>> this is two hours.

[inaudible conversations] >> the briefing will be called to order. welcome to my fellow members of the committee, our distinguished panel of witnesses, honors champions of the struggle for human rights in china who are joining us today, ladies and gentlemen. there's an old saying that the chinese invoked when they wish to avoid political discourse from the central park in beijing. the mountains are high and the emperor is far away. well, ladies and gentlemen,tinge there is no malice to shield us- and china's newest emperor has just landeds in washington and s at the front lawn of the white house.house. the pressing issues whichu separate our countries need to be urgently addressed sed. three of those many issues which will be the focus of today's briefing include security concerns, a human-rights, and

how our trade imbalance and the chinese currency manipulation adversely impact our u.s. economy. when the cold war ended over two decades ago many in the west it seemed that the threat from communism had been buried with the rubble of the berlin wall, however, while america slapped an authoritarian china was on the rise. china became one of our biggest mortgage companies, holding over $900 billion of our international debt. in these past two decades western observers forgot that while freedom blossomed in eastern europe reform in china failed. china was led by a cynical group of leaders to sobered by the teeeleven massacre and the marred by the blood of its victims were determined to go forward with economic but not political change. the china that embraced has fallen far short of the benign

china which former decker to -- secretary of state spoke in the colony of freeze responsible stakeholder to read a response will say : as this -- reported allows the transshipment of north korean missile components to run. it open defiance of those u.n. sanctions which has the five member states -- a five member states it is duly bound to enforce. there is a responsible stakeholder declare that the south china sea is one of its core interests in open defiance of the navigational and territorial not -- writes of a southeast asian neighbor? does a responsible stakeholder admonish the u.s. navy that it cannot operate in the yellow sea in the very waters where general douglas macarthur undertook the heroic landing which turned the

tide of the war? would irresponsible stakeholder refer to the nobel peace prize committee as a bunch of clowns for awarding an honor to a distinguished chinese human rights advocate? would irresponsible stakeholder the arrests of the wife of a nobel peace prize winner as further respond -- retaliation for speaking the truth about the gross human rights violations in china? the u.s. took a big gamble when it voted for premier and normal trade relations for china over a decade ago in what some termed as the most important vote since world war ii. the vote was based upon what i see as a sadly mistaken belief that economic openings in a free-market reform would lead to democracy, respect for the rule of law, and a full array of political and human rights for the chinese people. yet today, as we meet here, the

research foundation estimates that they are close to 7 million people currently in chinese labor camps. it is as if the entire population of switzerland were being held behind barbed wire. the ruthless campaign against practitioners, a peaceful organization which promotes trade, compassion, and tolerance, has continued unabated for more than 11 years. i was proud to be the sponsor of a resolution in the last congress which received overwhelming bipartisan support addressing the persecution of fallon gone. the brutal denial of rights to people of tibet and the weaker people, the forced repatriation of number three and red fiji's continues to draw the attention of concerned citizens throughout the world. the american people have also borne the brunt of china's mercantile trade policies which promote trade surpluses through

cheap exports based upon an artificial depreciation of china's currency. jobs and american dollars have blown across the pacific to china for the past two decades as the american people have suffered high unemployment and a diminished standard of living. last fall i was pleased to be able to vote in favor of the currency reform for trade -- fair trade act which overwhelmingly passed the house. we are back with a new energy from a newly elected member who is determined to take back america's economy and are committed to a foreign policy the stance with our allies and hold accountable those to threaten our nation's security interests. and please deterrent to my distinguished ranking member for this committee, mr. berman, for his remarks. >> thank you very much, madam chairman. chinese president hu jintao is

in washington this week for a state visit. as we speak he and president obama our meeting at the white house. after an often tense year the two leaders will try to set the contours of the relationship for the immediate future. the u. s-china relationship, one of the most interconnected and complex in global affairs has major implications for the future of asia and the entire world. the challenge for the obama administration is to manage that relationship in no way that strengthens our cooperation with beijing in areas where we have shared interests while at the same time addressing the serious concerns we have regarding a number of china's policies. china is neither an allied nor an enemy. it is both a competitor and a partner in foreign affairs, security, and economics. a key goal of our china policy must be to prioritize our myriad

of global interests, identified those issues where we are most likely to positively change china's position and then find and use our leverage with the chinese to achieve those changes and accomplish our wider foreign-policy objectives. in my view our highest priority should be a rock. tougher sanctions on a ron was a significant diplomatic achievement for the obama administration. there is ample evidence that chinese entities continued to invest in the energy sector of iran. this helps them avoid the full impact of sanctions and facilitate the continued development of a nuclear weapons capability which turns the u.s., our allies in the middle east, and china, which is dependent on unstable sources of oil from the middle east. we must intensify our efforts to ensure china's full participation in the

multilateral sanctions is aimed against -- against iran. the u.s. and china must always deep in our -- as north korea's economic lifeline beijing holds considerable leverage over perrier incoming yet it has been too slow to make it clear to the number three that security and respect can be attained only by giving up its nuclear weapons and refraining from other aggressive behavior. the promotion of human rights and political freedom is a central goal of american foreign policy. these universal values must remain essential focus of our relationship with china appears record in this area remains deplorable. moreover those values are in china's self-interest, both its international image and in its economic growth are dependent upon developing a society based on the rule of law.

in the sphere of economic and trade one area of particular concern is china's theft of intellectual property and its indigenous innovation policy. in addition to compliance with the recent wto decision, china must do more to stop the piracy and counterfeiting that occurs openly on streetcorners and over the internet and step up its enforcement efforts. the crossroads we currently face and the u.s.-china relations present less of a choice for the united states and more of the toys for china. the obama administration has articulated a pragmatic policy and in several key areas the demonstration has said some success. there is no sign that china has made a fundamental decision to change its decision of leveraging with heightened political control and military modernization with regional and extra regional power projection.

at the same time and so letting china as much as possible from outside influences. as much as the rest of the world looks to china to play a constructive role it is not clear that china wants to play a positive influence beyond its borders. i look forward very much to hearing testimony from all of our witnesses today, and i yield back. >> thank you very much. now live would like to yield three minutes to its chairman designate of the subcommittee on asia and the pacific. >> thank you, madam chairman for calling this important briefing, i strongly believe that china is one of the greatest foreign policy challenges we must face in this century. china's wait in the global economy cannot be ignored. that nation's rapid modernization represents both opportunity and apparel for

america. as chairman designate of the subcommittee on the asian-pacific i am keenly aware of the challenges our nation faces when it comes to dealing with china. as experience has shown signs as unfair trade practices including currency manipulation, illegal subsidies and lax enforcement of intellectual property law make it very difficult for the hard-working people of america to compete on a level playing field that benefits this relationship. american manufacturers have been hurt most by this unbalanced relationship. manufacturing is the lifeblood of the 16th congressional district of the illinois, which i represent. our congressional district as summer between 142500 factories supporting more than 51,000 jobs. 24 percent of value added manufacturing in our congressional district represents exports. it is one of the most dense areas in terms of manufacturing

base and one of the most exporting congressional districts in the country. these hard-working men and women want to know what their government is doing to enforce trade laws with china and preserve america's industrial base bag. i hope our distinguished witnesses will focus their remarks on what the administration is doing and what it can do to urge the chinese government to follow the rules. very little has been done in the past several years. in my experience the chinese government is capable of stopping violators when they see it is in their interests to do so. so many americans are out of court. now is the time for this of ministration to work with congress to hold generous possible and give american manufacturers a chance to compete with china on a level playing field so that manufacturers can create jobs. madame chairwoman, i commend you for giving the american people a well-deserved voice and a look forward to the testimony of our

witnesses. >> thank you very much. but we would be recognizing the ranking member designate, but he is not present. we will proceed with the testimony. we are pleased to have as our witnesses a wonderful panel. thank you. we are pleased to welcome mr. larry wortzel to today's briefing. larry is a commissioner on the u.s.-china economic and security review commission appointed by speaker banner. among his many qualifications he served two tours of duty as a military attache of the american embassy in china and retired from the army with the rank of colonel. thank you for a briefing yesterday. also with us is gordon chang, currently a columnist at forbes. he practiced law in china and hong kong for nearly 20 years and has written extensively on sat and wrote rea. we are grateful to have him here today as he is a much sought after expert on the future of

china's economy. but if mr. yang jianli is the founder and president of initiatives for china. he was imprisoned in china following an outcry by congress and others for his release he was freed in april of 2007. immediately following his return to the u.s. he formed initiatives for china, a pro-democracy committee that is committed to peaceful transition to democracy in china. leslie, mr. robert sutter to has been a visiting professor of asian studies at the school of porn services in georgetown university since 2001. in addition to his full-time position mr. center teaches regularly as an adjunct professor of asian studies in the elliott school of its financial affairs, george washington university. he has extensive government career in congressional research

service and other u.s. federal agencies that lasted 33 years. we will begin with mr. larry wortzel. i'm sorry that i'm not so great with the pronunciations, but look at my name. i don't get too picky. i will be rather ruthless with the five minutes, so please confine yourself to five minutes. larry, you are recognized. thank you. >> chairman, ros-lehtinen, ranking member berman, members of the committee, thank you for the opportunity to address you today. that use at present are my own informed by my service in the u.s. army, on the u.s.-china security and review commission and my own research. in late 2004 chinese communist party chairman ileana ros-lehtinen set out a new set of missions for the people's liberation army. these new historic missions provide the basis for china's future defense research and weapons acquisition plans. they also set the stage for a

more assertive use of the armed forces inside and outside of asia in pursuit of expanding national interest. the pl a military modernization efforts provide the means for the armed forces to fill these new missions. china's military modernization efforts are comprehensive, affecting all the domains of war including space and cyber operations. in recent years china has acquired advanced surface ships and submarines to modern combat aircraft, ballistic and cruise missiles, and advanced command and control systems that tie everything together. in addition, the commander recently stated that china will field a ballistic missile a potential threat against u.s. aircraft carriers in the region's. the pla is still the fallback force of repression for the communist party against the populist.

the combination of these new missions and means to carry them out has brought about changes in china's military operation. traditionally the pla focused on domestic response and local contingencies. now is a military with a wider range of missions and the activities. the dispatch of chinese naval vessels in support of anti piracy operations of africa is one example. china's national interests are global, and the pla is becoming a force capable of acting beyond china's periphery. a more capable military accompanies a more assertive chinese foreign policy. this can be seen in china's recent provocative activities concerning its disputed territorial claims in the south and east tennessee's and in the economic zone. china's military capabilities also stoke beijing's competence. china's him stridently

complained about operations and the western pacific. beijing failed to condemn north korean attacks on south korea and strongly objected to a joint military exercises in the region between the united states and south korea. in military operations beijing continues to circumscribe the range of discussions between china and the u.s. refusing to address strategic issues such s cyber warfare and space operations. i'm pleased to see that secretary gates get to visit the second until record and there was some discussion of nuclear doctrine during his visit. despite his noticeable -- a noticeable improvement in relations across the taiwan strait beijing continues to insist on the right to use force should it interprets taiwan's activities as moving toward independence. across straight military balance increasingly favoring china, and

beijing has deployed over 1100 short-range ballistic missiles opposite the island. in my view taiwan's most pressing need is for new or modernized fighter aircraft. china continues arms sales and support to international pariah states such as north korea, burma, and ron. in addition food and energy bad foreign investment that china provides to north korea indirectly enables pyongyang to continue its nuclear efforts, it shows its economic power by a stoppage by a supplier of rare earth minerals to japan and it was unhappy with japanese policy. madam chairman, members of the committee, the key for the opportunity to do it addressee today. i look forward to your questions. >> they do so very much and take you for the time limit. we appreciate your time. five minutes please. >> chairman ros-lehtinen,

remember berman, distinguished members of the commission, thank you for the opportunity to be here today. the dominant narrative in the united states and elsewhere is that china has the upper hand when it comes to the united states. that is what president obama is hosting a state visit for an autocrat, chinese president hu jintao. this generally have the upper hand? i think most americans misperceive the economic relationship between the united states and china. today i would like to comment on three of those misperceptions. first of all, everybody says that china is decreasing its dependence on the united states back. well, china has an economy that is geared to selling things to last. the chinese economy is dependent upon exports, and its export sector is especially reliant on sales to the united states. last year when all the statistics are in at the we are going to see within 140 percent

of china's overall trade surplus related to sales to the united states. that is up from an already stupendous 90% in 2008. that trade dependence gives us enormous leverage because china is not a free trader. it has accumulated surpluses because of clear violations of its obligations under the world trade organization. second, everybody says that china's debt provides up -- our debt held in the hands of china provides a weapon. since august 2007 the chinese have talked in public about using that as a weapon, and, of course, they call it appropriately the nuclear option. welcome but china hasn't used the nuclear option since it first started talking about it. the reason is they know their attack plan won't work. let's think about the worst

possible scenario. the chinese stump all of our dead at one time. we have to look at the way global markets operate. if they do that they have to buy something which means they have to buy things denominated in pounds, euros, and in. that would send those currencies soaring through the ceiling in values which means that london, brussels, and takeya would have to go out into that global market to rebalance our currencies and bring them back down in value. the only way they can do that is to buy dollars. there would be turmoil, but it would not last long, just a few weeks, maybe a calendar quarter at the most dubious after this is all done we would have our debt held by our friends, rather than our potential enemy. i think the global markets are deep and can handle just about everything. although i do not think the united states should be accumulating debt and suddenly i don't want the chinese to hold

it, i also don't think it gives them a weapon. third, you hear many commentators say that china's currency manipulation is not the sole cause of america's trade deficit. well, of course that is right. there are a number of reasons that relate to our trade deficit. china's currency manipulation is an important reason. due to beijing's active manipulation it intervenes every day. the discounted value to the u.s. dollar is somewhere in the vicinity of 20-40%, maybe 30 percent would be a good estimate for today. a discount of that magnitude, of course, is significant. and i practiced law in asia many of my plans for u.s. manufacturers, and i would watch my plans haggle for days over pennies on unit prices. that is how important prices. it is counter intuitive to think that a discount of 30-40%, and that is what we are talking

about, would not have an affect on our trade deficit. you don't have to take my word for it. chinese premier bob, the top of economic officer came to the united states last september and talked about the possibility of countless chinese enterprises going bankrupt and countless chinese workers becoming unemployed if it increased in value. well, if that is what the currency does to china's manufacturers and their employers, then what to you think it does to hours? nonetheless, many economists say, you should not do this currency bill, h.r. 2378 which passed the house. i think we certainly need to. china won't change its destructive currency practices if we appeal to its self-interest, which is what the bush to administration and obama administration were doing. we have to apply pressure.

>> thank you. take you so much. mr. yang. >> thank you, your excellency. the key for the opportunity for me to testify on the fundamental matter in the relationship between u.s. and china. it is the matter of how chinese government treats its own citizens. china is the country with the most prisoners in the world, including a nobel peace prize winner. .. in addition to official prison system it is public knowledge

that in china there exist hundreds of jails, and one by local governments at various levels. this treason take numerous petitioners, going beyond this prison system, there are three new types of measures to control. china's authorities have been increasingly using in the past three years. number one. direct violence. th the direct violence against righ dissidents, human rights activist, and petitioners has increased in recent years. that people who have been doinge this local policemen or thugs hired by police. in some cases government officials are also involved. number two with, house arrest. this recent years -- in recent years house arrest has become

more and more widely used as a means of limiting us the dents -- dissidents and their families. as the wife of a blind human rights lawyer or, li jing was placed under house arrest. ever since he was released after sevenning four years and three -- serving four years and three months in prison last september, the entire family has been put under house arrest. the chens, the entire family, has not -- has been cut off from all contacts with the outside world. those who tried to visit them were badly beaten. lu shah's wife has been put under house arrest since last year when her husband won the 2010 nobel peace prize. and her communication with the

outside world has been completely cut off since october 20th last year. number three, disappearance. i also urge you to pay attention to the disappearance of chinese citizens as a result of the government's unwarranted actions. the most notorious case is shin. he has not been heard from ever since last april. after repeatedly detained and severely tortured, and his wife has been with us today here. here. another important case is that mongolian scholar who was arrested in december 1995 for peaceful activities demanding more autonomy for the mongolian region. he was later sentenced to 15 years in vail request, his -- in jail. his prison term was set to end in december last year, but a few

days before that the chinese authorities detained his wife and son. he was never seen getting out of of riz, and today the entire -- prison, and today the entire family has not been heard from. around the time of the nobel peace ceremony, liu xiaobo friends and supporters were either put under house arrest -- [inaudible] so coming pack -- back to the issue, i guess the question is why should china's treatment of its citizens be important concern for u.s. foreign policy toward china? we have a slew of analysis and answers to this question, and some people can even denounce this question as irrelevant, but i just want to echo the question from "the wall street journal" article last monday.

will a rising power that fails to honor commitments to its own people -- >> thank you, mr. yang. >> -- responsibility to fulfill its commitments to other -- >> thank you. that's a good question. thank you. mr. sutter. >> thank you very much, madam chairman and members of the committee. the u.s. relationship with the people's republic of china has been troubled throughout its twisted history. important areas of converging interests between the two powers are usually accompanied by important areas of differences. the relationship has become very broad-ranging, multifaceted and complicated, and it is the most important bilateral relationship in the world today. a pattern of seeking to advance common ground while managing differences prevail throughout most of the george w. bush administration. like president bush, president obama showed a course with china involving pursuing constructive contacts, preserving and protecting american interests and dealing effectively with challenges posed by rising

chinese influence and power. a strong theme in presid a strong fenian president obama's initial foreign policy was to seek cooperation of other world powers including china to deal with salient international concerns. he worked very hard at this but found the chinese leaders offered all only limited cooperation on issues like climate change and others. more worrisome were the challenges the administration opposed and this has been well-documented by my colleague mr. warsaw about the maritime areas around the periphery of china, and u.s. intervention in the south china sea and other issues. the obama government reacted coldly and firmly to what secretary of state clinton called these tests that were

manifestations of new assertiveness by china. it gave no ground on any of the chinese demands and also found chinese assertiveness with the united states and neighboring asian countries over various issues damaged china's efforts to portray a benign image in asia. these asian governments became more active in working more closely with the united states in an encouraging and active u.s. presence in the asia-pacific. the overall effect was a decline in china's position in the asia-pacific and rise in the position of the united states. meanwhile the obama government made clear to the chinese government and to the world that the united states is prepared to undertake military measures needed to deal with the buildup of chinese forces targeting americans and american interests in the asia-pacific. it also helped move china to curb north korea's repeated provocations by warning privately as well as publicly that the united states viewed north korea and nuclear weapons

development as a direct threat to the united states. over the past few months china has tried to ease differences with the united states in the period leading up to the current visit of president hu jintao. there have been some different things in calling the situation between the united states and china over the various areas of difference. looking out president obama wants to pursue closer engagement with china as part of the administration's o'rourke the engagement with the asia-pacific. his administration have also made clear it will not give in to chinese assertiveness or pressure and if needed will respond to such chinese actions with appropriate military, diplomatic or other means. given china's recent assertiveness it may appear less certain that president hu jintao shares president obama's interest in real engagement. on the other hand china's assertiveness has proven much more costly than beneficial for china's broader interests. it is against this background

that it seems likely prevailing circumstances will preserve and reinforced the positive equilibrium in u.s./china relations for three general reasons. both administrations see benefit from positive engagement in various areas. second, both administrations see that the two powers have become so interdependent that emphasizing the negatives in the relationship will heard the other side and also hurt them. both leaderships are preoccupied with a long list of urgent domestic and foreign priorities. in this situation, one of the last things they would seek is a serious confrontation in relations with one another. thank you for your attention. i look forward to respond to your questions. >> thanks to an excellent set of panelists. i will be recognizing members 45 minutes of questions and answers in order of seniority for those who were in their seats when the

gavel fell and in order of arrival for those who arrived after the briefing began. i would like to yield my five minutes for questions and answers to congresswoman circle of new york. the congress woman is recognized for five minute. >> i will direct my question to larry wortzel. if anyone else would like to comment i would welcome the answer. thank you for your service. according to recent news reports china facilitated the shipment of missile parts from north korean aircraft to airtran cargo flight at beijing's airport. how involved are the chinese government officials and chinese companies in weapons procurement for iran and in the development of iran's nuclear missile programs. >> they're pretty heavily involved. >> push the button to put the

microphone closer to your mouth. >> they're very heavily involved. they accept a those shipments from north korea through china. they facilitate. those things don't happen without the concurrence of central authorities from a national air control system. they have their own customs people so they are well aware of it and they could stop it. they have refused to participate in the proliferation security initiative which would have the effect of at least helping to control north korean proliferation. they simply have very different interests in iran than we do. i would argue that one of their interests is frustrating united

states policy and creating a second potential military competitor that is at least a bar down in that part of the world. that limits what we can do. we have to be a lot more careful in how we react. they sold everything for global limits of the missile technology control regime but they have told short-range missiles, they have sold cruise missiles, antiaircraft missiles. they are not doing a thing to reduce the potential level of violence and tension in that region. >> thank you very much. >> the gentle lady yield back. i would like to recognize the ranking member, mr. berman, for

five minutes. >> thank you very much. i but like to get gordon chang's response and perhaps also hear from larry wortzel on the very interesting thesis that gordon chang had. essentially looking at the issue of our debt obligations to china and our trade deficit has perhaps more our leverage and china's leverage. to ask you to play that out all longer, to what extent are you suggesting we use that leverage and whether it is in passing the kind of legislation the house passed last year and for what policy purposes should they be

restricted to persuading and pushing china to move within the wto ground rules or should they be utilized to achieve a broader geopolitical and military purposes. that is one question. i will ask the mall right now. the second question, fifteen or 20 years ago there with a notion that in its heart of hearts china like american presence in the western pacific, that that was a lot better for them than japan reconsidering its traditional military policy of thinking about its own nuclear weapons. more recently what south korea might decide to do. that in the way there was a beneficial effect. is that just out the window?

chinese military modernization so strong and they're not concerned about that and they're truly seeking to have us reverse a position we have had since the end of world war ii and add to that, if robert g. sutter or chris christie -- larry wortzel could do would, this is not a visitor of the most recent timber of china, there is a people's liberation army out there that is starting to do their own things without necessarily ended the direct direction of the leadership of the communist party. anything to those stories that have emerged recently? and i don't know if there will be time but you were eloquent regarding the issue of political disappearances, families and abuse, and what goes on inside china but what you were not able

to get into was what role can we play in affecting and changing that? are wary there won't be time for that last but go ahead. >> i would like to thank for congressman for being so polite in his characterization of my views. most people think that i am wrong and you were very nice in saying so. there are a couple things we need to do. first of all we need a little less diplomacy. we are feeding china's sense of self importance. we don't need new agreements on economic matters because everyone says when there's a problem with china let's go out and negotiate a new deal. we have tens of deals with the chinese. all we need to do is enforce them and enforce them more vigorously which means we need to take cases fifth to the wto more quickly and also because of a real problem china does pose to american manufacturers as i heard earlier rising we need to do a little bit of self-help

which is h r 2378. imposing penalties at an early stage for chinese subsidies. currency manipulation is one -- [talking over each other] >> you want to limit fat to economic issues. currency evaluation, violation of trade rules, subsidies, not larger geopolitical issues. we only have 30 seconds. i would like to get real quickly from larry wortzel and robert g. sutter. >> it is not an independent factor. it is under the control of the politburo standing committee of the china communist party and central military commission. i think china is ambivalent about the u.s. presence. very happy that extended deterrence restrains japan from becoming a nuclear power but wants a more forceful role in

the pacific and-gordon is correct -- >> we will continue with robert g. sutter at another time. unlike to recognize it has been pointed out the presence of chinese human rights that dissidents in the audience representing a cross-section of a press group inside china including representatives of the falun gong. unlike recognize mr. smith for five minutes. >> thank you very much. besides being the jailer of the nobel peace prize winner we need to ask who is hu jintao? in 1989 a few months before the massacre at tiananmen square hu

jintao was beijing's iron fist into bed. the man who ordered the savage beating of tibetan nuns and monks and even children. there are by an eyewitness accounts of children being pummeled to death and the murder of hundreds of tibetans. hu jintao reside overate lag state. clearly a dictatorship. president hu is responsible for the systematic detention and torture of millions of peaceful chinese, tibetans and leaders. harry wu spent two decades there. he knows what happens. torture, cattle prods put under the armpits and genitals. president hu jintao presides over that sickness and perversity. president hu's secret police hunt down christians, muslims, falun gong and tibetan buddhists and beats them often to death especially the falun gong who

are being killed. he is responsible for the barbaric, the worst violation of women's rights ever, one child per couple policy which relies on forced abortions to achieve its goals. hu's china brothers and sisters are illegal. they are illegal. anyone in the audience who has a sibling in china you are only allowed one. as a direct result the cumulative effect of this barbaric policy there are 1 hundred million missing girls in china. most have been silent about this terrible genderside directed against little girls. let me ask an outspoken leader on behalf of chinese human rights. it seems to me when a man like hu jintao comes in, the press give him a free pass. there will be a press conference. i would ask the press to ask the

hard questions. not just the generic questions about human rights. ask specifics about what is happening. what is happening to gao zhisheng whose wife is with us today, missing and reportedly tortured and the misuse and terrible burden they put on the children of dissidents. ask tough questions of the press and to president obama and secretary clinton. please be very specific in your conversations with hu jintao. just a glossing over of we talked about human rights, something on a list of talking points simply won't cut it. be specific and press this man who i believe ought to be at the hague being held to account for crimes rather than being treated with a state dinner. i would ask please.

>> i think the u.s. government -- would police the government can do and should do is raise the specific cases with their counterparts. if obama really does that, it works. it will continue to work. look at the practice, in two years the government believed private talking will work more effectively. book of the record. the u.s. government has not been successful in the past two years in helping get any of the prisoners out of prison.

we have to apply pressure. we have seen specific cases both privately and publicly. the u.s. government could do and should do. another way to do it to engage chinese democracy movement directly. now we have to recognize the leadership. we have a shared principal. the democracy movement is a valuable in china. engagement with china depends in part that in gauge -- the people be the china democracy movement. >> you emphasize the word publicly. not just private conversation. >> a gentleman's time is expired. i am pleased to recognize mr. payne, the ranking member designate of the subcommittee on africa global health and human rights for five minutes. >> thank you very much. i would like to focus on china's

economic interests in africana and implications of china's in engagement with african nations for governance of the drizzle economic growth and human rights across the continent, expansion of china's investment in africa we witnessed today began in 1990s. in that decade alone china's investment grew by an impressive 700%. accompanying this economic expansion was the wave of chinese migrant. some 750,000 in 2007 who live in africa now. mainly construction mining workers and oil workers and private traders but not an expansion of the africa middle-class that would normally accompany infrastructure development. it has been complex and varied reactions among analysts regarding implications of china's engaged and in africa. this had guarded optimism to

concern over potential chinese strategy and economic threat to african or western interests. i want to get your thoughts on the overall scope of china's growing ties with africa. what are the main political and economic goals and the main potential benefits and drawbacks for africa of these ties and in what way would you say china's relations with african governments have negative impact on human rights in africa and what are the potential opportunity for u.s./china cooperation on political humanitarian development priorities in china. they had a meeting where 43 countries were invited, 42 heads of state in africa. they have opened fire on workers who protested about poor working conditions in zambia. chinese soldiers fired on them and wounded 11 or 12 of them but on the other hand they give 4,000 scholarships a year to african students and that may be to indoctrinate them into china.

maybe robert g. sutter and larry wortzel would like to take that. >> this is a complicated and important issue. the driving force of china is a high-profile and africa, somewhat desperate in a way. they need resources. these companies lag behind as they search for these resources. the intensity of the chinese economic development is such that for chinese to improve their gdp they have to use four time the level of resources that are used in the united states with the same amount of improvement. they need stuff. they are all over africa trying to get the vitriol they really need to promote their economic development. at the same time china is full of companies looking to selfing is and the chinese

administration wants to have a balanced trade with africa and they have one because these chinese enterprises are very competitive with one another and building things or selling things and as you say they have gone to africa to sell these things. it is a very understandable way to keep a balanced relationship the chinese seek with africa. if you understand it this way you can see the driving force, to get the stuff and make money at the same time. there are several good books on this, an excellent book on this if you are interested, i am sure you are interested. the upshot of chinese behavior, it is secondary. there is collateral damage. there is a variety of things that are not very good. a small point. i am not sure the plo a are the people who shot these people. it may have been guards of some

sort. >> thank you for the question. i do not believe there are pla soldiers in africa. i think they are people out of bp l a working for government control security companies. we have done a lot of that. >> in ethiopia there were soldiers that were killed, in that region. >> they were united nations peacekeepers. i will look at that. >> they were protecting the oil reserves in ethiopia. >> i may be incorrect. china is interested in the extraction of resources. they don't care about human rights in those countries and they bring in their own labor and transfer no jobs whatsoever to the african citizens. that is the major dissatisfaction in africa. >> the gentleman's time has

expired. i recognize the chairman designate of oversight and investigation for five minutes. >> thank you. i would like to thank you for having this hearing at this moment because we have to understand that as we speak our country is officially welcoming president hu as if he had the same stature and acceptability as a democratic leader. we welcome him the same we do countries that democratic and respect human rights. this is wrong. we should not be granting monsters regimes engaged in massive human rights abuses and in this case the world's worst human rights abuser is being welcomed to our white house with respect to. what does that do to those people in china who only hope of

a peaceful future, the people of china are america's greatest allies. the people of china who want democracy. the people of china who want to respect human rights and a looking forward to a more humane system of peace with the world. those are our allies. what do we do to them when we welcome their oppressor, their murderer, one murdering their children to the united states with such respect. as we look at this visit with president hu, if our president follows suit the way our former presidents have as well, not just president obama, we are doing a great disservice not only to the people of china and the future cause of peace but a great disservice to the american people because what is happening? for three decades we have leaned over backwards for this regime, permitted to redeem in china a

monstrously human-rights abuses regime that have trade benefits they would give to democratic countries. with investments. let them get away with murder economically as well as human rights in the area of human rights. these are things we have got to call them to task for or our situation will continue to deteriorate. we are now vulnerable to a regime that was a weak 30 or 40 years ago. we are vulnerable to them. if we do not change our way of dealing with that regime they will destroy the peace of the world and we will be to blame for that. not only the repression of their own people. i want to ask larry wortzel in particular. not only does china have a more peaceful stand to the rest of the world, we see claims slowly but surely land claims and see

claims coming out. china is making claims in the pacific that threaten korea, japan and the philippines and commerce throughout that area. we see claims against india and vietnam. and frankly let me say our russian friends some they are going to wake up and find out that they have become partners with a country that mean them great harm and is willing to take away their territory. do you see any major threat to the piece of the world in the expanding territorial claims of china? >> first of all i think it is ironic that while china is brutally repressing the falun gong the chinese government is flooding the united states with confucians institutes that are supposedly spreading this peaceful chinese culture. with respect to their security

claims, as they get stronger militarily, they are simply becoming more forceful in the region and they are expanding their claims. that affects all the countries in southeast asia and all but countries on their periphery. for that reason it was very important that both secretary clinton and secretary gates have pretty forceful stance insuring peace for resolution of these disputed claims in the south china sea and east china sea. it is very important that our military works with and accept japan even though we don't take a position on the disputed claim. it is a threat to peace and security. >> this government which we have bolstered with policies that we knew would make the country stronger under the idea that it was more prosperous and more

peaceful that strategy hasn't worked and this country is now the head of an alliance of probations that threaten the peace and freedom of the entire world. >> the gentleman's time is expired. i would like to recognize mr. serious of new jersey for five minute. >> thank you, madam chair. as i read the newspaper accounts i am always fascinated by the statement that the chinese simply have different interests in many parts of the world than we do. i think that hides an awful lot. i do think the chinese have a hidden agenda and their agenda in my eyes is more like world domination. some how they want to go back 2,000 years ago. i think they never lost that.

we seem to help them in their goals. they just fill a void. take north korea for example. they do nothing. the they do nothing and they use north korea to their benefit. the relationship with iran. all they do is just boost iran. everywhere we seem to have -- i look at south america and icy many of their businesses. i look at what they do in africa. we just don't seem to get it. i was just wondering, you have been a spokesman for human-rights and the abuses that

have gone on in china. the you feel for your life or your family's life back home? >> yes. >> you still do after all these years. and some of the members that are here from other groups i assume they also fear for their families as they speak up against this monster developing before our eyes. i was wondering if you could comment on that. does your family still get threats? >> yes. my family members, china needed to report to the authorities are regular basis. >> they have to report to the authorities. >> to minimize the trouble. from my case, may not be the worst. many of my colleagues are with us today and i want to emphasize

china has largest government system in the world. it is still able to put anybody in prison, if it is determined to do so. if not responsive to its own people, treat its own people harshly. these -- government will do any good in the rest of the world. we have to keep asking this question. when we come to the foreign policy we cannot forget this component. i opened here many people in this country, talking about cold war mentality. so whenever they hear the word cold war they will fear. i do understand. my comment is we cannot simply

explain away the component which can be described as cold war in the relationship between the u.s. and china. japan, south korea, taiwan, these countries are democratic. if these two countries, the u.s. and china have fundamentally conflicting values which you just cannot explain away, it will not go away in the decades to come. there is a component that can be called cold war. the only difference that the u.s. and china has economic dependence, look cold war has not. the u.s. has closer economic relationship with the former

soviet union and eastern europe. that is the only different element. but i echo what mr. gordon chang said. china always has the upper hand in economic relations with the u.s.. >> the gentleman's time is expired. i recognize the chairman does it meant on the asia-pacific. >> as i mentioned in my opening statement, manufacturing is the backbone of our economy in northern illinois. this question is for gordon chang but others are welcome to answer. i spend much of my time working with numerous small and medium-sized manufacturers that have been harmed in one way or

other. they have engaged in a chinese embassy, a favorable ruling in the chinese courts of that issue. how many companies pick up their phone and go to the congressman for direct intervention on an obvious i p violation. the problem is often more complicated like the case of shredder fellows. they are fighting a fierce battle in china, a joint venture where they were locked out. inventory stolen. business practices and ip. if you are big you can succeed. but the small and medium-sized manufacturers are having an extraordinarily difficult time.

how do we encourage national provincial local governments in china to force the law and beyond rhetoric or grand themes a better way of dealing with china. that is an easy question. >> the important thing we have to do is less diplomacy in a way. i also think we need to follow the approach of h. r. 2378 which is to impose penalties whenever we see there are violations of china's trade obligations because this gives us immediate relief. talk about small manufacturers. they can't wait to three or four years it takes to get through the dispute resolution mechanism of the world trade organization. that is not a practical remedy for them. that is why we need legislation which is really tough because when we do that the chinese will understand. they have reacted to pressure and this is really the only way i can think we can do it in terms of saving small

manufacturers because their plight is not only important but urgent. >> i testified twice before the itc on recreation vehicle tires and automobile tires and they were on dumping illegal subsidies. you get the remedies and they come back again and someone is in the same thing under a different name. is over and over again. these companies spend fortunes on the attorneys' fees trying to protect their intellectual property. can't there be a mechanism that our government can have for lack of a better word and 800 number for people who are the options of piracy that somebody can afford attorneys to do battle for. >> we said we could do that in

many ways. that would basically involve beefing up the commercial sections of our embassy in beijing and consulates around china but also in the department of commerce. it needs to be put to a higher priority that we have. normally what happens in trade disputes is this enormous litigation. the united states really relies on injured parties. the government is more proactive, brendel sorts internally and the united states. the need to speed up the process because time is critical. >> i look forward to meeting you in my office and put our heads together. >> i will be there.

>> proud to recognize mr. sicily any of rhode island. >> i appreciate the opportunity to ask some questions. my questions relate to the impact of our relationship with china on american manufacturing. it has been clear to most of us have the chinese have willfully been weak in addressing intellectual property and presenting real problems for american businesses. i would like to hear your of thoughts on what actions we might take to protect american businesses from this theft of intellectual property, seizing of assets in joint ventures and refusal to meet contractual obligations and related to that i am particularly interested in your thoughts on what mechanisms we have in particular, for renewable energy. there was a recent complaint against the chinese subsidy

policy which the administration contends favored chinese producers of wind equipment and there have been examples where those conflicts have been resolved at the joint commission on commerce and trade. i wonder if you think those are an effective place for resolution if there are changes we need to make that will really help. american manufacturers be sure we are enforcing policies that affect manufacturers and jobs connected to those manufacturers. >> we have two problems. one is china's in turtle will like the indigenous innovation product, that president hu has been pushing. that will push them to joint-venture companies for anyone who wants to sell to government or state enterprises. that is an issue for the united states in china. the obama administration has put this at a higher priority

because it is so important and i think it is a question that these need to be discussed all the time. the other point you raised which is the out right theft. this is difficult because you can't litigate in chinese court because the courts are controlled by the party and often by local interests that have been the culprits. the only way the united states can deal with this issue is to have the commercial section in the embassy and various consulates. make it known for provincial authorities which is the case of importance to the united states. to show the presence of recognizing washington but this is extremely difficult. >> do you have -- >> you need to keep the pressure

on. you are advocating an approach pushing the opening door for the obama administration. the secretary of commerce, they very much want to do this kind of thing. maybe they need more people. they need some funding from congress to help in this regard but there's a broad sentiment in the obama government that this should be done. case by case you need to work these issues. you need pressure in a way that is credible. high-level attention is the way to go. this will win some support from the commerce department. >> thank you for that. are recognized mr. rivera of florida for five minutes. >> i am going to ask about two

island nation's. cuba and taiwan. won an island prison and the other a bastion of democracy surrounded by a fortress of tyranny. we will start with cuba. given china's involvement, i will throw this chart for al-shabaab -- larry wortzel. give us your thoughts about china's geopolitical intentions in cuba. and what is china up to with regards for oil drilling given information published regarding company involved in oil drilling and having a nexus with iran.

generally speaking china's geopolitical interest in cuba specifically with regard to oil drilling? >> thanks for the question. china has taken over the entire signal intercept complex that the soviet union had in cuba. there is a out question a military and intelligence purpose for the relationship. part of it is also support for another socialist state and you can link chinese activities with venezuela. and their support in cuba and for cuba. with respect to resources. they would be happy to extract

resources any way they could get it. but if you look at the visits of chinese military leaders and political leaders i always ask myself why the head of china's strategic rocket forces, second artillery is visiting cuba. we are not going to be in another cuban missile crisis but there is certainly something to military relationship going on and the same goes for venezuela. in some cases their relationships in central america and latin america related to diplomatic relations with taiwan and they manage to wean a couple countries away from recognition for recognition to china and that is part of it.

it is fair to say they should recognize the monroe doctrine. >> thank you very much. with respect to taiwan, i will direct the question to gordon chang. the issue of the f 17s and the decision on prolonging f-16s to taiwan and what you believe is your perspective on how this reflects the fulfillment of the taiwan relations act? >> end -- [talking over each other] >> the air force needs modernized aircraft. that have longer range inside china if their military chose to do that versus modernizing, when i talk to aviation engineers

facing you could take the ab and put in new avionics of, radar and targeting equipment. it needs new refrigeration to be able to handle at and they would then have a very capable aircraft. it is not one that would necessarily satisfy the taiwan legislature and there would still be a fight over the programming for the weapons systems and avionics. they will want program codes and we no longer transfer. if you made the decision i don't think there is any guarantee that they would affect the way we make it. and there's the political cost of a brand new system that china would object to noaa matter what we do but they need the aircraft and i think they have to have that.

>> please to recognize mr. connolly of virginia. welcome back, my friend. >> thank you so much. thank you for your service. i want to thank the panel and particularly robert g. sutter. we use to work together when i was on the senate relations committee. understanding serious human rights issues in china and other issues we are concerned about that have been enumerated, in your view given the fact that since richard nixon, we have had a level of relations with the head of state of that country is it a mistake for this administration to receive the president of china? >> thank you, great to be here.

we have a very complicated into a dependent relationship. we have so many priorities we have to balance them. every president we have had since nixon has done this. people can object in various ways and have a good reasons for this but obviously republicans and democratic presidents prioritize these things and determine this is the best way to go. we may be at a crossroads. we may have to change the situation. china may be trying to dominate the world. i don't think so. i think china has too many problems. the united states is the leading power of the world and it will stay that way for some time. the bottom line is you have to figure out where you come down on these priorities. every president of the united states has endorsed this

approach. >> you were talking earlier about taiwan's defense capability and they were in need of an upgrade of their fighter aircraft. is there any reason to believe the government of taiwan is not capable of a military incursion. >> the issue is -- with out any tactics they would have 800 ballistic missiles which could do a lot of damage. with special operations in surgeons in to tie one

infrastructure. this will be their storage facilities. i think they have been woefully deficient in the wave they dribbled in the command and control data links for their current forces. if there is one thing you could do to e immediately improve your capabilities is take the whole data link package and link all your ground and air assets and missiles so they could take part in cooperative targeting engagement but they are doing things. not everything we offered. they are developing their own multiple launch rocket systems. probably use systems with precision guided rounds. >> let me ask you another part of that given the limitations of

time. one of the thing that always concerns people of the misunderstanding about the nature of the united states commitment to the security of taiwan. in your view does the current government of china fully understand the nature of the u.s. commitment to tie one? >> the government of china does. at times the blue collectors in taiwan misinterpret our support. i had a legislator say we are glad to get this $16 billion arms package. it is an insurance policy that will come to our defense. they have to be ready to defend themselves. >> if you want to answer that too. >> with the real militarization of chinese politics and policy there is a danger that beijing does not understand our commitment and thinks we will

not defend taiwan. >> thank you. i would like to recognize congress woman elmer's. please use elected our committee. >> thank you. i would like to thank our distinguished panel and reach out to individuals and family members of all our human rights violations in china. you were a constant reminder to us that we need to be vigilant around the world to human-rights violations and how fortunate we are in the united states. my question is for larry wortzel and robert g. sutter. the you route prefer to be referred to a colonel or dr.? >> i would call on other things. >> along the security issues we

have been discussing last september a chinese fishing boat, fought to be a spy vessel deliberately collided with japanese coastguard vessels in the vicinity of the island, tensions rose to an unprecedented level before the chinese boat captain was released. how close to the two sides come to military conflict and what are the implications for the united states given our treaty obligations with japan? >> i don't think they came close to military conflict but it was a serious diplomatic -- it still continues to reverberate among the populace in both countries. these things can escalate and could escalate if there are other incidents. we have a treaty obligation with japan.

it is a very important ally and without question if japan got into a conflict, the the cirque conflict with china we would be at their side. the pacific commander and secretary of state have taken strong and principled positions and not recognizing the sovereignty of the island but at the same time insuring that the chinese understand that the united states is fully supportive of its treaty ally and the japanese understand that. we need to be very close to them and work very closely with them and even under the democratic party of japan and i know the foreign minister, they have strong leadership that understands the threats from china. >> i could say something about

this. is part of a pattern we have seen in the last two years of china being very assertive about the area around their periphery. the net effect of this has damaged china's position. china is weaker today than it was a year ago. the u.s. is much stronger and the obama government has this engagement of strategy which feeds into and what you are doing is reenforcing american stature and strength while weakening china. if i were as calculating person in china i would say this is really dumb policy. we have to stop doing this type of thing. the thing to watch after hu jintao's visit, will they stop doing this kind of thing? it is really dumb. it is hurting them. this is how you get the attention of the chinese leaders. make it hurt them and they stopped and the obama government has done a good job intervening and saying we won't allow this.

it has been quite effective. let's see what happens. if we have a situation, if it is being read militarize as mr. john selected, of more dangerous situation. civilian leaders have ultimate control and this kind of behavior, they need to calm down. >> thank you so much. the gentle lady leads back and we recognize the ranking member designates on released and south asia. >> the chinese have always been bad actors. the national focus of being exclusively the world number one

recluse until richard nixon came along and decided to have an intervention and decided it was better policy to try to engage the chinese rather than continue with china bashing which to some seemed counterproductive to reaching the particular policy and behavior change. now we have noticed a small club of recluse nation's. the chinese and north koreans have found each other and have formed recluse anonymous with china being a recovering recluse, trying sometimes very unsuccessfully to affect the behavior of the north koreans. both seem to be engaging in a very provocative activities on

and off especially of lake. can the chinese affect the behavior of the north koreans. they seem to be looking like they are trying -- sometimes looking like they are not. is that something like a dial up dial down depending on china's needs kind of control or do they lack any influence in the end? >> it is not can they but will they. >> you are saying they can? >> they provide between 70% to 90% of north corey's energy needs. somewhere around 50% of fuel needs and a great deal of foreign investment so yes, they can. they fear that if they cut some of that it will lead to

instability in north coriander they will end up with south korea, japan and the united states on their border. second, in my view, they enjoy the fact that the united states is pretty heavily dependent on them at least perceptual the to interact with north korea. ..ints in my view a lot of the state department's diplomacy against china, or for china. >> i think china could help with north korea, also. and i think their interest is very much on stability. that's what they want. and they worry that pressure on north korea not only could lead to the effect that mr. wortzel point out, but north korea, you could see them as any. north koreans talk about this quite often. >> i think they will seek their interest in stability. if situation in north koreaol.

looks like it's going to becomes very unstable, then they willco intervene, and i think they did intervene in the case of the north korean provocation at the artillery barrage ha killedat t several -- that killed several south koreans in the latter part of last year.st and the u.s. has maintained to h the north koreans that north korea's provocations and particularly its development of weapons is a direct threat to the united states. so the u.s. put, i hi, veryun good -- i think, very goodry pressure on the chinese to get them off the dime -- >> so you're saying that thee chinese have an actual 12-step plan? >> no. they don't -- no, they don't have a 12 -- i think this is the idea of china rising and beings in control.d they're not in control. they're riding the tiger on thi- one. they don't control north korea. they have a lot of influence over it, but this is -- >> the same can be said with their very different, but also difference relationship with iran. >> iran is much further away,

and their influence in iran isr much lower than in a place liken north korea. they're fundamental in north korea.a it's right on their border, it's a very -- >> but they're dealing with a nuclear power and a nuclear wannabe. don't they see this as a threat not just to us, but themselves? >> it's not so much the geopolitical -- the geopolitical element of north korea being ont the border of china, it's the idea of instability. >> you're talking about economic instability. >> exactly. >> and they're threatened more by that than nuclear stability? >> i believe they are. >> thank you very much,our mr. acker match. i recognize mr. burton, chairman designate of the subcommittee on europe and eurasia. >> thank you, madam chairman. or chair. thank you -- >> referred to earlier as yourtn excellency, i think. [laughter] >> thank you. thank you for having this hearing. i'm going to after i ask a couple of questions, i'm goingi

to yield my time to my good friend, mr. smith. first of all, you may haveque answered this question, mr. yang, but is there -- do you have any idea how many people, how many million people are in communist gulags? >> it's really difficult to get number. so for the obvious reason. and i talk about the prisonn, system.a i have talked to two prison systems.te one is official. youo know, through the court you can get the record how manyu people they detained, but there is another prison system that is black jail.in there are hundreds of them in china now run by local government of various level. so we just cannot know, cannote find out how many people are being detained.an and on top of that, you know,e many people are made missing, and many people are being put under house arrest.y >> sure. >> so we just don't know how un many people --. >> well, we've been told it's in

the millions, and i presume that you would agree with that. >> i don't have the specific number, and i would say many.>> i would say china has the most a prisoners of conscious in the world, yep. >> okay. one of the things that i gather from be listening to these --th from listening to these learned people is that i believe china is not dumb. i believe they're very start,not their leaders, and i think that they are playing chess, and they're doing it over a long period of time. the they're moving, as they can, into the caribbean and into south america. they're making friends and supporting tyrants who are not socialists, but many of them arr just plain out communists. and they're putting us in a trick bag because of the economiche things that they're doing to us. th right now we have a $270 billios trade deficit with them.ade

i think we're well over a trillion dollars in hock to them as far as their, what we owe them, and if they started pulling those strings -- which i think they probably will at some point -- they can make us at least to some degree dance tol their tune. and so i'd like to get from you gentlemen your perception on the long-term goals of china and whether or not they're doing what i think they're doing both economically and militarily. they're building their military up dramatically, and so they've got us by the throat as far as our debt to them, and that would threaten our economy long term. and if they're building up their military and making these connections around the world,ei does thart pose as a real long-term threat to the uniteld, and our security? -- unitedr states and our security? and i'd yield to mr. chang and

mr. wortzel. >> let me say that in my view there's a long-term, historical and cultural -- >> can you, can you sum up pretty quickly? because i --u >> yes. long-term cultural affinity fory the accrual of power and.com happens in in china -- dominance in china, and that creates where they can almost dictate to other independent states how they should behave. and that's a way i read a lot oh their behavior, particularly around the periphery.arti >> i believe that they want to be a pure competitor to the united states. they want to drive the u.s. outo of asia which i think is very clear. they would like the rem min by be the world's currency, andt certainly they want to dominaten nations on their periphery. this is clear from what the wh chinese have been doing, and as we've seen in this past year, it's been very concerning about their relations with japan, south korea, india where we see military or semi-military moveso

against these countries which are, after all, our allies.are, so china is, clearly, an c adversary and one we have to be very careful about because, yesf i do think they play chez. but the one thing is they often make serious strategic errors. they're very good on tactics,r but long-term strategic moves maybe not so good as we saw in this past year and as dr. sutter talked about. >> thank you. mr.-- >> mr. smith is recognized. >> thank you very much. my friend and colleague, you mr. connolly, a moment ago asked the question about, you know, qe receiving a chinese president like hu jintao. it's not that you don't meeti with or receive, it is how your do it. and the concern that manyis of s have is that a state dinner wheh bush had a working lunch ining 2006, it sends a message especially when he is the jailer of --m >> thank you, mr. smith. thank you. we welcome congresswoman bass of california to our committee.

thank you. and i'm pleased to recognize mr. shack bit of ohio -- shackne bit of of ohio. we're so pleased to have you return to serve with us. thank you. >> thank you very much, madamize chair. mr. wortzel, i have a couple questions for you first.tion i was, for quite a few years, one of the co-chairmen of the congressional taiwan caucus andt so have been very interested in those issues and have been there many times over the years. relative to their defense, youyo had mentioned the fighter planes in particular. could you discuss at the time there was a move for some submarines as well and that,ines ultimately, didn't go anywhere. i see you frowning. what are your thoughts aboutnie. that?th >> i,ou it's a very difficult problem.a ve it's a problem for the unitedfic states' navy because they reallr don't want to have to work on or produce diesel submarines. >> they were talking about doing it in france or europe some

lace?were >> the french got away with bribing enough chinese and taiwanese to get some destroyers there.to g everybody involved in that hadvv an accident falling off a tall building. i don't think that'll work a second time. they need submarines. i heene, if united states -- i mean, if the united states could get cose eta' ca to buy a dozena submarines from scwearmny and -- germany and transfer them, itb doesn't hurt anybody be the germans look the other way on the retransfer license. if we bought 'em on retransfer, theyan need 'em. but i don't think it's viable to think that they're going to begin to produce them fromink nothing and then fill out the rest of their defense budget.f >> which okay.no and relative to the missiles, ih think when we first organized the caucus, and this has beene 12, 14 years ago or so, i thinkc the number then was 400 or 500 in addition siss -- missiles, thousand 1100.

and, i mean, clearly, china's been threatening taiwan for many, many years thousand and bullying to a considerable degree. relative to the missiles, is there anti-missile technology that would be helpful? there was talk about that at tho time. you mentioned some missile system. could you elaborate on that slightly? >> well, we have sold them ballistic missile defense technology. they've bought a limited amount it will help them, it could protect specific areas. that's still an awful lot of missiles. >> uh-huh. >> my personal view -- and this is really a united states defense need -- we need to be working on lasers. we don't want to be shooting two or three missiles at another missile. we need to melt 'em right out of the sky quickly. >> okay. and then slightly off topic but not really that much, again,b continuing the taiwan vein, the

president has been in prison now for some time, and, you know, certainly he's been punished fon his alleged transgressions. isn't enough enough? isn't it about time, i mean, have they reached the point where you have, perhaps, thent criminalization of politics here? this mr. chang, i see you nodding. if you want to jump in, you'reyo welcome to do so. >> i think the real issue with former president chen is the procedures under which he was convicted. and at in this point -- at this point there needs to be ahis thorough review of the way the current government has been prosecuting and persecuting members of of the democratic progressive party. this is really a very bad story. the united states needs to payr attention. freedom house has talked a lot s about the erosion of human rights in taiwan, and it is going to be a big story in taiwan for the next two or three years. >> okay. thank you.t

and i just -- >> congressman, if i could just say something? >> yes, go ahead. >> your comments on taiwan. one thing -- first on the president's side, yes, there have been problems, perhaps, h with the due process. but, my god, the charges existence him that have been proven -- against him that have been proven are very damning. so the fact that he's in jail seems to make a lot of sense to someone like me.to >> how long has he been in prison now?b >> two years maybe? a little less --mayb >> family members as well? son, wife?>> f >> yes. his wife, i'm not sure where she is right now, but she's been convicted.but so this is big corruption, sir. and so i think the charges are worth looking at carefully. on the, on the military sideh l just keep in mind the one reservation i have about this, one of the most important ones, is taiwan willing to buy? taiwan is -- their gdp, their military budget is less than 3%g of their gdp.et i you're not dealing with a country that really wants to

mill tiez itself or build its up monetarily. >> that's one of the frustratinn parts.a we kept pushing them to buy theo weapons system, and thewe legislature just couldn't find a way to do it. >> thank you. and we thank ms. because of california for yielding -- bass of california for yielding her time and recognize there moreno who will be yielding his time tg mr. smith.n if you could make that motion. >> madam chair, i do yield my time to mr. smith, thank you.ir, >> thank you. mr. smith is recognized. >> i appreciate it. thank you, madam chair, for that courtesy and my good friend ando colleague, the new member. i have just a couple of questions in follow up. i kind of ran out of time akin moment ago about the issue of we how you receive a person who, with his past and present, raises serious issues about what we are actually doing especially toa the dissidents who will know throughout all of china,

including lou saw bow who is under house arrest that his jailer is getting a state dinner. these aren't nuances, these are profound issues that are raiseds here. so if you could, perhaps, some of you might want to speak to, that issue. let me also say, and thelet distinguished chairladyay mentioned a moment ago that in this audience are some of thego greatest and finest human rights defenders and their loved ones. zhang was about ducted out of vietnam -- abducted out ofsi vietnam as the president took over in 2002. they have not seen their father. they tried to get in to see them. he was abducted t out of vietnam back to china where he is now spending a horrific and enduring a horrific ordeal. hu, who is gao's wife who is here today, he made a 2000 trek to tie thatland with -- thailand with her two children after her

older daughter was so despond dent, perhaps even suicidal because she was being so mistreated. what we often forget, it's notbe just the dissidents, but it isso their families who share in thet cruelty meeted out by the -- meted out by the chinese dictatorship. she made it, thankfully, and her children.kfu but, again, it raises theand question about how i can a manho who is responsible -- and i would say directly responsible -- he gets a state dinner? when frank wolf and i made several trips to the prc, we met with the premier.c, i believe you do have meetings like that.beli we had a list of prisoners. we had issues dealing withress forced abortion, redishes persecution, we laid it all outp he wasn't happily in receipt of that, but it was a very, very real conversation. and i wonder if, you know, when the toasts are made later on tonight and there's all of this hoopla around a state dinner, that all of that kind of simmere

into the background and whatn message have we sent? also if you could speak to thise and i'll yield to you, the bad governance model. you know, when i chaired the africa subcommittee years ago, three hearings on what china is doing in africa, you know, and i people like bashir in zimbabwe, mugabe and so many p others who are dictators love the chinese model of control and secret police.ol a and i'm very worried about the influence that their bad governance model and their badv human rights model is having unless we really speak loud and clear. and i would, again, make my appeal to the president, to the pressnd corps, be public. don't mamby pamby. don't walk on egg shells. speak boldly about -- especially president obama -- about his fellow peace prize winner because he won it last year. this year, obviously, xiaobo wh, is languishing in prison and his wife under house arrest.

>> congressman, i'm personally upset about the honor that hu jintao is receiving.u so it's not a measure whether to meet or receive hu jintao, ih agree with you totally. and keeping hu jintao this honor will send two messages to chinas one to chinese government, the other to china's people. to the chinese government that can be described as that we can get away with the atrocities we perpetrated in the past. put this putting people who with woj nobel peace prize in jail, we can get away with any human rights violation. the message to the people that u.s. may not be that sincereif about human rights issues ins china.huma and i want to emphasize that china is a very practical, veryy rational player.

china's government legitimacy ii performance-based, namely, the only source of legitimacy for this regime to continue its rule in china is the fact of economic growth.econ so we have too much imposed fear or deny -- on ourself thinkinga if we take a stronger position on human rights issues, that will jeopardize our economic relationship with china. why should our fear of? if it is done, that issue of fear any jeopardizes of economic relation with u.s. and thest rest of the world. -- the rest of the world because the strong economic growth will -- [inaudible] all the problems we haveel accumulating in the pastl few hv years that will cause theat government to collapse. >> thank you.go >> thank you very much, mr. moy

ray know, for yielding the time to mr. smith. and now batting cleanup, one of our committee superstars, mr. royce, chairman of the subcommittee on terrorism and trade, is recognized for five minutes.adam >> thank you, madam chair. i think maybe this is an issue that maybe everybody who'ss representative of the businessyb community who does business ines china should be thinking about. an article on extortion in the harvard business review in december, and the subject is china v. the world. whose technology is it?wh an exhaustive study of the actual consequences for u.s.t businesses in china. let me just read you, larry, one ofh the conclusions that the authors wrote here.e chinese officials have learned to tackle multi-national companies, including u.s. companies, often forcing them t. joint ventures with its

national champions and transfer the latest technology in exchange for current and future business opportunities.nt a companies that resist are simply excluded from projects. the chinese government uses thep restrictions to drive wedges between foreign rivals vying to land big projects in the countro and induce each of them to transfer the technologies that state-owned enterprises need to catch up.s itne is extortion. and we all know numerous examples.rti we've heard witnesses, i think, two years ago we heard frome nancy wine stein. nancy lifestyles opened a business in beijing only to hav it stolen out there under her. she was in shanghai. that was a shanghai example.n but, you know, since that hearing i probably heard from a half dozen businesses that said we don't want to go public, but thissi is their mow discuss op

remember die. now it appears, you know, in the harvard business review laying out the case that this is the modus operandi for the chinesedo government. could i have your thoughts on that? >> it is the modus operandi.op now, i have to say that american companies that are induced to do that do that of their own volition because they hope that based on the ability to enter the marketplace, they're going too earn a lot of money.etpl >> sure.u >> some do, some don't. >> but, larry, the next chapter is once the technology ishe t stolen, that company had better be prepared for a pretty quick exit out of china.ed f was its -- because its contracts are up about to change, its worf force doesn't show up the next morning, it's in violation ofxt any number of new rules, its

leases are terminated. we've heard the stories over and over again.ard >> well, i would only suggest a legislative strategy to remedy it -- >> yes?ed >> and that's if a company can>a legitimately demonstrate that its products or its technology was stolen -- >> yeah. >> -- then prohibit the sale ofe that stuff in the unite.r >> well, that's a good remedy.nd that's a good remedy.stat but from the experience that we've had going to bat with ourv constituents out in california, and nancy would be an example, wern have not been able through the court system in china to have any success.ou and to my knowledge, i don'ta know of any success.e ii wondered if you would agrees with one of the points made many this report. and the authors conclude it might be use for the u.s --

useful for the u.s. to dispense with the premise that it can have an economically compatible existence with china, in other n words or knowing going in these are two radically differentff systems, ander china has failedo bring its systems into compliance with any of the international norms for commercial activity or for rule of law.or >> i don't know why you would>> choose to do business with a documented thief. >> well -- >> excuse me, documented thief? >> yeah. >> my hope would be that there are many be other countries in asia that have an interest in closer relations with the u.s. we see this in the polling all the time. and i think a key aspect of managing china's rise will be our alliances with china'sl neighbors across east asia andr south asia.in and i think that giving reassurance to our friends andta

placing a check on maybe china'e regional ambitions is going to be necessary. but what more should we be doing with these countries to encourage trade investment, and what more should we do to letine the u.s. business community know their return on investment is ao negative one in terms of china? that gets out caseally in the journal -- occasionally in the journal but not often enough. >> thank you.y thoe gentleman's time hasn expired. and now for truly our last question and answer five-minute will be mr. forten berry of nebraska to close out our hearing. >> thank you, madam chair, for the time, and thank you,nk y gentlemen, for appearing for us today. i have a fairly lofty sentence in front of me. basically, it says i want to stress the importance ofys managing our complex relationship with china in ain manner that honors the transcendent principles thath define our national purpose and identity.iden as i look out in the audience

here, i see a number of young people, and i think it'sa important to get your mind around this. many of you are, perhaps, newly married or hope to be married in the future.ps let's suppose you were in chinam and the authorities come by and say how many children do youme b have? we have one, and we have one on the way.e well, that's one too many.on come with us. can you imagine that this united states? we can't even get our mind around these concepts. and yet this is president hu china of today. now, i sincerely hope that as the president meets with -- that's president obama -- meets with president hu that humana rights issues are going to figure most prominently in these discussions, and the white house has indicated some direction int that regard. since i've been serving in congress, members of both sidese of the aisle have boldly challenge ld beijing on the ruthless treatment of democracy advocates and their families, religious minorities and womenre in families victimized by a

callous policy of coerced abortion. let's turn to economics. a full estimate is that we owe t about $2 trillion to china, and we have a bilateral trade deficit approaching 300 billion and, of course, this posed weighty concerns. where appropriate, i believe wet must challenge china to abandonl its unbridled mercantilism which manifests itself in massive subsidies and other trade-distorting practices that contribute to this staggerings imbalance. i think, also, we must look ourselves in the eye in the unitedst states. and take action to get our fiscal house in order, to revive our stagnant manufacturing industries, refurbish ourn industrial base and take responsibility for our economic future. the reality is we buy their stuff, and they buy our debt.ndt and this is a truly

dysfunctional marriage. i so i think we have an obligatioo to forthrightly address the sources of tension in this relationship with china and our commitment to mutual respect should never entice us to ignore these very serious concerns. and i hope that the administration will echo these concerns in their meetings today with chinese leadership. i my question to the panel is this: the chinese give cover to the north koreans. the chinese do can business with iran. the chinese do not respect human rights.espe what type of world does china envision? what is their end game? a nationalistic surge underwritten by a new capitalistic communist model never foreseen in the history oc the world? that, leads?nt on >> i'd be very happy to comment. i think the chinese objective is very much focused on the hereth and thousand.

mr. yang -- here and now. mr. yang emphasized they have a legitimacy deficit, and theiri legitimacy rests on economic performance. and to do that they need stability. and to do that they have to interact with the world on a lo of different ways, in a lot of of different ways with economicc development being primary. so to confront the united states in a major way is something c that, i think, is notethi fundamental to what they're about right now. their long-term plans are very vague.r they've got a very big agenda for the short term. and it's going to keep them busy for a long time. >> so does raising the concerns that i've raised, that i raised as well as many others today help address or give rise to more legitimacy concerns as the further distance themselves from what we would consider to be the international community of responsible missions? >> the idea that we should --r the idea that we should address all the issues that you've mentioned in a forthright way ih very, very clear. we should do that.

no question. but i think your idea that somehow the chinese have this y plan for domination and control of the world, i think a better image is that china is a bit scrambling, trying to keep legitimacy, trying to keep control of a very vibrant economic and social situationoca that isn't under good control in many respects. >> does raising the issues ii just raised hinder their quest for this legitimaciesome. >> i think it could. >> or do they not care because economics trumps everythingsome. >> no, economics doesn't trumpg. everything.mi prestige is important as well, and their position is importanta as well.im >> thank you.l >> can thank you.e the gentleman's time has expired. it's a testament to the great interest that this topic has that members keep coming back. so, please, recognize mr. deutsche, my floridian colleague, for fiver minutes. >> thank you, madam chair. i appreciate