Thank you, Ken, for that kind introduction. To the Members of the Board of Trustees, to Dr. Michael Pillsbury, to our distinguished guests, and to all of you who, true to your mission, “think about the future in unconventional ways” – it’s an honor to be back at the Hudson Institute.
For more than half a century, this Institute has dedicated itself to “advancing global security, prosperity, and freedom.” And while Hudson’s hometowns have changed over the years, one thing has held constant: You have always advanced that vital truth, that American leadership lights the way.
And today, I bring greetings from a champion of American leadership, at home and abroad – the 45th President of the United States of America, President Donald Trump.
From early in this administration, President Trump has made our relationship with China and President Xi a priority. On April 6th of last year, President Trump welcomed President Xi to Mar-A-Lago. On November 8th of last year, President Trump traveled to Beijing, where China’s leader welcomed him warmly.
Over the course of the past 2 years, our President has forged a strong personal relationship with the president of the People’s Republic of China, and they’ve worked closely on issues of common interest, most importantly the denuclearization of the Korean Peninsula…
But I come before you today because the American people deserve to know… as we speak, Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States.
China is also applying this power in more proactive ways than ever before, to exert influence and interfere in the domestic policy and politics of our country.
Under our administration, we’ve taken decisive action to respond to China with American leadership, applying the principles, and the policies, long advocated in these halls.
In the “National Security Strategy” that President Trump released last December, he described a new era of “great power competition.” Foreign nations have begun to “reassert their influence regionally and globally,” and they are “contesting [America’s] geopolitical advantages and trying to change the international order in their favor.”
In this strategy, President Trump made clear that the United States of America has adopted a new approach to China. We seek a relationship grounded in fairness, reciprocity, and respect for sovereignty, and we have taken strong and swift action to achieve that goal.
As the President said last year on his visit to China, “we have an opportunity to strengthen the relationship between our two countries and improve the lives of our citizens.” Our vision of the future is built on the best parts of our past, when America and China reached out to one another in a spirit of openness and friendship…
When our young nation went searching in the wake of the Revolutionary War for new markets for our exports, the Chinese people welcomed Americans traders laden with ginseng and fur…
When China suffered through indignities and exploitation during her so-called “Century of Humiliation,” America refused to join in, and advocated the “Open Door” policy, so that we could have freer trade with China, and preserve their sovereignty…
When American missionaries brought the good news to China’s shores, they were moved by the rich culture of an ancient but vibrant people, and not only did they spread faith; they also founded some of China’s first and finest universities…
When the Second World War arose, we stood together as allies in the fight against imperialism… And in that war’s aftermath, America ensured that China became a Charter member of the United Nations, and a great shaper of the post-war world.
But soon after it took power in 1949, the Chinese Communist Party began to pursue authoritarian expansionism. Only five years after our nations had fought together, we fought each other, on the mountains and in the valleys of the Korean Peninsula. My own father saw combat on those frontlines of freedom.
Not even the brutal Korean War could diminish our mutual desire to restore the ties that for so long bound us together. China’s estrangement from the United States ended in 1972, and soon after, we re-established diplomatic relations, began to open our economies to one another, and American universities began training a new generation of Chinese engineers, business leaders, scholars, and officials.
After the fall of the Soviet Union, we assumed that a free China was inevitable. Heady with optimism, at the turn of the 21st Century, America agreed to give Beijing open access to our economy, and bring China into the World Trade Organization.
Previous administrations made this choice in the hope that freedom in China would expand in all forms – not just economically, but politically, with a newfound respect for classical liberal principles, private property, religious freedom, and the entire family of human rights… but that hope has gone unfulfilled.
The dream of freedom remains distant for the Chinese people. And while Beijing still pays lip service to “reform and opening,” Deng Xiaoping’s famous policy now rings hollow.
Over the past 17 years, China’s GDP has grown 9-fold; it has become the second-largest economy in the world. Much of this success was driven by American investment in China. And the Chinese Communist Party has also used an arsenal of policies inconsistent with free and fair trade, including tariffs, quotas, currency manipulation, forced technology transfer, intellectual property theft, and industrial subsidies doled out like candy, to name a few. These policies have built Beijing’s manufacturing base, at the expense of its competitors – especially America.
China’s actions have contributed to a trade deficit with the United States that last year ran to $375 billion – nearly half of our global trade deficit. As President Trump said just this week, “we rebuilt China” over the last 25 years.
Now, through the “Made in China 2025” plan, the Communist Party has set its sights on controlling 90% of the world’s most advanced industries, including robotics, biotechnology, and artificial intelligence. To win the commanding heights of the 21st Century economy, Beijing has directed its bureaucrats and businesses to obtain American intellectual property – the foundation of our economic leadership – by any means necessary.
Beijing now requires many American businesses to hand over their trade secrets as the cost of doing business in China. It also coordinates and sponsors the acquisition of American firms to gain ownership of their creations. Worst of all, Chinese security agencies have masterminded the wholesale theft of American technology – including cutting-edge military blueprints.
And using that stolen technology, the Chinese Communist Party is turning plowshares into swords on a massive scale…
China now spends as much on its military as the rest of Asia combined, and Beijing has prioritized capabilities to erode America’s military advantages – on land, at sea, in the air, and in space. China wants nothing less than to push the United States of America from the Western Pacific and attempt to prevent us from coming to the aid of our allies.
Beijing is also using its power like never before. Chinese ships routinely patrol around the Senkaku Islands, which are administered by Japan. And while China’s leader stood in the Rose Garden of the White House in 2015 and said that his country had “no intention to militarize the South China Sea,” today, Beijing has deployed advanced anti-ship and anti-air missiles atop an archipelago of military bases constructed on artificial islands.
China’s aggression was on display this week, when a Chinese naval vessel came within 45 yards of the USS Decatur as it conducted freedom-of-navigation operations in the South China Sea, forcing our ship to quickly maneuver to avoid collision. Despite such reckless harassment, the United States Navy will continue to fly, sail and operate wherever international law allows and our national interests demand. We will not be intimidated; we will not stand down.
America had hoped that economic liberalization would bring China into greater partnership with us and with the world. Instead, China has chosen economic aggression, which has in turn emboldened its growing military.
Nor, as we hoped, has Beijing moved toward greater freedom for its people. For a time, Beijing inched toward greater liberty and respect for human rights, but in recent years, it has taken a sharp U-turn toward control and oppression.
Today, China has built an unparalleled surveillance state, and it’s growing more expansive and intrusive – often with the help of U.S. technology. The “Great Firewall of China” likewise grows higher, drastically restricting the free flow of information to the Chinese people. And by 2020, China’s rulers aim to implement an Orwellian system premised on controlling virtually every facet of human life – the so-called “social credit score.” In the words of that program’s official blueprint, it will “allow the trustworthy to roam everywhere under heaven, while making it hard for the discredited to take a single step.”
And when it comes to religious freedom, a new wave of persecution is crashing down on Chinese Christians, Buddhists, and Muslims…
Last month, Beijing shut down one of China’s largest underground churches. Across the country, authorities are tearing down crosses, burning bibles, and imprisoning believers. And Beijing has now reached a deal with the Vatican that gives the avowedly atheist Communist Party a direct role in appointing Catholic bishops. For China’s Christians, these are desperate times.
Beijing is also cracking down on Buddhism. Over the past decade, more than 150 Tibetan Buddhist monks have lit themselves on fire to protest China’s repression of their beliefs and culture. And in Xinjiang, the Communist Party has imprisoned as many as one million Muslim Uyghurs in government camps where they endure around-the-clock brainwashing. Survivors of the camps have described their experiences as a deliberate attempt by Beijing to strangle Uyghur culture and stamp out the Muslim faith.
But as history attests, a country that oppresses its own people rarely stops there. Beijing also aims to extend its reach across the wider world. As Hudson’s own Dr. Michael Pillsbury has said, “China has opposed the actions and goals of the U.S. government. Indeed, China is building its own relationships with America’s allies and enemies that contradict any peaceful or productive intentions of Beijing.”
China uses so-called “debt diplomacy” to expand its influence.Today, that country is offering hundreds of billions of dollars in infrastructure loans to governments from Asia to Africa to Europe to even Latin America. Yet the terms of those loans are opaque at best, and the benefits flow overwhelmingly to Beijing.
Just ask Sri Lanka, which took on massive debt to let Chinese state companies build a port with questionable commercial value. Two years ago, that country could no longer afford its payments – so Beijing pressured Sri Lanka to deliver the new port directly into Chinese hands. It may soon become a forward military base for China’s growing blue-water navy.
Within our own hemisphere, Beijing has extended a lifeline to the corrupt and incompetent Maduro regime in Venezuela, pledging $5 billion in questionable loans that can be repaid with oil. China is also that country’s single largest creditor, saddling the Venezuelan people with more than $50 billion in debt. Beijing is also corrupting some nations’ politics by providing direct support to parties and candidates who promise to accommodate China’s strategic objectives…
And since last year, the Chinese Communist Party has convinced 3 Latin American nations to sever ties with Taipeiand recognize Beijing. These actions threaten the stability of the Taiwan Strait – and the United States of America condemns these actions. And while our administration will continue to respect our One China Policy, as reflected in the three joint communiques and the Taiwan Relations Act, America will always believe Taiwan’s embrace of democracy shows a better path for all the Chinese people.
These are only a few of the ways that China has sought to advance its strategic interests across the world, with growing intensity and sophistication. Yet previous administrations all but ignored China’s actions – and in many cases, they abetted them. But those days are over.
Under President Trump’s leadership, the United States of America has been defending our interests with renewed American strength…
We’ve been making the strongest military in the history of the world stronger still. Earlier this year, the President signed into law the largest increase in our national defense since the days of Ronald Reagan – $716 billion to extend our military dominance in every domain.
We’re modernizing our nuclear arsenal, we’re fielding and developing new cutting-edge fighters and bombers, we’re building a new generation of aircraft carriers and warships, and we’re investing as never before in our Armed Forces. This includes initiating the process to establish the United States Space Force to ensure our continued dominance in space, and authorizing increased capability in the cyber world to build deterrence against our adversaries.
And at President Trump’s direction, we’re also implementing tariffs on $250 billion in Chinese goods, with the highest tariffs specifically targeting the advanced industries that Beijing is trying to capture and control. And the President has also made clear that we’ll levy even more tariffs, with the possibility of substantially more than doubling that number, unless a fair and reciprocal deal is made.
Our actions have had a major impact. China’s largest stock exchange fell by 25% in the first 9 months of this year, in large part because our administration has stood up to Beijing’s trade practices.
As President Trump has made clear, we don’t want China’s markets to suffer. In fact, we want them to thrive. But the United States wants Beijing to pursue trade policies that are free, fair, and reciprocal.
Sadly, China’s rulers have refused to take that path – so far. The American people deserve to know that, in response to the strong stand that President Trump has taken, Beijing is pursuing a comprehensive and coordinated campaign to undermine support for the President, our agenda, and our nation’s most cherished ideals.
I want to tell you today what we know about China’s actions – some of which we’ve gleaned from intelligence assessments, some of which are publicly available. But all of which is fact.
As I said before, Beijing is employing a whole-of-government approach to advance its influence and benefit its interests. It’s employing this power in more proactive and coercive ways to interfere in the domestic policies and politics of the United States.
The Chinese Communist Party is rewarding or coercing American businesses, movie studios, universities, think tanks, scholars, journalists, and local, state, and federal officials.
Worst of all, China has initiated an unprecedented effort to influence American public opinion, the 2018 elections, and the environment leading into the 2020 presidential elections…
To put it bluntly, President Trump’s leadership is working; and China wants a different American President.
China is meddling in America’s democracy. As President Trump said just last week, we have “found that China has been attempting to interfere in our upcoming 2018 [midterm] election[s].”
Our intelligence community says that “China is targeting U.S. state and local governments and officials to exploit any divisions between federal and local levels on policy. It’s using wedge issues, like trade tariffs, to advance Beijing’s political influence.”
In June, Beijing circulated a sensitive document, entitled “Propaganda and Censorship Notice,” that laid out its strategy. It states that China must “strike accurately and carefully, splitting apart different domestic groups” in the United States.
To that end, Beijing has mobilized covert actors, front groups, and propaganda outlets to shift Americans’ perception of Chinese policies. As a senior career member of our intelligence community recently told me, what the Russians are doing pales in comparison to what China is doing across this country.
Senior Chinese officials have also tried to influence business leaders to condemn our trade actions, leveraging their desire to maintain their operations in China. In one recent example, they threatened to deny a business license for a major U.S. corporation if it refused to speak out against our administration’s policies.
And when it comes to influencing the midterms, you need only look at Beijing’s tariffs in response to ours. They specifically targeted industries and states that would play an important role in the 2018 election. By one estimate, more than 80% of U.S. counties targeted by China voted for President Trump in 2016; now China wants to turn these voters against our administration.
And China is also directly appealing to the American voter. Last week, the Chinese government paid to have a multipage supplement inserted into the Des Moines Register – the paper of record in the home state of our Ambassador to China, and a pivotal state in 2018. The supplement, designed to look like news articles, cast our trade policies as reckless and harmful to Iowans.
Fortunately, Americans aren’t buying it. For example: American farmers are standing with this President and are seeing real results from the strong stands that he’s taken, including this week’s U.S.-Mexico-Canada Agreement, where we’ve substantially opened North American markets to U.S. products – a great win for American farmers and manufacturers.
But China’s actions aren’t focused solely on influencing our policies and politics. Beijing is also taking steps to exploit its economic leverage, and the allure of China’s large domestic market, to advance its influence over American corporations.
Beijing now requires American joint ventures that operate in China to establish “party organizations” within their company, giving the Communist Party a voice – and perhaps a veto – in hiring and investment decisions.
Chinese authorities have also threatened U.S. companies that depict Taiwan as a distinct geographic entity, or that stray from Chinese policy on Tibet. Beijing compelled Delta Airlines to publicly apologize for not calling Taiwan a “province of China” on its website. It also pressured Marriott to fire a U.S. employee who liked a tweet about Tibet.
Beijing routinely demands that Hollywood portray China in a strictly positive light, and it punishes studios and producers that don’t. Beijing’s censors are quick to edit or outlaw movies that criticize China, even in minor ways. “World War Z” had to cut the script’s mention of a virus originating in China. “Red Dawn” was digitally edited to make the villains North Korean, not Chinese.
Beyond business, the Chinese Communist Party is spending billions of dollars on propaganda outlets in the United States, as well as other countries.
China Radio International now broadcasts Beijing-friendly programming on over 30 U.S. outlets, many in major American cities. The China Global Television Network reaches more than 75 million Americans – and it gets its marching orders directly from its Communist Party masters. As China’s top leader put it during a visit to the network’s headquarters, “The media run by the Party and the government are propaganda fronts and must have the Party as their surname.”
That’s why, last month, the Department of Justice ordered that network to register as a foreign agent.