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A Conversation with Rep. Michael Mccaul (R-TX)

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A Conversation with Rep. Michael Mccaul (R-TX) American Enterprise Institute How to counter China’s global malign influence: A conversation with Rep. Michael McCaul (R-TX) Introduction: Kori N. Schake, AEI Remarks: Michael McCaul, US House of Representatives (R-TX) Discussion: Dan Blumenthal, AEI Michael McCaul, US House of Representatives (R-TX) 10:00–11:00 a.m. Tuesday, February 4, 2020 Event Page: https://www.aei.org/events/how-to-counter-chinas-global-malign- influence-a-conversation-with-rep-michael-mccaul-r-tx/ Kori N. Schake: I lead the Foreign and Defense Policy team here at the American Enterprise Institute. And it is my enormous pleasure this morning to welcome to AEI, once again, Congressman Michael McCaul. Congressman McCaul has represented the 10th District of Texas since 2004. He has three different times chaired the Homeland Security Committee in the House and he now is the ranking Republican on House Foreign Affairs. He is also the author of a terrific book from 2016 called “Failures of Imagination” that if you haven’t read, I strongly recommend to you. It limbers you up to think about not just the threats, but also policy choices and the technology that we all need to get knowledgeable about. And he is here this morning to talk with us about China, first to give prepared remarks and then to be in a conversation with AEI’s own terrific director of Asia policy, Dan Blumenthal, who has a distinguished career both in government and also as a scholar of these issues. His forthcoming book, “The China Nightmare,” is out this spring from AEI, which I also encourage you to read. Congressman McCaul, won’t you come up? Michael McCaul: “The China Nightmare.” Wow. Look forward to reading that. Is the sound OK? Kori N. Schake: Yep. Michael McCaul: All right. I just want to thank AEI for inviting me once again. It’s a great institution. We’ve hired a lot of my staff from AEI, and they’ve done a fantastic job. You’ve really been a leading voice on China and a go-to resource for policymakers like myself. We rely on your products very much so. And let me first say that my heart goes out to all those battling the coronavirus in China and around the world. And we hope that it can be contained and a vaccine found in near future and it not spread any more into the United States. I want to engage in a really serious conversation about overall relationship with China and our understanding of the People’s Republic of China and Chairman Xi’s Chinese Communist Party. And our policies must be really guided by the facts. And I want to start with anecdotally a case I worked on in 1996 when I was a young federal prosecutor at the Department of Justice Public Integrity Section. And there were reports coming in that China was trying to influence our election. So the idea of a foreign power trying to influence our election is not anything new. And in this case, it was the PRC. And I had the case, Johnny Chung, and we prosecuted him. He pled guilty, and he started cooperating with us in what was probably the most fascinating prosecution that a young guy at that time could have because Johnny Chung then led us to the director of Chinese intelligence, and Chung really walked into an intelligence apparatus. He met with Liu Chaoying who was the executive vice president of China Aerospace, and her father was the most powerful general in China at that time. There was no distinguishing between private sector and military intelligence. And so they brought him in, in a room with an antenna. Ji Shengde, the Chinese director of intelligence said, “We like your president, we want to see him get reelected and we want to give him money.” And they gave him about $360,000. We had a bank deposit slip from Liu Chaoying, China Aerospace, into his Hong Kong bank account. And then Johnny, in his usual comical way, paid off his mortgage and the rest of it went to the Clinton campaign. But it was interesting in the sense that at a young age — this is decades ago now — but I got a taste of, you know, the tech-transfer satellite technology. Why were they so interested in — Clinton had gone pro-Taiwan, anti-China to then pro-China. And the idea that they could cultivate him to do the tech transfers, dual-use technologies like satellites to maybe help our economy but strengthen the Chinese. And they liked that policy, and they liked it so much they wanted to see him get reelected. I thought it was very fascinating. We had a lot of wiretaps up in China. A lot of strange things that happened. And the strangest thing is my FBI agent, foreign counterintelligence, when the wall was up back then, we shared a lot with him, but he couldn’t share anything with us. A year after that case was over, he was indicted for espionage. He was sleeping with a Chinese spy. That’s called a honeypot. And everything I was giving him, he was turning over to the Chinese spy that he actually took to FBI Christmas parties, believe it or not. And that information, all that information was sensitive information from Title 3 wiretaps, went straight to the PRC and to the Chinese. So that was my first kind of taste of China. And, you know, that’s been more than 20 years ago. But this story really could easily be a headline today. And the threat from Chairman Xi’s Chinese Communist Party largely remains the same. But it’s now more aggressive, it’s more expansive, sophisticated, and better-resourced. And the threat is really multidimensional, impacting schools our children attend, the technology we rely on, and the potential wars we need to plan for. The CCP is a strategic adversary and our top competitor. And let me be clear, our challenge is with the CCP and not the Chinese people or their rich culture. Immigrants of China descent are deeply intertwined into the fabric of our society. They’re entrepreneurism, work ethic, family values, and commitment to the American dream have enriched communities across our country. But it’s the Chinese Communist Party that has been using a slow, deceptive campaign for decades to achieve superpower status by eroding the foundations of democratic societies around the world and American global leadership. Chairman Xi is accelerating this campaign. Not the reformer many imagined in the beginning, Xi is a hardened Communist. He’s a believer of what former Chairman Mao said, “All political power grows out of the barrel of a gun.” The United States initially worked with the PRC. President Nixon, Henry Kissinger’s trips to China led them to believe that we could possibly stave off a shared threat from the Soviet Union by driving a wedge between Communist powers. And just as we helped other Asian countries rebuild their economies, the United States believed a prosperous, stable PRC was in our global interest. In his 1972 victory speech, President Nixon cast his opening with China as part of the “greatest generation of true peace that man has ever known.” We miscalculated. We really miscalculated this one on all levels. As Dr. Pillsbury, author of “The Hundred-Year Marathon” stated, “It was the most dangerous, most systematic, significant and dangerous intelligence failure in American history. China promotes a false narrative that the United States seeks to stop China’s rise when, in truth, they have rejected decades of engagement and repeatedly chosen to pursue malign, deceptive, zero-sum policies, empty promise after empty promise.” I commend the Trump administration for distinguishing itself with a new policy, a competitive policy, and a clear-eyed policy approach towards China. Under this administration, the United States will begin to impose consequences for China’s maligned actions. But how did we get here? For decades, the United States policy of leniency towards the PRC has been based on false assumptions. The CCP claims the PRC is open and free, yet it rounds up and oppresses ethnic and religious minorities, including Christians, Uighurs, and Tibetans, and censors free speech and religious texts. Just last week, I helped pass legislation in the House supporting the people of Tibet against the CCP’s attempts to dismantle Tibetan Buddhism and the Dalai Lama. And they want to replace the Dalai Lama with one of their own, and we cannot let that happen. The CCP claims the PRC is a market economy, yet it spends tens of billions of dollars to subsidize its own industries. It steals hundreds of millions of dollars worth of American intellectual property every year. And as Secretary Pompeo has explained, under Chinese law, private sector companies must share technology with their military. China does not have a private sector as we know it in this country. These Chinese companies are arms of the state at best and tools of the military at worse. The CCP claims its foreign policy respects sovereignty and international rules, yet it disregards its WTO commitments, and it has the world’s second-largest GDP but still claims to be a developing nation status in order to deceive the international system and get World Bank loans. Imagine, China is the number two economic empire in the world, yet they are defined as a developing nation that qualifies for World Bank loans. I think as a country with an expansive space program, do they really need loans from the World Bank? Additionally, they use debt-trap Belt and Road Initiative diplomacy to take strategic land and resources from nations through their predatory Belt and Road Initiative.
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