[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]
[H.A.S.C. No. 111-114]
CHINA: RECENT SECURITY DEVELOPMENTS
__________
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
JANUARY 13, 2010
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HOUSE COMMITTEE ON ARMED SERVICES
One Hundred Eleventh Congress
IKE SKELTON, Missouri, Chairman
JOHN SPRATT, South Carolina HOWARD P. ``BUCK'' McKEON,
SOLOMON P. ORTIZ, Texas California
GENE TAYLOR, Mississippi ROSCOE G. BARTLETT, Maryland
NEIL ABERCROMBIE, Hawaii MAC THORNBERRY, Texas
SILVESTRE REYES, Texas WALTER B. JONES, North Carolina
VIC SNYDER, Arkansas W. TODD AKIN, Missouri
ADAM SMITH, Washington J. RANDY FORBES, Virginia
LORETTA SANCHEZ, California JEFF MILLER, Florida
MIKE McINTYRE, North Carolina JOE WILSON, South Carolina
ROBERT A. BRADY, Pennsylvania FRANK A. LoBIONDO, New Jersey
ROBERT ANDREWS, New Jersey ROB BISHOP, Utah
SUSAN A. DAVIS, California MICHAEL TURNER, Ohio
JAMES R. LANGEVIN, Rhode Island JOHN KLINE, Minnesota
RICK LARSEN, Washington MIKE ROGERS, Alabama
JIM COOPER, Tennessee TRENT FRANKS, Arizona
JIM MARSHALL, Georgia BILL SHUSTER, Pennsylvania
MADELEINE Z. BORDALLO, Guam CATHY McMORRIS RODGERS, Washington
BRAD ELLSWORTH, Indiana K. MICHAEL CONAWAY, Texas
PATRICK J. MURPHY, Pennsylvania DOUG LAMBORN, Colorado
HANK JOHNSON, Georgia ROB WITTMAN, Virginia
CAROL SHEA-PORTER, New Hampshire MARY FALLIN, Oklahoma
JOE COURTNEY, Connecticut DUNCAN HUNTER, California
DAVID LOEBSACK, Iowa JOHN C. FLEMING, Louisiana
JOE SESTAK, Pennsylvania MIKE COFFMAN, Colorado
GABRIELLE GIFFORDS, Arizona THOMAS J. ROONEY, Florida
NIKI TSONGAS, Massachusetts TODD RUSSELL PLATTS, Pennsylvania
GLENN NYE, Virginia
CHELLIE PINGREE, Maine
LARRY KISSELL, North Carolina
MARTIN HEINRICH, New Mexico
FRANK M. KRATOVIL, Jr., Maryland
ERIC J.J. MASSA, New York
BOBBY BRIGHT, Alabama
SCOTT MURPHY, New York
DAN BOREN, Oklahoma
Erin C. Conaton, Staff Director
Julie Unmacht, Professional Staff Member
Aileen Alexander, Professional Staff Member
Caterina Dutto, Staff Assistant
C O N T E N T S
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CHRONOLOGICAL LIST OF HEARINGS
2010
Page
Hearing:
Wednesday, January 13, 2010, China: Recent Security Developments. 1
Appendix:
Wednesday, January 13, 2010...................................... 35
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WEDNESDAY, JANUARY 13, 2010
CHINA: RECENT SECURITY DEVELOPMENTS
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
McKeon, Hon. Howard P. ``Buck,'' a Representative from
California, Ranking Member, Committee on Armed Services........ 2
Skelton, Hon. Ike, a Representative from Missouri, Chairman,
Committee on Armed Services.................................... 1
WITNESSES
Gregson, Hon. Wallace C., Assistant Secretary of Defense for
Asian and Pacific Security Affairs, U.S. Department of Defense. 6
Shear, David B., Deputy Assistant Secretary for East Asian and
Pacific Affairs, U.S. Department of State...................... 8
Willard, Adm. Robert F., USN, Commander, U.S. Pacific Command.... 5
APPENDIX
Prepared Statements:
Gregson, Hon. Wallace C...................................... 58
Larsen, Hon. Rick, a Representative from Washington,
Committee on Armed Services................................ 44
McKeon, Hon. Howard P. ``Buck''.............................. 41
Shear, David B............................................... 74
Skelton, Hon. Ike............................................ 39
Willard, Adm. Robert F....................................... 46
Documents Submitted for the Record:
[There were no Documents submitted.]
Witness Responses to Questions Asked During the Hearing:
Mr. Coffman.................................................. 84
Mr. Forbes................................................... 83
Mr. Skelton.................................................. 83
Questions Submitted by Members Post Hearing:
Mr. Bishop................................................... 88
Mr. Coffman.................................................. 88
Mr. Forbes................................................... 87
Mrs. McMorris Rodgers........................................ 88
Mr. Ortiz.................................................... 87
CHINA: RECENT SECURITY DEVELOPMENTS
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House of Representatives,
Committee on Armed Services,
Washington, DC, Wednesday, January 13, 2010.
The committee met, pursuant to call, at 10:00 a.m., in room
210, Capitol Visitor Center, Hon. Ike Skelton (chairman of the
committee) presiding.
OPENING STATEMENT OF HON. IKE SKELTON, A REPRESENTATIVE FROM
MISSOURI, CHAIRMAN, COMMITTEE ON ARMED SERVICES
The Chairman. Good morning. Today we have with us Admiral
Robert Willard, Commander of the United States Pacific Command,
the Honorable ``Chip'' Gregson, Assistant Secretary of Defense
for Asian and Pacific Security Affairs, and David Shear, Deputy
Assistant Secretary of State for East Asian and Pacific
Affairs. And we welcome you gentlemen to the first hearing
before this committee.
We are pleased that you could join us today and testify on
recent security developments involving the country of China.
Also I wish to welcome Admiral Willard's wife, Donna, who
is seated behind the good Admiral, and we welcome you. If the
Admiral missteps a bit, why you just whisper in his ear and
help him out. Welcome.
This is a very important and a very timely hearing. It is
interesting to note that just this morning, press reports
indicate that Google is contemplating pulling out of China,
which we may discuss a bit in our hearing.
Now, I have stressed for some time the significance of
developments in China to our national security. In recent
years, while we have been heavily focused on events in the
Middle East and South Asia, China's influence has grown in Asia
as well as beyond.
I am pleased that the Obama Administration has prioritized
the United States-China security relationship and was
encouraged by the joint statement that resulted from the
President's recent visit to China. I welcome the
Administration's efforts to increase U.S.-China's relations and
cooperation in areas of common interests ranging from
counterterrorism and nonproliferation to energy security.
We must work together with China for the settlement of
conflicts and reduction of tensions that contribute to global
and regional instability including denuclearization of the
Korean peninsula, the Iranian nuclear issue, and the situation
in South Asia.
I particularly welcome the administration's support for
increasing military-to-military contacts. I have long viewed
such contacts as essential. It builds trust, it promotes
understanding, it prevents conflicts and it fosters
cooperation. And given my own visits to China in recent years,
I know how important these relationships are.
Looking back at U.S.-China security cooperation under the
previous Administration, there are some positive steps, but
there is still much progress to be achieved. In the new
Administration, we will continue to face plenty of challenges,
and I remain concerned by trends and ambiguities regarding
China's military modernization, including China's missile
buildup across from Taiwan and the steady increase of China's
power projection capabilities.
Moreover, China's military budget continues a trend of
double-digit increases at a time when China provides more and
more of the loans that support the American economy.
China's transparency on defense issues is still limited,
and questions remain regarding China's strategic intentions.
This was highlighted just days ago following China's concerning
missile intercept event.
At the same time the reduction of tensions across Taiwan's
state is a positive development, and I hope to see further
progress in that area, including meaningful action by China to
reduce its military presence directly opposite to Taiwan.
I am also encouraged by China's recent involvement in the
counterpiracy operations in the Gulf of Aden. This demonstrates
responsible use of Chinese military power in line with its
international responsibilities, of which I hope we can see
more.
I continue to believe China is not necessarily destined to
be a threat to our country, but there are trends and
ambiguities that do concern us. I continue to believe that the
United States must demonstrate our own interests in the Asia-
Pacific region including our ability to project power
effectively there. At the same time we must also acknowledge
China's limitations and recognize that China's choices may well
be shaped by our own actions.
So I look forward to hearing from our witnesses about the
actions that the Department of Defense (DOD) and the Department
of State (DOS) are undertaking, and I hope they will help us
better understand recent security developments involving that
nation.
I also look forward to receiving a 2010 Department of
Defense annual report on this subject which is due to this
committee in the month of March.
Before we begin I turn to my friend from California, the
Ranking Member Buck McKeon.
[The prepared statement of Mr. Skelton can be found in the
Appendix on page 39.]
STATEMENT OF HON. HOWARD P. ``BUCK'' MCKEON, A REPRESENTATIVE
FROM CALIFORNIA, RANKING MEMBER, COMMITTEE ON ARMED SERVICES
Mr. McKeon. Thank you, Mr. Chairman. Thank you for holding
today's hearing on recent security developments involving the
People's Republic of China. Today is our first opportunity to
examine the Administration's policy toward China and how such a
policy is aligned with our overall approach to the region.
This hearing also gives us a form to better understand
China's military buildup and activities where they are
expanding their areas of influence around the globe, all of
which have serious implications for the strategic posture of
the United States.
I would also like to welcome our witnesses the Chairman
recognized, and thank you all for being here today. I look
forward to hearing your testimony and our discussion.
As I review our policy toward China, it is my understanding
that President Obama's team may follow an approach of strategic
assurance as put forward by Deputy Secretary of State James
Steinberg. This strategy is based on the belief that China
cannot be contained and therefore we, America and the
international community, must accept its rise to power. In
return we seek China's reassurance that its stature will not
come at the expense or security of other nations.
For example, strategic assurance may be demonstrated in
part via China's cooperation with the United States and other
nations on matters of shared interest. In particular within the
last year, we worked together in our handling of the global
financial crisis, countering piracy off the east coast of
Africa, and isolating North Korea for its persistent and
aggressive nuclear and missile tests.
While these are positive steps in our relationship, we
cannot ignore the reality that China still falls short in the
column of reassurance. Actions speak louder than words. Here
are but a few of the examples.
First, on Monday China demonstrated its resolve to expand
its strategic capabilities with a missile defense test. As of
yesterday, we heard from the Pentagon that this test was
conducted without advance notification to the United States.
What are China's intentions for employing a missile intercept
system? Once again we are left in the dark to question China's
commitment to transparency and cooperation. More concerning,
this test comes at a time of tension over our arms sales to
Taiwan. Is this test intended as an aggressive signal?
Second, according to the latest U.S.-China Economic and
Security Commission report, I quote: ``There has been a marked
increase in cyber intrusions originating in China and targeting
U.S. Government and defense-related computer systems, an
activity that could potentially disrupt U.S. commercial and
banking systems, as well as compromise sensitive defense and
military data.'' And the Chairman remarked about Google and the
problem that they are having and where we are moving in that
direction.
Third, in March 2009, a Chinese naval vessel behaved in an
aggressive manner toward the United States Naval Ship (USNS)
Impeccable. Despite China's assertion of its rights within its
maritime exclusive economic zone (EEZ), this incident
illustrates its willingness to violate international law and
reflects increasing risks of China's expanding military
operations in areas where U.S. forces routinely operate.
Independently, these examples are a cause of concern, but
more so when seen under an umbrella of marked uncertainty
surrounding China's future course in terms of its military and
security ambitions.
I would like to now turn to the neighborhood in which China
resides. This brings me to the President's recent trip to Asia.
While some see the U.S.-China joint statement as a significant
accomplishment, from my view we are merely left with a laundry
list of issues that need to be worked out. Furthermore, I am
deeply concerned with the message we sent to our partners in
the region. From Australia to India, the trip raised questions
about who has the upper hand in the U.S.-China relationship. At
a time when we should be focused on reaffirming our commitment
to the region, we left many doubting the depth and breadth of
American power and influence.
For example, in its 2009 Defense White Paper, the
Government of Australia states, ``We also need to consider the
circumstances of a more dramatic and, in defense planning
terms, sudden deterioration in our strategic outlook. While
currently unlikely, a transformation of major power relations
in the U.S.-Pacific region would have a profound effect on our
strategic circumstances. Of particular concern would be any
diminution of the willingness or capacity of the United States
to act as a stabilizing force.''
I hope each of you will give concrete examples of what we
are doing to alleviate these doubts.
Finally, in just a few weeks the Department of Defense will
submit its 2010 Quadrennial Defense Review (QDR) to Congress.
Shortly afterwards we will receive the Nuclear Posture Review
(NPR). In the 2006 QDR, the Pentagon noted that China was at a
strategic crossroads and that it had the greatest potential to
compete militarily with the United States.
In its 2009 Annual Report to Congress on China's Military
Power, the Department maintained that the pace and scope of
China's military transformation continued to increase, fueled
by the acquisition of advanced foreign weapons. Also similar to
years past, it noted that China continues to develop and field
disruptive technologies, including those for anti-access and
area denial as well as for nuclear, cyber, and space warfare.
When we receive the QDR, I will be looking closely at any
changes to the Department's assessment of China. My fear is
that we will downgrade the China threat in an attempt to
justify last year's and future cuts to key defense programs. If
the conclusion is the same as it was in 2006, then I expect the
President's budget to invest in the necessary capabilities to
execute our contingency plans in Asia. This is the type of
strategic reassurance our allies need, and is the key to
stability in Asia.
With respect to the NPR, we must be cognizant that any
additional reductions in our strategic capabilities will only
invite China to seek strategic parity with the United States.
In closing, today we will hear about the need for candid
dialogue and improved engagement with China. As you know, we
made changes to the Pentagon's Annual Report on China's
Military Power in this year's defense bill to focus on those
areas. While I believe that coming to the table is vital to
avoiding misunderstanding and miscalculation, we must be
mindful that it takes two to make a relationship work and that
our priority focus must always be on protecting America's
national security interest.
This is truly a timely hearing and we appreciate your
appearance here this morning. Thank you, Mr. Chairman.
[The prepared statement of Mr. McKeon can be found in the
Appendix on page 41.]
The Chairman. I thank the gentleman.
A word to the members. We will be back in our old haunts,
the committee room, around the first of next month. So it will
be much more convenient for us, and it is going to look very,
very good. I am very pleased with what I saw yesterday.
Each of the witnesses today, as I understand it, have
statements to make. And we will call on Admiral Willard first.
Admiral.
STATEMENT OF ADM. ROBERT F. WILLARD, USN, COMMANDER, U.S.
PACIFIC COMMAND
Admiral Willard. Thank you, Chairman Skelton,
Representative McKeon, and members of this committee. Chairman,
thank you very much for introducing my wife Donna who joins me
today. She has been a military spouse for 36 years, in addition
to being a mom and a grandmother. And she is now very much a
joint spouse at Pacific Command (PACOM), with oversight of the
needs of Army, Navy, Air Force, Marine Corps, and Coast Guard
families, as well as families of our civilian workers within
PACOM. I am pleased to have her here as well. Thank you, sir.
I have now been in command of the United States Pacific
Command for about three months. And although I may be new to
PACOM, I have commanded extensively in the Asia-Pacific region.
Subsequently, during my 36 years of service, I have developed a
great respect for this part of the world. In that time, I have
come to believe that now more than ever it is vital to our
Nation's security interests and economic prosperity.
In previous tours, as now, the emergence of China and its
military has been a routine topic of discussion in my
interactions with regional leaders. Of concern to most,
reconciling China's declared desire for a peaceful and stable
environment for economic development with a new military
capability and capacity that appear designed to challenge
international freedoms of action and potentially enforce
influence over regional nations.
Reconciliation of these two divergent positions can only
occur through continuous frank conversations and mutual actions
within a strong and mature military-to-military relationship, a
relationship that does not yet exist between the United States
military and the People's Liberation Army (PLA). And until it
does, and it is determined that China's intent is indeed
benign, it is critical that we maintain the readiness of our
forward-deployed forces, continually reinforce our commitment
to our allies and partners in the region, and meet each
challenge by the People's Republic of China (PRC) in a
professional manner that is consistent with international law.
It is clearly in both nations' interest and the Asia-Pacific
region's interest to manage these complexities and to develop a
relationship with China that is constructive in every way.
At U.S. Pacific Command, our goal is to support this
relationship by identifying opportunities that allow us to work
more closely with China while also encouraging her to reconcile
strategic intent with increasingly sophisticated combat
capabilities. Congress can assist by maintaining a focus not
only on China but on the growing importance of the Asia-Pacific
region to our Nation and to our global partners.
Our messages during engagements with Chinese leadership,
both in Beijing and during their visits to Washington, D.C.,
must be consistent, resolute, and invoke the Nation's
principles and values. I offer my staff's direct support to you
during your travels to the region and invite you to stop in
Honolulu and visit U.S. Pacific Command on your way to or from
this area of responsibility (AOR).
Finally, I would like to thank this committee for the
strong support you provide to the men and women of our United
States military. Despite being involved in two wars, our
retention and recruiting rates remain very strong, which is a
direct reflection of the quality of life initiative supported
by you and by the American people.
On behalf of more than 300,000 men and women of U.S.
Pacific Command, please accept my sincere appreciation for the
work that you do for us and for this great Nation. Thank you,
and I look forward to answering your questions.
The Chairman. Thank you Admiral.
[The prepared statement of Admiral Willard can be found in
the Appendix on page 46.]
The Chairman. Secretary Gregson.
STATEMENT OF HON. WALLACE C. GREGSON, ASSISTANT SECRETARY OF
DEFENSE FOR ASIAN AND PACIFIC SECURITY AFFAIRS, U.S. DEPARTMENT
OF DEFENSE
Secretary Gregson. Mr. Chairman, members of the committee,
thank you very much for this opportunity to appear today to
discuss recent military and security developments in the
People's Republic of China. I am pleased to be joined by old
friends and colleagues, Admiral Willard and Mr. David Shear.
China's rapid rise as a regional political and economic
power with growing global influence has significant
implications for the Asia-Pacific region, the United States,
and the world. These developments occur in a dynamic
environment with little historical precedent.
As Secretary Gates said, during the past three decades an
enormous swath of Asia has changed almost beyond recognition.
Hundreds of millions have emerged from poverty to higher living
standards as a result of cooperation, openness, and mutual
security. New and reemerging centers of power alike are
realizing extraordinary growth and development. From India to
Indonesia, China to Russia, and Australia to Japan, millions
have moved from poverty to prosperity. China's rapid
development helps drive this extraordinary and dynamic growth.
In turn, China gains greatly from Asia's growth. The United
States welcomes a strong, prosperous, and successful China. As
President Obama stated, the relationship between the United
States and China will shape the 21st century, which makes it as
important as any bilateral relationship in the world.
But this development occurs as new challenges emerge. Our
new security issues cover a very wide range. These include
economics, regional areas of tension, terrorism, proliferation,
energy supplies, piracy, the effects of climate change and
disasters, both manmade and natural. Our increasingly
interconnected world and common demands for resources require
cooperation and integrated solutions.
Since the committee's last hearing on this topic, we have
seen several significant developments, some positive, others
troubling. Many are documented in the Secretary of Defense's
Annual Report on the Military Power of the People's Republic of
China.
On one hand, we have several positive examples of China's
contribution to international peace and stability. We are
encouraged by China's support for the United Nations Security
Council Resolution (UNSCR) 1874 and its efforts to support the
denuclearization of the Korean peninsula.
China is also developing emergency military capabilities
that are allowing it to contribute cooperatively in the
delivery of public goods from peacekeeping and counterpiracy to
humanitarian assistance and disaster relief. We appreciate the
positive experience of our two navies working in concert with
the international community to combat piracy in the Gulf of
Aden, and we are looking forward to building on these
experiences.
But we have concerns about the pace, scope, and lack of
transparency in China's military modernization. The People's
Liberation Army is changing from a mass army, designed for
protracted wars of attrition on its own territory, to one
developed for winning short-duration, high-intensity conflicts
on its periphery against high-tech adversaries. Weapons and
material to support this are being procured from both foreign
sources and an increasingly capable industrial and technical
base.
Organizational and doctrinal changes are also evident, as
are disruptive technologies designed for anti-acess in aerial
denial, nuclear space, and cyberspace arenas.
Modernization and expansion of military capabilities across
the Taiwan Strait continues, with the addition of more
missiles, enhanced air, surface, and undersea capabilities.
Over the past several years, China developed and articulated
roles and missions for the PLA that go beyond immediate
territorial interest.
We will continue to use military engagement with the PRC to
demonstrate U.S. commitment to the Asia-Pacific region and act
as a partner in addressing common security challenges. We will
maintain and enhance our presence and alliances in Asia and
clearly demonstrate U.S. resolve. Our interests lie, as they
have for the decades of Asia's rise, in constructive engagement
with China, combined with a strong network of alliances and
partnerships throughout the region.
Thank you and I appreciate the opportunity to be here, and
I look forward to your questions.
The Chairman. Thank you Mr. Secretary.
[The prepared statement of Secretary Gregson can be found
in the Appendix on page 58.]
The Chairman. Secretary Shear.
STATEMENT OF DAVID B. SHEAR, DEPUTY ASSISTANT SECRETARY FOR
EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF STATE
Mr. Shear. Thank you, Mr. Chairman, Mr. McKeon. I
appreciate the opportunity to appear before you today. My
colleagues from the Department of Defense have already
addressed our military-to-military relations with China, so my
remarks will focus on the President's November trip to Asia as
well as our broader security goals regarding China and the
region.
Since coming to office, President Obama has repeatedly
stated that the United States welcomes the emergence of China,
and that in an interconnected world power does not need to be a
zero-sum gain. We welcome an international world for China in
which its growing economy is joined by growing responsibility.
And I would reiterate our desire that as the Chinese economy
grows, they become a responsible member of the international
community.
President Obama's trip to Asia in November 2009, with stops
in Japan, Singapore, China, and South Korea, was intended to
demonstrate the U.S. commitment to the region, build trust,
articulate our values on issues such as human rights, and
strengthen and expand our cooperation with China. The trip was
productive in this regard.
During his first-ever visit to China, the President
deepened his acquaintance with his Chinese counterparts and
demonstrated to them the importance we place on cooperating on
such issues as Iran, North Korea, and Afghanistan. The
President set the stage for further cooperation with China in
preparation for the Copenhagen conference on climate change. He
discussed exchange rates in trade, clean energy, military-to-
military exchanges, human rights, and stopping the spread of
nuclear weapons. We outlined the key accomplishments of the
visit in a joint statement issued by President Obama and
President Hu Jintao on November 17th.
It has been said before that in order to get China right,
you have to get the region right. The United States is a vital
contributor to Asian security and economic prosperity. Our
active presence in Asia helps promote regional security and
stability. We intend to deepen our engagement and strengthen
our leadership in the region by strengthening our complements
to allies and partners and enhancing our involvement in
regional institutions. And the Secretary addressed these issues
as well as our presence in the region in an important speech in
Honolulu yesterday.
The President's trip to China and the region demonstrated
the importance we place on East Asia, which remains vital to
U.S. security and prosperity. In the November joint statement,
the Chinese recognized the positive role the United States
plays in East Asia by stating that China welcomes the United
States as an Asia-Pacific nation that contributes to peace,
stability, and prosperity in the region.
The trip was also a continuation of our efforts to build a
positive, cooperative, and comprehensive relationship between
the United States and China. As President Obama has said, the
ability of the United States and China to partner with each
other is a prerequisite for progress on some of the most
important issues of our times. Those issues include several
important security challenges. Issues such as North Korea and
Iran cannot be successfully addressed without intensive and
sustained involvement by China. To date we have been encouraged
by China's willingness to cooperate with these areas, although
there is a lot of work to be done.
We obviously do not see eye to eye with the Chinese on
every issue. For example, on Taiwan, the United States remains
committed to our one-China policy based on the three joint
communiques and the Taiwan Relations Act (TRA). We believe that
this policy has contributed greatly to the peace and stability
of the past several decades, and we remain committed to that
framework. We welcome the improvement in cross-Strait relations
over the past year. At the same time we have voiced our
concerns about China's rapid military modernization program as
it relates to Taiwan.
China's continued military buildup across the Taiwan
Strait, despite improvements in cross-Strait relations, raises
many questions about Beijing's commitment to a peaceful
solution to the cross-Strait issue.
Similarly, the United States and China have differences on
the issue of human rights. The promotion of human rights
remains an essential element of American foreign policy. As the
President has said, it is a part of who we are as a people.
President Obama has stated that the rise of a strong prosperous
China can be a source of strength for the community of nations.
This summer, we will hold another meeting of the U.S.-China
Strategic and Economic Dialogue that we initiated last July. We
will use this and other forms to continue building our
relationship with China and to seek pragmatic cooperation on
issues of mutual concern. At the same time, we will remain
engaged and active throughout the region, supporting our allies
and expanding our leadership in this vitally important part of
the world.
Thank you for the opportunity to make these remarks, sir.
And, Mr. Chairman, if you don't mind, I would like to say a
little something on the subject of Google. As you all may know,
Google made a statement yesterday about a cyber attack on its
facilities allegedly originating from China. And Secretary
Clinton made a strong statement on this yesterday, which I
would like to repeat for you all. She said: We have been
briefed by Google on these allegations which raise very serious
concerns and questions. We look to the Chinese Government for
an explanation. The ability to operate with confidence in
cyberspace is critical in a modern society and economy.
The Secretary also said that she will be giving an address
next week on the centrality of Internet freedom in the 21st
century, and we will have further comment on this matter as the
facts become clear. The Secretary will deliver a speech on
Internet freedom next Thursday that was scheduled before
Google's announcement. She has been very engaged on the issue
of Internet freedom and anticipated the need to stake out clear
policy ground on this subject.
The Secretary had dinner with ten executives of leading
high-tech companies last week and discussed Internet freedom
during that dinner. She has been actively listening and
learning from those assembled executives, including Google's
Chief Executive Officer (CEO) Schmidt . She takes this issue
very, very seriously. And we have been in touch with Google
subsequent to their contact with Secretary Clinton, and we have
been in contact with all of the agencies dealing with cyber
security on this issue, and we will be happy to remain in touch
with you on this subject.
The Chairman. Thank you very much Secretary Shear.
[The prepared statement of Mr. Shear can be found in the
Appendix on page 74.]
The Chairman. A question to Admiral Willard and Secretary
Gregson. What is the major security challenge our country has
with China? And to Secretary Shear, what is the major
nonsecurity challenge we have with China? Admiral.
Admiral Willard. Chairman Skelton, I think the major
security challenge is the level of uncertainty that exists in
attempting to reconcile the public statements that China makes
regarding its long-term intent, which is generally that it
characterizes its military capabilities and capacities as
defensive only and seeks a peaceful and harmonious environment
in which to grow its economy and prosper, with a military
capability that is not necessarily consistent with that
characterization of the future in that the power projection
capabilities, the capabilities' capacities, both in asymmetric
areas and conventional areas, tend to exceed that description.
That ambiguity that currently exists and our attempts to
reconcile that are the security issue that we hope to tackle in
a military-to-military dialogue with our PRC counterparts.
The Chairman. Secretary Gregson.
Secretary Gregson. I would only add to the Admiral's
remarks that we remain particularly concerned about their
ongoing developments in the nuclear arena, cyberspace--as
Secretary Shear eloquently discussed--and space capabilities.
Their development in the air and maritime realms also fit in
there, but particularly nuclear, cyberspace, and space
capabilities constitute a potential asymmetrical threat to our
ways of doing business. We watch all this very carefully.
The Chairman. Thank you. Secretary Shear.
Mr. Shear. Let me discuss the major nonsecurity challenges
by sharing with you our priorities for our nonsecurity
relationship with China. The number one priority is
coordinating with China on the global financial crisis.
Economic recovery is President Obama's number one priority. And
economic recovery and how we coordinate with the Chinese on
this subject is the number one issue on our agenda with the
Chinese.
We want the Chinese to rebalance their economy as we
rebalance ours. The Chinese people will need to save less and
consume more. We would like to see the Chinese economy shift
away from its emphasis on heavy industry export-oriented
industry. We seek the Chinese pursuit of a market-oriented
flexible exchange rate. All of these issues came up in the
President's meetings in Beijing with its Chinese counterparts.
A second priority is cooperation with China on
international security issues such as Iran and North Korea.
And the third priority is coordination with the Chinese on
the subject of climate change. And I think on climate change,
we achieved some progress both with the Chinese and the
international community in the context of the Copenhagen
conference several weeks ago.
The Chairman. Mr. McKeon.
Mr. McKeon. Thank you, Mr. Chairman. In my opening
statement, I highlighted some of the concerns when it comes to
our policy approach toward China. From what I can gather from
last year's annual report to Congress, you share some of the
same concerns regarding China: a shift in strategic priorities
and behavior, especially as it expands its need for access to
more markets and natural resources; expanding and improving
disruptive military technologies in areas such as space and
cyber space; a lack of transparency when it comes to military
budget intentions and decision-making; and its increasing
leverage in the region and around the world.
Gentlemen, what precisely is the President's China policy,
how is it different from his predecessor, and how will it seek
to address these shared concerns? I want to start with you,
Admiral.
Admiral Willard. Thank you sir. I think from the military
standpoint, our approach to China is very much two-fold. It is
first and foremost to seek to grow a relationship with China
that encourages their constructive contributions to the
security issues in the Asia-Pacific region. It is the purpose
behind a military-to-military dialogue. It is the reason for
our emphasis to the Chinese on the need for continuity, some
constancy. In terms of that dialogue, we think that it is
lagging behind the other engagements between our Nation and the
People's Republic of China.
Secondarily, on the issue of the ambiguities that currently
exist, the inconsistencies that we deal with in the Asia-
Pacific region, we bear the responsibility to ensure our
forward presence and the readiness of our forces in the region,
to assure our allies and partners in the region and to continue
to grow those relationships, as Secretary Gregson described in
his opening comments, so as to maintain a security in the
region that we have frankly been responsible for, for the past
150 years.
So we will maintain our presence in the region as robustly
as we have in the past as we continue to engage the Chinese in
dialogue, and hopefully foster an improved relationship and get
to some of the ambiguities that have been discussed thus far
this morning.
Mr. McKeon. Thank you. Secretary Gregson.
Secretary Gregson. In the President's words stated to the
Chinese at the Security and Economic Dialogue as well as in
Beijing, we seek a positive cooperative and comprehensive
relationship with China. Secretary Gates' interpretation or his
characterization of our policy is that China is not a strategic
adversary; it is a partner in some respects, but a competitor
in others.
Our Defense Strategy released in 2008 states, as you
mentioned, a Chinese potential for competing with the United
States. And that U.S. interaction will have to be long-term,
multi-dimensional, and involve peacetime engagement between our
defense establishments as much as it involves field and
military capabilities. It is impossible to separate our
engagement with China from our engagement with the region. Our
consistent and increased engagement with the region are
enhancements of our alliances and partnerships there, not only
in the East Asian region but increasingly through the Indian
Ocean area, will be essential to us shaping the environment
that will allow us to also shape or develop cooperative
comprehensive relationships with the Chinese.
Mr. McKeon. Secretary Shear.
Mr. Shear. In order to build a positive, cooperative, and
comprehensive relationship, we are engaging with the Chinese to
seek out common interests and devise ways of pursuing those
common interests together. This is not an easy task. It can be
very challenging. While we share common interests, our
interests are not always identical. And our bilateral
relationship with China, our approach to the region as a whole,
as well as to maintaining our military strength in the region,
are all part of a comprehensive approach to developing a
relationship with China.
Mr. McKeon. Thank you.
China, they are shifting away from labor-intensive
relations and they are moving toward increasing production of
high-technology goods. They have matured as a manufacturer and
assembler of advanced technology products. They have created an
attractive environment for foreign companies to make
investments with increased subsidies, tax incentives, and
preferential loans.
At the same time, we are hearing concerns from industry
that defense policy changes emerging from the QDR, coupled with
recent anticipated cuts in DOD spending, will force U.S.
industry to divest itself of certain capabilities, reduce our
production lines, and inhibit innovation.
Gentlemen, as the President develops his China policy, to
what extent does U.S. industrial policy enter into his
decisionmaking?
I am concerned about our workforce. Do you share my concern
that the United States industrial base may be unable to sustain
the technological innovation that has been the hallmark of U.S.
military, given the current physical environment? And can you
provide specific examples of how the President's China policy
seeks to address China's unfair trade policies and ensure that
the U.S. military continues to have access to the manufacturing
capacity, technological capacity, and strategic materials
necessary to equip our warfighters in the future?
Mr. Shear. If I may start, Congressman, with regard to
China's unfair trade practices. We have a multipronged approach
towards trade with China that includes pursuing cases in the
World Trade Organization (WTO) on Chinese unfair trade
practices. And we achieved several successes last year in this
regard, particularly with the protection of intellectual
property rights. We are also enforcing our laws and regulations
on trade, and the President's decision on the 421 case on tires
is a case in point.
Again, we are also vigorously pursuing the Chinese on the
enforcement of intellectual property rights. Overall, as we
pursue economic recovery, I think attention to our
technological capabilities will be central to the
Administration's approach to both the economy as a whole and to
our economic relationship with China.
Mr. McKeon. Admiral.
Admiral Willard. Representative McKeon, while trade is not
in my lane, certainly the industrial base and the production of
our military capacities is. And I would only offer that the
work that you do as a committee to help to strengthen the
United States industrial base on behalf of its military, the
attention that you pay that--and I know that Secretary Gates'
emphasis on doing what we can to strengthen the U.S. industrial
base in support of our Armed Forces is of critical importance.
And I would offer, one, my thanks to you for our efforts in
this particular area, and again offer my emphasis on the
criticality of an industrial base that can support this
military not in the near term, but in the long term.
Mr. McKeon. Thank you very much.
Secretary Gregson. Mr. McKeon, it is clear that China is
developing an increasingly capable technical and industrial
base. It is also clear that they are able to procure certain
items of foreign military goods and technology and reverse-
engineer it to suit their needs.
At the same time, industrial espionage is not unknown. Our
intelligence agencies and our technology control agencies
exercise as vigorous a control as possible to ensure that we
not only prohibit unauthorized American transfers of
technologies to China, but also that our other partners around
the world obey our tech control restrictions.
Behind the industrial base, of course, is also the American
educational base. And I think that we need to make sure that
that base, the colleges and universities, the quality of the
graduates that we are producing, is maintained. We have the
advantage of qualified students from all over the world that
want to come to the United States to go to our schools, and we
are enriched by that process, as is our entire educational and
then on into the industrial and technical base. We need to make
sure we maintain that as a priority so that we can meet the
goal that you set out that we maintain our advantages.
Mr. McKeon. Thank you very much, Mr. Chairman.
The Chairman. I thank the gentleman. Dr. Snyder.
Dr. Snyder. Thank you, Mr. Chairman. I appreciate you all
being here.
Secretary Gregson, it is hard to believe it has been about
40 years since your Vietnam days. We appreciate your service
there as a marine, a young marine in Vietnam.
Mr. Shear, I am going to direct my questions to you just
because of our limitations on time, but Admiral and Secretary,
feel free to join in if you want to augment what Mr. Shear has
to say. Mr. Shear, what do you see, what does the Chinese
Government perceive as their greatest existential threat?
Mr. Shear. I think Chinese security goals--the Chinese
pursue a variety of security goals. I think the number one goal
is the preservation of the Chinese Communist Party (CCP). I
think the Chinese Communist Party is very concerned about the
prospects for social stability in China. I think they spend a
lot of time and resources trying to ensure that the vast social
and economic changes they are undergoing do not shake their
rule of China.
Dr. Snyder. So as the Chinese Government is sitting there
looking ahead, they see their greatest existential threat not
the United States, not Taiwan, not the Japanese or any other
foreign entity, they see their greatest existential threat as
being something happening internally. Is that a fair summary of
what you said?
Mr. Shear. Yes. I think the Chinese pay a lot of attention
to internal security and internal social stability, and that is
a number one goal for them.
Dr. Snyder. Would you--I forget the length of time it has
been since we had that devastating earthquake in China that I
think caught the world's attention probably longer than some of
these tragedies do because of what happened to the school
buildings. And I was surprised by the level of cracking down
the Chinese Government exerted on parents trying to find out
what happened.
As you look back at that, how do you analyze what occurred
with regard to the internal discussions, internal
investigations, that occurred around the destruction of the
school houses?
Mr. Shear. I agree, the destruction of the school houses,
the loss of lives, as well as the overall destruction in
Sichuan province was very tragic. We did everything we could to
help the Chinese recover from that.
Dr. Snyder. I am interested in stifling the investigation
internally about what occurred, the building codes at school
buildings.
Mr. Shear. My belief is that the Chinese Government has
conducted an investigation and that that they have concluded
that they need to improve building codes. They have not been
particularly transparent in the extent to which they have
conducted this investigation. They have, as you say, repressed
dissent on this subject. It was very interesting watching the
Chinese public's reaction to the earthquake, however. There was
a great deal of spontaneous interaction on the Internet;
voluntary groups arose spontaneously through communication on
the Internet, and a lot of Chinese simply up and volunteered to
go to Sichuan to help things out. So you have a very
complicated situation.
Dr. Snyder. Going back to what you said about the number
one threat they perceive as internal stability, if you
aggressively repress and stifle the efforts of parents to find
out why their children died because of bad local government
policies in terms of approval of building codes, isn't that an
indication of evidence for your first statement? I mean, I
don't know how to look at it other than they were apprehensive
that somehow a local effort to figure out what happened with
local building codes could turn into some kind of a national
movement. Because if there were bad policies in those school
buildings, I suspect it could have occurred anywhere. Is that a
fair analysis?
Mr. Shear. I agree.
Dr. Snyder. I want to ask, too, you are a linguist and have
lengthy State Department experience, where are we with regard
to the development of Chinese languages skills amongst our
folks here that aspire to be both part of the military, part of
Admiral Willard's group, but also State Department? Where are
we at with regard to Chinese language skills?
Mr. Shear. The State Department itself has an extensive
language product conducted both in Washington, in Taipei, and
in Beijing. I myself was one of the first--was the first
foreign service officer (FSO) to study Chinese in mainland
China after 1949. I went to the Johns Hopkins Center in
Nanjing.
Dr. Snyder. The fact that we have an aggressive State
Department program is an indication that we don't have language
skills within the American public at large. Where do you see
that in terms of as we move ahead?
Mr. Shear. I agree that we need more Chinese language
skills developed within the American public at large. We have
seen great growth in Chinese language teaching in high schools
and at the university level. And in this regard the President
announced a very strong initiative during his trip to increase
the number of American students in China to 100,000 over the
next 4 years, and we will be working to implement that in the
coming weeks and months.
Dr. Snyder. Thank you all for your service.
The Chairman. I thank the gentleman. Mr. Bartlett.
Mr. Bartlett. Relevant to Dr. Snyder's question, I would
like to suggest that China has two concerns that largely
illuminate their very aggressive military buildup. The first is
Taiwan, a tiny island the size of Maryland, three-fourths of
which is truly uninhabitable, 20-some million people, versus a
homeland of 1,300,000,000 people. Why the big concern? I think
they see if Taiwan can declare its independence, so can a lot
of other regions, like Tibet, for instance, and they see their
empire unraveling if Taiwan can do this.
So I hope that we can resolve this concern diplomatically
because I think China will do anything necessary militarily to
keep Taiwan from declaring its independence.
The second major concern they have--and, Admiral, you
mentioned that in the eighth page of your prepared testimony--
energy. I led a congressional delegation (CODEL) of nine
Members to China three years ago to talk about energy, and they
began their discussion of energy by talking about post-oil.
We in the Congress have a lot of trouble seeing beyond the
next election, and our business community is primarily focused
on the next quarterly report. The Chinese are looking ahead
decades and generations, and there will indeed be a post-oil
world. The Chinese are now aggressively buying up oil all over
the world and buying goodwill.
And, Mr. Secretary, I ask the State Department, why would
they buy up oil when in today's world it makes no difference
who owns oil? Who comes to that, what is in effect a global
auction, with the dollars buys the oil. So who owns the oil
makes no difference. They told me the Chinese were buying oil
because they didn't understand the marketplace. I think they
understand the marketplace very well. And I think that in the
future, the Chinese will tell us, ``Gee, guys, I am sorry, but
we own the oil and we cannot share it with the world.''
To make that a reality they have to have a blue water navy
big enough spread globally across the world far enough to
protect all of the sea lanes for the passage of this oil. To
the extent that we continue to use a fourth of the world's oil,
that we have done nothing to reduce our demand for foreign oil,
I think we hasten the day that the Chinese will tell us we are
not going to share our oil with the world.
What should be our policy relative to energy, because I
think it is an overarching issue. Oil is now $80 a barrel. The
world will never ever again have sustained good times until we
do something meaningful about alternative energy. And so far,
we the world and we the United States have done nothing
meaningful about aggressive conservation or alternative energy.
What ought we be doing to avoid this real potential threat from
the Chinese to deny us access to oil because they own it?
Mr. Shear. Congressman, we are pursuing intensive dialogue
with the Chinese on the subject of energy security, in which we
have raised our concerns about Chinese efforts to lock up oil
reserves with long-term contracts, and will continue to engage
them on this subject at very senior levels.
Mr. Bartlett. But, sir, engaging them on the subject is
quite irrelevant. As long as we continue to be largely
dependent and increasingly dependent on foreign oil, we have no
meaningful program of conservation or development of
alternative energy to wean us from oil. Oil is an incredible
energy source. The quantity and quality of energy and oil is
unmatched anywhere in liquid fuels. And to the extent that this
1 person in 22 uses a fourth of the world's oil, to the extent
that this continues, do we not make inevitable this
confrontation with China over energy?
Mr. Shear. We share your concerns on this subject,
Congressman, and our energy security dialogue with the Chinese
is aimed at avoiding conflict over the search for oil.
Mr. Bartlett. I would like to see shared concerns matched
by some meaningful leadership action. Sir, I just don't see
that. Do you see it?
Mr. Shear. We have worked with the Chinese to increase
their cooperation with the International Atomic Energy Agency
(IAEA). We have seen some progress there. The Chinese are
building an oil reserve, an emergency oil reserve, which we
welcome. We are going to keep pursuing this issue with the
Chinese.
Mr. Bartlett. Thank you.
To China envisioning a post-oil world, I think we in no way
believe that there will be a post-oil world. I would suggest
that we ought to confer more with the Chinese so that
collectively we do not precipitate huge international crises
over energy. Thank you.
The Chairman. I thank the gentleman.
Mrs. Davis.
Mrs. Davis. Thank you, Mr. Chairman.
Thank you to all of you and thank you for your service as
well.
If I could follow up on my colleague's question, I guess,
how would you characterize China's energy dependency as
influencing its defense policy? Would you say that to a great
extent, or if you would like to characterize that for us? And
how has it used the sale of military technologies to secure
energy deals? Is that, again, a large part of their policy, or
to a greater, less extent, and what should we be doing about
that?
Mr. Shear. I will defer to my Defense Department colleagues
on this subject.
Secretary Gregson. Thank you.
We see China increasingly developing the ability to get, to
move beyond concerns of territorial defense and moving around
the world in large part to protect their access to energy
sources and to protect the lines of communication. It would
suggest it drives not only defense policy for China to an
extent, but it also drives a lot of their foreign policy.
We tend to focus on the development of the Chinese navy,
thinking of the lines of communication from the Persian Gulf.
Saudi Arabia is their biggest supplier of oil. Angola is the
second. But there is also, the Chinese are also concerned with
energy extraction, mineral extraction in Central Asia and other
areas, so it is a definite driver of their policy.
Sale of military technology is a concern, particularly to
states that are of keen interest to us, such as Sudan and
others, where arms deals have been negotiated and executed. One
can derive a conclusion that if they are importing oil from
there, that there is a connection between the arms deals.
Nevertheless, while we suspect a connection, we are concerned
about Sudan. And any arms transfers to Sudan, of course, are of
concern. Yes, we see that, too.
Mrs. Davis. In our discussions, and I might turn to Admiral
Willard in terms of the transparency and the relationships, the
military relationships. In that regard, in terms of energy, is
that an issue that has some transparency in discussion, or
would you say, again, that that is of great concern to us but
one that we are not able to impact greatly?
Admiral Willard. I think the Chinese have actually been
quite vocal regarding their concerns over their sea lines of
communication (SLOCs) in particular, as it relates to the
movement of all their commerce, to include their trade but as
well energy and other natural resources.
They refer to, in particular, the Malacca problem, which is
their choke point, all of our choke point, at the Strait of
Malacca, and the strategic value of that Strait and the
importance of protecting and securing those sea lines to
include the various choke points that exist between the sources
of those natural resources and commerce and China itself.
Secretary Gregson, I think, said it well. The expansion in
their naval capacity and their Air Forces certainly has a
dimension to it that has to do with securing their regional
commercial interests. How far that will extend beyond the Asia-
Pacific region, the South China region, and East China Sea into
the Indian Ocean region remains to be seen. But they are
demonstrating the capability to operate at longer ranges by
virtue of their assistance to the international counter-piracy
issue in Gulf of Aden now and their ability to sustain their
operations there.
Mrs. Davis. Secretary Shear, would you say that in the
development of our relationships, then, and that we are working
with that in a more cooperative way or, again, not having quite
the ability to have that at a level of discussion that we are
seeking, and what are we doing about that?
Mr. Shear. At the same time, we are discussing with the
Chinese energy security and regional security issues. At the
same time, we are seeking more transparency from the Chinese in
their defense and security policies.
We are also strengthening our relationships throughout the
region, particularly in Southeast Asia. Secretary Clinton has
visited Southeast Asia three times last year. She is in the
region again as we speak. And remaining in contact with our
friends and allies throughout the region, particularly in
Southeast Asia, will play an important role in our addressing
this.
Secretary Gregson. If I may touch very briefly on one
aspect of your question about transparency, it is not strictly
a defense equity, but there is active engagement in the
scientific and educational communities on development of
renewable energy between China and the United States. Usually
it occurs in conferences and efforts under the cognizance of
the Department of Energy (DOE) or the Department of Interior
(DOI). So that is one encouraging sign that there is some
thought to life beyond oil.
Mrs. Davis. Thank you.
The Chairman. I thank the gentlelady.
The gentleman from Virginia, Mr. Forbes.
Mr. Forbes. Thank you, Mr. Chairman.
Mr. Chairman, I want to begin by thanking you for not just
this hearing but for asking a lot of tough questions about
China and the United States' relationships before many Members
of Congress did that. I appreciate your leadership on that.
Also, Admiral, thank you so much for your service and for
your wife's service. I know that is a partnership team.
For all of your staff, I know the heavy work that they have
to do just to come to a hearing like this.
Mr. Secretary, this year we appreciate so much all of you
being here.
I am going to try to ask my questions so that they can have
short and succinct answers, not because I want to cut you off,
because I would love for you to extrapolate any way you want in
the record; just because I only have five minutes, and this
microphone goes dead.
But, Admiral, I looked at your testimony, and as I read
that testimony, China currently has 290 ships in their navy. Am
I accurate in that assessment?
Admiral Willard. Roughly, yes, sir.
Mr. Forbes. Roughly. That number doesn't exist in a vacuum.
Isn't it significant that we try to extrapolate or actually get
some idea of what their shipbuilding plan actually is so we
know how many ships they are going to be building over the next
several months if we want to try to project our strength
against theirs?
Admiral Willard. Of course.
Mr. Forbes. Is that a significant component to our
evaluation?
Admiral Willard. It is part of a broad evaluation of
China's future.
Mr. Forbes. If we look, according to the 2009 Military
Power of People's Republic of China Report to Congress produced
by the Pentagon just a few months ago, the estimate was that
they had 260 ships; is that correct?
Admiral Willard. I would have to go back and seek that
number.
Mr. Forbes. Let me just tell you, for the record, it was,
so we missed it by about 30 ships. How many ships do we
currently have, roughly, in our Navy now?
Admiral Willard. In the Pacific Command, I have access to
about 180 ships.
Mr. Forbes. Overall in the Navy, any idea?
Admiral Willard. About 283.
Mr. Forbes. We have 283. According to the report that was
given us a few months ago, they had 260 ships. Again, just as
one component, fewer ships than we did. According to your
testimony, they have 290. That is more ships than we do.
Again, I know that is just one component to look at, but it
shows the importance, I think, and the significance of having
some idea of what kind of shipbuilding plan they are
undertaking so we know whether that 260 ships were accurate or
the 290 ships were accurate.
Mr. Secretary, I would like to ask you if the United States
currently has a shipbuilding plan, not whether it is being
modified, not whether you like it, not to even ask you to tell
me what it is, but do we currently have a shipbuilding plan for
the United States of America as you know it from the Department
of Defense?
Secretary Gregson. There is a plan, as delineated in the
program and in the President's budget, yes.
Mr. Forbes. So it exists?
Secretary Gregson. Yes, sir.
Mr. Forbes. Now, are you aware that, by law, the Department
of Defense was supposed to give the United States Congress that
shipbuilding plan when they submitted the budget, so that we
would know and could make the same kind of comparisons that the
Admiral talked about were significant in knowing about the
ships that the Chinese had, that we were supposed to have that
by law submitted to us at the time the budget was submitted?
Secretary Gregson. It is not our intention to ever ignore
any requirements from Congress.
Mr. Forbes. Just asking you whether you knew that that was
the law or not?
Secretary Gregson. No, I did not.
Mr. Forbes. The question I would ask you, Mr. Secretary, if
you could supply for the record at some particular point, if
that shipbuilding plan existed, I would just submit to you,
one, the law required that we get a copy so we could make that
same kind of comparison.
Secondly, this committee unanimously had a congressional
inquiry demanding that you comply with the law, the Department
of Defense, and give it to us. To date, we still haven't had
it. I would just ask you to submit to the record for us the
legal justification of why you refused or the Department of
Defense refused to give the United States Congress their
shipbuilding plan.
Then I would also ask you if you want to submit for the
record, because I won't have time to have you in my minute and
15 left, how we can legitimately talk about a lack of
transparency with China when we won't submit our own
shipbuilding plan to the United States Congress?
Mr. Shear, I would just ask you, again, shortly for your
testimony, if you could submit to us for the record, I was
excited to hear about the victories that we have had in wins
with intellectual property rights and the economy with China,
and we want to get those publicized because I don't hear them,
you know, anywhere that I look or study.
If you would submit a list of those victories that we have
had this year for the record, both with intellectual property
rights and the Chinese economically for the record, we would
love to have them so we can talk about them and get them out.
[The information referred to can be found in the Appendix
beginning on page 83.]
Mr. Forbes. With that, gentlemen, thank you so much for
your service and for being here.
Mr. Chairman, I yield back.
The Chairman. Thank you very much.
Admiral, I might point out that one of those most memorable
congressional moments was when, along with Mr. Forbes, we
planted the tree at Kunming in memory of the American fliers
who flew the hump and those who were part of the Flying Tigers
during the Second World War. I certainly hope that you will be
able to revisit that place for us and give us an update on the
tree that we planted.
Admiral Willard. I will do that.
The Chairman. Mr. Marshall.
Mr. Marshall. Thank you, Mr. Chairman.
I would like to yield my time to the chairman of the
Seapower Subcommittee, the gentleman from Mississippi, Mr.
Taylor.
Mr. Taylor. Thank you, Mr. Chairman.
Thank you, Mr. Marshall.
Admiral, you know, in my life, I never guessed as a kid we
would be at war in Panama or Afghanistan or Bosnia. You know,
we always thought it would be the war against the Russians, and
thank goodness that did not happen.
With that in mind, the things we don't expect to happen
often do happen. One scenario that concerns me is that, you
know, our carriers can go about 15 years from here to there on
the fuel that is built into that vessel. But the vessels that
defend those carriers have to refuel every three to five days.
A logical assumption is that the weak link, then, in our
carrier task force is the oiler that supplies that destroyer or
cruiser that protects the carrier. If I am a potential enemy of
the United States, I am not going to hit us where we are
strong; I am going to hit us where we are weak. It is my
understanding that we have a limited number of oilers in the
Pacific, somewhere between 8 and 12.
And so the logical question would be, you know, since our
enemies have been pretty good at finding our weaknesses and
exploiting them, and thus the improved explosive device (IED)
in Iraq, what steps is the Navy taking should some scenario
develop in the Pacific where a potential enemy's first step is
to take out those 8 or 12 oilers? Does the fleet then fail to
sail? Because one of the things really that Congressman
Bartlett impressed on me is our need for energy independence in
the long term.
One of the ways that we can achieve that, as we know, is
with nuclear-powered surface combatants. Each one of those can
save about ten million gallons of fuel per ship per year, plus
you don't need that oiler. You lose that weak link.
Now, Congress has passed language that says our next
generation of surface combatants is going to be nuclear-
powered. We have passed legislation that says the next
generation of large-deck amphibs is going to be nuclear power.
But what I don't see is the Navy taking any steps to
implement that. That is one thing.
The second thing is, in the short-term, if you have only
got 8 or 12 of this thing that is vital, what steps does the
Navy have as a backup should a clever foe decide that round one
is to take out the oilers? What is your backup plan, and what
are we doing in the short-term to increase those numbers so
that that worst-case scenario doesn't happen?
Admiral Willard. Thank you, Representative Taylor.
I think you bring up some provocative issues, and that is
how we handle some of the tactical level risks to our force
complement when we conduct major-scale operations. And
certainly the protection of our tanking assets at sea is a
major factor in our planning and in the way in which we attempt
to mitigate potential vulnerabilities.
I think, to your point regarding nuclear power, we gain
great flexibilities with our aircraft carriers and our
submarines being nuclear-powered. As you suggest, our surface
ships do rely on refueling. I would offer that we refuel at
sea. We also refuel in port. When we are operating in the
western Pacific, the approach is to complete both of those.
We also have the capability, though it is exercised rather
rarely, to refuel our surface ships from our carriers
themselves. Our big deck ships have the opportunity to conduct
refueling of our smaller escort ships.
Between protection operations around them and the various
ways in which we can take advantage of geography and the force
complement to conduct refueling, we manage this problem, and
our naval commanders are tasked with planning around it and
managing it very carefully.
I take your point that refueling of our ships is keenly an
area that we have to focus on, and the adequacy of our tanker
fleet to be able to ensure that we have the freedom of actions
that we require in our operations is very important.
Mr. Taylor. Admiral, if I may, the chairman is going to
gavel this thing in 20 seconds. I have laid out my concerns.
Would you have someone from your office, at your convenience
but hopefully in the very near future, come visit with me with
a more detailed and in-depth answer than you are able to give
in public?
Admiral Willard. Be happy to. Thank you.
Mr. Taylor. Thank you, sir.
The Chairman. Thank you.
The gentleman from Minnesota Mr. Kline.
Mr. Kline. Thank you, Mr. Chairman.
Thank you, gentlemen, for your service and for being here
today.
It seems like forever that we have been concerned with,
worrying about China's role in a couple of places. I would like
for you to touch on briefly some of which you already have. One
is, of course, when General Gregson and I were lieutenants, we
were worried about Taiwan, the Straits and China and what
China's actions may be. And in that case, we were probably
mostly worried about what the Taiwanese government might do
that might precipitate military action on the part of China.
It seems we are sitting here today, and we still have some
of those concerns. President Ma in Taiwan and some new folks
there may have changed some of that dynamic, and I would be
interested in your discussing where you think we are and what
the level, if you will, of tension is now in China-Taiwan
relations.
Then the other one that never goes away and we have been
discussing in our lifetime, we have had U.S. forces in Korea
since before Mr. Gregson and I were lieutenants and certainly
before you were an ensign, Admiral. And we still have troops
there. And the question here is China's role in being able to
influence actions in North Korea, particularly with their
nuclear and missile activities.
We have 3 minutes and 22 seconds. If any of you or all of
you can address both of those and how you see China, where
China is now in both of those issues, relationship with Taiwan,
the potential for military action there and how China is doing
in helping us get back to the Six-Party Talks, and what is
going on in North Korea?
Secretary Gregson. Thank you for those questions. I will go
very quickly, so my colleagues can jump in.
Since the election of President Ma Ying-jeou, Taiwan and
China have undertaken a series of reciprocal actions that we
find very favorable. Direct flights, visitations to offshore
islands, business ties, all the sinews of normal peace-time
engagement that we think contributes to a decrease in tension
and operates in support of our objective of a peaceful
settlement of issues across the Taiwan Strait.
It has been mentioned more than a few times before, we
remained concern about the buildup of PRC military capabilities
across the Strait. We watch very carefully not only the amount
of that buildup but the types of systems that they are
developing to make sure that we maintain the ability to fulfill
our obligations under the Taiwan Relations Act (TRA).
On North Korea, we are encouraged by China's support of
United Nations (U.N.) Security Council Resolution 1874, very
important to prevent North Korea from profiting from their
nuclear-related technology, their missile-related technology.
It is very important to keep North Korea from exporting any
type of weapon systems that are prohibited under 1874.
China's support is essential to maintain an international
consensus to keep 1874 a viable resolution, and we are very
positively encouraged, as I said, about their development on
that.
In the meantime, we continue to ask China to exert their
influence to work on their neighbor to convince them of the
wisdom of complete, verifiable and irreversible
denuclearization, which remains our goal with North Korea.
Mr. Kline. And are you getting a good response from the
Chinese in that effort? I mean, that is what we are getting
down to. We have said for a long time that we cannot have
success with the denuclearization and the demilitarization or
missilization, I guess, if that is a word, of North Korea
without China's active participation because of the enormous
influence that China has with North Korea.
Are we seeing that influence, or is it sort of quiet now?
Secretary Gregson. We are seeing influence. We would like
to see more influence for our part. We have made it quite clear
that we intend to fulfill all of our obligations to our allies
and that we will, to the extent that we are not successful in
achieving complete, verifiable, and irreversible
denuclearization in North Korea, we will enhance those
alliances, and we will enhance our ability to enforce our
alliance obligations, and that that is a condition that
contributes as much to instability in Northeast Asia as any
other scenario that China could be worried about.
Mr. Kline. Thank you.
I see my time has expired, so I will yield back the two
seconds.
Thank you, Mr. Chairman.
The Chairman. I thank the gentleman. The gentleman from
Washington, Mr. Larsen.
Mr. Larsen. Thank you, Mr. Chairman.
Gentlemen, thank you for coming today.
Secretary Gregson, with regard to Monday's missile test,
how would you characterize the notification China gave to the
international community compared to what the U.S. does when we
conduct a missile test or even when Russia conducts a missile
test?
Secretary Gregson. I am not aware that we received any
notification until after the test.
Mr. Larsen. How would that differ, then, how would that
differ largely with a ballistic missile test process that the
U.S. undertakes or that Russia undertakes? Do we provide
notification?
Secretary Gregson. Traditionally, through notice to
mariners, notice to airmen, closure areas, various things, yes.
Mr. Larsen. So there was no indication at all or, not
indication; there was no communication with the international
community about the missile test and its reasons and so on, at
least as far as we know from China?
Secretary Gregson. I am looking at my colleagues. I am
personally not aware of any.
Mr. Larsen. Secretary Shear, do you have any thought on
that?
Mr. Shear. We are not aware of any prior notification of
the test. We have spoken with the Chinese since the test. We
have asked them for more information. We have asked them to be
more transparent with regard to this test and their testing in
general.
The Chinese have only responded so far that this particular
test was defensive in nature. It was not aimed at any specific
countries and that no orbital debris was created by this test.
Mr. Larsen. Something we could all read in the paper
ourselves but not actually helpful. That is my comment. You
don't have to comment on that.
Mr. Chairman, before we move forward, I have a statement
for the record. I would like unanimous consent to enter that.
The Chairman. Without objection.
[The prepared statement of Mr. Larsen can be found in the
Appendix on page 44.]
Mr. Larsen. Thank you.
For Secretary Shear and Secretary Gregson, China may be our
most important dialogue in Asia right now, but Japan clearly
remains our most important ally in the region. This reports,
obviously, with the new Japanese government trying to seek or
create or develop in concept an East Asia security group
between Japan, China, and South Korea--recent statements
indicate that maybe Japan all along was intending to include
the United States.
How would you discuss the steps that the U.S. has taken to
strengthen the U.S.-Japanese relationship while we are also
pursuing a various set of relationships with China? I mean,
Secretary Shear can start there, and Secretary Gregson can
follow.
Mr. Shear. We are working very closely with the Japanese to
strengthen the alliance. Secretary Clinton met with Foreign
Minister Okada in Honolulu yesterday. They celebrated the 50th
anniversary of the U.S.-Japan Security Treaty. They recommitted
to strengthening the alliance. I think it was a very good
meeting.
Mr. Larsen. Secretary Gregson.
Secretary Gregson. We have been undergoing for some time a
transformation and realignment of U.S. forces and Japanese
forces within Japan. Pending is the continuation of the
realignment with the buildup of U.S. forces in Guam. The Guam
program also includes near continuous presence of Japanese
aviation and ground forces in Guam and their training. We look
forward to rapid implementation of that as a way to adapt and
transform the military and security aspects of our alliance for
the new century.
Mr. Larsen. Thanks.
Back to the missile test, and this may be for Admiral
Willard or for Secretary Gregson, given the recent Taiwan arms
sales going through and in the context of this missile test, do
we see this as a tit-for-tat, and do we anticipate something
else happening because of the Taiwan arms sales, which I think
most of us, all stand four-square behind?
For instance, when they were announced in 2008, China
suspended any further military-to-military discussions,
including the consultative talks, but those started up again
last month, I think.
Are we anticipating another tit-for-tat because of the arms
sales, Admiral Willard?
Admiral Willard. Well, if history bears out at such time as
arms sales would be announced or their consultation with our
Congress would take place, the PRC has typically reacted very
vocally, and our military-to-military engagement has
historically been suspended. Whether or not that is the case
this time or not will remain to be seen.
I would offer that in the discussions that General Xu had
with the Secretary and with me on his way back to Beijing, we
emphasized the need for constancy in that military-to-military
dialogue. We were explaining the mutual benefit of maintaining
it, whether or not differences erupt between our governments or
not.
Again, I think we will be testing the maturity of that
military-to-military relationship in the future, not just over
our legal obligation to conduct Taiwan arms sales, but over
other issues between our governments as well.
Mr. Larsen. Thank you.
I see my time is up.
The Chairman. Mr. Coffman.
Mr. Coffman. Thank you, Mr. Chairman.
I would like to ask the panel to address what I believe has
become a very serious emerging national security threat as it
relates to China. It has to do with industrial base supply
issues controlled by China and not any specific military
threat, but I am hoping, given your background and your current
positions focusing on Pacific Rim nations, to garner the
benefit of your thoughts and comments. Worldwide demand for
rare earth elements are escalating rapidly.
Rare earths are used in a number of applications, including
emerging green technologies, and many of us on this dais have
concerns as to what that means for American innovation and
domestic job growth. But the fact that so many national
security and defense systems require these materials to
function and operate is of greater concern to us here at this
hearing.
Ninety-five percent of worldwide rare earth reserves being
accessed today are located in China or controlled by Chinese-
led interests. Today, there are no rare earth elements or
production sites of significance taking place in North America
or anywhere outside of China.
China's domestic demand for rare earth elements could
easily equal Chinese production as early as 2012. Furthermore,
in October of 2009, an internal report by China's Ministry of
Industry and Information Technology disclosed proposals to ban
the export of five rare earth elements and restrict supplies of
the remaining metals as early as next year.
I ask the witnesses to comment on these developments and
address their entity's situational awareness of the reliance on
these rare earth elements, what they feel are the strategic
implications, and how they plan to develop an appropriate
policy to mitigate this impending supply crisis as it relates
to national security and defense?
Mr. Shear. Sir, I would like to take that question for the
record and get back to you as soon as we can.
[The information referred to can be found in the Appendix
beginning on page 84.]
Mr. Coffman. I appreciate that.
Very well, anyone else care to respond?
Secretary Gregson. Likewise.
Mr. Coffman. A second question. About four or five years
ago, I believe that since we don't have formal relations with
Taiwan in terms of an ambassador here, I think general counsel
might be the term--I am not sure what the term is for their
diplomatic representative in Washington--I was at a dinner
seated next to him and asked him what the most significant
national security issue was to Taiwan. At that time he said a
recession in China.
I asked him why that was the case. He said because then he
felt that the leadership of the People's Republic of China, the
PRC, will look outward as to threats to deflect the attention
of the people of China on their own domestic problems, and that
is where he felt that Taiwan would be the most vulnerable.
I wonder if any of you could comment on that?
Secretary Gregson. That has, the relationship of economic
development, national development, to the authority, legitimacy
of the leadership has been often discussed as a matter of
speculation. A connection has been drawn, and as a matter of
fact, it has often been stated that eight percent per year
growth or better is necessary to maintain domestic tranquility
within China.
While we watch that from the defense side, we also watch
the development of capabilities. We try and make sure that we
have done everything we can to counter the capabilities we see
on the other side of the Strait. Relying on the fact that we
can't read minds and read intentions with clarity, we can draw
inferences and we can get ideas. But we are not relying on the
conditions of prosperity to be a guarantee that nothing bad
will happen.
We are taking all appropriate precautions to make sure we
can react if the situation worsens, regardless of what the
prosperity situation is across the Strait.
I understand the points of your dinner companion, and I
think it is an interesting observation, a very interesting
observation, particularly from their side. But on the defense
side, we remain oriented on the capabilities.
Mr. Shear. The Chinese Government certainly appeals to
Chinese nationalistic sentiment frequently, but we don't see an
uptick in that or an effort to blame Chinese domestic problems
on foreign sources as a result of the economic downturn. It
looks to us like the Chinese economy is turning around. They
had eight percent growth last year. I think they may have eight
to nine percent growth this year. We are not seeing that
phenomenon happen right now.
Mr. Coffman. Thank you, Mr. Chairman.
The Chairman. I thank the gentleman.
Mr. Kissell.
Mr. Kissell. Thank you, Mr. Chairman, and welcome
gentlemen.
Admiral Willard, thank you for being here, and thank you
for the service that you render to your nation.
I am going to go back a little bit. As we know, China is an
ancient kingdom many thousands of years old, and I am going to
go back 2,000 to 3,000 years.
Sometimes when we study history, we tend to separate our
time lines and forget that history moves at the same time
period. In the time period while Europe was in the Middle Ages
and before, China was a prospering kingdom and arguably could
have made some of the same decisions that Europe later made in
terms of conquest, expansion, exploration, and did not. And if
the history book that I taught from was correct, it was a
decision that this was not a pursuit that they wanted
nationally to evolve to. And while Europe later came to
dominate the world, China in many ways chose not to do that.
And if you look at the history since then, of course, the
time period where the European nations tended to dominate
China, that China has never pursued that course of what you
maybe call aggression or expansion or looking overseas and
other places for, you know, their national prospects.
I am trying to get an idea in my mind what is the mindset
of the Chinese now. How much has that changed, or has it
changed? We have talked about all the ambiguities that exist
among what China may be doing. For our two secretaries, if you
had to narrow it down, what is the Chinese mind set? Is it
aggressive? Is it defensive? Is it, we want to be equal to, we
want respect? What is the mindset of the Chinese now?
Mr. Shear. We are familiar with your view of Chinese
history. From our historical experience, we see rising powers
as a potential challenge to the international community. We
hope to avoid that in China's case by engaging intensively----
Mr. Kissell. And I don't mean to interrupt, but what is the
Chinese mindset? I understand how we view it, but what do you
think that they, long-term, how are they trying to position
themselves, and why?
Mr. Shear. I think the Chinese want to express themselves
as a major global power. I think they have done that mostly
economically so far. I think that remains a lower priority on
their list after securing communist power, communist party
stability in power, and after domestic economic development.
Secretary Gregson. I would concur with that.
I might add that I think a lot of Chinese attitude consists
of the fact that world trends are working in their direction
now and that it is time for them to enjoy some of the largesse
and the benefits of being a world power that they were not able
to do for the last couple of centuries.
Mr. Kissell. One other question, going in a different
direction, I had read recently where water would be a great
limitation towards China and its ability to continue its
economic expansion. I just wonder what your thoughts are, how
that may anything figure in, how much it figures in, and what
that might mean long term?
Secretary Gregson. At conservative population growth
estimations and conservative economic growth observations,
there is the potential out there in the future that resource
allocation of precious liquids--oil, water--will become an item
that is going to require vigorous, active, and cooperative
management.
The Mekong River Initiative right now is one way to try and
manage water and related items, like fresh water fish, recent
things. The Mekong starts in China and, of course, goes through
Southeast Asia. Any time somebody puts a dam at one point on
the river, it affects everybody downstream, those obvious
things. Yes, this is going to be an item of major concern.
Mr. Kissell. Thank you, gentlemen.
I yield back my time.
The Chairman. I thank the gentleman.
The gentleman from Louisiana, Mr. Fleming.
Mr. Fleming. Thank you, Mr. Chairman.
My question is for Admiral Willard. As you know, sir, our
aircraft carriers are a platform that we use to project power
around the world. This is certainly relevant to some of the
issues brought up about oil and energy in general.
It is my understanding that the Chinese have a mid-range
ballistic missile that can travel up to 2,000 kilometers, can
easily attack an aircraft carrier, and that we really don't
have any antidote for that. Hopefully it is still under
development and not fully capable.
So what is our Navy's plan to protect our aircraft carriers
given this potential shift in power and certainly our ability
to project our Navy and the Naval Air Forces closer to the
perimeters of China itself?
Admiral Willard. As you suggest, as one element of the
anti-access strategy by China, there has been development of a
ballistic missile capability that we believe is intended to
target surface ships to include our aircraft carriers, and it
is an issue of major concern.
We, within our programs, are developing capabilities to
protect, you know, obviously, protect our surface ships to
include our aircraft carriers. From that, the details,
obviously, we would need to discuss at some future opportunity
in a closed session.
Mr. Fleming. Would you agree, sir, that this may put even
more emphasis on the need for the next-generation bomber, which
is an air platform that, again, is a standoff type of defense
mechanism or attack mechanism, if you will, that, you know, we
have sort of laid that aside here recently, and I am wondering
if maybe we need to take a stronger look at that in view of
what we are seeing here?
Admiral Willard. I think when we approach the anti-access
capabilities that are being developed here that we have to look
broadly at all of the capabilities that provide us
opportunities to continue to operate with freedom of action
inside the envelopes of that capability. Certainly our bomber
force and any recapitalization of our bomber force, extended
range weapons, as well as our ability to penetrate with our
surface ships and not give up access where we require it are
all parts of the defense strategy to accomplish that.
Mr. Fleming. Thank you, sir.
Thank you to the panel, and thank you for your service.
I yield back.
The Chairman. I thank the gentleman.
The gentleman from Mississippi, Mr. Taylor.
Mr. Taylor. Mr. Chairman, I am going to yield to the only
member of the Ranger Hall of Fame that is a Member of Congress,
Mr. Marshall.
Mr. Marshall. Thank you, Mr. Taylor, I appreciate that.
I am curious about the extent to which we can expect that
China at some point might be more helpful to us where terrorism
is concerned and specifically the efforts in Iraq and
Afghanistan and our worries about Pakistan and India and
possible conflicts there.
A couple of Chinese colonels published a book called
``Unrestricted Warfare'' in the mid-1990s. Probably most of you
have already read that or at least read an executive summary of
it. And that piece, that book, explores ways in which China can
engage in conflicts with the United States, in essence,
asymmetrically, and publication of the book was authorized and
approved by the Chinese government. Not so many years have
passed since the publication of the book.
Among the things that these two colonels observe, and this
book's publication precedes 9/11, is that the close
relationship between America's political elite and the
military-industrial state combined with America's military
expeditionary capacity means that it is only a matter of time
before America gets itself involved in conflicts that bankrupt
it.
If there is an ongoing attitude in China that it is good
for China to see the American economy weakened, then it seems
to me that China might be holding back in assisting us with
regard to Iraq, Afghanistan, and terrorism generally because
this is something that is costing us an awful lot of money.
I would just like general comments about Pakistan, India,
the flash points there, nuclear power, you know, controlled by
both, and any thought that China is at some point here going to
join this effort against terrorism which, if you think about
it, given the nature of their evolving economy, they are going
to be a target also eventually.
Mr. Shear. Congressman, with regard to China's approach to
American economic health, I think the Chinese have recognized
that we are interdependent economically and that our economic
relationship benefits both sides.
On the subject of terrorism, we engage the Chinese on this
subject, both at senior levels and at the working level through
a counterterrorism working group, which has met recently.
In general, our cooperation on counterterrorism issues with
the Chinese is at a fairly basic level, but we are working on
it. On the subject of Afghanistan and South Asia generally, I
think the Chinese share our interest in peace and stability in
South Asia, particularly in Afghanistan. It is right on China's
border.
We have engaged the Chinese fairly intensively on the
subject of Afghanistan. Special Envoy Holbrooke has been to
Beijing twice to discuss this subject with them. They have
expressed an interest in cooperating, but we are still at the
early stages.
Mr. Marshall. So we haven't seen anything concrete?
Mr. Shear. Not yet, no.
Mr. Marshall. And where terrorism is concerned, have we
seen anything concrete there?
Mr. Shear. We conducted exchanges with the Chinese,
particularly in the run-up to the Olympics. We are continuing
those exchanges, but I would say we are at a very basic level.
Mr. Marshall. What have we proposed that they do with
regard to terrorism or stability in Afghanistan, Pakistan,
India, et cetera? What are we proposing that they are just not
willing to do?
Mr. Shear. We think, we think, as I say, the Chinese have
expressed an interest, a general interest in cooperation. We
conducted a working-level meeting with the Chinese to discuss
specific ways in which we can work together on the ground in
Afghanistan before the President's visit in November. I think
they are thinking this through right now.
We have proposed such avenues, things they can do to help
Afghanistan in agricultural infrastructure, infrastructure
generally, capacity-building and areas like that. But we are
still just beginning. We are pressing the Chinese on this.
Mr. Marshall. What about assistance from China? I know we
are looking at different ways to get materials into
Afghanistan. Is there any movement where that is concerned?
Secretary Gregson. We are developing alternative lines of
communication to avoid overdependence on the lines of
communication (LOCs) through Pakistan. Generally they involve
the Northern Distribution Network. We don't know of an
opportunity yet for China to contribute.
Mr. Marshall. Thank you, Mr. Chairman.
The Chairman. I thank the gentleman.
Mr. Franks.
Mr. Franks. Thank you, Mr. Chairman.
Thank you, Admiral Willard. I want to direct my first
question to you, thank you just for your lifetime commitment to
the cause of human freedom and all the things people like us up
here talk a lot about the importance of protecting freedom.
People like you personify it, and we are really grateful to
have you here today.
I was encouraged about your discussion related to
protecting some of our battle groups from emerging Chinese
missile technology. As you are probably very aware in the
Perry-Schlesinger report, it said that we had to be careful
with long-range defenses because it could upset the strategic
balance between the U.S. and China, and the U.S. and Russia.
But in light of some of the recent reports in the media
that China is working to perfect or develop a mid-range and
long-range missile defense capability, they don't seem quite as
concerned about that strategic balance as maybe we are.
I guess my question to you, can you talk to us a little bit
about the Chinese missile defense technology advances and
specifically their medium- to long-range capabilities?
Admiral Willard. I would only offer that, in terms of their
missile defense capabilities, that they are by and large still
in the research and development (R&D) stages, that this is a
subject actually of inquiry regarding the most recent missile-
to-missile engagement that has been witnessed and that the
Chinese, as we have discussed earlier, reported on over the
past several days.
These developments and other developments we would continue
to watch, but in terms of levels of detail and so forth,
obviously, in a closed session to discuss.
Mr. Franks. Well, let me, if I could, then, switch--thank
you, Admiral--to Secretary Gregson.
Can you tell us about China's space program? Have there
been any advances in technology, or have they continued
pursuing space as a military venue since their 2007 anti-
satellite (ASAT) test? The question is predicated on the notion
that, you know, China has, with their ASAT capability, has
pursued, in a phrase, weaponizing space, and it seems it is
pretty clear to me that has already happened. But can you tell
us, have they continued pursuing space as a military venue
since their last ASAT test in 2007?
Secretary Gregson. The Chinese have stated that they oppose
the militarization of space. Their actions seem to indicate a
contrary intention. We continue to press the Chinese for
explanation, and we would be happy to provide details in a
closed session.
Mr. Franks. Well, Mr. Chairman, I guess I make the point
all too often here that I think it is important as a country to
maintain our missile defense capability. We seem to be moving
into a dynamic, militarily and otherwise, in the future that
that will be a critical consideration for us, and I think that
we have a moral responsibility to the citizens to be able to
defend the U.S. from any missile launched from anywhere on the
globe, at least that is the goal.
I know that Mr. Reagan contemplated and hoped for that, and
we have come probably further than even he contemplated at one
point. But I think the ultimate concern should still be to be
able to defend ourselves in that situation because in a world
where radical rogue nations are potentially going to be a part
of that equation, I think it is vital that we continue in the
direction of developing that.
And I thank all of you for your efforts in that regard.
I yield back, Mr. Chairman. Thank you.
The Chairman. I thank the gentleman.
Ms. Bordallo, the gentlelady from Guam.
Ms. Bordallo. Thank you very much, Mr. Chairman.
Secretary Gregson, I appreciate working with you on the
Guam issues and look forward to your answers today.
Mr. Shear, thank you for appearing before the committee.
Finally, Admiral Willard, thank you, and I look forward to
working with you as our new PACOM commander.
As you all may know, I co-chair the China Caucus with my
colleague, Congressman Forbes, and I have several questions
regarding recent security developments in China and how it
affects our posture in the Asia-Pacific region.
Secretary Gregson, it seems that China wants to continue
becoming a global power that has serious force projection
capabilities. On his most recent Asia trip, President Obama
stated that the United States is and will remain a Pacific
power. In that vein, how does the realignment of military
forces in Japan and to Guam play in the balance of power in the
Pacific? If we are to remain a Pacific power, what other
enhancements of our current military and civilian capabilities
are needed to maintain a robust posture in the Asia Pacific
area?
Secretary Gregson. Thank you for the question.
Secretary Gates has remarked often that there is sovereign
U.S. territory in the Pacific, Alaska, Hawaii and Guam, and
with the help, vital help, from Japan, we are increasing, as
you know, our air, naval, and marine presence in Guam. This
will also enable the continuous or near-continuous presence of
Japanese and other allied and friendly forces for training with
the United States and better position us for continued
engagement, not only throughout Southeast Asia and the Indian
Ocean but also into the area involving the compact states and
our other territories in the mid-Pacific. I think this will
allow us to continue to develop capabilities and to continue to
develop relationships across a region that will contribute to
peace, stability, and prosperity throughout the area.
Ms. Bordallo. Thank you.
My final question is for Admiral Willard.
The 2009 report to Congress from the U.S.-China Economic
and Security Review Commission made a very intriguing and a
stark finding, and that is China's development of anti-ship
cruise missiles. The report states that, ``According to the
U.S. Department of Defense, this missile will have a likely
range of 1,500 kilometers, be armed with maneuverable warheads,
and is intended to deny regional access to surface ships of the
opposing side. When combined with appropriate surveillance and
targeting systems, this missile could have the potential to
destroy or disable aircraft carriers and their associated
battle groups while in transit.''
Now I am concerned by this finding and would like to
explore our deterrent capabilities in the Pacific to respond to
this growing tactical threat by the Chinese. What types of
deterrents are in place on our surface fleet to combat this
tactical weapon? What impact would this weapon system have on
our ability to project our naval power in China, such as port
visits to Hong Kong?
Admiral Willard. Thank you, ma'am, for the question.
I would offer that the Chinese have developed a ballistic
missile with extended-range capabilities that we believe is
intended to counter surface ships. They have also developed
extended-range cruise missiles, as you suggest, for launch from
their surface ships and from their submarines as part of a
broader anti-access strategy.
All of these developments, capability developments, and the
capacities that they are fielding, have led to concerns both on
the part of the United States and on the part of the region
with regard to what they are there for and their intended use.
In the case of--you bring up deterrents, there is a
responsibility that we bear to the region, writ large, to
extend deterrence throughout the region to prevent wars from
happening, to prevent future contingencies from occurring. We
have been very successful, I would offer, for many decades now
in accomplishing that.
That is by and large accomplished through our presence and
posture in the region, and that is unchanged. Regardless of
these developments, capabilities, developments that you
describe, we maintain a presence on the waters in the region as
we have for a century and a half, and we intend to stay.
We think that the extended deterrence that the United
States offers to our allies and partners in the region, our
presence to ensure security in the sea lines of communication
and air lines of communication in this part of the world, are
vital to our Nation's security as well as to our Nation's
economy and the economies of our partners and allies.
Ms. Bordallo. Thank you, Admiral.
And I yield back. I thank the chairman.
The Chairman. I thank the gentlelady.
Mr. McIntyre.
Mr. McIntyre. Thank you, Mr. Chairman.
Thank you, gentlemen, for being here today. Because I was
tied up in another matter, I got here a little bit later. I
want to ask about something just for clarification.
I know in December of a year ago, China began to provide
its naval vessels to protect the commercial ships navigating in
the Gulf of Aden from the Somali pirate attacks. Do you
characterize this as a positive development with regard to
U.S.-Chinese cooperation? And are they willing and are
currently working with the United States in cooperation vis-a-
vis dealing with these pirates?
Admiral Willard. I would, from the PACOM perspective, we
view it as a very positive development. It is a demonstration
of the PRC's willingness to utilize their military capability
in a way that is contributing to other nations, to the
international betterment of security in that particular region
of the world.
They began those operations operating outside of the
international regime that was put in place to coordinate the
efforts by the many nations that are contributing to the anti-
piracy effort over the years. Now that this has been occurring,
I would offer that the PRC has grown closer to those regimes
and to the extent that there is a line of communication that
has been developed and a level of information sharing that is
both contributing to their operations and also contributing to
the operations of the combined task force that is engaged in
counter-piracy.
To both your questions, yes, it is positive. And yes, they
have grown closer to cooperating, not just with the United
States, but with the international effort that is often
foreign-led in the Gulf of Aden.
Secretary Gregson. I concur completely with the Admiral.
The freedom of navigation, freedom of the seas, freedom of
navigation, freedom of innocent commerce, freedom of innocent
passage is vitally important to both the United States and
China as well as the rest of the world, particularly
considering the Gulf of Aden and where it sits across the lines
of communication that are vital to energy supplies moving
around the world.
The Chinese over time, as the Admiral stated, are
increasingly coming to understand and to appreciate the norms
of cooperation that have been established in an international
task force out there. While they still cannot for their own
political reasons join the international task force, they are
operating ``in cooperation with'' the task force. And informal
lines of communication and cooperation are growing, and we see
this as overall a very positive development.
Mr. McIntyre. Thank you.
With the very limited time, let me change to another
subject.
Admiral, do you believe that we are building enough ships
to counter the continual buildup of ships by the Chinese in
their naval fleet in the Pacific? Do you feel like we are
keeping the pace as we need to, or that there needs to be a
stronger buildup of the American fleet?
Admiral Willard. I would speak for Pacific Command and our
ability to contend with the security issues within my area of
responsibility, and I believe I can do that. I think that the
importance of maintaining our industrial base and continuing to
recapitalize our surface fleet in the Navy is critically
important and that, as the Pacific commander, it is critically
important to me that my naval component contribute the level of
combat power that I require for the joint operations that we
conduct.
Mr. McIntyre. The question is, do we have enough ships to
do that? Or do you feel like we are on course to maintain the
level of the number of ships we need to do that?
Admiral Willard. I am satisfied with the current budget and
shipbuilding level of effort that we are pursuing in the United
States Navy to produce the ships that I require to accomplish
my mission in the Pacific.
Mr. McIntyre. Beyond the number of ships, do you feel like,
or if in fact there becomes a problem with the number of ships,
do you feel like we still have the capability otherwise to
effectively counter the Chinese buildup?
Admiral Willard. The short answer is yes. Currently, the
U.S. Pacific Command is contributing nearly 30,000 troops to
the Middle East, and certainly force structure to the two wars
that are currently ongoing in our Nation. And as we determine
our abilities to meet our obligations throughout the Pacific to
include the potential for future contingencies in the Western
Pacific, I have to evaluate the associated risks with that
force structure commitment to our two wars and what mitigations
I am obligated to put into place to ensure that I can perform
my mission. And, yes, I believe I can do that.
Mr. McIntyre. We want to support you in that. Thank you,
Mr. Chairman.
The Chairman. I thank the gentleman from North Carolina.
The last question I would address to Secretary Gregson. In
light of the Google news this morning and other recent attacks
against American Government sites, how are we addressing the
increase in the cyber attacks from China?
Secretary Gregson. I think it is not only increased cyber
attacks from China that the United States faces, but increased
cyber attacks from a number of places, including nonstate
actors, everybody with access to the necessary----
The Chairman. I understand that. I am asking about China.
Secretary Gregson. Among other things, we are standing up a
Cyber Command as a sub-unified command of Strategic Command
(STRATCOM). We have a number of security procedures that have
been put in place over the years throughout the Department of
Defense to protect our proprietary networks. And we continue to
research ways where we can enhance our defenses in the future.
This is an ever-evolving threat and we take it very seriously.
The Chairman. Secretary Shear, do you have any comments?
Mr. Shear. Cyber security is a national priority for this
Administration. Shortly after taking office, the President
directed that the National Security Council and the National
Homeland Security Council conduct a top-to-bottom review of our
cyber security efforts. The results of that review were
published in May. We are in the process of implementing those.
We are particularly concerned, particularly after the Google
affair, about Chinese efforts. We will be raising this with the
Chinese, and we take it very seriously.
The Chairman. Secretary Gregson, in open session can you
tell us what the jurisdiction of the Cyber Command is?
Secretary Gregson. I would like to take that for the
record, Mr. Chairman.
[The information referred to can be found in the Appendix
beginning on page 83.]
The Chairman. Thank you very much.
I certainly thank the witnesses today. I think this is the
first hearing on China per se that we have had in this
Congress, and you have done very, very well.
Admiral Willard, thank you, Secretary Gregson, Secretary
Shear. It is certainly good for you to be with us, and look
forward to seeing you again. The very best to you.
[Whereupon, at 12:03 p.m., the committee was adjourned.]
=======================================================================
A P P E N D I X
January 13, 2010
=======================================================================
PREPARED STATEMENTS SUBMITTED FOR THE RECORD
January 13, 2010
=======================================================================
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
=======================================================================
WITNESS RESPONSES TO QUESTIONS ASKED DURING
THE HEARING
January 13, 2010
=======================================================================
RESPONSE TO QUESTION SUBMITTED BY MR. SKELTON
Secretary Gregson. The mission statement for U.S. Cyber Command,
which is to be a sub-unified command under U.S. Strategic Command,
states that: USCYBERCOM plans, coordinates, integrates, synchronizes
and conducts activities to: direct the operations and defense of the
specified DOD information networks; prepare to, and when directed,
conduct full-spectrum military cyberspace operations in and through
cyberspace in order to enable actions in all domains, ensure U.S./
Allied freedom of action in cyberspace and deny the same to our
adversaries. The DOD will support, when requested and directed to, U.S.
Government agency requests for assistance. [See page 34.]
______
RESPONSE TO QUESTION SUBMITTED BY MR. FORBES
Mr. Shear. The United States advanced its trade agenda with China
on a number of fronts in 2009. The U.S. won two major cases on
intellectual property rights at the WTO as well as a key WTO case on
auto parts tariffs and subsidies. In addition, President Obama
announced a decision to impose three-year ad valorem tariffs on Chinese
tire imports to stop a harmful surge of imports of Chinese tires.
Finally, China agreed to open its markets in several key areas in the
most recent U.S.-China Joint Commission on Commerce and Trade (JCCT).
World Trade Organization
On December 21, 2009 the World Trade Organization Appellate Body
rejected China's appeal and confirmed important panel findings that
Chinese restrictions on the importation and distribution of certain
copyright-intensive products, such as theatrical films, DVDs, music,
books and journals, are inconsistent with China's WTO obligations. The
WTO ruling is critical to guaranteeing that legitimate, high-quality
American entertainment products have full access to the Chinese market.
Getting these products into China's markets promptly is a vital tool in
the fight against rampant intellectual property piracy in China.
In another dispute brought by the United States, a WTO panel ruled
that certain Chinese intellectual property protection and enforcement
rules were inconsistent with China's WTO obligations. The panel found
that China's denial of copyright protection to works that do not meet
China's ``content review'' standards is impermissible. It also found it
impermissible for China to provide for simple removal of an infringing
trademark as the only precondition for the sale at public auction of
counterfeit goods seized by authorities. Finally, the panel clarified
China's obligation to provide for criminal procedures and penalties to
be applied to willful trademark counterfeiting and copyright piracy on
a commercial scale. In keeping with the ruling, China has committed to
correct these problems by spring 2010, affording American rights
holders new opportunity to protect and profit from their goods,
services, and ideas.
In December 2009, the Obama administration announced an agreement
between the United States and China confirming China's termination of
many dozens of subsidies most of which had been supporting the export
of ``famous brands'' of Chinese merchandise. The agreement will ensure
a level playing field for American workers in every manufacturing and
export sector, including household electronic appliances, textiles and
apparel, light manufacturing industries, agricultural and food
products, metal and chemical products, medicines, and health products.
As a consequence of WTO litigation, China in September 2009
eliminated discriminatory charges on imported auto parts, creating
increased market opportunities for American manufacturers.
Section 421 Tire Case
In September, the President announced a decision to impose three-
year ad valorem tariffs on Chinese tire imports to stop a harmful surge
of imports of Chinese tires. This decision was consistent with China's
WTO accession protocol, which allows WTO members to take such action
when an import surge from China disrupts the market.
U.S.-China Joint Commission on Commerce and Trade
Through this year's JCCT, the U.S. negotiated increased market
access in China for American businesses and workers in a variety of
sectors:
China agreed to improve access for U.S. energy companies
by removing local content requirements on wind turbines. This agreement
will enable more American companies to take advantage of the fast
growth of China's wind energy sector.
China agreed to accept medical devices that had received
prior approval by a foreign country. According to industry, China's
prior approval requirement could have affected over $350 million in
U.S. products.
China gave assurances that it will impose maximum
administrative penalties on individuals that used the Internet to
infringe on intellectual property rights and began a four-month
campaign to clamp down on Internet piracy. This agreement will help to
ensure that U.S. copyright holders continue to benefit from their
products as internet use expands across China.
China agreed to strengthen oversight and enforcement
regarding counterfeit pharmaceuticals.
China gave assurances that it was in the process of
liberalizing its licensing procedures for certain types of direct
selling services companies. One U.S. company has already received its
license. [See page 20.]
______
RESPONSE TO QUESTION SUBMITTED BY MR. COFFMAN
Mr. Shear. The Department of State takes very seriously reports
that China is seeking to limit exports of rare earth elements. We are
working closely with other agencies to review the consistency of
China's rare earth export restrictions with its WTO commitments. In
November 2009, the United States requested the establishment of a WTO
dispute settlement panel regarding China's export restraints on nine
raw materials that are key inputs for numerous downstream products in
the steel, aluminum, and chemical sectors. Although China is the source
of most of the world's supplies of rare earth metals, widespread and
substantial reserves of these metals exist elsewhere. [See page 25.]
?
=======================================================================
QUESTIONS SUBMITTED BY MEMBERS POST HEARING
January 13, 2010
=======================================================================
QUESTIONS SUBMITTED BY MR. ORTIZ
Mr. Ortiz. What is the impact of China's military modernization on
the DOD's efforts to transform U.S. military capabilities and the U.S.
approach to the Asia-Pacific region? Has thought been given to a
greater U.S. Naval presence in PACOM AOR, in addition to the buildup in
Guam?
Secretary Gregson. The Department of Defense takes seriously the
potential challenge posed by China's military modernization program.
The QDR discusses this in the context of how we will deal with
increasingly sophisticated anti-access capabilities, such as those
China is fielding and developing in large numbers and across all
domains--air, sea, land, space, and cyber. The QDR outlines several
operational concepts and capabilities to counter anti-access
challenges: developing air-sea battle concepts, expanding long-range
strike capabilities, exploiting undersea advantages, increasing the
resiliency and dispersal of U.S. forward posture and base
infrastructure, assuring access to space and the use of space assets,
enhancing the robustness of C4ISR capabilities, defeating enemy sensors
and engagement systems, and increasing joint and combined training
capacity in the West Pacific. All of these have potential applications
within the Asia-Pacific region.
As noted in the QDR report, we are transforming the U.S. sovereign
territory of Guam into a hub for security activities in the region. We
continue to review our Asia-Pacific posture with an emphasis on
maintaining a credible deterrence and assuring allies and partners. As
part of this posture review, we are examining whether positioning
additional naval forces within the PACOM AOR is necessary.
Mr. Ortiz. With the increase of the PLA Navy, and all the demands
being asked of PACOM, what does the Pacific Command need to effectively
deal with the broad range of security concerns in the Area of
Responsibility?
Admiral Willard. USPACOM has a requirement for a forward military
presence. This presence is a combination of U.S. Forces stationed in
Japan, the Republic of Korea, Singapore, and Guam along with the
rotational forces that deploy and transit through the Western Pacific.
Additionally, USPACOM needs increased intelligence, surveillance and
reconnaissance (ISR) assets, to provide timely indications and
warnings. It is important that these forces and assets remain in the
Pacific and are available. USPACOM along with the Department of State,
and the whole of government needs to assure access to bases and support
areas. This access is most critical in dealing with the broad range of
security concerns in the Pacific.
______
QUESTIONS SUBMITTED BY MR. FORBES
Mr. Forbes. Please submit the legal justification used by the
Department of Defense that supports the Department's refusal to submit
the Fiscal Year 2010 Navy Shipbuilding Plan as required by section 231
of title 10, United States Code.
Secretary Gregson. Given that the National Security Strategy (NSS)
was due for release soon after the FY 2010 budget, the impact of the
NSS on force structure could not be accounted for in a FY 2010
Shipbuilding Plan.
In addition to the National Security Strategy, the statutory
guidelines require that the report reflect the Quadrennial Defense
Review (QDR). The latest QDR is being developed in parallel with the
NSS. Additionally, the Nuclear Posture Review, which has direct bearing
on the numbers of strategic ballistic missile submarines, remains
underway in conjunction with the QDR. All of these efforts have
substantive impacts on the Navy's force structure requirements.
Therefore, the Department considered it prudent to defer the FY
2010 Report and submit its next report concurrent with the President's
Fiscal Year 2011 budget.
The Annual Long-Range Plan for Construction of Naval vessels for FY
2011 will be delivered to Congress on 1 February 2010.
Mr. Forbes. Please explain how the United States can claim to have
a level of transparency with the People's Republic of China (PRC) with
regards to military matters when the Department of Defense cannot
provide a legally required shipbuilding plan to the United States
Congress.
Secretary Gregson. The transparency we see from China's military is
improving, but still has a long way to go, and this requirement is
something we raise with the PLA quite frequently and at all levels.
With respect to the U.S. Navy's shipbuilding plan, I understand the
Department of the Navy is putting the finishing touches on the Annual
Long-Range Plan for Construction of Naval Vessels for FY2011 and should
be submitting it to the appropriate oversight committees shortly.
______
QUESTIONS SUBMITTED BY MR. BISHOP
Mr. Bishop. As China's ballistic missile technology and programs
continue to mature, their emerging capability makes it even more urgent
for the Department of Defense to invest in a comprehensive, multi-
layered missile defense system. In the FY10 Defense Appropriations
Conference report, Congress approved additional money for Standard
Missile-3 Block 1A interceptors. How soon does PACOM need this proven
defensive capability in order to increase the ability of the U.S. to
provide additional protection for the Allies of the PACOM theatre?
Admiral Willard. [The information referred to is classified and
retained in the committee files.]
Mr. Bishop. The Department of Defense has asked China to be more
transparent in their long-range missile testing by providing missile
notifications, and we hear of more and more Chinese missile technology
advances. Do recent Chinese missile technology advances provide the
United States with an increased urgent operational requirement for the
Standard Missile-3 Block 1A technology at an accelerated pace?
Admiral Willard. [The information referred to is classified and
retained in the committee files.]
______
QUESTION SUBMITTED BY MRS. MCMORRIS RODGERS
Mrs. McMorris Rodgers. Secretary Gregson, Mr. Shear, and Admiral
Willard, I'd like to thank each of you and offer my appreciation for
the service you are performing to our nation. Your work in the defense
of our country and its citizens does not go unnoticed. Thank you. Does
the Department of Defense feel threatened at any level from a cyber
attack emanating from China? And have we had any indications of a
threat of a cyber attack from China? In December 2009, President Obama
named a Cyber Security Chief to the White House. With the increased
importance the White House is placing on cyber defense, and with the
ever-increasing number of cyber attacks we are seeing, does the
Department of Defense feel the need to increase staff to manage this
increased threat? Also, is the DOD coordinating efforts with other
countries to share intelligence gathered? What can the DOD report to
Congress on this endeavor?
Secretary Gregson. With the difficulty in attributing cyber
activities to a specific actor, let alone a specific government, DOD
defends its networks round the clock from a variety of threats
regardless of source. Over the past ten years, the frequency and
sophistication of cyber intrusions and probes into DOD networks have
increased exponentially. More than 100 foreign intelligence
organizations are trying to hack into U.S. systems. Foreign militaries
are developing cyber capabilities. And some governments already have
the capacity to disrupt elements of the U.S. information
infrastructure.
To address this growing and pervasive threat, Secretary Gates
directed the formation of U.S. Cyber Command, a sub-unified command
under U.S. Strategic Command. As U.S. Cyber Command and the supporting
Service elements are stood up, DOD will evaluate over time the staff
size required to accomplish the mission. As with intelligence gathered
in other areas, DOD is coordinating efforts to share information about
cyber threats with other countries. The Department has briefed six
committee staffs, including the HASC, and intends to continue an
ongoing dialogue with concerned Members and committee staffs on the
Department's efforts to address cyberspace issues, including the stand-
up of U.S. Cyber Command.
______
QUESTIONS SUBMITTED BY MR. COFFMAN
Mr. Coffman. I'd like to ask the panel to address what I believe
has become a very serious emerging national security threat as it
relates to China. It has to do with industrial base supply issues
controlled by China, and not any specific military threat. But I am
hoping--given your backgrounds and your current positions focusing on
Pacific Rim nations--to garner the benefits of your thoughts and
comments. Worldwide demand for rare earth elements is escalating
rapidly. Rare earths are used in a number of applications including
emerging green technologies, and many of us on this dais have concerns
as to what that means for American innovation and domestic job growth.
But the fact that so many national security and defense systems require
these materials to function and operate is of greater concern for us
here at this hearing. Ninety-five percent of worldwide rare earth
reserves being accessed today are located in China or controlled by
Chinese-led interests. Today, there is no rare earth element production
of significance taking place in North America or anywhere outside of
China, and Chinese domestic demand for rare earth elements could easily
equal Chinese production as early as 2012. Furthermore, in October 2009
an internal report by China's Ministry of Industry and Information
Technology disclosed proposals to ban the export of five rare earths
and restrict supplies of the remaining metals as early as next year. I
ask the witnesses to comment on these developments. Please address
their entities' situational awareness of this reliance, what they feel
are the strategic implications, and how they plan to develop
appropriate policy to mitigate this impending supply crisis as it
relates to national security and defense.
Secretary Gregson. The Department of Defense is aware of the issues
concerning the rare earth elements and their importance to U.S.
industry and national defense. The Office of Industrial Policy has been
investigating actions involving rare earth resources for many years,
particularly in the context of potential foreign acquisitions of U.S.
rare earth deposits. Section 843 of the National Defense Authorization
Act for Fiscal Year 2010, Public Law 111-84, requires the Comptroller
General to complete a report on rare earth materials in the Defense
supply chain. The Office of Industrial Policy, in collaboration with
other U.S. Government agencies including the U.S. Geological Survey,
has also initiated a detailed study of the rare earth elements. The
study is assessing the Department of Defense's use of these materials
as well as the status and security of domestic and global supply
chains. The report, to be completed this fiscal year, will address
vulnerabilities in the supply chain and include recommendations to
mitigate any potential risks of supply disruption.
Mr. Coffman. I'd like to ask the panel to address what I believe
has become a very serious emerging national security threat as it
relates to China. It has to do with industrial base supply issues
controlled by China, and not any specific military threat. But I am
hoping--given your backgrounds and your current positions focusing on
Pacific Rim nations--to garner the benefits of your thoughts and
comments. Worldwide demand for rare earth elements is escalating
rapidly. Rare earths are used in a number of applications including
emerging green technologies, and many of us on this dais have concerns
as to what that means for American innovation and domestic job growth.
But the fact that so many national security and defense systems require
these materials to function and operate is of greater concern for us
here at this hearing. Ninety-five percent of worldwide rare earth
reserves being accessed today are located in China or controlled by
Chinese-led interests. Today, there is no rare earth element production
of significance taking place in North America or anywhere outside of
China, and Chinese domestic demand for rare earth elements could easily
equal Chinese production as early as 2012. Furthermore, in October 2009
an internal report by China's Ministry of Industry and Information
Technology disclosed proposals to ban the export of five rare earths
and restrict supplies of the remaining metals as early as next year. I
ask the witnesses to comment on these developments. Please address
their entities' situational awareness of this reliance, what they feel
are the strategic implications, and how they plan to develop
appropriate policy to mitigate this impending supply crisis as it
relates to national security and defense.
Admiral Willard. This question highlights not only the importance
of rare earth elements, but also their long-term strategic value to
China. Now, with over 50 percent of rare earth ore reserves (the United
States has about 10 percent) China is not so much reliant but indeed
looks to corner the global rare earth market. Confident in a long-term
plan for domestic exploitation, some Chinese have gone so far as to
advocate banning the sale of rare earth (RE) elements to the United
States as part of sanctions against U.S. companies for their role in
recent arms sales to Taiwan.
That China could control not only prices but access to important RE
materials is worrisome, as the U.S. Rare Earth Industry and Technology
Association reports that ``Rare Earth elements are uniquely
indispensable in many electronic, optical and magnetic applications for
the U.S. military.'' These systems and subsystems include those vital
for electronic warfare (jamming), avionics, night vision, and specific
weapons systems such as the Predator UAV, Tomahawk cruise missile,
Excalibur Precision Guided Artillery Projectile, the GBU-28 ``Bunker
Buster,'' and other smart munitions. Our challenge, therefore, is to
secure an environment in which access to such strategically important
materials is unimpeded.
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