Cabinet Members Testify about China

Secretary of Defense Lloyd J. Austin III, Secretary of State Antony J. Blinken and Secretary of Commerce Gina M. Raimondo appear before the Senate Appropriations Committee. The Cabinet members testify about investing in security and a path for relations between U.S. and China during a fiscal year 2024 budget request hearing. May 16, 2023.


Will come to order. We are here today to discuss the US China relationship and the investments that we need to keep our nation secure, competitive and strong and maintain our leadership on the world stage. And let me make clear from the outset when we talk about competing against China and countering Chinese influence, we are talking about competing against its government, not the Chinese people or the millions of Chinese Americans who help make our country great. I’m glad to have secretaries, Austin Lincoln and Romano here to discuss the all of government approach. We need to meet this challenge. And as this is our first full committee hearing, I do want to thank Vice Chair Collins, as well as our chairs and ranking members, Tester Coons, Shaheen Graham and Moran for working with us on this topic that I know every one of our members cares about. And I’d like to thank all of my colleagues for their work in the recent weeks to jumpstart our appropriations process and hold more than 30 very substantive hearings on President Biden’s budget request and critical issues. We have made important progress, but I hope we can keep things on track and mark up our bills soon. Vice Chair Collins and I had hoped that this Thursday would be our first full committee. Markup. She and I are working very hard and will update all of our committee members on when we expect to have our first mark mark up in the June work period this week in the house. They are getting ready to mark up their own appropriations bills. It is my goal and I know the goal of Senator Collins to be marking up in a similar time frame. What every member in this room knows too is that the Senate must have its voice heard in this process. To that end, this committee has received critical input from nearly all 100 senators to inform our work as we craft our spending bills that meet our nation’s needs. We owe it to our colleagues and our communities and most of all our constituents to put forward the shared priorities of this chamber in a slate of bipartisan spending bills. And this hearing offers a valuable opportunity to go in depth on one of those shared priorities, making the investments that our nation needs to stay ahead of the Chinese government and other competitors who are doing everything they can to try and overtake America economically militarily. And on the world stage, as I have said throughout our subcommittee hearings, keeping our country safe and competitive is not just about defense spending, keeping our country safe means investing in diplomacy and development, to counter political and economic coercion, to promote stability, to stand up to Autocrats, to support our allies and advance our global leadership. Instead of seeing ground to the governments of China and Russia, keeping our communities safe means funding to stop deadly fentanyl from crossing our borders and dangerous cyber-attacks that can decimate our infrastructure, our schools, our hospitals and more and it means funding to make sure our supply chains for drugs, food baby formula and more are safe, are stable and not dependent on the whims of Beijing and others. And when it comes to keeping our competitive edge on the world stage, that means investing in American innovation with funding for R and D advanced manufacturing. Like we passed in the Chips and Science Act, Clean Energy Jobs, cutting edge biomedical research, emerging technologies like A I and more, it means investing in our economy at every level, supporting our farmers and small businesses, maintaining our ports and our railways and other infrastructure that we need for trade, strengthening and expanding our trade partnerships so we can sell American goods across the world, protecting our intellectual property. And of course, we cannot be competitive with the Chinese government. If we are not investing in the backbone of our economy, our working families, we cannot compete without investing in high quality public schools for our kids. We cannot compete without investing in higher education and workforce programs that help key industries find the workers that they need and we’re stunning the efforts to rebuild American manufacturing and so many other sectors of our economy. If we refuse to tackle the childcare crisis, that is keeping parents out of the workforce. And not only are these issues as important as our defense investments, they are connected, make no mistake. China is pressing forward with an aggressive modernization and expansion of their military capabilities as such. There are certain investments we absolutely must make to strengthen our own defensive and deterrence capabilities. The president’s budget requests the largest ever amount of funding for the Pacific Deterrence initiative and that is critical. We need to ensure the military has the resources. It needs to stay ahead of China’s military modernization, strengthen logistical preparedness and expand cyber capabilities and more. However, as the Secretary of Defense has said, repeatedly, keeping our nation safe requires a whole of government approach. After all our weapons need chips. So making them ourselves and working with like-minded partners to secure our supply chains is a matter of national security and this is key. We need to make sure we have a regular appropriations process. So every department including D D can plan for the year ahead. We cannot settle for C R that freeze our progress result in year over year funding cuts and seriously impair every single one of our agencies abilities to fulfill their missions and move our country forward. The Chinese Communist Party doesn’t govern by C R and they don’t govern by cuts and we can’t either. Which is why it’s been so important to me and I know Senator Collins and many others to make sure we meet this moment, do our jobs and get our bipartisan funding bills passed in a timely way. I’m glad to say we have bipartisan agreement on the problem. We are here to discuss today keeping ahead of the Chinese government and our competitors. And based on our past bipartisan efforts, I think we do have a shared understanding that the solution here must be an all of government approach. Just a few months ago, we passed an appropriations bill for this fiscal year that showed Congress can take this challenge seriously. Senators Shaheen and Moran worked together to increase funding for the National Science Foundation and fund the tech hubs program building on our bipartisanship and Science Act to invest in R and D and innovation and building a strong stem workforce. Senator Coons and Graham secured additional resources to advance us global leadership by growing our diplomatic footprint especially in the Indo Pacific. Increasing funding for the Indo Pacific strategy and providing funding and flexibility for agencies like state USA ID and the Development Finance Corporation to address emerging strategic priorities. Senators Murphy and Capito made critical funding increases to improve detection and seizure of narcotics like fentanyl and related illicit contraband and to dismantle and disrupt transnational criminal organizations. Senators Feinstein and Kennedy worked together to increase funding for the Office of Science and Department at the Department of Energy and fund our national labs so we can develop clean energy solutions and improve advanced manufacturing. Our funding bill and the bipartisan infrastructure law also included critical investments to support infrastructure improvements to ensure our ports can ship goods around the world. I think it’s safe to stay, to say we showed just a few months ago there is bipartisan support for an across the board effort to counter the growing influence of China’s Communist Party. But if we want to stay competitive, if we want to stay ahead, we have to stay the course and build on those investments. Which is why I find the approach House Republicans have called for it dangerous suggesting massive funding cuts across the government at a pivotal moment after years of bipartisan consensus for maintaining America’s global leadership, that tactic will throw in the towel to our competitors and give the Chinese government our spot as the global superpower of the 21st century. Because let’s be clear, Republicans aren’t just proposing one year of cuts to R and D and diplomacy and workforce programs, essentially everything that keeps us competitive. They are demanding spending caps that will tie our hands and lock in even more cuts over the next decade. I worry that what is being proposed leads to a lost decade for America in a moment when we cannot afford it. So let’s be clear China is not debating whether to pay its debts or wreck its economy. China is not debating whether to invest in its future or cut and cap the investments that keep it competitive. And China does not operate on C R. The more we play with default and punt investments and teeter on the edge of government shutdowns, the more we prove China and our competitors are right and helping them show the world that it is their moment to overshadow our leadership and helping them demonstrate their core belief that totalitarianism is stronger than democratic values here at home and around the world. That is why it is so critical for the Senate to make its voice heard on America’s future. We have to show that there is a bipartisan vision to strengthen our nation’s competitiveness and security by investing in American leadership across the board and a bipartisan will to get it done. That is why I’ve been focused on in all of our subcommittee hearings. It’s what I hope to hear about from our witnesses today and it’s why I want all of us to continue our work and mark, mark up bipartisan spending bills soon because the bottom line, we find ourselves today at a real turning point and this year’s government spending bills will determine whether or not we are prepared to compete with China and whether or not we will stay ahead or fall behind. We cannot close our eyes or plug our ears when it comes to a threat, the threat the Chinese government poses, we have got to build on the progress we’ve made, keep our country safe and competitive and invest in America’s future as we decide what investments we do or don’t make, the stakes couldn’t be higher and they could not be more serious. So I want to thank everyone who’s here today. Thank our witnesses. We look forward to hearing your testimony today and I will turn it over to Vice Chair Collins for her opening statement. Chair Murray, thank you so much for holding this important hearing before I turn to my formal remarks. Let me echo the chair’s determination to keep proceeding with the appropriations process in a way that will avoid a late end of the year gigantic continuing resolution that continues to fund programs that do not need funding, that prevents new programs from starting. And that makes it impossible for agencies to plan. It also ends up costing the taxpayer more money. So I share the chair’s determination to keep proceeding and I look forward to beginning subcommittee markups in June. I would note that we have gotten off to a very fast start. Our subcommittees on both sides of the aisle have worked together uh to have a series of hearings that literally have held dozens of hearings on the president’s budget request. And that’s an essential start for this process to our witnesses. I want to tell you that I’m very much. Looking forward to your testimony on how we can work together to strengthen us security and competitiveness. Regarding China America has competition with China is an increasing challenge, but it is not a new one overlay China’s modern economic successes with its 3500 years of history. And today, the world faces an authoritarian government that seeks to regain its hegemonic past and dismantle the international order created by the United States and our allies following World War Two. To be clear, China’s vision is to be the world’s military and economic powerhouse and it is well on its way today, China has the world’s largest navy, the world’s largest army and the world’s largest economy by purchasing power parity. Competition with China occurs in every domain from the United Nations to cyberspace to Africa. Our focus with regard to our military competition with China must remain on deterrence which is defined by the strength of our readiness, capacity and capabilities and that of our allies and partners. We must ask ourselves at the Pentagon and Taiwan have the weapons, munitions and manpower necessary to credibly deter China from using force to accomplish its objectives. As Secretary Austin knows from our hearing last week, I believe that the administration could do better in this regard. Secretary Blinken challenge is getting our bilateral diplomatic relations with China on as stable a footing as possible. Given the inconsistent statements by the president on us policy toward Taiwan, it would also be helpful if the secretary were to clarify today. If there has been any change in the one China policy and the strategic ambiguity there in America is only as strong abroad as we are at home, including the innovation and technology, we can protect. I hope today that Secretary Romano will give us an update on efforts to prevent the theft of intellectual property to bolster us leadership and advanced technologies and to impede China from exploiting American technologies to advance its military interests. Finally, as one Department of Homeland Security official recently testified, the fentanyl crisis begins and ends in China. Many precursor chemicals originate in China and Chinese criminal organizations launder the drug cartels, money and source the pill pressors that facilitate the distribution of this deadly poison. Just last month, the employees at a restaurant in Auburn Maine opened a crate expecting to find mugs that they had ordered. Instead, they found 14 kg of fentanyl that is enough to kill five times the population of the entire state of Maine. Thankfully, the employees called local law enforcement who sees the fentanyl undoubtedly saving many lives. Addressing the fentanyl crisis must be at the top of this administration’s agenda with China. Again, I look forward to discussing these significant issues with our witnesses this afternoon. Thank you. Thank you, Vice Chair Collins. I will now briefly introduce today’s witnesses and move to testimony. I’m very pleased again to welcome Secretary of Defense Lloyd Austin, Secretary of State, Antony Blinken and Secretary of Commerce Gina Romano. I’m grateful to all three of our witnesses for the work they do every day to keep our community safe and help us stay competitive. And I want to thank each one of you for taking time today to be with us and to answer our questions, we will now move to opening remarks. And Secretary Austin, I will begin with you. Uh Chair Murray, vice Chair Collins, members of the committee, thanks for the opportunity to testify about America’s strategic competition with the People’s Republic of China. I’m glad to be joined by Secretary Blinken and Secretary Rao. We rely on each other every day because to compete and succeed, we must use all of the tools of American power. And I’m grateful to Congress for recognizing the urgency of the China challenge and taking bipartisan action to meet it. I’d like to underscore five key points today about how the Department of Defense is tackling the security challenge of the PR C in lockstep with our partners across the administration around the world. And here in Congress first, we’re focusing the entire department on continuing to outpace the PR C. As the President’s national security strategy notes, the PRC is our only competitor with both the intent and increasingly the capacity to reshape the international system to suit its autocratic preferences. Beijing has increased its bullying and provocations in the Indo Pacific. It’s embarked upon an historic military buildup including in space and cyberspace. Of course, war is neither imminent nor inevitable, but we must face up to the Pr CS growing assertiveness. The department’s mission is clear to deter aggression that threatens our vital national interests. So we’re investing more than ever in a formidable innovative fighting force and a more resilient force posture in the Indo Pacific. Our budget includes a 40% increase over last year’s request for the Pacific deterrent initiative to an all-time high of $9.1 billion. We’re delivering critical capabilities through more agile approaches to testing and acquisition. And we’re developing novel operational concepts for how we employ the joint force. Our national defense strategy calls the PRC our pacing challenge and we chose the word challenge carefully. The United States does not seek confrontation, conflict or a new Cold War, but America has never shied away from competition and we’re working with both our rivals and our friends to strengthen the guard rails against conflict, to prevail in strategic competition. We must work together as one team and that’s my second point that demands even closer cooperation with our colleagues at the Department of State Commerce and elsewhere. We work with the Department of State to help prevent conflicts from breaking out. In the first place. We protect the free and open trade lanes that drive the world economy and we’re supporting the Department of Commerce’s leading role in implementing the Chips and Science Act and we work closely with commerce to advance our technological advantages. Third, we are determined to keep the Indo Pacific free and open and most countries in the region share a common vision of an open and inclusive Indo Pacific, free of bullying and coercion. And we’re proud to stand together with them. So we’ll continue to strengthen the rules based international order by making clear the folly of aggression and maintaining open lines of communication. Fourth, the whole administration is working to deepen ties with our network of alliances. We’re working with our friends around the Indo Pacific and the world through security cooperation and assistance and through combined operations and exercises. We’re also working to develop innovative new capabilities and deepen integrated deterrence in recent months. That strategy has produced historic results in Japan. We’re for deploying more resilient and mobile assets and that includes our plans to deploy the Twelfth Marine Electoral Regiment. We’re pursuing major New Force Posture initiatives with Australia and through the historic a partnership, we will work with our Australian and British allies to help forge a more stable balance of power in the Indo Pacific for generations with our Philippine allies. We will have rotational access to four new locations under the Enhanced Defense Cooperation Agreement. And meanwhile, we’re expanding our security cooperation with South Korea, India, Thailand, Singapore and many others. We’re deep deepening our ties with ASEAN and the Quad and I’m pleased that the United States will soon provide significant additional security assistance to Taiwan through the presidential drawdown authority that Congress authorized last year. This is part of our long standing commitment to upholding our obligations under the Taiwan Relations Act and other US policy and to doing our part to maintain peace and stability in the Taiwan Strait. So we’ll need to remain a lot so we need to remain a reliable partner. That brings me to my final point. The best way that Congress can ensure our strategic advantage is with an on time appropriation that supports the president’s budget request. No amount of money can buy back the time that we lose when we’re forced to operate under the continuing resolutions and reducing funding to F Y 22 levels across the government would hamstring our ability to compete even if the defense department is exempted from cuts. We succeed as a team and a department of Defense succeeds when our interagency partners succeed. We’re not just shaping our military but America’s entire strategy to compete and lead. I look forward to working with all of you to continue that proud tradition of us global leadership. Thank you, madam chair. Thank you, Secretary Austin, Secretary Blinken Murray, vice chair Collins State and Foreign Office. Chair coons ranking member Graham, distinguished members of the Appropriations Committee. Thank you for this opportunity to testify before you today. Thank you for bringing us all together. I’m very pleased as well to be here with Secretary Austin, Secretary Rao. This administration is committed to leading a bipartisan whole of government China strategy that advances us interests and values and delivers for the American people. And to your point Chair Murray, I think we do stand at an inflection point. The post-Cold War era is over. There is an intense competition underway to shape what comes next. China represents the most consequential geopolitical challenge that we face today, a country with the intent and increasingly the capability to challenge our vision for a free open, secure and prosperous international order. We cannot dictate Beijing’s path. We cannot wait for China to change its trajectory, but we can put ourselves in a position of strength to compete intensely, to shape the broader strategic environment around China. And to advance our vision, we do not see conflict with China or a new Cold War. We’re not trying to contain China. And in fact, the United States continues to have a comprehensive trade and investment relationship with China as do most of our allies and partners. We are however resolutely for de risking and diversifying, not decoupling. That means investing in our own capacities and in a secure resilient supply chain, pushing for a level playing field for our workers and companies defending against harmful trade practices and ensuring that the United States and allied technology is not used against us. We’re also committed to working with allies and partners to advance a free and open indo pacific one that is at peace and grounded in respect for rules based international order. Uh When we talk about free and open, what we mean is this, we mean countries being free to choose their own path and their own partners and that problems will be dealt with openly not coercively rules will be reached transparently and applied fairly goods, ideas and people will flow lawfully and freely across the land, the seas, the skies and cyberspace. The world is watching how we and Beijing manage this relationship. And it’s in our best strategic interest to do so responsibly in a way that promotes security and prosperity and delivers solutions on shared challenges that matter to the American people and to people around the world. Last year, I had an opportunity to set out the administration’s Comprehensive PR C strategy to invest align and compete. We have made historic investments here at home including the bipartisan Infrastructure law, the Chips and Science Act, the Inflation Reduction Act to strengthen our ability to compete. We’ve aligned our approach with key partners in Europe and Asia and beyond working methodically to elevate our engagement around the world. And as a result, we have achieved greater convergence on how to deal with the challenges that China poses than ever before. As we compete, we will work to maintain open lines of communication at all levels with the PR C to avoid miscalculation to prevent competition from veering into conflict. Senior level engagements over the past few weeks demonstrate that commitment. We will purposely engage China not as a favor or with engagement as an end in and of itself, but in ways that reflect our values and where we can find areas of cooperation that are in our mutual interest. That’s what the world expects of responsible powers. So we’ll push for progress on priorities like the climate crisis, macroeconomic stability, public health, we’ll continue to press the need to curb the flow of precursors that exacerbate fentanyl and synthetic opioids and the crisis that they pose. And I very much appreciate the leadership of this committee on this most urgent challenge for the United States. We’ve heard from members in both parties on both sides of the hill that this unprecedented challenge requires an ambitious resource strategy. We very much agree. That’s what the president’s proposed F Y 2024 state department budget aims to do give us the resources and the agility to advance our strategy. This budget positions the United States to up our game. In the Indo Pacific. The front line of our competition with China. The Indo Pacific is the most dynamic and fastest growing region in the world. 50% of the world’s population, 60% of global GDP eight of the top 15 us export markets. It supports three million jobs here in the United States provides about $900 billion in foreign direct investment to our country and it’s driven about 75% of global economic growth over the last five years, China as it happens, invests a full 50% of its assistance and economic and diplomatic resources in the Indo Pacific. Our budget proposal will allow us to further deepen our diplomatic footprint in the Indo Pacific from new missions in the Pacific Islands to a surge of new positions in the region and beyond, including in the areas of greatest contestation with Beijing, like technology, economics and regional and international organizations. Beijing understands that diplomacy is a critical tool. It’s why it’s invested heavily in building up its own diplomatic capacity, its own diplomatic reach. And in fact, it’s increased its diplomatic budget last year at a faster rate than its military one. And today it has more diplomatic posts around the world than the United States. If we’re serious about this competition, we have to demonstrate the same diplomatic seriousness of purpose across the board. Now we’re not demanding that other countries choose between us and China. But rather we aim to offer a more attractive choice if we can spark a race to the top so much, the better that would be to everyone’s benefit. Our budget sets us up to work with like-minded partners to strengthen our offer and ensure it’s relevant and responsive to the needs and aspirations of people around the world. That’s why the budget includes $2 billion in new investments in high quality sustainable infrastructure rather than low quality opaque extractive projects that leave countries mired in debt. It would invest $2 billion to bolster indo Pacific economies and help the United States compete in areas where the PRC currently dominates. And in key priorities for the region including maritime security, disease, surveillance, clean energy, digital technology underseas, communications cables, critical mineral mining, and it contains over $7 billion to extend our economic engagement with the freely associated states via the compacts of free Association. That’s a critical component of our Indo Pacific and national security strategy. Altogether, these funding streams ensure that we can meet a generational challenge and demonstrate our long term commitment on issues that matter most to key countries in the region so that the United States remains the partner of choice. During this decisive decade, our efforts and investments together with our partners will determine whether we succeed in advancing our shared affirmative vision for the international system or whether the PRC can erode or replace the global rules and norms that guarantee peace, security and stability in the world. I’m grateful for this committee’s partnership to sustain the resources and policies required by this challenge and very much look forward to taking your questions. Thank you. Thank you, Secretary B Lincoln, Secretary Raymondo. Good afternoon, good afternoon, Chair Murray, Vice Chair Collins and members of the committee. It is my pleasure to be here with you with my colleagues to have this opportunity to discuss President Biden’s fiscal year 2024 budget request and our work as a whole of government approach to protect America’s national and economic security and promote our competitiveness in the face of the very real and increasingly significant challenges from China, as has been said by my colleagues and by Senator Murray and Senator Collins, competing with China requires everyone on the field, operating as a whole of government and working in a bipartisan way with Congress. It requires the use of the full extent of our economic diplomatic and military tools. And I am so honored to be here with my colleagues in doing this work together. And I look forward to working with you on a bipartisan basis with the Senate as you uh develop additional legislation, building on the chips and Science Act to ensure that we can compete and secure our economic future. The Commerce Department in partnership with you is leading the way on a bold domestic agenda, bringing advanced manufacturing and critical indu industries back to the United States. And at the same time, we have never been more aggressive in using our department’s tools to address the threats from China. I want to say that again, this Commerce Department under President Biden’s leadership has never been more aggressive in using our tools than we have been in the past few years today. I’d like to focus on three key areas of investment in the president’s budget request for the Commerce Department that will strengthen our ability to out compete China. First, this budget makes strategic investments in innovation, manufacturing and supply chains. The fact of the matter is without strong manufacturing and the jobs and innovation and technological leadership that flow from it. We are at a disadvantage in the race to invent and commercialize future technology. The numbers are in my written statement but the budget supports funding for the National Institute of Standards and Technology, including the Manufacturing Extension Partnership and the International Trade Administration which will improve American manufacturing capabilities, strengthen our supply chains and improve our export capacity. Additionally, as has been mentioned today, thanks to the Chips and Science Act, the department is investing over $50 billion to strengthen revitalize and reassure domestic semiconductor manufacturing capacity and critically research and development. These investments along with the department’s new tech hubs initiative which just on Friday released its first funding opportunity will supercharge tech ecosystems all across this country and are absolutely crucial investments in order for us to compete and out compete. China second, the budget includes funding for the Bureau of Industry and Security to continue activities that strengthen us national security, foreign policy and our economy through our strategic use of export controls including unprecedented restrictions imposed last October on China’s access to advanced computing chips and semiconductor manufacturing equipment. B I S is preventing the use of us technologies that enable China’s military modernization, their human rights abuses and other activities that are contrary to the United States national security and foreign policy interests. Currently there are over 2400 entities on the entity list that face restrictions on export controls. China and Russia represent the top two. When we find conduct prohibited by our export controls, we take action and I’m very proud to say that last month, the Commerce Department announced a $300 million civil penalty, the largest ever administrative penalty imposed against an American company for selling hard disk drives to Huawei without a license. Third. And finally, the budget enables us to partner with our allies to advance our shared values and shape the strategic environment in which China operates. As Secretary Blinken just said the budget includes funding for I T A to ensure that us businesses and commercial interests have a robust advocate on foreign trade and market access barriers. This funding will help us counter China’s economic coercion and enhance us export competitiveness worldwide. The budget calls for increased funding for us economic engagement in the Indo Pacific. So this budget request is absolutely critical to our economic and national security and without this funding and or with substantially reduced funding, make no mistake about it. We’re putting both at risk as has been said by chair Money Murray. China is doubling down on its competition with the US and investments and we cannot afford to slow down now. So I look forward to the discussion we’re having today and I thank you for your time and your effort in this effort. Thank you very much. Secretary Romano, we will now begin a um round of five minute questions of our witnesses and I do ask my colleagues to keep track of your time and stay within those five minutes. Each of you has testified about the importance of the investments the president’s budget proposal makes in your agencies. I I want to drill down for a minute and make clear to this committee what the stakes really are if we do not pass bipartisan spending bills, if we end up flat lining spending and not making any policy decisions this year under a continuing resolution or if we cut non-defense spending back by billions. Um What can you say in this open setting about the worst impacts and how far it will set us back in our ability to stay competitive with countries like China and Secretary Austin?

I will begin with you. I thank you, Chair Murray. Uh as I said before, no amount of money can make up for lost time. And as you said, Chair Murray Pr C is not waiting. Uh our budget reflects our strategy. We, we went to great pains to make sure that we linked our budget request to the strategy. And so it without a budget, it’s uh difficult to, to execute the strategy as designed. We can’t execute new starts, severe impacts to procurement and it will affect readiness and our ability to build out our infrastructure as well. Specifically what that means. It takes ship building. For example, we could expect a $9.7 billion or so impact to shipbuilding. Our production rate increases. Uh We won’t be able to uh to accomplish those. Uh We won’t be able to award the second uh uh a contract for the second Columbia class submarine. Uh We won’t be able to start the production on the Virginia class submarines. It will delay our ability to get the critical munitions that we need for ourselves and also to support our allies and partners as well. Uh munitions like Gimler Tomahawks uh and uh and mark 48 torpedoes just to name a few things. Uh chair and uh and again, the list is pretty extensive. Thank you, Secretary Blinken. Yes, thank you very much. I just say two things first, if you look at this overall, from our perspective before drilling down on China, if we were to end up in that world, our ability to do things that on a bipartisan basis. Congress supports including support for Ukraine and its neighbors, including countering harmful pr C influence and resourcing our indo pacific strategy, including maintaining our leadership and everything from humanitarian assistance to global food security. We would be severely hindered in doing that. We’d also have real challenges when it comes to the investments that we need to make in security and in upgrades, physical and cyber, leaving our personnel, leaving our facilities, leaving our cyber defense more vulnerable than it otherwise would be more specifically in this region. And with regard to China, we have in the budget, a number of items that are critical in our judgment to being able to effectively counter China’s growing influence in virtually every region of the world. It would reduce our efforts to engage and build the kinds of partnerships we need to push back against that influence, to make sure that the United States remains the partner of choice. We have among many other things, funding provided in the budget to make significant investments and to enable us to catalyze private sector investment in critical infrastructure in mining, critical materials and rare earth materials in making sure that we can help develop secure communications networks, underseas, cables and a secure cyberspace in these in so many other ways, we would be significantly hindered beyond that, the investments that we need to make in our own personnel, expanding our missions in the Indo Pacific as we’re in the process of doing, making sure that we attract and train the most effective talent, particularly when it comes to dealing with China. All of that would be hindered. And finally, and it’s hard to quantify this. Um I think we’d be sending a broader message of retreat at a very time when we need to be sending the opposite message around the world. You want to turn on your uh excuse me, the can you hear me?

Yes, the Commerce Department is involved in both our offensive strategy, which is to say, investing in our defensive strategy, which is to say, protecting our technology. So I’d like to very quickly highlight three ways that we would be very significantly impaired in our ability to meet the China challenge first B I S. So if we were to go back to 2022 levels, that would be about 100 and 25 fewer people in B I S, that’s 100 and 25 fewer people to uh do end use checks around export controls. Last year, we did 1100 end use checks in 54 countries. The vast majority related to China with 100 and 25 fewer people. We would not be able to do all we do and us technology would get into the hands of Malign actors in China I T A. We have foreign commercial service officers in 79 countries all over the world. We would have to cut at a time when China is expanding. We wouldn’t be present in Africa and South America in the Indo Pacific in the way that we want to be. And finally, as it relates to investment, as you said, Senator Murray, we need to invest has the federal government’s smartest minds around artificial intelligence and cyber. We need to be investing in that. We currently have a billion dollar backlog of deferred maintenance. At N S. At the same time, China is investing in new facilities of their nest equivalent so I’ll stop there in the interest of time, but it’s significant. Thank you very much. Uh Senator Collins, thank you, madam, chair Secretary Lincoln. What specifically is the State Department doing to deter China from continuing to send to Mexico, the precursor ingredients and the pill presses for fentanyl that eventually makes its way into the United States. Thank you very much. Um Just step back for one second. In 2019, China agreed to schedule fentanyl and fentanyl related substances. The positive development there was that the export of fentanyl itself to the United States, more or less ended. However, what emerged in its place is exactly what you’ve described and that is the fabrication of precursor chemicals. Many if not all of them perfectly illicit, but then uh illegally diverted to the production of fentanyl often made in Mexico. And then as you know, shipped into the United States, we have been in every single engagement that we’ve had with China pressing this issue in particular, pressing China to take action to get control of the illicit diversion of precursors uh into fentanyl and other synthetic opioids. China’s response has been a number of things including their view that this is a demand problem for the United States and that while they scheduled fentanyl, we have not. So this is an argument in the absence of that. Uh we’ve sanctioned Chinese individuals and Chinese entities that we have found taking part in this diversion at the same time, we’re building an international coalition of countries on fentanyl and on synthetic opioids to make this a global challenge. And here’s why and here’s how this will affect China, what we’re seeing because our market has tragically become saturated. We are seeing criminal enterprises push to make new markets in other parts of the world, in Europe and in Asia. As a result, the demand signal on China to take effective action, I am convinced is going to grow and not just from us, from other parts of the world. China is going to have to decide whether it wants to be responsive to that demand signal or whether it’s going to continue uh to allow one way or another, the diversion of these chemicals, we will continue to take resolute action wherever we find those who are engaged in the diversion. Uh And at the same time, we would be better off if we could secure genuine cooperation from China in helping us to deal with this problem that now we do not have that now. I mean, China is not only providing the precursor chemicals, it’s now providing the pill presses that are used by the cartels. And the only thing, the only thing I’d add here is that this of course is and has to be a comprehensive effort starting with the actions that we’re taking at home, moving to the work that we’re doing on our border, then to the work that we’re doing with Mexico, which is absolutely vital and then the broader international community to include, of course, China Secretary Austin last year Congress authorized up to $1 billion to send existing dod weapons to Taiwan. Consistent with the Taiwan Relations Act, you’ve testified that the administration intends to exercise this authority and there were press reports just last week that the administration was contemplating a $500 million package for Taiwan. Will the administration be requesting the necessary funding to backfill any US weapons and munitions that are provided to Taiwan as we have done with Ukraine, so that there is no net loss to the US military capability as a result of the package under consideration by the administration. Thanks, vice chair. First of all, let me thank Congress for what you’ve done to provide us with the authority to affect presidential drawdown. That’s critical in our efforts to provide Taiwan what it needs to for self-defense going forward. And you are correct. We are working on that initiative and we hope to have an action forthcoming here in the near term. Um We will absolutely need to have the uh the appropriations to uh replace those things, uh which uh which we provide. And so uh vice chair, we won’t hesitate to come forward and ask for what we need to uh make sure that we maintain our, our stocks. Thank you, Senator Sheen. Thank you madam chair and thank you to each of you for being here. Um I have um brought along with me two maps that I know are um you have seen before, Secretary Austin because they’re done by the Department of Defense and I brought them because I think it shows very clearly the challenge that we have. Um these are of China’s influence in Latin America and in Africa. And if you look at the maroon color in Latin America, Central and South America, everything that’s in maroon, all of those countries are members of the Belt and Road Initiative, 21 of 31 countries in Central and South America members of the Belt and Road Initiative. Um in Africa, it also shows um the challenge that we have. Now Secretary Blinken, you said in your opening remarks that the Pr C People’s Republic of China has more diplomatic posts around the world than we do. Um We can’t effectively compete if we don’t have qualified, confirmed ambassadors in place. And that’s important, not just for each country but also for the multilateral bodies where China is busy building support while in many cases, we don’t have anyone serving. So I appreciate that the Biden administration has accelerated the announcement of key nominations in recent weeks, but we’re still waiting on the appointment of a special envoy to Belarus at a time when Lukashenko is making visits to China, the administration hasn’t nominated an ambassador to Haiti or the Dominican Republic and it only just appointed Ambassador Marcel to serve in Italy, which of course is welcome news, but it’s taken over two years to get there. I recognize that the hold up here is largely in the Senate. I call on my colleagues, particularly those people who are holding in mass ambassadorial nominations from coming to the floor. But we also don’t have an ambassador to the Arctic region where both Russia and China are looking to gain strategic foothold. We can’t get our ambassador to the African Union confirmed when we’re in the middle of a conflict in Sudan and where China is expanding their Belt and Road initiative in countries like Montenegro and Georgia. China is seeking to make strategic investments while our nominees are being held on the Senate floor. So can you Secretary Blinken speak to how many ambassadorships are currently open and pending before the Senate and then whether there are specific important ambassadorships that we should be taking up as soon as possible because we have strategic interests at stake. Senator. Thank you for raising that. As I mentioned, China now has a handful of more diplomatic posts around the world than we do. We have 173 missions. They have roughly 180 each. One of theirs has a fully accredited ambassador. We currently have 14 nominees on the floor pending confirmation. Many of whom have been in this process for a year or more. We have another 40 who are somewhere else in the process going through their hearings and evaluation uh by the committee. Um So we’re acting at a, at a deficit at a disadvantage. China is able not only to be present in more places, but it’s got full, fully accredited ambassadors in each of them. And that makes a difference as good as our charges are, as good as our DC MS are. And they’re terrific. It’s simply not the same thing what happens. And I’ve seen this time and again, is that a foreign leader, head of government, head of state will engage with one of our Senate confirmed ambassadors, but may be more reluctant to engage with someone who is there um filling in until an accredited ambassador could get there. That leaves a vacuum and guess who fills the vacuum increasingly, it’s China. So we’re penalizing ourselves. If we’re not getting our full team on the field as quickly as possible, it’s simply not a serious way to compete. And what would you say to those people who say I’m very concerned about the PR C as a part of our great power competition as we’re looking at the challenges that we face. But I’m not willing to vote for the ambassadors who are gonna be there in countries to help us with this fight. Well, I think there’s a contradiction and I would hope that everyone who is invested in making sure we can compete effectively. And I believe that’s probably every member of this, this body uh in both parties will take account of the impact of not having accredited ambassadors in every country that uh that we need them. And to your point, I’m looking at, at your map and we know we see that China is active on every continent seeking to advance its influence. Again. If we’re not there, we’re not competing. Thank you. Thank you, madam chair. Thank you, Senator Graham. Uh Thank you. I have a uh a letter from myself and Senator Coons like to introducing the record about what our subcommittee has done to deal with the China problem. Thank you. Uh Secretary Austin. I’ve been telling my constituents in South Carolina that if we fold in Ukraine and let Putin have his way with the Ukraine, China is more likely to invade Taiwan. Do you agree with that?

I agree, Senator, not only China, but uh we’ll see other bad actors around the world. Uh try to do the same. I couldn’t agree with you more. So, how we deal with other bad actors in the world matters?

Do you believe our disastrous withdrawal from Afghanistan emboldened our enemies?

Secretary Austin Senator, as you know, uh there were three uh things that happened and I don’t have time for three things. Do you believe it emboldened our enemies?

And if you don’t, you’ve missed a lot. I don’t. Ok. Good. Well, you, months ago that China was on the verge of supplying lethal aid to Russia, was that accurate when you said it, it was Senator Kay. Do you?

We all agree. We want China not to help Russia. Right. Here’s an idea. 100 us senators recommended to you that we declare Russia a state sponsor of terrorism to deter people like China from giving them a weapons. Here. We are months later and nothing has happened. And Miss Secretary, I, I like you a lot but you’re never going to designate Russia a state sponsor of terrorism. Are you never say never?

Well, I can pretty well say China sees all talk here. If you’re really worried about China giving weapons to Russia instead of picking up the phone and calling the Chinese. Please don’t do that. Why don’t you get 100 US senators to pass a law telling China if you give them one bullet, we’re gonna sanction the hell out of you. Could I just could I just add to that. I, I think uh China has taken account of the, so do you think they’ve been deterred of the unprecedented sanctions and export controls that we have against?


Think making Russia a state sponsor of terrorism would not send a stronger signal to China to China. Don’t help the Russians. I think the authorities that we have and we’ve used, which are very effective. Let’s send a clear message. Yeah, let’s go to Iran. Is Iran a state sponsor of terrorism under us. Law, madam Secretary. Yes, I believe it is. Ok, they’re sanctioned to the hilt, right?

Ok. Do you realize that Ron’s oil revenue went up 20% last month?

I believe. I know it’s gone up. Yeah, it’s gone up 20% every month. Why?

Because of China?

So this idea that we have a strong China policy is a bunch of. It’s not the budget will deter China. It’s our will to take on people like China. So I think we’re in a real world of hurt. Let’s talk about the navy. You know, the the chairman criticized the house budget proposal. I quite frankly understand some of your concerns ac R would be disastrous. I agree. Secretary Austin, the C N O of the navy said we needed 373 manned ships and 100 and 50 unmanned uh ships to deal with the threats we face. Are you aware of that?

I’m aware that he said that we need uh do you agree with him?

I I agree with the plan that the, that the navy is out. Well, here’s what the navy said for us to get 373 ships. What we need?

I would think the navy is really important to, to China that would have to spend 5% over inflation to reach that goal. Are you aware of the fact that the budget you proposed to this committee spends 1.7% under inflation?

I I am it’s uh under current rates, right?

Well, I would say that you’re never gonna get the 373 ships if you got to spend 5% over inflation. And the budget is 1.7% below inflation. And here’s what the committee needs to know. Under the budget proposed by the president. We go from 296 ships this year to 291 in F Y 28 China has 340 ships and by 2025 they’ll have 400 we project by 2030 they’ll have 440 ships. So we’re not doing what we need to be doing to let China know we’re serious about playing in their backyard. So this idea of countering China cannot be looked in the budget vacuum. How many diplomats we have on the ground?

Everything we’ve done in the last two years in my view has made every bad actor more emboldened. And it started with Afghanistan and the Iranians are making more money under sanctions, not less. And China is the biggest reason. We’re not doing a thing about it. We have a chance here in a bipartisan fashion to send a signal before it’s too late. And when it comes to Ukraine, I appreciate this committee’s bipartisan action. But I can tell you right now, if the Department of Defense doesn’t provide the IC C with the evidence necessary to prosecute Russians and you’re holding it up we’re sending yet another signal that we’re all talk when it comes to bad actors. So you may be pleased with what you’re doing, but I am not Senator Coons. Thank you, Chair Murray, Vice Chair Collins. Thank you for the forbearance of my colleagues. Uh given my timing demands and thank you to our witnesses in front of us. Having the Secretary of Defense Secretary of State Secretary of Commerce jointly appear in front of us is a reinforcement of the need for a joint approach to reinforcing us national security, our diplomacy development, economic competitiveness in the face of the very real challenge of the pr C I will just at the outset repeat what we heard from the chair, which is that we cannot default and we cannot fail to appropriate Xi Jinping has assessed the United States as a flawed and failing political and economic system. Nothing we could do would reinforce that impression more than defaulting on our national debt or failing to appropriate. Let me turn to some of the investments asked for in this year’s budget that will advance our joint goal. Secretary Blinken Raymundo. You saw the posters that Senator Shaheen put up in the global South, whether in Latin America, Africa, the Pacific Islands, Southeast Asia, we see that the global South is increasingly aligning with Chinese economic and foreign policy, not because they failed to appreciate the risks of debt burden diplomacy, not because um they perceive China’s alternative governance models better. But because they say over and over the absence of an American presence, we have to show up. It is a challenge of presence and engagement, strategic communication, providing credible alternatives, particularly regarding economic investment. You’re both on the board of the Development Finance Corporation. It’s a critical new resource to compete with the Belt and Road initiative and it’s investing billions in development projects with key partners around the globe. Speak if you would to, what authorities and resources does the D F C need to maximize its impact to meet this moment?

And what else are you proposing in this budget to address these critical challenges of engagement to push back on China’s investment globally?

Secretary Blinken, if you would thank you very much, Senator and just before I get to that just uh for the record and I’m sorry that Senator Graham is is no longer here. But you know, we have sanctioned 40 different entities for oil trade with Iran of the 40 that we have sanctioned. 17 were Chinese um with regard to these investments, Senator I could not agree with you more and it is vital for us to be able to compete to compete effectively. And in particular, because this is our comparative advantage to catalyze private sector investment, we are not going to match China dollar for dollar in state investment. The way we do it is by catalyzing private sector investment. The D F C is one of the most critical vehicles for doing that. What we’ve proposed in the budget is a mandatory allocation for the D F C. In addition to its regular budget that would allow us to create in effect a new revolving fund that would boost equity investments in viable development to leverage private capital and also to counter some of the predatory lending that we see coming from China. This would in a number of ways support the very kinds of projects that both people want and need and that advance our position, strategically mineral mining and reprocessing, wireless networks, undersea cables, ports, roads, rails, medical manufacturing in different parts of the world, water and sanitation. I’ll give you just one example of something that’s already in train in F Y 22. We have AD F C investment of just $30 million that is allowing us to produce critical minerals mining platform to support nickel and cobalt mining in Brazil, something that is essential to the technology of the century. In addition, airport in Sierra Leone and African investment fund for digital infrastructure. It’s a long way saying we need to make sure that the D F C is well capitalized that it also has the flexibilities particularly to make equity investments. This is what our partners are most looking for. Thank you, Mr. Secretary Secretary. Yes, thank you, Senator. Uh and thank you for your leadership as it relates to the D F C. I agree with everything that Secretary Blinken has said our ability to counter China requires us to show up, requires us to show up in embassies and it requires us to show up on the ground with money and that includes us private capital. And so the D F C I would argue plays a more important role now and in the years to come than it ever has, it is, as secretary said, critical minerals, but it’s also basic infrastructure, you know, basic investments in infrastructure, roads and bridges, clean energy, uh clean infrastructure, and the D F C can provide concessionary finance, for example, to draw forward a great deal of us, private capital. I can tell you this in all of my travels and I will be going uh this summer to Africa and all of my travels. The United States is uh the the source of choice over China and the D F C working with us will help us to show up with the capital that’s so sorely needed. Thank you both Senator Moran, Senator Collins. Thank you uh secretaries. Thank you for being here. Um Let me start with uh Secretary Romano. Welcome back. Uh you and I have had a chance to see some aviation and aerospace uh activities uh in our country. The RAND corporation recently testified that for each three of the aviation categories, military commercial in general, the United States is ahead of China and competitive with or better than the rest of the world. However, and I quote, China continues to close the gap with the United States Secretary Romano Aviation Aerospace plays a critical role in both our economic and national security in light of the China continuing closing the gap their advances in this field and the Chinese Communist Party’s explicit intention to challenge us dominance. What can policymakers do to ensure the US remains a global leader in aviation, aerospace and the innovation that is associated with both?

Thank you, Senator for your question. Uh There are a number of things we can do. But one thing in particular that I will point to uh at the Department of Commerce that we are doing is investing in tech hubs. There are regions all around the country uh that have expertise in aviation skills, R and D, talent, etcetera. Uh Not necessarily in New York City and San Francisco. And so by investing in tech hubs all across America and identifying areas of excellence including in aerospace and aviation, making those investments which draw together the public sector and the private sector and research universities. That is the way we stay ahead. That is the way we stay ahead of China, investing in R and D, investing in every nook and cranny of this country to tap into the full extent of our innovation and talent and investing in our workforce. Uh Thank you, Secretary Secretary Austin. Anything you would add in regard to the value of technology uh and capabilities in aerospace and aviation generally as a, as a manufacturing component, as a research component of our country. What does it mean to our national defense?

First of all, I absolutely agree with, with the secretary and that’s why you see us asking to invest some $146 billion in R D T N E. It’s the largest request for, for research and development that we’ve ever made. And you also see us continuing to invest in, in our air forces. We’re asking for some $60 billion plus to make sure that we maintain a dominant air force. And if you look at things that we’re doing with respect to making sure that we maintain that edge. I think the, the, the raid that we unveiled B 21 radar that we unveiled in December is clear evidence of our focus on making sure that we remain out front and we go after the capabilities that are necessary to support our war fighting concepts. So we will continue to do that. I think we’re investing in the right thing and we appreciate Congress’s support. Secretary Blinken uh during your uh appropriations subcommittee hearing. I asked you about trade uh and particularly the, the uh updated T P P agreement that we are not a part of. Uh and I would highlight this as well for Secretary Romano. Um your, your answer, I don’t mean that you were cavalier in your answer, but your answer was in part T P P was a good agreement, but we’ve moved on uh since then, the world has changed and uh I took those words and uh researched what many countries are saying. In fact, they’re asking us to engage in this trade agreement uh countries in the South Pacific, Australia, for example, Thailand. And I just would highlight again for both of you, Secretary Romano and Secretary Blinken, the importance of trade. We need the relationships that perhaps you’ve described using diplomacy and diplomats and state department officials and relationships. But in my view, one of the pillars that’s missing in this administration’s efforts to connect the rest of the world and the United States together is trade agreements in which we are not negotiating and not pursuing. And I think it’s a mistake for our country’s economy. And I think it’s a mistake for our country’s national security. The rest of the world needs to see economic benefits by being aligned. And I can tell you China does an excellent job of demonstrating at least up front temporarily what an ally and supporter they are of other countries’. Economies, Senator, I very much appreciate your perspective on this. Let me just say very quickly, two things. First, some of the investments that we’re talking about and the vehicles for those investments financed in the president’s budget are actually critical to delivering what people are looking for and need in country after country around the world and doing it in a way as I said, it’s a race to the top, not the race to the bottom that we sometimes see with investment coming from China. Second, we are very focused on putting in place and implementing the Indo Pacific economic framework or IP F. We have 14 countries that have signed on to do that. It includes trade facilitation particularly with regard to digital trade. It includes supply chain diversification and resilience. It includes work on a clean economy that many of these countries are looking for, including the financing, the development of such an economy and it includes a pillar on combating corruption and other things that corrode the efforts to actually make trade investment work. We found great enthusiasm for that among the countries that have signed on as I said, they are now 14 and we are working overtime to actually put that on the rails and make it work. Mr. Secretary China has requested to engage in that to enter that agreement and Great Britain has entered as well. Other countries are finding uh the value uh that I wish we would see. Thank you, Senator Tester. Thank you Senator Collins and I wanna thank all three of you for being here today. Uh We have heard and we know some of the things that China is doing, what they’re doing with their military they’re doing with money manipulation, what they’re doing with the precursors of fentanyl, with cyber-attacks, harmful trade policies, opposition to a free and open Pacific. Um Senator Shaheen talked about the Belt and Road initiative. Uh, what they’ve done worldwide with Rare Earth and what they’re doing with technology theft. On the other side of the equation, we’ve got the United States of America, the greatest country on earth didn’t happen by accident because we had folks who came before us that made good decisions. Unfortunately, we’re not in that boat. Uh, the folks here in Congress, I think you forgot what our mission is. We’re dealing with the debt ceiling on money that we’ve already spent, which will cause us to go into default, which will cause us to go into a depression. If not remedied, folk will lose retirement. We could even lose our reserve currency. We’re dealing with an individual is holding all our flag officers in the military. I don’t have to talk to secretary asked about how negative that is. We talked, Senator Sheen talked about the ambassadors that have been held on the floor and we’ve got a situation where um uh we’re probably on the cusp of going to AC R which I know the chairman and ranking member of this committee despise as do I. But if we don’t get our act together, that’s exactly where we’re headed, that doesn’t make us stronger, that makes China stronger. And it’s not on any A U three that are sitting there, it’s on the United States Congress. And so we need to wake up because this is a real threat. Secretary Austin, I wanna ask you about weapons modernization and how does our weapon modernization compare to China’s efforts with modern weapon modernization?

I uh uh uh thanks Senator. Uh First of all, let me tell you that I I T uh truly maintain and believe that uh we have the competitive edge and we’re gonna work to maintain that competitive, competitive edge going, going forward. And so that’s why you see us looking to invest not only in research and development, but also $60 billion to maintain the Air Air Force, that we believe we need another $48 billion to invest in maintaining the world’s greatest navy. And I’ll bet on our navy versus any other navy any day of the week and also $11 billion to invest in uh long range fires. And that includes hypersonic. So we’re pushing hard to make sure that uh that we’re going after the right capabilities that will help us maintain the edge in the future now and in the future. And uh and that’s why we’re asking him for the budget that we’re asking for. Uh Are there any areas that you would talk about in this type of a session where you would say we’re behind from a technology standpoint, modernization standpoint. I I would like to have uh a conversation, a conversation in a, in a, in a secure uh uh very good. Thank you. Uh Thank you. For that. Look, I, I’ve heard directly from folks in Montana about, um, the impression that Chinese is buying or uh buying land in, in, in, in our great state. We’ve seen some reports out in North Dakota. Uh And I think it’s not only about food security, it’s actually more even about the national security and both are pretty important. Um, look, I know this isn’t an easy nut to crack. There’s, I think there’s 30 bills out there on, on deals with foreign owned ownership of land. China, Russia, Iran, North Korea. Um I guess the general question is, are you guys in any of your capacities?

And if it’s not within your Bailey wick, that’s fine. Seeing any evidence the Chinese are buying land and are they doing it themselves through Chinese companies or are they potentially doing it through shell companies?

I’ll start with you, Secretary Lincoln. So Senator to, to put this in perspective. And again, uh not my area of expertise but based on the the facts as I believe them to be, I think about 3% of our farmland is, is foreign owned and of that 3% a very small percentage is owned by Chinese individuals or Chinese entities, which doesn’t mean there’s not an issue. Uh because depending for example, on where that farmland happens to be situated, uh there may be an issue but I wanted to put it in perspective and we’re well aware of a number of bills of both federal and state that would place restrictions of one kind or another on foreign ownership to include Chinese ownership of agricultural land. Um The Committee on Foreign Investment uh cus looks as you know, at um anything that might involve a strategic investment that could pose a threat to our uh to our security. Um I I I leave that to them that’s in the province of the Treasury Department. Needless to say we look very carefully at any investment uh from anywhere, but notably from China that could pose a threat in one way or another to our security. I am out of time. Either one of you could respond to this in writing if you, unless you’ve got a real quick response, I would just say this, that there are a number of bills out there and I think you’re spot on. It’s, it’s not quantity, it’s quality and if it’s the wrong site, we’re in trouble. Thank you all very much. Thank you, Senator Capito. Thank you uh madam chair and, and vice chair and thank you all for being here uh with us today in your service. Uh Secretary Blinken. I, I heard your response to Senator Collins re uh question on fentanyl. Uh I come from the state has the largest uh amount of overdose deaths per capita than any other state in the union. And a lot of this is directly attributable to fentanyl. What I heard in your answer was highly insufficient because I don’t have the impression that we’re pressing hard enough. I don’t know. We were in Mexico several about a month ago talking to the President there to try to help with that. You said things going on on the border. We all know that this drug is flowing across our southern border. Can you give me a better answer here?

Uh, and, and, and give us some hope that we can really clamp down on this illicit killer of a, of a drug?

Thank you very much, Senator. And first of all, let me be very clear that I could not agree with you more the imperative of, of this challenge as you know, very well. This is the number one killer of Americans aged 18 to 49. Uh And as we also know, last year, we seized uh enough fentanyl to kill every single American. That’s what we seized. There’s obviously a lot more out there. So this is at the very top of our priority list. What I was trying to suggest earlier is that we have to uh deal with this and we are across the entire spectrum of the issue by which I mean, this, there’s obviously work that we’re doing. That’s very significant in terms of what’s happening here at home, including demand treatment recovery. Um That’s a critical component. I was just in Denver visiting the uh among other things, the Police Department of the city some of the Americas, we brought together 250 mayors from across our hemisphere. One of the things we focused on was fentanyl synthetic opioids precisely because this is a problem that’s coming to them as it’s already come to us with the border is obviously critically important. The most important thing is this 95% of the fentanyl that’s coming into the United States from across the border is coming through legal ports of entry. As best we can tell that means that the technology among other things that we need to get to our border to screen for this, which we’re doing is a critical component. Mexico. You could not be more right, a vital necessary uh partner in this. Now we’ve, I’ve spent more important. President Biden has spent many hours with President Lopez Obrador on this issue. And I would say that we’ve seen both a glass half full and a glass half empty, glass half full. We saw record levels of seizures of fentanyl by Mexican authorities. Last year, we’ve seen far more people dedicated to trying to interdict the fentanyl to break up the labs, et cetera. We now have a cooperation agreement with them that goes not just to law enforcement but that also goes to their regulatory agencies. This is a critical component but clearly more uh effort and more resources need to be dedicated. Finally, the, the the broad picture, sorry to China, China. Yes. So as we were discussing before. The critical piece of this right now is the diversion of uh illicit uh precursors, actually illicit precursors that turn into illicit fentanyl. And right now China is the or Chinese entities with them. We are communicating on every single engagement. I think uh I, I can say that uh without fear of contradiction, I think every single engagement that I have had with the, with the Chinese government, last engagement was in Munich. Uh This is a couple of months ago. Yeah. Well, I’m not the only one. Uh every official that we have who’s engaged with China, including officials in my department. This is at the top of the agenda. So we have uh we have one of two ways that this is gonna work either we are going to elicit genuine cooperation from China on this. And as I said earlier, there’s going to be a growing a growing global demand for that cooperation because the problem that started here as you know is moving around the world. So we are building, you’ll see in a few weeks, a coalition of countries coming together to work together on dealing with synthetic opioids, notably fentanyl. So that demand signal is going to grow stronger and stronger in the absence. Though of the cooperation, we have already sanctioned uh a number of Chinese enterprises and entities for engaging in the uh transfer of precursors for fentanyl. We know if we can stop the ingredients from, from getting to where they’re produced, much less the pill presses that I didn’t realize China is now sending uh sending into Mexico. If you look at uh methamphetamine when it was, when it first came on to the, to the drug scene, probably 20 years ago, what did our state governments do?

Our state, uh you know, stop the flow of Sudafed. You had to get it behind the counter because that was one of the ingredients. If you can and, and guess what?

It will hurt. If you can get rid of the ingredients, you can really make a huge difference here. So whatever we can do, I, I think I I it it’s just uh horrifying what we see happening. Well, I understand we have a demand issue. I understand we need to work on prevention, that’s stuff we can do and will do. But I would just press press you and I know you’re pressing hard but we just gotta press harder here because this is, this is a, a national disaster. I share your concern. Thank you, Senator Shotts. Thank you chair. Uh Thanks to uh all of the secretaries for being here. Um Secretary Blinken. Um the PR C remains the world’s worst environment for internet freedom. Uh Given its global influence, the political advantages of a repressive uh use of technology and the Pr CS relatively inexpensive products. There’s concern that this could further increase the number of countries without a free internet. How important are tools like the Open Technology Fund which helps to create circumvention tools in pushing free access to information Senator. There are a number of things that are critical and that’s one of them making sure that we’re able to get in the hands of people, organizations around the world, the tools that we have and that are available to circumvent efforts to stifle their ability to communicate. It’s something by the way that we’ve done in Iran since the protests broke out and the efforts were made to crack down on the ability of people to communicate. So these are vital tools, but there’s an even bigger picture that I think is vital and that is the competition that we’re engaged in to see who is going to actually build the communications networks of the future as well as the present we have across the board. Uh countries that are investing in five G, we want to make sure that they use as we call it in the in this business, trusted vendors, not untrusted vendors. And our diplomacy has been intensely engaged in working with countries to do that. Part of that is getting countries to adopt investment screening mechanisms. We’ve had some success over the last couple of years in getting countries to do just that to make sure that they have the tools to detect someone who’s trying to make an investment in their country, including in critical technologies and communications, infrastructure. Uh whether they that’s someone or an entity that uh that they can trust. So the macro picture is very important and then individual technologies that we can help get into the hands of people to circumvent uh suppression are important as well. A couple of legislative matters, I want you to comment on, please. Um uh I’ll just give them to you both although they’re not particularly related. Uh how important would it be if we were able to ratify the law of the sea treaty and um as ambassador uh hopefully um lands these uh negotiations of the Compact of Free Association um with our brothers and sisters in the, in the Pacific Islands. I’m wondering if you can speak to the importance of, of implementing legislation and, and follow through um uh with the, with the co foundations. Yes. So on the, on the latter, uh we’ve made very significant progress in uh getting uh in, in uh expanding and extending these agreements. They are vital to our Indo Pacific strategy uh vital to our overall national security strategy as you know, very well. Um These island nations in the North Pacific are basically uh what stands between us and the further reaches of the Pacific. We have long standing agreements with them. It would be vital to make sure that having negotiated their extension, that we provide the resources necessary to do that at law of the sea and law of the sea. Look in my judgment, um not being a part of that is a self-inflicted wound. We see again and again, country after country in Southeast Asia looking to pointing to the law of the sea to assert their maritime rights as opposed to the rights that China is asserting that bear no relationship to the law. And when we point this out, when we call out China for making maritime claims that are not based on the law, they say, well, you don’t have much standing to speak about that because you haven’t ratified law of the sea. My response to them has been, it’s true. We didn’t ratify it but we abide by it. You ratified it and you don’t abide by it nonetheless, it would be tremendously helpful. It’s a good line. I think it’s the best you can do, but the best we can do is to ratify the law of the sea. Secretary Austin. Could you take those two questions uh as well?

The co a question and the law of the sea. I, I agree with Secretary B Lincoln that uh that these are uh partners that are really, really important to us as, you know, uh senator, uh significant portion of their residents actually have served in the military or are serving in the military. So they’re, they’re very, very supportive and where they are from. Uh in, in terms of geography is absolutely critical. And so we’re leaning into this and helping uh uh Secretary Lincoln’s people. Uh do everything that we can as a team to, uh, to get this across the goal line. But the point that he made, uh, is it, I think it’s absolutely critical. Uh, and, and I agree with Secretary Blinken that, uh, we are, we live by the law of the sea. Uh, and so, uh, it would make sense to, uh, uh, to, to ratify it. So, thank you, Senator Kennedy. Thank you madam chairman chair and thank you all for being here. Um Se Lincoln, have you uh have you ever visited any of the 15 Pacific Island Nation States?

I have. Yes, they’re wonderful people, aren’t they?

I would agree. Um And, and they have well placed pride in their countries, do they not?

They do, right. Um Can, can we agree that these 15 independent um Pacific Island Nation States are just that they’re, they’re independent countries?

They’re not just dots that some world leaders see out of their plane windows when they are traveling to meetings elsewhere?

That that is correct. Um And can we agree that uh that China is making a concerted effort to try to bring these independent countries within the ambit of the Communist Party of China?

We can, can we agree that America should have a deeper strike that let me rephrase that Mr. Secretary putting China aside. Do you, do you agree with me that um it is the uh prudent and moral thing to do to uh to have deeper engagement with our fellow countries in the, in, in, in the Pacific, particularly in terms of trade and investment. Very much so. Yes. Would you support showing the 15 island 15 Pacific Island Nation states the respect and dignity that they deserve by creating an ambassadorship just for these 15 uh Pacific Island Nation States to be appointed by the president of the United States and confirmed by the United States Senate Senator, something that we’re we’re looking at. But let me just put this in context as you rightly said, these are independent sovereign countries, which is exactly why uh we have been engaged in a very intense effort to actually get embassies and to have ambassadors in more of these countries. And as you know, right now we’ve opened an embassy in the Solomon Islands. Uh We’ve opened one in Togo. Uh We have one pending in Kiribati. Uh And we’re also doing the same thing in Vanuatu. So having these bilateral ambassadors is critical as you also know, uh President Biden Mr. Secretary, can I interrupt you?

I’m really so sorry, but we, we have a limited time and, and I, I, I have followed the uh the, the efforts of the Biden administration in this regard. But what I’m talking about is a pointing and not relying on, on other envoys or ambassadors. I’m talking about creating a new ambassadorship uh for the 15 Pacific Island Nation States appointed by the president and confirmed by the Senate who would spend her or his time traveling to all of the island states, talking about trade investment and listening. So Senator I say two things to that one. I think it is important that we continue to engage these uh countries independently, given their independence. That but to your point and I agree this is important. We have a point appointed a senior envoy to the Pacific Island Forum. This is the main body as you know, that brings all of these islands together. We appointed someone who’s a deeply experienced ambassador in law. Is it, it’s not, it’s an appointment by the, by the Secretary of State. That’s correct. So a new president could come in and say we don’t want to do this anymore because could she or he not?

That is what I’m talking about if, if the Pacific Island countries are so important and I think they are and I think I’ve heard you say they are. May I ask you again?

Would you support creating an ambassador, ambassador level status?

I don’t care what you call it, but it wouldn’t be an ambassador level status appointed by the president and confirmed by the United States Senate. What’s wrong with that?

I I would just say Senator that first, the senior envoy that we have who is a former ambassador to several of these countries um in effect fulfills that that function. Um So that’s important. He’s not an ambassador, he’s appointed by a president. I’m talking about making this permanent. Well, of course, the future president could decide not to appoint an ambassador at any given country. Well, but, but why wouldn’t you want to, why wouldn’t you want to embed this in the law?

If and, and give the Pacific Island countries the respect they deserve. I’d be happy to, to pursue this with you. I think what we’re hearing you happen to have a bill. I’m very happy to look at it and come back to you. I, I really think that we have not given, I’m not criticizing you or your team. I, I, I just think that we haven’t given these countries the respect they deserve. And the best way to do that would be to give them a permanent ambassador. I think we should pursue this conversation because I’d really welcome doing that. What I’m, I’m gonna put you down to talk about it. Absolutely. Thank you, madam chair. Thank you, Senator Baldwin. Thank you madam chair and ranking member for convening this very important hearing. And thank you to our uh secretaries for being here today. Um Secretary Raymondo, I wanna uh thank you for including in your testimony, uh the importance of the tech hub program. And uh you’ve also responded to a number of questions referencing uh the importance of that program. And uh I certainly appreciate your leadership at the Department of Commerce as a member of both the Commerce Committee and this Appropriations Committee. Um I work both on the authorization side and the funding side of the regional uh tech hub program. Um And our committee delivered an initial $500 million investment to get it started. Um So I look forward to working with you and my colleagues on this committee to develop tech hubs in more geographically diverse parts of the country. Uh which I agree is needed to ensure our economy can compete with China fiscal year 24. In this coming fiscal year, Congress needs to deliver additional funding for the program to help ensure us global economic and technological leadership. And the only way we can get this done is by passing a robust bipartisan appropriations bills in a timely manner. Um But my question for you is actually on a different uh priority under your purview at commerce and that’s trade enforcement. Um As Secretary of Commerce, you are a member of the forced labor enforcement task force which was established by the uighur forced Labor Prevention Act. That legislation also specifically tasks uh the Secretary of Commerce along with the Director of National Intelligence with consulting on the development of a strategy to ensure us supply chains are free of forced labor uh in China. So uh secretary, could you uh both explain the nature of that undertaking but also importantly, the impact that reduced funding or even a continuing resolution would have on the important work being done at Commerce. Uh to combat forced labor in China. Thank you, Senator and good afternoon, first, very briefly on tech hubs. I do want to reiterate that chips and science authorized a $10 billion investment, which I think is about right. And so half a billion is, you know, barely a down payment. I am very grateful for half a billion. We’re hard at work. We’re gonna run a pilot program, I I believe will be spectacular. However, you know, as you correctly say, we definitely need more money. Uh The president’s budget this year, I believe uh calls for another two billion or 1.4 billion with respect to trade. Um We take trade enforcement incredibly seriously. And in this regard, I have always said America can out compete. China if we all play by the same rules and China doesn’t play by the same rules in trade. They flood our market with heavily subsidized goods and undercut our prices and undercut our industry. And as you say, there is often forced labor in the supply chain and we should have zero tolerance for forced labor in that supply chain. Uh uh Right now, uh one of the things that we do with the Commerce Department is at any given time, we are enforcing between six and 700 countervailing duties, anti-dumping, countervailing duties, many of which relate to China’s unfair practices. Uh Any cut in our funding would massively inhibit our ability to do that, you know, we barely have enough people to do it now. Uh And that would affect the, the uighur issue you say?

But also anything else that China is doing to undercut um any of our industries?

Thank you. Um Secretary Austin in fiscal year 2023. Uh The committee supported uh our committee uh supported the establishment of an industrial based expansion and shipyard infrastructure initiative specific to the Constellation class frigate, a ship that is currently being built in Wisconsin. Uh This program will now be supported by a workforce development initiative that will equip our workers with the specialized skills required to support the domestic uh shipbuilding base as well as keep the navy on track to expand the fleet. This year. I’m again advocating for this program to continue to receive funding because we know that sustained investment is critical to the health and stability of our defense industry. Again, the only way we will get this done is by passing robust bipartisan bills on time. Um Secretary Austin, can you speak to how the workforce investments that we’ve been funding like this program?

Keep our nation competitive and secure. It goes without saying uh Senator, thanks for the question, but uh our workforce is absolutely critical. Um You know, as we uh you know, we have in our, our industrial base is one of our core strengths uh and central to that uh that core strength is the workforce. Uh And as we’ve been challenged over the years in terms of being able to rapidly expand capacity and capability. Uh Some of those challenges are workforce challenges. So everything that we can do to, to uh to train and, and, and, and empower our, our workforce I think is uh is helpful, it’s critical. Uh And so I appreciate all that you’re doing. Uh I think it’s the right thing and would ask that we do more in that regard, Senator Bowman. Uh Thank you, madam chair. Uh Thank all of you all for being here. We appreciate all your great work, the, the uh Secretary Lincoln. Um There’s growing concern about the lack of communication between the US and China. Uh I believe you change the world through personal relationships and then also you deescalate things as they occur in visiting with some of our allies as we get out and about uh there’s concern from them, you know, that, that again, China and the United States are not communicating as well as we should. Uh Can you talk a little bit about that and, and what steps you take to reach out to your Chinese counterparts?

Thank you very much, Senator. Uh when President Biden and President Xi met in Bali, uh at the end of last year, one of the things that they agreed on was the importance of having these lines of communication. Um at the very least so that we put a floor under the relationship or some guard rails on it. Uh President Xi calls it a safety net. Take your pick of terminology, but it’s important because as we’ve all talked about today, we’re engaged in an intense competition with China across many areas. But it’s not in our interest for that competition. If you’re into conflict, if we can do anything to avoid that and we’re determined to uh to do that, that starts with communication. So I couldn’t agree with you more. Um I think we’ve shown recently that um there is more senior level engagement with China, most recently our ambassador in Beijing and also the national security adviser, Jake Sullivan, meeting with his Chinese counterpart, Wang Yi over a couple of days in Europe. And that’s important because what we believe would be the right course is to now see more senior level engagement in a, in a sustained way across our administration and theirs precisely so that we can make sure that at the very least we’re, we’re, we’re talking to each other that we are making very clear um what we stand for, what our intent is, what we’re looking for as well as where possible uh finding areas of cooperation, including as we were just talking about uh on something like synthetic opioids on fentanyl. So I also think senator that it’s not only what’s in our interest, but the rest of the world looks to us to manage this relationship responsibly, we’re determined to do that. No, I I appreciate that. And like I said, that, that I think, you know, there has been concern amongst some of our allies in that part of the world that, that, that we can do a better job. Certainly they can do a better job of, of, of making that work. Uh Madam secretary, we had a really good conversation the other day about trade. I know that you feel like it’s important, we feel like it’s important. Um Can you tell us what the challenges or obstacles that you anticipate in, in facing and establishing additional trade?

Many of the the many of the uh potential partners in the region?

Uh They don’t want to choose between us and China, but they want to hedge their bets as far as as where do they do business?

What are the, what are some of the obstacles to, to getting additional trading opportunities going?

Yes. Thank you, Senator first. Let me say I wanna echo something that Tony just said. We, the Commerce Department is very focused on export controls and we will be vigilant and aggressive as possible. We will protect what we must, but we want to trade where we can and that includes with China, you know, we have no interest to decouple many jobs in America, depend upon trade with China in things outside of technology, completely unrelated to our national security. And I do think, and I agree, I I appreciate you stating that. Thank you with respect to the rest region. I think it’s a few things. First, it’s it’s showing up. So the Commerce Department’s budget, President’s budget calls for additional funding for foreign commercial service presence in the Indo Pacific. One of the most dynamic, fastest growing regions of the world economically. We need to be there, we need to be doing business, we need to promote our own exports there. Uh Secondly, as we’ve discussed the Indo Pacific economic framework, although is not a trade agreement and we’ve discussed that uh it is significant if, if we are successful, I believe we will be in getting 14 countries to sign on to a supply chain cooperative agreement, a critical Minerals Cooperative Agreement, Infrastructure Agreement. It will bring more us industry trade investment to the region. And I think that’s all incredibly important. Um It’s not so much obstacles because they want us in the region. It’s a, you know, China doesn’t want us and we shouldn’t make these countries choose by the way, but we should be their partner of choice. And I believe we will be when we show up um in the way that we are and we need to continue to thank you very much. Thank you madam chair, Senator Murphy. Uh Thank you madam chair and to the vice chair for this very important hearing. Thank you all for enduring a a long afternoon. Um Listen, China is not 10 ft tall. Um They’re tall, they’re getting taller, but we still enjoy certain definitive advantages. Um One of those advantages is our story. Uh our story of participatory democracy and open economy is the story of the last 100 years and can be the story of the next 100 years. Um And so I want to talk to you for just one minute. Uh Secretary Blinken about our investment in telling that story, but also in making sure to push back against false narratives coming out of Beijing. It’s hard to tell exactly how much money they’re spending on their propaganda operation. But it’s more than us, they’re making a lot of mistakes with the information that they spread. So they are, they are not flawless in the execution of their misinformation and propaganda operations. Um But they do threaten to dwarf ours over the next 10 to 20 years if we don’t really get smart about spending more money and spending it in a more coordinated way. So you’ve proposed a 12% increase to the Global Engagement Center, which is the state department’s capacity, but that doesn’t feel like a big enough number. Uh And so I wonder if you could just say a word about the importance of that capacity, the importance of the other capacities that our agencies have. And oh, by the way, we have to reauthorize the Global Engagement Center, um We actually have to get that done by the end of the year in order to make sure that we can continue to push back against these narratives around the world. Thank you for raising that. Senator. I think what we’re seeing is a number of countries who are in the business of in effect trying to weaponize information as part of competition or in some cases, adversarial relationship with us. And one of the reasons that we established the Global Engagement Center was precisely to be able to push back effectively on that. But with the truth, not with misinformation or disinformation. And so the G C as you know, is working with other federal agencies to direct to lead to synchronize and coordinate our efforts to understand the sources, the trends in Foreign Malign actors efforts to spread disinformation and misinformation and also to compete in the information space. Even when it’s not uh disinformation, with regard to China, the G E C plays, I think a very, very important role. Um and just to give a few examples uh in our own hemisphere in the western hemisphere where we see China being very active, it has supported journalism and research on the messaging tactics that China engages in. It’s helped them assess their influence in in the information environments in the western hemisphere. And we’ve helped them to build out regional expertise in Africa. We’ve engaged the G ecs engaged in capacity building workshops with sinologists to help people better understand the influence that China is wielding its ambitions and to make those findings public. And one final thing, this is an important one together with China House, the consolidated place that we built in the department to bring all of our China expertise together. We’re engaged with the G E C in proactive affirmative messaging to push back on something that’s very interesting that China does and Russia also does, they provide free of charge their equivalent of the associated press to country after country. And so if you’re getting up in the morning in dozens of countries and listening to the news or reading a newspaper, you’re getting information that sounds like it’s being locally produced but is in fact directly from the wire service of China or the Russian Federation, we are now making available to these countries, the associated Press, Reuters and other objective sources of information. Um I think it’s an incredibly important information. Thank you for leading. Um Just give us one last piece of advice on Taiwan policy to the extent that this gets brought into our discussion about appropriations. Um You have recommended significant changes in Taiwan policy to bolster economic relations, security relations, cultural relations. But you have warned Congress against um implicit security guarantees or implicit formal recognition of Taiwan, recognizing symbols of sovereignty. You have not seen the re you do not predict a return on investment uh related to us security. Uh If we uh essentially overturn the one China policy in the Taiwan Relations Act, does that continue to be your recommendation to the Congress?

It does the uh the policy that administration after administration has pursued over over five decades, Republican and Democratic alike uh grounded in the one China policy, the Taiwan Relations Act, the three communiques six assurances has done very well done very well for Taiwan, done well for us. And ironically arguably done well for the PR C because it’s preserved peace and stability, it’s put in place an understanding by which up until now, everyone refrains from taking unilateral action to try to change the status quo and thus potentially creating a crisis that would have global effects. One of the concerns that we have going back some years is that Beijing no longer seems to accept the status quo in Taiwan and has been taking steps of various kinds to increase the pressure to coerce Taiwan and to contemplate perhaps the use of force at some point in the future. I think country after country around the world is increasingly making clear to Beijing that that would have catastrophic consequences for everyone. We have 50% of world trade that goes through the strait every single day, 70% or so of the semiconductors manufactured on Taiwan. If there were to be a crisis as a result of unilateral action taken by China, with regard to Taiwan, we would have a global economic crisis on our hands that country after country would be affected by. But at the same time, we have been resolute, absolutely resolute in our support for Taiwan, including its ability to defend itself, to make sure that it has the ability to engage throughout the international system. And with countries around the world, we have ourselves increased our engagement in a whole variety of ways with Taiwan because we take very seriously our commitment under the T R A Taiwan Relations Act that again goes back many years. But I think the basic framework that’s been in place for many decades. Over many administrations has served us well and disrupting that status quo would actually not be in our interest. Thank you, ma’am. Thank you, Senator Fisher. Thank you madam chair. Um I have a number of issues. I’d like to uh touch on today. So I’m gonna try to not make a long statement. I hope all of you will answer with uh a short response as well. Uh Secretary Austin section 12 62 of last year’s N D A A required that both the Departments of Defense and State submit a comprehensive report on the bilateral access agreements to Congress. These are the agreements with over flight uh basing agreements agreements for logistics support or refueling support. And that report is due in a couple of weeks. Will it be on time?

It will great. How many uh planned cooperative security locations, forward operating locations or fuel support points require access agreements that currently do not exist?

Well, there, there are as you know, a number of agreements that we continue to pursue And of course, uh when the need arises when an operation is being conducted, uh no matter what, even if we have agreements, we’ll have to go back in to that country and request those uh those rights. We’ve done some things recently to uh to increase our, the locations that we’re operating with our allies and partners in the region. For example, the Philippines is a good uh good example of that. Uh We continue to work with uh with countries like Japan and Australia uh to make sure that we can uh rotate forces in and out in Australia, for example. And so we are making significant progress. It, it would be really helpful to have those agreements in place before they’re needed. Correct. That’s correct. Thank you for the work you’re doing on that. Uh Secretary Blinken. Are you coordinating with the Department of Defense on these agreements?

Absolutely. Thank you. Uh Secretary Roman. Uh When you were before the um C DJ S subcommittee, uh we brought up, I brought up uh and we had a discussion over rip and replace being an emergency um that, that we have to um be aware of with the, that’s, that’s installed and, and being able to have that funded. Do you believe that Congress needs to consider all the legislative options on the table right now in order to address this emergency?

I certainly believe it poses a national security risk. Huawei remains in American networks including near military bases and I think that Congress should fully fund the F CCS uh rip and replace program. Ok, thank you. I’m gonna quote Senator Kennedy. Um, I happen to have a bill for that and uh I hope my, my colleagues will consider that uh Senator Hickenlooper and I have been working on a bill and hopefully we can use some of those uh UNO COVID-19 funds to uh fill that gap that exists there. Uh Secretary Austin, I appreciate the uh prior discussions we’ve had about the department’s fiscal year 2024 budget request and how it addresses munitions uh production issues that we are facing in this country. And I agree that the current request is a step in the right direction. But I also think there’s more that we can do and I think there’s more that we have to do from your perspective. Uh Would it be useful to be able to add additional Muni munitions multiyear procurement authority and, and help us to remove some of the um low value?

I’d say contracting requirements that are out there. Uh When we’re setting up these future uh contracts, it, it, it very much would uh Senator and let me uh thank you for what Congress is doing has done. And I hope we’ll do in terms of granting us authorities for multi procurement uh actions there. That’s been very, very helpful. And uh and as you know, we’re going, we’re asking for some $30 billion to invest in munitions, which is just about the limit of what, what the industry can produce in this next year. You know, I I’ve been very concerned about our munitions requirements that we have for ourselves, the security of our nation, but we also uh obviously have contracts and supply to other nations as well. Uh Secretary Blinken, you testified recently that the long pole in the tent in providing equipment to Taiwan to defend itself is the production capacity. Um Do we have the same issue with foreign military sales to other nations as well besides Taiwan?

Uh We do, I think um let me put it this way uh in my capacity as Secretary of State, I have signed out more cases for Taiwan than any of my predecessors. So uh and we’re looking at ways to make our department even more uh efficient and I know that um our colleagues at dod are doing the same thing. But if you actually look at the calendar, the schedule of these things where we have a challenge is on the on the production end. And there are a whole variety of reasons as you know, for that, that’s actually changing. It’s changing as a result of intense engagement with industry. It’s changing as a result of the fact that in part, because of Ukraine and the Russian aggression, there is a growing demand around the world that is getting production lines that have been dormant moving again, but unfortunately, it’s not flipping a light switch, but we’re intensely focused on that and the Secretary of Defense obviously is doing this every day. Thank you. Thank you, madam, chair, Senator Peters. Thank you madam chair. And first of all, I want to thank the panel. Thank you for being here today and discussing us economic competitiveness, uh especially with respect to China. You know, I’m particularly focused on ensuring that we’re competing and winning at every single level of our our economy. That means both in attracting and retaining talent in stem and technology innovation, including A I, as well as making sure that America’s manufacturing sector remains the best in the world by obviously first off supporting a strong workforce on the shop room floor, but also just making sure we’re making things in our country. I don’t believe you can really be a great country unless you actually make things, which is why manufacturing is absolutely essential to that. One example of this dual competitiveness imperative I believe is autonomous vehicles, that technology is, represents the future for mobility in the auto industry. And if the US is going to be a leader in the future of the automotive industry, we have to find ways to not only develop autonomous vehicle technology here in America, but we actually have to manufacture it here in America and deploy it in our country as well. That’s why I’ve worked long on legislation to ensure that America can manufacture this cutting edge technology. So we don’t lose the race with China. China is investing massive amounts of money in this technology. Many believe this technology represents in some ways the Moonshot for artificial intelligence because of the complexity of it. And I don’t want to be in a position where we’re playing catch up for years like we are, we have been in areas like semiconductor chips. So madam Secretary Secretary Armando, um my question is for you, how, how is the Department of Commerce working to ensure that its strategy on economic competitiveness particularly with China reflects strong support, not only for just research and development and innovation, but actually the making of things and manufacturing with American workers here in the United States. Thank you, Senator. Good afternoon. I wholeheartedly agree that we need to get back into the business of making more things in America. And as my colleagues know, the pre no one believes that more than President Biden. And so we are doing a number of things ensuring that we can regain our rejuvenate our manufacturing sector. First and foremost is the Chips Act, obviously will create hundreds of thousands of manufacturing jobs. This budget calls for increased investments in the manufacturing extension partnership which will provide technical assistance to small manufacturers, which is the majority of manufacturers even in Michigan. You know the I know big auto but all the small suppliers M E P will help them to become more digitized to do training, et cetera. Uh We’re also investing a great deal of money uh in job training and apprenticeship initiatives with the focus on manufacturing. So, uh in the interest of time, I’ll simply say we took our eye off the ball as a country on manufacturing, we thought we could in search of cheap labor, outsource everything. And now we have problems in our supply chain. We’re overly dependent and it’s a national security at risk. And so we have to improve that. The final thing I’ll say is this in the budget that we propose, we are asking for additional funding to establish a supply chain office at the Commerce Department so that we can be in the business of proactively monitoring and predicting supply chain challenges before they happen and not just be reactive and that will be immensely helpful to us to rejuvenate manufacturing. Thank you. Certainly, all of you know, China is a persistent and ever evolving cyber security threat to our nation as well as our federal government systems. And yet despite this, our main federal cyber security law, the Federal Information Security Management Act has not been updated for a decade. Secretary Austin, uh to ask this question for you is given dod s position in both countering the Chinese government through cyber com as well as protecting dod systems from cyber-attack. Could, could you discuss how the dod empowers and benefits from the Department of Homeland Security mission to protect federal civilian systems as well as critical infrastructure here in the homeland and how this committee can support that effort. Well, thank you, Senator, first of all, let me agree with what you said in terms of China being a persistent cyber threat. It is absolutely the case. As you very well know, Dod and DH S have overlapping equities and we continuously collaborate and share information in order to be able to better protect our information uh in the uh domestically. Um But not only do we share intelligence, uh We actually coauthor advisories uh when uh when, when the time, when, when the occasion presents itself. Uh and we also share best practices. So this is uh we’re, we’re very, very uh tightly connected. But uh but again, uh the ability to help even more would uh would be welcome. Uh And uh and so, uh to your point, uh everything that we can do to uh to ensure that we have the freedom to do that or the, the ability to do that would be helpful. Thank you. Thank you. Thank you, Senator Murkowski. Thank you, madam chair and thank you to Senator Britt for deferring. Appreciate that. Thank you um for your leadership. I appreciate it. Um I’m gonna talk about the Arctic um Secretary Austin, you noted yourself on a trip to Alaska uh in 21 you said here in Alaska. Um We are, we are where the Indo Pacific nation. Um And and us as an Arctic nation intersect these two critical regions intersect. This is where we can project power in both regions and where we must be able to defend ourselves from threats coming from both places. It’s also where we can better posture ourselves and prepare for climate changes that will impact our future secretary Blinken, you uh were in Anchorage um conducting a summit with China just recognizing the geostrategic location that that plays there. We had a classified brief this morning with General Van, her head of North com no ad and uh General Van, he is very, very upfront in saying that our direct investment in Arctic capable platforms, training and infrastructure continues to lag. He repeated that again this morning. And so I wanna, I wanna move us because when we talk about the Indo Pacific, it’s not just the islands that Secretary uh Senator Kennedy was talking about. I think we recognize that it extends all the way up north. And when we’re thinking about China and where China is partnering right now and where Russia is gaining advantage even at a time of, of sanctions coming at them because of this awful war in Ukraine. The two of them are partnering in bilateral relationships with everything from what’s going on in the water to moving oil from Russia to evade those sanctions to help out China there and fund Putin’s War. Uh Last year, we saw a flotilla uh coming across the Gulf of Alaska with Chinese and Russian ships, uh warships, you know, they were, they were 75 miles from Alaska. We’re nervous about all that is happening there and I think you all probably would agree that we have reason to be nervous. So what we do in sending that, that message, it comes down to policies, it comes to personnel to Senator Shaheen’s Point. The president has named an Arctic ambassador at large. We need to get that moving. Thank you for that. We’ve put in place some, some additional personnel to help on the personnel side, um policies. We need to know that that Secretary Austin, you guys are right there with us in, in, in acknowledging that we need to have a deep water port in the Arctic. No needs to move forward. Uh Senator Britt and I were down in Mississippi and Alabama checking on the polar security cutters. They’re coming but they’re not coming fast enough. We need a commercially available ice breaker up there soon because we’re not going to see our, our polar security cutters for 34 years and probably longer than that because they’re gonna be down in Antarctica. So we are exposed up there. And so when we’re talking about, about the US China relationship, let’s remember how it kind of comes together, unfortunately, um because of, of Russia and our proximity there. So I wanna ask you, Secretary Austin, we’ve, we’ve acknowledged that we have updated our Arctic strategies that’s so important from all branches of the department. But I think we all recognize that strategy without action is, is just a piece of paper when I look at the mil uh projects uh that, that the president’s budget has submitted um only seeking funding for two mil projects in one of the most strategic locations in our country. Now, we’ve talked about what is on the unfunded priority list and there’s a lot of things for the Arctic there. But it causes me to question whether or not we are appropriately resourcing what we need to do in order to have the level of preparedness, the level of deterrence that I think we would, we would hope to see. So secretary as, as you well know, Senator, we have some of our most uh valued assets in Alaska. We have F-22s F-35s fifth generation fighters and we’re happy about it. That, that, that’s right. And, and you’re taking really good care of them up there. Uh We just uh stood up uh uh the 11th airborne, which is, uh that’s gonna continue to provide a great capability. Uh I, I asked to invest this year some $500 million in over the Horizon Radar which will increase our domain awareness. Last year. I asked for $373 million to, to, to invest. So we’re going to continue to invest to increase domain awareness. We’re gonna continue to do things, the kinds of things that we’re doing as we speak, as you know, we have an exercise on going in, in Alaska in the Great North. We need more of that with allies and partners to make sure that we can operate efficiently and effectively in that environment. So we’ll look to continue to invest. But your point is well taken on. Mil. Thank you and I’m out of time. But Secretary Blinken, uh acknowledging that we can always do more on the personnel side. We’d like to, to make sure that we’re paying attention to that as well. I was always working with you on that. Thank you. Thank you, Senator Merkley. Uh Thank you all. And uh Secretary Lincoln, uh we have uh China engaged in slave labor uh with the uh kind of a million uighurs. We have them taking away the Tibetan Children uh to boarding schools when they’re just five or six years old. We have China stripping the political rights out of, out of Hong Kong. Uh Is it fair to say that China is a, a massive human rights violator?

Yes. Is this alone a reason to encourage our, our companies to develop supply chains elsewhere uh in and of itself?

I think that uh companies that don’t wanna perhaps face the moral hazard of uh engaging in that way would uh would see it that way. Yes. And we have seen under Xi that China is flexing its muscles very much in the, in the Pacific region in a whole host of, of, of, of ways in that context. I want to thank you for visiting Vietnam. You visited the week right after I led a congressional delegation there. How important is uh Vietnam and other ASEAN nations is uh counterweight to, to China in the region?

Well, first ASEAN itself is vital because it brings together as you know, all the Southeast Asian nations and uh in many ways, um they sometimes feel more comfortable tackling a challenging issue collectively as opposed to uh individually. But for us, the bilateral relationships, as well as the relationship with, with ASEAN are of increasing importance. As you mentioned, we have, I think a good and growing relationship with Vietnam. We just had the president of the Philippines here, President Marcos for a very important visit. The work the Secretary of Defense has done there as well as the work that my department has done in strengthening our engage in the Philippines is vital and I could go down the list of, of countries in Southeast Asia as well. I just wish it didn’t take two days to get a congressional delegation halfway around the world to start those meetings. It gets hard to, to uh for the legislators to uh uh hold as many direct conversations in the region but means a lot if we go, it means obviously a lot of members of the M I really, I strongly applaud and also encourage what you and other members of this committee and other committees are doing. I think that congressional engagement is absolutely vital and it’s really important that our counterparts hear uh from you directly, the concerns the prerogatives of, of Congress Secretary. Und. Um You noted that in search of cheap labor, we lost manufacturing jobs in the United States as supply chains moved overseas. And of course, it’s particularly true, uh primarily true in, in, in China. Um And that uh that effort really um gave, well, I guess I’ll put it this way. Do you agree that um that trade relationship with China and the, the enormous number of supply chain factories that moved from the US to China helped, helped accelerate China’s path to wealth and power in some ways. Yes, I would agree. Yeah. Well, in, in many ways, because they, they ran huge uh uh surpluses that allowed them to invest massively in including uh helping the uh uh Belt and Road initiative. Uh As we look at the way China behaves in the world and uh the the factors uh of competition, should we be encouraging our companies develop and move their, their, their factories to other uh other countries in the region?

I think that companies there are certainly increased risks with operating in China. In fact, you’re seeing it, you see in recent months, Chinese officials without notice, raiding American companies. Um so I think every company has to make these decisions. And as Secretary Lincoln said they are, they are risk associated with it. What we are doing in our work, especially in the Indo Pacific is uh and I was recently in India and of course the president is hosting Prime Minister Modi is working with those countries uh to, you know, increase our economic relationship and partnership. Um but also working to help American companies reassure workers to America. Thank you. I, I love the, the word Res Shore. Uh Thank you. But I have one more question I wanted to get in before my time is up. But appreciate that. I just want to acknowledge that even as we’re sitting here worried about the wealth and power of China, their wealth and power continues to grow in part because of the massive amount of, of products that we buy from, from, from China. Uh which is in my mind, reason to encourage and remove Sec Secretary Austin. Uh I’ve heard uh uh two uh strategies in relation to uh Taiwan. Uh One is um hey, the Taiwan strait is a very difficult piece of water to cross. Uh And we can do a massive amount to turn Taiwan into a porcupine with uh inexpensive uh weapons that can take out expensive weapons and, and uh that lays out a whole strategy uh and is important in the context of Xi’s argument. He wants to be militarily prepared to take Taiwan by 2027. And then I’ve heard the other argument being we need to uh uh greatly enhance our ability to conduct war directly against China uh including uh uh prepositioning tons of material armaments, weapons uh so forth. Uh And those are two very different strategies. Which strategy do you think is most important?

Uh Actually, Senator, thanks. I, I think they’re both important. Uh Number one, we’ve learned uh a number of important lessons from uh uh uh Ukraine’s uh war with uh with Russia and, and one of those lessons is that uh you know, with asymmetric capabilities and asymmetric uh tactics and techniques, uh a smaller force can do a uh a, a really good job in defending themselves against a, a larger force uh to use your word, uh turn themselves almost into a porcupine, make it difficult for that larger force to digest them. But in terms of uh you know, the China problem set writ large. Now, our my mandate is to make sure that we continue to deter China on a daily basis. And the way you deter another, another force is by making sure that you have a combat credible capability in investing in the things that we know that will provide us uh uh the edge. And in, in any kind of contest is the right things to do the right thing to do. And that includes in some cases uh moving things forward in theater, prepositioning things. And so I think it takes both of those, uh both of those approaches to have a, a complete uh deterrent capability. Uh Thank you a lot to explore their times out. Thank you, Senator Brett. Thank you, Chair Murray. Uh Thank each of you for being here today. I greatly appreciate it. Secretary Blinken, Secretary Armando. Thank you for the time you’ve given us over the last few weeks on this important issue. Um, and particularly the issue of fentanyl. I hope to be able to dive into that more today. Secretary Austin, I’m actually gonna start with you a special welcome uh and a war eagle to a fellow war eagle to a fellow Alabamian and an Auburn University postgraduate Secretary, Austin. I truly believe we achieve peace through strength. I grew up outside the gates of Fort Rucker that you know, has more recently been renamed Fort Novice. I saw firsthand the sacrifice of our servicemen and women and I saw that that sacrifice wasn’t just theirs, it was that of their entire family giving so that our country could remain safe and strong. I have a deep appreciation for our men and women in uniform and for the families who also serve as I think about dod s modernization efforts. Alabama has played and continues to play a vital role across our great state. Our defense industrial base is leading efforts ranging from hypersonic direct energy, modern, modern modernization of our rotary wing aircraft, National Security Space launch, contested logistics and manufacturing and assembling in key missile programs such as javelin, Thad Jas and Ja, this is just a sampling of what Alabama’s talent, synergies and capabilities provide to the defense and national security community as we face impending threats from the Pr C Secretary Austin. You’ve been in this seat now for nearly 2.5 years on a scale of a to f what grade would you give yourself on aligning the dod to the national defense strategy and ensuring the joint first force is able, willing and ready to address the multi domain threat that is posed by China. I would give my team a very high, high grade because as you’ve heard me say a couple of times today, Senator, everything that we do is focused on our national defense strategy. We’ve gone, we specifically aligned our budget request to that strategy, the capabilities that we’re going after will provide us the, the capability to support our war fighting concepts. And so everything that we do is is aligned with this strategy. So I number one, I think it’s the right strategy. Number two, I think that we are very much focused on the execution of that strategy. Well, thank you for that answer. I think we owe it to the American people that you have the resources to ensure that we have the most lethal and best equipped military in the world. Secretary Austin, I’d be remiss if I didn’t touch on one more topic as we consider the multi domain threat, land Sea Air Space that is posed by the PR C particularly from a space perspective. As the leader of the Department of Defense, I implore you to cut through the politics and make a final basing decision for the US Space Head Command headquarters. As you know, Huntsville’s Redstone Arsenal finished first in both the Air Force’s evaluation phase and the selection phase that leaves no doubt that the Air Force’s decision to choose Redstone as the preferred basing location was correct. And it was done on the merits that decision should remain in the Air Force’s purview. Media reports have said that the President and those in the White House are preparing to prioritize partisan political considerations at the expense of our national security, our military modernization and our force readiness. And for me, that is deeply disturbing when you look at this, you said earlier in order to compete and succeed against China, we must use all of our tools. When you look at that, we know that those tools are there at Redstone Arsenal. When you look at the city of Huntsville in the past two years, they have been ranked by US News and World Report as number one and number two place to live in the United States. The city has also been ranked number three and most affordable places to live in the country. It was number three in the city’s nationwide. Uh Search for best quality of life and number four as the most prosperous place in America. I could go on and on about the actual city of Huntsville and the accolades um, that have been rightfully given to them. But the bottom line is not only is Huntsville’s workforce, the best prepared to support Space command’s mission, but also the city of Huntsville is the best place for that workforce to thrive and to live the American dream. Locating the permanent Space Command headquarters on Redstone Arsenal undoubtedly remains in the best national security interest of the United States. You referenced earlier in your remarks, the buildup of China in both space and cyberspace. My colleague across the aisle said Xi Jinping says that the US has a flawed and failing political system, do not prove him right?

Urge the president to take the politics out of this, do what’s best for making sure that we are ready and capable to face China on all fronts, urge him to allow the Air Force to do their job. It is certainly, in my opinion, pastime. Thank you, Senator Manchin. I don’t know if I can follow that. Very good. Um First of all, I wanna thank you all for your tremendous service to our country, all three of you and uh just a few things I I everything has been said so well and stated our challenges that we have and where we are doing well and where we can improve and, and, and all of us agree. Um I have my differences with the administration on the fast, the, the, the speed of which they’re trying to put electric vehicles and we can’t supply this uh support that we need. We don’t have access to all the critical minerals. We don’t have the processing, we don’t have the anodes and cathodes. But by God, they’re, they’re hell and determined to put electric vehicles out and be uh relying on China for that. So I have, I have tremendous concerns there and they know it and I’ll work through that. The thing I want to bring up is that whether it be the ships or the missiles of the guns and the bullets and everything else that we have to do and what Ukraine has shown us in the world. I’ve been thinking about one thing that makes us different, everyone else. It’s our allies that trust us, believe in us more than that is the compassion of humanity that we have. The aid with all my disagreements I have here lately with the administration. I want to thank you all for increasing the aid budget to our allies and our friends and people in need. My grandmother used to say that Joe, the best thing you can do is feed somebody. It changes everything, changes everything. And for that is any other country do what we do in human aid. We, I, as I’m understanding, we’ve never put a condition on food or health care or any of that have we senator, we have not. And you’re 100% right. If you just take one very quick example. World Food Program critical United States provides more than 40% of its budget. China and Russia each provide less than 1% of its budget. I could go down the list of uh organizations that are providing. I, I really think all of us, I haven’t, we haven’t even talked about aid. I, I’ve been here for a couple of hours and we haven’t talked about the strength that we have as the United States of America. It’s the, it’s, it’s the heart and soul, it’s the humanitarian. It’s just everything that we are. And, and, and so when I go to another country, I says, when things get tough, man, you gotta depend on someone. It’s gonna be the US, ain’t nobody coming. And I think they want to do, we can have all the military might in the world and we have to be able to be competitive. But with that and having our allies that are really rally behind us and fight for us. To me, that means almost everything. And I said that makes us different. And as long as we do that uh and continue that aid and I think you all shown a little bit of a budget increase about $3 billion but it’s money well invested. We’re not spending that we’re investing in um anything that you think that we can do along those lines there with the food and the health care necessities that people have around the world and developing nations also, I don’t think that we get credit enough unless our military is involved or we have strict oversight of how this food and all this humanitarian aid is distributed. I feel good when I see our military distributing it. Uh general. Uh, but sometimes I know in some of the, well, uh well, mean, well, well, meaning uh programs that are doing it in a doesn’t seem to get to the right people or we get credit for it as a country. And, and senator again, I couldn’t agree with you more. One of the things we did uh during COVID and providing vaccines free of charge with no political strings attached to country after country around the world through an international uh entity called Kovacs is we also made sure that it was branded and so that people knew in a variety of ways that when they were getting vaccines that were saving their lives, it was coming from the United States. And as I was traveling around the world country after country has thanked us profusely for coming to their aid in that moment of need and in a way different than any other country on earth. Well, if we can just get our act together on the other things that we’re trying to compete and not being relying on until we’re able to produce it. Ourselves. And the only thing I’ve said, we cannot change, we cannot change the values uh, of other countries that don’t have our same values. And that’s basically the love of family and the love of our religious freedoms and the love of democracy. We can’t change that. We get caught up in some of this some time and I hope we don’t. But, and I’ll say this and I’ll close on this. I’ve been around long enough to remember that if we didn’t fight in Vietnam, the communists were coming to this country. I remember basically the Gulf War that if we didn’t go over there and protect Kuwaiti oil, it would disrupt the economic markets. I remember the Iraq war, if we didn’t fight, declare war in Iraq, that we would have weapons of mass destruction used on us in my lifetime. This is the only support or involvement that we’ve been with the war. That’s the most just cause I’ve ever seen exactly what the United States of America should be. Is that light on, on that Beaming Mountain basically shining brightly uh saying that we will defend democracy wherever people seek it and we will make sure that we don’t leave them. And I hope that we maintain that posturing, especially with Ukraine. My grandfather used to say when I got in trouble. He says, honey, I’ll be behind you until your back hurts until your chest hurts. I’m sorry until your chest hurts. I said Papa. That’s all I need. He’ll always be behind me. If the United States stays behind Ukraine until their chest hurts, they’ll know we’re with him forever. We’ve got to win that and we’ve got to continue to be committed and our allies. So I thank you all of you all three of you for your services. And Secretary Mondo, I know you lost your mother and I, I’ve been thinking about that and it’s very difficult. I hope you’re all are getting through this. All you have is the memories and they, they gotta be beautiful. But thank you all. Thank you. Thanks madam chair and thanks to the ranking member for holding this hearing today. Thanks to all of you for being here. Secretary Austin, the Chinese are pr C is dramatically building its nuclear capabilities. Are you committed to making sure that we continue to modernize our nuclear forces?

I am Senator and as you can see from our budget requests, the the funds to continue that modernization effort are reflected in the budget. Thank you. I appreciate that support. I think it’s vitally important for the nuclear triad for both you, Secretary and also for Secretary of State Lincoln. Are we providing the weapons that the Ukraine needs to end the war to win the war?

However, you define that uh rather than stalemate, there’s been talk of F-16s, certain long range artillery and so forth tanks. Are they getting the weapon systems they need?

So that we end this conflict and they don’t end up in stalemate. I, yes, I, I believe they are. And this is something that the Minister of Defense Ukrainian Minister of Defense and I talk about on a near weekly basis and certainly we meet every month along with some, the Ministers of Defense of some 50 countries and discuss what their needs are and we mobilize the support to provide to them most recently. You know, you’ve heard us talking about the requirements for, for air defense and that was the thing that they needed most. What we’ve seen here in the last couple of days is uh you know, that focus on air defense has been very, very helpful for the Ukrainians as we saw the latest barrage from Russia and they defended their skies very skillfully. So I think we are and I think going forward, we will hopefully see the Ukrainians begin to change the dynamics on the battlefield. And can they do that with air to ground as well as patriot systems and that kind of thing versus more aircraft?

Well, right now, the the skies on both sides are just uh it’s it’s absolutely lethal. So any time that you put uh any meaningful um number of aircraft in the sky, uh one or the other is gonna shoot it, shoot it down. Uh And so I think uh that capability will continue to evolve in terms of what, what Ukraine has for uh No, I, I understand where you’re going with this. Uh Secretary B Blinken ending the war, winning the war versus stalemate. Uh I also very much agree with Secretary of Defense and let me just add one element if I could. Senator, one of the things that um I’ve heard my colleagues say from the beginning and by the way, if you go back to before the beginning, we did drawdowns of critical equipment well, before the Russian aggression because we saw it coming to make sure that the Ukrainians had in hand, what they needed to repel that aggression. We did a draw down Labor Day before the war started, the aggression started. We did another one, Christmas. We did it quietly so as not to give the Russians some excuse, but we did it. And as a the stingers, the javelins that they had in hand that allowed them to repel the attack against Kiev and that whole area was very successful. What we’ve done every single step along the way is to try to adjust to where the the war was, where the aggression was to give the Ukrainians what they need to take back. Yes, to take back the land that’s been seized from them. But the other critical element that the Secretary of Defense talks about on a regular basis is the weapons systems are critical, but as critical the training because they don’t know how to use them. Doesn’t do you a lot of good to give them the best system in the world, the maintenance. If the thing is going to fall apart in a week because they can’t maintain, it doesn’t do you a lot of good. And of course, the tactics for bringing all of these different systems together, all of that is something that the secretary, the chairman of the joint chiefs have been deeply focused on. And that’s how you have, I think a winning strategy and yes, the Ukrainians need to be able to get back to the land that’s been seized from them as Secretary of State, talking about an end game winning strategy with the Ukrainians uh to the American people, I think would be helpful in terms of the support for as well as our allies, in terms of the support for what we’re doing over there. I think that’s important and I think you need to really be out there explaining that to the American people as part of that support effort. I was recently in both South Korea and Taiwan. One of the things that I’m hearing in both cases, but certainly from Taiwan is they’ve ordered about $19.5 billion dollars’ worth of military hardware, very, very advanced hardware back to the porcupine strategy. They need that sooner than later. We also have uh you know, the situation in Ukraine. We also have our own domestic needs. How do we get the uh military industrial complex to be able to produce these, uh, weapons, particularly the ones we need in these key situations sooner. You know, how do we help them get that done?

Uh, Secretary Austen, the, the high end capabilities, the hardware that you’re talking about, uh, some of that aircraft. And, uh, you know, we, we came in the door F-16 in the case of Taiwan. For right, we leaned into that, uh, right away. I put a, uh, group of senior uh people together to look at where the uh where the uh the bumps in the road where, you know, where the uh where the friction was. Uh And uh and so we did that and we continually tried to eliminate all the friction points that we possibly can. This is a uh there are multiple uh elements that go into this equation center as you well know. Uh and uh and we’ve worked with state to uh to see what we can do to compress timelines. But uh coming out of two years of COVID, there were parts of the industry that were challenged and some of some of the because of that, some of some things are gonna take a bit longer uh in terms of weapon systems and we continue to engage uh industry leadership. You know, I talked to CEO S, my deputy talks to CEO S uh to, to not only work with them to expand their capacity or capability but also to, to begin to uh shrink the amount of time that’s necessary to produce a particular product. And, and in some cases, we’ve been, I think we’ve been very successful. Some things are sophisticated to the point where we’re not quite there yet, but we’ll continue to work at this. So P G M, for example, precision munitions uh takes a long time typically to make one. I think there are things that we can do. Uh, as we look, look at how we produce those uh to begin to shorten that process, uh uh those processes as well. Thank you. Thank you. Uh Thank you, um madam chair and thank all of you for your testimony and for your service secretary Austin. Uh Thank you for being uh one of a long line of secretaries who recognizes that in addition to getting a robust defense budget uh to do the work that you and your team at the defense department, do we need to adequately fund other elements of our national security?

Like the state department, diplomacy and development like the Secretary of Commerce uh and her team. And I’m fairly satisfied that at the end of the day here, we’ll have a budget that meets the needs of the defense department, but I’m really worried about what we’re seeing coming out of the House of Representatives right now in terms of its impact on other critical elements of our national security uh budget. Uh So I wanna ask a couple questions starting with Secretary Raymondo And um I also wanna say we’re sorry about the loss of your mom. Um I know she was proud of the work you’re doing. And let me ask you about that because uh President Biden laid out a really important vision about the need to invest in innovation and to invest in rejuvenating our manufacturing base. The chips and Science Act was a big part of that. As you said, uh we’ve done a big piece of funding on the chips part, but we better follow through on the science part. That’s the A I, that’s the quantum computing, that’s other critical elements of technology. Uh where China has said that they intend to try to dominate by the year 2025 beyond. Um I know that if we do what we need to do in this country, um we will continue to have our competitive edge but not if we don’t. So that’s one element, the other element you’ve spoken to this in your, your testimony is we want to make sure that as we develop very advanced technologies including in semiconductors and the equipment to manufacture semiconductors, we don’t want it to fall in the hands of the PR C military. And that’s why we’ve worked with our allies and partners, you and Secretary Blinken and others have worked with our partners uh to make sure that we get an agreement to prevent that from happening. The agency and government that really focuses on implementing that is the B I S, right, the Bureau of, of Information and, and Security. And could you just describe in a little more detail what will happen if we go back to 2022 funding levels for this department?

It seems to be an entity that fights way above its weight and it’s essential in this effort. Can you speak to the impact on keeping our technologies out of the hands of China’s military and the importance in terms of the impact on imposing pain on Russia’s economy and, and slowing down Putin’s war machine. Yes. Thank you, Senator. Good afternoon and thank you for your sympathy. Uh My family and I appreciate that. So first let me say that our competition with China increasingly revolves around technology, the United States of America, our innovation ecosystem, our entrepreneurship are the envy of the world and we need to keep it that way. And that means investing, investing in talent, investing in research and development, investing in Nest. I said earlier N T has a billion dollar backlog in deferred maintenance. That’s the crown jewels in the United States government as it relates to artificial intelligence, quantum cyber, et cetera. At the same time, we’re behind a billion China is massively investing in their metrology institutes, their equivalent of Nest. Uh So I strongly believe as you say that we have to lean into research and development and invest in science chips is an excellent beginning, but it isn’t just chips, it’s bio manufacturing, it’s critical minerals, it’s other areas of advanced manufacturing and we will not be able to compete. We lead China now in A I, we lead China now in semiconductors and we have to continue to invest to maintain the lead. Uh B I si appreciate you saying we punch above our weight. I happen to agree. Uh There’s only uh about 5, 500 some odd people that work in B I S, which is obviously quite small. If we were to go back to F Y 22 funding levels, we’d be down 100 and 25 slots as a percent of what, you know what the 583 F T E S that’s crushing within days of uh you mentioned Russia and Ukraine within days of the invasion. The Commerce Department working with the interagency led a 36 country coalition to enact sweeping export controls that to this day into, you know, reduces Russia’s ability to uh continue their war uh with respect to China. Um Last year we did, you know hundreds of end use checks related to the PR C. I mean, in October, we put forth the most sweeping semiconductor uh export controls ever in our country’s history. Just last month, we did a $300 million penalty on a company because they were violating export controls by selling hard disk to Huawei and on and on and on. So I will we’re out of time, so I will stop. But it is a very real risk for our national security to cut the funding of B I S. And I, you know, I think, I think Secretary Austin and my colleagues would agree. Well, thank you. And I, I see time as that. I do want to say, Secretary Blinken, thank you for all your efforts. Your testimony on the Indo Pacific. I was gonna ask you about the maritime security issue which President Marcos when he was here emphasized. And in a trip I took with Senator Merkley to Vietnam and Indonesia, it was clear they want to protect their territorial waters, their E E Z S, their fisheries and their resources. And we’re on the same page here and if we cut that budget, um we will not be able to meet our, our commitments. So I wanna thank you and your team as well and, and, and thank you for your engagement and leadership on this. It’s making a big difference. And one of the things that we’re working very hard on with allies and partners in the region is to increase what we call their maritime domain awareness so that they know uh what’s going on in the seas and, and waters around them, which are so vital uh to uh to those countries. And that’s part of our, our budget. We don’t want to short change that either. Thank you. Thank you, madam, Senator Hyde Smith. Thank you madam chairman. And I wanna thank our distinguished panel today for the willingness to serve and the willingness to step up. We certainly appreciate that. You know, I’m from Mississippi and we’re just very proud that we have played such a significant role in uh contributing to our nation’s defense capabilities. We are from shipbuilding to aerospace technology. We have a tremendous talented workforce in Mississippi and Pascagoula, Mississippi. We have families that have worked in that shipyard for generations and we just do this very well. And uh you know, it does demonstrate our ability to have high quality defense systems and they do protect our service men and our service women. But the rapid and unprecedented modernization of China’s military and naval fleet specifically is of great concern. As many of the members here have demonstrated today and asked questions about uh Secretary Austin. This question is gonna be for you, the security of our national interest and those of our allies will rely on ensuring the United States maintains air dominant strategy. Will you describe the department’s efforts to modernize the K C 1 35 fleet and the K C 46 fleet?

And uh will you also explain the role and significance of the Air National Guard and refueling missions in the Pacific region?

Uh uh Thanks uh Senator. Uh first of all, our, our refueling capability is rivaled by none. That’s a strategic advantage that I think gives us the reach. Gives us the ability to project power in ways that no other country even comes close to. So, as you’ve seen from our budget request, you know, some $60 billion to invest in aircraft to modernize aircraft across the board. We want to make sure that we’re able to go after the capabilities that we need and also not have to carry capabilities that we don’t need any longer, which will prevent us from modern, modernizing the fleet. But we’re going to continue to invest in uh in, in platforms that, that uh help us maintain that, that edge that uh that I just talked about. But uh our, our tanker fleet is uh is, is truly amazing. And so the National Guard uh obviously uh punches above its weight class uh in, in, in every endeavor and certainly they add significant value to this effort as well. So thank you for that. And um do you anticipate any roadblocks in ensuring that current Air National Guard refueling units such as the 1 86 Air refueling wing in Mississippi received the K C 56 that we have funded that process adequately. Well, I I, I would certainly, I’ll work with the Secretary of the Air Force to visit his plans, specific plans on, on, on that unit going forward and we will get back to you with a detailed answer on the plans. Ok. And I have a another minute and a half left that I’m gonna take advantage of before we end this very long day. But uh Secretary Austin, the rate at which the Biden administration and your department are requesting funding to modernize our naval service fleet is being significantly outpaced by China. As we well know if this committee were to provide additional funding to ship procurement, how would your department use it, use it to address the growing threats from China in the Indo Pacific region?

Well, certainly, I truly believe that we have gone after those capabilities that help us conduct, conduct the strategy that we’ve laid out for ourselves. And I think, you know, comparing numbers is part of the equation but but not the whole equation. Capability having the right capabilities. The right mix of capabilities is uh is the, you know, the the major issue here. If you look at our navy, uh we are the most combat credible navy on the face of the planet. I’m gonna work to keep it that way. And I think we’re investing in the right things, nine battle force ships we’re asking for in this budget and we’re, we’re going to go after the capabilities that industry can produce for us. We’re also going to continue to invest in the infrastructure in the industrial base. So we asked you for $4 billion to do that this year 2.7 in up and then another $1.2 billion in the submarine industrial base. And I would end by saying, as you know, our underwater capability uh is, is matched by none uh on the planet and we continue to invest in uh our submarines, a Columbia class in this budget two Virginia class submarines. And I think uh that will help us maintain the edge. All right, thank you for that answer. Thank you. Thank you very much. That concludes our question and answer period. Senator Collins. Would you like to make any closing remarks?

Thank you, madam chair. I just want to thank our witnesses for asking for answering our questions today. Uh There will be additional questions, I’m sure for the record, but thank you for your presence. Thank you. And I, I wanna thank Vice Chair Collins and all of my colleagues really good turnout today for such a thoughtful discussion. And I especially want to thank our witnesses, Secretary Austin Secretary Blinken, Secretary Terry Mondo for sharing your time and knowledge with us today. I look forward now to talking with all my colleagues to take what we have learned today and make sure that we do quickly mark up spending bills that make the investments that we need to compete with the Chinese government. Let’s not parse words here. The PR C poses a serious and growing challenge economically and in terms of our national security. So we have to be clear that tackling this challenge isn’t just about how much we spend on our military because if we choose to only plus up defense spending and undercut other critical programs across government. We are setting ourselves up to lose the 21st century to China building semiconductors here at home. For example, is a matter of urgent national security that requires investments in R and D advanced manufacturing, reliable supply chains and trade partnerships and a skilled workforce that relies on things like child care, higher education and workforce investments and more. We need to make sure that we invest in America across the board. That means yes, investing in defense priorities, but also our families and communities here at home, our diplomacy across the world and our ability to compete globally. So I’ll say it again, China doesn’t operate on C R. I hope it is plain to members on both sides of the aisle that the string single strongest way we can send a message to the PR C saying that America is serious about winning the 21st century is to pass robust bipartisan and on time, full year appropriations bills. And before I end, I do want to reiterate something that Secretary Austin spoke to this afternoon when he testified that he did not see conflict with the government of China as necessary or in a it is our shared goal that we work together to have a productive relationship with China. So I appreciate all of our witnesses for their work to make that a reality that will end our hearing today. And for any senators who do wish to ask additional questions. Questions for the record will be due in seven days on Tuesday, May 23rd at five PM. The hearing record will also remain open until May 23rd for members who wish to submit additional materials for the record again. Thank you so much to all of our witnesses. Today, committee stands.

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