U.S. States and the China Competition SECRETARY POMPEO 20200208

U.S. States and the China Competition    SECRETARY POMPEO  20200208

Thank you, Governor Hogan, Governor Cuomo. Nice to see you.

It’s great to be here with you all. I was watching basketball on my phone on the way in – Auburn 91, LSU 90 – and I – it’s a final in overtime. Yes, exactly. I was reminded – you said I’m the 70th Secretary of State. It always reminds me President Trump is the 45th President of the United States, so there is a lot more turnover in my gig than there is in his. (Laughter.) So it’s good to be with you today.

I do want to thank Governor Hogan and the vice chair, Governor Cuomo, and everyone else here at NGA for hosting me here today.

It’s a hard act to follow, following the President’s State of the Union address the other night. I have no medals of freedom to distribute here today.

Nor am I passing out copies, so you can’t tear them up when I’m done. (Laughter.)

I’ve gotten to know some of you as I’ve traveled throughout the states. I’ve probably traveled inside the country more than many secretaries of state. It’s something they usually don’t do as much. I think it’s important that the American people understand what our diplomats are doing around the world and why we’re doing it.

So I just wanted to mention that if you see me in your state, I’m not lost. Your state has not seceded from the union. I know where I am.

Although I know there are some folks in California who are clamoring for “Calexit,” so President Newsom, I look forward to working with Secretary of State Feinstein when that comes to be. (Laughter.)

I can get away with California jokes. I grew up in southern California. My dad still lives in the same house I grew up in in Orange County. It’s a wonderful place.

Last year, I received an invitation to an event that promised to be, quote, “an occasion for exclusive deal-making.” It said, quote, “the opportunities for mutually beneficial economic development between China and our individual states [are] tremendous,” end of quote.

Deal-making sounds like it might have come from President Trump, but the invitation was actually from a former governor.

I was being invited to the U.S.-China Governors’ Collaboration Summit.

It was an event co-hosted by the National Governors Association and something called the Chinese People’s Association For Friendship and Foreign Countries. Sounds pretty harmless.

What the invitation did not say is that the group – the group I just mentioned – is the public face of the Chinese Communist Party’s official foreign influence agency, the United Front Work Department.

Now, I was lucky. I was familiar with that organization from my time as the director of the Central Intelligence Agency.

But it got me thinking.

How many of you made the link between that group and Chinese Communist Party officials?

What if you made a new friend while you were at that event?

What if your new friend asked you for introductions to other politically connected and powerful people?

What if your new friend offered to invest big money in your state, perhaps in your pension, in industries sensitive to our national security?

These aren’t hypotheticals. These scenarios are all too true, and they impact American foreign policy significantly.

Indeed, last year, a Chinese Government-backed think tank in Beijing produced a report that assessed all 50 of America’s governors on their attitudes towards China. They labeled each of you “friendly,” “hardline,” or “ambiguous.”

I’ll let you decide where you think you belong. Someone in China already has. Many of you, indeed, in that report are referenced by name.

So here’s the lesson: The lesson is that competition with China is not just a federal issue. It’s why I wanted to be here today, Governor Hogan. It’s happening in your states with consequences for our foreign policy, for the citizens that reside in your states, and indeed, for each of you.

And, in fact, whether you are viewed by the CCP as friendly or hardline, know that it’s working you, know that it’s working the team around you.

Competition with China is happening inside of your state, and it affects our capacity to perform America’s vital national security functions.

I want to set the context today for this topic.

At the end of the Cold War, America started to engage with China heavily. It made good sense. We thought that the more we interacted, the more it would become like a liberal democracy, like us here in the United States.

It didn’t happen, and you all know this.

Indeed, under Xi Jinping, the country is moving exactly in the opposite direction – more repression, more unfair competition, more predatory economic practices; indeed, a more aggressive military posture as well.

You should know this doesn’t mean we can’t do business with China. I had an operation when I ran Century International. We had a small office in Shanghai. We can find places to cooperate when our interests converge.

You can see that in the first part of the trade deal that President Trump got done, signed last month.

We’re happy about that. It was the right thing to do. That was indeed a deal that was good for both the United States and China. And these economic ties are powerful. They’re important and good. They’re good for your state; they’re good for America.

Look at the nearly 18 tons of medical supplies the United States just flew to China this past week to help fight the coronavirus. Yesterday we announced more than $100 million in assistance to China and the countries that are affected by that virus.

And on that note, too, I want to take just a moment to note I want to send my condolences to the loved ones of the United States citizen who fell victim to the coronavirus in Wuhan over the last days.

But while there are places we can cooperate, we can’t ignore China’s actions and strategic intentions. If we do, we risk the important components of our relationship that benefit both countries.

The Chinese Government has been methodical in the way it’s analyzed our system, our very open system, one that we’re deeply proud of. It’s assessed our vulnerabilities, and it’s decided to exploit our freedoms to gain advantage over us at the federal level, the state level, and the local level.

Last year, I announced that I would give a series of speeches on China, and this is part of that. It’s the context in which state and local government officials ought to think about the way they lead with respect to our relationship. It’s important. China matters.

It’s been part of my mission at the State Department to mobilize all parts of the United States Government. I was out in Silicon Valley a couple weeks ago to talk to America’s leading tech companies about this very set of issues.

And I need your help, too.

What China does in Topeka and Sacramento reverberates in Washington, in Beijing, and far beyond. Competition with China is happening. It’s happening in your state.

In fact, I would be surprised if most of you in the audience have not been lobbied by the Chinese Communist Party directly.

Chinese Communist Party friendship organizations like the one that I referenced earlier are in Richmond; Minneapolis; Portland; Jupiter, Florida; and many other cities around the country.

But sometimes China’s activities aren’t quite that public, and I want to talk about some of that today. Let me read you an excerpt of a letter from a Chinese diplomat. It was China’s Consul General in New York sent a letter last month to the speaker of one of your state legislatures.

Here’s what the letter said in part. It said, quote, “As we all know, Taiwan is part of China… avoid engaging in any official contact with Taiwan, including sending congratulatory messages to the electeds, introducing bills and proclamations for the election, sending officials and representatives to attend the inauguration ceremony, and inviting officials in Taiwan to visit the United States.” End of quote from the letter.

Think about that. You had a diplomat from China assigned here to the United States, a representative of the Chinese Communist Party in New York City, sending an official letter urging that an American elected official shouldn’t exercise his right to freedom of speech.

Let that sink in for just a minute.

And this isn’t a one-off event. It’s happening all across the country.

Chinese consulates in New York, in Illinois, in Texas, and two in California, bound by the diplomatic responsibilities and rights of the Vienna Convention, are very politically active at the state level, as is the embassy right here in Washington, D.C.

Maybe some of you have heard about the time when the Chinese consulate paid the UC-San Diego students to protest the Dalai Lama.

Or last August, when former governor Phil Bryant of Mississippi received a letter from a diplomat in the consul’s office in Houston, threatening to cancel a Chinese investment if the governor chose to travel to Taiwan. Phil went anyway.

Last year, a high school – a high school, a high school in Chicago – disinvited a Taiwanese representative to serve on a climate panel after Chinese pressure.

It’s one thing to pressure the Secretary of State of the United States of America. It seems quite something else to go after a high school principal. It shows depth. It shows systemization. It shows intent.

Chinese Communist Party officials, too, are cultivating relationships with county school board members and local politicians – often through what are known as sister cities programs.

Look, this Chinese competition is something you all know. It sits in the back of your mind. But you have many duties and you are busy people. But this competition is well underway. And while these might seem like local matters to some, the cumulative effect is of enormous national importance and international significance.

Of course, too, our public educational institutions are another arena of competition with China.

I know, governors, you don’t run these institutions on a day-to-day basis, but you often have impact on the people that do. The FBI director and I think the Attorney General, too, talked yesterday about something called the “Thousand Talents Plan.” It’s a plan to recruit scientists and professors to transfer the know-how we have here to China in exchange for enormous paydays.

The program has probably targeted campuses in your state. Indeed, the Department of Justice has indicted professors in my home state at the University of Kansas and at Virginia Tech and at Harvard.

A Texas A&M investigation reportedly discovered more than 100 academics participating in Chinese talent recruitment plans. Only five of them had declared that they were participating in this program.

And goodness knows what else we have not discovered.

There are indeed very credible reports of Chinese Government officials pressuring Chinese students – students studying right here in the United States of America – to monitor fellow Chinese students and to report back to Beijing.

One very prominent pro-democracy Chinese student on a college campus in the Northeast last year received death threats – death threats for exercising his right to free speech. The FBI became involved.

Make no mistake about it: We want talented, young Chinese students to come study in the United States of America. I see it at Wichita State University. These are wonderful young people. We ought to encourage them to be here. But they shouldn’t have to fear the long arm of Beijing, which often reaches out via groups like the Chinese Students and Scholars Association.

Look, that’s just one of many campus groups directly influenced by the Chinese Communist Party and its representatives right here in the United States.

Many of you are familiar with Confucius Institutes. Confucius Institutes purport to have the sole purpose of teaching Mandarin language skills and Chinese culture. A bipartisan Senate committee found last year in 2019 that the Chinese Communist Party controls nearly every aspect of the Confucius Institutes’ activities here in the United States.

Over the past few months, the University of Missouri, the University of Kansas, the University of Maryland have independently decided to close down their Confucius Institutes after conducting their own reviews, and schools in 22 other states are doing or have already done the same.

Sadly, China’s propaganda campaign starts even earlier than college. China has targeted K through 12 schools through its “Confucius Classrooms,” the CCP’s program to influence kids at elementary, middle, and high schools around the world.

Do you know that we have no ability to establish similar programs in China? I’m sure that doesn’t surprise you. President Trump has talked about reciprocity in trade. We should have reciprocity in all things. Today they have free rein in our system, and we’re completely shut out from theirs.

As of 2017, there were 519 of these classrooms in the United States. Beijing knows that today’s kids are tomorrow’s leaders.

The China competition is happening. It’s happening in your states, and it’s a competition that goes to the very basic freedoms that every one of us values.

And when it comes to doing business, I’m asking you to adopt a cautious mindset. In the words of President Reagan, when you’re approached for an introduction or a connection to a deal, trust but verify.

I know you all have power over pension funds or the people that run them. As of its latest public filing, the Florida Retirement System is invested in a company that in turn is invested in surveillance gear that the Chinese Communist Party uses to track more than 1 million Muslim minorities. California’s pension fund, the largest public pension fund in the country, is invested in companies that supply the People’s Liberation Army that puts our soldiers, sailors, airmen, and Marines at risk.

And it is the case for many Chinese companies, too – no Sarbanes-Oxley. Their books are not wide open, so it’s difficult to know if the transaction that’s being engaged in is transparent and fair and follows the rule of law.

Now, all of these things may well be legal. But the question is: Do they demonstrate good judgment and preserve America’s national security?

I want to urge vigilance on the local level, too. In the District of Columbia, there have been concerns raised that the new Metro cards manufactured by China could be vulnerable to cyber threats.

So again, it’s worth trusting but verifying. There are federal officials prepared to help you work your way through these challenges when they arise. Don’t make separate individual deals and agreements with China that undermine our national policy. I know none of you would do so intentionally. Let us help you make sure we’re getting it right.

We’re here to help. The Trump administration wants to help. There are so many things we have already done.

Last year, we issued a letter to state governments. It reaffirmed that Taiwan remains a key business partner and a friend in every other way.

We have strengthened the review process for Chinese companies that are investing in your states.

We have revoked visas for so-called “research scholars” who abused their privileges by teaching in Confucius Classrooms, and made sure that they departed the United States.

We’ve banned scientists from the Department of Energy, which overseas America’s 17 largest national – excuse me, nuke labs, including our nuclear research facility in New Mexico. We did so because they were participating in Chinese talent recruitment programs.

We have directed two Chinese propaganda outlets, the Chinese Global Television Network and Xinhua News Agency, to register as foreign agents.

And we at the State Department have started to require Chinese diplomats to apply – comply with the same rules we comply with when we’re in China. Chinese diplomats now must notify the State Department in advance of official meetings with state and local officials.

They must declare their official visits to U.S. educational and research institutions as well.

This is just fairness, reciprocity, basic common sense. This is not an onerous restriction to put on China.

Look, I know it’s 2:30 on a Saturday afternoon. There are lots of good things we could do. I hope you will all take on board what I’ve said today.

You all have important missions leading your states. These are complex, difficult jobs. You have the task to create jobs and opportunity in your state for your people, attract human capital, investment that undergirds our prosperity.

It’s a tough job, and you get curveballs every day from all across the place.

But don’t lose sight of the competition from China that’s already present in your state. Let’s all rise to the occasion and protect our security, our economy; indeed, all that we hold dear, all of those freedoms.

It’s what leaders must do.

It’s what we do as Americans.

I hope God will bless each and every one of you, each of your states, and the United States of America.

Thank you for letting me be with you here this afternoon.