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tv   White House Trade Director Peter Navarro  CSPAN  June 29, 2018 3:44am-4:19am EDT

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term. at 3:30. john roberts will speak at the judicial conference of the fourth circuit. on c-span 2 at 9 a.m. a discussion about recently imposed tariffs and at noon a discussion about the legal challenges facing immigrants. c-span's washington journal live every day, the issues that impact you. coming up friday morning, mark janice, lead plaintiff in the supreme court case, and his attorney discuss the high court's ruling this week. then author malcolm nance talk about russian interference in the 2016 election. watch friday morning. join the discussion. . friday a conversation with the chief justice of the united
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states, john roberts, from the judicial conference of the fourth circuit, live friday at 3:30 p.m. eastern, on c-span, or listen on the free c-span radio app. white house trade director peter navarro spoke at the hudson institute about the u.s.-china trade relationship and what the 2025 plan means for u.s. manufacturing. this is half an hour. thank you all for coming. we are honored to have dr. peter navarro today for a very specific discussion of the report he and his office released last week. i have to be on the best behavior because we're streaming live on the internet.
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i would ask you as a courtesy to dr. navarro at the end of his comments at 1:00, we all just stay in our seats, let him go out the back door hopefully with a big round of applause. i'm going to applaud him. i read the report, i took it with me to china last week trying to get reaction from the chinese. the first year and a half of the trump administration they tried to pretend dr. navarro did not exist. that has changed. since this report came out and also since the wall street journal has written so much about him and the president has praised him, the chinese now have a totally different approach, that dr. navarro exists, but he should be struggled against and this report has gone unacknowledged, unreported in the chinese media. this to me is a home run for
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dr. navarro and the report. it means that what he's describing in this report is so sensitive and accurate that the chinese media doesn't have a response yet. in my personal view, this report suggests one of the steps to avoid a trade war and to return to the idea of cooperation with china is that china somehow has to deal with the hard evidence dr. navarro puts in this report. he very carefully cites other u. s. government documents. he cites a defense department study that came out in january of this year and goes over many techniques of concern to the defense department and china's industrial power. he cites academic research and stories, and my personal opinion
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as a skal or in scholar in this field, he seems to be information that has not been declassified before. so i thought the report was quite important, a new state-of-the-art finding. but it goes back to something that the obama administration issued in january of 2017. the obama administration issued a white house study of chinese industrial policy as it focused on the semi conductor industry, and many of the same issues, of intellectual property theft, use of investment, use of companies, coercion of firms. they were first raised in the obama report, but it, too, didn't get much press attention because it was already january 2017. so i think dr. navarro's plan today is to go over the contents of the report that is unknown to
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the chinese people. so we have media reach into china. , it will continue the notion that china really owes an answer to these concerns that have been so carefully documented in this report. and, by the way, it has an annex. this report has only 160 footnotes. the annex has even more and has a very detailed account of these chinese industrial policies. frankly, the term economic aggression in the title i personally believe this is quite justified. once you read the whole report, you will see that economic aggression is correct and it's not introduced here for the first time. it was in president trump's national security strategy when that was issued. so i hope you all will join me in a warm round of applause for
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dr. peter navarro. and i should say the sales of his three books have gone up, and a really wonderful development is his film, which is on youtube online, in the next day or two, it's going to reach 1 million viewers. the title is somewhat controversial. it's called death by china. dr. peter navarro. [ applause ] >> a master of the understatement. somewhat controversial? my deep thanks to hudson institute for sponsoring this, and actually two of my favorite scholars are here. one of them is mr. pills burr bury. also seth, who is trying to get this in the united states, back on track.
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the president himself is committed to a 351-ship navy and it's only through the analysis of people like seth that we have situational awareness of why we need to do that. so i congratulate hudson for being at the forefront. my mission today is simple. the, quote, seek truth from facts, and all i'm going to do today is provide a factual account of the industrial policies, the policies and practices of the peoples republic of china which are presented in this matrix. we have six strategies of what mr. pillsbury called chinese aggression. that's not my term. it is a term that was introduced in the 2017 national security strategy and then on the column here is the over 50 past
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policies and practices that china engages in in order to promote its economy worldwide. if you can say that one picture is worth a thousand words, this matrix is worth about a half a trillion dollars a year that contributes to the trade surplus of china using these various policies and practices, most of which are outside the bounds of international trading order. before i do that, let me just step back for a minute and talk a little bit about the administration's trade policy and trade philosophy. the president, president donald j. trump has made it clear that he's a free trader. he has made it aabundantly clear that for his administration trade should be free, fair, reciprocal, and balanced. and in a world where we had
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free, fair, reciprocal and balanced trade, we would have zero tariffs. we would have zero nontariff barriers. we would have zero subsidies to industry. we would have zero incidences of currency manipulation and currency undervaluation, and we would have zero instances of using a value-added tax not as a way to raise revenue in a given country but also as a tool of mercantileism to keep goods out of that country and to provide competitive advantage. if we were in china, they might call that the five zero. we're not in that world and because we're not in that world, the united states of america basically sends about a half a trillion dollars a year off
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shore in the form of a trade deficit.
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would capture 70% of the production of the emerging industries of the future within seven years. extraordinary. as president trump has said, if we lose the industries of the future, we won't have a future.
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so, some of you at least have the chart as a handout and it will be up on the web available to you. but let me just somehow walk through what the chart looks like. it's a standard matrix where you have the six categories of economic aggression. this is the industrial policy of china. what distinguishes china from the rest of the world, most of the rest of the world is that it's a nonmarket economy. it's the heavily state driven economy. and so in the second column here, one goal is to protect the chinese market from competition and imports. no secret there. the second goal is to expand the global share of markets. that is to attack global markets. this would be a protectionist.
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china also, for decades, has had a policy of going out and trying to secure the core resources of the world. it can be things like copper in chile. it can be things like cobalt, which is really important in high-tech production in the congo. they have been a very good job of doing that. the third, the fourth category, dominate traditional manufacturing industries, they have done a superb job of doing that. machine tools, shoes, computers, electronics, they have well over 50% market share and most of the traditional manufacturing industry. they have become the factory floor of the world. this didn't happen by accident. it didn't happen through free
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market capitalism. it happened through the set of practices which i'm going to talk about shortly. and then these last two columns here capture in essence the problem that the united states trade representative has been grappling with in terms of the attacks on our technological base. by people's republic of china. this is simply acquiring the technologies and intellectual property from not just the united states, but from the rest of the world. and at the same time, capture the emerging high-tech industries that will drive future growth and advancements in the defense industry. and what's important about this last column here. this is the made in china 2025 industry. plus, the industries identified in medium to long range planning 2006 document.
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it's things like vehicles, robotics, high-tech shipping. there is extreme manufacturing, which is the nanotechnology at one end, but also large facilities bigger than anything you could see or imagine. china is trying to dominate all of this. now, how do they go about it? this is where we get to the 50 different ways. there's over 50 different things here. if you look at the chart, you can't see it from where you're sitting, but there's a little y for yes in each one of the cells. so, for example, there's some things that china does, which is only used to advance one goal. for example, there's a technique they use called brand forcing, or the force use of chinese brands. this is when a company, a foreign company with a well known brand comes in with a quality product, sets up their facilities in china, and wants
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to sell into the market. but it's forbidden from using its own brand. you put a chinese brand on it, and that is used in the domestic market and down the road, the hope is they will build that brand and begin using that internationally. so that would be one where it is simply in one cell. on the other hand, there are some things on the chart, which run the table. all six strategies. one of them, for example, is consolidating state owned enterprises in the national champion. consolidating state owned enterprises in the national champions. this is really, really important to understand. for example, you look at the rolling stock industry. this is the trains and the metro cars and things like that. a lot of jobs. a lot of technology. a lot of implications for the
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future. in the beginning in china, they had a number of national champions that they were greeting within the country to produce first in china and then around the world. as they proceeded in that industry and others. the best thing to do is to consolidate those industries, basically create monopolies within the country to go out and do battle with the rest of the world. in that particular industry rolling stock, it basically put australia out of business in that. the company's crrc, i believe is the name, is making a very strong bid in this country. and the problem that you have is that these national champions, when they come forth, benefit from a lot of things around the rest of the
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matrix. let me again, seek truth from facts. let me walk you through some of the things they do on this chart. so, it's literally, i didn't quite find a z on this. i got down to w. you start with the adverse administrative approvals and licensing processes. we have approvals and licensing processes. our domestic company and wants to produce in this market, sell into this market. that's fine. but the problem is, and there's well over a dozen or more of these approval processes. the chinese will use the ability to gain your license or your administrative approval as a tool to extract some kind of concessions, usually on technology. and so this is a very powerful tool. it's very difficult to detect. as an unfair trade practice, but it is in the chinese
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economy when you go in there. second one on the list is antimonopoly law extortion. i think the poster child for this is what happened. basically this law was invoked against qualcom and an extraction of a large sum of money, and some promises. again, of technology transfer. it's always about technology transfer. and what came out of the 301 investigation was an understanding of when china goes after our technology, and our intellectual property, they steal it, they force the transfer of it. they evade the export controls that we have in place, and they buy it. and when you're running a third of a trillion dollars deficit with china every year, they accumulate a lot of money to
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buy it. burdensome and intrusive testing. this is an interesting tool. so, yeah, the medical device or car or some kind of product that what you want to sell into the chinese market. so what do the chinese say? well, we need to unpack this thing. what's in it? so then they get the look behind the veil and it's like well, we are just doing it to make sure there's no health and safety problems, but again, it's a way of extracting information and technology. it could be burdensome as well. you can withhold or delay the testing unless you get a concession. this is in effect. and by the way, one of the things my office does at the white house, we have a s.w.a.t. team where companies come to us with specific problems and i've
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had many, many companies come in with a problem that they are having with china and they'll go oh man, they did this to us. and then they did this to us. i would bring them over the chart and you say, you mean they did that, that, and that? you go, oh, we're not the only one. that's the thing. we're not the only one. this is why i think this report could be useful, because it gives everybody a common understanding of the challenges that we need to face. of the structural challenges. chinese communist party corporate government. this is truly extraordinary. we have now by decree, the chinese communist party getting seats on governing boards of companies. so, this is not profit maxization anymore.
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it's like advance the strategic goals of the state. claim sovereign immunity on u.s. soil to prevent litigation. this is kind of interesting. they want access to our market and to do business here, but they also want to claim their state owned enterprises and not subject to our laws. interesting. counterfeiting and piracy. the ip commission report that john huntsman led, rich spent a lot of work on, came out with costs in the order of $300 billion a year, just on theft alone. this is an extraordinary transfer of wealth. cyber enabled espionage. mandates, which allow them to peek under the hood. traps to developing countries. this speaks to the idea that
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the way china is able, in many case, to gain control not just to the resources of the country like copper or cobalt, but infrastructure is to lend a bunch of money to these countries that they can't afford to borrow, and foreclose on that loan, just like what happened, anybody know the issue? i believe that's the one where the chinese basically gained ownership. what's going on here? so, the point is, this is a long list. over 50 ways that china engages in these acts, policies, and practices with the goal of advancing their own economic dominance, which has in itself military implications. and this is what we're up against when we're basically
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trying to build an international trade order based on free fair and balanced reciprocal trade. so i simply present to you this as facts. challenge these as facts, if you will. i welcome that challenge. if this matrix accurately describes the industrial policies, acts, and practices of the chinese government, if that is true, then you can understand the structural challenge we face in trying to move to a better place down the road in terms of having a trading system that works for everybody. if you're in a negotiation, i'll leave you with this. if you're in a negotiation and take 25 of these off the table, and successful negotiation, you still have 25 left. thank you for the audience here
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at the hudson institute. i salute this institute and i'm going to get on with the mission down the road here. thank you very much. >> dr. navarro, can we keep these charts? >> yes. >> thank you. thank you very much for coming. i encourage everyone to down load both the report and the annex from the internet. there are a number of copies of the matrix being passed around. i don't know how many -- can you put your hand up if you have a copy of it already? okay. some more desemination is left. thank you for applauding. i think it's quite important that the community take dr. navarro's work seriously, not just his three books, but his
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efforts with the white house. what i keep hearing is there's much more of a team strategy at the white house. it's not some sort of debate going on. there's a combined approach. as i said earlier with introducing dr. navarro, these concerns go back to the obama administration. that may explain why two nights ago, 400 members of congress voted to approve the reform of our so-called system, protection against intellectual property and national security issues and investment coming into the country. 400-2. that's a lopsided vote. in the senate, the cosponsor on the democratic side was dianne feinstein. obviously silicon valley concerns. also passed the senate. so, this is a really strongly bipartisan concern that many
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people have and i think the publication of this report provides a single document where the concerns are listed and dr. navarro gave you a clue that just eliminating 25 of the issues, 25 of the practices, wouldn't be enough. ideally, all 50 will be dismissed with and the european union has similar concerns. so, thank you all very much for coming. on friday, the global business dialogue hosted a discussion with manufacturing leaders about u.s. steel and aluminum tariffs. we'll have live coverage starting at 9:00 a.m.
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eastern on cspan2. brad will be our guest on in-depth fiction edition live sunday at noon eastern. his latest book, spy master, will be published on july 3. his other books include use of force, the lions of lisern, blacklist, state of the union, plus 14 more thrillers. interact with brad by phone, twitter, or facebook. our special series in-depth fiction addition will author brad thor, sunday, live from noon to 3:00 p.m. eastern on book tv. on cspan2. sunday night, on afterwards. physician mona hanna details her efforts to prove that children in flint, michigan, were being exposed to lead poisoning. in her book, what the eyes don't see, a story of crisis, resistance and hope in an
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american city. she's interviewed by michigan senator, gary peters. >> let's talk about -- you heard that there might be lead in the water. when did that happen and what were some of the actions you took? >> the point i realize there was lead in water wasn't until the end of august of 2015. it wasn't from seeing patients. it happened to be at my house, over a glass of wine, with a high school girlfriend who happened to be a water expert. formerly with the e.p.a. in washington, d.c. when d.c. went through a similar lead water crisis. and with a glass of wine in my hand, she said have you heard about the water? everything is fine. she is like no, everything is not fine. it's not being treated properly, and there's going to be lead in the water. and that was the moment that i realized i needed to take action. i tried to get children's blood lead levels because that's something that the state and
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county has surveillance programs for. they track this. just like we track flu and other epidemics. i couldn't get the government data. so did my own research at our public hospital to see what was happening to our children's blood lead levels. it was the easiest research project i have ever done. looking at the change in blood levels. what we saw was alarming. >> watch afterwards, sunday night at 9:00 p.m. eastern on cspan2. secretary of state, mike pompeo, and ivanka trump held a press conference to release the human trafficking report. the report ranks foreign countries based on their efforts to prevent human trafficking. they also presented awards to foreign nationals for assisting the state department in antitrafficking efforts. this is half an hour.

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