VIDEO and RUSH TRANSCRIPT: U.S. Rep. Ritchie Torres Participates in Select Committee Hearing Examining CCP Risks to American Businesses, Investors

WASHINGTON, D.C. – U.S. Representative Ritchie Torres (NY-15) tonight participated in the fourth hearing of the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party (CCP), which focused on the risks American businesses and investors face in the People’s Republic of China (PRC) and the ways in which the CCP forces technology transfer, coerces foreign companies, and threatens foreign investors.

The hearing also explored the different vectors of risk, including recent evolutions in PRC law, the capricious enforcement of those laws, and physical threats to U.S. businesses in the PRC. Testimony was provided by three witnesses: Ms. Piper Lounsbury, Chief Research and Development Officer, Strategy Risks; Mr. Shehzad Qazi, Chief Operating Officer and Managing Director, China Beige Book International; Mr. Desmond Shum, Author, Red Roulette: An Insider’s Story of Wealth, Power, Corruption and Vengeance in Today’s China.

VIDEO of Rep. Torres’s five minutes of questioning can be found here.

VIDEO of the full hearing can be found here.

A RUSH TRANSCRIPT of Rep. Torres’s remarks and questioning is below, as delivered:

REP. TORRES: Thank you, Mr. Chair. The business community is confronting a China radically reshaped in the image of Xi Jinping. What distinguishes Xi from his predecessors is an unyielding ideological insistence on prioritizing politics over economics and consolidating control at the expense of growth. Exhibit A, China’s draconian zero COVID policy led to a severe and sustained slowdown in the Chinese economy. A slowdown which China has not yet recovered, and from which it might never fully recover. The weight of debt and demography has come crashing down on China at the very moment it can least afford. Exhibit B, China’s ill-conceived declaration of a no limits partnership with Russia on the eve of the war in Ukraine has reshaped the relationship with Europe to the detriment of China and to the benefit of the United States. Exhibit C, China’s systematic conversion of businesses since lifting zero COVID as well as the enhancement of the anti-espionage law continues to raise ever-deepening doubts about the safety of doing business in China. Xi Jinping is China’s most powerful leader since Mao Zedong. And yet he seems to be using his consolidated power to catastrophically mismanage the economics and geopolitics of his own country. The CCP is not merely malevolent, it is increasingly incompetent. Mr. Shum, is that a fair assessment or do you see it differently?

MR. DESMOND SHUM, Author, Red Roulette: An Insider’s Story of Wealth, Power, Corruption and
Vengeance in Today’s China: It is absolutely the assessment. Most of the Chinese, a billion four Chinese would agree with you. The issue is the way the Xi Jinping calculates and the way people like him calculates. They think all these issues are short-term sacrifice they’re willing to do. They’re willing to exchange because in their view, they have another vision, grand vision to be realized at these costs somewhere down the road.

REP. TORRES: The strategic competition between the United States and China contains a paradox. The great competitive advantage of the United States is the rule of law. The great competitive advantage of China paradoxically, is the opposite. The CCP’s lawlessness creates the economic equivalent of asymmetric warfare. China benefits from a rules-based international order without following the rules. It benefits from an open global market without opening its own domestic market and when it opens the market. It does so deceptively to expropriate the intellectual property and technology of others. So, Ms. Lounsbury, how will we win a competition in which we follow the rules and the other side only disregards them?

MS. PIPER LOUNSBURY, Chief Research and Development Officer, Strategy Risks: Well, I did outline a few ideas in my written testimony, and you eloquently just stated an accurate characterization of the asymmetry. I don’t know what to do other than try to find some incentives for our own companies to really allow for the market to change on its own through perhaps some pricing rebates, some tech tax credits, there’s got to be other ways to incentivize our own companies to make that decision to you know, add some supply chain or resilience and or, you know, re-shore to the degree that will make that asymmetry less and less palpable. I also just think that in general, the data monopoly that the party has right now is something that’s got to get more attention. I think you had Dr. Eric Schmidt here last month. He made some great comments. But I would, I would urge you to look at how we are managing our data, and what types of silos we can create to lessen that asymmetry that the Chinese have on our own data.

REP. TORRES: Humans are creatures of motivated reasoning. It’s human nature to believe what we want to believe, it’s human nature to reason from our emotions and from our economic self-interest, and why when I see leaders of Wall Street, or Silicon Valley or corporate America, accuse us of overreacting to the coercive conduct of the CCP, what I often see is motivated reasoning at work. And so, Mr. Qazi, to what extent does the American business community, which is heavily invested in China, remain in denial about the reality of the CCP as a strategic challenge and the reality of China as an increasingly unsafe place to do business?

MR. SHEHZAD QAZI, Chief Operating Officer and Managing Director, China Beige Book International: You know, the business community has spent a lot has spent a lot of time coming back to Congress and complaining about as a matter of fact, the very same issues that you highlighted up until when Congress and other members in DC said, look, China’s actually a coercive of power. Now they’re starting to push back. The short answer is they are very much in denial because there is the idea is there’s money to be made. And there are ways for us to you know, perhaps take a stricter line on China and certain things, especially things that affect us, like IP theft and all the rest, but we don’t have to get up and leave right away. There’s business we got money to be made.

REP. TORRES: Recently, Elon said that he was going to uphold socialist values. So, he’s a free speech absolutist except in China. So, thank you.

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