[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                           PROTECTING EMERGING 
                               TECHNOLOGIES
                       FOR PEACE AND STABILITY IN THE 
                                INDO-PACIFIC

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

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE INDO-PACIFIC

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 17, 2024

                               __________

                           Serial No. 118-75

                               __________

        Printed for the use of the Committee on Foreign Affairs
        
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                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
53-137 PDF                  WASHINGTON : 2024 


Available:  http://www.foreignaffairs.house.gov/, http://
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-----------------------------------------------------------------------------------                           

                      COMMITTEE ON FOREIGN AFFAIRS

                   MICHAEL T. McCAUL, Texas, Chairman

CHRISTOPHER H. SMITH, New Jersey     GREGORY MEEKS, New York, Ranking 
JOE WILSON, South Carolina               Member
SCOTT PERRY, Pennsylvania	     BRAD SHERMAN, California	
DARRELL ISSA, California	     GERALD E. CONNOLLY, Virginia
ANN WAGNER, Missouri		     WILLIAM KEATING, Massachusetts
BRIAN MAST, Florida		     AMI BERA, California
KEN BUCK, Colorado		     JOAQUIN CASTRO, Texas
TIM BURCHETT, Tennessee		     DINA TITUS, Nevada
MARK E. GREEN, Tennessee	     TED LIEU, California
ANDY BARR, Kentucky		     SUSAN WILD, Pennsylvania
RONNY JACKSON, Texas		     DEAN PHILLIPS, Minnesota
YOUNG KIM, California		     COLIN ALLRED, Texas
MARIA ELVIRA SALAZAR, Florida	     ANDY KIM, New Jersey
BILL HUIZENGA, Michigan		     SARA JACOBS, California
AUMUA AMATA COLEMAN RADEWAGEN, 	     KATHY MANNING, North Carolina
    American Samoa		     SHEILA CHERFILUS-McCORMICK, 
FRENCH HILL, Arkansas		          Florida	
WARREN DAVIDSON, Ohio		     GREG STANTON, Arizona
JIM BAIRD, Indiana		     MADELEINE DEAN, Pennsylvania
MICHAEL WALTZ, Florida	             JARED MOSKOWITZ, Florida
THOMAS KEAN, JR., New Jersey         JONATHAN JACKSON, Illinois
MICHAEL LAWLER, New York	     SYDNEY KAMLAGER-DOVE, California
CORY MILLS, Florida		     JIM COSTA, California
RICH McCORMICK, Georgia              JASON CROW, Colorado
NATHANIEL MORAN, Texas		     GABE AMO, rhode Island
JOHN JAMES, Michigan		     BRAD SCHNEIDER, Illinois
KEITH SELF, Texas			

                Brendan Shields, Majority Staff Director
                Sophia Lafargue, Minority Staff Director
                                 ------                                

                      Subcommittee on Indo-Pacific

                      YOUNG KIM, California, Chair
ANN WAGNER, Missouri			AMI BERA, California, Ranking 
KEN BUCK, Colorado                         Member
MARK GREEN, Tennesse			ANDY KIM, New Jersey
ANDY BARR, Kentucky			BRAD SHERMAN, California
AUMUA AMATA COLEMAN RADAWAGEN, 		GERALD CONNOLLY, Virginia
    American Samoa			WILLIAM KEATING, Massachusetts
WARREN DAVIDSON, Ohio			JOAQUIN CASTRO, Texas
MICHAEL WALTZ, Florida

               Daniel Markus, Subcommittee Staff Director
                         
                         
                         C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page

                               WITNESSES

Fick, Hon. Nathan, Ambassador at Large, Bureau of Cyberspace and 
  Digital Policy, U.S. State Department..........................     6
Kang, Honorable C.S. Eliot, Assistant Secretary, Bureau of 
  International Security and Nonproliferation, U.S. State 
  Department.....................................................    13
Rozman Kendler, Honorable Thea D., Assistant Secretary, Export 
  Administration, Bureau of Industry and Security, U.S. 
  Department of Commerce.........................................    23

                                APPENDIX

Hearing Notice...................................................    49
Hearing Minutes..................................................    51
Hearing Attendance...............................................    52

 
 PROTECTING EMERGING TECHNOLOGIES FOR PEACE AND STABILITY IN THE INDO-
                                PACIFIC

                      Wednesday, January 17, 2024

                          House of Representatives,
                  Subcommittee on the Indo-Pacific,
                      Committee on Foreign Affairs,
                                                    Washington, DC.

    The subcommittee met, pursuant to notice, at 2:08 p.m., in 
room 210, House Visitor Center, Hon. Young Kim (chair of the 
subcommittee) presiding.
    Mrs. Kim of California. The Subcommittee on the Indo-
Pacific of the Foreign Affairs Committee will come to order. 
The purpose of this hearing is to examine our existing 
bilateral and multilateral engagement on critical and emerging 
technology with our allies and partners in the Indo-Pacific.
    I now recognize myself for an opening statement. I want to 
welcome everyone to the Indo-Pacific Subcommittee's hearing 
entitled Protecting Emerging Technologies for Peace and 
Stability in the Indo-Pacific.
    The Indo-Pacific region is important for U.S. technology 
for at least two reasons. First, Chairman Xi Jinping has made 
technological superiority a cornerstone to the Chinese 
Communist Party's national and military competitiveness. In 
2013, Xi said during an inspection of the Chinese Academy of 
Sciences that high-end science and technology is a national 
weapon in modern times. Since then, through his military-civil 
fusion and Made in China 2025 programs, the CCP has aimed to 
catch up and surpass the United States in technological power 
and strengthen the People's Liberation Army through reform and 
technology. Successive U.S. Administrations have concluded that 
it is in the interest of our national security to impose costs 
and degrade certain capabilities for the Chinese Communist 
Party.
    Second, to maintain the United States' technological 
advantage, we must work with other like-minded and technology-
advanced countries, like Japan, South Korea, and Singapore. 
These are three of the top-ten countries in the world with that 
expertise. We must cooperate with these countries on research 
and development, manufacturing, and implementation of high-end 
technology. At the same time, like-minded countries need to 
work with us to ensure the technology we share or jointly 
develop do not end up in the hands of the CCP.
    For example, I was proud to introduce the KOALA Act. This 
provides a defense technology trade exemption for one of our 
closest allies in the region, Australia. The KOALA Act 
contributed significantly to the final implementation law that 
passed in the Fiscal Year 2024 NDAA. The cooperation of this 
magnitude will help to deter the Chinese and advance our 
national security but only if states implement the law 
correctly and provides the exemption to which the Australians 
are clearly eligible for.
    Today's hearing will tackle these issues. We will discuss 
several tools today that are vital to ensuring our collective 
technologies do not fall into the hands of the CCP, like export 
controls, sanctions, and research security. We will also look 
at existing and proposed bilateral and plurilateral structures 
that can work together to reduce regulatory barriers to 
technology cooperation and to harmonize export controls. So I 
look forward to our fruitful discussion on what more we and our 
allies and partners can do on these fronts.
    In just a few days, I will be leading a bipartisan CODEL to 
Singapore, Malaysia, and Vietnam to discuss PRC influence in 
the region, South China Sea issues, and technology cooperation. 
In preparation for this trip, I would particularly like to hear 
from our witnesses what Southeast Asian countries are doing to 
protect critical technologies from the hands of the CCP and 
where there are opportunities for more tech cooperation with 
these countries.
    So I thank our witnesses for your willingness to testify 
today, and I look forward to a detailed discussion about U.S. 
Government efforts in this regard.
    The Chair now recognizes the ranking member, the gentleman 
from California, Mr. Bera, for your opening statements that you 
have.
    Mr. Bera. Thank you, Chairwoman Kim, for holding this 
hearing and for your partnership on this important topic of 
Protecting Emerging Technologies to Ensure Peace and Stability 
in the Indo-Pacific. This subcommittee hearing is a nice 
complement to the full committee hearing that we had earlier 
this morning looking at outbound investments and how we can 
protect our outbound investments but also address the national 
security concerns that affect not only us but our partners in 
the West.
    As we saw in that hearing this morning and I think as 
you'll see in the subcommittee hearing, this really is not a 
partisan issue. This is an issue that Democrats and Republicans 
both in this Congress but across Administrations understand 
and, you know, whereas two decades ago, we would have hoped, as 
China built a middle class and it developed an entrepreneurial 
class, that it would become a responsible member of the global 
economic order. Unfortunately, we have seen out of Beijing, 
we've seen out of Xi Jinping, particular policies, and one that 
we talked about this morning was kind of the civilian-military 
policy doctrine which really blurs the line on that 
cooperation.
    I do want to point out and applaud the Biden Administration 
for supercharging our export control policy in the face of the 
tremendous geopolitical change and challenge that we see in the 
Indo-Pacific. The Administration's expansive export controls go 
further than any previous Administration. And in 2022, BIS 
imposed unprecedented export controls to restrict the PRC from 
obtaining advanced computing chips, develop and maintain some 
super computers, and manufacture of advanced semiconductors. 
These controls were expanded this past fall; and, again, I 
think it is a step in the right direction.
    I look forward to hearing the testimony of the witnesses 
today. I look forward to working with the chairwoman, as well 
as the chairman and ranking member of the full subcommittee and 
across Congress. I think, as the chairwoman rightfully pointed 
out, it is not just our policies, but it is the policies of 
working with our like-minded, like-valued allies as we look to 
both protect these important investments, important 
infrastructures, but then also as we work with the private 
sector to make sure they understand, it was pointed out in that 
civilian-military policy doctrine that they may be looking at 
making reasonable investments in the PRC, that how those 
investments may undermine our own national security. So I think 
Congress does have to do a job helping the private sector 
understand where those investments may have detrimental 
effects.
    So, again, I look forward to hearing from the witnesses. 
And with that, I will yield back.
    Mrs. Kim of California. Thank you, ranking member. Other 
members of the committee are reminded that opening statements 
may be submitted for the record.
    And we are pleased to have a distinguished panel of 
witnesses before us today on this very important topic. Mr. 
Nathan Fick is the Ambassador at Large for the Bureau of 
Cyberspace and Digital Policy at the U.S. State Department. Mr. 
C.S. Eliot Kang is the Assistant Secretary for the Bureau of 
International Security and Nonproliferation at the Department 
of State. Ms. Thea Rozman Kendler is the Assistant Secretary 
for the Bureau of International Security and Nonproliferation 
at the State Department, Department of Commerce. Thank you for 
being here today. Your full statements will be made a part of 
the record, and I will ask each of you to keep your spoken 
remarks to 5 minutes in order to allow time for member 
questions.
    So let me now recognize Ambassador Fick for your opening 
statement.

 STATEMENT OF HON. NATHAN FICK, AMBASSADOR AT LARGE, BUREAU OF 
      CYBERSPACE AND DIGITAL POLICY, U.S. STATE DEPARTMENT

    Mr. Fick. Chairwoman Kim, Ranking Member Bera, 
distinguished members of the subcommittee, on behalf of the 
Department of State, thank you for the opportunity to speak 
with you today. I'm honored to provide an overview of our work 
advancing U.S. technology policy priorities globally and our 
efforts to strengthen U.S. technology leadership in the Indo-
Pacific.
    At the State Department, I oversee the organizations that 
lead and coordinate the department's work on cyberspace, 
digital policy, digital freedom, and emerging technologies: the 
Bureau of Cyberspace and Digital Policy, known as CDP, and the 
Office of the Special Envoy for Critical and Emerging 
Technology, S/TECH for short. Building on years of bipartisan 
work to establish these organizations, Secretary Blinken 
launched both in 2022 as part of a comprehensive effort to 
consolidate our technology diplomacy efforts, to upgrade and to 
elevate and integrate them, and to make technology issues more 
central to U.S. foreign policy.
    We thank the committee for your sustained support of this 
mission, particularly for the creation of a dedicated 
Cyberspace, Digital Connectivity, and Related Technology, 
that's CDT for short, for an assistance fund in the recently 
passed 2023 State Department Authorization Act. At our core, we 
believe in technology's power to solve major challenges and 
support American prosperity and global security.
    As a Marine combat veteran, a technology entrepreneur, an 
executive, and now the first person to hold this role at the 
State Department, I see tech innovation as an increasingly 
foundational source of geopolitical power driving more and more 
of what is and is not possible in our foreign and national 
security policies. Technology is increasingly ``the game,'' and 
we must engage in this geopolitical competition boldly and with 
urgency on behalf of our values and our interests. We face 
well-resourced and technologically capable competitors and 
adversaries who possess authoritarian visions and use long-term 
technology-based strategies to advance those aspirations.
    These competitors most notably include the PRC, which 
wields all elements of national power to try to bend the rules-
based international order in its favor, to build economic and 
technical dependencies, and to lock in long-term influence.
    A key tenet of our work is building digital solidarity with 
allies and partners across a growing set of technology topics 
of high geopolitical significance, including innovation and 
industry leadership, cyber incident response capacity building, 
information communication technology supply chain 
diversification, trusted digital infrastructure project 
support, and the rights respecting uses of technology. These 
efforts cut across the digital ecosystem from basic 
cybersecurity protections to 5G networks to other aspects of 
digital infrastructure, including data centers, low-earth-orbit 
satellites, and undersea cables, as well as to the new 
generation of enabling technologies, including AI.
    Foreign assistance is an important element of our 
engagement on these topics. For example, we plan to leverage 
foreign assistance funding to support a major undersea cable 
and cybersecurity resilience project together with Australia 
and private sector partners to connect strategically important 
Pacific Island countries to trusted digital infrastructure. And 
I will be in the region next week, I think just shortly after 
you, Chairwoman Kim, to build on this work.
    The creation of the dedicated foreign assistance fund in 
the State Auth is an important step in streamlining work like 
this Pacific Island project, providing the U.S. with the 
agility to move at the speed of technology and, importantly, 
also at the speed of our competitors. Funding assistance 
instrument will be critical to making long-term investments in 
Indo-Pacific stability.
    More broadly, we've launched high-level dialogs on critical 
and emerging tech with Singapore, the Republic of Korea, and 
India, together with White House and interagency partners. We 
also engage closely, of course, with our Quad partners on 
critical and emerging technologies and the cybersecurity of our 
critical infrastructure. We support elements of AUKUS with 
Australia and the United Kingdom. We are strengthening U.S. 
diplomatic capabilities internally, and I do not want to lose 
sight of this, with a goal of having a trained cyber and 
digital officer in every U.S. mission around the world by the 
end of next year.
    The U.S., thanks to our robust innovation economy, is the 
world's leading provider of cybersecurity and digital 
technology products and services, and the State Department 
works on behalf of the American people to promote stability and 
trusted digital ecosystems around the world. Thank you for the 
opportunity to appear before you today. I look forward to your 
questions.
    [The statement of Mr. Fick follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Kim of California. Thank you, Ambassador Fick. I now 
recognize Assistant Secretary Kang for your opening statement.

STATEMENT OF HON. C.S. ELIOT KANG, ASSISTANT SECRETARY, BUREAU 
  OF INTERNATIONAL SECURITY AND NONPROLIFERATION, U.S. STATE 
                           DEPARTMENT

    Mr. Kang. Chairwoman Kim, Ranking Member Bera, and 
distinguished members of the subcommittee----
    Mrs. Kim of California. Turn your mike on, please.
    Mr. Kang [continuing]. Thank you for inviting me to testify 
today on this very important topic. The mission of the State 
Department's Bureau of International Security and 
Nonproliferation, known as ISN, is to prevent, protect, and 
promote. We prevent the proliferation of weapons of mass 
destruction, WMD. We protect critical and emerging 
technologies, such as AI, which can be used to develop or 
improve WMD. Their protection stems from national security 
concerns, not economic competitiveness.
    To the extent that we promote, however, we promote civil 
nuclear cooperation. It is important that civil nuclear 
cooperation are conducted under the highest standard of safety, 
security, and nonproliferation. So we leverage diplomatic 
relationships, negotiate and implement nonproliferation 
agreements and treaties, offer capacity-building programs, and 
work multilaterally on export controls and sanctions.
    ISN partners closely with the Office of the Special Envoy 
for Critical and Emerging Technology and the Bureau of 
Cyberspace and Digital Policy. And we work hand-in-glove with 
the National Security Council and their interagency. ISN also 
has a deep and longstanding partnership with the intelligence 
community. For almost a decade, ISN has been sounding the alarm 
about the Chinese Community Party's growing ambition to develop 
the PLA through its civil-military fusion strategy, MCF for 
short. This MCF strategy which merges the PRC's and commercial 
innovation ecosystem decreases our confidence in the ability to 
ensure that U.S. technologies exported to PRC will be used only 
for legitimate civilian uses.
    So we have been coordinating with the interagency and 
especially with our indispensable partner, the Commerce 
Department's BIS, to counter CCP's MCF strategy. This 
partnership includes developing advanced semiconductor export 
restrictions to the PRC, such as the October 22 and October 23 
rules on AI-enabling chips and chip manufacturing equipment. 
And as diplomats, ISN works tirelessly with our allies and 
partners on export control diplomacy, some of which we do not 
discuss beyond our confidential diplomatic exchanges.
    Thanks to the work of this committee and a strong 
bipartisan supporting Congress, the CHIPS Act and its 
International Technology Security and Innovation fund, known as 
ITSI, are making a profound contribution to this diplomatic 
effort. With ITSI, we are developing the Semiconductor Protect 
Fusion Cell to counter MCF by providing access to open source 
data to better recognize and raise awareness of the problematic 
PRC end users and disrupt any illicit activities. ISN also 
manages other foreign assistance programs to strengthen 
regional regulatory systems, improve implementation and 
enforcement measures, and enhance research security among 
partners.
    While PRC looms large in our work, we are also concerned 
with Russia. As Russia's illegal war in Ukraine continues, we 
are tackling Russia's growing ties with the DPRK. Just last 
week, in response to the deliveries of DPRK's military 
equipment and munition to Russia, ISN used its sanctions 
authority to block proliferation networks facilitating these 
transfers. And we are vigilant about what Russia may be 
providing to the DPRK in exchange. After all, nothing is free. 
Everything has to be paid for.
    Chairwoman Kim, we recognize that critical emerging 
technologies have global supply chains. Hence, ISN takes a 
global approach to protecting these technologies, including 
engaging like-minded partners in multilateral diplomatic 
efforts and expanding bilateral cooperation.
    However, the Indo-Pacific is particularly important, a 
region rich with technology innovators and critical suppliers. 
So ISN is deeply involved in the larger effort to maintain a 
free and open Indo-Pacific by promoting cooperation with our 
allies and partners. Indeed, ISN's critical work on AUKUS 
Pillar 1, a game-changing partnership, exemplifies our 
commitment to the region.
    Thank you again for inviting me to testify today. I look 
forward to your questions.
    [The statement of Mr. Kang follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Kim of California. Thank you, Assistant Secretary 
Kang. I now recognize Assistant Secretary Kendler for her 
opening statement.

STATEMENT OF HON. THEA D. ROZMAN KENDLER, ASSISTANT SECRETARY, 
 EXPORT ADMINISTRATION, BUREAU OF INDUSTRY AND SECURITY, U.S. 
                     DEPARTMENT OF COMMERCE

    Ms. Kendler. Thank you, Chairwoman Kim, Ranking Member 
Bera, distinguished members of this committee. Thank you for 
inviting me to testify about the Biden-Harris Administration's 
ongoing efforts at the Commerce Department's Bureau of Industry 
and Security, or BIS, to advance U.S. national security and 
foreign policy interests, protecting emerging technologies for 
peace and stability in the Indo-Pacific. I appreciate the 
opportunity to work with you and your teams on these critical 
issues to ensure that we are effectively countering China's 
military modernization and human rights abuses and identifying 
and controlling technologies critical to protecting our 
national security while we also degrade Russia's ability to 
wage war in Ukraine.
    We cannot accomplish these goals without collaboration with 
allies and partners on multilateral export controls and the 
expansion of international technology partnerships. Through our 
bureau's licensing officers, trade data and industry analysts, 
and our growing international policy and intelligence analysis 
teams, we identify sensitive U.S. technologies that would give 
our adversaries an advantage, and we develop the policies and 
strategies to protect such technologies. We assess the 
availability of foreign technology and the effectiveness of our 
controls, as well as foreign end users that require extra 
scrutiny. We then adopt controls that address both technology 
and end users.
    Technology controls are based on the performance 
specifications of an item. The country-wide controls we put in 
place on advanced semiconductors and semiconductor 
manufacturing equipment to China are an example of these 
technology controls.
    End user controls deny items to particular entities. We 
impose these controls through additions to our Entity List when 
there are specific and articulable facts that an entity is 
engaged in activities contrary to U.S. national security or 
foreign policy interests. Of the 787 China-based entities 
currently on the Entity List, 303, more than a third, have been 
added in this Administration. Many in the last 2 years have 
been added for companies that are shipping items to Russia.
    For approximately 70 years, a foundation of U.S. dual-use 
export controls has been the government's close work with 
allies and partners to coordinate our policies to control the 
spread of weapons of mass destruction and conventional weapons. 
These efforts are steered through four multilateral regimes 
and, for most of the world and certain of our partners, these 
regimes are so intrinsic to global export control systems that 
those country's domestic laws may not conceive of controls 
adopted through any other mechanism.
    Through technical expert meetings and other international 
engagements, we at the Bureau of Industry and Security are 
committed to the important efforts of these regimes. With our 
interagency partners, including the State Department, BIS has 
developed countless proposals over the years to add new items, 
remove items, and modify parameters of the control lists. At 
the same time, we recognize that the world has changed 
dramatically since establishment of these regimes after the 
cold war. The digital revolution complicates strategies built 
around the control of tangible goods.
    In this difficult moment, we are fortunate to have vibrant 
export controls collaborations, particularly with the partners 
in the Indo-Pacific. They have joined us in the global export 
control coalition of 39 major economies that have adopted 
substantially similar controls on Russia following Putin's 
brutal invasion of Ukraine, an effort that has reinvigorated 
our connections with export control counterparts in the Indo-
Pacific and Europe.
    We also welcome partner engagement in safeguarding our core 
technologies, particularly in the face of China's challenges to 
global peace and security, including through the military-civil 
fusion strategy exacerbated by China's form of government in 
which the government can coerce companies to act contrary to 
their interests when it is in the government's interest.
    Through export controls we are working to cultivate trusted 
ecosystems that will allow emerging technologies to develop in 
a safe space. Export controls set a clean line about who we 
trust when it comes to dual-use technologies. Through these 
ecosystems, partners that share our values, our commitment to a 
rules-based order, and our security outlook benefit from trade 
in these technologies, while others do not.
    In the Indo-Pacific, our partnerships are key to fostering 
trusted technology ecosystems, combating economic coercion, and 
preventing the misuse of sensitive technologies to undermine 
our national security and that of our allies and partners. We 
maintain a host of formal and informal international 
engagements with other implementing agencies across the region, 
which I look forward to discussing with you during this 
hearing.
    U.S. export controls have been and will always be most 
effective when deployed in conjunction with those governments 
that share our values. As technology evolves, we will protect 
our national security by coordinating with our closest allies 
and partners, ensuring that the fruits of advanced technologies 
are applied to our shared security and prosperity.
    Thank you. And I welcome your questions.
    [The statement of Ms. Kendler follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Kim of California. Thank you, Ms. Kendler. I now 
recognize myself for 5 minutes of questioning, and I want to 
start by saying that last year the Administration decided to 
remove the Chinese Ministry of Public Security's Institute of 
Forensic Science (IFS) from the Commerce Entity List.
    So, Ms. Kendler, since you were before our Oversight and 
Accountability Subcommittee and testified recently, can you 
explain to us why IFS was added to the Entity List to begin 
with?
    Ms. Kendler. Congresswoman, I appreciate your concern about 
this entity and its activities in China, its placement on our 
Entity List. I cannot speak specifically to an entity beyond 
the information that is in the public record. We have national 
security concerns and foreign policy concerns associated----
    Mrs. Kim of California. From my understanding, IFS was 
added due to their egregious abuse of the Uyghur Muslims 
through genomics. So, Ms. Kendler and, Mr. Kang, please chime 
in, can you explain to us the interagency process that led to 
the decision to remove IFS from the Entity List?
    Ms. Kendler. Congresswoman, it is very important to us at 
the Commerce Department to--our regulations require that we 
have unanimous interagency agreement whenever an entity is 
removed from the Entity List. It is very important to us that 
we have the equities of all four departments that participate 
in the End-User Review Committee, that's Commerce, Defense, 
Energy, and State, and that we consider the equities of all 
four of those agencies whenever an entity is removed from our 
list.
    Mrs. Kim of California. Mr. Kang, do you want to add to 
that briefly?
    Mr. Kang. Yes. What I could add is that tackling fentanyl, 
which has been declared a national emergency by the President 
and is one of the top Administration priorities to get a handle 
on a problem, a crisis, that kills up to more than 100,000 
ordinary Americans, and removing IFS allowed us to get better 
cooperation from China.
    Mrs. Kim of California. Can we talk about that just a 
little bit? I want to know exactly when the decision was made 
to remove IFS. Like, how far in advance was that decided from 
the time President Biden with Xi Jinping in San Francisco 
November of last year? I know they had a conversation. They 
talked about establishing a working group to tackle the 
fentanyl and all of that, but I am specifically interested in 
knowing when that decision was made.
    Ms. Kendler. Congresswoman, we at the Commerce Department 
do run the process for the End-User Review Committee, and I 
should note that we have around a hundred entities on the 
Entity List that are related to human rights abuses in Xinjiang 
specifically. We also have entities on the Entity List that are 
there for other human rights abuses in China.
    Specifically as to the timing, that's something that is in 
the interagency process, and I would be happy to get back to 
you within the bounds of our legal authorities of what we can 
provide.
    Mrs. Kim of California. Well, I want to emphasize, as you 
mentioned, the human rights should not be a bargaining chip to 
secure high-level meetings with the CCP. Rather, it should be 
the priority of meetings with our CCP counterparts.
    Let me move on. You know, we have a series of multilateral 
engagements with our partners and allies in the Indo-Pacific on 
technology issues, including the Quad working group on critical 
and emerging technology and the ASEAN Committee on Science, 
Technology, and Innovation. Ambassador Fick, this is something 
that I think you can speak to. Do we have the diplomatic 
structures to engage in discussions at the working group level 
on specific sectors of technology cooperation? If so, what 
sectors have a stronger diplomatic framework or which are 
lacking?
    Mr. Fick. Thank you, Congresswoman, for the question. I 
believe that the creation of these new organizations at the 
State Department is an effort on our part to do exactly what I 
believe you're asking, which is ensure that we have the 
organization, the expertise, and the senior representation to 
engage with our counterparts bilaterally and multilaterally on 
these topics everywhere of geopolitical significance to the 
United States.
    I will be representing us, for example, at the ASEAN 
Digital Ministerial Meeting in Singapore in a couple of weeks. 
And the areas where we have the closest cooperation include 
cybersecurity capacity building, ensuring----
    Mrs. Kim of California. Will you be leading our discussions 
on our end on all of these structural engagements?
    Mr. Fick. I am not sure that I can categorically say all, 
but I do represent us on the digital ministerial track with 
ASEAN, the G20, the G7, and other similar organizations, yes.
    Mrs. Kim of California. Thank you. My time is up, so now 
let me recognize Ranking Member Bera for 5 minutes of 
questioning.
    Mr. Bera. Great. Thanks, Chairwoman. Maybe this is a 
question for Ambassador Fick. Certainly, the focus of this 
subcommittee hearing is investment export controls on critical 
technologies. An area that I have been thinking about a little 
bit, which I think is a bit harder to get a grasp on, but I 
think, Ambassador Fick, with your experience in the private 
sector and the technology sector, should we, as Congress, be 
thinking about, you know, where funding for venture companies 
come from and if let's say the PRC is funding dollars in 
venture that are then going to U.S. startup companies that are 
looking at critical technology? Like, how do we track that? How 
should we think about that because that also seems to be an 
area of potential vulnerability where it looks like a U.S. 
startup is working on this, but outside investors could--is 
that an area we should be spending time thinking about and how 
should we think about that?
    Mr. Fick. Congressman, it is a bit outside the remit of my 
current role, but I did spend 10 years as an operating partner 
at a venture firm, and so it brings some perspective to the 
question. I think it is important that we think about these 
investment issues both inbound and outbound and, certainly, PRC 
or other investment dollars as limited partners into these 
funds usually come with strings attached around required 
partnerships or technology transfer. And so a congressional 
role in shining a light on that, making it clear, and 
encouraging investors in the United States to look a layer or 
two deeper would, in fact, make us more secure.
    Mr. Bera. Ms. Kendler.
    Ms. Kendler. Thank you. This is a really important topic to 
be discussing. I was out in Silicon Valley last fall having 
conversations exactly on this topic, making sure that we have 
educated nascent U.S. startups about export controls because, 
no matter where the money is coming from, the technology flow 
is controlled under export controls, depending on the nature of 
the technology or the end recipient of the technology. So those 
laws remain in place as implemented by Commerce with our 
colleagues regardless of who is investing in the technologies.
    Now, I completely agree that we should be very concerned 
about whether strings are attached, and that is certainly 
something that we can look at also in the CFIUS context when 
you have foreign enterprises acquiring U.S. entities. Here, it 
is a little bit harder to see, but our export controls will 
apply to the technology regardless. And we have a 
responsibility at Commerce, which we are deeply engaged in, to 
educate all sorts of enterprises, small, medium, well 
established, nascent about those controls.
    Mr. Bera. And let me ask a similar question on outbound 
investment. I think what I call the civilian-military policy 
doctrine, I think you guys were calling the military-civilian 
fusion policy. You know, legitimately, U.S. companies, U.S. 
investors may be looking for investment opportunities overseas 
and so forth, and, you know, I asked this question earlier 
today: how should we think about, you know, again, legitimate 
investment that not necessarily understanding that that 
investment in a foreign entity, let's say an entity in the PRC, 
then potentially is developing technologies, et cetera, 
creating talent that may inadvertently undermine U.S. national 
security interests. Again, you know--yes, please.
    Ms. Kendler. I think export controls provide an excellent 
guidepost here. I share your concerns about money going into 
enterprises that may be working on indigenous technology that 
we have barred for export. And so the two issues go hand-in-
hand in terms of the most critical technologies that we are 
focused on protecting and that may be, for individual companies 
or funds looking at investing, that may be a starting point.
    Mr. Bera. Does Commerce have the authorities to restrict 
those funds from being invested or are those new authorities?
    Ms. Kendler. We do not control the flow of money at the 
Commerce Department or in the Bureau of Industry and Security, 
but any technology would be controlled under our authorities. 
And I anticipate, in any sort of outbound regime, that it would 
be our technical expertise in the Bureau of Industry and 
Security that would be applied.
    Mr. Bera. My sense is that is an area where it is not 
outbound technology that is going there but it is a startup 
company in an adversary that, you know, is drawing in external 
investment, but now they are working on some of those 
technologies indigenously. Secretary Kang, Ambassador Fick, if 
you want to answer
    Mr. Kang. Yes, if I may. There is clearly a glaring gap. 
Export controls could do so much because it basically deals 
with tangible goods. And with regard to even these passive 
investments but particularly in the case of venture capital, 
you also transfer intangible knowledge and know-how, and this 
gives a company in China or wherever access to U.S. origin or 
Western origin knowledge base.
    And another thing. As someone who has worked 
nonproliferation for over a decade, there are so many fund 
companies that are dealing with, seemingly, appearing very 
legitimate with legitimate support, but they are fronting for 
either the military or intelligence services in the case of 
PRC.
    Mrs. Kim of California. Your time is up. OK. Let me now 
recognize Ms. Wagner, Representative Wagner, for 5 minutes.
    Mrs. Wagner. Thank you, Madam Chairman. And I thank our 
witnesses for their service. China intends to supplant the U.S. 
as the global leader in critical and emerging technologies at 
any cost: bullying, bribery, and outright IP theft. If China is 
allowed to achieve dominance in the technologies that will 
shape our future, American communities and businesses will, in 
fact, suffer. Our allies and partners also risk losing access 
to safe, secure infrastructure and technologies that we all 
rely on for communications, for transportation, it could be 
medical care, national security. I could go on and on about 
other essential industries.
    The Indo-Pacific region is a global center of technological 
expertise and advancement, and the U.S. must work in lockstep 
with Indo-Pacific countries to safeguard sensitive cutting-edge 
technologies and reduce technological dependence on China.
    Assistant Secretary Kang or Kendler, what sector or 
subsectors of technology are the Indo-Pacific countries most 
concerned about and how would you rate their ability to protect 
these technologies from adversarial nations? Where are the 
biggest gaps in the Indo-Pacific to protecting critical 
technologies?
    Ms. Kendler. Congresswoman, when we think about critical 
and emerging technologies here, we are guided primarily by the 
19 categories of items that are identified by the White House 
in the critical emerging technologies list, and that is each 
one of those technologies is a space where we have export 
controls----
    Mrs. Wagner. Where are the gaps? Where are the biggest 
gaps?
    Ms. Kendler. I think that we have room to improve, but 
there are no big gaps. I would not identify big gaps. I would 
say that we have controls in each of these spaces. Our controls 
are generally defined in terms of technological floors, so as 
innovation occurs in these areas, they are already captured. 
And if they are not, we are working with our allies and 
partners, particularly those who are members of, I would say in 
this space, the Wassenaar Arrangement, which includes quite a 
few Indo-Pacific----
    Mrs. Wagner. Well, here is a gap that I see, and, 
Ambassador Fick, let me try this with you. Today, submarine 
cables transport 99 percent of intercontinental data. These 
cables are important. The fact that China is planning to 
increase its role in the development and the repair and 
production of undersea cables, what measures are your 
departments taking to undercut these plans and which pose, I 
think, a serious threat and gap to the secure flow of data 
around the world.
    Mr. Fick. Congresswoman, I agree very much with the premise 
of your question. I am going to the South Pacific next week on 
an undersea cable project to advance trusted connectivity 
across the South Pacific. I believe that, when our adversaries 
tell us what they intend to do, we should believe them.
    Mrs. Wagner. Yes.
    Mr. Fick. We watched them run a playbook with telecom. They 
are running the same playbook with every other technology area, 
including undersea cable. Unlike in telecom, we still have a 
national champion manufacturer here in the United States of 
trusted undersea cable, and we need to be careful to ensure 
that that company remains vibrant. And we have a comprehensive 
effort underway to put trusted undersea cable in place across 
the South Pacific.
    Mrs. Wagner. I am very concerned about Chinese companies 
repairing or even having access to undersea cables owned by 
U.S. carriers, to be honest. Are we concerned about this?
    Mr. Fick. I was recently at the cable repair depot in Sri 
Lanka asking exactly those questions about the Indian Ocean. 
Yes, we are concerned about it; and, yes, we believe that that 
is critical infrastructure that the U.S. needs to protect from 
end to end.
    Mrs. Wagner. And let me, just to followup again, what Indo-
Pacific regions and partners are most dependent on China for 
undersea cable development and how specifically is the U.S. 
collaborating with our partners to reduce dependence on PRC-
controlled infrastructure and promote safe and secure 
infrastructure?
    Mr. Fick. One of the best things we can do is get trusted 
cables deployed. That is, U.S.-or Japanese-or French-
manufactured cables that are owned and operated by the 
hyperscale technology companies that are generally American 
companies. So we are working to get those projects in place 
with branching units that will allow the development of spurs 
to islands and nations where we maintain military and other 
relationships.
    Mrs. Wagner. Well, these cables, as I said, they transport 
99 percent of intercontinental data, so this is a big, big 
concern that we should have, especially their access and 
repairing. So my time is expired. I yield back to the Chair.
    Mrs. Kim of California. Thank you. I now recognize 
Representative Sherman for 5 minutes.
    Mr. Sherman. I want to applaud the Administration for the 
action you have recently taken. As Mr. Fick points out, China 
is using all elements of national power. Their biggest element 
perhaps is their enormous trade surplus with the United States. 
It is over a third of a trillion dollars every year, and that 
means that it is 150 percent of what they spend on the People's 
Liberation Army. So just what they create as a trade surplus, 
they could finance one and a half People's Liberation Armies.
    In the trade effort, we have tariffs, they have tariffs. 
Theirs are higher. But they also have the capacity to orally 
instruct their companies not to buy from the United States. We 
cannot do that. No Member of Congress is going to call a major 
company in their district and tell them who to buy from. And so 
we have to match with tariffs. What they can do under the 
table, we won't. We will continue to run a giant trade deficit, 
and that means that every decade China will have an extra $3 
trillion.
    We are not at war with China. This is not a zero-sum game. 
If China develops better teddy bears more efficiently, I am 
happy for that. If the Chinese people live better, that is not 
a bad thing. We cannot just have entity controls because you 
can create a front company, as Mr. Kang points out. They can 
create a startup that is as sinless as a newborn babe, and we 
would have no reason to sanction that individual company. 
Technology is not, as Mr. Kang points out, not just a product 
that we can control. It is know-how, it is inspiration, it is 
direction for research.
    I want to illustrate this, that it is important what areas 
we focus on. If China has a big ship and we need somebody to 
carry our cargo, fine. And that means it is in the interests of 
the American shipper or the insurer to give them ideas on how 
to be more effective at ocean commerce. Fine. But we had a 
situation also in transportation but not taking our product 
from one port to another but taking our satellites into space 
where American companies who own satellites or who insured the 
launch gave them ideas on how to have better rockets. So we 
have to look at every relationship, particularly those that 
involve consulting.
    I want to urge some of my colleagues to look at a number of 
pieces of legislation. Mr. Van Drew and I have the Country of 
Origin Labeling Requirements Act because a lot of people want 
to see where something is made, which is fine. If you're in the 
store, it is right on the box. What if you buy from Amazon? You 
have no idea. What are you going to do? Ship the product back 
that you open the package and it is made in a country you do 
not want to patronize?
    We need to get our companies to report to their 
shareholders what they are doing to reduce their China risk. 
And as I said at this morning's hearing, we need to end the 
capital gains allowance for investment in China.
    Mr. Fisk, you are our digital policy special Ambassador. 
One thing I am worried about is digital misinformation from 
China. One of their best tools for that is TikTok. It is my 
understanding that, while we monitor other sources of digital 
misinformation, the relevant bureau, the Global Engagement 
Center, in the State Department does not monitor TikTok because 
you cannot have it on a government computer. What are we going 
to do so that we monitor what is going on on TikTok? I am 
confident that we have the technical expertise to make sure 
that one particular computer at the State Department does not 
give them access to the rest. When are we going to start 
monitoring TikTok's disinformation?
    Mr. Fick. Congressman, I believe I have said in previous 
testimony that I am the least popular parent in my children's 
middle school because of my stated views on TikTok. I do 
believe that it represents----
    Mr. Sherman. We have got to monitor it. When is the State 
Department going to start monitoring it?
    Mr. Fick. I can consult with my colleagues in the Global 
Engagement Center, and we can get an answer----
    Mr. Sherman. And could you furnish for this committee a 
statement as to whether we are monitoring it as we do other 
social media or whether we have abandoned that? And do not tell 
us, well, there is an executive order to say do not put it on a 
government computer. I am sure we could allow it to be on one 
unconnected air gap government computer.
    Mr. Fick. I am confident that we can get back to you on a 
question for the record in detail on that.
    Mr. Sherman. And then, Ms. Kendler, there is a tendency to 
think that in export controls, well, if we say no to the 
export, all we are doing is hurting corporate profits, and so 
all the national security interests are on one side. I would 
admonish you two things: When we say no, that means some other 
company in some other country says yes, and that builds that 
capacity. And when we say yes, it goes to an American company 
that builds our capacity. And, second, when our department acts 
slowly and then ultimately approves something, but it is too 
late because the business has gone elsewhere, we have lost on 
all fronts. So saying no or delaying is not without national 
security risk. Of course, saying yes at the wrong time is what 
you are most likely to be criticized for.
    I yield back.
    Mrs. Kim of California. Let me now recognize Representative 
Davidson for 5 minutes.
    Mr. Davidson. I thank the Chairwoman. It is an incredibly 
important hearing, and I am glad to see that we can have 
Administration witnesses because this is a topic that is 
incredibly important. Obviously, Republican promises on a whole 
host of things conflict with some of the Biden Administration 
promises, and, in this area, I am encouraged to see that we are 
aligned.
    Ambassador Fick, I am encouraged by your appointment and, 
frankly, by your credentials. You are one of a handful of 
private sector people, non-academia, people that have worked in 
capitalism, not in think tanks or in academia, that is part of 
the Administration and credited as one of the most innovative 
thinkers in the market. So glad to see you are there.
    When you think about this space, in 2018, the United States 
decided to update the Foreign Investment Risk Reduction 
Modernization Act, a kind of framework for foreign investment 
into the United States, and we did touch on the idea of 
outbound investment. Where are the voids that you are most 
concerned about?
    Mr. Fick. Thank you, Congressman. I appreciate your 
gracious words. I think that the specifics of inbound and 
outbound investment do fall outside my remit, so I would want 
to yield to colleagues who are perhaps closer to that 
particular issue and reState what I did say earlier, which is 
that I think that we need to have attention on both sides and I 
think that there is more that we can do in this world where so 
many of the innovative technologies that are increasingly 
contributing to national power are being developed by companies 
that, frankly, are very small or may not exist today, and they 
are going to change the landscape very quickly. But I would 
defer to colleagues on the specifics.
    Mr. Davidson. Thank you.
    Ms. Kendler. Thank you, Congressman. We have to avoid a 
situation where U.S. investments are supporting Chinese 
military modernization. We cannot permit the intelligence, the 
military technology of China to be built on U.S. funding. That 
would undermine our national security and foreign policy 
interests----
    Mr. Davidson. I wholeheartedly agree. Prior to being in 
Congress, I was in manufacturing. This is a little bit outside 
your area, but, fundamentally, does not our whole trade policy 
facilitate that?
    Ms. Kendler. Congressman, our export controls are 
calibrated and tailored for advanced technologies to China. The 
technologies that China cannot get elsewhere----
    Mr. Davidson. The entire industrial base is at risk. We saw 
that during COVID. You look at whether it is vitamins or base 
chemicals, I mean, fundamentally, we have a real supply chain 
risk problem, do not we?
    Ms. Kendler. We are very focused on our supply chain issues 
and U.S. technological leadership in the supply chain. We are 
on the brink of issuing a survey to poll the industry about 
legacy semiconductor chips, for example, as an area where we 
need more information about our supply chain, and that is 
certainly connected to national security.
    Our export controls are focused on national security and 
foreign policy interests. Last fall, we published an update to 
our artificial intelligence semiconductor chip rule to make 
sure that the chips, the most advance chips, which are made 
using U.S. technology, are not feeding the Chinese military, 
that are not being used for AI modeling of hypersonic missiles.
    Mr. Davidson. I thank you for that, and, certainly, that's 
important. I haven't been part of the debate on the CHIPS Act 
that we passed that, in theory, was supposed to strengthen the 
U.S. supply chain and, in a way, weaken China's or limit their 
access to the most innovative chips. I do worry about some of 
the unintended consequences. One of the companies in my 
congressional district is Silfex. They are a large employer in 
the region, but, fundamentally, they are supplying base 
material, silicon wafers, which is more of a commodity, and 
they are at risk of losing substantial employment because they 
cannot export those things. China is doing fine on commodity-
grade chips. So how do we strike the balance and not, you know, 
cause more harm to domestic manufacturers than we are 
intending?
    And I think the other thing is, when you talk about, you 
know, Ambassador, you mentioned small companies, when you talk 
about the biggest companies, a lot of times they will just 
create a different entity offshore and do the same thing. So 
how do we capture that with our current look at outbound 
investment?
    Ms. Kendler. Congressman, I am not really in a position to 
talk about outbound investment. In the export controls context, 
speaking of the AI chips rule, we actually, last October, took 
that issue on directly. We expanded our controls to deal with 
third countries that might be providing an opportunity for 
China to receive the chips that we have controlled through 
diversion or evasion of our controls. And so we established a 
license requirement for third countries that we thought might 
be susceptible to----

    Mr. Davidson. What about domestic manufacturers, like 
Silfex? What are we doing for those guys?
    Ms. Kendler. Congressman, I do not want to speak about a 
particular company here, but I would be happy to followup with 
you and your team----
    Mr. Davidson. We would greatly appreciate it because I 
think we are causing some unintended consequences or at least I 
hope they are unintended. I yield back.
    Mrs. Kim of California. Thank you. I now recognize 
Representative Andy Kim for 5 minutes.
    Mr. Kim of New Jersey. Yes. Thank you, Madam Chair. Thank 
you to the three of you for coming before us to be able to have 
this conversation.
    Assistant Secretary Kendler, I wanted to start with you. In 
your opening remarks, you talked about sort of our partnership 
globally, especially with partners in the Indo-Pacific, and you 
were making reference about some of the progress that we have 
made, especially vis-a-vis the challenges we face with Russia. 
I wanted to see if you can just expand on it a little more. I 
want to get a little bit more granularity from you just what 
has gotten better, stronger in that capacity and what have we 
seen on that progress that might be transferrable or applicable 
to the challenges that we face vis-a-vis China right now.
    Ms. Kendler. I appreciate that question quite a bit, 
Congressman Kim. It has been a core focus of our work over the 
last 2 years since Russia's invasion, further invasion of 
Ukraine. We, working with our implementing agencies around the 
world, 39 major global economies coming together to adopt 
substantially aligned measures toward Russia, Belarus, and, to 
a degree, Iran, as well, to keep the technologies that Russia 
and their allies need from reaching them. They need U.S. 
technologies. They do not have indigenous semiconductor 
manufacturing, for example. They must buy chips from outside 
Russia. That is just one example of a host of technologies that 
Russia requires to wage war.
    So by building this coalition and maintaining this 
coalition, which has required an enormous amount of effort, we 
have established new working-level connections, new senior-
level connections, between all of the implementing agencies 
associated with these substantially aligned controls, which 
enable us to talk about issues beyond Russia. Emerging 
technologies is an area where we are able to say, well, how are 
you dealing with this issue and share how we are dealing with 
the issue on a very practical level. And that can certainly 
carry over into any other space. We welcome conversations and 
are eager to have them.
    Our main partners in that effort have included Japan and 
Korea particularly. Of course, the EU and the UK are there, as 
well. But it is a great mechanism for further very practical 
cooperation.
    Mr. Kim of New Jersey. Yes. Thank you for that. Assistant 
Secretary Kang, I want to bring you into this conversation 
here, especially with the insights that you have. We talked 
about some of those partners, South Korea, Japan, others that 
have a lot more experience in this. But what we also know is 
that, in the Indo-Pacific, there are actually a lot of 
partners, though, that do not have as much of that experience 
and that infrastructure in terms of a robust expert control 
regulatory and enforcement system. So I guess I wanted to just 
get a sense from you how are we trying to help buildup that 
type of capability, that technical aspect, in terms of 
assistance or trainings? Is that something that we should be 
thinking about more to just try to lift that baseline up? You 
know, it is good that we are doing it with certain partners 
that already have some of that capability, but I just feel like 
there is sort of a weak-link situation here where we need to 
try to figure out how to kind of raise all boats there. So what 
are your thoughts in terms of that?
    Mr. Kang. Exactly. I agree with everything Assistant 
Secretary Kendler has said about working in coalition. And, 
certainly, the cooperation that we have engaged together to 
counter Russia could be transferrable with regard to dealing 
with China. But there is a serious capacity issue with regard 
to implementation, Administration. Some countries in the region 
do not have basic strategic trade laws.
    And another priority is also, given the trade flows, so 
many of the countries, the No. 1 country they trade with is 
China. So there is also the political will, how much to 
cooperate in this venture.
    So we are engaging diplomatically alongside our 
implementing partners from other agencies to engage at the 
highest leadership, political leadership, to highlight why it 
is in their interests to have a strong export control system, 
that it will actually build their prosperity by having a 
reliable and trusted network of suppliers and buyers.
    So we are utilizing the bipartisan support that you have 
given us with regard to our native funding and also in the 
context of the CHIPS Act, the ITSI fund. Particularly, we are 
focusing on semiconductor packaging in Southeast Asia. So those 
are extremely valuable in building that capacity.
    Mr. Kim of New Jersey. Thank you for that. And I think that 
is absolutely key is just this coalition building. Ambassador 
Fick, I just want to give you the last word here, just some of 
your reactions to this and just how you think we can try to 
make sure that this is not some weak link in this broader 
effort that we have.
    Mr. Fick. Congressman, I think one of the most pernicious 
terms in international technology diplomacy is digital 
sovereignty and the idea that any country can go it alone on 
these issues. And so it reminds me of those broadsides from the 
American Revolution that said we hang together or we surely 
hang separately. These are issues where we need to hang 
together with our allies and partners as we look at the stated 
intent of our geopolitical competitors and adversaries, 
especially the PRC and Russia and Iran and----
    Mr. Kim of New Jersey. I will just say here, as I am 
running low, is just let's make sure we are getting to follow-
on conversations about some of these other countries that we 
should be engaged. Sometimes, we talk too much about some of 
the ones that are working the best, but let's try to figure out 
how to engage on some of these others. Thank you. And I yield 
back.
    Mrs. Kim of California. Thank you. Let me now recognize 
Representative Andy Barr for 5 minutes.
    Mr. Barr. Thank you, Chair Kim. And let me followup with 
Assistant Secretary Kendler on Chair Kim's questioning about 
the Institute of Forensic Science. Just for everybody watching, 
this is, again, the Chinese Ministry of Public Security's 
Institute of Forensic Science, and it was, at one time, added 
to the Commerce Entity List; and then there was a decision that 
was made to remove IFS from the Entity List. And, again, for 
everybody watching, what is IFS? IFS was originally added to 
the Entity List due to their egregious abuse of the Uyghur 
Muslims through horrific genetic testing activities that echo 
the various crimes against humanity undertaken by Nazi Germany.
    IFS was removed from Commerce's Entity List. Now, Assistant 
Secretary Kendler, I am not suggesting this was your decision 
or even Undersecretary Estevez's decision, and I know you 
respond to Secretary Raimondo, not the State Department. But I 
want to know from you, to the best of your understanding, did 
the State Department direct BIS to remove this horrible group, 
IFS, from the Entity List?
    Ms. Kendler. Thank you for the question, Congressman. Each 
agency that participates in the End-User Review Committee has 
an equal vote. State Department's vote, Commerce Department's 
vote, they carry the same weight.
    Mr. Barr. So Commerce is equally culpable as the State 
Department in the decision to remove IFS from the Entity List, 
this Chinese entity that engages in genetic testing reminiscent 
of Nazi Germany.
    Ms. Kendler. Congressman, I am the granddaughter of a 
survivor.
    Mr. Barr. I know.
    Ms. Kendler. What I can tell you is that human rights and 
fentanyl, preventing deaths from fentanyl are both deeply 
important issues for this Administration.
    Mr. Barr. What did the Administration get from China, from 
the Chinese Communist Party for removing this entity from the 
export control Entity List? What did we get?
    Ms. Kendler. Given the national security imperative for 
handling the fentanyl precursors coming into this country, we 
were comfortable taking the step to delist IFS. It became clear 
that including IFS on the Entity List, it inhibited 
counternarcotic action by----
    Mr. Barr. When was it removed from the list?
    Ms. Kendler. I do not have the exact date. November of this 
year, of last year.
    Mr. Barr. And have we seen in the time since it was 
removed, have we seen any material enhanced cooperation from 
China on fentanyl?
    Ms. Kendler. I will defer to my colleague at the State 
Department on that answer.
    Mr. Kang. I could speak to that briefly. I understand there 
has been really ramped-up enforcement measures by the Chinese, 
and they also promulgated regulation pushed out further 
regulating trade and fentanyl precursors.
    Mr. Barr. See, here is what I do not understand: why we are 
always chasing diplomacy from a position of weakness. Why are 
we removing bad actors from our entities lists and our 
sanctions lists? Why do not we negotiate from a position of 
strength? Why do not we sanction? Why do not we impose more 
export controls on bad actors instead of making upward 
concessions with the hope that China will somehow change its 
behavior down the road. That is what I do not like about this 
diplomatic approach. It is negotiating from a position of 
weakness. Do you have a response to that?
    Mr. Kang. If I may. As a career civil servant serving in 
multiple Presidential Administrations, I see bipartisan 
consensus with regard to China. I think all of us see China for 
what it is. And the decisions we make may be tactical in nature 
and there may be tradeoffs that we have to make, but I see 
total consistency. Particularly, I served also in the Trump 
Administration and this Administration----
    Mr. Barr. Well, reclaiming my time. If we want to get tough 
on China and their peddling of the ingredients into fentanyl, 
exploiting our open southern border and killing our people, 
poisoning our people with fentanyl, and that happens a lot in 
Kentucky, in my home State, unfortunately, with components from 
mainland China. Why do not we sanction? Why does not the 
Administration support my bill that would sanction these 
Chinese entities that are responsible for manufacturing this 
poison instead of taking off a genetic testing arm of the 
Chinese secret police from the Entity List?
    Ms. Kendler. Congressman, I welcome the information that 
you have on entities in China operating to violate human 
rights, and we would be pleased to work with you and your team 
to get that information. We use the Entity List for national 
security and foreign policy protection, and we are eager to put 
entities on that have articulable and evidence-based reasons.
    In this instance, to protect national security, we care 
both about human rights and about fentanyl precursors for 
exactly the reasons you have identified, for the people dying 
in Kentucky and elsewhere. And those are both priorities. 
Sometimes, we make tradeoffs to protect our national security, 
and we----
    Mr. Barr. I see my time has expired. I do not think we have 
to make tradeoffs. I think we need to be tough on China and not 
make these up-front concessions in the hopes that somehow China 
will change their behavior. With that, I yield.
    Mrs. Kim of California. Thank you. Representative Barr, I 
want to thank you for raising that issue just, you know, since 
I have also raised that issue. I want to know if you know if 
the flow of fentanyl from China has decreased since November 
when the two leaders met and agreed, as I mentioned earlier in 
my line of questioning, when they decided to create the working 
group to address the fentanyl. I personally have not seen the 
decrease in fentanyl from China. Instead, my county, Orange 
County, that I represent, which is so close to the southern 
border, I work closely with the local law enforcement. Orange 
County Sheriff's Department have told me actually there is more 
increase in the fentanyl coming through our southern border. So 
I am not sure if you can say that we have addressed this issue.
    The devil is in the details. What has the working group 
done since November when the two leaders met and since we have, 
you know, taken the IFS off the Entity List?
    Mr. Kang. Chairwoman Kim, I could take that question back 
to those who more closely follow this issue. But just as we see 
problems with regard to advanced semiconductor chips popping up 
in Chinese companies, even after we controlled them, sometimes 
there is a lag effect and also there's an inventory that has 
been pushed out. So it is an incomplete answer, but I will get 
back to those folks who track this more closely and get back to 
you.
    Mrs. Kim of California. Thank you. Sorry about that. I now 
recognize Representative Keating for 5 minutes.
    Mr. Keating. Thank you, Madam Chairman. An area we haven't 
hit yet in our discussion is the nuclear area, which overlaps 
many of the things that your agencies are involved with. You 
know, there is a lot going on in Europe in terms of small 
modular reactors, but, you know, China, Pakistan, South Korea, 
Japan, Taiwan, Bangladesh, among others, all have nuclear 
programs. What are we doing through your particular agencies to 
deal with really very challenging issues of, No. 1, maintaining 
our competitiveness economically; our security, something that 
former Secretary Moniz addressed recently in terms of a 
collective approach, a multilateral approach, that has to deal 
with security issues around nuclear power and nonproliferation. 
It seems like the U.S. is, you know, lagging many of the other 
countries in many other regions of the world, and I am 
concerned in the Indo-Pacific, if their programs begin to 
expand into things like SMRs or other areas or continue to 
grow, we might continue to have a greater gap.
    Mr. Kang. I think I'm the nuclear person in the panel. 
Actually, sir, we have good news. It is a combination of 
nuclear accidents, Three Mile Island, Fukushima, not to mention 
Chernobyl, has really stymied development of nuclear energy and 
energy technology development in the West and also in the 
United States. But everybody recognizes that energy security is 
critical to our strategic strength, and nuclear is part of that 
picture. And also those who care about climate change, nuclear 
has to play a role as a bridging capability.
    And, fortunately, this is playing for our strength, our 
innovation. And among the small modular reactors that are out 
in the market today, those who are most advanced and have 
passed the certification of the NRC, a regulatory authority in 
the United States that is looked upon by everybody as the gold 
standard with tremendous respect from abroad, some of these 
reactor designs have passed muster and ready to deploy. And we 
are making tremendous progress in Europe, particularly among 
our Eastern European NATO allies. And with the situation with 
regard to Ukraine, the whole region is seized and they 
recognize that SMR is the answer to energy independence and 
security.
    There are also great opportunities in East Asia. We have 
partnerships with Japan and Korea. They have invested in some 
of our SMR technologies, and we are working together to provide 
collectively those funds that are necessary to create the 
foundation in recipient countries, particularly in Southeast 
Asia, so they could proceed with nuclear pursuits safely, 
securely, and nonproliferation guaranteed.
    So we are pouring all of our resources, particularly with 
ISN has its own tranche of capacity-building capabilities. We 
have this program called FIRST, and we are heavily investing in 
the region.
    Mr. Keating. And are we, at the same time, dealing with 
security issues as part of those discussions?
    Mr. Kang. Absolutely. Security, safety, has to be part of 
it, not just nonproliferation.
    Mr. Keating. Quickly, I just wanted to touch on one other 
area that overlaps, I think, some of the Transatlantic areas. 
You know, the Iranian drones that we found, there were 
components of that from our allies that were found in the 
actual drones that were being given to Russia to brutally 
assault Ukraine. How are we dealing with the disparities that 
do exist between our country and our own allies on many of 
these fronts? What are we doing to close that gap so there is 
no loophole there?
    Mr. Kang. So one of the things we are doing is, of course, 
threat awareness. A lot of these countries do not realize they 
are the source, the companies, whether they are front companies 
or actually production companies where they are producing 
products that end up in these drones. I have seen these drones 
and touched them, these drones that were deployed in Ukraine 
and also in the Middle East. And they are Iranian origin. But 
when you look at them, they use very basic technologies. These 
are difficult to control. A lot of it are commodity items in a 
sense. They are not quantum computing devices.
    So awareness is absolutely critical. And, recently, at the 
department, I cannot discuss it in further detail, we gathered 
together last week a group of countries to strategize together 
what we could do in terms of interjection, better export 
control, and apply national sanctions.
    Mr. Keating. This has to be done multilaterally, not----
    Mr. Kang. Absolutely.
    Mr. Keating [continuing]. By ourselves. Thank you. I yield 
back.
    Mrs. Kim of California. Let me now recognize Representative 
Radewagen for 5 minutes.
    Mrs. Radewagen. (Foreign language spoken.) Good afternoon. 
Thank you, Chairwoman Kim and Ranking Member Bera for holding 
this hearing. The modern globalized world is one of wonder. 
Modern telecommunications make it so I can speak to my family 
at home in American Samoa from here in Washington, DC, almost 
10,000 miles away, without any issue. That technology that 
allows this instant communication is mainly off-the-shelf 
products. Now, an issue that many Pacific Island countries have 
is monitoring our EEZs. These off-the-shelf technologies have 
helped many of my neighbors in monitoring their EEZs to counter 
illegal activities.
    I have quick questions for all of you. Ambassador Fick, 
would you agree that advances in software and data management 
are creating opportunities for U.S. diplomacy to support both 
domestic industry and national security and foreign policy 
missions?
    Mr. Fick. I agree very much with that.
    Mrs. Radewagen. Thank you. Secretary Kendler, if these 
types of items are wholly comprised of EAR99 technology and do 
not touch military systems in most cases, would BIS require a 
license for the transfer of the time to an ally or defense 
treaty partner?
    Ms. Kendler. We do not require licenses for low-level 
technologies classified under EAR99 to allies and partners 
unless there is an activity or an end user of concern in those 
countries.
    Mrs. Radewagen. So my last question is for you, Secretary 
Kang. Is this an area in which ISN can play a supportive role, 
including through export control cooperation, to build a 
unified, cohesive approach to the transfer of these types of 
systems?
    Mr. Kang. Absolutely. Working multilaterally is the key. We 
cannot go it alone, so we have to create a community of 
interest and we have to have common values, as well. This is 
where human rights also comes into play in export controls, so 
we have created in the auspices of Summit for Democracy 
something called ECHRI, Export Control and Human Rights 
Initiative. So all of these things come in, but all of these 
things have to be with the like-minded and those who share our 
values and common interests.
    Mrs. Radewagen. Thank you, Madam Chair. I yield back the 
balance of my time.
    Mrs. Kim of California. Let me now recognize Representative 
Connolly for 5 minutes.
    Mr. Connolly. Thank you. Welcome to our panel. Ms. Kendler, 
you are at the Department of Commerce. Presumably, it is a 
concern to the Department of Commerce, as it is to the 
Department of State, that something like 90 percent of the 
memory chip manufacturing capacity in the world is in one place 
with one company in Taiwan. What concerns do we have, given 
Chinese saber-rattling, about Taiwan with respect to the 
security of that critical manufactured product?
    Ms. Kendler. Congressman, Taiwan----
    Mr. Connolly. Can you get closer to the mike? It's hard to 
hear you.
    Ms. Kendler. Sorry, sir. Is this better?
    Mr. Connolly. Yes, great. Thank you.
    Ms. Kendler. Sure. Taiwan is a very close export controls 
partner, and we certainly want to do what we can through export 
controls to make sure that Taiwan has the technology it needs.
    Mr. Connolly. No, that's not my question. My question is 
that technology is at risk because of Chinese aggression. If 
China crosses the Taiwan Strait, the manufacturing capacity, 90 
percent of it, in terms of memory chips, is now in Chinese 
hands, not Taiwanese hands.
    Ms. Kendler. Congressman, through our efforts to protect 
national security and our foreign policy interests, we are 
cutting China off from the technologies it can use to wage war, 
and that includes our measures last fall on artificial----
    Mr. Connolly. Ms. Kendler, I'm sorry. Again, that does not 
address my question. My question has to do with the security of 
what is already there in Taiwan. What are we doing in terms of 
building redundancies, off-shoring Taiwanese manufacturing 
capacity, bringing it home if necessary, to ensure that we 
aren't so heavily reliant on one source with one company in one 
place?
    Ms. Kendler. Congressman, this is an important issue for 
the Commerce Department. I have been trying to give you export 
controls answers, and I do not think that is suitable to the 
question.
    Mr. Connolly. Right.
    Ms. Kendler. So perhaps we can take this back and get you 
additional information from other parties at the Commerce 
Department who are looking at this question with a different 
lens.
    Mr. Connolly. OK. Mr. Kang.
    Mr. Kang. Perhaps I can----
    Mr. Connolly. I must say, I am really, I cannot believe, at 
this point, that that's the answer of the Commerce Department 
of the U.S. Government, but, if that's what it is, that's what 
it is. It is not like this is a new issue.
    Mr. Kang. I think this is where----
    Mr. Connolly. It is a huge security concern. Mr. Kang.
    Mr. Kang. Yes, absolutely. So I think this is where 
congressional leadership is paying out. This is, of course, the 
CHIPS Act. The whole idea is to diversify the supply chain. So 
if we are not bringing it back home and we, of course, have a 
Taiwan company investing in the United States, a foundry. Also, 
in Japan, that's the case, as well. But also with regard to 
packaging and other even legacy chips, we are trying to have 
them in hands of our friends and allies. So this is, again, 
because of the foresight bipartisan support of Congress, I 
think that is the answer. But that will have to play out.
    Mr. Connolly. But I think, like so many other supply chain 
issues, we need to better understand how did this happen. I 
mean, this is American-invented technology that migrates to 
Taiwan because we weren't willing to put the resources into it 
the way they were. And, yet, the moment it is in friendly 
hands, may it ever be thus. But we have to plan for the what-
ifs, and China is making no secret of its designs. What is 
point of view, Ambassador Fick, of the State Department from a 
policy point of view with respect to this?
    Mr. Fick. I think an aspect of this that falls within my 
remit, Congressman, is working closely with my Taiwanese 
counterparts in an unofficial capacity to ensure that we are 
transferring to them lessons that we have learned in other 
places, like Ukraine, in order to strengthen deterrence and 
ensure that Taiwan, we maintain the status quo.
    Mr. Connolly. Really? So you think negotiating with Taiwan 
or advising Taiwan on deterrence protects this 90-percent 
worldwide manufacturing capability unique to Taiwan?
    Mr. Fick. I think we recognize the importance of Taiwan's 
unique role in the global economy because of the concentration 
of semiconductor manufacturing. I think we are taking 
comprehensive steps to diversify that supply chain outside 
Taiwan, part of it in the United States, part of it in friendly 
countries. And we are clearly trying to buy as much time as we 
can in order to develop and mature those alternatives, and that 
involves strengthening deterrence.
    Mr. Connolly. Thank you.
    Mrs. Kim of California. Thank you. Well, I want to thank 
the witnesses for your valuable testimony and the members for 
asking your questions. The members of the committee may have 
some additional questions, and I do, too, for your witness 
responses, and I will ask you to respond to those in writing.
    We cannot allow the Chinese Communist Party to dictate how 
critical and emerging technologies are developed and used. Xi 
Jinping cannot be trusted, and all technology developed under 
his regime can and will be used for human rights abuses and 
military aggression. It is, therefore, of the upmost importance 
that we invest in our own technological base, that we ensure 
all U.S.-developed technology is protected, that the U.S. and 
like-minded allies and partners are setting the rules of the 
road for the use of technology worldwide, and that we are able 
to jointly develop and manufacture critical technologies 
efficiently.
    It is important to recall that the United States 
established NATO after the end of World War II. It also created 
CoCom, the Coordination Committee for Multilateral Export 
Controls. The concept was simple: if the United States is going 
to guarantee the security of our allies, then our allies would 
help deny the export of strategic technology to an adversary.
    And fast forward, today, an adversary is inside our export 
control regimes. In some respects, we do not need novel 
solutions to our technology transfer problems. Instead, we need 
to go back to what worked: small groups of partners and allies 
denying our adversaries access to strategic technology.
    I want to thank all of you for joining us today. It is 
clear that we have much more work to do to be able to 
seamlessly develop critical and emerging technologies with our 
allies and partners in the Indo-Pacific and to protect these 
technologies from authoritarian adversaries. So I look forward 
to continuing our work with each of you to fill these gaps and 
maintain our U.S. technological superiority.
    In closing, pursuant to committee rules, all members may 
have 5 days to submit statements, questions, and extraneous 
materials for the record, subject to the length limitation.
    So without objection, the committee now stands adjourned.
    [Whereupon, at 3:32 p.m., the subcommittee was adjourned.]

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