Washington, D.C. — U.S. Senator Marco Rubio (R-FL) spoke during a Congressional-Executive Commission on China (CECC) hearing to discuss how the United States can counter the Chinese Communist Party’s use of economic coercion to silence international critics and spread its malign influence in the U.S. and other countries. During the hearing, Rubio also called out major American corporations for their “cowardly” efforts to lobby against his bipartisan Uyghur Forced Labor Prevention Act, which would prevent the U.S. from importing goods produced wholly or in part with slave labor.
Rubio is ranking member of the CECC and a senior member of the Senate Committee on Foreign Relations.
Bonnie Glaser, Asia Program Director, German Marshall Fund of the United States
Zack Cooper, Senior Fellow, American Enterprise Institute
Jenny Wang, Senior Strategy & Research Associate, Human Rights Foundation
Ho-Fung Hung, Henry M. and Elizabeth P. Wiesenfeld Professor in Political Economy & Chair, Johns Hopkins University
Video of Rubio’s remarks can be found here and a full transcript is below.
Rubio: “Thank you, Mr. Chairman, and thank you all for coming and doing this. It couldn’t be more timely; this is a major issue all across the board.
“My questions are largely geared on something you've all talked about and what the purpose of this hearing is, and that is the ability to leverage economic power — whether that is direct spending, and/or investments that the Chinese Communist Party makes abroad — or access to the marketplace, to get all kinds of actors to bend to their will: international organizations, countries and governments, and corporations.
“It is my belief, and I think well founded, that there are major American corporations who are, either wittingly or unwittingly, lobbyists on behalf of the official narratives and policy preferences of the Communist Party of China. And the reason is pretty simple…they go to them and they say or imply, ‘If you want to continue to have access to our marketplace, if you want to continue to be able to sell things here, which represents X amount of your annual revenue, then we expect you to go back to your, “friends,” in America and get them to back off.’
“And I think that, perhaps, the most stunning example of it has been the cowardly but real effort behind the scenes by several corporations who benefit from slave labor to impede the passage of the Uyghur Forced Labor bill that the Chairman and I and so many others, including in the House, have been working on. And so, with that reality in place, we've got some things that we need to tackle.
“First, Ms. Glaser, I think in your testimony you recommend developing a voluntary code of conduct for businesses regarding China, including a commitment to refrain from self censorship. That's another pretty amazing thing, is how much of the information and news we today consume is self-censored, because they don't want to not be able to distribute that program, that movie, whatever it might be, in a pretty large market.
“How would we hold these companies accountable if they, in fact, signed this code of conduct? Obviously this can't be a legal prescription because that sounds almost like a shaming [and] naming effort. But how would we first get companies to sign on [and], more importantly, who would hold them accountable to violations of it?
Glaser: “Thank you, Senator Rubio. It's very difficult to influence companies' choices, as well as to hold them accountable. If companies don't sign up to a code of conduct, we guess we can name and shame and say they are not interested in adhering to our values and joining with other companies around the United States and the world to defend those democratic values. So yes, it is a mechanism, essentially, to name and shame and to try to provide incentives for companies to get on board.
“In the case of something like slave labor, then I think you have more options. Because if you do good research and you identify that companies are using slave labor, you make that that data public. Then that company is going to be spotlighted in a way that it doesn't want to be, and perhaps people will buy fewer of their goods, people will write articles about them. This is going to be very negative in terms of their bottom line, as well as their reputation.
“It turns out things like movies, obviously, [are] far more difficult because the Chinese have accumulated a great deal of influence, there's a lot of people who go to watch movies in China. So I think, in that regard, you have to start with naming and shaming. And I think by making something like this voluntary, you're more likely to get companies to join on board. At least it's a beginning step. Thank you.”
Rubio: “Thank you. Ms. Wang. You talked about the passage of Senate Bill 413 that establishes the China Censorship Monitor and Action Group, and I'm proud to be the lead Republican cosponsor on this bill; I hope we can pass it swiftly. You recommend increasing transparency among American companies that are significantly exposed to China. Do you think it'll be a good idea to require U.S. listed companies to disclose the existence of Chinese Communist Party Committees and the role they play in the company's corporate governance in their annual reports to the FCC?”
Wang: “Thank you, Senator. Yes, I do believe that American businesses should be disclosing these. I was reading a bit more about Hollywood actually. I read a recent report by PEN America and it stated that a lot of the filmmakers have private meetings with decision makers. So I think when we ask for transparency, we can ask about their market shares, their closed door meetings, and who they are talking with. How can we better understand the situation when we don't have this data and we don't have this information? So yes, I do believe that we should.”
Rubio: “Just to be clear — when you talk about this, is it basically saying that they're going through a pre-censorship review? Like, ‘This is what our movie is about, this is what our script is about. Does any of this give you a problem or a heartburn?’ They're trying to avoid producing something they'd later on have to edit so they can have it distributed in this market.”
Wang: “Correct. According to the report, there is a quote that Xi Jinping says often, he would like films to ‘tell China's story well.’"
Rubio: “Professor Hung, do you believe that Hong Kong should continue to enjoy its reputation as a center for International Finance, given the power the Communist Party of China now exercises over foreign companies [and] last year’s detainment and arrest of business executives? Should they continue to be considered this international hub that’s safe to do business in?”
Hung: “Thank you, Senator Rubio. I think, as I outlined in my testimony, there’s a lot of troubling signs that the nature of the Hong Kong financial center and the institutions that protect its integrity and fairness have been deteriorating. There are some remaining institutions and practices that separate Hong Kong’s financial market from, for example, the Shanghai financial market. But, the direction is really troubling. I think what we can do is to indicate the kinds of measures the U.S. can do. For example, as I recommended, it can be put on the table that at some point the U.S. can ban investing in Chinese government bonds, just like what we have done in regard to the Russian sovereign debt. And also, we can totally decertify Hong Kong and we can stop recognizing Hong Kong as a kind of financial market separate from mainland China with regard to access to U.S. data and many other measures. So these kinds of options need to be put on the table and [we can] let them know that if they go further, then they will be enacted. Thank you.”
Rubio: “My time has expired, but I thank you all for being here. I apologize I didn't get to you, Mr. Cooper. But thank you all for being part of this.”