ANNUAL REPORT

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dkrause on DSKHT7XVN1PROD with USCC 534 him to Thailand, where as a signals intelligence collector he focused on Chinese military communications in Vietnam and Laos. Within three years, he had graduated from the Infantry Officer Candidate School and the Airborne and Ranger schools. After four years as an infantry officer, Commissioner Wortzel shifted back to military intelligence. Commissioner Wortzel traveled regularly throughout Asia while serving in the U.S. Pacific Command’s intelligence center from 1978 to 1982. The following year, he attended the National University of Singapore, where he studied advanced Chinese and traveled in China and Southeast Asia. He next worked for the Under Secretary of Defense for Policy, developing counterintelligence programs to protect emerging defense technologies from foreign espionage. Also, the Commissioner was active in programs to gather foreign intelligence for the Army Intelligence and Security Command. From 1988 to 1990, Commissioner Wortzel was the Assistant Army Attaché at the U.S. Embassy in Beijing, China. After assignments on the Department of the Army staff, he returned to China in 1995 as the army attaché. In these assignments he represented U.S. defense interests in China and traveled around the country observing and reporting on military and political events for the U.S. government. In December 1997, Commissioner Wortzel joined the faculty of the U.S. Army War College as Director of the Strategic Studies Institute. Concurrently he was professor of Asian studies. He retired from the U.S. Army as a colonel at the end of 1999. After his military retirement, Commissioner Wortzel was director of the Asian Studies Center at The Heritage Foundation and also vice president for foreign policy and defense studies at Heritage. Commissioner Wortzel has written or edited ten books on China, including Class in China: Stratification in a Classless Society; China’s Military Modernization: International Implications; Dictionary of Contemporary Chinese Military History; and The Dragon Extends its Reach: Chinese Military Power Goes Global. A graduate of the U.S. Army War College, Commissioner Wortzel earned his Doctor of Philosophy degree from the University of Hawaii-Manoa. He and his wife live in Williamsburg, Virginia. Michael R. Danis, Executive Director Formerly served as a senior intelligence officer with the Defense Intelligence Agency. Mr. Danis managed the agency’s technology transfer division; the U.S. government’s sole analytical entity tasked with producing intelligence assessments regarding all aspects of foreign acquisition of U.S. controlled technology and hightech corporations. He also established and led a unique team of China technology specialists producing assessments on China’s military-industrial complex, and the impact of U.S. export-controlled and other foreign technology on Chinese weapons development programs. While serving in the U.S. Air Force, Mr. Danis was twice temporarily assigned to the office of the defense attaché in Beijing. VerDate Sep 11 2014 12:36 Nov 02, 2016 Jkt 020587 PO 00000 Frm 00060 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2016\FINAL\11_C4_B_M.XXX 11_C4_B_M
APPENDIX III PUBLIC HEARINGS OF THE COMMISSION Full transcripts and written testimonies are available online at the Commission’s website: www.uscc.gov. January 21, 2016: Public Hearing on ‘‘Developments in China’s Military Force Projection and Expeditionary Capabilities’’ Washington, DC Commissioners present: Hon. Dennis C. Shea, Chairman; Carolyn Bartholomew, Vice Chairman; Hon. Byron L. Dorgan; Jeffrey L. Fielder (Hearing Co-Chair); Hon. Carte P. Goodwin; Hon. James M. Talent; Hon. Katherine C. Tobin; Larry M. Wortzel (Hearing Co- Chair). Witnesses: Oriana Skylar Mastro, Georgetown University; Timothy Heath, RAND Corporation; David Finkelstein, CNA; Mark Cozad, RAND Corporation; Christopher Yung, Marine Corps University; Kristen Gunness, Vantage Point Asia LLC, and RAND Corporation; Thomas Bickford, CNA; Michael McDevitt, CNA. February 24, 2016: Public Hearing on ‘‘China’s Shifting Economic Realities and Implications for the United States’’ Washington, DC Commissioners present: Hon. Dennis C. Shea, Chairman; Carolyn Bartholomew, Vice Chairman; Peter Brookes; Robin Cleveland (Hearing Co-Chair); Hon. Byron L. Dorgan; Hon. Carte P. Goodwin; Hon. James M. Talent; Hon. Katherine C. Tobin; Michael R. Wessel (Hearing Co-Chair). Witnesses: Michael Turner, Mars & Co; Jason M. Thomas, Carlyle Group; Paul Hubbard, Australian National University; Wentong Zheng, University of Florida; Roselyn Hsueh, Temple University; Terrence Stewart, Stewart & Stewart; Jeremy Haft, Caracal Strategies, and Safe Source Trading; John Ferriola, Nucor Corporation; Alan H. Price, Wiley Rein LLP; Adam Hersh, Columbia University; Gary Clyde Hufbauer, Peterson Institute for International Economics; Bernard O’Connor, Nctm. dkrause on DSKHT7XVN1PROD with USCC VerDate Sep 11 2014 12:36 Nov 02, 2016 Jkt 020587 PO 00000 Frm 00061 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2016\FINAL\11_C4_B_M.XXX 11_C4_B_M (535)
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USCC 2016 ANNUAL REPORT
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1 2016 REPORT TO CONGRESS of the U.
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U.S.-CHINA ECONOMIC AND SECURITY RE
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• The safety of food, drug, and o
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CONTENTS Page TRANSMITTAL LETTER TO
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IX Page Recommendations ...........
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2 ernment’s “going out” strat
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4 economically and politically stra
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6 wage rates are determined by free
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8 while allowing a greater role for
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10 began construction on its first
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12 from—the People’s Republic o
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14 cluding cyber and human intellig
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16 exporter of manufactured goods,
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18 Pakistan’s economic and securi
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20 Beijing appears to remain skepti
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22 trends in Hong Kong with regard
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24 UNSCR 2270. However, in May and
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26 Korea, designating Dandong Hongx
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28 tional order—both before and a
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30 to examine China’s economic an
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32 debt, and jeopardizing long-term
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Introduction CHAPTER 1 U.S.-CHINA E
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37 Statistics with Chinese Characte
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39 up from 52.3 percent in the seco
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41 Early signs suggest President Xi
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43 Figure 4: China’s Total Debt b
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45 reserves to defend the RMB. 75 I
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47 The pace of U.S. export growth t
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49 The United States continued to r
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51 commitments, China has only take
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53 Table 3: Top Five Business Chall
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55 U.S. Tech Firms and Their Chines
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57 ment of Justice’s May 2014 ind
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59 Internet Censorship As a result
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61 on the future of U.S.-China rela
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63 Chapter 1, Section 2, “State-O
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65 Table 5: Failed Chinese Bids for
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67 • Accelerating Bilateral Inves
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69 cess capacity, which will share
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71 United States Challenges Chinese
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73 rulings of the DSB [Dispute Sett
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75 Conclusions • In 2015, the U.S
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77 Addendum I: WTO Cases Recent and
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79 ENDNOTES FOR SECTION 1 1. Lucy H
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81 55. Gabriel Wildau and Don Weinl
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83 119. American Chamber of Commerc
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85 and Espionage Operations, oral t
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87 217. Kane Wu, “Chinese Compani
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89 271. Office of the U.S. Trade Re
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93 Lardy, senior fellow at the Pete
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99 pany competitiveness and stimula
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105 Table 2: Select Chinese Overcap
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107 levels. 135 The situation is on
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109 Figure 5: China’s Monthly Cru
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111 Figure 6: U.S. Steel Industry Q
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123 Addendum I: Section 15 of China
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125 Addendum II: AD and CVD Investi
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141 dkrause on DSKHT7XVN1PROD with
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143 lifetime cost of bringing the e
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145 gets achieved). 57 Using satell
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147 cost of compliance,’’ and p
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151 boost the efficiency of China
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Table 1: 157 Chinese Attempted and
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Table 1: 159 Chinese Attempted and
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163 Figure 4: China’s Total Debt-
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173 weapons, opens the U.S. militar
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175 ests, and allow for greater vol
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177 Addendum I: Key Targets in Chin
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179 Addendum I: Key Targets in Chin
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195 The ultimate impact of the ruli
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197 Environmental Impact of China
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201 China’s Maritime Disputes in
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203 Reform and Reorganization of th
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207 • PLA Army Headquarters: Chin
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211 Figure 5: Type 072A Tank Landin
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215 Figure 7: JL-2 Missile Range Co
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221 Space-Tracking Facility in Arge
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223 Table 1: Significant PLA Bilate
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227 Nigeria will be the first expor
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231 tional annexes to the 2014 Noti
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233 Select U.S.-China Security-Rela
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257 China’s Core Interests—Cont
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259 guerrillas in Colombia and held
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271 stan. 109 In 2014, the PLA Air
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275 conflict Chinese expeditionary
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279 RECOMMENDATIONS Developments in
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SECTION 3: CHINESE INTELLIGENCE SER
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291 Strategic Support Force In Dece
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293 of advanced intelligence, surve
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295 tives, and sexual entrapment. 4
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297 information to a Chinese intell
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299 such as power transmission grid
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301 for transferring trade secrets
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303 nal U.S. discussions of issues
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305 ENDNOTES FOR SECTION 3 1. U.S.-
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307 29. U.S. Department of Justice,
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309 63. U.S. Department of Justice,
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311 106. Eric Holder, “Attorney G
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314 sure its own ambitions in South
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316 Chinese foreign direct investme
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318 • Pakistan: In 2015, China an
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320 India “Acts East” and Puts
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322 Counter Terrorism and Religious
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324 tivities of the Dalai Lama and
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326 incursions across the border fr
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328 conducive to sea lane protectio
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330 Karachi Port, that could eventu
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332 India and OBOR India has not en
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334 China’s Arms Sales to Pakista
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336 For China, the goals of CPEC ar
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338 according to Mr. Small, “The
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340 side the Treaty on the Non-Prol
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342 Facets of U.S.-India Defense Re
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344 of China, but has advocated for
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346 • Recent U.S.-China tensions
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348 24. Debasish Roy Chowdhury, “
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350 71. Jeff Smith, Cold Peace: Chi
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352 127. U.S.-China Economic and Se
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354 2016, 86; Andrew Small, The Chi
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358 Taiwan’s Economic Challenges
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364 agreements. 57 Since then, many
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366 $67.2 billion, comprising 25.4
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368 Foreign Direct Investment China
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370 is leading the initiative, have
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374 Taiwan and the 11-Dash Line The
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384 trade-based partner to an innov
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390 • China’s military moderniz
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410 Hong Kong’s Political Gossip
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414 moving up one place compared to
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418 Chinese Censorship of Prize-Win
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420 Hong Kong and the ‘‘Panama
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424 Table 1: Select PLA Hong Kong G
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428 sitive periods in Hong Kong, le
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436 150. Commission meeting with Ta
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442 Korea. The resolution also bans
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444 increase pressure on Pyongyang.
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446 pand China-South Korea ties. 54
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448 Technical Details of THAAD The
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456 Korea runs perpetual merchandis
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460 pressure is more likely to brin
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462 ty for sanctions violations, co
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479 sailors would be stationed in J
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Page 539 and 540: APPENDIX II BACKGROUND OF COMMISSIO
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Page 551 and 552: 537 June 9, 2016: Public Hearing on
Page 553 and 554: APPENDIX IIIA LIST OF WITNESSES TES
Page 555 and 556: 541 Alphabetical Listing of Panelis
Page 557 and 558: APPENDIX IV LIST OF RESEARCH MATERI
Page 561 and 562: 547 China’s Military Agreements w
Page 563 and 564: APPENDIX V ACRONYMS AND ABBREVIATIO
Page 565 and 566: 551 OPM PBOC PLA PMI PPI PPP PRC QD
Page 567: 553 2016 COMMISSION STAFF MICHAEL R
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