 John. Hey, welcome, everybody. I'm glad you're here. My name is John Hamery. I'm the president of CSIS. And this is a rare privilege this afternoon to welcome Congressman, our two Congressmen, Congressman Kirk and Congressman Larson. It's privileged in two senses. One is these are two intellectual leaders on matters relating to China, US relations with China. That is worth coming to hear alone. But also let me just say it's rare when we see a Republican and a Democrat that want to partner together to shape a shared consciousness about directions for America. And I just want to say a personal thank you to both of you for doing that. I mean, this is a there was once a time when that was a norm. It's not a norm anymore. It needs to become one again. And I think you're showing all of us how it can be done. So we're really grateful that both of you are doing that. My colleague Charles Freeman is going to moderate the discussion. It's going to be fascinating. You all, your role, of course, is you've got to think of pretty good questions. I mean, a quality of a session like this is directly proportional to you. So please be active and engaged after we have a chance to hear them. But let me turn it to you, Charles, please. Thank you both for coming. Thank you. Thank you, Dr. Hamery. And thanks really to Mark Kirk and to Rick Larson for being here just back from China for the fifth time. That you were there. I've got their official bios in front of me, and I'm going to read extensively from them. But if I were really going to do that, then we'd kill the time here. But Rick Larson represents the second district of Washington and been there for a while. He's from a family that has been in that district for more than a century. So his roots are deep there, but his roots are also increasingly deep in the US-China relationship. And both he and Congressman Kirk from the 10th District of Illinois, a long-standing member. And really, these two people together, despite their different party affiliations, have come together on a very, in my view, most challenging issues of our time. And that's the US-China relationship and how to make it work at a very dynamic time. It's not often that you see a rising power and a de facto power come together peacefully. And it's specifically not that often that you see people approaching China not from the position of panda huggers or dragon slayers, but really coming in the center and approaching it with as much balance as they do. I want to turn it over to them and let them give some background on their most recent trip. We'll start with Congressman Larson and then go to Congressman Kirk and then we'll open it up for discussion. Great. Well, first off, let me thank the CSIS for helping to put this together for Mark and me. I want to thank John, Dr. Hamery, for all your help, Charles as well, for not just moderating today, but for your advice over the last several years on the work that Mark and I have been doing. I'll thank Jasper McSlarrow, who works for me as well when he was on the trip, and then a guy named Louis Lauder who works here at CIS, CSIS who used to work for me and was one of the two staffers who helped kick off the U.S.-China working group a couple years back. About four years ago, actually four years ago this month we created the U.S.-China working group as a way to create a space in the United States House of Representatives where our members of Congress could discuss China-U.S. relations, various relationships that we have, to recognize that we have more than one relationship with China, and as well at least be open to open to some ways of engaging this relationship and these relationships in a way that was more constructive than not. This most recent trip put in a plug as well for the National Committee on U.S.-China Relations, which is the oldest organization of its kind in the United States. It was the third-party sponsor of our trip. Guy named Steve Orlins is the president of the National Committee on U.S.-China Relations, and this is the third time that National Committee has sponsored this trip. And we've gone into a lot of interesting places in China as a result of the last several years. We've been out to Xinjiang to visit the Kyrgyzstan border, Erumchi and Kashgar, a couple of cities we visited. We looked at counter-narcotics and counter-terrorism issues. We've been to the Inner Mongolia Autonomous Region to be the first delegation, first official delegation to visit the space launch facility, the manned space launch facility in China, and that was a couple years back. It was in January. You've ever been in the Gobi Desert in January? You know, it's a pretty cool place, so we gutted it out, made our visit. But this was sort of an East Coast tour. I jokingly billed it as the Global Economic Recession Tour 2009. The trip had a couple of goals. Before I go over those, I want to make a very specific point. And that is that there's really no one country that the current administration is engaging more in 2009 than China. And that puts the trip kind of in context. If you look at Secretary Clinton's trip to Asia, which included China, saw the meeting in London between President Obama and President Hu. Before we were there, Senator Kerry, Chairman of Senate Foreign Relations and Speaker Pelosi were there as well. The week we were there, Secretary Geithner visited. This past weekend, Deputy Secretary of State Steinberg, was there, Todd Stern is a climate change envoys visiting or has visited. Can't keep up. Strategic Economic Dialogue in July here in DC, the Joint Commission on Commerce and Trade. We'll be taking place sometime later this year. Discussion of our Secretary of Commerce and Energy, Locke and Chu visiting possibly in October to discuss clean energy and trade and clean energy and jobs. There's discussion about the President going before or after Singapore. And of course, presumably in December, the SNED will follow up in Beijing at the end of the year. So that's a pretty heady context, I think, for a trip for two members of Congress who are collective service is 16 years, I think, 16. Well, if you count the months in this cycle, it's 16 years and 10 months. But this trip, as I said, was focused on the economy. And a couple of key goals in this trip was to assess the impact of the global economic crisis on the Chinese economy to understand better the Chinese government's response to the crisis. And then, obviously, to make an assessment about what that means for U.S. policymakers and what can we tell our colleagues in Congress. So a couple of things. You know, like I said, our third trip together, my fifth trip, Mark's actually been there more than five times. But we've been able to, fortunately, develop a relationship with both our U.S. embassy folks in Beijing and throughout the country. And let me pause right now by saying that the folks in our State Department and serving in China are doing a fantastic job and a fabulous job with that relationship. And we got to meet and work with some of those folks over there. And as well, we got to meet with a lot of folks in China that are pretty important in this relationship. Vice Premier Wang Qishan is the head of the Strategic and Economic Dialogue, the chairman of the China Banking Regulatory Commission, Liu Mingkong, Commerce Minister, Cheng Domingue. We met with their PBOC governor, People's Bank of China, their Federal Reserve chairman, if you will, Zhou Chaochuan. And in Hong Kong, we met with Donald Tseng, as the chief executive, as well as a variety of other folks. And I think if I'd give some assessments and I'll turn it over to Mark, I think generally speaking, I'd say that the U.S.-China relationship is strong. And the Chinese leaders that we met with indicated a continued willingness to work with the U.S. to further the bilateral relationship. You know, there was some discussion back even last week about Secretary Geithner's, the response Secretary Geithner got at the University, at Peking University from college students. Well, I've never talked to a group of college students that didn't take me on as well. So I don't think that's a very accurate assessment of the trip, because I think our assessment of the trip was that the Chinese leaders that we met with were very interested in seeing the United States be successful, that they looked to the United States to lead the global economic recovery. They were not looking to themselves to lead the global economic recovery, they're looking to the United States to lead that recovery. The other thing I'd say is that the Chinese economy's long-term shift from its dependence on foreign exports to more of an increased domestic investment and domestic consumption or creating domestic demand is gonna be long-term, definitely. But I think it also creates opportunities for US-based businesses that both serve the Chinese market directly, as well as small and medium-sized businesses that are suppliers in products and services or other things to these other businesses that are locating in China to serve that Chinese market. And that's why HR 2310, my bill, the US Small and Medium-sized Business Export Promotion Act is a bill that members of Congress should get on and co-sponsor, that's my commercial for my bill. By the way, I think some appropriators are working on that to say. If I'm not mistaken, I'll let Mark talk about what he's doing on that. I would also say this, that leaders in the US and China see the strategic and economic dialogue as the forum for the, to set that strategic direction of our relationship, but the Joint Commission on Commerce and Trade is the forum for creating those win-win situations. So the dialogue is there to help define the challenges and define the problems and define the opportunities, and then the JCCT exists in order to help solve some of those problems and solve some of those challenges, especially on the economic side. And I would say this as well, that members of Congress look to the S&ED and the JCCT for results, and that's a message that we delivered, of course we delivered not only to our own government, but we also delivered that message to the Chinese as well. That's important that the JCCT and the S&ED deliver results from a member of Congress perspective. Anticipating the question that might come up, any concern that the Chinese expressed about inflation in the United States were tempered definitely by their confidence in the dynamism of the U.S. economy. Again, getting back to that main point, and we heard this over and over again, Chinese leaders looking to the U.S. economy to pull the global economy into recovery, and also a lot of confidence in the U.S. economy. So just a couple of things that, and I'll turn it over to Mark as to review. First it's important again that the dialogue, the S&ED and the JCCT produce results. Second point is that as this long-term shift occurs in the Chinese economy, I believe it does provide some opportunities for us, but we have to take a long view, does provide some opportunities for U.S.-based businesses to great jobs here at home, serving a Chinese market. The U.S. companies already showed that they can succeed there, in fact in South, Amcham, South China said that 72.5% of their members actually serve the Chinese market. They're not there producing for export back in the U.S., but they're there to serve a Chinese market as well. I guess I'd just say in conclusion that this trip was, this trip, well I think we've been in three, like I said, three of these trips. I work hardest on this trip and I've ever worked, and I work hard because we had to bring our A game. It'll end up later, history will judge, if you will, if we brought our A game, but we've been able to get into a position where we're meeting with some folks who are in a position in China to make some things happen and to communicate from a member of Congress perspective, from people who have to go home every weekend, and respond to the 710,000 people that we represent, what it means for us to have to be responsive to, in a democracy, to the people that we represent and trying to communicate that to the leadership in China, I think is an important, certainly from my perspective, an important and desirous position to be in. And hopefully the trip was a success in many of the people's eyes and we'll get a chance to do this again. Well, as you know, the U.S.-China working group has evenly balanced about over 60 members of Congress and we try to keep all three warring tribes of the house in our group. That would be panda huggers, dragon slayers and the more extreme panda slayers that are definitely in the house. Rick and I long believe that the most important U.S. diplomatic relationship in the world is with Beijing for the 21st century. And so let me just touch on a couple of points going from West to East on the items that we raised during our mission, which was definitely the hardest working mission that we've had and at a key time when China's becoming so important for the United States. First, and as a part-time military officer, I was most interested in some cooperative programs with the United States and China to help out ISAF's supply problem in Afghanistan. Having served there in December and January, we definitely knew that when we had problems at the Torquham Gate or Spin Bull Dock with another Taliban attack, there was no lettuce in the Chow Hall and you began to see supply problems then expand from there. The proposal that we brought forward was that the Afghan government be able to make fuel and food purchases in Western China to help out the economies of Kashgar in a room sheet for the benefit of the Afghan government but related to that, the ISAF mission and of course the U.S. military. Knowing that based on our previous mission, in many cases the United States and China are up against the same enemy, a very well-funded radical Islamic narco insurgency now taking on the Public Security Bureau and People's Liberation Army on the Chinese side of the border and taking on ISAF and the Afghan government on the other side of the border. We received some pretty positive signals on that and we've had some detailed conversations with Ambassador Holbrook afterwards and I hope that the Hube administration and Obama administration are able to open up that gate. We certainly saw this weekend how the Russians now have talked about permitting lethal supplies going through Russia to Afghanistan and so we're ending into a virtuous cycle of supply to ISAF from the North rather than the unreliable supply lines from the South. When we were in central China itself, I originally worried that Guangzhou or southern China would be Cleveland East. Abandoned homes, shuttered factories, et cetera. We did not get that impression. This is a place undergoing 5% growth, not 9% growth, but growing nonetheless. And we received a surprising picture, especially from the Amchams in the South, that export-derived industries were doing quite poorly but industries who were serving the central Chinese market were doing pretty well. I would note that the US stimulus package is only 20% infrastructure, 80% social spending. I think the way the Chinese government designed their stimulus is much more intelligent. 80% stimulus and only 20% social spending. And you could see that demand hitting the Chinese market reflected in the bottom line of US exporters that were operating in southern China. When we were in Beijing, I think the dominant concern privately expressed was about the dollar. And the dollar concern comes in two forms. One, the tremendous borrowing that will be required by the United States, especially after a passage of the stimulus and the omnibus with a $1.8 trillion borrowing requirement just this month alone. It's about $160 billion a week that the Bureau of the Public Debt has to borrow. And one of the messages I had because we need to build trust and confidence and our number one creditor is that the budget numbers that the US government have put forward should not be believed. The Congress is actually gonna spend quite a bit more than what's in the budget. And the healthcare bill probably being the lead driver of additional spending by the Congress. Given the appetite for the public for tax increases, if we do pass major social legislation and repeat our general practice of waving budget guidelines prior to the passage of final omnibus appropriations bills, and I speak as a member of the Appropriations Committee, the borrowing requirement of the United States will actually go up from its published numbers. That's extremely likely. And that obviously is of concern to China that is already between Fannie Mae and Freddie Mac and the regular T bills invested over a trillion dollars in US debt. But by far the more strong concern that we heard was from the brand new policy in January of this year of quantitative easing, which is a technical way of saying that the Fed, one part of the government is buying another part of the government's debt, largely with printed money. And we heard across the board in private, substantial continuing and rising concern that I think was accurately reflected by the students at Peking University. That happened in public where senior Chinese officials wouldn't do that to a senior US official in public. But it's clear that China would like to diversify from its dollar investments. As I said to Wen Qicheng, loan us a billion dollars and you own us, loan us a trillion dollars and we own you. And it puts you in a unique point of vulnerability that I understand given the quantitative easing, printing of money that the Fed is doing that will make of course each dollar and especially each bond that has already been sold far less worthwhile. My hope is that the Congress takes a different direction that we spend less that will dramatically reassure our creditors, China being unfortunately now the number one, and also a group of congressmen and I sent a letter to Chairman Bernanke asking him to stop the quantitative easing buying of US debt by the Fed. As one Chinese key banker said, this is illegal under Chinese law. We would not be allowed to do this. And I frankly think it should not be allowed under US law as well. When we look at the overall establishment, we raise the issue of expanding the US diplomatic footprint in China. And we're very strongly backing what we think of as an interim policy. Originally given the problems in Tibet, I pushed forward the effort to fund a US consulate in Lhasa. Unfortunately that has now become a break point where we can't have any other consulates or diplomatic facilities until Lhasa is built. I actually don't hold that position. I think the United States should expand, especially in just about every city, over five million in China. And we don't need to call these consulates. We could call them as one country has called them diplomatic annexes or presence posts. These are very low cost posts, $1.5 million each according to me a member of the State Department of Appropriations Subcommittee. But one that listens to the US export community that says we follow the flag and we will go where US consulates are based. And so I think it's very important to expand that diplomatic footprint and a concomit footprint should be built by the Chinese in the United States. This is the most important diplomatic relationship is established. Overall, I think we felt that the two sides are undergoing some strain but handling in an extremely adult and professional fashion. The one point of discord that I would point out is on climate change policy. The Chinese government has the view that at Copenhagen they should mandate compulsory licensing i.e. the stealing of all intellectual property related to energy, climate change, control, energy consumption, et cetera. This would be the largest theft of US intellectual property licensed by a UN treaty ever. It also flips the politics of a climate change bill in the Congress. Right now a number of green industries like the climate change bill coming out but if an international treaty sanctions the theft of their intellectual property then there will be hardly any green jobs built in the United States because once one of your wind turbines or your water power machines is able to be copied the intellectual property standing behind that will be seized under a sanction by the Copenhagen treaty and put forward. Rick and I are working on an effort to see if we can generate some strong US opposition to that because we feel that climate change legislation is necessary but it's very important in the end for this legislation to lead to green American jobs and the licensing, the theft of intellectual property through a Copenhagen treaty in a provision called either technology transfer or compulsory licensing would be a dagger in the heart of the green economy of the United States and so we hope that the United States and China can basically work that out but work it out with a full defense of US intellectual property with that. Wow. Can I underscore that point? From a democratic perspective we saw the speaker attend, go to China the week that we were there and the theme there was energy efficiency, global climate change obviously with Copenhagen coming up at the end of the year and the potential for a trip and the discussion of this trip with the Commerce Secretary and Energy Secretary to talk about clean energy and trade. The US can be part of China's solution for the problems that they admittedly have with energy efficiency and emissions and I think legitimately we want to be part of that solution we're the two largest emitters of the CO2 in the world but we also have businesses in the United States who have the innovation, have the technology have the know-how to be part of that solution but we need a couple being part of that solution with being, making that part of the solution on the trade deficit as well and we are not gonna be able to successfully in my view turn our economy here in the US to be more of a green economy unless we can make that part of our economy this green innovation help that green innovation part of the economy take advantage of being part of the solution internationally and that won't happen it cannot happen if compulsory licensing or tech transfer or whatever people want to call it is part of a final treaty, it just won't happen so we are working on an amendment right now to the foreign relations State Department Authorization Bill and see if we can get that in or at least raise a profile I'm hopeful we'll be able to get it in the end of the House version and I don't want to comment on the dollar inflation Mark and I probably differ a little bit on emphasis here and I certainly agree that concerns were brought up on inflation, concerns were brought up on the dollar but also I'd have to say that leaders were looking for, leaders were met with were looking for a signal on the deficit which is something only Congress really can provide and it is a wake-up call to the United States Congress about spending, they were not looking for the deficit to be zero next year but certainly looking for the deficits over time to come down which I think is in the interest of the United States as much as it's in the interest of anybody else so certainly something we ought to do second, we had Bernanke before the budget committee last week and several of us asked the question about the ability to unwind some of these programs I think it was the People's Bank of China Governor who asked what is the exit strategy and so that we asked that question of our own Federal Reserve Chair and it's all on record, you said the ultimate exit strategy is our ability to raise interest rates from the current zero to something higher than that. The use of the short-term programs that Fed put in place can be shut down if they're not being used and some of them are not being used, interest rates on reserves can be set to a level that provides the appropriate incentives to banks but he also said it believes that the Fed and I think we'd all agree with this. Well, most members of Congress agree with this point. Some don't, I think Mark and I do. The Fed needs to maintain its independent authority to do whatever it needs to do as it exists under the law and authorities it was given when it was created. So that's sort of the nutshell response on the questions that people brought up with regards to concerns about inflation and the dollar. Yeah, I'm in the position of being unhappy with the Fed but I do not want Congress to take it away. But there are some members of Congress who do. Well, it's interesting to see how the discussion of the U.S.-China dynamic becomes such that China quickly becomes a mirror for some of the own things that we're doing and I think it's fascinating to sort of go through this discussion of how much we both need China whether it's on Afghan issues or on the flip side on climate change and you went through Rick and laid out a series of events of engagement over the next year. There are obviously a series of questions whether it's the climate change side or we clearly need each other at the end of the day. There are some non-traditional issues that are out there that may get in the way. We haven't talked about Taiwan's. Things are going better there. We haven't really talked about the issue of Tibet but clearly if President Hu and President Obama are supposed to meet in November we've got a meeting between the Dalai Lama and the President here in October. That didn't go so well when President Hu was supposed to meet Sarkozy. How do we manage some of these frictions on the way to get to the end game of wherever that is? We forcefully raised the issue of North Korea and for me in the past I've been to every province of North Korea. I know the government fairly well there and the point that I raised in the Foreign Ministry was while the United States and China have built a pretty strong partnership and the old military alliance between the PRC and the DPRK seems to be a distant memory a UN Security Council resolution has little chance to move the DPRK much in my view as opposed to the critical interruption of fuel supplies from the PRC to the DPRK that happened in August of 2006. In my view that was the central event that brought the DPRK back to the negotiating table because they're so heavily dependent on the PRC for petrochemicals. That's the point that I made at the Foreign Ministry and you can wrap it up in whatever you want. Obviously this is Northern Asia so we don't do a press conference and we don't see what it is. We just call it as they did before technical delivery problems but the message is sent just the same. With regards to North Korea, my impression of that meeting is that we had at the Ministry of Foreign Affairs is that the Chinese will probably go farther than they want to and not as far as we want them to on a new UN resolution. That the actions by Kim Jong-il were surprising to the Chinese and that it showed and perhaps showed the Chinese leadership that talking about dialogue and diplomacy and discussion can get you only so far before your neighbor does a nuclear weapons test. And as a result, I think the Chinese, again my assessment would be the Chinese leadership was embarrassed by that, more embarrassed than in 2006 and that as a result, they're gonna move, they'll move farther than they wanted to but probably not as far as we'd like them to. With regards to these other issues and I don't mean to say other issues like they're not important, the three T's, right, Taiwan, trade and Tibet. These three T's tend to be very problematic in the U.S.-China relationship. Taiwan is probably a little bit off the hook in terms of those three T's because President Hu and President Ma are like best friends forever right now when they're acting like it. With the introduction of charter flights, those charter flights set to become scheduled flights in July between the mainland and Taiwan, things seem to be moving pretty well between mainland and Taiwan. Honestly, I think U.S. policy would, U.S. response would be to say that's a good thing. Anything for stability in the straight relationship is positive. With regards to trade, I think it's still gonna be obviously problematic but again, the trade discussion might be subsumed a little bit more by the global financial crisis right now. Although there have been, there has been legislation introduced on the Hill, several pieces of legislation to try to deal with the trade issue, the currency issue by going to counter-radial duties and tariffs and so on. But again, my assessment is that those bills won't go very far, much like last year. They didn't get very far. Tibet will be problematic and I would not want to, I don't mean to be naive in saying this but I certainly would not want the U.S.-China relationship to hinge upon whether or not the president sees the Dalai Lama sometime this year or not. But that will partly depend upon what the administration thinks and does and partly depend upon what the Chinese government does in response. There's not much we can do to control that response and just knowing that the Tibet issue is a very high-profile issue for the Chinese government, something that most Americans don't quite fully understand and some do fully understand. But I want a very good answer on that issue. Ultimately, part of the human rights, part of foreign policy in the United States is the human rights plank. It is and it's not going away. We'll take some questions. We've got about 20 minutes just to start here. We've got some microphones going around so who has the mics? Oh, just come on down to the front. I guess we're not going to do the moving mics today. Louis was feeling lazy. Could you introduce yourself? Sure, my name is Ali Wang. I'm from the Carnegie and Denver International Peace and the China program. Two questions. One, on the domestic front, what is your sense in discussions with Chinese leaders of their greatest concerns at their greatest domestic concerns, whether rising unemployment for college graduates, the health care system under him? So what is your sense of their greatest concerns at home? The second question on the international or global front is that I think that there are a lot of, I wouldn't call it a consensus necessarily, but there certainly are. There is a sense among observers of Chinese politics that the United States is losing influence in a lot of parts of the developing world vis-a-vis China, whether you look at Latin American countries, African countries, Asian countries. So what is your sense of what the United States should do to engage Chinese presidents in the developing world? Is it a hedging tactic, a cooperative tactic? What should the US be doing? Thanks. In our discussions with the Chinese leaders, it became very clear that the top three priorities domestically are the same top three priorities I have in the Markhands, jobs, jobs and jobs. Unemployment issues continue to be the number one priority for the Chinese leadership. It's sometimes surprising to me that I need to at least explain my views to my colleagues in Congress that President Hu does not wake up wondering what 300 million people in the United States think of him. He wakes up wondering what 1.3 billion people in China think of him. And right now with the economic downturn, especially hitting hard on the East Coast, and then some of that drifting into the interior, the Chinese leadership has chosen to take a, it might be a very strong stand with their stimulus package that is heavily focused on what they call fixed asset investment or infrastructure, as well as domestic lending. So a lot of money going into the banks presumably so those banks can lend to companies or to individuals. And that's how they're gonna address it. Now one of the problems that they face though when we have this discussion is that for them to get where they eventually wanna go, that is creating some domestic demand, they're a long way from getting there. They're a long way from having a health insurance model like the U.S. has. They more have like a health, seems like a healthcare reimbursement model. You pay, get your broken leg fixed up front and then you ask for, get your money back. So that's why people hoard their money. Retirement, pension scheme, retirement scheme, long way to get there still. So in talking with one of the provincial party secretaries about well, what's your plan locally? And he discussed a few things that would sound familiar to us, training for college students so they graduate but immediately go into training program until the economy turns around. Some unemployment benefits. But then after that it gets into this discussion about on the other hand then some of them go home. And because a lot of these folks are migrants from provinces, more rural areas, they go home and their family has a piece of land and they go home and farm it. And it's like that's part of the social safety net right now. That, they can decide if that's a model that's sustainable. I would suggest that it's not. The biggest domestic concern I picked up was university graduates from the East Coast provinces. And what do we do? And they do have a regional problem with that. And the government is trying to deal with it but I think that's a significant concern. And with regard to foreign policy, so far I don't see an effort by China to really build a significant counterweight influence. I think that's a mischaracterization of what's happening. What appears to me happening is an enormous investment in commodities as a huge inflation hedge. And the most recent investments was their decision to buy an entire second strategic petroleum reserve, which is one inflation hedge. And then to buy $80 billion in gold, which is the equivalent of two Fort Knox's. And you would only make those decisions if you're expecting dollar inflation than they are. And on the international, by the way folks, if you want to get the microphones to get in line, unless no one wants to ask. Regarding on the international front, I would say that the US needs to get out in the world for the sake of the United States, not for the sake of any counterweight that China. Countries will do what they will do. The United States should get out there and be with countries in the world for our own interests. Not because China's out there, or any other countries out there. Yeah. Hi, Jill Perlow, Physicians for Social Responsibility. You mentioned that our response to the DPRK's two nuclear tests and their continuing progress on their program has, we rely a lot on China, and China's willingness to work with us on our policy response. So I was just wondering if you could talk a little bit more about that and what incentives we actually have to help get China on board with our policy response. Thank you. I just start by saying, you know, we've sanctioned, to use a technical term, we've sanctioned the DPRK out the ying-yang. So there's not a lot of extra impetus there, but in a long dinner we had with the chairman of the NPC Foreign Affairs Committee, former foreign minister, we sort of went through the obvious points, which is with the United States having exhausted its economic sanctions, with no military option of any kind, this center of instability is largely a Chinese problem. And if you don't control the problem, you become the father of the nuclear weapons program of Japan. That, you know, one thing that a lot of international observers have missed is the Japanese decision to rely on a civilian nuclear power program. A, and B, the decision to reprocess the fuel from those reactors has turned Japan into the largest owner of plutonium on planet Earth, 1.5 tons. So as one wag said, Japan could turn into a nuclear power at a long weekend with enough plutonium for 7,000 warheads. And if a significant and continuing threat emerges to the Japanese people, and China does not control that threat, then Japan will build a deterrent. And that would significantly counter things against China's long-term interest. So it is absolutely in the interest of China to control the nuclear weapons program of North Korea. Yeah, I sort of seen what Mark said in a different way. The question was, what incentives do we have to get China to be involved in the DPRK or North Korea more actively? I don't know that we need to do anything. And North Korea is doing a hell of a job getting China interested. China's policy is that, as is ours, ours was further, but is, you know, they don't want a nuclear peninsula. Well, they're gonna get one. Unless they do something more, unless China does something more, they are going to get one. And so I think it's getting to a point where they need to decide if they're serious about their policy or not. Bonnie? Yes, Bonnie Glazer, senior fellow with the Freeman Chair here in China Studies. Thank you both, Congressman, for coming today, sharing your remarks and for all of your contributions to the U.S.-China relationship. I'd like to ask two short questions on security issues. You talked a bit about your conversations with the Chinese on Afghanistan, and of course, we increasingly think of the Afghanistan question as inextricably linked to the problems in Pakistan. And so I'm wondering if you raised, with the Chinese, who of course have a very close alliance with Pakistan, what kinds of things they might do to shore off stability there. My second question relates to the military confrontations we have been having, not just with Navy ships, but also with fishing vessels with the Chinese in their exclusive economic zone as was reported earlier in, I believe, March, and then again in April with the U.S.-N.S. impeccable and victorious. And whether you found any willingness on the part of Chinese to engage in discussions with the United States about agreement on safety procedures at sea so that we can avoid a real collision that might result from the kind of dangerous activities that we have seen taking place there. Thank you. I'll take the second question. We did discuss this with the Ministry of Foreign Affairs, I'm sorry, the issue of the impeccable and the victorious with the Ministry of Foreign Affairs, and I think ultimately we need to shift that conversation as well to the PLA and PLA and since they're the ones out there and they kind of run their own foreign policy shop as well, but what we said to them is that we understand that you have a definition of what your EEZ is and the rest of the world has a definition of what your EEZ is. So we're not going to debate that right now. We are going to lay out the problem that exists when private commercial vessels, in this case fishing vessels, are interfering with the progress of military vessels and the kind of situation that could result from that. With miscommunication, say there's an altercation, say there's a collision, that can only get worse if something like that happens. So we think that, so we want to say we think that we at least ought to have, while we can continue to debate about where the line ought to be on the map, let's figure out where the line ought to be in the water for how these vessels are going to relate to each other. And go from there. So that was the basic point that we tried to make it seem to be open to it. They're going to continue to be open to it. They wanted to get in the discussion about where the line ought to be on the map, but I wasn't going to buy it. I told them that they weren't going to convince me otherwise. So why try? I'm too hard headed, so. We had brief discussions on Pakistan and obviously a repatriation of 10 Uyghurs recently and in many ways I think they have the same perceived threat that we do, so there's a great deal of commonality of interest in Western China, Central Asia over what the United States and China can do, not just regarding the Afghan supply lines, but assistance to the Pakistani government, et cetera, relief, especially. We've got now millions of displaced people out of the SWAT and other districts and China can play a significant role there. As a Republican, let me just give praise to the Obama administration. If we had left the South China Sea and basically agreed to a 200 mile territorial water, if you look at the lines, it basically encompasses islands claimed by three other countries. So if you agree to that, you then spark two other wars. But then every other country agrees, ceases that territory and you will see the sea lanes of the entire world on which our oil and international trade disappear overnight, where you'll have conflicts in a dozen different locations if you surrender. So the Obama administration did the right thing, put the Chenghou right next to victorious. We're the largest navy in the world and the Chinese correctly perceived that there's a lot on their plate right now and a military confrontation with the United States was not their number one priority. We said, we're not interested in doing anything different and hopefully you're not interested in doing anything different because common action on the dollar, common action on stimulus, common action on all the other bilateral. By the way, we haven't even talked about the deployment of the Food and Drug Administration to China, the deployment of the Consumer Product Safety Commission to China, both which the China working group has got to start happening. I mean, this is a relationship which has gone from ping pong to 180 different issues now, if not more. And they, at least at the MFA seemed to fully recognize that and share a bit of that priority. I'll give you the floor in two seconds. I just wanted to ask, one of those 180 issues is cyber security. Correct. Can you talk a little about what you discussed or didn't discuss while you were there? Well, we didn't actually discuss it there. It's probably, you know, I'm already thinking about the next trip and what might be on the agenda for that trip. And I think since in the past, we have visited the PLA, but we did not, this particular trip, is probably a laundry list of issues of the PLA that we'd be interested in talking to them about. And I think they'd be very, very uninterested in hearing from us about it. Great. Hi, Nick Reno. I'm an intern here with the Berkshire at CSIS. I was just curious about some of the recently reported military procurement choices for the Chinese have sort of had the indication that they're very geared towards possible confrontation with Taiwan. And I was just curious exactly while you were there, if you picked up on any sort of changes in sort of their stance towards that particular issue. I would just say that I think after 1996, the PLA and the government made a decision to procure the means necessary to handle the Taiwan problem militarily, but not necessarily making the decision to do that. And now that they have a government in Taipei who they work with very closely and very well, any kind of military action is highly unnecessary and interrupts every other agenda. And so things are going very well with the Taiwan relationship. Well, Rick and I were there watching CCTV. They were de-mining Kinmen Island because Kinmen had made the choice that here I am three miles away from key markets that I wanna be able to trade with to boost up my island. And meanwhile, Taiwan is dozens of miles away. And it's just one further aspect of the increasing good relations between Taipei and Beijing. And if I could say that I think that that we can overthink the Chinese military modernization, but I think we need to think about it in the right way as well. I don't think it is surprising that they're trying to modernize the military. It's fairly antiquated, has been fairly antiquated in the way they're organized and what the platforms they have militarily. And so you would think that, like most of every other country in the world, that they would make that kind of investment. But the second part is how we respond to that. And I think that we need to respond to it rationally. That we need to look for ways to utilize it to our mutual advantage. For instance, if they're going to be experimenting with operations other than war, OOTW, then for instance, they're peacekeeping missions. They're deployment destroyers to the Gulf of Aden on anti-piracy. They're gonna be doing those kinds of things that we need to be thinking about how can we help them because we want every other country to do these kinds of things too. And in response to a question that we asked, that I asked Secretary Gates a few weeks back in budget hearing and our services, I said, do you envision a day where US and China would be maybe operating side by side on perhaps some peacekeeping or some other operation, military operation? And his straight answer was yes, of course. So I think we need to be careful about how we look at it, but I'm also one of those guys who, I'll hedge with the best of them as well. We need to consider what they're doing and look at what they're doing in terms of how that might impact us, but not necessarily be so focused on that that we forget to see how can those capabilities be leveraged into doing the kinds of things that we like to do as well. Jasper, Rich, do we have time for one more? Yeah, we like to think of ourselves as your constituents, but we realize there's other constituents that we have to work for. Cal, let's make this the last question. Thank you. Cal Cohn with the Emergency Committee for American Trade. I appreciate both of your comments with regard to the issue of compulsory licensing. Our own group in the broader business community is very concerned with this issue, not only as regards the issue of climate change legislation or climate change policy, but more broadly, you mentioned you are thinking or putting together an amendment to address this and one of the bills going forward. Is there anything you can share with us with regard to what you plan to include in the amendment? And then related on the whole issue of what countries in the advanced developing world are willing to do to advance economic development more broadly, did you get any sense when you were in China that the Chinese are willing to do more in terms of opening their own markets to less developed countries than they in order to spur progress in the DOA development agenda negotiations? Many are suggesting that one of the reasons why the DOA Drowned is not moving forward as quickly as possible is advanced developing countries like China expect to be given to rather than to give in particular to the least developed world. Thank you. I didn't get a lot on DOA from them, but with regard to compulsory licensing. Over time, I hope the president does see the political danger to the Waxman bill and the Copenhagen Treaty that if the treaty licenses the theft of US intellectual property across an area that may encompass 15 to 20% of the US economy, then the effect of the legislation will be to increase energy prices in the United States and authorize the theft of intellectual property. At that point, large companies probably led by a GE that's tried to reposition themselves, switches from a supporter of the legislation and the treaty to an opponent because you've just licensed all of their technology to be expropriated by others. When you've seen this compulsory license has been mainly used in one other area which is regard to AIDS medicine. And there you begin to see, okay, somewhat of a compelling case because we're talking about someone dying. But with regard to climate change, et cetera, I think at that point, you're talking about a whole swath of the US economy. And if we permit the theft of our technological edge, then don't we accelerate us falling behind even further? I would say as an investor, if you told me the Copenhagen Treaty permitted compulsory licensing, then I would tell all of my funds, find a non-climate area to invest in because the US company will not be able to keep control of its own innovations. They're about to wrap that up for me because on the flight back from China, I was making that case. He got that line from me. On the age argument, it's easy, you know? Yeah, it's right. On the age argument, it's easy. And climate change is not so easy to make from climate change. Not so easy at all. But we can share the language with you. If you want to see the language, we're working out the finer details of it right now. It's always a negotiation. But I was saying, and we're going to wrap up here, I just want to reiterate the point I made at the beginning that there's no one country right now that the administration is engaging more than China. If you look at the schedule that has been and the talked about schedule through the rest of the year, 2009 is really shaping up to be a year of this administration engaging China on a variety of issues, whether it's trade, climate change, the financial crisis, the reintroduction, looking at the suspension of the military and military exchanges. From top to bottom, these 180 plus issues, whatever that number is, there's no one country that right now we seem to be engaging with more than that of China. And I think in this time, that is the right approach. Great. Thanks very much. I really appreciate both of your time. Thank you guys all. Thanks.