VIDEO: On Senate Floor, Rubio Discusses Threat Chinese Telecommunications Firms Pose to U.S. National Security
May 15 2018
Washington, D.C. – U.S. Senator Marco Rubio (R-FL) spoke on the Senate floor today to discuss the threat posed by Chinese telecommunications firms like ZTE.
Earlier today, Rubio raised this issue at a Senate Intelligence committee hearing. He also highlighted the issue of China’s bullying of U.S. companies and its efforts to pressure nations in the Western Hemisphere to sever ties with Taiwan in favor of Beijing. Last week, Rubio delivered remarks on the Senate floor and introduced legislation to protect American workers from China’s economic aggression. The bill would prohibit the federal government, or subsidiaries/contractors, from purchasing telecommunications equipment or services from Huawei and ZTE. Rubio also recently wrote an op-ed on his legislation, outlining how to counter these economic tools of aggression used by Beijing.
A rough and partial transcript of Rubio’s remarks is below:
RUBIO: Mr. President, I want to begin, I want read an excerpt of an article that ran on October 8, 2012. It was in The New York Times and the article opened with the following and this is a quote: “A House committee issued a blistering bipartisan report on Monday that accused two of China’s largest telecommunication companies of being arms of the government that had stolen intellectual property from American companies and could potentially spy on Americans. The House Intelligence Committee said after a year-long investigation, it had come to the conclusion that Chinese businesses Huawei Technologies and ZTE Inc. were a national threat because of their attempts to extract sensitive information from American companies and because of their loyalties to the Chinese government.”
The story continued by saying, “allowing the Chinese companies to do business in the United States would give the Chinese government the ability to easily intercept communications and could allow it to start online attacks on critical infrastructure like dams and power grids.” This was from a report, a bipartisan report, in the year 2012 in the month of October by the United States House of Representatives committee on Intelligence. Since then, over and over again, we've heard the threats, we’ve heard the intelligence community in this country clearly define this threat. Virtually every one of the open hearings we’ve had on the Intelligence Committee, I or one of my colleagues had an opportunity to ask every member of the intelligence community, the director of National Intelligence, the director of the CIA, the director of the FBI, the director of Counterintelligence. And every time me or someone else asked, would you use a ZTE Phone, we're still waiting for one of them to say yes. Every single one of them says no.
Which is why I was pleased a couple of weeks ago when the Commerce Department brought sanctions against ZTE. It was not a commerce issue, though it could be. It wasn’t. It was because on top of the spying and everything else, ZTE had helped Iran and North Korea evade international sanctions, and so the penalty was that American companies could no longer sell component pieces to ZTE, which has led them to being on the brink of being out of business. No one should feel sorry for ZTE. This is a company heavily subsidized by the Chinese government, that protects them at home, protects them in China, subsidizes them in China, but then exports them abroad with the hopes that they can help them steal secrets and monitor and be an arm in the tool of intelligence for them. And so no one should feel sorry for them. And so I was surprised to see a couple of days ago as the President tweeted and then there have been some articles about perhaps, maybe these sanctions might be going away in exchange for a deal on agriculture. I want to tell you if that's what happens, the president has gotten terrible advice, and it would be a terrible thing for him to do. I think it would be deeply problematic for the national security of the United States and ultimately for his hopes of rebalancing America's relationship with china geopolitically, economically, commercially, and certainly on security.
The most important thing to understand is that China is carrying out a plan. They’ve put it out there. It's not a conspiracy. It’s there for the world to see. It's called “Made in China, 2025.” “Made in China 2025” is a plan to dominate the ten most important technologies of the 21st century. You may ask, why is that big deal. Countries would want to do that. They have every right to aspire to that, and I agree. If they want to dominate these ten fields, they have every right to invest in it, they have every right to invest in research and innovation, they have every right to do all of that. The problem is that's not how they intend to dominate these fields. The way they intend to dominate the ten top technologies of the 21st century is to steal the intellectual property, basically the ideas, the protected, secret ideas that our companies are innovating that American companies are innovating—that American researchers are innovating—to steal that and use it for themselves. Furthermore, they insist that all of their companies be allowed to sell whatever they want this the United States without any restriction, on the other hand, our companies are restricted. Some of them prohibited from selling to China's 1.2 billion person market, soon to be the largest economy in the world.
So, in essence, they intend to dominate these ten fields by cheating their way into a position of dominance, and that alone is not just an economic issue, this is a national security issue. If you dominate the field of artificial intelligence, if you dominate the field of telecommunications, if you dominate the field of aerospace technology, you will dominate the field of national defense and national security and you will pose a threat to other countries that do not. And we're giving it to them. We are literally allowing them to steal it from us. And they play our system against us. American companies go to China to do business and here's what they tell them. You can only do business here if you partner up with a Chinese company. You have to give them all the secrets to how you do business. By the way, time and again, as soon as the Chinese company can do what the American company can do, the American company gets kicked out and suddenly you have a competitor all over the world that you helped build by giving it to them for free.
Sadly, a lot of American companies play the game because all they care about is being able to sell to China in the short term and have profits without any thought of the long term of national security of the United States. I imagine many of these are the same voices trekking down to the White House to do the deal with ZTE. This is not just a commercial and trade issue. It is much more than just that. Much more than just that and it needs to be taken with the seriousness that it deserves. It's not just about telecommunication. If you have a ZTE phone and they are widespread in the United States and these things are hitting up against our towers, they won’t just use that to pull American phone companies out of business, they can use that to spy on American companies to steal the intellectual property of the United States. It is exactly what they've done, it’s what the report says they do—spying on Americans, stolen intellectual property from American companies.
This trade dispute with China is about a lot more than trade. It's about geopolitical balance. It's about fairness, and this is our last chance to get it right. It is almost too late. It is almost too late, and I'm telling you if we get this wrong, if we back down, when historians write about this period of time in history, they will say Americans gave it over to the Chinese because they were more interested in short-term gain and willing to turn over the future. And we will live in a world where China dominates the top fields, including many that are critical to the defense of our interest and our nation. I would argue that ZTE should not be allowed to sell anything in the United States. I would argue to you that if a technology company from another country is being used by that country not just to spy on government secrets, but to steal the intellectual property of our business, they should be out of business in the United States. And some people would say, well, China is very powerful, they are going to come back and use other means to punish us. Let me tell you this, we have extraordinary leverage over their technology industry.
For example, one of the things ZTE can do is they can buy from a company called Tsinghua Unigroup, which is a government owned company. They can buy components from them. But then we can cut them off as well. In fact, every major telecom in China, Huawei, etc., they all depend on components from the United States. Ultimately, what I would hope to arrive at is a balanced trade situation, a balanced geopolitical -- geo political situation between the United States and China. Right now it is out of balance and when you allow imbalances to persist in international relations, it leads to conflict, wars, and showdowns. That's what imbalances lead to. Imbalance leads the country that is dominant to take advantage of the countries that are not unless you agree to surrender to them. This issue of China and ZTE is a terrible mistake. If the president cuts a deal with ZTE that says pay a couple hundred million dollars in fines and you’re back in business…These sanctions against them are punishment for evading and breaking sanctions. If you basically wave that off in exchange for a deal for agriculture, these farmers have done nothing wrong. These farmers are victims of retribution.
What we should be saying is if you don't lift the tariff on our farmers, we will do the same thing to ZTE, Huawei and others. That's what we should be saying, instead of being tricked into this apparent deal that someone's cooking up over there and giving the president terrible advice, which by the way, I know that's not where his instincts are. Someone is getting to him, I don't know if it's Treasury or where it is but this is the wrong time to cut a deal and this would be a terrible deal.
This is not just about technology. If you don't believe that China uses its leverage, the leverage of economics to reach into your life here in America. People will be asking, what does that have to do with me? What does that have to do with us? Yes, it's a bad thing and we're worried about China in the long term, but what does it have to do with me here at home? Let me tell you. China has no problem using its long arm and economic leverage to interfere in the lives of Americans.
I'll tell you how. About two weeks ago two American airlines, United and American Airlines got a the letter in the mail from the Chinese government telling them that we noticed that your website says Taiwan, it doesn't say Taiwan-China. Unless you change your website, we will punish you and we may take away your routes. They haven't made a decision yet. We’ve reached out to both companies. Let me give you a clue. If they are anything like other American companies that have been threatened, they are going to cave, especially United that has all of these routes. This is an American company headquartered in the United States who will have to change their website because China threatened them. You think that's not bad. I'll tell you something crazy. The GAP, the clothing store, came out with a map of China but didn’t have Taiwan on the t-shirt. China threatened them. Within hours the GAP puts out a tweet, “we're so sorry, we apologize, we didn't mean to offend you, we respect your sovereignty.” Over a t-shirt for god's sake. This is the leverage that they have. You know, there are Hollywood movies that are written in a way to avoid certain topics because otherwise they won't be allowed to play the movie in China. You know there are actors that are not allowed to be in certain movies, that can't get a Hollywood blockbuster movie because you can't distribute it. Like Richard Gere. Can't have Richard Gere movies in China because he's pro-Tibet. This is crazy stuff, but here’s perhaps the most egregious one. Marriott, great American company, hotels, everybody’s stayed at one. Marriott had an employee. A guy lived in America, not even an executive, just a guy, good guy, hardworking guy. He accidentally went online and accidentally, wasn't even on purpose, accidentally liked a tweet about Tibet. And China went crazy. And they threatened Marriott.
Marriott didn't just apologize. They fired him. This is an American. Didn't live in China. He lives in the United States of America. Lost his job for accidentally liking a tweet that china didn't like. This happens over and over again and it isn't noticed. This is how they use economic leverage. This is how they get Panama to tell Taiwan we no longer recognize you diplomatically. We now recognize china. This is how they got the Dominican Republic to do the same thing last week or a couple weeks ago. They won't stop. Paraguay might be next, I hear. This has to stop. We don't want to contain China. We welcome a prosperous China. We want a global partner. Imagine the U.S. and China working together against nuclear proliferation, against radical terrorism, against all the threats of the world. But this is not leading to a partnership. This is leading to a world in which China dominates every key industry, remakes every institution, and America becomes a junior partner the way Vladimir Putin and Russia already are to China. That we cannot accept. But that is where we are headed because administrations both Republicans and Democrat took this threat too lightly, they thought that when China got rich, they would start playing by the rules.
Guess what? They not only not play by the rules, they assume all the benefits of the rules but live by none of the responsibilities. This is our last chance. This administration has been given the historic opportunity at the last chance of getting the balance in this relationship right. And one misstep could blow the whole thing apart and doom generations of Americans to living in a world not one with a powerful China, one with a dominant China and a declining America.
And that may sound like hyperbole but if they win this battle on ZTE, the world will notice and the message it will send is when push comes to shove, this administration is no different than the others when they come under pressure, you can get to the right people with the right friends in corporate America and they will back down. And once that happens, every country in the world will govern themselves accordingly. They will not join us in confronting China's aggression and China's unfairness because in the back of their mind, they will be saying to themselves when push comes to shove, America is going to back down the way they did at ZTE the issue itself is problematic. We can't sell phones in America that are used to spy on our on companies but on a broader scale it sends a message that demoralizes this effort and I think has dramatic consequences.
I hope that the White House and I encourage the president to think very seriously and very carefully. He's in a very strong position right now. I urge him to think very carefully about the next step and to listen to the people and his administration that are talking to him about the ZTE issue for what it is, a national security threat and much bigger than just one company in the telecom industry.