[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




 
                         RENEWING ASSURANCES: 
                     STRENGTHENING U.S.-TAIWAN TIES

=======================================================================


                                HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 15, 2017

                               __________

                           Serial No. 115-43

                               __________

        Printed for the use of the Committee on Foreign Affairs
        
        
        
        
        
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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM R. KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID N. CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina          AMI BERA, California
MO BROOKS, Alabama                   LOIS FRANKEL, Florida
PAUL COOK, California                TULSI GABBARD, Hawaii
SCOTT PERRY, Pennsylvania            JOAQUIN CASTRO, Texas
RON DeSANTIS, Florida                ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina         BRENDAN F. BOYLE, Pennsylvania
TED S. YOHO, Florida                 DINA TITUS, Nevada
ADAM KINZINGER, Illinois             NORMA J. TORRES, California
LEE M. ZELDIN, New York              BRADLEY SCOTT SCHNEIDER, Illinois
DANIEL M. DONOVAN, Jr., New York     THOMAS R. SUOZZI, New York
F. JAMES SENSENBRENNER, Jr.,         ADRIANO ESPAILLAT, New York
    Wisconsin                        TED LIEU, California
ANN WAGNER, Missouri
BRIAN J. MAST, Florida
FRANCIS ROONEY, Florida
BRIAN K. FITZPATRICK, Pennsylvania
THOMAS A. GARRETT, Jr., Virginia

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 ------                                

                  Subcommittee on Asia and the Pacific

                     TED S. YOHO, Florida, Chairman
DANA ROHRABACHER, California         BRAD SHERMAN, California
STEVE CHABOT, Ohio                   AMI BERA, California
TOM MARINO, Pennsylvania             DINA TITUS, Nevada
MO BROOKS, Alabama                   GERALD E. CONNOLLY, Virginia
SCOTT PERRY, Pennsylvania            THEODORE E. DEUTCH, Florida
ADAM KINZINGER, Illinois             TULSI GABBARD, Hawaii
ANN WAGNER, Missouri

                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Rupert J. Hammond-Chambers, president, U.S.-Taiwan Business 
  Council........................................................     7
Mr. Dan Blumenthal, director of Asian studies and resident 
  fellow, American Enterprise Institute..........................    24
Mr. Russell Hsiao, executive director, Global Taiwan Institute...    30

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Ted S. Yoho, a Representative in Congress from the 
  State of Florida, and chairman, Subcommittee on Asia and the 
  Pacific: Prepared statement....................................     3
Mr. Rupert J. Hammond-Chambers: Prepared statement...............    10
Mr. Dan Blumenthal: Prepared statement...........................    26
Mr. Russell Hsiao: Prepared statement............................    33

                                APPENDIX

Hearing notice...................................................    60
Hearing minutes..................................................    61
Written responses from Mr. Rupert J. Hammond-Chambers and Mr. 
  Russell Hsiao to questions submitted for the record by the 
  Honorable Ann Wagner, a Representative in Congress from the 
  State of Missouri..............................................    62


          RENEWING ASSURANCES: STRENGTHENING U.S.-TAIWAN TIES

                              ----------                              


                        THURSDAY, JUNE 15, 2017

                       House of Representatives,

                 Subcommittee on Asia and the Pacific,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The subcommittee met, pursuant to notice, at 2:45 p.m., in 
room 2200 Rayburn House Office Building, Hon. Ted Yoho 
(chairman of the subcommittee) presiding.
    Mr. Yoho. The subcommittee will come to order. For those of 
you that were present and you saw Republicans and Democrats on 
both sides, that wasn't dysfunction. That was to show you the 
Foreign Affairs Committee is very well united and that was done 
purposely, right?
    The subcommittee will come to order. Members present will 
be permitted to submit written statements to be included in the 
official hearing record. Without objection, the hearing record 
will remain open for 5 calendar days to allow statements, 
questions, and extraneous material for the record subject to 
length, limitations, and the rules.
    Good afternoon. Taiwan has received significant attention 
in Congress since last year--excuse me--has not received 
significant attention in Congress since last year. At that 
time, the focus was on the campaign and later the victory of 
President Tsai Ing-wen, and the mood was optimistic and 
celebratory.
    Since that time, unfortunately, Taiwan's international 
outlook has become increasingly cloudy. Just this week, Panama 
severed diplomatic ties with Taiwan and recognized the People's 
Republic of China, a gut-wrenching loss for Taiwan's dwindling 
diplomatic recognition. Last month, the PRC blocked Taiwan's 
delegation from attending the World Health Assembly in Geneva, 
the annual gathering of the World Health Organization, despite 
the fact that Taiwan has regularly attended the summit and has 
been an international force for good in the health space. It is 
not only Taiwan's loss, but the world's as diseases know no 
borders.
    Since President Tsai's election, the PRC has escalated a 
global campaign to squeeze Taiwan's international recognition 
out of existence. Taiwan's security situation is being 
challenged alongside its diplomatic presence. The PRC has 
undertaken unprecedented military provocations around Taiwan in 
recent months. In November of last year, China flew aircraft 
around the perimeter of Taiwan's Air Defense Identification 
Zone for the first time. In January, the PRC sailed the 
Liaoning, its first aircraft carrier, through the Taiwan 
Straits.
    These actions, the PRC's increasing global military 
ambition, and its belligerence in the East and South China Seas 
have contributed to an environment of instability. However, the 
United States has not completed an arms sale to Taiwan since 
2015, though the Taiwan Relations Act requires the United 
States to offer the necessary equipment for Taiwan's self-
defenses capabilities.
    Successive administrations have shown a lack of resolve in 
executing our defense commitments to Taiwan, emboldening the 
PRC which remains uncommitted to a peaceful resolution of 
Taiwan's status. Our most recent arms sales was in 2015, and 
the prior sales were years apart. Since 2008, sales have been 
delayed so that they can be bundled together and their timing 
can be manipulated. The arms sales process has become a 
political calculation designed to minimize friction with the 
PRC. Not only does this concede to Beijing a degree of 
influence over our arms sales process, it seems to contravene 
President Reagan's assurance that the PRC would not be 
consulted on arms sales to Taiwan.
    Economic pressure on Taiwan is increasing as well. Taiwan 
has long been a developed, high-tech economy, and is especially 
dependent on international trade for its prosperity and 
economic growth. But the PRC's massive and growing economic 
clout grants it the ability to exclude Taiwan from trade 
agreements and to use economic pressure to change other 
nations' policies toward Taiwan.
    It is astonishing to think that the backwards, isolated PRC 
of 1979 could someday bring this level of diplomatic, security, 
and economic pressure to bear. This geopolitical reality that 
was held when we established our One China Policy has changed. 
The People's Republic of China is no longer the third party to 
a great power competition between the United States and the 
Soviet Union. It has become a challenger, seeking to attain 
great power status for itself by overturning a peaceful 
unipolar order.
    Despite this, our One China Policy has remained virtually 
unchanged since 1979. It is important for Congress to consider 
whether our policies are still serving us well and how we might 
improve them. In particular, renewing our assurances to Taiwan 
to continue and steadfast U.S. support is especially important.
    We have convened this hearing today to work toward these 
goals, and I thank the witnesses and I thank my colleagues for 
joining me today to help strengthen U.S.-Taiwan ties. And, 
without objection, the witness' written statement will be 
entered into the hearing, and I now turn to the ranking member 
for any remarks he may have.
    [The prepared statement of Mr. Yoho follows:]
    
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    Mr. Sherman. Thank you, Mr. Chairman, for holding this 
hearing. I was impressed when I met President Tsai when she was 
in the opposition when we met in Taipei in 2015, and even more 
impressed when she visited the United States in 2016 and came 
to my district. Now she is the only female President in the 
region.
    The United States has a strong interest in supporting the 
people of Taiwan and those interests are enshrined in the 
Taiwan Relations Act and we need to abide by the six 
assurances. Our clear message should be that the United States 
does believe in the power of dialogue, but we unequivocally 
support the right of the people of Taiwan to determine their 
own government through elections.
    Taiwan should not be used as a bargaining chip. Our 
relationships with China are important, their dealings with 
North Korea are important, but we need to stand by the Taiwan 
Relations Act for many reasons, including that Taiwan is a 
democratic partner.
    Freedom House recently upgraded its appraisal of Taiwan's 
democracy from 1.5 up to 1, which is their highest rating, 
noting not only the success of the 2016 elections, but also 
increased freedom in the area of press and academic freedom. 
Taiwan respects human rights, LGBT rights, et cetera. Taiwan is 
a partner of ours in intelligence and in cybersecurity, and it 
is miles ahead of China when it comes to protecting 
intellectual property.
    The Taiwan Travel Act is important. We should be upgrading, 
certainly not downgrading, our relationship with Taiwan. Taiwan 
is a country of 23 million people. At many times we have sold 
them billions of dollars in arms, but, surprisingly, in spite 
of that we do not allow Taiwanese officials to travel to the 
United States in any official capacity. Instead, we have this 
ruse where they can only come if they are refueling to go to 
some Latin American country of far less interest to the 
Taiwanese officials than the United States is, and stay in our 
country for a day or two during that refueling process.
    This is incredibly inconvenient to my colleagues. It is, 
however, very convenient for me since the tradition of not only 
this but prior Taiwanese Presidents is that when they land in 
Los Angeles they come immediately to a Taiwanese hotel in my 
district. So I am the only member perhaps that should oppose 
the Taiwan Travel Act, but I do indeed support it. That is why 
I joined with our colleague, Steve Chabot, introducing it and 
it of course expresses the sense of Congress that it should be 
U.S. policy to have governmental leaders of Taiwan free to 
visit the United States.
    The U.S. needs to be an advocate for Taiwanese 
participation in international relations whether that be 
Interpol, whether that be the World Health Assembly. China's 
efforts to degrade Taiwan's participation in these 
international organizations is not just outrageous for the 23 
million people who should be represented in these 
organizations, it is bad for the entire world. The only 
beneficiaries are diseases and international criminals.
    Taiwan is part of the world and its involvement in these 
organizations are necessary for Interpol, the World Health 
Assembly, the WHO to achieve its objectives, their various 
objectives. As to Lee Ming-Che, who has been arrested in China 
for so-called activities endangering national security, she has 
not received visitation rights. His condition is questionable 
and this is unacceptable.
    We look forward to Taiwan diversifying its trade and 
economic relationships, not only deepening them with the United 
States but also other countries so it is not dependent on 
China. We note the new Southbound Policy to engage with South 
and Southeast Asia. As far as our own relationship with Taiwan, 
we are talking about $85 billion in trade. We do have a trade 
deficit but it is a modest one given the size of the 
relationship. That is contrasted with the highly lopsided, 
almost metastasized relationship we have with China, and I look 
forward to seeing what we can do to even, to make that trade 
deficit even smaller. With that I yield back.
    Mr. Yoho. Thank you, Mr. Sherman. And we had the distinct 
pleasure, she stopped in Miami. President Tsai stopped there to 
have dinner with us as she was going to refuel with you, so it 
was a great moment.
    Mr. Sherman. Is that your opposition to the act?
    Mr. Yoho. That was bipartisanship.
    Mr. Sherman. Bipartisan opposition.
    Mr. Yoho. We have been joined by the chairman of the full 
committee, Mr. Royce, for a statement.
    Mr. Royce. Well, thank you, Chairman Yoho. I appreciate 
that and let me just mention also that I appreciate you having 
this hearing. I appreciate the markup that preceded this on the 
Taiwan Travel Act. I am also a cosponsor of that legislation. I 
think by encouraging more visits between the two governments, 
including at the highest levels, we are going to further 
strengthen the critical U.S.-Taiwan partnership. I think we 
share certain commitments--one of them is democracy, another is 
human rights, the rule of law--and it is really these values 
that serve as the bedrock of this partnership.
    And as these members have accompanied me, I will just 
mention also that every year I lead a large bipartisan 
delegation to Taiwan to highlight the broad and steadfast 
relationship that the U.S. has with Taiwan, and this was made 
possible by the Taiwan Relations Act of 1979. Taiwan is facing 
new challenges as a result of changes in cross-strait and 
global dynamics as well, and it is more important than ever to 
reassure Taiwan of the U.S. commitment to the relationship.
    Unfortunately, just this week, under pressure and with 
inducements from Beijing, Panama broke off decades of 
diplomatic relations with Taiwan and switched diplomatic 
recognition to the People's Republic of China. This decision 
from Panamanian President Varela came after Taiwan has, 
according to media reports, provided $20 million per year in 
foreign aid to Panama, on average. I would hope that Panama, 
and all nations, would act to include Taiwan in international 
organizations.
    I found it particularly concerning that Taiwan was excluded 
from this year's World Health Assembly, especially when we 
consider that wherever we go internationally after a disaster 
we see Taiwanese physicians, doctors, and civil society show up 
to assist. Taiwan has contributed to international efforts 
obviously to improve global health with financial and technical 
assistance, and the Ebola case would just be one of many, many 
that have occurred. It is for this reason that Taiwan has been 
invited to the World Health Assembly for the past 8 years. 
Taiwan's exclusion this year only hurts global health, as our 
colleague Congressman Brad Sherman has said. There should have 
been no question about Taiwan's participation.
    I am a strong advocate for strengthening Taiwan's economic 
links to the United States and across Asia. Taiwan, as we all 
know, is the tenth largest goods trading partner, and the 
seventh largest market for our farmers and ranchers. Taiwanese 
companies invest substantially here. Taiwanese companies have 
pledged $34 billion in investments into the U.S. in 2017, and 
with our shared values of democracy and open markets it is 
vital that we continue to grow this economic partnership. 
Chairman Yoho understands this and has taken the lead on this 
issue by authoring legislation to encourage a deeper trade 
relationship between the U.S. and Taiwan, and I am a cosponsor 
and supporter of those efforts.
    Finally, one of the key provisions of the Taiwan Relations 
Act was the commitment from the United States to provide Taiwan 
with defensive arms. I remain concerned about successive 
administrations' delays in our arms sales notification for 
Taiwan. I think this needlessly draws out the arms sales 
process. I hope to see regular notifications in the future and 
I look forward to the announcement of new sales this year.
    Again I thank Chairman Yoho, and I am looking forward to 
the witness' testimony.
    Mr. Yoho. Chairman Royce, thank you for being here. It is 
an honor to have you here. At this moment we are thankful today 
to be joined by Mr. Rupert Hammond-Chambers.
    Mr. Chabot, did you have something you want to add?
    Mr. Chabot. If the chair, because I am more than happy----
    Mr. Yoho. No, go ahead, my oversight.
    Mr. Chabot. I was just going to say I will associate myself 
with the chairman's comments and leave it there so that we can 
move on to the witnesses.
    Mr. Yoho. Thank you, sir. We are joined today by Mr. Rupert 
Hammond-Chambers, president of the U.S.-Taiwan Business 
Council; Mr. Dan Blumenthal, director of the Asian Studies and 
a resident fellow at the American Enterprise Institute; and Mr. 
Russell Hsiao, executive director of the Global Taiwan 
Institute. We thank the panel for joining us today and share 
their experience and expertise and we look forward to that. You 
will have approximately 5 minutes to give your opening 
statement. The green light will come on, and then don't forget 
to hit the button to turn your mike on. Mr. Chambers, we will 
start with you. Thank you.

 STATEMENT OF MR. RUPERT J. HAMMOND-CHAMBERS, PRESIDENT, U.S.-
                    TAIWAN BUSINESS COUNCIL

    Mr. Hammond-Chambers. Thank you, Mr. Chairman and Mr. 
Chairman, members of the committee, it is an honor to be with 
you today. Taiwan remains a critical global partner for the 
United States. As noted, it is in fact our tenth largest 
trading partner which is extraordinary when you consider the 
island has very little in the way of natural resources and 23 
million people living on a relatively small island. The economy 
surpasses $447 billion in annual GDP and its currency reserves 
now surpass $440 billion.
    By any measure, Taiwan is a poster-child example of the 
success of post-World War II U.S. foreign policy and its 
support for the building of flourishing free market 
democracies. Taiwan is worthy of significant investment by the 
United States, not just to support the island but as a 
representation of America's sustained commitment to the region. 
Since 2005, however, the U.S.-Taiwan relationship has seen 
significant distress. And again, as noted successive 
administrations have downgraded the bar of support for the 
island in the face of an increasingly aggressive and hegemonic 
People's Republic of China. The PRC campaign to undermine 
support for Taiwan continues apace, with a focus on linking 
China's behavior on non-Taiwan matters, such as North Korea, to 
the willingness of the U.S. to curb its support for Taiwan in 
areas critical to Taiwan's ongoing peace and security such as 
arms sales and expanded trade relations.
    As the PRC's economic and military power grows, the United 
States is increasingly challenged to assess whether it is 
willing to maintain its ongoing interest with Taiwan or if it 
will abdicate that leadership role in the hopes of moderating 
China's behavior in other areas of national interest. The U.S.-
Taiwan Business Council believes that U.S. trade with Taiwan is 
mutually beneficial, despite the consistent trade deficit in 
goods in favor of Taiwan that has persisted over the last 30 
years.
    Taiwan plays a tremendously important role both as a market 
for U.S.-made goods, as a manufacturing and innovation partner 
for U.S. businesses. You only need to look at your iPhone as an 
example of the importance and day-to-day partnership that the 
U.S. has with Taiwan. Goods and services trade with Taiwan 
along with extensive investments by Taiwan businesses in the 
U.S. promotes economic growth here and supports U.S. jobs 
across the country and in many industries. The U.S.-Taiwan 
Business Council also believes that Taiwan is a well-placed 
partner with this administration and this Congress in exploring 
and partnering on new bilateral trade initiatives including the 
possibility of signing a fair trade agreement.
    The Taiwan Relations Act clearly states that the U.S. will 
remain obligated to provide Taiwan with arms of a defensive 
character as noted already in formal comments.
    The U.S. is Taiwan's primary military partner and retains a 
close material relationship with the island that covers not 
only arms sales, but also cooperation on cyber intelligence, 
training, maintenance, and logistics. Past U.S. policy, 
particularly under the Obama administration, focused 
significant efforts on the expansion of training and exchanges. 
While it goes mostly unseen, it does have a material impact on 
the island's defense.
    In instances where U.S. commitments to Taiwan's defense are 
discreetly carried out, there has been stability and ingenuity 
in expanding cooperation. However, where the commitment is 
overt, such as with arms sales under the Taiwan Relations Act, 
there has been significant regression particularly since 2011. 
As of June 15, 2017, we have seen only a single sale of arms to 
Taiwan, in 2015, since as far back as September the 21, 2011. A 
closer inspection of the trend lines shows a material U.S. 
commitment in free fall. The Trump administration has been 
handed a challenge to assess and deliver on a new range of 
commitments for Taiwan's national defense such as new fighters 
and diesel-electric submarines.
    U.S. strategic interests in the Asia-Pacific remain 
inexorably intertwined with our support for Taiwan's economy 
and national security. However, this aspirational goal is being 
undermined by an orchestrated and coercive PRC policy to weaken 
support for Taiwan and to restrict Taiwan's self-determination.
    If the U.S. continues to rhetorically say the right things 
but materially fails to act, then Taiwan risks being further 
marginalized globally and will be forced to interact with China 
from a weak position. This is inherently destabilizing. The 
present trajectory could lead to a crisis in the Taiwan Strait 
triggered by China's determination that the overall trilateral 
balance has tipped squarely in its favor and that China would 
then act accordingly. Thank you very much.
    [The prepared statement of Mr. Hammond-Chambers follows:]
    
    
    
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    Mr. Yoho. Thank you, Mr. Chambers.
    Mr. Blumenthal?

STATEMENT OF MR. DAN BLUMENTHAL, DIRECTOR OF ASIAN STUDIES AND 
         RESIDENT FELLOW, AMERICAN ENTERPRISE INSTITUTE

    Mr. Blumenthal. Thank you very much, Mr. Chairman and Mr. 
Ranking Member. Thank you for inviting me to testify on this 
very important issue. I termed my testimony, Taiwan as Partner 
and not Taiwan as Problem because I think what is missing in 
our policy toward Taiwan is reality and the truth. The reality 
is it is in the 21st century versus 1971 and 1972.
    The reality is that Taiwan is a thriving democracy, wishing 
nothing more than to develop peacefully into more of an 
innovative technological powerhouse. It makes no claim on 
Chinese territory, it has abandoned the Chinese civil war long 
ago, and it poses absolutely no threat to the Chinese people. 
To the contrary, it has played a great role in China's economic 
boom.
    And let's be very clear about what the PRC is doing. It is 
making an imperial claim on Taiwan. When we acquiesced in 
China's One China Policy--they call it Principle--we basically 
said that we are acquiescing in helping China reattain all of 
its lost imperial territories. They sit on Xinjiang. They sit 
on Tibet. They are having more encroachments on Hong Kong. The 
last remaining imperial territory left is Taiwan. Now there may 
have been good reason to do so back then, but let's be very 
clear this is an imperial claim. The Chinese may say otherwise. 
They may say there are issues regarding the civil war, but we 
are, in essence, acquiescing to Chinese imperialism.
    This is surely an oddity in today's international 
relations. In the 21st century we certainly don't see the 
United States or other countries acquiescing on imperial 
ambitions. Obviously to the Congress' great credit, one of the 
finest things it did was pass the Taiwan Relations Act at the 
time and adhere to it and make sure the executive branch 
adhered to it so that Taiwan wouldn't become completely 
swallowed up.
    A little history if you will indulge me. Back then China 
badly needed an opening with us. They had the Soviet Union on 
their border. They wanted to attack Vietnam. I am not so sure 
what we got out of that deal. That is for the historians. But I 
will ask this question. Are we still getting bad deals with 
China? Has anything really changed? When things float up in the 
foreign policy sphere about fourth communiques and so forth, we 
have to ask ourselves have the three communiques served our 
interests? Why in the world would we want a fourth?
    We have to actually ask ourselves another question. Is 
there any other bilateral relationship governed by joint 
statements, communiques, and diplomatic snapshots of the moment 
rather than by treaty or anything else? What force do 
communiques have in diplomacy? They are a snapshot of the 
geopolitical moment. That is history. We are stuck with what we 
have today. We probably could have and should have gotten dual 
recognition of Taiwan and China in the 1970s like we did with 
Germany. Maybe we won't get it today, but there are still many 
options that we have to keep increasing Taiwan's autonomy and 
well-being.
    Quickly, defense. We have all mentioned it. Taiwan could 
absolutely do more on its defense budget. But I was a Bush 
appointee during the $30 billion arms package to Taiwan. Taiwan 
has bought every single item on that package that we offered to 
them, besides the submarines, and that is because we have been 
playing games with the submarines. They will buy. Their defense 
budget will skyrocket if we make things on offer.
    But we should go further than just cross-Strait relations. 
Taiwan should be an integral part of our first island chain 
defense strategy. It is a harder target than the Philippines. 
If we sell the right things and engage in the right security 
cooperation with Taiwan it will make it harder for China to 
break out into the Pacific Ocean with impunity.
    Let me skip trade, although it is very important. Let me 
just say this in closing. It is the height of fantasy to think 
that we can go forward with any building of Asian order without 
Taiwan. Taiwan is a claimant in the South China Sea. Taiwan is 
a more advanced economy than a lot of the TPP countries that 
entered. In fact, from an economic viewpoint it would be easy 
to do an FTA with Taiwan. The only thing holding us back is our 
reluctance with China.
    We can't just sit here and ignore the fact that Taiwan sits 
in the middle, geostrategically, between Northeast and 
Southeast Asia. We can't have a South China Sea policy without 
Taiwan. And conversely, if Taiwan does fall into the hands of 
China, it will badly impinge upon our security interest with 
respect to the Japan alliance in the Pacific Ocean. So, Taiwan 
is, in reality, a partner, a key partner, and there is a lot 
more we can do to integrate it into the Asian order because the 
reality is it is already part of it. Thank you.
    [The prepared statement of Mr. Blumenthal follows:]
    
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    Mr. Yoho. Thank you, Mr. Blumenthal, for those informative 
statements, and I look forward to getting into the questions.
    Mr. Hsiao?

  STATEMENT OF MR. RUSSELL HSIAO, EXECUTIVE DIRECTOR, GLOBAL 
                        TAIWAN INSTITUTE

    Mr. Hsiao. Thank you, Chairman Yoho and Ranking Member 
Sherman, for inviting me to testify before this subcommittee. 
This is truly an honor for me to be a part of this important 
and timely proceeding with my copanelists whom I deeply 
respect.
    It has been over a year now since the subcommittee last 
held a hearing on Taiwan. A lot has happened since then. I 
would like to point out three clusters of developments for the 
subcommittee's considerations. First, President Tsai Ing-wen's 
historical election in January 2016 as the government's first 
female President sets a positive standard for other democracies 
worldwide.
    In addition to electing a female head of government, 
Taiwan's Supreme Court recently issued a landmark ruling that 
invalidates a civil code provision prohibiting same-sex union. 
This act further raises Taiwan's profile in the league of 
progressive and liberal nations. According to the independent 
watchdog organization Freedom House, which monitors freedom and 
democracy worldwide, Taiwan ranked third most free in the Asia-
Pacific, only behind Australia and Japan. While no democracy is 
perfect, democratization has had a moderating effect on 
Taiwan's fractious politics, which is clearly illustrated in 
the measured policies of the ruling government, and through the 
opposition Nationalist Party's chairperson election last month.
    On cross-Strait, political relations between Taipei and 
Beijing has cooled as the PRC refuses to deal with the Tsai 
administration unless she accepts the so-called 1992 Consensus. 
While formal channels of communications between the PRC's 
Taiwan Affairs Office and to Taiwan's Mainland Affairs Council 
remains shut after Beijing froze dialogue back in June 2016, 
functional channels for coordination between different 
government agencies remain open. As a Chinese-speaking 
democracy, Taiwan has a unique role to play in China's future, 
but that role must not come at the expense of the freedom and 
democracy that the people of Taiwan have fought for and now 
enjoy.
    The chilling case of the detained human rights activists, 
Lee Ming-che, who has been in detention since March 19th, 
throws into sharp relief the impact that China's non-democratic 
system has for Taiwan and its people, and also for Hong Kong. 
As the 2014 student-led protests in Taiwan and Hong Kong 
illustrate, what happens in Taiwan has a demonstration effect 
on Hong Kong, and what happens in Taiwan has a demonstration 
effect on Taiwan.
    Despite Taipei's measured approach to cross-Strait 
relations, Beijing fired the first salvo that ignited cross-
Strait tensions only 1 month after Tsai Ing-wen was elected 
President.
    In February 2016, the PRC resumed diplomatic ties with 
Gambia. December 2016, Sao Tome and Principe switched 
diplomatic recognition. In January 2017, Nigeria announced that 
it was demoting ties with Taiwan by forcing Taipei to move its 
representative office from Abuja to Lagos. Panama's 
announcement just Tuesday that it had switched diplomatic 
recognition to PRC is the latest in a series of escalatory 
steps in Beijing's enhanced pressure tactics against Taiwan 
that include economic, military, and diplomatic coercion. It 
was only a matter of time before Beijing pulled the trigger.
    Taiwan's informal ties with countries like the United 
States, India, Japan, Australia, and Singapore are now more 
important than ever as Beijing squeezes Taiwan's international 
and diplomatic space further. Specifically, more efforts need 
to be made to upgrade Taiwan's ability to engage the 
international community by including Taiwan in not only 
bilateral, but also multilateral exchanges to offset Beijing's 
coercive full-court press on Taiwan's international space.
    As a strategic effort to rebalance its foreign relations 
and economy, the Tsai government has reinvigorated a 
longstanding policy to diversify its economic outreach which is 
currently heavily concentrated on China to the growing markets 
in the Indo-Pacific. Through an all-of-government approach, 
Taiwan is attempting to forge closer economic links as well as 
deepen the people-to-people ties with 18 countries in Southeast 
Asia, South Asia, and Australasia. The new plan is also the 
natural outgrowth of demographic trends on the island as more 
immigrants come to the country and with more children born of 
mixed marriages.
    And just as the United States looked toward Asia in the 
former administration's pivot to rebalance strategy, Taiwan is 
also looking south to capitalize on the growing markets as well 
as strategic importance of the region.
    Against the backdrop of a growing military imbalance in the 
Strait, Taiwan has currently embarked on ambitious measures to 
strengthen its indigenous defense capabilities and industries. 
Taipei just released a new military strategy through its QDR.
    As a percentage of total government spending, Taiwan 
currently spends up to 15 percent on defense and, in March, 
Taiwan's minister of National Defense targeted for military 
expenditures to rise to the proverbial 3 percent of GDP. In 
this context, it is worth at least asking ourselves why in the 
absence of a mutual defense treaty does the U.S. demand that 
Taiwan spend an arbitrary 3 percent of its GDP on defense while 
expecting less of our other allies and partners.
    Second, we now have a new President of the United States, 
an unorthodox President, who has not only shown that he will be 
not held back by unnecessary diplomatic norms, he has also 
demonstrated a willingness to question policy dogmas. As 
President-elect, Trump made an important gesture by taking a 
congratulatory phone call with the President of Taiwan. For a 
conversation that lasted no more than 10 minutes and mainly 
involved an exchange of niceties, the blowback was 
disproportional and underscores the fragility of the U.S.-
Taiwan relationship.
    The administration has identified North Korea's nuclear 
program as a primary threat in East Asia. In its efforts to 
apply maximum pressure on Pyongyang to denuclearize, President 
Trump is clearly attempting to re-enlist the support of the 
Beijing to use its leverage over North Korea to stop its 
provocations. Interestingly, experts have noted that while 
Beijing's leverage over Pyongyang is significant relative to 
the United States' and Japan's because the two have little to 
none, Beijing's actual leverage over Pyongyang is perhaps very 
little. The fact that North Korea has launched 16 missiles in 
ten tests so far in 2017 may be evidence of that lack of 
leverage. Therefore, any anticipation of what a tradeoff may 
bring in terms of actual results must be measured by a dose or 
realistic expectation in what China can and is willing to do.
    While there is no evidence to indicate that the 
administration is considering such a move, I would simply note 
this as caution for the administration to avoid entertaining 
such a seductive idea that has no legs. With that I will yield. 
Thank you.
    [The prepared statement of Mr. Hsiao follows:]
    
    
    
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    Mr. Yoho. Thank you, gentlemen. I appreciate everybody's 
statement and your expertise. And that is what I rely on is 
your expertise to help draft policies of where we go. You know, 
we know where we come from. We have seen the changes happening 
in the Asia-Pacific Theater.
    I was at a conference, I think it was a year ago when we 
were with a bunch of the generals, and they say we are going 
through a tectonic shift in world powers that we have not seen 
since World War II. Then if you parallel that or take that into 
consideration with what is going on in the Asia-Pacific 
Theater, the South China Sea, you see China making 
international claims to areas that they have never done this 
before. Historically, it has not been done. They are following 
the nine-dash lines and they start claiming sovereignty to 
areas and start building the islands in those areas, 
militarizing those islands.
    We were at a hearing probably a year and a half ago with 
the Chinese Ambassador and he assured us that the Spratly 
Islands and the islands they were building were for peaceful 
navigational purposes. We just wrote an editorial about that 
giving our opinion on that and that is what it is, an opinion. 
But I think we can tell by the actions what China is doing with 
the intention of where they are going.
    I read Robert Gates' book called Duty, and they were 
talking about the Taiwanese sales, and it was the last one that 
we had, and they were talking about how we have done this since 
1979. China has kind of resisted a little bit, but that last 
one they resisted strongly. Our negotiator asked their admiral 
what was the big concern, we have done this 1979, and their 
response was this, and I think this is very poignant and very 
succinct on where their intentions are. The Chinese Ambassador 
said, I know you have, but we were weak then, we are strong 
now.
    From that point forward you look at what they have been 
doing since then. They have been isolating Taiwan further and 
further. We saw what they did with the WHO. Taiwan researchers 
were so critical in the SARS epidemic with the research that 
they did that they should be invited regardless of who they 
are. I would want them at the table in those negotiations in 
those discussions, yet China says no, we want them out of here. 
We have seen them do that over and over again as you brought up 
what they have done in Africa, and those countries in Africa 
have pivoted from them.
    We just saw what Panama--so I think the writing is on the 
wall with the direction. With them, them being China, building 
in the South China Sea and the world stood idly by and allowed 
them to become aggressive, if that aggression is not blocked, 
if that aggression--I don't want to say even blocked. If it is 
not challenged and said no, you can't do this, it is going to 
continue is what I see happening. I want to just read something 
here. A real pain you guys getting my reading.
    A strong and economically prosperous Taiwan is in the 
interest of the United States and should be one of our core 
pillars of America's support for the island. I think that is 
very succinct and very direct on where we should stand and we 
should work harder to work with--I don't want to say the 
sovereignty of Taiwan, but recognizing Taiwan as who they are 
and not cross the bridge or cause trouble with the One China 
Policy because they have to deal with it. They are right there 
110 miles off that coast.
    So my question to you is how do we move forward to protect 
the independent nature of that relationship so that Taiwan can 
continue to flourish with the development, the economic 
prosperity, as Ranking Member Sherman said with the Freedom 
House index it was 1.5, now they are 1. I mean they are top of 
the scale--so that we don't go backwards? I know China feels 
threatened by that.
    How do we bring that assurance so that we can continue the 
relationship that we have and build upon that? I would hope 
China would look at them as a great example of what can happen 
without fear.
    Mr. Hammond-Chambers?
    Mr. Hammond-Chambers. Thank you, sir. Well, a couple of 
thoughts for sure. I would certainly state right off the bat 
that in my view the Taiwan Relations Act has the scope to 
handle the challenge that you have just posed. And that was 
really the genius, the vision of the TRA back in 1979, so I 
don't believe that there is a requirement to amend what was 
conceived back then.
    But what we certainly need is more consistency particularly 
out of the executive branch on Taiwan policy. That certainly 
has undermined efforts particularly over the last 11 to 12 
years, successive administrations, the absence of consistency 
and the growing pressure of course the Chinese have placed. It 
would help at a practical level if there was more consideration 
of Taiwan related initiatives separate of consideration of 
China.
    What might illustrate that point is to point out to the 
committee that when you have representatives of the 
administration come up and speak to you, you will note that 
often the person responsible is responsible for both China and 
Taiwan. In my view that immediately puts Taiwan and the 
interests of the United States, vis-a-vis Taiwan, on a back 
foot, because that person will reflexively consider China when 
they consider Taiwan and that is always a larger account than 
it is on Taiwan front. So perhaps separating those, making a 
case to the executive branch that Taiwan should have more 
operating room within the interagency process and within 
different departments.
    Mr. Yoho. I appreciate that and we are out of time. So I 
would love to hear from you two, but maybe if you can submit 
that, your thoughts on that to the record. Now we will go to 
Ms. Titus from Nevada, for 5 minutes.
    Ms. Titus. Thank you, Mr. Chairman, and thank you for 
holding this hearing. I am proud to consider myself a good 
friend of Taiwan. I represent a number of Taiwanese Americans 
in my district in southern Nevada, and I have had the privilege 
of visiting Taiwan to see the culture and the history and enjoy 
the food and all up close, so I thank you for your hospitality.
    Throughout my time here in Congress too I have worked to 
strengthen the relationship between Taiwan and the United 
States supporting military sales to Taiwan, and Taiwan's 
efforts to join international organizations. Something that is 
especially relevant to my district is expanding the visa waiver 
program so people from Taiwan can visit without having to have 
a visa. Last year, we welcomed close to \1/2\ million Taiwanese 
visitors and that included about 50,000 to Las Vegas.
    As a representative of Las Vegas, and we love visitors. 
That is something I would like to ask you about. If you haven't 
been to Las Vegas, please come and see us. I just would ask any 
members of the panel, first, what do you think that we might be 
able to do specifically in promoting tourism, more tourism 
between the United States and Taiwan as we look to strengthen 
our relations both politically and economically?
    Mr. Hammond-Chambers. On the tourism front, as you 
correctly pointed out, there is already a significant Taiwan 
population here. I think some advertising in Taiwan certainly 
would help. I think if the U.S. is looking to raise the number 
of Taiwanese visiting the United States, advertising specific 
places like Las Vegas, the incoming NFL team that you have. The 
Taiwan citizens are voracious followers of American 
professional sports teams and Vegas appears to be on a roll in 
that regard.
    Ms. Titus. So to speak that is right.
    Mr. Hammond-Chambers. I think you have hockey and football 
arriving imminently and surely basketball and baseball will 
follow in time, which is a very exciting time for you. Taiwan 
citizens follow American sports and that might be something 
worth advertising to them.
    Ms. Titus. It is interesting. We have a program, Brand USA, 
where we have tried advertising in parts of Europe. Maybe we 
need to look at not at cutting that program, which has been 
very successful, but expanding it.
    Mr. Blumenthal or anybody else?
    Mr. Blumenthal. On tourism I think that first of all, going 
the other direction, a number of newspapers and magazines have 
now claimed or reported that Taiwan is one of the best tourist 
destinations for Americans and the top place for expats to live 
when they do business. In terms of Taiwanese coming here, I 
think Rupert Hammond-Chambers has some good ideas. I think 
casinos and Las Vegas are something the people of Taiwan enjoy 
and perhaps share that enjoyment if we are looking at people to 
people talks between the Chinese and Taiwanese, they share that 
enjoyment with their mainland friends. I think they are going 
to build some big casinos in Taiwan. I think they are a big 
attraction as well, so I think it will always be a place the 
Taiwanese want to go.
    Mr. Hsiao. Thank you for that question and let me just echo 
my colleagues' comments so far. I would also just add that the 
United States remains one of the favorite destinations for 
Taiwanese people to travel to, I think, and the soft power of 
the United States in terms of its appeal to the people of 
Taiwan, students, is, I think, not matched by any other country 
in the world.
    So improving on that I think is, while I think it is 
certainly a worthwhile and important goal to strive towards, I 
think there is already a high standard there that we are 
working on and I think to improve that I think is to deepen 
that relationship in a way so that we cultivate emerging 
leaders who are going to be future leaders of both the United 
States and Taiwan, so that connection is on an even deeper 
level. I think programs that would be able to encourage that 
would be a vehicle to work towards. Thank you.
    Ms. Titus. Maybe even some exchanges with UNLV's School of 
Hospitality or that sort of thing. Just real quickly, Mr. 
Chairman, I want to go back to a point that you just made, Mr. 
Hammond-Chambers. I too share your concern about the mixed 
messages coming out of this administration, not just to Taiwan 
but to the whole rest of the world. We don't seem to know who 
is in charge. Is it the President, is it the Secretary of 
State, is it the non-appointed undersecretary? So I think we 
should really pay attention to the need to get our foreign 
policy in order and not just made from Twitter to Twitter.
    Mr. Yoho. The chair will now recognize Mr. Chabot who used 
to be the chairman of the Asia-Pacific Subcommittee, and we 
thank you, sir.
    Mr. Chabot. Thank you very much. So it sounds like this 
administration isn't all that different from some previous 
administrations, I would note. But in any event, we are both 
William and Mary graduates and we actually like each other a 
lot and there ought to be more William and Mary graduates in 
Congress, I think, don't you?
    But in any event, when I first came here two decades ago 
and after becoming more and more involved on Taiwanese issues, 
along with Dana Rohrabacher and two Democrats we formed the, we 
were the founding Members of the Congressional Taiwan Caucus, 
and it is one of the largest caucuses and I think one of the 
most important caucuses we have here on Capitol Hill.
    But when I first came here, China had a couple hundred 
missiles aimed directly at Taiwan, now they have 1,600 missiles 
aimed at Taiwan. I consider myself to be a very good friend of 
Taiwan, but some constructive criticism that I would give is 
one of the more frustrating things that I have had. As somebody 
who is trying to be a friend on Capitol Hill, one of the 
witnesses--I think it was you, Mr. Blumenthal--who mentioned 
that the legislature in Taiwan has to get their act together if 
we are trying to help them militarily to actually have a 
sufficient budget and then move forward with the budget.
    You had different parties involved, you had the DPP and you 
had, you know, it was a problem. So for years when we were 
willing to sell them the weapons they couldn't get their act 
together to buy them, then we had an administration that was 
less willing to sell the weaponry that they needed.
    So I guess my question, and I will go to you, Mr. 
Blumenthal, since I think you brought it up, how can we finally 
thread that needle and have the decision makers here who want 
to supply the weapons, and the Taiwanese leaders who want to 
purchase those weapons, how do we do that? And then what are 
the specific things that they need?
    I mean obviously it is planes and we were trying for 
submarines here, but they aren't making anything but nuclear 
submarines and that is really not what they need. They tried 
France, and the U.S. doesn't make them anymore, a whole range 
of things. I think the one I went on that was a World War II-
era submarine. We didn't go out on it but we saw what they had 
available.
    I will stop rambling and turn it over to you, Mr. 
Blumenthal.
    Mr. Blumenthal. Sure. I think you are right that we ought 
not, as good friends of Taiwan, to let them off the hook 
either. I think 3 percent of GDP is not even enough when you 
are looking at it. If you look at other national security 
states facing that kind of threat, from Singapore to South 
Korea to Israel, 3 percent of GDP is actually paltry.
    But there is a chicken and an egg problem, because Taiwan, 
as painful as it is, Taiwan will buy--it may take a long time--
but they will buy everything we put on offer. So in that $30 
billion defense package of 2001, the only thing not bought were 
the submarines, and that was more of the games that we were 
playing internally because of not wanting to sell diesel 
submarines for navy reasons.
    So what should we be putting on offer to Taiwan? At this 
point, as you correctly mentioned in terms of the missile 
threat, the air threat and so much more, things that are 
survivable, so some kind of submarine program even if they 
built it themselves in Taiwan. There are licenses sitting in 
the State Department right now if Taiwan needs to build their 
own defense that we can offer help with.
    Munitions, stand-off munitions of all kinds, UAVs and 
UCAVs, we have got to think much more creatively and 
asymmetrically in terms of encouraging shore-based land attack 
cruise missiles. We have to think much more creatively about 
what can survive the initial onslaughts since missile defense 
won't be able to do it anymore. But we ought not let Taiwan off 
the hook.
    Mr. Chabot. Thank you very much. I appreciate that. Let me, 
I have got less than a minute to go so let me just touch on a 
couple of things, and if I had had more time I would have gone 
into more detail. I am concerned about China using the term 
``core interest'' now with reference to Taiwan. The PRC using 
that term in reference to Taiwan that is concerning. It is 
pronounced Hsiao?
    Mr. Hsiao. Hsiao.
    Mr. Chabot. Mr. Hsiao, you had kind of raised this issue, 
and again I don't have time to go into any great detail about 
it. But with North Korea being as great a threat as it has been 
for a long time and continues to be maybe even more so now, 
well, certainly more so now with the development of 
intercontinental ballistic missiles, and depending on China to 
help and they have helped virtually nothing up to this point, 
there is concern that they think they can use Taiwan then as a 
bargaining chip, and that is something that absolutely cannot 
happen.
    I would strongly urge the relatively new administration not 
to let that happen because Beijing will say lots of nice things 
and then actually delivering on them that is a very another 
thing, and so we should always keep that in mind. And I will 
certainly, when I talk to the State Department those are the 
types of things that I will bring to their attention. Thank you 
very much and I yield back.
    Mr. Yoho. Thank you, Mr. Chabot.
    Mr. Rohrabacher, you are next.
    Mr. Rohrabacher. Mr. Chairman, I am sorry that I was late. 
I, actually, you schedule two hearings at the same time you 
have got to run back and forth and that is what this is.
    I have taken a keen interest in Taiwan. During the Cold 
War, Taiwan's help, especially during the Vietnam War, was 
instrumental in saving the lives of thousands and thousands of 
American military personnel. I was not in the military but on 
my way to Vietnam when I was out of the military I did stop in 
Taiwan and I was part of an operation that was actually 
headquartered in Taiwan to try to defeat the communists in 
Vietnam. That is another lifetime ago.
    But let me note today, I think all of these years Taiwan 
has been a shining example of human rights. That is one of the 
reasons that the mainland, the gang in the mainland cannot get 
them out of their mind because they know that this is an 
example where Chinese people are able to make democracy work 
and in working for the benefit of the population. I think 
Beijing is a klepto-dictatorship that is no longer a Marxist-
Leninist under anybody's definition of Marx and Lenin.
    The people of Taiwan with their free press have been able 
to maintain a semblance of honest government. I am not saying 
that they are pure because they are not, we know, but the fact 
is, Mr. Chairman, Taiwan can show the people of the mainland of 
China that there is a better way, and thus again are playing a 
very important role in providing for and ensuring that we will 
have a peaceful world.
    Because unless China in some way reforms out of this clique 
that is running Beijing--basically the people in Beijing are 
trying to subjugate their own people and they are ripping them 
off and they are trying to dominate a huge chunk of the 
planet--unless they can get down to what democratic government 
is supposed to be, and that is serving the needs of your own 
people, there will be a conflict eventually. Taiwan is actually 
the way that we can send that notice that that will not be 
permitted.
    But I do have a question for you and that is--and I have 2 
minutes left. Japan, actually they occupied Taiwan. It was 
Formosa then for a long time. And how many years was that, 
decades was that? Was it 100 years? Was it 50 years? What was 
that? Well, for a significant chunk of history, Formosa was 
occupied by Japan.
    Can Japan play a role now in the security of Taiwan; will 
that be accepted? Is that something that is too provocative, or 
would the benefits of that--Japan has not played the role that 
it should play in the last 50 years because of their penance 
for World War II. Well, it is time for Japan to start playing a 
major role again. What should that be in relationship to 
Taiwan?
    Mr. Hammond-Chambers. Thank you for the question. I will be 
very quick and then I will hand it over to Dan and Russell. 
Certainly on the defense side Japan can discretely partner with 
Taiwan in the development of domestic capabilities that Taiwan 
seeks to produce itself. Japan has a robust defense industry 
community with excellent technologies. I wouldn't expect them 
to sell a complete platform or system, but they have many 
technologies that Taiwan could partner with and produce 
defensive equipment that would help maintain peace and 
security.
    Mr. Rohrabacher. Very good suggestion.
    Mr. Blumenthal. I would say very quickly, a sort of truth 
in policy is that there is no defense of Japan and the first 
island chain without Taiwan and Prime Minister Abe certainly 
knows this and has made for Japan revolutionary changes.
    But what we can do--without our leadership it won't go very 
far. An integrated first island chain strategy on our part 
would harden the Ryukyu Island chain further than Okinawa, and 
then have more joint ISR between Taiwan and Japan to be able to 
track those PLA task forces that are going into the Pacific. 
That is very much in our interest. Japan has the attitude and 
aptitude and willingness to do so, but they would need a signal 
from us. We can really harden that island chain and cause big 
problems for the PLA Navy.
    Mr. Hsiao. I completely agree with everything that was just 
said. I would just add that it is as much of a political issue 
as it is a military one and I think that there are significant 
trends, improvements in terms of how Japan is engaging with 
Taiwan. For instance, changing its de facto Embassy in Taiwan 
from the Interchange Association to the Japan-Taiwan Exchange 
Association to having a senior vice minister visit Taiwan 
earlier this year.
    I think that these trends should be encouraged by the 
United States and I think the United States can send a strong 
political signal by upgrading the exchanges between the United 
States and Taiwan, and the Taiwan Travel Act is one example.
    Mr. Rohrabacher. If there is going to be peace in the world 
Taiwan and Japan are going to have to play a major role, 
because I believe China is one of the antagonists we have got 
to deal with or they will deal with us. Thank you very much.
    Mr. Yoho. Thank you, Mr. Rohrabacher. And just in time, it 
is your turn. I now turn to Mr. Sherman, the ranking member.
    Mr. Sherman. Mr. Hammond-Chambers, what steps can we take 
to export more to Taiwan?
    Mr. Hammond-Chambers. Thank you, Mr. Sherman. I do believe 
at the core of that question is an expanded trade relationship 
that would come with some sort of agreement on, again, 
nomenclature can be played around with of course, but let's for 
argument's sake call it fair trade agreement. There are a 
number of areas in which Taiwan----
    Mr. Sherman. Mr. Hammond.
    Mr. Hammond-Chambers. Yes, sir.
    Mr. Sherman. I am looking for approaches that will reduce 
the trade deficits. So if you are talking about increasing 
imports as well as increasing exports, do you have a suggestion 
on how we reduce the trade deficit or reach balanced trade?
    Mr. Hammond-Chambers. Well, we could certainly sell more 
weapons to Taiwan. That would reduce the trade deficit. Our 
defense manufacturers are significant----
    Mr. Sherman. Many of us have advocated that for national 
security rather than economic reasons, but----
    Mr. Hammond-Chambers. You did ask.
    Mr. Sherman [continuing]. You know, it is--anybody else 
have any ideas how we would reduce the trade deficit? I see no 
one else on our witness panel anxious to answer that one. We 
will move on to the next question which relates to arm sales, 
but we will address Mr. Blumenthal and Mr. Hsiao.
    What are Taiwan's most pressing needs, and I am asking for 
more of a national security rather than a trade balance answer 
to this. What are Taiwan's most pressing needs for military 
hardware? What arms deals to Taiwan do you think the Trump 
administration would go ahead with, and should we sell them F-
35s?
    Mr. Blumenthal. We have to look now, given the state of the 
cross-Strait balance, at things that are survivable, that are 
dispersible, that are mobile, that can be underwater and still 
shoot at a landing force, and I think we have to think of 
things in terms of what China has done to us which is help 
Taiwan build a A2AD network. So----
    Mr. Sherman. What network?
    Mr. Blumenthal. Anti-access area denial network, the kinds 
of things that China has done. So China has been able through 
submarines, through integrated air defense, through integrated 
C4ISR, through mining, made it very hard for us to operate in 
places that we used to be able to operate, denying us the 
space. Those are the kinds of things Taiwan can do.
    Mr. Sherman. Are there particular weapons systems that 
would fit that?
    Mr. Blumenthal. Submarines, which they want to build in 
Taiwan but we can have a big component of that, and those are 
licenses sitting at State right now.
    Mr. Sherman. What about the F-35?
    Mr. Blumenthal. F-35, I would look at many different 
options just because of the expense. You can do a lot of UAVs 
and UCAVs, for example, but it is a very expensive platform 
obviously.
    Mr. Sherman. How confident would we be that the PRC has not 
infiltrated somehow Taiwanese defense so that F-35 technology--
--
    Mr. Blumenthal. Well, Taiwan has to do a lot better as do a 
lot of our allies on security assurance and information 
assurance.
    Mr. Sherman. So would you be concerned that if we sold an 
F-35 that there wouldn't be adequate security?
    Mr. Blumenthal. Well, no, because they have broken into our 
F-35s here and so----
    Mr. Sherman. They already have the plans.
    Mr. Blumenthal [continuing]. They already have what they 
need.
    Mr. Sherman. Why don't we go on to Mr. Hsiao.
    Mr. Hsiao. Thank you, Ranking Member.
    Mr. Sherman. You are not brightening up my day, Mr. 
Blumenthal. Mr. Hsiao.
    Mr. Hsiao. On the F-35s I would just say that the Taiwanese 
military have assessed that they have a need for the F-35s, 
based on exercises that they have conducted on an annual basis, 
in order to execute the missions that they assess as necessary 
in order to deter the People's Liberation Army. I think any 
assessment on Taiwan's defense needs need to be based at least 
with a strong consideration of what their defense needs are and 
what they assess their defense needs are.
    I would also add that different sales such as submarines to 
Taiwan also fill a need on the part of Taiwan to be able to 
engage China in a manner that targets their weaknesses. So I 
think it is well known that one of the weaknesses of the PLA is 
in its ASW, which is anti-submarine warfare, and to be able to 
have Taiwan be able to possess and be able to operate 
submarines within the periphery waters would be necessary for 
the missions that it sees to deter Beijing. And then along with 
that I would also reinforce Dan and Rupert's comments earlier.
    Mr. Sherman. Thank you. I see my time has expired.
    Mr. Yoho. We will go to Ms. Wagner.
    Mrs. Wagner. Thank you, Mr. Chairman. As we all know, this 
week, Panama switched diplomatic relations from Taiwan to 
China. China's checkbook diplomacy is a dangerous provocation 
to cross-Strait relations, and its cheap tricks in our own 
backyard are particularly concerning.
    I was impressed with President Trump's call to President 
Tsai Ing-wen, and I am adamant that we fully engage with Taiwan 
through high level official visits, weapons sales, and pressing 
for Taiwan's inclusion in international organizations. Taiwan 
will never be a bargaining chip in U.S.-China relations and we 
must ensure that the Trump administration provides support to 
our important democratic partner in the Asia-Pacific.
    Mr. Blumenthal, the Trump administration need not alter its 
support of Taiwan or its outreach to our democratic partners in 
the country in order to secure China's increased support to 
counter the North Korean threat. In fact, bowing to China on 
Taiwan will do no favors for any American policy. How can the 
new administration prioritize Taiwan's security and democracy 
even as the President courts President Xi Jinping's 
collaboration on North Korea?
    Mr. Blumenthal. Well, thank you very much for your 
statement and your question. I think that we have already seen 
signs that we are not just going to be trying to cozy up and 
get closer to China because of North Korea. I think patience in 
the Trump administration is running thin on the North Korea 
question with respect to China.
    I also look at the recent FONOP or challenge, which in some 
ways was a much more aggressive challenge on the South China 
Sea than we have done in the past, as a sign that we can walk 
and chew gum at the same time. Since we are looking for 
reciprocity with China, China does things we don't like all the 
time and we still have good relations, we still have 
cooperative relations with them.
    They have militarized, as was mentioned before. They have 
essentially taken the Paracels, they are gone. They are pretty 
close to taking the Spratlys if we don't do anything on the 
Scarborough reef or the Scarborough Shoal. So the idea that 
China can do all kinds of things we don't like and yet seek our 
cooperation but we have to cooperate on everything with China 
is just false.
    Then finally on your Panama point I would raise this. We 
always talk about our policy on both sides of the Strait to 
maintain the status quo. There is no such thing. China is 
constantly changing the status quo. Going forward and forcing a 
country or buying off a country to de-recognize Taiwan is a 
major change in the status quo. We called Taiwan out on this. 
We have to call China out on this as well.
    Mrs. Wagner. I agree and it is a provocation.
    Mr. Blumenthal and Mr. Hsiao, does the U.S. face unique 
challenges in China's checkbook diplomacy targeting Central 
America as opposed to China's efforts earlier this year to 
obtain diplomatic recognition for--I will try this--Sao Tome 
and Principe in West Africa?
    Mr. Hsiao. Yes, and thank you for that question. To the 
question on Central America and Beijing's coercive strategy to 
isolate Taiwan internationally, I think just as Beijing right 
now is using a multidimensional strategy to isolate Taiwan, I 
think it is important to have a multidimensional strategy to 
counter that. I think not only a bilateral mechanism, there 
needs to be a multilateral mechanism by which the United States 
can help to enhance Taiwan's international space.
    I think in this effort, the Global Cooperation and Training 
Framework that has been implemented between the United States 
and Taiwan since 2015 needs to be enhanced, upgraded, and 
adequately resourced in order to ensure that Taiwan can 
cooperate with the United States and third-party countries to 
help overcome this full-court press that I have described as 
Beijing's strategy to pick off Taiwan's allies and also degrade 
unofficial relations between Taiwan and other countries.
    Mrs. Wagner. Mr. Blumenthal, any comment?
    Mr. Blumenthal. Yeah, very short. I think we have a 
particular concern with China strategically in Central America 
without question, but I think China's main motivation around 
the world is to isolate Taiwan. We should pay special attention 
to Chinese activities in Central America.
    Mrs. Wagner. I believe my time has run out. Mr. Chairman, I 
am going to submit the rest of my fantastic questions to this 
panel----
    Mr. Yoho. And they are.
    Mrs. Wagner [continuing]. And they are awfully--for a 
written response. I thank our witnesses and I thank the 
chairman.
    Mr. Yoho. Thank you, Ann. We will go to Mr. Connolly now 
from Virginia.
    Mr. Connolly. Thank you, Mr. Chairman. It is a pleasure to 
be here both in my capacity as a member of the committee and 
subcommittee and also co-chair of the Taiwan Caucus. I have had 
the privilege of going to Taiwan 23 times since 1988. I was an 
Eisenhower Fellow and I have seen extraordinary change. When I 
first went to Taiwan in 1988 it was a one-party state. It was 
not a functioning democracy and some core freedoms we cherish 
and so does Taiwan today were not cherished in 1988. There were 
serious restrictions on speech and political organizing, on 
dissent and on travel and on investment in the mainland. I have 
witnessed over that time period one of the greatest changes in 
a nation I have ever witnessed, and I have traveled a lot.
    I wonder, Mr. Hsiao, probably when I first went there you 
weren't born, but to what would you attribute, and all of you 
could comment. Why this profound change? I mean what happened 
in Taiwan? Was it something unique to the people of Taiwan or 
what was the spark or evolutionary process that led us to this 
open democratic society in sharp contrast to the other place?
    Mr. Hsiao. Thank you for that very profound question, 
Representative. I think there are two factors. There are 
internal and external factors. The external factor, I think, is 
driven by the loss of recognition, the de-recognition by the 
United States to the PRC that pressured the government from the 
top down to liberalize, to integrate more Taiwanese into the 
political process in order to establish a greater foundation 
for legitimate rule.
    And then also at the same time and to give credit to the 
Taiwanese people who have strove to have a greater freedom and 
democracy. I think the United States has played a pivotal role 
in supporting that democratic movement in Taiwan in the '80s 
and '90s onward. So I would say that it is a confluence of 
these factors that really drove Taiwan to become the democratic 
example and model that exists now, to the extent now that it 
can serve as a model for Southeast Asian countries that are 
making similar sort of progressions in their political 
developments.
    Mr. Connolly. Mr. Hammond-Chambers, I assume that many of 
the companies that are members of your Council also operate in 
the mainland.
    Mr. Hammond-Chambers. That is correct.
    Mr. Connolly. And so how does that work? I mean are they 
under pressure from Beijing to disinvest in Taiwan or do they 
turn a blind eye? Do they welcome it? What is that relationship 
like, what kind of pressure are they under, if any?
    Mr. Hammond-Chambers. Typically they aren't under any 
pressure at all. There are several instances where U.S. 
companies have been identified by PRC authorities in an attempt 
to be pressured and those typically relate to PRC 
interpretation of the company overstepping grounds regarding 
Taiwan sovereignty. So perhaps they might have published 
something that had Taiwan's official name Republic of China in 
it, or in some of the instances where some of our larger 
defense companies have interests in the mainland as well they 
might have been identified.
    I have been the U.S.-Taiwan Business Council for over 20 
years. I am not aware of a single instance, however, in which a 
U.S. company had a long-term impact on its interests in the 
mainland as a consequence of the fact that it is doing business 
on Taiwan.
    Mr. Connolly. Very interesting. So while Beijing is 
pressuring the countries like Panama to switch recognition, 
they are not doing the same in the business side.
    Mr. Hammond-Chambers. Correct. It is all about the 
business, Mr. Connolly.
    Mr. Connolly. Yeah. Mr. Blumenthal, and by the way you can 
comment on other things as well, but earlier before this 
hearing, I know you are aware, we actually approved a bill that 
for the first time, well, in a long time, has Congress saying 
enough. We are going to address some issues that we have kind 
of ceded to the State Department and the White House over many 
administrations.
    I wonder if you might comment on that because one of the 
things that has concerned me, and wear my other hat in the 
Taiwan Caucus, is how much at least tacit control we have given 
to Beijing in terms of the nature of the relationship with 
Taiwan. We have a statute, the Taiwan Relations Act, which came 
out of the committee I used to work for that was initiated by 
Congress and that is the guiding document about the 
relationship. That document commits us to a certain posture 
with respect to Taiwan's defense including the sale of 
defensive weapons.
    I don't know that that statute says the President of Taiwan 
can't come to the United States or to Washington, DC, and yet I 
remember Presidents of Taiwan calling me kind of on the sly 
when they were at an airport so we could talk because there was 
no official visit here. I understand a Presidential Head of 
State visit is one thing, but I mean putting a bag over your 
head and pretending you don't exist is quite another.
    So I know that is a long question, but I really am bothered 
by how much power we seem to have ceded Beijing on many facets 
of the relationship. I am very grateful, Mr. Chairman, that 
this subcommittee and hopefully the full committee is taking 
some of that back, finally. But I wanted your comment and then 
I am done. Thank you.
    Mr. Blumenthal. Well, I agree wholeheartedly. I mean, there 
are many, many factors involved. There is nothing in these 
communiques, which again are simply joint statements between 
countries made in the 1980s and 1970s, at a very different time 
that says anything about who our President can call or speak to 
or visit or meet. That is somehow a mystical paper in the State 
Department, somewhere that was written probably 30, 40 years 
ago, somebody interpreting what we meant by those communiques. 
We may be stuck with those communiques in the One China Policy, 
but we are certainly not stuck with China telling us whom we 
can meet with. It is so very much in our interests, and in 
their interests that we keep an ongoing high level dialogue 
with Taiwan for the sake of predictability and stability.
    I would finally say that one thing that a lot of people are 
looking at now is the level of Chinese propaganda and political 
warfare the Chinese Communist Party targeted against the United 
States. It is much different than Russia or other rivals, but 
it is a huge problem and it has changed the minds of many 
people.
    They have convinced many important people including 
probably policy makers that the communiques say something that 
they don't, that we acknowledge that Taiwan is part of China. 
We do not. We leave the status to be determined by the two 
parties. They have made great headway and it is an active 
political warfare campaign. It is not just passive diplomacy or 
neglect.
    Mr. Connolly. Thank you. And Mr. Chairman, thank you.
    Mr. Yoho. Mr. Connolly, I would like to work on some of 
this stuff to draft policies that we can direct maybe the State 
Department or the administration.
    We are going to, if you guys have enough time I would like 
to go back to Ranking Member Sherman and then I would like to 
end with a couple statements.
    Mr. Sherman. Mr. Hammond-Chambers, we have had this 
description of how China is on the international stage trying 
to hem in, delegitimize Taiwan, but I wonder how that squares 
with their economic behavior. Can you describe cross-Strait 
investment and cross-Strait trade over the last few years?
    Mr. Hammond-Chambers. Yes, Mr. Sherman, it continues to 
expand quite frankly. The economic links between the two sides 
remain robust, somewhat cooled down since Tsai Ing-wen took 
over. But for the most part----
    Mr. Sherman. How big is the investment of each country in 
assets in the other----
    Mr. Hammond-Chambers. The PRC investment in China is 
tightly held, so very minimal.
    Mr. Sherman. PRC investment in Taiwan?
    Mr. Hammond-Chambers. In Taiwan is minimal. There are some 
areas that the PRC could invest in but it is quite tightly held 
now. Conversely, in China, Taiwan investment is massive and a 
lot of it has circumvented regular ways to monitor, so I have 
seen numbers ranging from $100 to $250 billion worth of Taiwan 
capital invested in China.
    Mr. Sherman. And what do we do to persuade the Taiwanese 
that putting their investments in a country that may seize them 
at any moment may not be as desirable as investing in the 30th 
Congressional District of California?
    Mr. Hammond-Chambers. Well, I think there are many 
Taiwanese who would like to do nothing more than invest $250 
billion in your district, sir, but I----
    Mr. Sherman. One billion at a time.
    Mr. Hammond-Chambers. Okay. But there are many people in 
Taiwan including the present Taiwan administration that have 
deep concerns about what has transpired over the last 20 years 
and have policies such as the Southbound Policy to try and curb 
that. However, they have limited control over their businesses 
in this regard who have less of an interest in the national 
security concerns.
    Mr. Sherman. They have a lot of control if they choose to 
pass laws, and if they choose to simply do what is politically 
popular with the economically important then they have no 
power. The idea of creating what could be as high as a $250 
billion investment in Beijing creates powerful forces in Taipei 
to lobby for the Beijing position.
    A failure of a business to conduct such lobbying could 
impair the value of their investment or cause their investment 
assets to decline in yield or to be treated as favorably. The 
prospect of the seizure of those investments should there be 
some sort of crisis means that you have very powerful economic 
interests that may want to reunify on any basis that protects 
those investments. But again the opportunities in the 30th 
congressional district are still available. I will go to the 
other witnesses. And also in Florida there is some excellent--
--
    Mr. Yoho. I am glad you added us in there because your 
side--no offense--you are promoting that and she is promoting 
the casinos. I am like we need to throw Florida in there.
    Mr. Sherman. We will throw Florida in there a little bit, 
but once they see the opportunities in the 30th district--let's 
see. How can and in what cases is China, well, I guess in every 
case China has tried to keep Taiwan out of international 
organizations. So the question is, really, is how can Congress 
help resist such pressure and what can we do to assist Taiwan 
in joining all the international organizations from the World 
Health Organization to Civil Aviation to U.N. Framework on 
Climate Change, Interpol, et cetera? Mr. Blumenthal, then Mr. 
Hsiao.
    Mr. Blumenthal. Well, we already very much have the 
international legal basis to do so because of the WTO accession 
and Taiwan's accession into it. So all the arguments that China 
makes against Taiwan's membership particularly in organizations 
that don't require statehood, or a recognition of statehood, 
are very specious because they agree to the WTO accession 
already.
    Mr. Sherman. And does WTO require statehood?
    Mr. Blumenthal. We negotiated in a way that didn't and so 
we have the basis now, the diplomatic and legal framework to 
negotiate Taiwan's accession to any international organization 
that doesn't require statehood.
    Mr. Sherman. So why does China work so hard in their effort 
to delegitimize the sovereignty of Taiwan to keep Taiwan out of 
organizations' membership in which does not establish 
sovereignty?
    Mr. Blumenthal. Because there is very little pushback. So 
for example, we can have an FTA--we have the basis of an FTA in 
international law and diplomatic custom.
    Mr. Sherman. You are saying FTA or DA?
    Mr. Blumenthal. Yeah, I know. I don't mean to talk about 
the trade deficit. We could theoretically have a free trade 
agreement, but China pushes back by saying that that would 
confer statehood upon Taiwan, a completely specious argument 
given----
    Mr. Sherman. Especially if the agreement provided for a 
reduction in the trade deficit. Let me go on to Mr. Hsiao. What 
can Congress do to help Taiwan get into these international 
organizations?
    Mr. Hsiao. Thank you, Ranking Member. I would just add that 
I do think there needs to be a more inclusive approach in 
dealing with Taiwan's international space and how the United 
States strategize its approach to getting Taiwan into 
international organizations. I would add that I think there is 
a good existing mechanism through the Global Cooperation and 
Training Framework, and I think that it can be expanded to lead 
as an example of how Taiwan and the United States can cooperate 
with third-party countries in trying to in areas of health 
alleviation, in areas of women empowerment, in democratization, 
energy, that these are functional areas of cooperation where 
people will see, other countries will see the value of Taiwan's 
contribution, and any efforts on the part of the PRC to limit 
that would just fly in the face of decency of what is necessary 
for as Taiwan as a contributing member of the international 
community.
    Mr. Sherman. I yield back.
    Mr. Yoho. Thank you. If you will indulge me just for a few 
more minutes, what I have gained and what I have deemed out of 
this is we see an aggressive China. We see that they are 
continuing this. We are seeing they are putting more pressure 
on the international community to exclude Taiwan as a semi-
independent state of their own, a democracy that has been very 
successful, very fruitful, and we keep hearing that we need to 
partner with China. I think China needs to partner with us and 
the rest of the free world.
    I say that when we look at our trade, the last report I had 
China borrowed, stole, or highjacked over $600 billion of 
intellectual property. I don't want a partner like that. We 
need to put more pressure--and like you said, Mr. Blumenthal, 
the reason they are doing what they are, nobody is standing up. 
It is time to stand up because we see the writing on the wall. 
If we don't do it now, it will be easier to do it now than to 
wait another 5 years because Taiwan will be that much more 
isolated. The South China Sea will also be that much more boxed 
in, and then the trade that we talk about and the spread of 
democracy of our tenth largest trading partner, it will affect 
us.
    So coming out of this meeting I always like to have action 
items. When I read the USTR's recommends that the Trump 
administration end the policy of packaging and return to a 
regularized process, whereby Taiwan would be treated like other 
security assistance partners all the way from the U.S. 
accepting letters of request for pricing and availability data 
to consulting with notifying Congress of an intention to sell 
arms to Taiwan. We have put it into this quagmire or this box 
where, yeah, we are doing it but we are kind of hiding it so we 
don't want to offend anybody. I think we need to go back to be 
bold and just say yeah, we are, because it is in the 1979 
agreement.
    We have also, as an action item we put in a free trade 
agreement that we entered as House Resolution 271 in April 6th 
of 2017. I think there is still time for you to get on that 
even in the 33rd district of California.
    Mr. Sherman. Yeah, as long as we add a provision about 
requiring a system to reach balanced trade I will be on it.
    Mr. Yoho. I want to touch base on that right now as a 
little aside on the trade deficit. It remains large, but Taiwan 
has imported larger and larger percentage of imports from the 
U.S. over recent years, and by a percentage our deficit has 
been cut in half over those years and we are going in the right 
way.
    But as far as more action items and I think you heard a 
resounding theme in here and I agree wholeheartedly with this, 
and that theme is Taiwan will not be used as a bargaining chip 
and I think China needs to understand that from this point 
forward. I think we will stand real strong and we will get the 
rest of the countries to do that too.
    You know, the freedom of navigation, we need to do more of 
those because China has created on their islands, according to 
their Ambassador that I talked to, lighthouses on the Spratly 
Islands strictly for peaceful navigational purposes. I agree, 
and I think we should all utilize that and thank them for that.
    The free trade agreement, like I said, we introduced on 
April 6th, and letters of support for the importance of the 
contributions of the health, worldwide health organizations 
that Taiwan has contributed to, and we are sending letters to 
support their inclusion in these organizations, and we haven't 
had a communique since 1982.
    When you read those it is kind of like your parents, well, 
yeah, you can go ahead and do that but don't tell your mom or 
don't tell anybody you are doing that. I mean that is the way I 
read those and I think we need to come out, maybe it is time 
for a fourth one that has clarity and purpose so that we can go 
into the 21st century with a clear direction, a peaceful 
direction, and it is time that we as the United States showed 
the leadership in that.
    Do you guys have anything that you want to end up with, 
maybe 30 seconds apiece? Mr. Hammond-Chambers?
    Mr. Hammond-Chambers. Yes, just very quickly, Mr. Chairman, 
I would just like to point out on my colleague's point about 
information warfare, we had this week we had the switch in 
recognition from Panama. One of the challenges that we face is 
that the PRC continues to define what our One China Policy is.
    Mr. Yoho. Exactly.
    Mr. Hammond-Chambers. And it does real, real damage. I 
understand Mr. Tillerson was up on the Hill yesterday. He said 
the One China Policy. I commend you in saying our One China 
Policy, because what the Chinese like to do is they like to 
define our One China Policy as their One China Principle. And 
regrettably, all too often it shows up in our media.
    Mr. Yoho. Right.
    Mr. Hammond-Chambers. Two days ago, USA Today, yesterday, 
the Washington Post and the Associated Press, the Chinese 
definition of the One China Principle as our One China Policy, 
so I would certainly encourage you and your committee members, 
sir, when you have an opportunity to be very clear about U.S. 
policy on that standpoint.
    Mr. Yoho. Thank you.
    Mr. Blumenthal?
    Mr. Blumenthal. Yeah, I agree with all of your suggestions. 
I would include in that getting the State Department, Defense 
Department, and intelligence agencies to report on China's 
active information warfare, political warfare against us in a--
--
    Mr. Yoho. Stay tuned, we have a good bill coming out on 
that.
    Mr. Blumenthal. Good. You know what, I am not as smart as 
you guys. You are ahead of me.
    Mr. Yoho. It is the guys behind me.
    Mr. Blumenthal. But I would caution against a fourth 
communique because I think that doesn't include Taiwan and the 
Chinese have gotten the better end of the stick on the last 
three.
    Mr. Yoho. I intend to have it written to where it, you 
know, I don't want to say make America great or put America 
first, but the only way you can do that is if you help your 
partners you are dealing with become very successful too.
    Mr. Blumenthal. Right. The greater point I was making is 
that we have no other policy, just based on joint statements 
made in the Cold War and it is ridiculous.
    Mr. Yoho. It is. It is absolutely ridiculous.
    Mr. Blumenthal. It does not reflect----
    Mr. Yoho. In the 21st century with superpowers.
    Mr. Blumenthal. That is right. It doesn't reflect the 
geopolitical moment anymore.
    Mr. Sherman. I would add one other thing. There is an 
Article I to the United States Constitution. It provides for 
the ratification of treaties. Nothing that you are describing, 
a press release from a President no longer living is not 
binding on the people of the United States. The Vienna 
Convention on the Law of Treaties, you have got ratified 
treaty, you have got legislative executive agreement, 
unratified treaty, and then you have got press releases from no 
longer living Presidents.
    Let me put this another way. A ratified treaty is like a 
minister, a groom, a bride, rings. This communique is like five 
margaritas at a seedy singles bar----
    Mr. Yoho. In California.
    Mr. Sherman [continuing]. In California. And let me tell 
the chairman that certainly five margaritas at a seedy singles 
bar in California is not a binding commitment. Thank God.
    Mr. Yoho. Mr. Hsiao, do you have something you want to end 
up with?
    Mr. Hsiao. Thank you, Chairman. Thank you, Ranking Member. 
I think I would just like to close on the need for a greater 
clarity on U.S. defense commitments to Taiwan. I say this with 
sincerity, that the massive military buildup across the Strait 
and China's continued refusal to renounce the use of force 
against Taiwan is a threat to the peace and security of the 
Western Pacific area.
    While the United States had managed to deter Beijing from 
taking destructive military action against Taiwan in the last 
four decades, I think when China was relatively weak, and I go 
to the point that you have made, the premise of China saying 
that it was weak then it is stronger now, that we are 
approaching dangerously close to where the benefits of this, 
the cost outweighs the benefits.
    So I think as the PLA grows stronger, a perceived lack of 
commitment by the United States to defend Taiwan will further 
embolden Beijing to use force to resolve the Taiwan issue. 
Thank you.
    Mr. Yoho. I think that was very well spoken by all of you, 
and I thank you for wrapping it up that way. I liked the levity 
of it. I didn't know you had so much levity. That is good to 
know. But I appreciate your thoughts, your expertise, and what 
you do, and we will move forward with some of the suggestions 
you had. Reconsider the fourth communique and maybe consult you 
before we go forward.
    That pretty much concludes this hearing and we thank 
everybody for participating. We thank the crowd for being here. 
You guys were great to stay here the whole time in this hot 
room. This committee hearing is adjourned.
    [Whereupon, at 4:20 p.m., the subcommittee was adjourned.]

                                     

                                     

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