as well.xvi
These tactics are an extension of China’s doctrine of “cyber sovereignty” — the idea that a state
has the absolute right to control information within its border.xvii

China has already brought this notion to bear on its people…in the form of censorship, domestic
disinformation, and the social credit system. But increasingly we are seeing it exported on a
global scale.xviii

PRC Economic Ambitions

Third, on the economic front, President Xi has pursued two economic strategies aimed at
displacing the United States position of economic leadership.

Through the China 2025 plan, Xi has focused on developing domestic Chinese capabilities in
strategic industries of the future. At the same time, the PRC is working to expand Chinese
exports globally to its existing customers, as well as the developing world.xix

President Xi is making a play for dominance in areas like 5G, AI, quantum computing, robotics,
and biotech. In addition, China is employing the full power of the state to build the infrastructure
and set the standards for new technologies like 5G wireless — just like the United States did
with many 20th century technologies. But unlike the United States, China is setting these
standards to promote its own interests, rather than notions of fair competition. xx

At the same time, China exploits the openness of the international trading system to gain market
access for Chinese companies. And, Beijing has maintained — or even increased — barriers to
foreign companies.xxi

Globally, the Belt and Road Initiative aims to build infrastructure and trade relationships heavily
weighted in China’s interest.xxii Accompanying this has been a digital initiative to promote
Chinese telecommunications equipment. The goal is not merely to promote Chinese vendors, but
to seed the global telecom market with equipment and services that could ultimately be exploited
by Chinese security services.xxiii

The truth is, the Chinese Communist Party is attempting to harness Chinese companies, civil
society and even overseas diasporas as extensions of the state. These efforts are neither hidden
nor subtle.xxivOver the past few years, China enacted laws requiring all citizens and companies to
act in support of “national security” and the Chinese government. xxv

Despite protests to the contrary, no Chinese company, however global, is genuinely “private.”
These companies don’t make decisions entirely for economic and commercial reasons, because
they are legally required to act as an extension of the Chinese Communist Party when called

PRC Science & Tech Policy

And this leads into the fourth aspect of China’s efforts to reshape the international order: its
science and technology strategy.

Again and again, we’ve seen U.S. companies forced into joint ventures with Chinese
companies… or required to share source code and other IP… in order to work in China. We have
heard from American companies who have been put out of business after Chinese competitors
stole their technology and produced their own lower-cost versions with the assistance of state

But China’s blatant efforts to steal American technology do not stop at its borders. The Justice
Department revealed last year that more than 90% of DOJ’s economic espionage cases — and
more than two-thirds of trade secret cases — have involved China.xxviii

In particular, the Chinese Communist government views Western universities and government
labs as fertile ground for the transfer of sensitive research back to China. And what’s particularly
alarming, is that it sees Chinese expats — especially students and academics — as essential
assets in those efforts.xxix

The fact is, Chinese nationals make up roughly one third of all foreign students in the United
States.xxx Out of the 363,000 Chinese nationals studying in the U.S. last year, nearly half of them
were in STEM fields.xxxi And many are returning home to take advantage of opportunities in
China’s growing economy.

My concern isn’t necessarily with people who want to come here and learn and then go home,
but I do have concern that the Communist Party is attempting to coerce some of these students
for technology transfer and intelligence collection purposes.xxxii

Let me be clear: the majority of these students are blameless and make significant contributions
to the research environment and the U.S. economy. But we have to acknowledge the fact that
Chinese intelligence often preys upon this population, threatening family back home so students
will come back and bring a thumb drive.

The truth is, under President Xi, China is drifting from international cooperation and shifting to a
more nationalistic and confrontational path of scientific advancement. And while we must not
lose sight of our own founding principles, we also cannot ignore the fact that China is playing by
a different set of rules.

Sounding the Alarm & Next Steps

So, where does this leave us?

Left unopposed, this threat to global norms and values jeopardizes not just America’s position in
the world. It risks undermining the free inquiry, free travel, free enterprise and other values that
have animated decades of global stability and prosperity.

That’s why I am so deeply concerned by the Trump administration’s erratic and incoherent

While the administration has rightly raised the concerns about China — something previous
presidents should have done earlier — the administration’s unilateral approach to this challenge
is not leading us towards success.

After all, these difficulties I have outlined pose a challenge not only to the United States; not just
to the West; but to all nations committed to democracy, individual liberty, an independent
judiciary, and the rule of law. Countries like Japan, South Korea, Australia, India, and others…
we all face these same challenges.

Yet rather than building a coalition to confront this shared issues, President Trump has alienated
our closest allies.xxxiii Instead of building a values-based international coalition to stand up to
China, the president has minimized the importance of human rights and representative
government — even as pro-democracy protestors gather in the streets of Hong Kong singing the
Star-Spangled Banner.xxxiv

The president’s insistence on framing this as a conflict between our two countries has resulted in
little tangible gain. We cannot afford to frame this strategic challenge in simplistic, Cold War
terms — dividing the world in two and fighting for a bigger half.

And frankly, this is just not realistic, given China’s economic integration. The PRC is the top
trading partner for more than two-thirds of the world.xxxv And like many of our allies, the U.S.
economy is deeply intertwined with China’s.

Moreover, while China and the U.S. are competitors in many areas, we also confront many
common challenges. From climate change, to water scarcity, to North Korea — the stakes are too
high for each country to simply retreat into its own corner.

Instead, we need a comprehensive strategy to defend against China’s bad behavior; to

compete with China in the 21st century; and to strengthen the international order it seeks
to upend.

Here’s where I believe we should start.

Defensive Measures

First, let’s talk about defense measures — and how to protect ourselves, especially in the short-
term. This can’t just be up to the federal government. It needs to be a partnership between the
government and the private sector.

That’s why, over the past year, I have been convening a series of briefings for business and
academia, partnering with Republicans on the Intelligence Committee and leaders from the IC, to
give those outside government an inside look at the threat, and what’s at stake.

I have also introduced legislation with Marco Rubio that would, in part, help formalize and
coordinate this effort. Our bill establishes an Office of Critical Technologies at the White House,

which would be responsible for developing a government-wide strategy to protect against state-
sponsored threats to critical American supply chains and technologies.xxxvi

However, I believe the government can do more to protect ourselves –

First - We need to secure our supply chains, especially for military platforms and equipment. An
October 2018 GAO report found cyber vulnerabilities in nearly all U.S. weapons systems.xxxvii
And our Navy has admitted in public reports that it relies upon systems so compromised by our
adversaries that “their reliability is questionable.”xxxviii

We can start by securing Internet of Things devices before they are exploited.xxxix I have
bipartisan, bicameral legislation that would require all internet-connected devices purchased by
the government, including DoD, to meet minimum security requirements.

Back in 2018, I was also proud to support language into the annual defense bill banning the use
of ZTE and Huawei components in government systems.xl I also think we need a national
strategy to deal with supply chains. Which is why, along with Senator Mike Crapo, I’ve
introduced a bill to establish a National Supply Chain Security Center within the ODNI. xli

Companies also need to fortify their own systems against both cyber-attacks and insider threats.

Second — We should get serious about securing our telecommunications systems, especially
when it comes to 5G. That means relying on trusted companies to build our telecommunication
infrastructure, and it means setting standards that adhere to our democratic values.

I’ve supported this administration’s initial steps to limit the use of telecommunications
equipment from China and other foreign adversaries. I hope the President sticks to these efforts,
but more still needs to be done.

I also believe we need a serious conversation about how to best replace existing equipment
across the country, especially among our rural carriers… many of whom installed equipment
from Huawei and ZTE because it was the cheapest option.

Third — The federal government should develop better oversight and controls to stop Chinese
investments in critical and dual-use technologies.

By law, all Chinese citizens and companies are ultimately beholden to the Chinese Communist
Party, not their board or shareholders. Our corporate ownership rules need to acknowledge this

I have supported CFIUS reforms to expand oversight over these transactions. But we need to
ensure implementation meets congressional intent, and that companies can’t skirt CFIUS

Another item I am working on is much-needed beneficial ownership legislation, so that the
Chinese government and other bad actors cannot hide investments in anonymous shell

Fourth — We need to continue our progress on enhancing export controls, which prevent
sensitive technologies from being exported to China.

Congress has made some progress, and the Department of Commerce is currently working on
language to strengthen the U.S. export control regime. But given how much cutting-edge
research and development is happening within the commercial sector, we need to establish these
controls quickly, and in coordination with our allies.xlii

We currently partner with 42 other nations through the Australia Group export control regime.xliii
These are exactly the kinds of institutions we must to be strengthening.

Fifth — There need to be clear consequences for American companies and citizens that enable
China’s bad behavior.

I’ve become increasingly disturbed that the U.S. business and academic community has
deepened partnerships with China to gain short-term market opportunities, while ignoring the
larger geopolitical impact. Equally troubling, we’ve seen American investors pour money into
Chinese companies that advance the PRC’s military capabilities. We’ve also seen American
companies develop technologies that directly enable the censorship, surveillance, and social
control efforts of China and other authoritarian regimes.xliv

These efforts may be good for business, but they directly support China’s efforts to rewrite
global norms and rules. And at the very least, we should make clear to both companies and
academic institutions that complicity in China’s repression efforts will jeopardize their ability to
do business with, or receive grants from, the federal government.

Sixth- We need to do a better job protecting our research and development…especially the
critical work that goes on at U.S. universities and research labs. Universities should double-down
on security and compliance requirements — things like disclosing additional sources of
income… or affiliations with foreign military and intelligence organizations.

That said, these security measures must be enforced in a transparent and fair way. The goal is to
protect our IP, but it’s also to help these students and researchers being preyed upon by the
Communist Party, not discriminate against them.

This will also require creative thinking to “flip the script” on the CCP’s efforts to coerce Chinese
students and researchers to bring home early-stage research into key technologies. Beijing relies
on its leverage — including families back home — to force individuals with access to federally-
funded or sensitive research to return to China for the transfer of such technologies.

What if we considered expanding asylum access to include Chinese students, and their families?
It wouldn’t be a guaranteed deterrent, but it might create enough doubt in the minds of the
Communist Party that they would have to rethink such tactics.

Call to Action: A New Sputnik Moment

But we need to do more than just play defense against China’s tactics.

This should be a wakeup call to mobilize in support of maintaining our competitive edge — a
new “Sputnik moment” for the 21st century.

In 1957, the successful satellite launch shocked the American people, and shattered the
perception of our technological dominance over the Soviets. It’s hard to exaggerate the impact
this moment had on Cold War America. It demanded a quick response, leading to major research
investments and an increased emphasis on STEM education at all levels.xlv

As a result, most of us have only ever known a world where technological innovation was
largely American or Western—driven. Just think about the technology that shaped the course of
the last 60 years: the integrated circuit, wireless communications, and the Internet, to name a
few. We developed the technology. We wrote the rules of the road. And the rest of the world

That was an enormous strategic and economic advantage for us in the post-WWII period, and it
is one we need to match today.

Following WWII, the United States funded 69% of annual global R&D. Today, we fund less
than 28%, with only 7% going to non-defense R&D, like wireless technology.xlvi

Even if we are successful in convincing our allies that Huawei and ZTE equipment presents a
serious security risk to critical networks, we have limited alternatives to offer.

As we look ahead to the technologies of the future, we need to step up our commitment to
funding scientific research if we hope to compete in the decades ahead.

It likely will mean a different kind of defense investment strategy. I have worried for some time
that we are investing in the best 20th-century military money can buy, when much of our conflict
will happen in 21st century domains like cyber, space, and misinformation/disinformation. And
in many of these areas, such as satellites, China is rapidly becoming our peer.

While we spend $750 billion a year on defense, China spends about a third of that. And with that
$500 billion difference, they are investing heavily in other 21st century technologies.xlvii

The United States needs to ensure that we are not overinvesting in legacy systems and

Our defense budgets need to better align with the fact that the “battlefield” might not be the
South China Sea. It could be the networks behind our power grid or our financial sector.

But ensuring our competitive edge also means mobilizing outside of the defense industry. It
means promoting STEM education and making sure our children get an affordable, high-quality
education so they can compete. It means investing in U.S. infrastructure — including our
railways, roads, airports, and high-speed internet.

And we’re going to need to train and attract a workforce that is up to the task.

Fortunately, this is an area where we can call upon some of our nation’s greatest strengths:
inclusion, diversity, and entrepreneurial spirit. One reason that we’re the land of opportunity is
that you can come to this country as an immigrant, and within that first generation, you can
become an American. China, with its oppression and persecution of minority populations like the
Uighurs, cannot say the same.

Sadly, this is just one area where Trump administration policies have been remarkably short-

Partnering Abroad

The truth is, we cannot effectively advance our national security interests alone.

Whether it’s standing up to China on trade issues, advancing a free and open Indo-Pacific, or
developing a secure telecom infrastructure — it can’t happen without our allies and partners.

Acting in isolation only enables China to play countries and companies off each other —
undermining our leverage and impact. especially when so many countries share our commitment
to democracy, global security, and a rules-based trading system, as well as our concerns about
China’s tactics.

This is where the Trump administration has gotten it all wrong — underestimating the
importance of partners in advancing our most fundamental interests. For example, our efforts to
convince allies to adopt alternatives to Huawei have been constantly undermined — particularly
when the President keeps hinting that restrictions on Huawei could be a bargaining chip in the
context of a wider trade deal.xlviii

We should instead be working closely with our allies and partners to create a market for
competitors to Huawei that abide by basic security and privacy standards. This includes setting
fair, open and secure standards for 5G — standards based on technical rigor, not China’s
geopolitical interests.

On the trade front, we should be making common cause with trading partners and allies who face
the same economic consequences of China’s bad behavior. We should be coordinating with our
allies on export controls and the screening of foreign investment.

Let’s also recognize that our allies are ahead of the United States on some key technologies. We
should be coordinating with our allies to research and innovate together.

In order to pursue a free and open Indo-Pacific, based on our values, we must deepen our
cooperation with our allies and partners such as South Korea, Japan, Australia, and India, while
expanding our network of alliances.

As co-chair of the India Caucus, I see real opportunities to increase our engagement with India
on a set of shared strategic interests, such as maritime cooperation, cybersecurity and counter-

The United States also has a number of existing security arrangements with key allies —
trilateral and quadrilateral mechanisms— that can be bolstered. We should continue to enhance
the defense capabilities of our regional partners, increase inter-operability, and support
democratic institutions in developing countries.xlix

Using new tools such as the recently established U.S. International Development Finance
Corporation (the new OPIC), the United States should work with partners to bring private capital
to the developing world in a way that’s consistent with our values.

Across the board, the U.S. should be rallying countries with similar concerns around multilateral
mechanisms to change China’s behavior. The U.S. and our allies built the WTO based on
openness and the idea that fair play benefits everyone.

Collective action on behalf of freedom and fairness can push back on President Xi’s dangerous
ideas and move China onto a better path.


This will require a significant strategic shift from business, academia, and the federal

It will also require us to focus our approach: we need to increase our defenses, step up our
response to China’s economic ambitions, and strengthen our partnerships abroad.

We face great challenges when it comes to China, but this is not a time to be fearful. We remain
the strongest country in the world. And our success derives from our democratic values and our
free enterprise system.

I would just close by saying: It’s never paid to bet against America, and I wouldn’t recommend
starting now.

Thank you.


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Elizabeth Economy, “Smart Competition: Adapting U.S. Strategy Towards China at 40 Years,” Prepared Statement before the House

Committee on Foreign Affairs, May 8, 2019, https://docs.house.gov/meetings/FA/FA00/20190508/109457/HHRG-116-FA00-Wstate-EconomyE-