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April 15, 2021 Hearing Transcript HEARING ON AN ASSESSMENT OF THE CCP’S ECONOMIC AMBITIONS, PLANS, AND METRICS OF SUCCESS HEARING BEFORE THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION ONE HUNDRED SEVENTEENTH CONGRESS FIRST SESSION THURSDAY, APRIL 15, 2021 Printed for use of the United States-China Economic and Security Review Commission Available via the World Wide Web: www.uscc.gov UNITED STATES-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION WASHINGTON: 2021 U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION CAROLYN BARTHOLOMEW, CHAIRMAN ROBIN CLEVELAND, VICE CHAIRMAN Commissioners: BOB BOROCHOFF DEREK SCISSORS JEFFREY FIEDLER HON. JAMES M. TALENT HON. CARTE P. GOODWIN ALEX N. WONG ROY D. KAMPHAUSEN MICHAEL R. WESSEL The Commission was created on October 30, 2000 by the Floyd D. Spence National Defense Authorization Act of 2001, Pub. L. No. 106–398 (codified at 22 U.S.C. § 7002), as amended by: The Treasury and General Government Appropriations Act, 2002, Pub. L. No. 107–67 (Nov. 12, 2001) (regarding employment status of staff and changing annual report due date from March to June); The Consolidated Appropriations Resolution, 2003, Pub. L. No. 108–7 (Feb. 20, 2003) (regarding Commission name change, terms of Commissioners, and responsibilities of the Commission); The Science, State, Justice, Commerce, and Related Agencies Appropriations Act, 2006, Pub. L. No. 109–108 (Nov. 22, 2005) (regarding responsibilities of the Commission and applicability of FACA); The Consolidated Appropriations Act, 2008, Pub. L. No. 110–161 (Dec. 26, 2007) (regarding submission of accounting reports; printing and binding; compensation for the executive director; changing annual report due date from June to December; and travel by members of the Commission and its staff); The Carl Levin and Howard P. ‘‘Buck’’ McKeon National Defense Authorization Act for Fiscal Year 2015, Pub. L. No. 113–291 (Dec. 19, 2014) (regarding responsibilities of the Commission). The Commission’s full charter and statutory mandate are available online at: https://www.uscc.gov/charter. CONTENTS THURSDAY, APRIL 15, 2021 HEARING ON AN ASSESSMENT OF THE CCP’S ECONOMIC AMBITIONS, PLANS, AND METRICS OF SUCCESS Opening Statement of Vice Chairman Robin Cleveland (Hearing Co-Chair) ............................................................................................................ 1 Prepared Statement ............................................................................................................. 3 Opening Statement of Commissioner Michael Wessel (Hearing Co-Chair) ............................................................................................................ 4 Prepared Statement ............................................................................................................. 6 Panel I: The Chinese Communist Party’s Economic Ambitions: Is the Past Prologue? Panel I Introduction by Commissioner Michael Wessel (Hearing Co-Chair) ............................................................................................................ 8 Statement of Matt Pottinger Distinguished Visiting Fellow, Hoover Institution ............................................................. 9 Prepared Statement ........................................................................................................... 11 Statement of Miles Yu Senior Fellow, Hudson Institute; Visiting Fellow, Hoover Institution ............................ 18 Prepared Statement ........................................................................................................... 21 Statement of Loren Brandt Noranda Chair Professor of Economics, University of Toronto ...................................... 26 Prepared Statement ........................................................................................................... 28 Panel I: Question and Answer. ............................................................................................. 52 Panel II: Understanding China’s Economic Drivers and Ecosystem Panel II Introduction by Commissioner Michael Wessel (Hearing Co-Chair) .......................................................................................................... 73 Statement of Jude Blanchette Freeman Chair in China Studies, Center for Strategic and International Studies ............. 74 Prepared Statement ........................................................................................................... 76 Statement of Ling Chen Assistant Professor of Political Economy, Johns Hopkins School of Advanced International Studies ......................................................................................................... 84 Prepared Statement ........................................................................................................... 86 Panel II: Question and Answer ............................................................................................ 96 ii Panel III: Policies and Planning for Emerging Industries: New Mobility, Cloud Computing, and Synthetic Biology Panel III Introduction by Vice Chairman Robin Cleveland (Hearing Co-Chair) .......................................................................................................... 108 Statement of Nigel Cory Associate Director for Trade Policy, Information Technology and Innovation Foundation ......................................................................................................................................... 109 Prepared Statement ...........................................................................................................1 12 Statement of Jason Kelly Co-Founder and CEO, Ginkgo Bioworks ....................................................................... 160 Prepared Statement ...........................................................................................................1 63 Statement of Joanna Moody Research Program Manager, MIT Energy Initiative Mobility Systems Center .............. 167 Prepared Statement ...........................................................................................................1 70 Panel III: Question and Answer .......................................................................................... 183 Panel IV: China’s Pursuit of Leadership in Digital Currency Panel IV Introduction by Vice Chairman Robin Cleveland (Hearing Co-Chair) .......................................................................................................... 200 Statement of Martin Chorzempa Senior Fellow, Peterson Institute for International Economics ........................................201 Prepared Statement ...........................................................................................................204 Statement of Yaya Fanusie Adjunct Senior Fellow, Center for a New American Security .........................................225 Prepared Statement ...........................................................................................................2 28 Statement of Samantha Hoffman Senior Analyst, Australian Strategic Policy Institute Cyber Center .................................239 Prepared Statement ...........................................................................................................2 42 Panel IV: Question and Answer .......................................................................................... 257 QUESTIONS FOR THE RECORD Forthcoming after answers are submitted ............................................................................270 PUBLIC COMMENT SUBMITTED FOR THE RECORD Public Comment from Jean Public ...................................................................................... 271 iii AN ASSESSMENT OF THE CCP’S ECONOMIC AMBITIONS PLANS AND METRICS OF SUCCESS THURSDAY, APRIL 15, 2021 U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION Washington, D.C. The Commission met in Room 233 of Hall of the States Building, Washington, DC and via videoconference at 9:30 a.m., Vice Chairman Robin Cleveland and Commissioner Michael Wessel (Hearing Co-Chairs) presiding. OPENING STATEMENT OF VICE CHAIRMAN ROBIN CLEVELAND HEARING CO-CHAIR VICE CHAIRMAN CLEVELAND: Good morning. Our hearing today will provide an assessment of China's past and current economic capabilities and plans, and how the Chinese Communist Party is directing and evaluating future success. In studying China for some time, it seems many often evaluate success through a Western lens, which means we overlook the CCP's key policies and practices and find ourselves often surprised when they choose a course inconsistent with global obligations and responsibilities. I welcome the fact that 9 of our 12 witnesses today have not appeared before the Commission, so will bring fresh, new thinking to the challenges before us. For the better part of the last two decades, U.S. policymakers have pursued a path committed to expanding market access and opportunities aligned with global trading rules. We've actively promoted international treaty obligations protecting Hong Kong citizens and democracy, as well as sovereign rights for regional states in the South China Seas. We have consistently globally advocated for human rights and lead the world in providing generous humanitarian aid, unconditional foreign assistance, and unprecedented levels of debt relief for our poorest neighbors. We've collaborated with friends and allies in building a generation of innovation, prosperity, and freedom. And throughout this history, we have offered the statement that we expect no state-nation
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