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the presiding officer: are there any senators wishing to vote or wishing to change their vote? if not, the ayes are 52, the nays are 43. the motion is agreed to. the clerk will report the nomination. the clerk: the judiciary, john b. nalbandian of kentucky to be

united states circuit judge for the sixth circuit. a senator: mr. president. the presiding officer: the senator from florida. mr. rubio: mr. president, when the story of the 21st century is written, there will be a couple chapters about vladimir putin's russia and most certainly chapters about radical jihadists, and perhaps a few chapters on some other things that we have yet to fully anticipate, which still remains over 80 years in the century,

but there is no doubt that the vast majority of the story about the 21st century will be about the relationship between the united states and china. china, the most populace nation on earth, the second largest economy, soon to be largest economy on the planet is a country that cannot be maintained. it will be a factor both economically and geopolitically, as it should be for a nation of that magnitude and a culture that deep with such long history. however, there are imbalances developing in that relationship which i believe are threatening not just to our nation but ultimately to the peace, the security, and the stability of the world, and it is on that topic that i wanted to come to the floor and speak today and perhaps about some of the things we need to know about it. there was a consensus which i could admit i perhaps from time to time was a partaker in, that china was a country that would eventually as it grew more prosperous would become not just

more democratic but more willing to live by the rules that the world has conducted itself by since the end of the second world war. now, perhaps i wasn't as strong an adherent of that as some others. i have always been, of course, deeply suspicious of communism and autocratic nations, but there was still the belief that somehow things could work out and that eventually at some point both demographics and economics would force china to accept the benefits and the wisdom of a global economic order that has maintained the peace since the end of the second world war. that was a terrible mistake. for, in fact, that is not how it has played out. for the better part of 30 years now, china has been allowed to systematically violate all of the rules of fair play and trade and commerce. under the guise of saying eventually they are going to come around and behave. not only has it not worked, it has allowed them to accelerate their economic growth to the

detriment of american workers, american industry, and economies all over the world. today china's three years into a plan called made in china 2025, and what made in china means, what it's all about is china intends to be the dominant power and dominate ten key sectors of the future economy. they outline what all ten of those are. now, if that dominance was the result of being more innovative or spending more money on research or just being better, then we would have little to explain about. it would be on us to become more innovative ourselves and to put more money into research and technology and these sorts of things. but that's not what it's the product of. it's the product of cheating. the massive theft of intellectual property, the largest single transfer of wealth in the history of mankind, stolen, stolen because they buy small companies who are developing some key component in

a broader technology, and they take it for themselves. stolen because when an american company or any foreign company, for that matter, wants to do business in china and have access to their 1.3 billion, 1.4 billion people, you have to partner. they make you partner with a chinese company, your partner, quote-unquote, steals your secrets, and then they kick you out and now you're -- they're your competitor. so if you think about it, they're able to make all of these advances without paying for them. imagine if you had a business that was able to grow without having to pay for all the research that went to get to that point. this is what they do. it has allowed them to expand militarily, commercially, economically, to a point where we are now at the edge of a very dangerous economic and geopolitical imbalance that needs to be addressed. it needs to be addressed now. we're almost out of time. five years from now, six years

from now, three years from now, it may be too late to address this. i want to start, i want to reiterate what i said at the outset, this is not about containing china nor about crippling china. it is about ensuring that we are going to have stability in the world, stability in which our companies and their companies can partner but they need to do so voluntarily. a stability where they cannot steal our secrets. a stability where they cannot violate the rules of trade but benefit from the rules of trade. and so that is what i hope to address through a new bill called the frair trade in china enforcement act which i have filed today. the first problem we want to address is that china's building its industrial capacity with u.s. intellectual property and technology. i have highlighted how they steal our technology and our intellectual property, and they use it. as an example, general electric and honeywell technology is being used in china by one of g.e. and honeywell's competitors. they didn't sell it to them.

it was stolen from them. two american companies had their secrets stolen, and now their competitor in china is using their technology that they spent money and time investing in. the solution to that problem is to pass a law that prohibits the sale of national security sensitive technology and intellectual property to china, and the bill would do this by directing the department of commerce to use its export control authority to block military-capacity exports and components of made in china 2025 exports to china. so basically the department of commerce would look at made in china 2025. these are the sectors that they are trying to dominate, and we would prohibit the sale or the transfer of intellectual property sensitive to those industries. meaning american companies, even if they have a partnership with china, would be prohibited by law in sharing this information with them willingly. the second problem we have

frankly is here at home, and that is we have these large multinational united states companies that are very valuable intellectual property and technology, who partner with chinese firms, and they know that their intellectual property is going to be stolen, but they don't care, and they don't care, number one, because they are not going to pay the full costs of the loss of this intellectual property. it's going to be borne out by the entire country. a great example of that would be a c.e.o. or business executive. they know they're only going to be at the company for x number of years, and so they make the decision that i would -- i don't care if they are going to steal our intellectual property. i want to have access to the chinese market, because it's is .4 billion people. it's going -- 1.4 billion people. it will allow us to sell a lot of stuff there. our profits will go up. i am going to look good in the quarterly reports. i will look good at the board of directors. who cares if this harms the united states. my obligation is to the corporation, not the country. that's their view. in fact, many of these c.e.o.'s

of large multinational companies, they consider themselves to be citizens of the world before they consider themselves to be citizens of the united states. they are willing to turn these things over because by the time we are hurt by it as a nation, they are long gone. by the time they are hurt by it as a company, they are long gone. but they're going to have some pretty good quarters as they expand into the largest market in the world, and their shareholders and their board of directors are going to be very happy about it. that's a big problem. just because a company has their address in the united states does not mean that they consider themselves to be american companies. and of course this is a big, big problem among many large multinational corporations who are doing business there and know exactly what's going on but are more interested in the short-term profits than in the impact on our national security. the solution that i propose to that problem in this law is to increase taxes on multinational corporations and the income that they earn in china and the tax would be increased equal to the amount of the lost value of the

stolen intellectual property or technology. so if we have lost a billion dollars, there would be a billion-dollar increase in that business profit that they made in china through that partnership. it does this by imposing a tax rate of 2%, roughly equal to what the trade representative's office estimates is the cost of lost intellectual property as a percent of total corporate profits in china. the third problem we have is that china -- and i mean china both its sovereign wealth management and individuals who have made a lot of money directed by government in many cases, has gone on a buying spree of u.s. debt, treasuries, of stocks, even of real estate. my hometown of miami is one of the places being heavily invested in now to increase their trade surplus and to weaken the u.s. economy. you say how. let me give you an example. after china rose to the world trade organization, it had all this excess capital resulting from its large surpluses, and so what that drove them to do is to

take that excess capital they were making now that they were a part of the w.t.o. and investing it in the united states and real estate, for example. so here you have people coming in and paying for real estate above the value of the property, driving up prices. it's one of the things that helped fuel the housing bubble. you can only imagine if the property next door, the building next door, the luxury condominium units next door are sold at a price higher than the asking price might be, you're driving up the market for everybody. but they do this over and over again. this cheap financing of our debt, buying up so many of our treasuries because there's such demand for that treasury, because there's so much demand for our debt, our yield, the amount of interest we pay back to the investor is lower. and the result is it's one of the things that's driven our national debt here. it's been so easy to borrow because it's been cheap. so what's the solution? well, the solution is to update the income tax treaty that was signed in the 1990's.

and that taxes profits on china on these investments. including the holdings of the national debt out of previous preferential rate to what it would be for anybody else. what my law would do, it would make with holding taxes on chinese investment income revert to what the law is for everyone else. for example, the u.s. pair would withhold a greater amount of tax on distributions to chinese payees. so they would -- whatever income they are making from the debt, from the stocks, from the assets they bought in the united states and they've invested in, whatever they're making on it, they would pay taxes on that income the same as anybody else would. as opposed to under a preferential rate in the 1980's. and this is important. because among the things that all of us investment, surplus investment does in the u.s., it increases the value of the dollar artificially. they did that when they were manipulating currency. the stronger the dollar, the weaker our exports. the more expensive it is to buy

something in the united states. the currencies fluke yate as a matter -- fluctuate as a matter of course. this is the deliberate manipulation of our currency, one of the byproducts of this. taxing the income they make on those investments the same as anybody else would have to pay and not this preferential rate would help bring some balance to that. one additional problem that we want to address is that the chinese government's made in 2025 plan is a plan to displace american manufacturing and they intend to do that no matter what it takes. let me give you an example. made in china 2025 targets artificial intelligence and next-generation information technology. it targets robotics. they target new energy vehicles. they target biotechnology, meaning biopharm ma, biologics in terms of curing diseases. they target energy and power generation, aerospace, not just

airplanes but space travel. they target high-tech shipping, targeting advanced railway, new material, agriculture machinery. these advanced high-tech industries are supposed to be the competitive advantage of the united states in the 21st century. this is not protectionism what i'm talking about. if this was a fair competition on these technologies versus them, that's what free markets are supposed to do. but that's thought how they're doing it. the way they compete within these industries is in addition to stealing our secrets and buying up the companies that are in the supply chain, they deny our companies access to their markets. but they want full and unfettered access to ours. what is the solution? the solution is to prepare duties on andism pose chinese in-- and impose chinese investor shareholder caps on u.s. companies producing goods targeted about i made in china 2025. this bill would do this by defining made in china 2025 as a

counteravailable subsidy for american industries affected by made in china 2025 exports thus reducing future demand for chinese exports in these industries. we have to raise the price of the products that they are stealing from us. otherwise they will put our industries out of business and our children will live in a world where we depend on china for artificial intelligence, for robotics, for new energy vehicles, for aerospace, for pharma. can you imagine living in a world where the cure for alzheimer's is controlled by chinese pharmaceutical companies? the amount of leverage it would give them geo political. and if they reached that because they outhustled us is one thing but to get there by stealing what we produce, by denying our companies to sell over there but asking us to allow their coation to sell here -- their companies to sell here, that's not competition. that's theft. that's an imbalance.

that needs to be addressed. by the way, we also have the s.e.c. block any majority stake acquisition of a listed company producing the component goods in any of these industries. in the made in china 2025 exports. and this is in order to limit their ability to buy up our small companies or buy up enough of a controlling interest in american companies to take them from us. that's the other strategy they have. as they go in into industries that go under the threshold of what the government looks into and they buy up percentages of the company or the entire company itself and now they control what was supposedly an american company. they now own it. try doing that in china if you're an american. and the argument that we should continue to allow them to do it because they're a developing country is ridiculous. no one can make that argument anymore. that's the argument that's been made for all these years. there is one last thing that we need to do and this has been in the news a lot lately. the chinese around the world and

have tried in the united states to use their companies in telecommunications, particularly wawaway and -- huawei and zte, they wanted us to buy components and parts and equipment from haway and use is for our cell phone networks, servers and routers, put those in our country. well, if you're someone and you're a country who as a matter of geo political strategy steal not just spy like normal countries do but steal intellectual property and corporate secrets to build your economy at the expense of someone else's and you control the routers and telecom system or enough of it in another country, we're making it easier for you to steal thosening things from us. imagine a major u.s. university conducting research and their entire back office and all of their computer networks of which this is stored has huawei equipment, it allows the chinese government to go into this equipment, remotely use it to

exstract all this information. -- extract all this information. they don't have to send any spies because we brought them inside. this is a problem across the economy. that needs to be dealt with in broader terms. but in this bill, a bill that i have separately also filed with senator cotton, wee would prohibit the federal government or subsidiaries and contractors of the federal government from buying telecommunication equipment or services from huawei or z.t.e. because what we cannot afford is to have in our own government or in companies that are servicing the government, telecommunications equipment and services vulnerable to espionage, either corporate or national security. let me close with this. there are a lot of big issues going on in the world. and for a lot of people, including myself, this issue is pretty new. i've long been concerned about china's military expansion. they're putting all kinds of

missiles on the islands in the south china sea. i have long been concerned about the human rights violations, what they've done with tibet. just so you know the sort of influence level they have, marriott corporation fired an american worker, an american living in the united states working for marriott, was fired because they liked a social media post about tibet. and so the chinese got mad. they told marriott you need to correct this. and they fired the employee. an american because he liked a social media post by mistake about tibet. did you know united airlines and american airlines just got a letter from the chinese government saying that unless you change your website so that it says taiwan, china and not just taiwan, we're going to start fining you and may take away your ability to fly into china. american companies which i hope do not give in. this is happening every single day. do you know that hollywood movies are made so that they would be allowed to be distributed in china. in essence, hollywood and

entertainment is deliberately not making movies or saying certain things in movies, political things, things that would offend the chinese government because if you do, they won't let you sell your movie to 1.3 billion, 1.4 billion. there are actors reich richard gere -- like richard gere who can't make movies because they can't be distributed in china because he's in favor of tibet and its independence. these are happening and we're arguing about a bunch of silly things. this is the single biggest challenge facing this nation for the next 20, 30, 40 years and we're almost out of time to take it seriously. just a week ago, i traveled to latin america. i was in panama where the chinese have built not one but two port facilities on the panama canal. not surprisingly because of all this investment, last year panama decided to switch. it no longer recognizes taiwan. it switched to china.

last week while in panama, the dominican republic announced they had switched. little by little they are going and using their investments in these countries first to get them to derecognize taiwan but ultimately because they're spending so much money in these countries to leverage them to align their foreign policy to china's. in our own hemisphere. we do not want conflict with china. we want parody, stability, reciprocity and fairness. that's not what we have right now. and we've taken far too long to take it seriously. now is the sometime to do it. this is about more than just trade. this is about geo politics and national security. it will be the defining issue of the century and a time to take it seriously is now. and my bill which we hope to continue to build on and improve is our effort to hopefully begin this dialogue and taking steps on this very important topic. with that, mr. president, i yield the floor. a senator: mr. president? the presiding officer: the senator from delaware. mr. carper: mr. president, good

afternoon. i was filling up my chrysler town & country minivan with gas last weekend. i noticed the price in delaware is up to about $2.80 a gallon for regular gas. that's up by close to a dollar to what it was not that long ago. the first time i bought gasoline in delaware, i was right out of the navy. i served in the vietnam war, naval flight officer and moved from california to delaware. i drove my car to a gas station right in the middle of the gas war. i actually benefited from the gas war in 1969 in texas when i was driving from pensacola, florida, to san diego naval station. but i filled up my volkswagen for less than $2 during the gas war in some old town in texas. fast forward to 1973, 1974.

we were having a different kind of war with opec. and they were putting the squeeze on us and much of the rest of the world by reducing the amount of oil that they're bringing out of the ground and driving up prices. and then we had an oil blockade and things really got interesting for a while. i'm not sure who was president, if it was gerry ford who succe succeeded jimmy carter. somebody finally said in the white house, maybe democrats and republicans, they said, you know, we've got to be smarter than this. we continued to be dependent on foreign oil. they can put a blockade in place and essentially make it difficult for us to get oil. and pay the price that they want. so we decided, democrats, republicans, the president, congress working together decided that what we should do is increase fuel efficiency of our cars in this country.

we hadn't done it for quite a while. and they put in place fuel efficiency standards for cars. and they -- we stepped up the requirements for a period of years and then after a while, after several years the -- that target level stopped. we reached a ceiling and after that, i think it was like 27 miles per gallon, as i recall. after that, the standards stayed right there for years. actually, maybe for a couple of decades. and we kind of revisited the issue. i want to say in 2007 and said, you know, that doesn't make much sense. why don't we begin to increase fuel efficiency again. and so we did with legislation, bipartisan legislation, senator finsenator.mrs. feinstein: and s worked on it and passed

legislation. began to increase not dramatically but for a while, for a number of years. mr. carper: the full efficiency standards for cars, like trucks and suv's. when we fell into the great recession in 2007, 2008, 2009, we saw the auto companies go -- a couple of them, chrysler and i believe g.m. go into bankruptcy. they got a huge bailout from our taxpayers, from the government. i was one of the people who sponsored that, supported that. in return for them doing that, getting that kind of help, they agreed to a more rigorous increase in fuel efficiency standards going forward. there's now talk -- there's going to be talk tomorrow in the white house about whether or not we should continue to raise fuel efficiency standards for cars and light trucks and suv's. interestingly enough, the -- the c.e.o.'s from a number of

companies, american auto companies and those who have plants here but they're actually may be a foreign-based -- foreign-headquartered auto company, they'll meet with the president tomorrow. and they're going to be talking about what should be done with those fuel efficiency standards. should we continue to am p them up? under current law they will be amped up until 2024, 2520. and then after that there's really nothing in the law that says what should happen after 2025. there are some in the white house, maybe the president, some in the white house who think that the -- we taught to basically hold in place where we are and not continue to increase fuel-efficiency standards for cars, light trucks, and s.u.v.'s. and the administration has been basically suggesting a message

that their path forward is, let's just hole it in -- hold it in place like we did in the oil embargo. and so the white house is going to meet tomorrow with these auto executives, and it's going to be an interesting conversation. i expect the president's going to say, look, we're going to give you a break. we don't think you ought to build cars, trucks, and advance that nobody wants to buy. they want to big vehicles, fuel inefficient, it doesn't matter. we will stop increasing the fuel efficiency standards. and that should help the idea of the white house and the auto companies and say, well, that should be what you want. that should be what you need. the message that i think the president will hear from -- from the auto industry is going to be probably a surprising one from him -- for him because that's not what they are going to be

asking for. i don't know if our presiding officer makes customer calls. i do. i did it when i was governor, congressman, treasurer, i visited businesses large and small year in and year out. one time delaware built more cars, trucks, and advance per capita than any other state, near the university of delaware 4,000 people worked there, another 4,000 worked at g.m. between will ming toond -- wilmington and newark. we lost them both like that. i think it is important to have a vibrant and strong auto industry. ry have done a lot of customer calls over the years to auto manufacturers, including chrysler and g.m. i visited a bunch of other companies as well. and when i do customer calls, i ask three questions of whoever

i'm visiting. i ask, how are you doing? i ask, how are we doing? we, being the state of delaware, if i was the governor of delaware or federal government. how are we doing? what can we do to help? and i hope during this conversation that it will take place about 24 hours from now. i hope the president's going to listen -- in a listening mood, and i hope he'll say, well, what do you need? here's what he's likely to hear from them. they are not asking for relief and not having to comply with fuel efficiency standards. here's what they are asking for. they are asking for some flexibility in the near years, between 2021 and 2025, and in return for some flexibility and the targets for fuel efficiency and those years, they are willing to agree to more

aggressive targets in the out years between say, 2025 and 2035. the auto industry knows by then a -- i don't know if the majority of vehicles built here in this country will be electric or built with battery fuel cells, but we will see a revolution here in this country and around the world. in the rest of the world they will build vehicles, cars, trucks, vans, s.u.v.'s that are far more fuel efficient and far less polluting. and we in this country will get to compete in a world marketplace for -- against those competitors. how do we better ensure that we're able to compete? what the auto industry is it going to say, give us flexibility in the near term, 2021 to 2025, we're willing to work where more vigorous standards afterwards, but give

us some certainty. currently there are folks in california and in other states that support california who have the ability under the law to have their own separate standards, tailpipe standards and fuel-efficiency standards compared to the rest of the country. when this was first envisioned, the auto companies almost had a heart attack and they said the idea of having to build one set of model, say a model that's -- a ford, but having to build one version of that model for california and ten or 11 other countries and then something different for maybe the other 40 states. you didn't want to have to worry about that or do that. we know we have to be more energy efficient and less polluting, but they were concerned about having to do that, two versions of every model they were going to have to build. so it worked out that california can continue to have their own

tdz -- standards, but the auto industry, and frankly other countries too who build vehicles, build to one model -- one version of one model for each of the models that are sold in this country. the auto companies are going to say tomorrow, we need to be able to continue to do that. we don't need to be building two versions of the same model for every car that is sold -- car, truck, light truck, s.u.v. sold in this country. and the auto companies are going to say to the president, there's no need to kick california to the curb or other states that support this position, what we do need is what i said earlier, flexibility in the near term up to 2025, and after that, more rigorous standards going forward. one of the things i learned a

long time before i was governor was that among the things that businesses need is certainty and predictability. they need certainty, they need predictability. that is especially true in the auto industry, where the lead time to build a new car, truck, s.u.v. or van can be five, six, seven years. that's why this is an important conversation to -- tomorrow. i learned long before i was governor that -- that governors don't create jobs, presidents don't create jobs, senators don't create jobs, mayors don't create jobs. what we do is help create a nurturing environment for job creation. and among the things that help provide that in nurturing environment are predict ability and certainty with respect to our laws and regulations. it is also helpful to have the federal government and colleges and universities to provide money for research and

development. some of the r&d that enabled our auto fleets and the light trucks and s.u.v.'s to be more fuel efficient, some of the r&d was appropriated here by this body has been used to make us more competitive in the world markets. our tax policy is to encourage people to buy more energy-efficient vehicles. we have -- we use the government's purchasing power to buy more energy-efficient vehicles so they will make a mark and more likely to sell them and build them in quantity. so i just conclude by saying, mr. president, when you meet with these folks tomorrow from carmakers across the country and around the world, that you won't just tell them what you think they want to hear, you will ask them, what do you need? what do you need? and i think the message you will hear will be quite different from the message he's prepared to give them. we really want to help the

domestic auto industry, we can do that if we want. it is not by rolling back or freezing in place fuel efficiency standards, it's helping us to get to the next level and using the kind of technology in our vehicles that we can sell around the world and compete against the best in the rest of the world. all right, mr. president. i think that's it for me. i don't look -- i don't see anybody else on the floor asking to speak, so i will note the absence of a quorum. the presiding officer: then the clerk should call the roll. quorum call:

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