>> this case is not about antitrust exemption. this case is about what section one of the sherman act means, and the court made pretty clear in its 1984 decision that section one has a limited purpose, its limited purpose is to regulate its lead independent sources of competition. the nfl teams aren't. if it weren't for the league as justice clay said the teens would have no value. they would have no business purpose. even if they were to go off and joined another league they still can produce the product on own and less it was with others. >> can we get you to come over to the microphone? >> yes answer straightahead. >> this case is said to be

bigger than other cases because the potential of this will affect the unit and had negotiations with salaries go and everything else. and that somehow don't be a broader antitrust exemption apply. it seemed like that was what the nfl is asking for and that's not what the judges were considering. >> you been spending to much time reading the papers of two breeze instead of reading or briefs. >> can you expand on that? you're not looking for -- >> this case doesn't have anything to do with union issues, as either purposely injured. if the case is bigger than other cases, there is a question it's all because of the hype of the press, not because of the substance of our breeds. >> what will stop intel from building houses, starting car shops, going off into other ventures to? i think the question you want to ask is what is it to stop the member clubs of the nfl's from separately, independent of the

nfl, going into other ventures that the answer is nothing except the antitrust laws. if they go into business laws they are unrelated to production and promotion of nfl football then there are a whole host of legal schemes that would regulate their conduct. and that conduct may be perfectly lawful. >> stevie dissents the justices were skeptical? >> the best answer i can give you to that question is in 1996 when the only other time i argued a case before the supreme court, i walked out with a sense that some of the justices were skeptical of my position, and in the end we won eight to one. i think it's very dangerous to draw inferences based on the justices questioned that i think there's no doubt that justice breyer had some serious questions, but aside from justice breyer, who may simply have been engaging in aggressive

questioning and who may not have been showing his opinion, i think it's very hard to tell how all of the other justices would have ruled. >> okay. >> is there anyone here from american needle? >> did anybody lose their blackberry? [inaudible conversations] [inaudible conversations] >> nfl players want to come over? can we get somebody from the info players? >> can we get your name until? >> my name is jeffrey kessler, and i'm counsel for the nfl players association, the nba players association, and filed a brief for the hockey players

association and baseball players association of. >> so tell us why this case was important to all these players associations? >> the players are mostly concerned that the leagues not claimed complete immunity from antitrust laws to fix player salaries, to fix the price of tickets to fans across markets, to fix all aspects of competition really to the detriment of players and fans. >> how clear is that today that that's not the case because we listened to the arguments that we listen to the reactions of the justices. we believe that the cannot shield the nfl from all antitrust scrutiny. we think congress decided that. we think a majority of the justices will hopefully agree with that. >> do you think the leak was actually asking for that? >> i think it was very clear by their last questioned when they said, even they could fix the prices of the sale of the independent franchises, and you

got a remark from one of the justices, i think the comment was, wow. that it was very clear that they were asking or a broad-based immunity from antitrust law. and we think it's clear the supreme court is going to say you apply what's called a rule of recent. >> greg leakages in this case has nothing to do with labor, and yet i'm the players are concerned if the nfl wins this potentially could lead to labor strike. could you talk about that little bit? >> yes. mr. leedy had an opportunity for the supreme court to say he wasn't seeking a protection. even to fix the wages of secretaries. and yet he was not able to concede that point so we assume, if he thinks the giants and jets or the redskins and ravens can get together and fix the prices other secretaries, that he thinks they could fix the prices of labor. then they can impose instruction that will prevent good teams from getting better. or take any other conduct

without the antitrust laws coming into play at all. we don't think the supreme court will be. >> you mentioned this 96 case, said in that case it was one entity negotiating with the players. what's your response be? the brown's case had to do what happens when there is a labor union collective bargaining this case is about antitrust and immunity from the. and so we are very content for the antitrust laws to apply. we don't think the brown case is loaded at all actually. >> thank you. [inaudible conversations] [inaudible conversations]

>> to allow the sale of patriot missiles to taiwan. up next pentagon and state department officials testify about china's relationship with its asian neighbors and the u.s. they also look at recent changes in china's military strategy. we will show you as much of this two-hour hearing as we can, until our live coverage of the hearing on the financial industry. >> today we have with us admiral robert willard, commander of the united states pacific command. honorable chip gregson, assistant secretary of defense for asian and pacific security affairs, and david shear deputy assistant secretary of state for east asian and pacific affairs, and we welcome you gentlemen to the first hearing before this

committee. we're sort of pleased that you could join us today and testify on recent security developments, involving the country of china. also, wish to welcome admiral willard's wife, donna, who is seeded behind the good admiral. and we welcome you. is the admiral missteps of that, why, you just whisper in his hair and you help them out. welcome. this is a very important and very timely hearing. it's interesting to note that just this morning, press reports indicate that google is contemplating pulling out of china, which we may discuss a bit in our hearing. now stress for some time the critical significance of developments in china to our national security. in recent years while we have been focused on events in the middle east, and south asia, china's influence has grown in

asia as well as beyond. i'm pleased the obama administration is prioritized the united states china security relationship, and was encouraged by the joint statement that resulted from the president's recent visit to china. i welcome the administration's efforts to increase u.s.-china relations and cooperation in areas of common interests ranging from counterterrorism and nonproliferation, to energy security. we must work together with china for the settlement of conflicts and reduction of tensions that contribute to global and regional instability, including denuclearization of the korean peninsula. the iranian nuke issue, and the situation in south asia. i particularly welcome the administration support for increasing military to military context of launches his context is essential. it builds trust, promotes understanding, prevents conflicts and fosters

cooperation. and given my own visits to china in recent years, i know how important these relationships are. looking back at u.s.-china security cooperation under the previous administration, there's some positive steps but there is still much progress to be achieved. in the new administrator will continue to face play of challenges, and i remain concerned by trends and ambiguities regarding china's military modernization, including china's missile buildup across from taiwan and a steady increase of china's power projection capabilities. moreover, china's military budget continues a trend of double-digit increases at a time when china provides more and more of the loans that support the american economy. china's transparency on defense issues is still limited, and questions remain regarding china's strategic intentions. this is highlighted just days ago following china's concerning

missile intercept event. at the same time, the reduction of tensions across china is a positive element and i hope to see further progress in the area, including meaningful action by china to reduce its military presence directly opposite taiwan. i'm also encouraged by china's recent involvement in a counterparty operations in the gulf of aden. this demonstrates responsible use of chinese military power in line with its international responsibilities of which i hope we can see more. i continue to believe china is not necessary destined to be a threat to our country. but there are trends and ambiguities that do concern us. i continue to believe that united states must demonstrate our own interest in the asia-pacific region, including our ability to project power effectively there. at the same time, we must also acknowledge china's limitations and recognize that china's choices may well be shaped by

our own actions. so i look forward to hearing from our witnesses about the actions, and at the department of defense and department of state are undertaking, and i hope they will help us better understand recent security developments involving that nation. i also look forward to receiving a 2010 department of defense annual report on the subject, which is due to this committee in the month of march. however, before we begin i turned to my friend from california, the ranking member, mr. mckeon. >> thank you, mr. chairman. thank you for holding today's hearing on recent security developments involving the peoples republic of china. today is our first opportunity to examine the administration's policy toward china, and how such a policy is aligned with our overall approach to the region. this hearing also gives us a form to better understand china's military buildup and

activities where they are expanding in areas of influence around the globe. all of which have serious implications for this strategic posture of the united states. i would also like to welcome our witnesses, that the chairman recognize, and thank you all for being here today. i look forward to your testimony and our discussion. as i review our policy toward china, it's what understand that president obama's team may follow an approach of strategic assurance, as the ford by deputy of the state deputy steinberger discharges based on the believe china cannot be contained and therefore we, america, and the international committee must accept its rise to power. in return, we seek a china's reassurance that it stature will not come at the expense or security of other nations. for example, strategic assurance may be demonstrate in part by china's cooperation with the united states and other nations

on matters of shared interest. in particular, within the last year we worked together in our handling of the global financial crisis. countering piracy off the east coast of africa, and isolating north korea for its persistent and aggressive nuclear and missile tests. while these are positive steps in our relationship, we cannot ignore the reality that china still fall short in the calm of reassurance. actions speak louder than words. here are but a few examples. first, on monday china demonstrate its resolve to expand its strategic capabilities with the missile defense tests. as of yesterday we heard from the pentagon that this test was conducted without advance notification to the united states. what are china's intentions for employing a missile intercept system? once again we are left in the dark to question china's commitment to transparency and cooperation. more concerned, this test comes at a time of tension over our arms sales to taiwan.

is this test intended as an aggressive signal? second, according to the latest u.s.-china economic and security commission report, i quote, there's been a marked increase in cyber intrusions originating in china targeting u.s. government and defense related computer systems. an activity that could potentially disrupt u.s. commercial and banking systems, as well as compromise sensitive defense and military data, and the chairman remarked about google and the problem that they are having and where we are moving in that direction. third, in march 2009, a chinese naval vessel behaved in an aggressive manner towards the u.s., and as impeccable. despite china's assertion of its rights within its maritime act dumb zone, this incident illustrates its willingness to violate international law and reflects increasing risks of

china's expanding military operations in areas where u.s. forces routinely operate. independently, these examples are a cause of concern. but more so when seen under an umbrella of market uncertainty surrounding china's future course, in terms of its military and security ambitions. i'd like to now turn to the neighborhood in which china resides with this brings me to the president's reach and trip to asia. from my view, we are merely left with a longer list of issues that need to be worked out. furthermore i am deeply concerned with the message we send to our partners in the region. from australia to india, the trip raised questions about who has the upper hand in the u.s.-china relationship. at a time when we should be focused on reaffirming our commitment to the region, we

left many doubting the depth and breadth of american power and influence. for example, in its 2009 defense white paper, the government of australia states, we also need to consider the circumstances of a more dramatic and in defense planning term, sudden deterioration in our strategic outlook. while currently unlikely a translation of mayor power relations in the u.s. pacific region, would have a profound effect on our strategic circumstances. of particular concern would be any diminution of the willingness or capacity of the united states to act as a stabilizing force. i hope each of you will give concrete examples of what we're doing to alleviate these doubts. finally, in just a few weeks a department of defense will submit its 2010 quadrennial defense review to congress. shortly afterward will receive

the nuclear posture review. and the 2006 qdr the pentagon noted that china was at a strategic crossroad and it had the greatest potential to compete militarily with the united states. in its 2009 annual report to congress on china's military power, the department maintained that the pace and scope of china's military transformation continue to increase, fueled by the acquisition of advanced foreign weapons. also similar to years past, it do that china continues to develop and field disruptive technologies, including those for and to access and aerial denial as was for nuclear cyber and space warfare. when we receive the qdr, i will be looking at any changes to the department's assessment of china. my fear is that we will downgrade the china threat in an attempt to justify last year's and future cuts to key defense

programs. if the conclusion is the same as it was in 2006, then i expect the president's budget to invest in the necessary capabilities to execute our contingency plans in asia. this is the type of strategic reassurance our allies need, and is the key to stability in asia. with respect to the mpr, we must be caucus at the end of an additional reduction in our strategic capabilities will only invite china to seek strategic parity with the united states. in closing today, we'll hear about the need for candid dialogue and improved engagement with china. as you know, we made changes to the pentagon's annual report on china's military power in this year's defense bill to focus on those areas. while i believe that coming to the table is vital to avoid misunderstanding and this calculation, we must be mindful that it takes two to make a relationship work, and that our priority focus must always be on

protecting america's national security interest. this is truly a time and time again and we appreciate your appearing to this point. thank you, mr. chairman. >> i thank the gentleman. a word to the members. we will be back in our old haunt, the community room, around the first of next month. so it will be much more convenient for us. it's going to look very, very good. i'm very pleased with what i saw yesterday. each of the witnesses today, as i understand it, have statements to make, and we will call on them, admiral willard first. admiral? >> thank you, chairman skilled, representative mckeon, and members of this committee. chairman, thank you very much for introducing my wife, donna, who joins me today.

she's been a military spouse for 36 years, in addition to being a mom and a grandmother, and she's now very much a joint spouse, of the pacific command with oversight of the needs of army, navy, air force, marine corps and coast guard families. as well as families of our civilian workers within a com. i'm pleased to have her here as well. thank you, sir. i've now been in command of the united states pacific command for about three months, and although i may be new to pay, i commanded extensively in the asia-pacific region. consequently during my 36 years of service, i developed a great respect for this part of the world. in that time i've come to believe that now, more than ever, it's vital to our nation's security interest and economic prosperity. in previous tours as now, the emergence of china and its

military has been a routine topic of discussion and my interactions with regional leaders that i have concerns of most reconciling china's declared desire for a peaceful and stable environment for economic development, with a new military capability and capacity that appeared designed to challenge international freedom of action, and potentially enforce influence over regional nations. reconciliation of these two divergent positions can only occur through continuous frank conversations and mutual actions within a strong amateur military to military relationship. a relationship that does not yet exist between the united states military and the pla. and until it does and it's determined that china's intent is indeed benign, it's critical that we maintain the readiness of our forward deployed forces, continually reinforce our

commitment to our allies and partners in the region, and meet each challenge by the people's republic of china in a professional manner that is consistent with international law. it's good in both nations interest in the asia region to manage these complexities and to develop a relationship with chinas that is constructed in every way. at u.s. pacific command, our goal is to sport this relationship by identifying opportunities that allow us to work more closely with china. while also encouraging her to reconcile strategic intent with increasingly sophisticated combat capabilities. congress can assess by maintaining a focus not only on china, but on the growing importance of the asia pacific region to our nation and to our global partners. our messages during engagements with the chinese leadership, both in beijing and during their visits to washington, d.c., must

be consistent, resolute, and invoke the nation's principles and values. i offer my staff support, direct support to you during your travels to the region, and invite you to stop in honolulu and visit u.s. pacific command on your way to or from a this area of responsibility. finally, i would like to thank this committee for the strong support you provide to the men and women of the united states military. despite being involved in two wars, our retention and recruiting rates remain very strong, which is a direct reflection of the quality of life initiative supported by you and by the american people. on behalf of more than 300,000 men and women of u.s. pacific command, please accept my sincere appreciation for the work that you do for us and for this great nation. thank you, and i look for to answer your questions. >> thank you, admiral. secretary gregson?

>> mr. chairman, members of the committee, thank you very much for this opportunity to appear today to discuss recent military and security developments in the people's republic of china. i'm pleased to be joined by old friends and colleagues, admiral willard and mr. david shear. china's rapid rise is a regional and political economic power with global influence has significant implications for the asia-pacific region, the united states and the world. these developments occur in a dynamic environment with little historical precedent. and secretary gates said during the past three decades, an enormous swath of asia has changed almost beyond recognition. hundreds of millions have emerged in poverty to higher living standards as a result of cooperation, openness and mutual security. new and reemerging centers of power i like are realizing extraordinary growth and development. from india to indonesia, china

to russia, and austria to japan, millions have moved from poverty to prosperity. china's rapid development helps drive is extraordinary and dynamic growth. in turn, china gained greatly from asia's growth. the united states welcomes a strong prosperous and successful china. as president obama stated, the relationship between the united states and china will shape the 21st century, which makes it as important as any bilateral relationship in the world. but this development occurs as new challenges emerge. our newest security issues cover a very wide range. these include economics, regional areas of tension, terrorism, proliferation, interview supplies, piracy, the effects of climate change, and disasters both man-made and natural. our increasingly interconnected world and, demand for resources require cooperation and integrated solutions.

since the committee's last hearing on this topic, we have seen several significant developments, some positive, other troubling. many are documented in the secretary of defense's annual report on military powers of people's republic of china. on one hand, we have several positive examples of china's contribution to international peace and stability. we are encouraged by china's support for un security council resolution 1874, and its efforts to support the denuclearization of the korean peninsula. china is also developing an emergency military capabilities that are allowing it to contribute cooperatively in the delivery of public goods, from peacekeeping and counter piracy, to humanitarian assistance and disaster relief. we appreciate the positive experience of our two navies working in concert with the international committee to combat piracy in the gulf of aden, and were looking forward to building on these experiences.

but, we have concerns about the pace, scope and lack of transparency in china's military modernization. the people's liberation army is changing from a mass army designed for protracted wars of attrition on its own territory to one developed for winning short duration, high intensity conflict on its periphery against high-tech adversaries. weapons of material to support this are being procured from both foreign and sources and increasingly capable and daschle and technical base. organizational and doctrinal changes are also evident as are disruptive technologies designed for anti-access and aerial denial, nuclear space and cyberspace arenas. modernization and extension military capability across the taiwan strait continues with the addition of more missiles enhanced error surface and undersea capabilities. over the past several years, china develop and articulate roles and missions for the pla that go beyond immediate territorial interests.

we will continue to use military engagement with the prc to demonstrate u.s. commitment to the asia-pacific region, and acts as a partner in addressing common security challenges. we will maintain and enhance our presence and alliances in asia, including demonstrademonstrate u.s. resolve. our interests lie as they have for the decade of asia's rise in constructive engagement with china, combined with a strong network of alliances and partnerships throughout the region. thank you, and i appreciate the opportunity to be here and i look forward to your questions. >> thank you, mr. secretary. secretary shear? >> thank you, mr. chairman, mr. mckinnon, i appreciate the opportunity to appear before you today. my colleagues from the department of defense have already addressed our military to military relations with china. so my remarks will focus on the presence of november trip to asia as was our broader security goals regarding china and the

region. since coming to often, president obama has repeatedly stated that united states welcomes the emergence of china, and that an interconnected world, power does not need to be a zero-sum game. we welcome an international role for china in which its growing economy is joined by going responsibility. and i would reiterate our decided that as the chinese economy grows, they become a responsible member of the international community. president obama's trip to asia in november 2009 with stops in japan, singapore, china, and south korea, was intended to constrain the u.s. commitment to the region, build trust, articulate our values on issues such as human rights, and strengthen and expand our cooperation with china. the trip was productive in this regard. during his first ever visit to china, the president gave in his acquainted with his chinese

counterparts, and demonstrate to them the importance we place on cooperating on such issues as iran, north korea, and afghanistan. the president set the stage for further cooperation with china in preparation for the copenhagen conference on climate change. he discussed exchange rates and trade, clean energy, military to military exchanges, human rights, and stopping the spread of nuclear weapons. we outline the key of compliments of the visit in a joint statement issued by president obama and president hu jintao on november 17. it has been said before that in order to get china right, you have to get the region right. the united states is a vital contributor to asian security and economic prosperity. our active presence in asia helps promote regional security and stability. we intend to deepen our engagement and strengthen our leadership in the region by strengthening our commitments to allies and partners, and

enhancing our involvement in regional institutions. and the secretary addressed these issues, as well as our presence in the region, in an important speech in honolulu yesterday. the president's trip to china demonstrates that fact in the region demonstrate the importance we place on east asia which remains vital to u.s. security and prosperity. and the november joint statement, the chinese recognize the positive role the united states plays in east asia by stating that china welcomes the united states as an asia-pacific nation that contributes to peace, stability and prosperity in the region. the trip was also a continuation of our efforts to build a positive, cooperative and comprehensive relationship tween the united states and china. as president obama has had the ability of the united states and china to partner with to get is a prerequisite for progress on some of the most important issues of our times. those issues include several

important security challenges. issues such as north korea and iran cannot be successfully addressed without intensive and sustained involvement by china. today, we have been encouraged by china's willingness to cooperate with these areas, although we have a lot of work to be done. although there is a lot of work to be done. we obviously do not see eye to eye with the chinese on every issue. for example, on taiwan, the united states remains committed to our one china policy based on the three joint communiqués and the taiwan relations act. we believe that his policies contribute greatly to the peace and stability of the past several decades, and we remain committed to that framework. we welcome the improvement over the past two years. at the same time, we have voice our concerns about china's rapid military modernization program, as it relates to taiwan.

china's continued military buildup across the taiwan strait despite improvement in cross strait relations raises many questions about beijing's commitment to a peaceful solution to the cross straits issue. similarly, the united states and china have differences on the issue of human rights. the promotion of human rights remains in a central element of american foreign policy, as the president has said it is a part of who we are as a people. president obama has did the rise of a strong prosperous china can be a source of strength for the committee for nations that this summer will hold another meeting for the u.s.-china economic dialogue that we initiated last july. we will use this and other foreign to continue building a relationship with china and to seek pragmatic corporation on issues of mutual concern. at the same time, we will remain engaged and active throughout the region supporting our allies and expanding our leadership in this vitally important part of the world.

thank you for the opportunity to make these remarks, sir, and mr. chairman, if you don't mind, i would like to say a little something on the subject of google. as you all may know, google made a statement yesterday about a cyber attack on its facilities allegedly originating from china. and secretary clinton made a strong statement on this yesterday, which i'd like to read before you all. she said, we have been briefed by google on these allegations, which raises serious concerns and questions. we look to the chinese government for an explanation. the ability to operate with confidence in cyberspace is critical in a modern society and economy. the secretary also said that she will be giving an address for next week on the centrality of internet freedom in the 21st century, and we will have further comment on this matter as the facts become clearer. the secretary will deliver a speech on internet freedom next

thursday, that was scheduled before google's announcement. she has been very engaged on the issue of internet freedom, and anticipate the need to stake out clear policy ground on this subject. the secretary had dinner with 10 executives of leading high-tech companies last week and discussed internet freedom during that dinner. she has been actively listening and learning from those assembled executives, including google's ceo schmidt. she takes this issue very, very sisley. and we have been in touch with google subsequent to their contact with the secretary clinton, and we have been in contact with all of the agencies dealing with cybersecurity on this issue, and we will be happy to remain in touch with you on this subject. >> thank you very much, secretary shear. a question to admiral willard

and secretary gregson. what is the major security challenge our country has with china? into you, secretary shear, what is the major nonsecurity challenge we have with china? admiral? >> chairman skelton, i think the major security challenge is the level of uncertainty that exists in attempting to reconcile the public statements that china makes regarding its long-term intent, which is generally that it characterizes its military capabilities and capacities as defensive only, and seeks peaceful and harmonious environment in which to grow its economy and prosper. with military capabilities that

is not necessarily consistent with that characterization of the future, and that the power projection capabilities, the capabilities capacities, both in asymmetric areas and conventional areas, tend to exceed that description. that ambiguity that currently exist, and our attempts to reconcile that, are the security issue that we hope to tackle in a military to military dialogue with our prc counterparts. >> secretary gregson? >> i would only add to the admiral's remarks that we remain particularly concerned about their ongoing developments in a nuclear arena, cyberspace, as secretary shear eloquently discussed, and space capabilities. their development in the air and maritime realms also fit in there, but particularly nuclear,

cyberspace and space capabilities constitute a potential asymmetrical threat to our ways of doing business. we watch all those very carefully. >> thank you. secretary shear? >> let me discuss the major nonsecurity challenges by sharing with you our priorities. for our nonsecurity relationship with china. number one priority is coordinating with china on the global financial crisis. economic recovery as president obama's number one priority. and economic recovery and how we coordinate with the chinese on this subject is the number one issue on our agenda with the chinese. we want the chinese to rebalance their economy, as we rebalance hours. china will need -- chinese people will need to save less

and consume more. we would like to see the chinese recovery -- economy shift away from its emphasis on heavy industry, export oriented industry. we seek the chinese pursuit of a market oriented flexible exchange rate, all of these issues came up in the presidencpresident's meetings in beijing with his chinese counterparts. the second priority is cooperation with china on international security issues, such as iran and north korea are in the third priority is coordination with the chinese on the subject of climate change. and i think on climate change, we have achieved some progress both with the chinese and the international community in the context of the copenhagen conference several weeks ago. >> and mr. mckeon?

>> thank you, mr. chairman. in my opening statement i highlight some of the concerns when it comes to our policy approach toward china. from what i can gather from last year's annual report to congress, you share some of the same concerns regarding china. a shift in strategic priorities and behavior, especially as it expands its need for access to more markets and natural resources. expanding and improving disruptive military technologies in areas such as space and cyberspace, a lack of transparency when it comes to military budget intentions and decision-making, and it's increasing leverage in the region and around the world. gentlemen, what precisely is the president's china policy? how is it different from his predecessor? and how will it seek to address these shared concerns? i'm going to start with you, admiral.

>> thank you, sir. i think from the military standpoint, our approach to china is very much twofold. it is first and foremost to seek to grow a relationship with china that encourages their constructive contributions to the security issues in the asia-pacific region. it's the purpose behind military to military dialogue. it's the reason for our emphasis to the chinese on the need for continuity, some constancy in terms of that dialogue. we think that it is lagging behind the other engagements between our nation and the people's republic of china. secondarily, on the issue of the ambiguities that currently exist, the inconsistency that we deal with in the asia-pacific region, we bear the

responsibility to ensure the our ford presence and the readiness of our forces in the region to assure our allies and partners in the region and to continue to grow those relationships as secretary gregson described in his opening comments. so as to maintain a security in the region that we, frankly, have been responsible for for the past 150 years. so we will maintain our presence in the region as robustly as we have in the past, as we continue to engage the chinese in dialogue, and hopefully foster an improved relationship and get to some of the ambiguities that has been discussed thus far this morning. >> thank you. secretary gregson? >> in the presidents words stated to the chinese, at the security and economic dialogue as well as in beijing, we seek a

positive cooperative and comprehensive relationship with china. as secretary gates -- secretary gates interpretation or his characterization of our policy is, that china is not a strategic adversary. it is a partner in some respects, but a competitor in others. our defense strategy released in 2008 states, as you mentioned, a chinese potential for competing with the united states, and at u.s. interaction will have to be long-term, multidimensional and involve peacetime engagement between our defense establishments, as much as it involves field and military capabilities. it's impossible to separate our engagement with china for our engagement with the region. are consistent and increased engagement with the region, are enhancements of our alliances and partnerships there, not only in the east asian region, but increasingly through the indian ocean area will be essential to as shaping the environment that

will allow us to also shape or develop cooperative comprehensive relationship with the chinese. >> secretary shear? >> in order to build a positive cooperative and comprehensive relationship, we are engaging with the chinese to seek out common interest , interests, and devise ways of pursuing those common interests together. this is not an easy task. it can be very challenging. while we share common interests, our interests are not always identical. and our bilateral relationship with china, our approach to the region as a whole, as well as maintaining our military strength in the region are all part of a comprehensive approach to developing a relationship with china. >> thank you.

china, they are shifting away from labor-intensive operations and they're moving towards increasing production of high technology goods. they've matured as a manufacturer and assembler of advanced technology products. they've created an attractive environment for foreign companies to make investments with increased subsidies, tax incentives and preferential loans. at the same time, we are hearing concerns from industry that defense policy changes, emerging from the qdr, coupled with recent anticipated cuts in the d.o.d. spending, will force u.s. industry to divest itself of certain capabilities, reduce our production lines, and inhibit innovation. gentlemen, as the president devotes his china policy, to what extent does it u.s. industrial policy and/or into his decision-making? concerned about our workforce. do you share my concern that the united states into a show based

maybe i'm able to sustain the technological innovation that's been the hallmark of the u.s. military, given the current fiscal environment? can you provide specific examples out of president's china policy seeks to address china's unfair trade policies and ensure that the u.s. military continues to have access to the manufacturing capacity, technological capacity, strategic materials necessary to equip our war fighters in the future? >> if i may start, congressman. with regard to china's unfair trade practices. we have a multi-pronged approach toward trade with china. that includes pursuing cases in the wto on chinese unfair trade practices, and we achieved in several successes last year in this regard, particularly with the protection of intellectual property rights. we are also in forming --

enforcing our laws and regulations on trade on the presidents decision on the 421 case on tires is a case in point. again, we are also vigorously pursuing the chinese on the enforcement of intellectual property rights. over all, as we seek passionate as we pursue economic recovery, i think attention to our technological capabilities will be a center to the administration's approach to both the economy as a whole and to our economic relationship with china. >> admiral? >> representative mckeon, while trade is not in my lane, certainly the industrial base and the production of our military capacities is, and i would only offer that the work that you do as a committee to

help to strengthen the united states industrial base on behalf of its military, the attention you pay that, and i know that secretary gates emphasis on doing what we can to strengthen the u.s. industrial base in support of our armed forces is of critical importance. and i would offer one, my thanks to you, for your efforts in this particular area near cadigan, offer my emphasis on the criticality of an industrial base that can support this military, not in the near term, but in the long-term. >> thank you very much. mr. mckeon, it's clear that china is a developing an increasingly and national base. it's also clear that they are able to procure certain items of

foreign military goods and technology, and didn't reverse engineer it to suit their needs. at the same time, it's industrial espionage is not unknown to our intelligence agencies and our technology control agencies exercises vigorously control as possible to ensure that we not only prohibit unauthorized american transfers of technologies to china, but also that our other partners around the world all day our tech control restrictions. behind the industrial base of course, is also the american educational base hit and i think that we need to make sure that that base, the colleges and universities, the quality of the graduates that we are producing, is maintained. we have the advantage of qualified students from all over the world that want to come to the united states, to go to our

schools. and we are enriched by that process, as is our entire educational and on into the industrial and technical base but we need to make sure we maintain that as a priority. so that we can meet the goal that you set out, that we maintain our advantages. >> thank you very much, mr. chairman. >> thank the gentleman. >> thank you, mr. chairman. i appreciate you all think you're. secretary gregson, it's hard to believe it's been about four years since your vietnam days. we appreciate your service to their as a marine. a young brain and it not. mr. chairman, i got my question to you just because of our limitations on time, but abele and secretary, please feel free to join in if you want to augment what mr. chair has to say. >> mr. terry, what does the chinese government perceive as their greatest existential

threat? >> i think chinese security goals -- chinese pursue a bright as a critical trick i think the number one goal is the preservation of the chinese communist party. i think chinese communist party is very concerned about the prospects of war, social stability in china. i think they spent a lot of time and resources trying to ensure that the vast social economic change their undergoing do not shake their rule of china. so as the chinese chinese gum is sitting there looking ahead, they see their greatest not the united states, not taiwan, not the japanese or any other foreign entity. they see their greatest existential threat as something they had in turnley, is that they're?

>> yes, i think the chinese pay a lot of attention to internal security and internal social stability. and that is the number one goal for them. >> i think on the world's attention probably longer than some of these tragedies do because of what happened in the school buildings. i was surprised by the level of cracking down, the chinese government exerted on parents trying to find out what happened. as you look back at that, how do you analyze what occurred with regard to the internal discussions, internal investigations that occurred around the distraction of the schoolhouses? >> i agree. the destruction of the schoolhouses, the loss of lives, as well as the overall destruction in the province was very tragic.

we did everything we could to help the chinese recover from that. >> i'm interested in stifling the investigation in turnley, about what occurred. building codes. >> my belief is that the chinese government has conducted an investigation and that they have concluded that they need to improve building codes, they have not been particularly transparent in the extent to which they conducted this investigation. they have come at you see, repressed dissent on this subject. it was very interesting watching the chinese public's reaction to the earthquake, however. there was a great deal of spontaneous reaction on the internet. voluntary groups of rows spontaneously through communication on the internet. and a lot of chinese simply up and volunteered to go to help things out. so you have a very public a

situation. >> going back to what you said about the number one threat they perceive as an internal stability, if you aggressively repress and stifle the efforts of parents to find out why their children died because of ad local government policies in terms of building codes, isn't that an indication of evidence for your first payment? i mean, i don't know how to look at it other than they were apprehensive, that somehow a local effort to figure out what happened with local building codes could turn into some kind of national movement. if they were bad policies in the school bonus, i suspect it could have occurred elsewhere. is that a fair analysis to? i agree. >> i wanted to ask, you're a linguist and have a link the state department experienced. where are we at with regard to the development of chinese

languages skills amongst our folks here that aspire to be both part of the military, part of the admiral willard's group, and also state department? where are we at with chinese labor skilled? >> the state department itself has an extensive legless program, conducted both in washington, in taipei and in beijing. i myself was one of the first, was the first foreign service officer to study chinese in mainland china after 1949. i went to the johns hopkins center in noshing. >> but the fact that we have an aggressive state department program is indication we don't have language skills within the america public at large. where do you see that in terms of as we move ahead? >> i agree that we need -- we need more chinese language skills developed within the american public at large. we've seen greater growth in chinese language, teaching in high schools and at the university level. and in this regard, the president has announced a very

strong initiative during his trip to increase the number of american students in china to 100,000 over the next four years ago we will be working to implement that in the coming weeks and months. >> thank you all for your service. >> i think the german. mr. bartlett? >> to mr. sasquatch and, i would suggest china has two concerns that largely a limited their very aggressive military buildup. the first is taiwan. tiny island, 20 some million people versus a homeland of 1,000,000,390 people. why the big concert? i think they see that taiwan can declare its independence, so can a lot of other regions like tibet, for instance, and they see their empire unraveling of taiwan can do this. so i hope we can resolve this concert diplomatically because i think china will do anything

necessary militarily to keep taiwan from declaring its independence. the second major concern i have, and admiral, you mentioned on the eight page of your prepared testimony, energy. i lead a panel of nine members three years ago to talk about energy. and they begin their discussion of energy by talking about post-oil. we in the congress have a lot of trouble seeing beyond the next election. and our business community is primarily focused on the next quarterly report. the chinese are looking ahead decades and generations, and there will indeed be a post-oil world. the chinese are now aggressively buying up oil all over the world, and buying. mr. secretary, as the state but why would they buy up oil? when today's, it makes no difference, the effect of global auction when the bicycle appeared to who owns the oil makes no difference that they tobia chinese by oil because they didn't understand the

marketplace. i think they understand the marketplace very well. and i think that the future, in the future the chinese will tell us, i'm sorry, but we own the oil and we cannot share it with the world. to make that a reality, they had to have a blue water navy big enough, spread globally across the world far enough to protect all the sea lanes for the passage of this oil. to the extent that we continue to use a fork of the worlds oil, that we have done nothing to reduce our demand for foreign. i think we hasten the day that the chinese will tell us we're not going to share our oil with the world. what should be our policy relative to energy, because i think it is an overarching issue. or less about $80 a barrel. the world will never, ever again have sustained good times until we do something meaningful about alternative energy, and so far

we the world and we the united states have done nothing meaningful about aggressive conservation or alternative energy. what ought we be doing to avoid this real potential threat from the chinese to deny us access to oil because they own it? . . we have no meaningful program of conservation or development

of alternative energy. oil is an incredible energy source. quantity and quality of energy is unmatched anywhere in liquid fuels. this one person in 22 uses a quart of the world's oil. do we not make inevitable this confrontation with china over energy? >> we share your concerns on this subject and our energy security dialogue is aimed at avoiding conflict over the search for oil. >> i would like to see shared concerns matched by some meaningful ownership action. i don't see that. do you see that? >> we have worked with the chinese to increase their cooperation with the energy agency. we have seen some progress.

the chinese are building an oil reserve, which we welcome. we will keep pursuing this issue with the chinese. >> in no way do we believe they oppose oil wells and we should confer more with the chinese so that collectively we don't precipitate international crises over energy. >> miss davis? >> thank you for your service. if i could follow up on my colleagues's question how would you characterize china's energy dependency? would you say that to a great extent or would you characterize that for us? how was that used on military technologies to secure energy

deals? is that a large part of their policy? or to a lesser extent, what should we be doing about that? >> i will refer to my defense department colleagues on this subject. >> we see china developing the ability to get -- to move beyond concerns of territorial defense and moving around the world in large part to protect their access to energy sources and protect the lines of communication. it would suggest that drives defense policy to an extent and also drives a lot of foreign policy. we tend to focus on the development of the chinese navy thinking of lines to the persian gulf. gold is the second but there's also -- the chinese are concerned with energy extraction

and other areas. it is a definite driver of their policy. sale of military technology is a concern to states that are key interest to us such as sudan and others where arms deals have been negotiated and executed. one can derive a conclusion that if they are importing oil that there's a connection between arms deals, nevertheless, we suspect a connection, we are concerned about sudan and any arms transfer. we see at too. >> in our discussions in terms of the transparency and the relationship to military relationships, in that regard in terms of energy is that an issue that has some transparency in discussion or would you say, we

are not able to impact -- >> the chinese have been quite vocal in their concerns over the lines of communication speed as it relates to the movement of all of their commerce to their trade and energy and other natural resources. they refer to the joke point. the strategic value of that and the importance of protecting and securing those key lines to include the points between the natural resources and commerce and china itself.

secretary greg -- wallace c. gregson said there's -- it had to do with securing their regional commercial interests. how far that will extend beyond the asia-pacific region and east china into the indian ocean remains to be seen but they are demonstrating the capability to operate at longer ranges by virtue of their assistance to the international counterpiracy issue in the gulf of aden and their ability to sustain their operations. >> would you say the development of our relationships, that we are working with that. or not having the ability to have that level of discussion we are seeking. what are we doing about that?

>> energy and regional security issues, seeking more transparency from the chinese and security policies. and particularly in southeast asia. secretary clinton has been booed southeast asia three times. remaining in contact with our friends and allies played an important role in addressing this. >> if i may touch on one aspect about transparency it is not strictly a defense but there is active engagement in the

scientific and educational communities between china and the united states. that usually occurs in conferences under the department of energy or the department of the interior. that is one encouraging sign. there is some thought to life beyond oil. >> mr. ford? >> on want to begin by thanking you not just for this hearing but asking a lot of tough questions before many members of congress did that. i request your leadership on that. it is a partnership team. the heavy work they have to do to come to a hearing like this. this year we appreciate you being here. i want to ask questions so they can have short and succinct answers, i would love for you to

extrapolate, we only have five minutes before the microphone goes dead. i looked at your testimony. as i read the testimony china has 290 ships. am i accurate in that assessment? >> yes. >> that number doesn't exist in a vacuum. isn't it significant that we tried to extrapolate what they're shippedbuilding plan actually is so we know how many ships they will be building if we want to project our strength against bears? is that a significant component to our evaluation? >> that is a broad evaluation. >> the military power produced by the pentagon, the estimate is 260 ships.

is that correct? >> i have to -- >> we missed 30 ships. how many ships are roughly in our navy? >> in the pacific command i have access to 180 ships. >> overall? >> 283. >> according to the report a few months ago they have 260 ships as one component. i know that is just one component to look at. it shows the importance and significance of having some idea of the shipping plan they are undertaking. the 290 ships were accurate. i would like to ask you if the united states currently has a shipbuilding plan, not whether

it is being modified. do we currently have a ship atbuilding plan for the united states of america as you know it from the department of defense? >> there is a plan as delineated by the program and the president's budget. >> are you aware that the department of defense was supposed to give the united states congress that shipbuilding plan when they submitted the budget so we could make the same comparison's the admiral talked about were significant in knowing what the chinese had that we were supposed to have a law submitted at the time the budget was submitted? >> is not our intention to ignore any requirements. the question i would ask, mr secretary, if you could supply -- if that shipbuilding plant

existed i would submit one law required we get a copy so we could make the same comparison. a congressional inquiry demanding we comply with the law. we still haven't had it. i would ask that you submit for the record the legal justification, refuse to give the united states congress their shipbuilding plan and if you want to submit for the record because i don't have time, how we can legitimately talk about a lack of transparency with china when we won't submit our own shipbuilding plan to the united states congress. i would just ask you again shortly for your testimony if you could submit to us for the record, i was excited about the victories we had with intellectual property rights and

we want to get this publicized because i don't hear them anywhere i look. if you submit a list of those victories with intellectual property rights for the record. we would love to talk about them. thank you so much for your service. >> thank you very much. i made point out the most memorable congressional moment was mr. forbes. we planted the tree in memory of the american fliers, who were part of the flying tigers during the second world war. i hope you will be able to revisit that place for us and give us an update. >> mr. marshall?

>> i would like to yield my time, the gentlemen from mississippi? >> thank you, mr. marshall. i never guessed we would be at war in panama or afghanistan. i thought it would be war against the russians but that did not happen. the things we don't expect to happen do happen. an area that concerns me is our carriers can go 15 years here or there on years built into that festival -- vessel. they have refueled every three to five days. a logical assumption is the weak link in our carrier task force is the oiler that protect the carrier. if i am a potential enemy of the

united states i will not hit us where we are strong, i will hit us where we are week. we have a limited number in the pacific between 8 and 12. the logical question would be since our enemies have been good at finding weaknesses in exploiting them in iraq, what steps are we taking? should some scenario developed in the pacific where a potential enemy's first step is to take out those eight or 12 oilers. does the fleet failed to sell? one of the things congressman bartlett impressed upon me is the need to pour energy dependence and the long term so we can achieve that. this was a nuclear power surface combatant. each could save some -- $10 billion a year. we don't need that boiler. you lose that weak link.

congress's past language says it could be nuclear power. you pass legislation that says the next generation is going to be nuclear power. what i don't see is the navy taking any steps to implement that. second thing is in the short term if you only have eight or 12, what steps does the navy have shooed a clever fellow decide to take out the oilers? what is the backup plan to increase those numbers so the worst case scenario doesn't happen? >> thank you, representative taylor. you bring up some provocative issues and that is how we handle some of the tactical level risks to our complement when we complement major scale operations and the protection of our tanking assets at sea is a

major factor in our planning and the way in which we attempt to mitigate potential vulnerabilities. to your point regarding nuclear power, we gain great flexibility with our aircraft carriers and submarines being nuclear-powered. our surface ships do rely on refueling. i would offer that we refuel at c. we also refuel in pork. when we operate in the western pacific the approach is to complete both of those. we also have the capability exercised rather rarely to refuel our surface ships from our carriers themselves. our big deck ships have the opportunity to conduct refueling of our smaller escort ships.

so between protection operations around them and the various ways in which we can take advantage of geography and the fourth complement to conduct refueling, we manage this problem and our naval commanders are tasked with planning around it and managing it very carefully. i take your point that refueling of our ships is keenly and areas that we have to focus on and the adequacy of our tanker fleet to be able to ensure we have the freedom we require in our operations is very important. >> if i may. the chairman is going to gavel us in in twenty-second. i have laidconcerns. hopefully in the very near

future come visit with me with more detailed and in depth answer than you are able to give in public. >> be happy to. >> the gentleman from minnesota. >> thank you for your service and for being here today. i want -- it seems like forever that we have been concerned with or worrying about china's role in a couple places. i would like you to touch on briefly some of which you already have. when general wallace c. gregson and i were lieutenants we were worried about taiwan and china and what china's actions may be. we were probably mostly worried about what the government might do that might precipitate military action on the part of china. we are sitting here today and

still have some of those concerns. some new folks may have changed some of that dynamic and i would be interested in discussing where you think we are and what the level of tension is now in the china/taiwan relations and the one that never goes away that we have been discussing in our lifetime, we have had u.s. forces in korea since before wallace c. gregson and i were lt.s and you were an ensign and we have troops there. the question is china's role in being able to influence actions in north korea particularly with their nuclear and missile activities. we have three minutes and 22 seconds that many of you or all of you can address in how you

see china. we are chinese in both of those issues. relationship with taiwan and potential for military action and how china is doing in helping us get back to six party talks and what is going on in north korea. >> i will go very quickly so my colleagues can jump in. taiwan and china have undertaken a series of reciprocal actions we find very favorable. direct flights, visitations to offshore islands, business ties, all of the sinews that we think contribute to a decrease in tension and operates in support of our peaceful settlement of issues across the taiwan strait. it has been mentioned that we remain concerned about the buildup of military capabilities and we watch very carefully not

only is the amount of the buildup but the types of systems they are developing to make sure we maintain the ability to put their relations under the relations act. we are encouraged by china's support in security council resolution 1874 to prevent north korea from profiting from their nuclear related technology or missile related technology and keep north korea from exporting any weapon system prohibited under 1874. to china's support is essential to international consensus to keep 18748 viable resolution and we are very positively encourage about their development. we continue to ask china to exert their influence, to work on their neighbor to convince them of the wisdom to complete irreversible nuclear as asian which becomes our bowl with

north korea. >> getting a good response from the chinese, for a long time, we had success with denuclearization or missile -- if that is a word -- without china's active participation. the enormous influence with north korea. are we seeing that influence? or is it sort of quiet? >> we are seeing more influence for our part. we have made it quite clear that we intend pursue our obligations to our allies and we will take that to the extent that we are not successful in irreversible denuclearization in north korea. we will enhance our ability do

enforce our obligations. that is a condition that contributes to instability as any other scenario. >> my time has expired. >> the gentleman from washington, mr. larsen. >> thank you for coming. with regard to sunday's missile test. how would you respond to the notification china gave compared to what the u.s. does when we conduct a missile test or when russia conducts a missile test. >> i am not aware we received any notification. >> how does that differ from the

ballistic missile test process? do we provide notification? >> the mariners noticed closer areas and various things. >> there was no indication at all of the international community about the missile test and its reasons and so on. at least as far as we know from china. >> i am not aware -- >> do you have any -- >> we are not aware of any prior notification of tests. we have spoken with the chinese since the test. we have asked them to be more transparent with regard to this test and testing in general. the chinese have only responded so far that this particular test was defensive in nature and not aimed at any specific countries and no warble debris was creaor

created by this test. >> that is not helpful. before we move forward, if i attempt to enter that. for david b. shear and wallace c. gregson, china is our most important dialogue, the most important ally in the region, they developed in concept east asia security between japan, china and south korea, recent statement indicate, intended to include the united states. how do we discuss steps the u.s. is taking to increase the

u.s./japanese relationship while we are pursuing a various set of relationships with china? >> we are working closely with the japanese to strengthen the alliance. secretary clinton met with the prime minister yesterday and celebrated the fiftieth anniversary of the u.s./japan security treaty. and strengthening the alliance. >> secretary wallace c. gregson? >> we have been undergoing a transportation and realignment of u.s. forces and japanese forces within japan. pending is the continuation of the realignment with the buildup of u.s. forces in guam. we look forward to rapid

implementation of that as a way to adapt and transform the military and security aspects of our alliance for the new century. >> back to the missile test. this is for robert f. willard or wallace c. gregson. given the recent arms sales going through and the context of the missile tests do we see this as something else happening? most of us are behind -- for instance, when they were announced in 2008, china suspended military discussions. those started up again last month. are we anticipating another tit-for-tat because of the arms

sales? >> if history bears out at such a time as arms sales would be announced with a consultation with our congress would take place, the prc has reacted very vocally and our military to military engagement has historically been suspended. whether or not that has been the case this time or not will remain to be seen. i would offer that in the discussions with the secretary, on the way to beijing. we emphasize the need for constancy in that military dialogue. we were explaining the mutual benefits of maintaining it. whether or not differences erupt between our governments or not, we will be testing the majority of that military to military

relationship in the future, not just over our legal operation. other issues with governments as well. >> my time is up. >> mr. kaufman? >> thank you, mr. chairman. i would like to address a very serious national security threat as it relates to china. has to do with issues control by china. .. rn as to what

that means for american innoefing as and domestic jobs growth. the fact that so many national security and defense systems require these materials to function and operate is a greater concern to us here at this hearing. 95% of worldwide rare earth reserves are being accessed today are located in china or controlled by chinese-led interests. today there no rare earth elements of or production sites of significance taking place or anywhere outside of china. chinese domestic demand for rare earth elements can equal chinese production as early as 2012. furthermore in october of 2009 an internal report by china's ministry of industry and information technology disclosed proposals to ban the export of rare earth and elements and

restrict supplies of the remaining metals as early as next year. >> i asked the witnesses to comment on these developments, and address their entities situational awareness of the reliance on these rare elements. what they feel are the strategic invitations, and how they plan to develop appropriate policy and mitigate the supplanting supply crisis as it relates to national security. >> sure, i'd like to take that question for the record and get back to ss again. >> very well. anyone else care to respond? second question, about for five years ago, i believe that since we don't have formal relations with taiwan, in terms of an ambassador here, i think general counsel might be the term i'm not sure what the term is, for the diplomatic representative in

washington, but i was at the dinner and seated next to him and asked them what the most significant national security was to taiwan. and at that time, he said a recession in china. and i asked him why that was the case, and he said because then he felt the leadership of the people's republic of china, prc, will look outward as to threats to deflect the intention of the people of china on their own domestic problems, and that's where he felt that taiwan would be the most vulnerable. i wonder if any of you could comment on that? >> that has the relationship of economic development, national development to the authority, legitimacy of the leadership, has been often discussed. as a matter of speculation and a

connection has been drawn, and matter-of-fact, it's been often stated that 8 percent per year growth or better is necessary to maintain domestic tranquility within china. while we watch that from the defense side, we also watched the development of capabilities, and we try to make sure that we have done everything we can to counter the capabilities we see on the other side of the strait, relying on the fact that we can't read minds and read intentions with clarity. we can throw in and get some ideas, but we're not relying on the conditions of prosperity to be a guarantee, that nothing bad will happen. we are taking appropriate precautions to make sure we can react if the situation worsens, regardless of what the

prosperity situation is across the great. i understand the point of your dinner companion, and i think it's an interesting, very interesting observation, particularly from their side. but on the defense side we remain oriented on the capabilities. >> chinese government certainly appeals to chinese nationalistic sentiment frequently, but we don't see an uptick or an effort to blame chinese domestic problems on foreign sources as a result of the economic downturn. and it looks to us like the chinese economy is turning around. they had 8% growth last year. i think they have eight to 9% growth this year. but we're not saying that phenomenon happen right now. >> thank you, mr. chairman. >> thank the gentleman.

mr. kessler? >> thank you, mr. chairman, and welcome, gentlemen. and thank you for being here today and thank you for your services that you render your nation. i'm going to go back at. as we know, china is an ancient kingdom, many thousands of years old. i'm going to go back to or 3000 years. sometimes when we study history, we tend to separate our timelines and forget that history moves in the same time he. in the time period in the middle ages and four, china was a prospering kingdom. and argue that, could have made some of the same decisions that europe later made in terms of conquest, expansion, exploration, and did not. and if the history book that i taught from was correct, it was a decision that this was not a

pursuit that they wanted nationally to revolt to. and while europe later came to dominate the will, china in many ways chose not to do that. and if you look at the history since then, of course the time period when the european nations tended to dominate china, that china has never pursued that course of, what you may be called expansion, looking overseas in other places for their national prospects. i'm trying to get an idea in my mind, what is the mindset of the chinese now. how much has that changed, or has it changed? we've talked about all the ambiguities that exists among what china may be doing, for our two secretaries. if you had to narrow it down, what is the chinese mindset, is it aggressive? is a defensive? is that we want to be equal to?

we want respect? what is the mindset of the chinese? >> we're familiar with your view of chinese history. from our historical spirit as my experience, we see rising powers as a potential challenge. to the international community. we hope to avoid that in china's case by engaging intensively -- >> i don't mean to interrupt, but what is the chinese mindset? i understand that we do it, but what do you think they, long-term, how are they trying to position themselves and why? >> i think the chinese want to express themselves as a major global power. i think they've done that mostly economically so far. i think that remains a lower priority on their list after securing communist power, communist party stability.

and after domestic economic element. >> i would concur with that. might add that i think a lot of chinese attitude consists of the fact that world trends are working in their direction now, and that it's time for them to enjoy some of the largest and the benefits of being a world power that they were not able to do for the last couple of centuries your. >> one of the question going in a different direction. i had read recently where water would be a great limitation towards china and its ability to continue, you know, it's economic expansion. just wonder what your thoughts are, how that may figure in, how much it figures it and what that might be, long-term? >> at conservative population

growth estimations and conservative economic growth estimations, there is the potential out there in the future that resource allocation of the precious liquid, oil, water, will become an item that's going to require vigorous active and co-opted management. the mequon river initiative right now is one way to try and manage water and related items like freshwater fisheries and things to meet in china, and goes through southeast asia. anytime someone puts a damn on one point at a river, it affects everybody downstream. those obvious things yes, this is going to be an item oajor concern. >> thank you gentlemen. i yield back my time to. >> thank the gentleman. the gentleman from louisiana, mr. fleming. >> thank you, mr. chairman. my question is for admiral willard. as you know, sir, our aircraft

carriers are a platform that we used to project power are found the world. this is certainly relevant to some issues brought up about oil and energy in general. it's my understanding that chinese have a mid range ballistic missile that can travel up to 2000 kilometers. can easily attack an aircraft carrier. and that we don't have any real anecdote for that. hopefully it's still under development and not fully capable. so what is our navy's plans to protect our aircraft carriers, given this potential shift in power? and certainly our ability to protect our navy and the naval air forces closer to the

perimeters of china itself. >> as you suggested, as one element of the anti-access strategy by china, there has been development of a ballistic missile capability that we believe is intended to target surface ships to include our aircraft carriers, and it's an issue of major concern. we, within our programs, are developing capabilities to protect, you know, obviously protect our surface ships to include our aircraft carriers from that. the details are obviously we would need to discuss at some future opportunity in a closed session. >> would you agree, sir, that this may put even more emphasis on the need for the next generation, mama, which is an air platform which is again a

standoff type of defense mechanism or attack mechanism if you will, that we've sort of laid that site here recently, and i'm wondering if maybe we need to take a stronger look at that in view of what we're seeing here. >> i think when we approach the anti-access capabilities that are being developed here, that we have to look broadly at all of the capabilities that provide us opportunities to continue to operate with freedom of action inside the envelopes of that capability. certainly our bomber force and any recapitalization of our bomber force, extended range weapons, as well as our ability to penetrate with our surface ships, and not give up access where we require it, are all parts of the defense strategy to

a conference that. >> thank you, sir. thank you to the panel, and thank you for your service. i yield back. >> thank the gentleman. mr. taylor, mississippi. >> mr. chairman, i'm going to yield, only member of the ranger hall of fame, as a member of congress, mr. marshall. >> thank you, mr. taylor. i appreciate that. i'm curious about the extent to which we can expect that china at some point might be more helpful to us where terrorism is concerned, and specifically the effort in iraq and afghanistan, and are worried about pakistan and india, and possible conflicts of there. a couple of chinese colonels published a book called unrestricted warfare in the mid '90s, probably most of you have already read that. at least read an executive

summary of its. and that piece peace, that book explores ways in which china can engage in conflict with the united states in essence. asymmetrically. and publication of the book was authorized, approved by the chinese government. and not so many years have passed since the publication of the book. among the things that these two kernels observed, and this book publication proceeds 911, observed that the close relationship between america's political elite and the military-industrial state combined with america's military expedition a capacity means that it's only a matter of time before america gets itself in balls with conflicts and

bankrupted. if there is an ongoing attitude of china, that is good for china's two-seat the american economy weakened. then it seems to me that china might be holding back in assisting us with regard to iraq, afghanistan, and terrorism generally. echoes this is something that is costing us an awful lot of money. so i would just like general comments about pakistan, india, the flashpoint of there, nuclear power, you know, controlled by both, and any thought that china is at some point here going to join this effort against terrorism, which if you think about, giving the nature they are involved with the economy, they're going to be a target also eventually. >> congressman, with regard to the chinese approach to american

economic health, i think chinese recognize that we are interdependent, economically, and that our economic relationship benefits both sides. on the subject of terrorism, we engage the chinese on this subject, both at senior levels and at the working level to a counterterrorism working group, which has met recently. in general, our cooperation on counterterrorism issues with the chinese is at a fairly basic level, but we are working on it. on the subject of afghanistan, and south asia generally, i think the chinese share our interest in peace and stability in south asia. particularly in afghanistan. it's right on china's border. we have engage the chinese fairly intensively on the subject of afghanistan, special envoy holbrooke has been to beijing twice to discuss this subject with them.

they've expressed an interest in cooperating, but we are still at the early stages. >> we haven't seen anything concrete. >> not yet, no. >> and where terrorism is concerned, have we seen anything concrete or? >> we conducted, particularly in the run up to the olympics, and we're continuing those exchanges but i say we are at very basic level. >> what have we proposed that they do with regard to terrorism, or stability in afghanistan, pakistan, india, etc.? >> what are we proposing that they're just not willing to do a? >> we think, as i said say, the chinese expressed an interest in general interest in cooperation. we conducted a working level meeting with the chinese to discuss specific ways in which we can work together on the ground in afghanistan before the present visit in november. i think they are thinking this

through. right now, we proposed such avenues, things they can do to help afghanistan and agricultural, infrastructure generally, capacity building, and areas like that. but we're still just beginning. we are pressing the chinese on this. >> what about assistance from china? i know we're looking at different ways to get materials into afghanistan. is there any movement where that is concerned? >> we're developing alternative lines of communication to avoid over dependence on the loc is through pakistan. generally, they involve the northern distribution network. we don't know of an opportunity yet for china to contribute. >> thank you, mr. chairman. >> thank the chairman. mr. franken? >> thank you, mr. chairman. thank you, admiral willard. i want to direct my first question to you. thank you for your lifetime commitment to the cause of human

freedom and all the things, people like us talk a lot about the importance of protecting freedom, and people like you personify it and we're really grateful to have you here today. i was encouraged about your discussions related to protecting some of our battle groups from emerging, chinese missile technology. and as you probably very aware, a specialty report, it said we have to be careful with a long range defensive because it could upset the strategic balance between the u.s. and china and u.s. and russia. but in light of some other recent reports reports in the media that china has working to perfect or develop a midrange and long range missile defense capability, they don't seem quite as concerned about that strategic balance as maybe we are. and so i guess my question to you, can you talk to is a little bit about the chinese missile

defense technology advances, and specifically, their medium to long range capabilities? >> i would only offer that in terms of their missile defense capabilities, that they are by and large still in research and develop in stages. that this is a subject actually of inquiry regarding the most recent missile to missile engagement, that has been witnessed and that the chinese, as we discussed earlier, reported on over the past several days. so these developments and other developments, we would continue to watch, but in terms of levels of detail and so forth, obviously, in a closed session. >> well, let me, if i could then, switch -- thank you,

admiral, to secretary gregson. can you tell us about china's space program? are there any advances in technology, or had they continued pursuing space as a military venue since their 2007 test? the question is predicated on the notion that china has, with their capability, have pursued in a phrase, weapon icings based. and it seems it's pretty good to me that that's all rehab in, but can you tell us how they continued pursuing space as a military venue since their last asat test in 2007? >> the chinese have stated that they oppose the militarization of space. their actions seem to indicate the contrary intention. we continue to press the chinese for explanation, and would be happy to provide details in a closed session. >> well, mr. chairman, i guess i make the point all too often

here that i think it's important as a country to maintain our missile defense capability. we seem to be moving into a dynamic militarily and otherwise in the future that that will be a critical consideration for us, and i think until we have a moral responsibility of the citizens to be able to defend the u.s. from any missile launched from anywhere on the globe, at least that's the goal i know that mr. reagan contemplated and hope for that, and we have come probably further than even he coplan traded at one point. but i think the ultimate concern should still be able to defend ourselves in that situation, because a world where radical rogue nations are potentially going to be a part of that equation, i think it's vital that we continue in the direction of developing that. and i thank all of you for your efforts in that regard, and i you back, mr. chairman.

thank you. >> thank the gentleman. the gentleman from guam. >> thank you very much, mr. chairman. secretary gregson, i appreciate working with you on the guam issues and look forward to your answers to date. and mr. shear, thank you for appearing before the committee and fun, admiral willard, thank you and i look for to working with you as our new pacom commander. as you all may know i cochair the china caucus when my colleague, congressman forbes. and i have several questions regarding recent security developments in china and how it affects our posture in the asia-pacific region. secretary gregson, it seems that china wants to continue become a global power that has serious force rejection capabilities, and on his most recent asia trip, president obama stated that the united states is and will remain a pacific power. in that vein, how does the realignment of military forces in japan and the guam played in

the balance of power in the pacific? and if we are to remain a pacific power, what other enhancements of our current military and civilian capabilities are needed to maintain a robust posture? in the asia-pacific area. >> thank you for the question. the secretary gates has remarked often that there is sovereign u.s. territory in the pacific, alaska, hawaii and guam. and with the help of our vital help from japan, we are increasing, as you know, our air, naval and marine presence in guam. this will also enable the continuous or near continuous presence of japanese and other allied friendly forces for training with the united states, and better position us for better engagement, not only through our southeast asia and the indian ocean, but also into the area involving the compaq state and/or other territories in the mid-pacific.

i think this will allow us to continue to develop capabilities and to continue to develop relationships across the region that will contribute to peace, stability and prosperity throughout the area. >> thank you. my final question is for admiral willard. the 2009 report to congress from the u.s.-china economic and security review commission made a very intriguing and a stark finding, and that is china's develop of anti-ship cruise missiles. the report states, and ago, according to the u.s. department of defense, this missile will have a likely range of 1500 kilometers, be armed with maneuverable warheads, and is intended to deny regional access to surface ships of the opposing side. when combined with appropriate surveillance and targeting systems, this missile could have the potential to destroy or disable aircraft carriers, and their associated battle groups while in transit.

end of quote. now i am concerned by this finding and would like to explore our deterrent capabilities in the pacific to respond to this growing tactical threat by the chinese. and what type of deterrence are in place on our surface fleet to combat this tactical weapon. what impact would this weapon system have on our ability to protect our naval power in china, such as port visits to hong kong? >> thank you, ma'am, for the question. and i would offer that chinese have developed a ballistic missile with extended range capabilities that we believe is intended to counter surface ships. they have also developed extended range cruise missiles, as you suggest, for launch from their surface ships and from their submarines, as part of a broader anti-access strategy, all of these developments capability development and the

capacities that they are fielding had led to concerns, both on the part of the united states and on the part of the region, with regard to what they are there for and what they are intended use. in the case of, you bring up deterrents. there's a responsibility that we bear to the region, with large, to extend deterrence throughout the region, to prevent wars from happening, to prevent future contingencies from occurring. and we've been very successful. i would offer for many decades now in a publishing that. and that is by and large publisher to our presence and posh and the reason. and that is unchanged regardless of these developments, capabilities developments that you describe. we maintain a presence on the

waters in the region, as we have for a century and a half. and we intend to stay. we think that the extended deterrence that the united states offers to our allies and partners in the region, our presence to ensure security of the sea lines of the mitigation and air lines of key mitigation in this part of the world are vital to our nations security as well as to our nation's economy and the economies of our partners. >> thank you. thank you, admiral. i yield back. >> mr. mack and i. >> thank you, mr. chairman. thank you jim for being here today. because i'm tied up in another manner i got her a little later. i want to ask you about something for clarification. i know disseminator go china began to provide its naval vessels to protect the commercial ships navigating in the gulf of aden from the somali pirate attacks. do you characterize, this as a positive development with regard