Remarks by U.S. Senator Chris Coons (D-Del.)

The Nixon Forum on U.S.-China Relations

October 17, 2019

Thank you, Jane.  Thank you to everybody here at the Wilson Center.  Thank you for your forbearance given that I was engaging in that all too rare but still structurally important activity of voting in the United States Senate.  To Hugh, thank you for the opportunity to be with you today.  I look forward to what I know will be searching, challenging, and well-informed questions.

To those of you visiting from the Nixon Library and Foundation in California, I am pleased you have chosen to focus in this conference on not just the very important current set of issues in our bilateral relationship, but the history of how our countries got to this point and the willingness of leaders from both the United States and the People’s Republic of China to think boldly and think creatively about ways to advance the shared interests of our countries.

What kind of world will we inhabit together in the future?  What rules will govern global conduct?  How will we manage a rapidly changing climate, nuclear proliferation, the spread of deadly pandemics, the technologies that will shape our emerging future?  These are the questions that the United States and China, as the world’s largest economies with the most international influence and power, must answer.  We share an interest in working together to address these vital and pressing questions.  I favor a relationship with China in which we strive to cooperate as much as we compete in our efforts to set the rules that will govern international affairs. 

The reality, of course, is that there will be times when our views, our values, and our interests are at odds.  Those moments will require us to have frank exchanges and more diplomatic engagement, not less, as Robert Daly has suggested in his work here at the Wilson Center.  It will be vital, critical for leaders of both countries to define and articulate our interests and priorities precisely and dispassionately.  Inevitably, there will be areas in which we can and should compete.  Today, I want to take a few minutes and outline what I believe a sustained and bipartisan American strategy for dealing with China looks like.

The goal of this strategy is fairly simple – that the United States should retake its position as the leader of free and open societies around the world while making the necessary investments to secure our competitive edge.  We must strive to co-exist, compete, and cooperate with China – and all three are possible.  This strategy requires meaningful engagement from every aspect of American society – from government, to our private sector and Silicon Valley, to academia, think tanks, and other critical institutions. 

So, let me start by making a few overarching points if I could that inform my views.  First, recent talk of a renewed Cold War with China is both inaccurate at best and self-fulfilling or even dangerous at worst.  Over the last forty years, the United States and China have benefited enormously from the establishment of strong ties and deep economic interaction with each other.  Hundreds of millions of Chinese have raised themselves out of poverty through determined hard work after Deng Xiaoping embraced market forces.  As a result, China has become a peer competitor of the United States.  It is time to stop talking about the rise of China and recognize China is a peer competitor today.

Nonetheless, China’s decision to neither open up politically nor economically since its accession to the WTO in 2001 has forced us to a point where we now must re-examine, re-calibrate, and adjust the parameters of our relationship.  President Trump’s tariff war and Vice President Pence’s October 2018 speech at the Hudson Institute have certainly gotten the attention of China’s leadership and principally President Xi Jinping, and while I want to see the trade war end – as do millions of American farmers, and manufacturers, and business owners – there is bipartisan consensus that it should not end until we have rebalanced our trade relationship to allow countries to compete on a level playing field globally.  As I have traveled across the United States – I’ve been to 10 cities in the last two weeks – there is a broad anger in our country rooted in the perception that China has literally stolen the future of our middle class.  That is a broadly shared consensus across many states and many contexts.  Thus, if there is a mistaken belief that a Democrat winning the White House in 2020 would fundamentally change the dynamics between the United States and China in terms of discriminatory economic practices, I think they will not change.  I think frankly, this is going to be a consistent pressure and challenge from American domestic politics going forward.

We also must make it clear as a nation and a people that we are not opposed to China’s success, that we have a deep respect for China’s ancient culture and many accomplishments, and that the United States seeks to partner with China on many of the critical challenges that cross transnational borders.  But at the same time, we cannot be naïve.  The United States must be vigilant about China’s assertiveness abroad and recognize that if we want to preserve the openness that is so central, so beneficial to our country and our place in the world over the past seven decades, we need to clarify our interests to Chinese officials, work with our allies and partners to present a united message to China, and commit ourselves to domestic democratic renewal.  As former U.S. officials like Tom Donilon or Richard Haass have pointed out, in the case of competing with China, our foreign policy must begin at home.  In Congress, this means working in good faith with colleagues from both sides of the aisle to reinvest in our communities and live up to and demonstrate the capacity, the potential of our democratic values to solve the real problems facing American families and America’s economy.

I want to offer up four specific ways in which the United States must play a leading role in working with its like-minded partners to preserve freedom and openness.  These domains of competition are our seas and oceans, the industries of the future, the shape of the global economy, and the values systems of our societies.  I will also lay out a series of actions we can take now within the U.S. domestic context in each of these arenas to lay a better and stronger foundation for the future.

First, we must make clear we intend to preserve open sea lanes and freedom of navigation around the world. China, like us, has an interest in keeping the Red Sea, the Persian Gulf, the Straits of Malacca, and other key maritime lanes open.  Yet Chinese island building in the South China Sea, the coercive activity of its maritime militia, the opening of its first overseas military base in Djibouti, all run the risk of constraining international shipping, the free flow of trade, and U.S. military operations. 

U.S. leaders must work to bring their Chinese counterparts to the negotiating table to establish an agreed upon maritime code of conduct and maritime deterrence.  The Chinese should know which of their actions we oppose and our willingness to respond to preserve open sea lanes.  We should work with regional partners to improve maritime domain awareness, conduct regular freedom of navigation exercises, and maintain our military presence in the region.  Finally, the Senate should at long last ratify the United Nations Convention on the Law of the Sea to bolster our ability to resolve maritime disputes peacefully and enshrine freedom of navigation as an international norm.  During the summer of 2012, when I was a newly-installed Senator serving on Foreign Relations, I watched in amazement as literally dozens of credible, serious diplomatic, military, and business leaders testified over a long series of hearings about the urgency of this matter, this treaty first advanced by the Reagan administration, yet they were ignored by a minority in the other party who claimed that ratification would harm our sovereignty.  I think the consequences have been significant and harmful.  We have not been able to approach the developments in the South China Sea from a position of strength as a result.  

There are also steps we can take to improve our ability to safeguard the seas by adjusting our defense budget.  Our military doesn’t necessarily need to be any larger, but it does have to become more modern.  As Chris Brose has written in Foreign Affairs, a revolution in military affairs is occurring today as artificial intelligence, autonomous systems, ubiquitous sensors, advanced manufacturing, quantum science, and other emerging technologies transform warfare and warfighting platforms and systems in ways we haven’t seen in living memory.  We should reprioritize our defense spending accordingly.  Brose writes, “A military made up of small numbers of large, expensive, heavily manned, and hard-to-replace systems will not survive on battlefields... Success will require a different kind of military, one built around large numbers of small, inexpensive, expendable, and highly autonomous systems.”  We look at our annual budget, which is now around $750 billion and feel safer by rank orderings that say we spend more on defense than the next 10 nations combined. But we are not spending it as effectively as we should be, as we must be.  Spending $15 billion on an aircraft carrier that is vulnerable to a $10 million anti-ship missile is simply unwise.  We should innovate and invest in new technologies that can swarm, dominate, and overwhelm adversaries and thus deter conflict.   

The United States has an unquestionable and sustained interest in ensuring open seas.  Where China acknowledges this shared interest, we can work in partnership with them.  But where they do not, we must work with allies and partners, enshrine international norms through UNCLOS, and alter our military spending.

Technology is a tool of national power China is wielding to achieve its aims.  The U.S. government and our tech industry should view this as a generational call to action.

This leads me to the next, and arguably, the most important area in which the United States and China are already competing – the rules governing emerging technologies such as 5G, artificial intelligence, semiconductors, quantum computing, biotechnology, and the Internet of Things.  Unlike the world of thirty years ago, each of these new technologies has a national security application, and the technical and ethical standards of conduct in fields like cyber, outer space, internet, and in particular Internet of Things have yet to be written and embraced.  America’s dominant position in technology and innovation has given us significant advantages in setting the stage for open and interoperable systems that underpin the concepts of innovation, freedom, and creative development.  If that advantage instead slides and then shifts to an autocratic actor, who is designing and setting rules in different ways in these core areas, our ability to set the terms of interactions for everything from business dealings to social and political discourse based on ethical, inclusive, and fair standards is foundationally at risk.   

Technology is a tool of national power China is wielding to achieve its aims.  The U.S. government and our tech industry should view this as a generational call to action.  That is why I am so determined to help shape our country’s approach toward China going forward and this issue is increasingly the focus of my legislative work on revitalizing U.S. manufacturing, protecting patent holders and patent essential standards in 5G and other emerging sectors, and supporting new technologies in my home state of Delaware and across the country. 

The most important thing we can do to respond to China’s rise is to strengthen our own capacity for innovation.  We must reinvest in federally funded research and development, in STEM education throughout all of our schools. We should improve coordination between the federal government and tech hubs across our country. We should work with like-minded partners across Europe and the Indo-Pacific to regain a competitive edge and lead efforts to form an international technology alliance and establish the rules and regulations that will sustain an enduring, open internet and set the standards for the technologies of the future.  

As we strive to keep the internet open and the applications of these technologies ethical, we must understand some of these industries will require a degree of government protection.  That is why Congress passed reforms to close loopholes in the review of foreign investment, known in the United States as CFIUS.  As CSIS think tank scholar James Lewis and others have pointed out, U.S. technological leadership has flourished by embracing openness, but this openness cannot be so “laissez faire and unguided” as to ultimately lead to our demise.  I recommend notionally building a high fence around a small yard of our most critical and sensitive technologies, but as we safeguard these crown jewels of technology, we also have to strike the right balance to avoid a situation where there is a decoupling of global tech industries between the United States and China. 

This brings me to my third area of competition, trade.  Anyone thinking about trade today?  We need to rethink our trade strategy and focus it on stopping China’s intellectual property theft and forced technology transfer while acknowledging that other problematic Chinese economic behaviors, like state subsidization of key industries, are unlikely to change given the difference in our core models of governance.

While President Trump’s tariffs on China have effectively gotten President Xi’s attention, they have also hit our vital allies across Europe, North America, and Japan.  China has countered with forceful tariffs of its own, creating uncertainty and shifting global supply chains.  

There are ways we can and should restore our role as a global leader for open markets and free trade.  We have to work with our allies to reform the WTO and enforce the rules that we helped write and establish decades ago.  We also have to set the standards when it comes to international infrastructure, especially digital and communications infrastructure.  I have concerns about Belt and Road finance projects that leave recipients trapped in debt, or destroy the environment, or undermine human rights, or ignore labor and social standards.  We should encourage China, in a direction embraced by Xi Jinping in his opening remarks at this year’s Belt and Road conference, to enforce the highest international standards, and build on our administration’s ongoing efforts to deploy American transaction assistance teams to train foreign governments in how best to negotiate appropriate and better terms when engaging in BRI projects.

We also have to offer an alternative.  As many heads of state have said to me, “Belt and Road, you can criticize it, but where is your alternative?”  I worked hard with the Trump administration and with a bipartisan, bicameral group of colleagues to pass the BUILD Act to create a modernized 21^st century development finance corporation, an institution with an expanded scope and scale to provide a new tool in our tool kit and a meaningful response.  I am excited this new agency can secure up to $60 billion in U.S. private capital.  While falling short of the amount of funds that China is making available through Belt and Road, this new DFC has capabilities and authorities to allow us to partner with our allies’ DFCs in the Indo-Pacific, Europe, and across the world.  It will offer a clear alternative to Chinese financing and showcase projects that comply with the best international practices.

We cannot underestimate the role of the United States as a beacon of hope to those around the world who seek to follow a more open and democratic path.

The fourth and final area in which we are likely to compete with China is over values.  As CFR scholar Elizabeth Economy has pointed out, under the rule of President Xi Jinping, the CCP is today using over 200 million surveillance cameras to rollout a social credit system that either punishes or rewards Chinese people for their everyday behavior.  The number of foreign non-governmental organizations operating in China has plummeted from roughly 7,000 to 400 in just two years.  The CCP has not only repressed a million Uighur Muslims in Xinjiang province, but has rallied a group of illiberal states to express support for its re-education camps.  China has raised doubts about whether it will respect Hong Kong’s autonomy and the terms of the 1997 agreement it signed with the United Kingdom.  I think they should respect that agreement not just in word but in deed, and the United States should support the right of peaceful protestors in Hong Kong and encourage China to do the same. 

We cannot underestimate the role of the United States as a beacon of hope to those around the world who seek to follow a more open and democratic path.  I believe we have a profound interest in preserving democratic space in societies around the world.  We can do this by promoting standards of good governance, transparency, press freedom, and universal values in our conduct at home as well as in multilateral settings at the United Nations and abroad.

Instead of viewing the UN as a burden that somehow infringes on our sovereignty, the United States should reconsider its engagement as an opportunity to display American leadership.  There are areas where we can and should collaborate with China at the UN – the fight against climate change or in the vital work against Ebola, in addressing nuclear nonproliferation, or in UN peacekeeping missions.  The first time I met a Chinese flag ranking officer was in visiting a UN peacekeeping mission in South Sudan.  But we need to clearly define our interests in using the UN to preserve the values espoused not just in our own foundational documents, but in the Universal Declaration of Human Rights.  Since the Trump administration has withdrawn from UNESCO and the UN Human Rights Council, China has filled that void, calling itself now the “champion of multilateralism.”  Within the Human Rights Council, China advocates for each country to choose “its own model of human rights protection in the context of its national circumstances.”  This is a basic disagreement.

I believe in the universality and desirability of our democratic system, and I think we need to remain true to our values here at home and, in doing so, demonstrate the system’s strengths – the ways in which democratic government can produce strong and better results for its people.  Elected officials should not attack or criticize the legitimate reporting of the free press.  They should not vilify dedicated, career public servants.  Instead, we need to roll up our sleeves and demonstrate democracy works by delivering bipartisan solutions on education, infrastructure, health care.  We should not be afraid to address our deficit, which is on an unsustainable path and represents a national security threat in and of itself.  We have to be honest with ourselves about our own shortcomings in both domestic and foreign policy and then address them in a sustainable and bipartisan manner. 

In conclusion – I’m glad there wasn’t a round of applause.  In conclusion, we should use all the tools of U.S. diplomacy, capability, and influence to keep the world free and open and inclusive.

Our strategy for dealing with China has to be more sophisticated than simply saying BRI is a debt trap diplomacy and China’s treatment of Uighurs is bad, China’s theft of intellectual property is wrong.  We must have a more complex, broad, and deep strategy with regards to China.  While I agree with these three concerns, sentiment is not a strategy.  It is an attitude, and I am concerned it is an attitude based on fear and a sense of our own insecurity.  It is profoundly unrealistic to think that merely repeating our view of why we don’t like China’s behavior will somehow cause China to change.  Xi Jinping and the CCP are redoubling their dedication to their core model, and they believe they have a legitimate case to make to the rest of the world that their model of development works better.  So frankly, I think we should exercise some humility and be realistic about our prospects of changing the CCP.

Today, I’ve tried to lay out an alternative approach – to be vigilant and clear-eyed about what China is doing, to express our disagreements with them frankly, but to not allow that to be our sole focus.  We have to articulate and demonstrate why our ideas, our standards, and international practices are better for all nations.  We need to approach our role in this century with confidence in the American way, in our model that reflects the dignity of the individual, promotes freedom of navigation, fosters economic openness, innovation, and competition through freer and fairer trade, and a model that promotes the free press and free exchange of ideas across an open internet.  That is our alternative to a world based on authoritarian surveillance.  That is the American model.  If we are to re-assert and reclaim our role as the leader of free and open societies that share our values, we need to be true to who we say we are and show the rest of the world that our model works. 

Government by consent of the governed can be remarkably messy, but it is still the best form of government in the world at advancing peace, prosperity, and security and in addressing the legitimate needs of its citizens.  We have to set that example right here at home.

Thank you, and I look forward to your questions.