The strategic objectives that guide the U.S. economic approach towards China are securing U.S. and allied national security interests, promoting respect for human rights, fostering bilateral economic growth through healthy competition, and cooperating on pressing global issues, testified Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rosenberg to a Senate Panel Wednesday.
Discussing the national security challenges posed by China, Rosenberg highlighted China’s challenge to global norms and their exploitation of economic vulnerabilities through corruption. She cited the case of Wan Kuok “Broken Tooth” Koi, a Macau triad boss, and his organization, which was previously designated by the Treasury for such corrupt practices.
Paul Rosen, Assistant Secretary for Investment Security, emphasized the role of the Committee on Foreign Investment in the United States (CFIUS) in mitigating potential national security risks associated with foreign investment in the U.S. He outlined enhancements made through the bipartisan Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) to ensure comprehensive review of relevant transactions.
Assistant Secretary of Commerce for Export Administration, Thea D. Rozman Kendler, clarified the U.S.'s strategic approach towards China. Kendler explained that while U.S. actions aimed to restrict China’s access to key sensitive technologies, they did not represent a broader intent to choke off trade. “We are “de-risking and diversifying” with respect to the PRC on a narrow slice of technologies. We are not interested in decoupling. There are many areas in which the United States and the PRC can and should continue to cooperate.
Kendler provided detailed statistics on license applications “In calendar year 2022, license applications for the PRC had an average processing time (APT) of approximately 90 days. This APT is significantly longer than the CY 2022 APT for non-PRC cases of 43 days. It is also longer than the CY 2021 APT for PRC cases of 76 days. As evidenced by this data, BIS with its interagency colleagues is taking the time to ensure that PRC licenses are carefully reviewed
She further discussed specific measures taken to control China's access to advanced artificial intelligence and supercomputing technologies, stating that the moves were not aimed at restraining China’s economic growth but were based solely on national security and foreign policy considerations.
In his testimony, Matthew S. Axelrod, Assistant Secretary of Commerce for Export Enforcement, highlighted recent enforcement actions by the Disruptive Technology Strike Force, co-led by Commerce and the Department of Justice.
Senator Bill Haggerty (R-Tenn) voiced his concerns over a recent violation of American sovereignty by a Chinese high-altitude surveillance ship and requested export licensing data from the Commerce Department's Bureau of Industry and Security. “I'm very concerned to see this administration basically back off and kowtow just so they can obtain high level meetings with with you know officials in China this makes no sense we should be speaking from a position of strength not weakness.”
Senator Tester (D-Mont) discussed a proposed bill that would prevent China, among other countries, from purchasing farmland in the U.S., while Senator J.D. Vance (R-Ohio) criticized U.S. sanctions policy towards Russia, arguing it had failed to significantly impact the Russian economy.
Rosenberg defended the sanctions, stating that they had effectively severed Russia's connection with the international financial architecture, impacting their banking relationships.
Meanwhile, Senator Warnock of Georgia expressed concerns about the climate of fear enforcement activities had fostered among his constituents of Chinese descent, citing a “chilling atmosphere” among researchers and scientists. He asked Axelrod about steps taken to address potential civil rights issues during the targeting of Chinese government espionage activities. Mr. Axelrod cited his team’s Academic Outreach Initiative as an effort to “both safeguard sensitive research but also at the same time maintain that open collaborative environment.”
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