 Good afternoon everybody My name is Nancy Lindborg I'm the president here at the US Institute of Peace and I'm delighted to welcome everybody here for a very timely conversation With senator Mark Warner from Virginia About the US-China relationship an issue that's getting a lot of attention these days Senator Warner has been at the forefront of China And has been a leader on the conversation related to foreign policy and national security issues Both on China and through his years of service in the Senate For those of you who are joining us for the first time USIP was founded by Congress as a non-partisan national Institute dedicated to working with partners around the world to prevent and Resolve violent conflict and one of the things we do here in these are headquarters in Washington is to provide a space for Conversation about the most critical foreign policy issues of the day and I think the US-China relationship certainly qualifies as that And that is exactly what brings us together We've seen over the past decade how China has Shifted many of its policies. It's become far more active in the international stage and particularly It's invested heavily in countries around the world and playing a much more active role Regionally and we've seen this from North Korea to Burma to Africa And so here at USIP our China program directed by Jennifer Statz Has really looked at what is the role of China in conflict affected countries and as part of that work US leads a series of bipartisan senior study groups the first two of which have looked at North Korea nuclear and peace negotiations and China's role in Burma's internal conflicts So I invite you to check those out on our web Which is where you can find them? It is my pleasure to introduce senator Warner He brings a very rich background a very useful background that combines a business technology career with public service and in addition to being the senator From the great state of Virginia He has also served as Virginia Virginia's governor He has a proven record of bipartisanship Working to advance US interests and security abroad and most importantly He's the chair of the Senate intelligent committee Intelligence committee where he's worked with senator Richard Burr and other senators on both sides of the aisle So this this combination of the private sector Technology world and public service world I think gives him particularly keen insights into the topic that we're Discussing today, and he's really been in the forefront of leading conversations about technology economic and trade issues All of which are at the core of the US China relationship Thank you everybody for joining us today. Thank you for those who are joining us online If you are using social media Please use the hashtag and join us for the conversation at hashtag Send Warner at US IP and with that please join me in welcoming senator Warner Thank You Nancy. Thank you for that introduction. Thank you for the great work that US IP does on so many subjects It's great to see so many people here I do want to acknowledge my dear friend Ray Mahmood who's Men are just talking close to 40 year friend And who is very involved. I know not only US Institute piece But a number of terribly critical ventures around internationally and around the region I want to commend the Institute for the important work you do on foreign policy challenges I've got a lot to say so and I want to make sure we've got plenty of time for our discussion afterwards So let me get right at it Today, I think there is a widespread understanding That confronting a rising China is the foreign policy challenge of our time China is a global competitor of 1.4 billion people Living under an authoritarian system of government that is vying for economic political and military influences globally it is governed by the Chinese Communist Party whose view of Individual liberty rule of law and democratic values is starkly different from those of our own On all these points there is broad bipartisan agreement However, there is far less agreement on what our responses to these realities should look like How do we enact a strategy that continues to protect us interests and international institutions? While staying true to our values. I believe We can retain our leadership and global competitive advantage by embracing These defining characteristics that have made America the leader of the free world Those characteristics are our belief in the rule of law our checks and balances against government overreach and Our respect for the rights of an individual Especially when those rights come into conflict with the government or a majority faction These values are the foundation of our international successes and of our strongest alliances Today China is offering a very different model to the world It has achieved a meteoric rise while rejecting some of these core values And I want to make one thing clear at the outset my beef is with the policies of President Xi Jinping and the Chinese Communist Party not With the Chinese people and especially not with Americans of Chinese descent But the truth is the Chinese Communist Party today is intent on Fundamentally reshaping the norms and values that have underwritten decades of global stability security and prosperity The question is how do we respond? Do we engage China in a head-to-head cold war on multiple fronts? Or do we embrace what I would argue is our more traditional leadership role and strengthen the international order that Beijing is attempting to upend I would argue that the second approach of offering a better model to the world One rooted in freedom and opportunity is both consistent with our values and The approach most likely to succeed First I want to talk briefly about how we got here in many ways We're having a conversation like this because the conventional wisdom has changed rapidly over the past few years Until recently conventional wisdom told us that the u.s. And China would both rise together to nations intertwined partnership and trade business and education Like many I hope that the PRC's greater global integration would lead to a more open prosperous and potentially more democratic China and that a rising China would be good for the world Today it is clear that the aims of President Xi and the Chinese Communist Party do not align with that vision Instead the Chinese government has worked to challenge the rules-based international system and expand its brand of global influence military military presence and economic power It is time to wake up to the fact that Beijing is pursuing a strategy not only to strengthen China But to explicitly diminish US power and influence To do this the Communist Party is exploiting all the elements of state power To strengthen China's position in the world and they're doing this at the expense of human rights and human dignity The way I see it these efforts fall into four buckets military power influence campaigns Economic expansion and an area that has not received enough attention science and technology policy First on the military front The People's Liberation Army the PLA is expanding both its own domestic bases and starting to establish bases overseas China's naval forces are now able to conduct operations further from home in the Indian Ocean waters around Europe and the Western Pacific under the doctrine of military civilian civil fusion Beijing has pursued a cutting-edge side of cutting-edge technologies such as AI unmanned systems and hypersonics Which will be the essential the 21st century war fighting and the PLA is modernizing its military at a fraction of the cost that those of us in the West are approaching They're effectively skipping a generation of expensive R&D by by adopting platforms from foreign militaries or Sometimes stealing the intellectual property to do so Contrast that with the United States where we continue to spend 750 billion dollars on defense Including expensive updates to legacy military systems and platforms To compound this China is focusing its efforts on tools of asymmetric warfare like cyber space and misinformation disinformation U.S. Defense and intelligence officials are increasingly concerned that the PLA now threatens the United States United States in specific domains such as cyber and space and that China even leads in specific military technologies again such as hypersonic weaponry Former DNI coats and others have warned of China's ability to target critical infrastructure right here at home Like our electric grid using cyber attacks. I worry as well about the PLA's willingness to use cyber theft for economic espionage The truth is China is demonstrating that wars with near-peer competitors May no longer be a traditional mill-to-mill conflict But instead for the U.S. and our allies increasingly clear that cyber and again misinformation disinformation will be just as critical as military might going forward in the 21st century The second aspect of China's strategic strategy deals with its efforts to wage influence campaigns beyond its borders The PRC has tried to dictate how foreign entities characterize sensitive topics like the Dalai Lama or Tiananmen Square Beijing has often forced global businesses to conform to its world view in order to maintain access to the Chinese market For instance, dictating how U.S. Airlines put Taiwan on their global maps On college campuses, we have seen China use student groups like the Confucius Institutes to shape and stifle debate More broadly the Chinese Communist Party relies on a network of think tanks Newspapers and aligned businesses and political leaders to shape perceptions of China and the party They have also used their economic investments abroad to leverage pressure To pressure other nations to support their diplomatic agenda Just recently and this one was I think particularly noteworthy just recently a number of countries including majority Muslim countries Signed a letter expressing support for China's tactics with the Uyghur population and The Chinese government has pursued an extensive social media disinformation campaign Exploiting the continued vulnerabilities of YouTube Facebook Twitter all sites banned in mainland China to spread propaganda abroad The party also dominates Chinese language services like WeChat Expanding control over the flow of information not only within its borders But within its expat community as well These tactics are an extension of China's doctrine of cyber sovereignty the idea that the state has the Absolute right to control information within its border China has already brought this notion to bear on its people in the form of censorship domestic disinformation and the social credit system But increasingly we are seeing it exported on a global scale third on the economic front President Xi has pursued two economic strategies aimed at displacing the United States position of economic leadership So the China 2025 plan she is focused on developing domestic Chinese capabilities in Strategic industries of the future at the same time the PRC is working to expand Chinese exports globally to existing customers as well as the developing world President Xi is making a play for dominance in areas like 5g AI quantum computing robotics and increasingly even biotech in addition China is employing the full power of the state to build the infrastructure and here's where they're doing something different and actually set the standards for new technologies like 5g wireless on Actually adopting tactics that the United States used for much of the 20th century But unlike the US China is trying to set these standards to promote its own interests Rather than the notions of any sort of fair competition At the same time China exploits the openness of the international trading system to gain access for Chinese companies And Beijing has maintained or even increased barriers to foreign competition globally the Belt and Road Initiative to build infrastructure and trade relationships heavily weighed in China's interest Accompanying this has been a digital initiative to promote Chinese telecommunications equipment The goal is not simply to promote Chinese vendors But to see the global telecom market with equipment and services that could ultimately be exploited by Chinese security services The truth is Chinese Communist Party is attempting to harness Chinese companies civil society and even overseas diasporas as an extension of the state These efforts are frankly neither hidden or frankly very subtle Over the past few years China enacted laws requiring all citizens and companies to act in support of national security as defined by the Chinese government Despite protests to the contrary no Chinese company however global is actually private These companies don't make decisions entirely for economic or commercial reasons Because they are legally required to act as an extension of the Chinese Communist Party when called upon and This leads to the fourth aspect of China's efforts to reshape the international order its science and technology policy Again and again. We've seen US companies forced into joint ventures with Chinese companies Or required to share specific code and other IP in order just to get access to the Chinese market We've heard from American companies who have been put out of business After Chinese competitors stole their technology and produced their own lower-classed version of the American product with state subsidies But China's blatant effort to steal Western technology did not stop at its border The Justice Department revealed last year that more than 90 percent of DOJ's economic espionage cases and more than two-thirds of its currently open trade secrets cases all involved China in particular The Chinese Communist government views Western universities and government labs as fertile grounds for transfer of sensitive research back to China and What's particularly alarming is that it sees Chinese expats especially students and academics as essential assets in these efforts The fact is Chinese nationals now make up roughly one-third of all foreign students studying in the US Out of the 363,000 Chinese nationals studying in the US last year nearly half of them were majoring in STEM fields And many of them are returning home to take advantage of the opportunities in China's growing economy Now my concern isn't necessarily with people who want to come here and learn and then go home But I do have a concern that the Communist Party is attempting to coerce some of these individuals for technology information and intelligence collection purposes Let me be clear the majority of these students are blameless and make significant Contributions to the research environment and to the US economy But we have to acknowledge that what's changed has been in the last few years more and more the Chinese intelligence services Often praise upon this population Literally threatening the students families back at home saying your son or daughter needs to not only come home But bring a thumb drive back The truth is President Xi China is drifting from the international cooperation and shifting to a more Nationalistic and confrontational path of scientific advancement and while we must not lose sight of our own founding principles We also cannot ignore the fact that China is now playing by a different set of rules So where does that leave us? Left unopposed this threat to global norms and values jeopardizes not just America's position in the world it risks undermining the whole notion of free inquiry free travel Free enterprise and other values that have animated decades of global stability and prosperity That's why I'm so deeply concerned by the Trump administration's erratic and incoherent approach While the administration has rightly raised concerns about China something frankly that previous presidents should have done earlier The administration's unilateral approach to this challenge is not leading us towards success After all these difficulties I've outlined Pose a challenge and let me make sure try and challenge not just to the United States Not just to the West but to all nations committed to democracy Individual liberty an independent judiciary and the rule of law countries like Japan South Korea Australia India and others they all face the same challenges as the traditional West does Yet rather than building a coalition to confront these issues President Trump has alienated some of our closest allies Instead of building a values-based International coalition to stand up to the China the president has minimized the importance of human rights and representative government Even when we see the protesters in Hong Kong Standing up and singing the star-spangled banner The president's insistence on framing this is a conflict between our two countries has resulted in little tangible gain We cannot afford to frame this strategic challenge in simplistic cold war terms Dividing the world into two and seeing who can weigh out the best and frankly. This is not just realistic Given China's enormous economic integration into the rest of the world The PRC is the top trading partner for more than two-thirds of the world and Like many of our allies the US economy is deeply intertwined with China Meanwhile while the China and the US are competitors in many areas as Nancy's said We also confront many common challenges from climate change to water security to North Korea The stakes are too high for both of our countries to retreat into kind of a permanent confrontational basis Instead, I think we need a comprehensive strategy to defend against China's bad behavior to compete with China in the 21st century and To strengthen the international order it seeks to upend Here's where I believe we should start First let's talk about defensive measures and how to protect ourselves, especially in the short term This can't just be up left up to the federal government. It needs to be a partnership between the government and the private sector That's why over the past year I've been convening a series of briefings for business and academia Always partnering with a Republican member of the Center Intel Committee and with leaders from the IC to give those outside government an inside view of what we've seen I've introduced legislation with Marco Rubio Rubio that would in part help formalize and coordinate this effort our bill Establishes an office of critical technologies at the White House Which would be responsible for developing a government-wide strategy to protect against state sponsored threats to critical American supply chains and technologies However, I believe the government can and should do more First we need to protect our supply chains especially for military platforms and equipment an October 2018 GAO report found cyber vulnerabilities in near Nearly all us weapon systems and our Navy has admitted in public Reports that it relies upon systems so compromised by our adversaries that their quote reliability is questionable We can start by securing the Internet of Things devices before they're exploited I have bipartisan bicameral legislation that would require All government purchases of Internet connected things particularly coming out of the DOD meet at least de minimis security standards Back in 2018. I was also proud to support language into the annual defense bill That would ban the use of ZTE and wall way components in government systems And I think we need as I said a national strategy to deal with supply chains That's why I along with Senator Mike Crapo introduced a bill to establish a national supply chain security center within the OD and I Companies also need to fortify their own systems against cyber attacks and insider threats Second we got to get a lot more serious about securing our telecommunication systems especially when it comes to 5g That means relying on trusted companies to build our telecommunications infrastructure And it means setting standards that adhere to our democratic values I've supported this administration's initial steps to limit the uses of wall way and other telecom equipment from China I just hope that the president sticks with these efforts, but more still needs to be done I also believe that we need a serious conversation about how to both replace Current equipment that is across the country many of our smaller carriers have bought wall way equipment because frankly it's been a lot cheaper Third the federal government needs to develop better oversight and controls to stop Chinese investments in critical dual-use technologies by law all Chinese citizens and companies are ultimately beholden to the Communist Party not their board of shareholders and Our corporate ownership rules need to acknowledge that I've supported sypheus reforms to expand oversight over these transactions But we need to ensure that the implementation meets congressional intent and companies can't skirt sypheus oversight Another war area. I'm working on is much needed beneficial ownership legislation So the Chinese government and other bad actors cannot hide their investments inside anonymous shell companies Fourth we need to continue our progress on enhancing export controls which prevent sensitive technologies From being exported to China Now Congress has made some progress and the Department of Commerce is currently working on language to strengthen the US export control system But given how much cutting-edge technology and research and development is happening within the commercial sector We need to establish these controls quickly and to coordinate with our allies We currently partner with 42 other nations through the all Australia group export control regime These are exactly the kind of international organizations that must be strengthened fifth there must be clear consequences for American companies and citizens that enables enable China's bad behavior I've become increasingly disturbed that US businesses and the academic community has deep in partnerships With China to gain short-term market opportunity While ignoring the larger geopolitical impact Equally troubling we've seen American investors pour money into Chinese companies that advance the PRC's military capabilities We've also seen American companies develop technologies that directly Enable the censorship surveillance and social control efforts of China and other authoritarian regimes Now these efforts may be good for business But they directly support China's efforts to rewrite global norms and rules and at the very least We should make clear to both companies and academic institutions That complicity in China's repression efforts will jeopardize their ability to do business with or receive grants from the federal government Sixth, we need to do a better job of protecting our research and development Especially the critical work that goes on at US universities in research labs Universities should double down on security and compliance requirements Things like disclosing additional sources of income or affiliations with foreign military and intelligence organizations That said these security measures must be enforced in a transparent and fair way The goal is to protect our IP But it's also to help these students and researchers being preyed upon by the Communist Party Not to discriminate against them This will require creative thinking to flip the script on the CCP's efforts to coerce Chinese students and Researchers to bring home early-stage research in key technologies Beijing relies on its leverage Including families back home to force individuals with access to federally funded research Sensitive research to return to China for the transfer of such technologies What if we actually considered Expanding asylum asylum access to include Chinese students and their families if they were threatened Now wouldn't be a guaranteed deterrent But it might create enough doubt in the minds of the Communist Party That they would have to rethink their current tactics But we need to do more than just play defense against China's tactics This should serve as a wake-up call to mobile to mobilize in support of maintaining our competitive edge Actually a Sputnik moment for the 21st century in 1957 the successful launch of Sputnik Actually shocked the American people and our government into making remarkable investments in science education STEM research and a host of other technologies Sputnik Demanded and required a quick response and it led to America's leadership literally for the next 70 years We not only generally invented or have not invented here. We oftentimes set the standards Over the last 60 years. We've seen the integrated circuit wireless communications and the internet the name a few where We actually set the standards and That helped move the rest of the world that was an enormous strategic and economic advantage for us in the post-war World-two period and we need to match that effort again today following the World War two the United States funded literally 69% of annual global R&D Today that's number is down to 28% and only 7% in non-defense areas like wireless technology Even if we are successful in convincing our allies like that wall way and ZTE equipment present security Significant security risks. We've got to have an alternative to point them to and if we look ahead to the technologies of the future We need to step up our commitment to funding scientific research if we hope to compete in the decades ahead It likely will mean a different kind of in defense investment strategy I've worried for some time That we are investing we are investing in the best 20th century military that money can buy With much of the conflict unfortunately in the 21st century I believe will happen in domains like cyber space and misinformation and disinformation in Many of these areas like satellite to site super sonics China is rapidly becoming our peer and While we spend 750 billion dollars on defense China spends 250 roughly, but that 500 billion dollar different Delta China is investing in all of these cutting-edge technologies The United States needs to ensure that we are no longer Over-investing in legacy systems and platforms Our defense budgets need to better align with the fact that the battlefield might not be the South China Sea It could be the networks that power our grid or our financial sector But ensuring our competitive edge also means mobilizing outside the defense industry It means promoting STEM education and making sure our children get an affordable high-quality education so they can compete It means investing in US infrastructure not just railroad railways and roads and bridges But it also means high-speed internet and other connectivity And if we're going to train and attract a work force of the future it has to be up to the task Fortunately, this is an area that we can call upon some of our nation's greatest strengths Inclusion diversity and entrepreneurial spirit One reason is that we are the land of opportunity is that you can come to this country as an immigrant and in the first generation become an American China with its oppression and persecution of minor minority populations cannot say the same Sadly, this is again one area where the Trump administration's policies have been remarkably short-sighted The truth is we cannot effectively advance our national security interest alone Whether it's standing up to China on trade issues Advancing a free and open Indo-Pacific region or developing a secure telecom infrastructure It can't happen without our allies and partners acting in isolation Only enables China to play countries and companies often rather Undermining our leverage and impact Especially when so many companies countries actually do share our commitment to democracy global security in a rules-based trading system This is where the Trump administration again has gotten it all wrong I was underestimating the importance of partners in advancing our most fundamental interest For example, our efforts to convince allies to adopt alternatives to wall way have been constantly undermined Particularly when the president keeps hinting that the restrictions on wall way could be used as a bargaining chip in the context of a trade deal We should instead be working closely with our allies and partners to create market competitors to wall way That actually abide by our rules This includes setting fair and open secure standards for 5g based upon technological rigor Not China's geopolitical interests on the trade front We should be making common cause with trading partners and allies who face the same economic consequences of China's behavior We should be coordinating with our allies on expert controls and screening of foreign investments Let's also recognize that our allies are ahead of the United States on certain key technologies We should be coordinating with them on research and development In order to pursue a free and open into Pacific based on our values We must deepen our cooperation with our allies and partners such as South Korea Japan Australia and India While expanding our network of alliances as co-chair of the India caucus I see real opportunities to increase our engagement with India on a set of shared strategic interests Such as maritime cooperation cyber security and counter piracy The United States also has a number of existing security arrangements with key allies Trilateral and quadrilateral that can be bolstered We should continue to enhance defense capabilities of our regional partners increase interoperability and support democratic institutions in developing countries Using new tools such as the recently established US international development finance corporation or the new OPEC The United States should work with partners to bring private capital to developing world in a way that is again consistent with our values Across the board the US should be rallying countries with similar concerns about Multilateral mechanisms to challenge China's behavior The US and our allies built the WTO based on openness in the idea that fair play actually benefits everyone Collective action on behalf of freedom and fairness Can push back on President Xi's dangerous ideas and actually move China into a more responsible path This will require a Significant strategic shift from business academia and the federal government. It will also require us to focus our own approach We need to increase our defenses step up a response to China's economic ambitions and strengthen our partnerships abroad We face great challenges when it comes to China, but this is not a time to be fearful We remain the strongest country in the world And our values are still the envy of the world We know at times sometimes when we look at our current politics that Things seem a little bit of a mess But it's never been a very good idea to bet against the United States of America I still believe that is true today, even with the challenges we confront. Thank you all very much And a Warner, thank you for a very comprehensive overview Yeah, that was the longest talk I think I've ever given But you you you laid out in a very comprehensive way the Complications and the nuances of a relationship that as we were talking about earlier has has shifted tremendously over the last decade and You know, can I just ask you to say a few more words about this remarkable shift that's occurred What has changed how we think about this this really critical relationship? Let me again. I stated this in my speech, but I want to reiterate in China is a great country China has history that rivals any nation in the world and I remember when I was governor leading a State trip to China and was 2005 just incredibly impressed with the energy the Entrepreneurship the activity and I was you know Absolutely part of the group that kind of embraced this notion that the rise of China and the rise of the United States You know, there would be points of conflict, but they would generally end up with greater collaboration my view though has Fundamentally changed over the last three to five years part of that has come from increasing Words from businesses that have invested in China that have seen their intellectual property stolen that have seen Chinese competition with state subsidized enterprises Take out their activities part of that has come come from the level of intellectual property theft that's taken place in this country But most of that has come from the absolutely unanimous sense of everyone across the whole intelligence community that as president Xi further consolidated party power and Re-established the primacy of the Communist Party in ways that both change the legal structure and the business outlook of Enterprises in China that the goal no longer for China was a collaborative effort, but it was a real goal to Dominate and not just dominate within the region But in a host of technology and host of various across the whole world, so I Think that's caused a reassessment. I frankly think and while I'm critical of some of the things President Trump's done I give him credit for Elevating this issue. I actually believe President Obama should have in the later stages of his term and I think it is it is the the foreign policy threat of a challenge of our time and The the challenge we face is not and we should not default to us China as a competition This is a competition between the Communist Party China versus kind of any economy that is Market-based that has rule of law independent judiciary And that's why I think as I tried to make the point that we need to rely upon these alliances and rebuild them Well, you also said that we need to not retreat back into a Cold War frame But yet we need to be able to go head-to-head on some of the technology challenges within our own values and our own systems So that presents a particular challenge if you think about The spread of Huawei and 5g and technologies that have the full weight of the Chinese Government behind them. So have you given thought to what does that look like? How do we tackle that kind of challenge? first of all and I I think we were all Caught off-guard the government and private industry and let's take it again. I'm a little biased. I'm a telecom guy Let's go founder of next tell I was in the wireless industry for years I think We at least America had kind of gotten a Little lazy presuming that Every technological innovation if not invented in America even if one invented America we would end up setting the standards and Whether the virtue of the world's largest economy and we were usually very close if did not invent it here we were close in terms of the the collaboration and We never really processed that into policymaking because we always assumed we would set the rules number one and number two We always thought we almost kind of had a hands-off approach that said we didn't really mind Who ended up being the technology? leader on the private sector because if we set the rules and we were the largest market we'd figure out a way and nine times out of ten the market leader was always an American company so as as And we should on 5g we should have been thinking about this Not just recently but years ago. So what's happened is? China has gone out they have their enterprise wall way backed by in a sense China Inc in terms of financing So they can offer decent equipment with huge subsidies 140% financing in many ways taking exactly the playbook that companies like motor role and AT&T use back in the 80s and 90s as American companies dominated the earlier stages of wireless development and And We're left one without a national champion So when we first went out and and said let me make two points here with wall way we went out and I think Inappropriately tried to explain why this is a problem. This is not a problem Currently because there is a backdoor in the equipment But when you move to a 5g network it means it is much more software driven There's not a single switch and it means when wall way only sells it's equipment in a what in a sense It's called a full stack So you have to buy all wall way equipment and if you get updates you think about on your your Apple phone how many updates you get on a regular basis in a 5g network the number of updates that you'll be receiving software base Will be exponentially higher and if you have a Company that at the end of the day and this is why the Australians Prohibited wall way is not is ultimately not responsible to independent judiciary and rule of law But responsible to the government at any moment in time in the future the government can say to wall way then next update You send put malware in and I don't think we made that clear That the problem is not you know When the countries were saying will show us the current backdoor it is the ongoing threat and the fact that we don't have Recourse because wall way at the end of the day is responsible the Communist Party not to a rule of law or an independent judiciary So we didn't explain the threat well enough And then when if we did and most of the most of the intelligence communities around the world have acknowledged this problem But we have the challenge then of saying If this equipment is a lot cheaper and what are you saying America? We should buy instead there is no American company So you have the competitors or Erikson Nokia and Samson all great companies But none of them have the wherewithal of their country that they're located in to match The financing power that China Inc. Can bring So we may need and we have and this is this is a pretty Traumatic concept, but there's a lot of conversation going on we in this country Have always Avoided notions of industrial policy where the government tries to pick winners or losers I Think some of that when we're competing against the nation the size and scope and focus of China May need to be rethought So we may need and we are having conversations that say you know Should we with our five eyes partners or with the other ventures think about how we can combine and have a Doesn't necessarily have to be American, but Western and I say Western in the concept of Not geographic because the countries that were first brought this to our attention were more Japan Korea and Australia You know open democracy type Equivalent that would have quality equipment with the financing able to compete and that would be a that is a dramatically different approach than anything We've thought about in recent times, but it is driven by the fact that when we're competing against China with its size scope economic heft and intellectual capabilities We're gonna have to think think differently. I Want to ask one other question and then we'll open it to the audience so be thinking we'll have mics coming through you made I think a big point of Differentiating the government from the people of China. I think everyone appreciated your call to not demonize Chinese Americans or the Chinese nationals who are studying among the among us, but you also noted the importance of both the business sector and the university Academic sector Participating in in a partnership to address the shift that you so articulately outlined. How do you risk? How do you assess the risk benefits of the engagement the kind of very fruitful rich engagement with? academia with business with with People-to-people with the need to think differently. How do we move on that? Let me try to take that a couple of different ways first I've been making this point particularly vis-a-vis my beef is not with the Chinese people and The best indication I think of The fact that Is the people of Hong Kong? I mean the people of Hong Kong are are expressing in ways that has a Remarkable remarkable courage that the last thing they want is this Communist Party system inflicted on them So I think that strengthens the case and frankly. I think Many Chinese students who are who are studying here who first get exposed to what happened at Tianan Square? We folks get exposed to different democracy You know, we need to nourish that and we need to be one more supportive of the folks in Hong Kong, but to also constantly be Careful in language and framing that this is not anti-Chinese number one, and it's particularly a concern with Chinese Americans who are rightfully Horribly afraid that that was an incident back in the 80s. I think it was the gentleman's name Victor Chen I think who who was killed Chinese ancestry During the 80s because people thought he was Japanese. This was during the kind of anti-Japanese phobia of that period and then you we clearly see the kind of bias that took place against Muslim Americans after 9-11 so It is essential and I don't think our government has done nearly a good enough job Engaging with the Chinese American community on an ongoing basis to say because they are they are very much the Trying to be exploited by we chat and by by other tools of The Chinese use against the diaspora and there's a lot of this going on particularly in Australia So put that on one side where we need to continue to make this on academia. It is it's a challenge You know three hundred sixty three thousand students all paying a hundred cents on the dollar tuition many of these universities have become addicted to that tuition flow and These are great students And and this is an area that we need to be very thoughtful about but we also have to acknowledge The Many universities are kicking off the Confucius Institutes who've really manipulated these students But the number of our top universities that had intellectual property theft in the last five years would stun you So I think we have to do this in cooperative Let me just get to the last the last point which is with with business And this is the part where I'm where we've had some pushback when I see some of our friends in private equity who Much of our business community is kind of acknowledges But with the private equity folks who may be making huge amounts of money by investing in some of these Chinese tech companies Who are helping build the surveillance state and the social credit system that would make Orwell blush in terms of levels of surveillance and Somehow say they be unborn bear no Moral responsibility, I think we really need to to expose this and rethink it and and what do we do about the Given this complicated agenda with the terrible human rights abuses Happening right now with the against the Uighurs you mentioned the Hong Kong protesters What are we able to do about that? Well, that's that's again where When our America doesn't make part of its foreign policy human rights individual liberty freedom of expression We lose our moral force The fact that many countries Muslim majority sign that letter supporting the Chinese policy against the Uighurs is pure economic intimidation and It is extraordinarily disappointing that This administration has not spoken up on the other hand, you know, I think about Senator Rubio I think about a lot of my Republican colleagues. They have remained stalwart in speaking up about American values and you know 98% of What I Went through today Maybe not the Trump parts, but the other 95% I think most of my Republican colleagues won't wholeheartedly agree on Okay, let's take we're gonna take three questions from the audience We have micro-ners here. We'll start with this gentleman Right there and then we'll come down here to the front row Yeah, go ahead. Okay. Thank you very much senator Warner You talked about the importance of working with our allies and please identify yourself. Thank you My name is Patrick Lozada, and I'm with the telecommunications industry association and I work on global policy Huawei is not a member You talked about the importance of working with our allies on a lot of these issues But I think it's it's challenging because not a lot of our allies or not all of allies in Europe or in other places are necessarily On the same page and would be willing to limit their own commercial interests In in some of these issues, so how do we convince them? How do we work with them to push this agenda? We're gonna we're gonna Down here in front and then this general. Let's actually go here with this gentleman and then pass it over there We'll do the three Okay Thank you very much Senator Warner, Dr. Elaine Cereo associate rector of UACU in Kiev, Ukraine I'd like to focus a little bit on the point if you would expand on your thinking with regard to US higher education institutions and what could the US government on a larger scale do to support US higher education institutions so that they aren't so backed into the corner as you pointed out with Foreign students and with a third of them coming from China so much is based monetarily on This the Survivals in the case of the rapid rising of higher education costs in the United States of those institutions Needing to bank on Those students because without it. Okay our students can move forward. Thank you great. Thanks, and Then we'll let you take a batch Senator I'm proud to be one of your constituents in Virginia. I was a I know you've got to like introduce yourself to I'm Pat Maloy I Was on the China Commission as a commissioner had five two-year terms and what I saw was the change in our corporations from Stakeholder to shareholder value where our corporation felt their only responsibility was to enrich their shareholders in top I'm going to ask you to get to a Chris question. Okay, I saw that Chinese being able to play on that that our companies would transfer Technology and R&D and others. I was delighted with the business round table statement recently that they're moving away from that Emphasis solely on shareholder value back to a more stakeholder value system I'm wondering if that's part of the issue that we should be addressing and taking on the China challenge. Thank you I'm gonna go ahead and take a shot And I'll actually try to do this quickly one More state and federal support for higher education. Yeah, we I can give you chapter and verse of the decline in support In terms of public dollars and we've simply increased The the debt limits of our students So there are my 22 friends who are running for president who've all got a variety of ideas There's I've got a bunch of ideas in that bucket, too But we have to make higher education both more affordable and more accessible to Americans But at the same time recognize one of the greatest assets of our country Have been these foreign students who've stayed and decided to build their businesses here in America northern, Virginia's is you know 40% of our of our tech businesses are started by first-generation Americans So I do not want to walk away from that Attracting the world's best and brightest and frankly we need an immigration policy that actually allows I would think more of these qualified students to stay here if they choose afterwards because we have the both Worst of both worlds at this point. We have we have incredibly bright people coming studying Many of them wanting to stay But we're not very immigrant friendly right now and particularly hard with China when they've got the ability to threaten the family if you don't come back and You know, but the other students they can simply if they're not welcome here They are welcome in Canada, Australia and the UK who've done meaningful immigration reform that we need to emulate in terms of The BRT's question about stakeholder versus shareholder primacy. I absolutely Support what they've done, but we've got to make sure those are more than words Candidly This is would be a much paddish heard my spiel on this But we actually need to make capitalism work for a broader group of people and I feel that will go to this issue I think it goes to investment in human capital and how we treat it in the tax and accounting basis because the Chinese companies With their state support having much longer time horizon and don't have that enormous pressure to make three cents next quarter That then sometimes makes the Americans companies Disinvest in R&D and a host of longer term Longer term issues in terms of the telecom telecom companies. I think most of the most nations are starting to understand at least at the intelligence level committee level community level that wallways a long-term security threat and it's really based on Two issues it is based upon the vulnerabilities in 5g on software updates But it's ultimately based upon the fact that if you if you to make your country dependent upon a system of From a country where there is no independent judiciary or rule of law and that company at the end of the day is loyal to the political party Not to an open trading system You know you're gonna be vulnerable, but we have to couple that With one the ability to think about how we Help finance the way we did through the first three or four generations of wireless Where the western companies could provide the same kind of financing? We have to provide the same kind of financing whether it's through the new opic Or maybe it ought to be an expanded five-ice effort or even greater effort And we also have to have an alternative That we can say you know and this gets into this where you get into an area where we've not done before and the industry might Would have problem if we start to say Here are one or two champions That have the heft in the staying power at this point as much as I respect the three country companies that are out there I'm not sure any of them think they have the staying power to compete long-term against wall way back to buy a chart don't come Okay over here ambassador Right there and then Keep your keep your hands up We'll go ahead and then we'll take two more. Thank you so much Senator Warner In your remarks you had mentioned my sorry. My name is Jaleel Jilani. I'm a senior fellow at the US Institute of Peace Senator Warner in your remarks you had mentioned the Growing outreach of China and the use of its military forces away from home But then it can be argued that at the time of their ascendancy Most of the western powers they did exactly the same that China is doing So my question is that isn't this criticism slightly out of place and self-contradictory Thank you. Repeat them repeat You mentioned about the Growing Chinese outreach and the use of their military forces away from home That's the that's something that you mentioned in your remarks My question is that it can be argued that at the time of their ascendancy Most of the western powers they did exactly the same that China is doing. So isn't this this Criticism of Chinese behavior slightly misplaced and self-contradictory Okay, couple more questions See this gentleman up here and right down here in the front. Hi Tim Aiken also a constituent the senator Thank you for being here sir Prospects of reviving trans-specific partnership and sorry a second question I'll try and work in here is that what is the sustainability of the current based on your intelligence perspective of The current communist leadership. Is there an opportunity for change there and how might that occur? Thank you On the second one, I'd love to tell you but I'd have to kill you. Thank you so much senator Warner for Presentation and overview of them where we stand right now My name is Elena Keith and I'm also your constituent. So Virginia and I My question is so you've mentioned there is $750 billion investment say Into defense that's our defense budget. How do you think based on what you've said? it has to be reallocated and where new investments perhaps need to come and Should we make some particular educational programs and national priority say and Create legislations to support that. Thank you so much The first gentleman ambassador your Critique is a hundred percent accurate You know that the in many ways the West had these same Expansionary imperialistic tendencies I would argue that Even if not fully Implemented at least the the underlying values that the Western governments said they adhered to of democracy rule of law individual rights and Some expression of freedom While not perfect was at least The underlying argument. I think what makes what I fear that the China is doing is I am listening the China is Chinese Military expansion is still relatively small The Belt and Road Initiative is good old-fashioned 20th century imperialism in a in a different suit But what concerns me is That what China is actually exporting is an economic system that is kind of a State one capitalism But I think more frightening is what they've been able to create in terms of our surveillance state using technology to Monitor people's behavior in a way that is pervasive beyond anything that even the Soviets at the most extreme Expected so if you are suddenly saying to a regime and I won't cite Around the world here. We will build your power plant. We will build your roads We're gonna offer you deeply discounted wall way equipment And if you put that equipment in we can find a way for you to monitor all your people and all your dissidents That to me is a clash of values that Democracies no matter where they're located around the world or people who aspire to democracy No matter where they live all over the world should be concerned about in terms of TPP I think we totally blew it when we didn't try to sell it as not a trade deal, but a national security deal and The fact that both political parties have have You know kind of walked away from Multilateral trade agreements is of concern to me because I think there is a there's a reason and that we could help build those values in if we do it right whether TPP and it's Some will argue that many of the countries we have bilateral relations with I still think some international economic security Order that takes Asian parts of the Americas is an effort worth Re-invigorating but the rest of them the group has moved on as you know But I think that needs to be back on the agenda to your question. I think that Let me give you two examples I've also had a little bit of time and focus on the Russian intervention into our democracy in 2016 And what Russia did against us in 2016 they also did to the UK in the Brexit vote They did in the French presidential elections if you add up all the Russians spent in American intervention the Brexit vote in the French presidential elections It's less than the cost of one new F-35 airplane So the reason we know that Russia China Iran and others will be back is Because it's effective and it's extraordinarily cheap So I talked to lots of folks in the defense establishment and this is where the the rhetoric and the reality sometimes don't match up I think we all realize that seven hundred fifty billion dollars investing in all these legacy systems That it doesn't long term we can't take that seven hundred fifty billion and move it to You know a trillion five a year If we're really going to meet all of the needs in cyber and misinformation Disinformation disinformation all the new investment areas really make sure our grids and our our systems are totally safe But the willingness of the defense establishment who've said to me. Yes senator We agree with you, but we really don't have a process that says okay. How do we actually? Reprioritize if we're going to try to take maybe not five hundred billion, but could we take? 250 billion of that 750 and move it into cutting-edge research I would argue for the longer term of our economic and Power and values position that might be a better investment than simply buying more 20th century stuff senator You've given us a Very comprehensive very thorough Framework both of the challenges and some prescriptions for how to move forward I want to thank you for taking time out of a very very busy schedule to come down to share that with us We're very grateful to have somebody with your knowledge and background and energy Working what is clearly a significant set of challenges? Thank you Nancy. Thank you SIP for this opportunity particularly thank the audience That was the longest talk I've ever given and I was getting tired. I can imagine how tired you guys I think everyone was spellbound. This is a big big subject and by no means is it is it fully comprehensive there? But there we really it needs this kind of attention across all these areas And I'm sure people in the crowd have got good ideas to add to it as well Well, thank you everyone who's online. Thank you everyone who joined us today and most special Especially thanks to you senator Warren. It's really been a pleasure. Please join me in thanking senator Warren