A food safety factory shutdown has Americans hunting for baby formula. Readying themselves for a covid-19 lockdown, Chinese in Beijing emptied store shelves. Emerging from lockdown, some in Shanghai are visiting well-provisioned markets. U.S.-China agricultural trade is booming, but many are still being left hungry. Food security, sustainability and safety remain issues.
U.S. Senate, Hearing on China's Belt and Road Initiative, June 12, 2019
Click on the link below to download the full transcript (including the testimony of Bartholomew, Kamphausen, Klimen and Scissors) of the hearing in pdf form.
From Sen. Cronyn's opening statement:
Since its accession to the World Trade Organization, China has consistently engaged in unfair trade practices that bolster its domestic industries at the expense of free trade and global stability.
China has weaponized foreign investment to force transfer of cutting-edge intellectual property to steal trade secrets, erode the technological gap, and create Chinese state-controlled competitors for American companies. Last Congress I authored the Foreign Investment Risk Review Modernization Act, which gives an interagency body known as the Committee on Foreign Investment in the United States additional tools to combat these threats. I am proud that President Trump signed this important legislation into law last year as part of the National Defense Authorization Act. While we have taken this important step to defend Americans against predatory Chinese investment practices, China’s ambitions are much more broad. In 2013, the Chinese Government announced the Belt and Road Initiative, through which it aims to construct billions of dollars of infrastructure projects in countries around the world. Since the creation of the Belt and Road Initiative, China has strategically invested hundreds of billions of dollars in ports, railways, roads, and digital infrastructure. To date, China has entered into Belt and Road agreements with more than 70 countries covering nearly two-thirds of the world’s population.
Belt and Road is a cornerstone of the Chinese Communist Party’s aggressive foreign policy goals and expansionist goals. It has been billed by its leaders as a way to modernize infrastructure corridors and to construct ‘‘a community of common destiny.’’ Unfortunately, this community of common destiny referred to by the Communist Party members is one in which China reshapes the global order and imposes its authoritarian economic regime and controls on the rest of the world. China’s Belt and Road Initiative poses three fundamental threats to the United States and our allies around the world: trade manipulation, economic exploitation, and security erosion.
At its core, the Belt and Road Initiative is fueled by China’s mission to manipulate and undermine the global rules-based trading system for its own benefit. China’s internal structures are predicated on the preferential treatment of its domestic industries, often at the expense of free and open competition.
This is further evidenced by the Made in China 2025 plan, which strategically compliments Belt and Road and seeks to make China dominant in a number of high-tech sectors of interest to the United States, including rail infrastructure, telecommunications, and artificial intelligence.
Belt and Road has not only exacerbated China’s unfair trade practices, it is in clear violation of their commitments as a member of the World Trade Organization. That is because Belt and Road is rigged to empower and create monopolies for Chinese-owned entities like Huawei, ZTE, and CRRC to carry out these projects all
over the world.
But China’s strategic vision goes far beyond empowering its state-controlled companies. It also seeks to bend unwitting countries through their economic exploitation and ‘‘debt-trap’’ diplomacy. In numerous countries, China has financed projects resulting in partner nations accruing crippling foreign debt from which they cannot escape. For example, when Sri Lanka was unable to service billions of dollars in Chinese-backed loans under Belt and Road, it had little choice but to grant China a 99-year lease allowing it to control a Sri Lankan port. In Venezuela, China reduced lending as the country’s debt spiraled out of control. In order to renew China’s interest, Venezuela agreed to sell nearly 10 percent of an additional stake in its state-owned oil enterprise.
But most concerning are the direct national security threats posed by Belt and Road. In 2017, China used construction of a Belt and Road seaport in the African nation of Djibouti as a Trojan horse to open its first overseas military base in the country. Because of Djibouti’s strategic location on the Horn of Africa, it serves as a gateway to global shipping traffic through the Red Sea and the Middle East. It is not hard to see why the presence of the Chinese military near the Middle East could destabilize the region and threaten our own national security interests. But that is exactly the objective of the Belt and Road Initiative. A 2018 Department of Defense report highlighted the long-term implication of China’s attempt to manage civilian ports, stating that China has made requests for military access and basing agreements which could allow the People’s Liberation Army to preposition necessary logistics to protect its interests. Equally concerning is China’s recent shift in focus from port and rail infrastructure projects to strategic plays in the world’s digital infrastructure. In Chile, the Chinese government is investing more than $650 million to build a subsea fiber-optic cable, which will become the largest data flow between Asia and Latin America. China has even begun providing certain countries, like Zimbabwe, with cutting-edge facial recognition software, which will give China control over additional troves of data. Given the grave threats posed by the Belt and Road Initiative, it is not enough for Congress to simply express concern or opposition to China’s efforts. Congress and the executive branch must work together to develop and implement a coordinated long-term strategy to ensure American trade and security policy can prevent the Belt and Road Initiative from achieving its stated objectives. So I look forward to discussing the panel’s perspectives on the Belt and Road Initiative and hope this hearing serves as a catalyst for the committee’s efforts to address the threat.
Tensions evident in the recent European Union-China virtual summit reflect the increasing skepticism in Europe toward China and the worries over Ukraine and economic ties as well as human rights and environmental issues.