U.S. Defense Bill Seeks to Counter China

Beijing’s increased military activity in South China Sea, pursuit of U.S. technology among issues
By Kate O’Keeffe and Siobhan Hughes

Republican Rep. Robert Pittenger of North Carolina has helped lead an effort to tighten U.S. national-security reviews of Chinese business deals. 

Congress is preparing to enact a defense-policy bill that some lawmakers say is tougher on China than any in history, as a bipartisan movement to confront Beijing gathers steam.
The measure, an annual policy bill that will authorize $716 billion in total defense spending for the coming fiscal year, seeks to counter a range of Chinese government policies, including increased military activity in the South China Sea, the pursuit of cutting-edge U.S. technology and the spread of Communist Party propaganda at American institutions.
The House of Representatives approved the legislation last week, and President Trump is expected to sign the bill into law after the Senate approves it as soon as Wednesday.
This year’s National Defense Authorization Act is a reflection of a growing bipartisan consensus in Congress and among national-security officials that the world is entering a new era of great power rivalries in which the U.S. must do more to compete with China and Russia.
“The central challenge to U.S. prosperity and security is the reemergence of long-term, strategic competition,” according to an unclassified summary of the U.S.’s 2018 National Defense Strategy. “China is leveraging military modernization, influence operations, and predatory economics to coerce neighboring countries to reorder the Indo-Pacific region to their advantage,” the document says.
The Chinese Embassy didn’t return a request for comment.
Some of the defense bill’s most notable provisions concern Chinese economic activity. 

The legislation seeks to both tighten U.S. national-security reviews of Chinese deals under the Committee on Foreign investment in the U.S. and to revamp export controls governing which U.S. technologies can be sent abroad.
Though the Cfius provisions, spearheaded by Sen. John Cornyn (R., Texas) and Rep. Robert Pittenger (R., N.C.), and the export rules, led by Rep. Ed Royce (R., Ca.), are expected to affect a wide array of American businesses, many supported the measures because of a growing concern over Chinese policies.
“Three years ago if you talked about doing things against China, the business community would push back,” said James Lewis, senior vice president at the Center for Strategic and International Studies in Washington, D.C. 

“They don’t push back anymore.”
“We have multiple nations out there that are threatening our national security from an economic-espionage perspective, and none of them equal China,” said Bill Evanina, Director of the National Counterintelligence and Security Center, at an event last week.
The defense bill also requires an annual report on China to include information on efforts by the Chinese government to influence U.S. “media, cultural institutions, business, and academic and policy communities” to fall in line with its security strategy.
Another provision limits Department of Defense funds for Chinese language programs at U.S. universities that host Confucius Institutes. 

These centers, funded by the Chinese government, have been criticized by Republicans—including Sens. Marco Rubio of Florida, Tom Cotton of Arkansas and Ted Cruz of Texas, as well as Rep. Joe Wilson of South Carolina—for peddling propaganda.
The bill also contains provisions to bolster defense ties with India and Taiwan, a self-ruled island that China claims as its own. 

And it bans China’s participation in Rim of the Pacific naval exercises—which involve 26 nations in a display of international military cooperation—until it stops militarizing islands in the South China Sea.
“It’s a signal to our allies and partners in the region—particularly Australia, Japan and Taiwan—that China’s activities in the South China Sea are not accepted as normal,” said Rachael Burton, deputy director at the Project 2049 Institute, a Virginia-based think tank.
One area in which a bipartisan group of lawmakers thought the defense bill fell short was with respect to Chinese telecommunications giant ZTE Corp. 

The Commerce Department in April banned U.S. companies from selling to ZTE for failing to honor an earlier U.S. agreement to resolve its sanctions-busting sales to North Korea and Iran. 

Because ZTE depends on U.S. suppliers, the ban was effectively a death knell.
But, in a surprise tweet on May 13, Mr. Trump said he and Chinese dictator Xi Jinping were “working together” to find a way to save ZTE.
The Commerce Department then struck a new deal with ZTE on June 7 that required the Chinese firm to put $400 million into an escrow account, pay a $1 billion fine, replace its board of directors and senior leadership, and fund a team of U.S. compliance officers to monitor the company for 10 years in exchange for being allowed to resume business with U.S. suppliers.
Dissatisfied with Mr. Trump’s deal, the Senate on June 18 voted to reinstate the initial Commerce penalty on ZTE by wrapping the measure into the defense bill. 

But Senate and House negotiators removed the language from the final text. 

The company didn’t return a request for comment.
Mr. Rubio has in recent tweets blasted the outcome as a “cave” by congressional negotiators.
“We got played by China again,” he said in a July 24 tweet. 

“This can’t continue.”