[EXTERNAL] VPOTUS In-Town Pool Report #2

From: Debra Saunders
Date: October 4, 2018 at 10:59:39 AM EDT
Subject: [EXTERNAL] VPOTUS In-Town Pool Report #2

Embargoed until delivery:

Thank you,Ken, for that kind introduction.To the Members of the Board of
Trustees,toDr. Michael Pillsbury,to our distinguished guests,and to all of you
who, true to your mission, “thinkabout the future in unconventional ways”– it’s
anhonor tobe backat the HudsonInstitute.

For more than half a century,this Institute has dedicateditself to “advancing
global security, prosperity, and freedom.”And while Hudson’s hometowns have
changed over the years, one thing hasheld constant: Youhave always advancedthat
vital truth,that American leadership lightsthe way.

And today, I bring greetingsfroma champion of American leadership, at home and
abroad – the 45th President of the United States of America, President Donald

From early in this administration, President Trump hasmadeourrelationship with
ChinaandPresident Xia priority.On [x-apple-data-detectors://2]April 6th
[x-apple-data-detectors://2]of lastyear, President Trump welcomed President Xi
to Mar-A-Lago.On [x-apple-data-detectors://3]November 8th
[x-apple-data-detectors://3]of last year, President Trump traveled to Beijing,
where China’s leader welcomed him warmly.

Over the course of the past 2 years, our President has forged a strong personal
relationship with the president ofthe People’s Republic of China, and they’ve
worked closely on issues of common interest, most importantly the
denuclearization of the Korean Peninsula…

But I come before you today because the American people deserve to know… as we
speak, Beijing is employing a whole-of-government approach, using political,
economic,andmilitarytools,as well as propaganda,to advance its influence and
benefit its interests in the United States.

China is also applying this powerin more proactive ways than ever before, to
exert influence and interfere in the domestic policy and politics of our

Under our administration, we’ve taken decisive action torespond toChinawith
American leadership, applyingthe principles, and the policies, long advocatedin
these halls.

In the“National Security Strategy” thatPresident Trumpreleased last December,he
describeda newera of “great power competition.” Foreign nations have begun to
“reassert their influence regionally and globally,”and they are “contesting
[America’s] geopolitical advantages and trying to change the international order
in their favor.”

In this strategy,President Trump made clear thatthe United States ofAmerica has
adopted a newapproachto China.Weseek a relationship groundedin fairness,
reciprocity, and respectfor sovereignty, and we have taken strongand swiftaction
to achieve that goal.

AsthePresidentsaidlast year on his visit toChina,“we have an opportunityto
strengthen the relationship between our two countries and improve the lives of
our citizens.”Ourvisionof the futureis built on the best parts of our past,when
America and China reached out to one another in a spirit of openness and

Whenour young nationwent searchingin the wake of the Revolutionary Warfor new
marketsfor our exports, the Chinese peoplewelcomedAmericanstradersladen with
ginseng and fur…

WhenChina suffered through indignities and exploitation during her so-called
“Century of Humiliation,”Americarefused to join in,andadvocated the “Open Door”
policy, so that we could havefreertrade with China, and preserve their

When American missionaries brought the good news to China’s shores,they were
moved bytherichcultureof an ancient but vibrant people,andnot only did they
spread faith;they alsofoundedsome of China’s firstand finestuniversities…

When the Second World War arose, westood together asallies in the fightagainst
imperialism…And inthat war’s aftermath,Americaensured thatChina becamea Charter
member of the United Nations, andagreatshaper of the post-war world.

But soon after it took power in 1949, the Chinese Communist Party began topursue
authoritarian expansionism. Only five years after our nations had foughttogether
, we foughteach other, on the mountains and in the valleys of the Korean
Peninsula. My own father saw combat on those frontlines of freedom.

Not eventhebrutalKorean Warcould diminish our mutual desire to restore the ties
that for so long bound ustogether.China’sestrangement from the United States
endedin 1972, andsoon after,were-established diplomatic relations,began to open
our economies to one another, andAmerican universities began training a new
generation of Chinese engineers, business leaders, scholars, and officials.

After the fall of the Soviet Union,weassumedthat afreeChina was inevitable.Heady
with optimism, at the turn of the 21st Century,America agreed togiveBeijingopen
access to our economy, andbring China into the World Trade Organization.

Previous administrationsmade this choice in the hopethatfreedom in China would
expand inallforms– not just economically, but politically, with a newfound
respect forclassical liberalprinciples, private property, religious freedom, and
theentire family ofhuman rights…butthat hope has gone unfulfilled.

The dream of freedomremains distantfor the Chinese people. Andwhile Beijingstill
pays lip service to“reform and opening,” Dung SHEOW-ping’s famous policy now
rings hollow.

Over the past 17 years,China’sGDP has grown 9-fold;it has become the
second-largest economy in the world. Much of this success was driven by American
investment in China.AndtheChinese Communist Party hasalso used an arsenal of
policiesinconsistentwithfree and fair trade,includingtariffs, quotas,currency
manipulation,forced technology transfer,intellectual property theft,and
industrialsubsidies doled out like candy, to name a few.These policies have
built Beijing’smanufacturingbase,at the expense ofitscompetitors– especially

China’s actions havecontributedtoa trade deficitwith the United Statesthat last
year ran to$375 billion – nearly half of ourglobaltrade deficit.As President
Trump said just this week, “we rebuilt China”over the last 25 years.

Now, through the “Made in China 2025” plan, the Communist Party has set its
sights on controlling 90% of the world’s most advanced industries, including
robotics, biotechnology, and artificial intelligence.Towinthe commanding heights
of the 21st Century economy, Beijing has directed its bureaucrats and businesses
to obtain American intellectual property – the foundation of oureconomic
leadership– by any means necessary.

Beijing now requiresmanyAmerican businesses to hand over their trade secrets as
the cost of doing business in China. It also coordinates and sponsors the
acquisition of American firms to gain ownership of their creations. Worst of
all, Chinese security agencies have masterminded the wholesale theft of American
technology – including cutting-edge military blueprints.

And using that stolen technology, the Chinese Communist Party is turning
plowshares into swordson a massive scale…

Chinanowspendsas much onits militaryasthe rest of Asia combined, andBeijing has
prioritized capabilities to erode America’s military advantages – on land, at
sea, in the air, and in space. China wants nothing less than to push the United
States of America from the Western Pacific andattempt toprevent us from coming
to the aid of our allies.

Beijing is alsousing itspowerlike never before. Chinese ships routinely patrol
around theSenkakuIslands, which are administered by Japan. And while China’s
leader stood in the Rose Garden of the White House in 2015 and said that his
country had “no intention to militarize the South China Sea,” today, Beijing has
deployed advanced anti-ship and anti-air missiles atop an archipelago of
military bases constructed on artificial islands.

China’s aggression was on display this week, when a Chinese naval vessel came
within 45 yards of the USS Decatur as it conducted freedom-of-navigation
operations in the South China Sea, forcing ourship to quickly maneuver to avoid
collision. Despite such reckless harassment, the United States Navy will
continue to fly, sail and operate wherever international law allows and our
national interests demand. We will not be intimidated; we will not stand down.

America hadhoped that economic liberalization would bring China into greater
partnership with us and with the world. Instead, China has chosen economic
aggression, which has in turnemboldened itsgrowing military.

Nor, as we hoped,has Beijing moved toward greater freedom for its people.For a
time, Beijinginched toward greaterliberty and respect for human rights, butin
recent years, it has taken a sharpU-turn towardcontrol andoppression.

Today, China has built an unparalleled surveillance state, and it’s growing more
expansive and intrusive – often with the help of U.S. technology. The “Great
Firewallof China”likewise grows higher, drastically restrictingthe free flow of
information to the Chinese people.And by 2020, China’s rulersaimtoimplement an
Orwellian systempremised on controllingvirtuallyeveryfacetof human life – the
so-called“social credit score.”In the words of that program’s official
blueprint,itwill “allow the trustworthy to roam everywhere under heaven, while
making it hard for the discredited to take a single step.”

And when it comes toreligious freedom, a new wave of persecution is crashing
down on Chinese Christians, Buddhists, and Muslims…

Last month, Beijing shut down one of China’s largest underground churches.
Across the country, authorities are tearing down crosses, burning bibles, and
imprisoning believers. And Beijing has now reached a deal with the Vatican that
gives the avowedly atheist CommunistParty a direct role in appointing Catholic
bishops. For China’s Christians, these are desperate times.

Beijing is also cracking down on Buddhism.Over the past decade, more than 150
Tibetan Buddhist monks have lit themselves on fire to protest China’s repression
of their beliefs and culture. And in Xinjiang, the Communist Party has
imprisoned as many as one million Muslim WEE-gursin government camps where they
endure around-the-clock brainwashing. Survivors of the camps have described
their experiences as a deliberate attempt by Beijing to strangle WEE-gurculture
andstamp outthe Muslim faith.

But as history attests, a country that oppresses its own people rarely stops
there. Beijingalsoaims toextend its reach across the wider world.As Hudson’s own
Dr. Michael Pillsbury has said, “China has opposed the actions and goals of the
U.S. government. Indeed,China isbuilding its own relationships with America’s
allies and enemies that contradict any peaceful or productive intentions of

China uses so-called“debt diplomacy”to expand its influence.Today,that countryis
offeringhundreds of billions of dollars ininfrastructureloanstogovernmentsfrom
Asia to AfricatoEuropeto even Latin America.Yet the terms of those loans are
opaque at best,andthe benefits flow overwhelmingly to Beijing.

Just ask Sri Lanka, which took on massive debt to let Chinese state companies
build a portwith questionable commercial value. Two years ago,that countrycould
no longer afford its payments – soBeijing pressuredSri Lankato deliverthe new
port directly into Chinese hands.It may soon become a forward military basefor
China’s growing blue-water navy.

Within our own hemisphere,Beijing hasextendeda lifeline to thecorrupt and
incompetentMaduro regime in Venezuela, pledging $5 billioninquestionableloans
that can be repaid with oil.China is also that country’s single largest
creditor, saddling the Venezuelan people with more than $50 billion in debt.
Beijing isalsocorruptingsomenations’ politics by providing direct support to
parties andcandidates who promisetoaccommodateChina’sstrategic objectives…

Andsince last year,theChineseCommunist Partyhasconvinced3LatinAmericannations to
sever ties withTaipeiand recognizeBeijing.These actions threaten the stability
of the Taiwan Strait – and theUnited Statesof Americacondemnsthese actions. And
while our administration will continue torespectourOne China Policy, asreflected
in the three joint communiques and the Taiwan Relations Act,America will always
believeTaiwan’s embrace of democracy shows a better path forallthe Chinese

These are only a few of the ways thatChina has sought to advance its strategic
interests across the world, with growing intensity and sophistication.Yet
previousadministrations all but ignored China’sactions– and in many cases,they
abettedthem. But those days are over.

Under President Trump’s leadership, the United States of America hasbeen
defending our interestswith renewed American strength…

We’ve been making the strongest military in the history of the world stronger
still.Earlier this year, the President signed into law the largest increase in
our national defense since thedays of Ronald Reagan – $716 billion to extend our
military dominance in every domain.

We’re modernizing our nuclear arsenal,we’refielding anddevelopingnew
cutting-edge fightersand bombers,we’re building a newgeneration of aircraft
carriers and warships, and we’re investing asnever before in our Armed Forces.
This includesinitiating the process to establishtheUnited States Space Forceto
ensureour continueddominance in space,andauthorizingincreased capability in the
cyber worldto build deterrence against our adversaries.

Andat President Trump’s direction, we’realsoimplementing tariffs on $250 billion
in Chinese goods,with the highest tariffsspecifically targetingthe advanced
industries that Beijing is trying to capture and control.Andthe President has
also made clear that we’ll levy even more tariffs, with the possibility of
substantially more than doubling that number,unlessa fair and reciprocal deal is

Our actionshave had a major impact. China’slargest stock exchangefell by 25% in
the first 9 months of this year,in large partbecause our administration has
stood up to Beijing’s trade practices.

As President Trump has made clear,we don’twant China’s markets to suffer. In
fact, we want them to thrive.But the United StateswantsBeijing to pursue trade
policies that are free, fair, and reciprocal.

Sadly, China’s rulers have refused to take that path– so far.The American people
deserve to know that,in response to the strong stand that President Trump has
taken,Beijing is pursuing a comprehensive and coordinated campaign to undermine
support for the President, our agenda, and ournation’smost cherished ideals.

I want to tell you today what we know about China’s actions – some of which
we’ve gleaned from intelligenceassessments, some of whicharepublicly available.
But all of which is fact.

As I said before,Beijing is employing a whole-of-government approach to advance
its influence and benefit its interests.It’semploying thispower in more
proactive and coercive waysto interferein the domesticpolicies andpolitics of
the United States.

The Chinese Communist Party is rewarding or coercing American businesses, movie
studios, universities, think tanks, scholars, journalists, and local, state, and
federal officials.

Worst of all,China has initiated an unprecedented effort to influence American
public opinion, the 2018 elections,andthe environment leading into the 2020
presidential elections…

To put it bluntly,President Trump’s leadership is working;andChina wants a

China is meddling in America’s democracy.As President Trump said just last week,
we have“found that China has been attempting to interfere in our upcoming 2018
[midterm] election[s].”

Our intelligence communitysaysthat“China is targeting U.S. state and local
governments and officials to exploit any divisions between federal and local
levels on policy. It’s using wedge issues, like trade tariffs, to advance
Beijing’s political influence.”

In June, Beijing circulated a sensitive document, entitled “Propaganda and
Censorship Notice,” that laid out its strategy. It states that Chinamust “strike
accurately and carefully, splittingapart different domestic groups” in the
United States.

To that end, Beijing has mobilized covert actors, front groups, and propaganda
outlets to shift Americans’ perception of Chinese policies.As a senior career
member of our intelligence community recently told me,what the Russians are
doingpalesin comparison to what China is doingacross this country.

Senior Chinese officials havealsotried to influence business leaders to condemn
our trade actions, leveraging their desire to maintain their operations in
China. In one recent example, they threatened to deny a business license for a
major U.S.corporationifit refused tospeak out against our administration’s

And when it comes to influencing the midterms, you need only look at Beijing’s
tariffs in response to ours. They specifically targeted industries and states
that would play an important role in the 2018 election. By one estimate, more
than 80% of U.S. counties targeted by China voted for President Trump in 2016;
now China wants to turn these votersagainst our administration.

And China is also directly appealing to the American voter. Last week, the
Chinese government paid to have a multipage supplement inserted into the Des
Moines Register – the paper of record in the home state of our Ambassador to
China, and a pivotal state in 2018. The supplement, designed to look like news
articles, cast our trade policies as reckless and harmful to Iowans.

Fortunately, Americans aren’t buying it. For example: American farmers are
standing with this President and are seeing real results from the strong stands
that he’s taken, including this week’s U.S.-Mexico-Canada Agreement, where we’ve
substantially opened North American markets to U.S. products – a great win for
American farmers and manufacturers.

But China’s actions aren’t focused solely oninfluencingour policies and politics
.Beijing is also taking steps to exploit its economic leverage,and the allure of
China’s large domestic market,to advanceits influenceover American corporations.

BeijingnowrequiresAmericanjoint venturesthat operate in China to establish
“party organizations” within theircompany, givingthe Communist Party a voice –
and perhaps a veto – in hiring and investment decisions.

Chinese authorities have also threatened U.S. companies that depict Taiwan as a
distinct geographic entity, or that stray from Chinese policy on Tibet. Beijing
compelled Delta Airlines to publicly apologize for not calling Taiwan a
“provinceof China” on its website. It also pressured Marriott to fire a U.S.
employee who liked a tweet about Tibet.

Beijingroutinelydemands that Hollywood portray China in a strictly positive
light, and it punishes studios and producers that don’t. Beijing’s censors are
quick to edit or outlaw movies that criticize China, even in minor ways. “World
War Z [x-apple-data-detectors://14]” had to cut the script’s mention of a virus
originating in China. “Red Dawn [x-apple-data-detectors://15]” was digitally
edited to make the villains North Korean, not Chinese.

Beyond business, the Chinese Communist Party is spending billions of dollars on
propaganda outlets in the United States, as well asother countries.

China Radio InternationalnowbroadcastsBeijing-friendlyprogrammingonover 30U.S.
outlets, many in major American cities.The ChinaGlobal Television Network
reaches more than 75 million Americans– and it gets its marching orders directly
from itsCommunistPartymasters. As China’s top leader put it during a visit to
the network’sheadquarters,“The media run by the Party and the government are
propaganda fronts and must have the Party as their surname.”

That’s why, last month,the Department of Justiceorderedthat networkto register
as a foreign agent.

The Communist Party hasalsothreatened and detained the Chinese family members of
American journalists who pry too deep.And it hasblocked the websites of U.S.
media organizations and made it harder for our journalists to get visas. This
happened afterthe New York Timespublished investigative reports about the wealth
of some of China’s leaders.

Butthemedia isn’t the only place where the Chinese Communist Partyseeks tofoster
a culture of censorship.The same is true of academia.

Look no further than the Chinese Students and Scholars Associations,of which
there aremore than 150 branches acrossAmerican campuses.Thesegroupshelp organize
social eventsforsome ofthe more than 430,000 Chinesenationals studying in the
United States;they also alert Chinese consulates and embassies whenChinese
students, andAmericanschools, stray from the CommunistPartyline.

At the University of Maryland, a Chinese student recentlyspokeat hergraduation
ceremonyofwhat she called the“fresh air of free speech”in America.TheCommunist
Party’s official newspaperswiftlychastised her, she became the victim of a
firestorm of criticismon China’s tightly-controlled social media,and her family
back homewasharassed.As for theuniversityitself, its exchange program with China
– one of the nation’s most extensive – suddenly turned from a flood to a

China exerts academic pressure in other ways,too.Beijingprovides generous
fundingto universities, think tanks, and scholars,with theunderstandingthat they
willavoid ideas that the Communist Party finds dangerous or offensive. China
experts in particular know that their visas will be delayed or denied if their
research contradicts Beijing’s talking points.

And even scholars and groups who avoid Chinese funding are targeted by that
country,as the Hudson Institute found out firsthand. After youoffered tohost a
speaker Beijing didn’t like, your website suffered a majorcyber-attack,
originating from Shanghai.You know better than most that theChinese Communist
Party istrying toundermineacademic freedomand the freedom of speechin America

Theseand otheractions,takenas a whole, constitute anintensifyingefforttoshift
American public opinion and public policyaway from the America First leadership
of PresidentDonald Trump.ButourmessagetoChina’s rulersis this:This President
will not back down – and the American people will not be swayed.We will continue
to stand strong for our security and our economy,even as we hope for improved
relations withBeijing.

Our administrationwillcontinue toact decisively to protectAmerican interests,
American jobs, and American security.

As we rebuild our military, we will continue to assert American interests across
the Indo-Pacific.

As we respond to China’s trade practices, wewill continue todemandaneconomic
relationshipwith Chinathat is free and fair and reciprocal, demanding that
Beijingbreak down itstradebarriers,fulfill itstrade obligations, and fully open
its economy, just as we have opened ours.

We will continue to take action until Beijing endsthetheft of American
intellectual property, and stops thepredatorypractice of forced technology

And toadvance our vision of a free and open Indo-Pacific, we’rebuildingnew and
strongerbonds with nationsthat share our values,across the region– from India to
Samoa. Our relationships willflow from a spirit ofrespect, built onpartnership,
not domination.

We’reforgingnew trade deals, on a bilateral basis, just aslast week, President
Trumpsigned an improvedtrade deal with South Korea, andwe will soon begin
negotiating ahistoricbilateral free-trade deal with Japan.

And we’re streamlining international development and finance programs, giving
foreign nations a just and transparent alternative to China’s debt-trap
diplomacy. To that end, President Trumpwillsign the BUILD Act into law in the
days ahead.

Andnext month, it will be my privilegetorepresent the United States inSingapore
and Papua New Guinea, at ASEAN and APEC.There, wewillunveil new measures and
programs to support a free and open Indo-Pacific – andon behalf of the
President,I will deliver the message that America’s commitment to the
Indo-Pacifichas never been stronger.

To protect our interests here at home,we’vestrengthenedCFIUS –the Committeeon
Foreign Investment in the United States–heighteningour scrutiny of Chinese
investment in America, to protect our national security from Beijing’s predatory

And when it comes to Beijing’s malign influence and interference in American
politics and policy, we willcontinue toexpose it, no matter the form it takes.
And we will work with leaders at every level of society todefend ournational
interests and most cherished ideals. The American peoplewillplay the decisive
role– and in fact, they already are…

As we gather here, anew consensus is rising across America…

Morebusiness leadersarethinkingbeyond the next quarter, and thinkingtwice before
diving into the Chinese market if it means turning over their intellectual
propertyor abetting Beijing’soppression.But more must follow suit.For example,
Google shouldimmediately end development ofthe “Dragonfly” app that will
strengthen Communist Partycensorshipand compromise the privacy of Chinese

More journalists arereportingthe truth without fear or favor, and diggingdeep to
find where China is interfering in our society, and why – and we hopethat more
American, and global, news organizationswill join in thiseffort.

More scholars arespeakingout forcefullyanddefending academic freedom, andmoreu
niversities and think tanksaremusteringthe courage toturn awayBeijing’seasy
money,recognizing that every dollar comes with a corresponding demand.We’re
confident that more will join their ranks.

And across the nation,the American peopleare growing in vigilance, with a
newfound appreciation forour administration’s actionsto re-set America’s
economic and strategic relationship with China, to finally put America First.

And under President Trump’s leadership, America will stay the course.China
should know that the American people and their elected representatives in both
parties are resolved.

AsourNational Security Strategy states: “Competition does not always mean
hostility.”As President Trump has made clear, we want a constructive
relationshipwith Beijing,where our prosperity and security growtogether, not
apart.WhileBeijinghas beenmovingfurther away from this vision,China’s rulers can
still change course, and return tothespiritof “reform and opening” and greater
freedom.TheAmerican people want nothing more; the Chinese people deserve nothing

The great Chinese story-teller LuShwunoftenlamented that his country “has either
looked down at foreigners as brutes, or up to them as saints, but never as
equals.”Today, America is reaching out our hand to China; we hope that Beijing
will soon reach back– with deeds, not words,andwith renewed respect for America.
But we will notrelentuntil our relationship with China isgrounded infairness,
reciprocity, and respectfor sovereignty.

There is an ancient Chinese proverb that tells us that“men see only thepresent,
butheaven sees the future.”As we go forward, let uspursueafutureof peace and
prosperitywithresolve andfaith…

Faith in President Trump’s leadership, and the relationship that he has forged
with China’s president…

Faith in theenduring friendship between the American people and the Chinese

Faith that heaven sees the future – and by God’s grace,America and China will
meetthatfuture together.

Thank you. God bless you. And God bless the United States of America.

Debra J. SaundersWhite House correspondentLas Vegas Review-Journal529 14th
Street NW Suite 994Washington, D.C. 20045(202)662-7391(510)332-5870

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