October 17, 2019

Chairs DeFazio, Maloney Statements from Hearing on China’s Maritime Silk Road Initiative

Washington, D.C. — The following are opening remarks, as prepared for delivery, from Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), and Chair of the Subcommittee on Coast Guard and Maritime Transportation Sean Patrick Maloney (D-NY) during today’s hearing titled: “China’s Maritime Silk Road Initiative: Implications for the Global Maritime Supply Chain.”

Chair DeFazio:

Chairman Maloney, thank you for scheduling this afternoon’s hearing to assess China’s Maritime Silk Road Initiative and the implications for our national and economic security.

As our country and China recalibrate our relationship in the beginning of the 21st Century, nothing could be more important.  Allow me to provide some context to squarely frame the irony of how we got to where we are today, and the challenges before us if we seek to reclaim our mantle as a great maritime power.

First, a little history. In 1890, Captain Alfred Thayer Mahan, a lecturer in naval history and the president of the United States Naval War College, published The Influence of Sea Power upon History, 1660–1783.

In this seminal thesis, Mahan argued that British control of the seas paved the way for Great Britain’s emergence as the world’s dominant military, political, maritime and economic power.

Mahan and some leading American politicians of the time such as Theodore Roosevelt believed that these lessons could be applied to U.S. foreign policy, particularly in the quest to expand U.S. markets overseas.

To ensure that the U.S. Government could guarantee access to new international markets, the principal of Sea Power required three elements:

  • A vibrant merchant fleet, which could carry American products to new markets across the “great highway” of the high seas;
  • An American battleship navy to deter or destroy rival fleets; and,
  • A network of naval bases abroad capable of providing logistical support for an enlarged, global navy, and maintaining open lines of communications between the United States and its new markets.

This policy, wholly adopted, resulted not only in the creation of Roosevelt’s “Great White Fleet”, but elevated the status of the United States as a global maritime and economic power.

For much of the first half of the 20th Century, policymakers abided by the need to maintain both naval power and a globally competitive merchant marine.

But starting in the later part of the 20th Century, globalization and the liberalization of trade began to undermine Sea Power’s prevalence in U.S. maritime policy.  Today, Sea Power has come to mean maintaining the world’s most powerful navy, but paying little attention to the maintenance of a vibrant merchant fleet.

The irony I referred to earlier is the fact that the Chinese Government has co-opted our very own principal of Sea Power to construct its Maritime Silk Road Initiative.  China is using Sea Power to guide its rapid and unrelenting technological development, and is using expansion of its own maritime and shipbuilding industries to brazenly advance its own security interests, both economic and sovereign, abroad.

That is why this hearing is so important. The Chinese are literally beating us at our own game, and few people seem to care or even notice what this means for our national and economic security. 

We can no longer remain ignorant, and I believe this hearing is a vital first step to pry open everyone’s eyes. Mahan once wrote, “those who rule the waves, rule the world.” I look forward to hearing from our witnesses this afternoon to better understand the dynamics of that competition, and what we need to do to win it.  Thank you.

Chair DeFazio’s full remarks can be found here.

Chair Maloney:

Good afternoon, and welcome to this afternoon’s hearing to take stock of China’s Maritime Silk Road Initiative and its implications for the United States’ maritime industry and military readiness.

This hearing comes at a critical moment in our relationship with the People’s Republic of China. Where we once found a willing international partner, we now face an increasingly aggressive and confrontational adversary. Just last week, I and my bipartisan Congressional delegation were denied visas to visit the US Embassy in China.

The unprecedented step of barring a US Congressional delegation from the country occurred for one reason only—our planned visit to Taiwan. Chinese officials stated that if we cancelled our visit to Taiwan the visas would be issued.

When we made clear that canceling the delegation’s stop in Taiwan was not an option, the officials demanded that I issue a statement endorsing Beijing’s version of the “one China policy” delegitimizing Taiwan’s political existence and further isolating the island’s 24 million people. I declined.

This single incident is emblematic of the numerous challenges the United States now faces in confronting China’s regional and global ambitions.

Moreover, as a Nation we find ourselves at a fork in the road as to the best course to ensure American access to efficient, reliable and secure global maritime commerce in this new geopolitical context.

The Maritime Silk Road Initiative, or “MSR”, is one component of an expansive trade policy promoted by China referred to as the Belt and Road Initiative. This overarching strategy intends to reshape the global economic seascape through Chinese investment in foreign maritime infrastructure.

Command of the marine transportation system has long acted as the stage on which great powers compete. Now, globally, over 90% of commercial goods travel by sea, and the competition is intense.

The infrastructure facilitating the transport of maritime commerce — ocean-going vessels, deep-water ports, high-speed railways, and fiber optic cables — descend from technologies Western powers once leveraged in the 19th and 20th centuries to expand their access to foreign markets. Today, the MSR mimics these strategies, for example, by building railways in Africa or laying transoceanic data cables. In some locations, new MSR projects are literally replacing colonial projects.

The MSR is a strategic economic policy, intended to promote the Chinese workforce, build bilateral ties, foster dependence, and ensure near-exclusive access to foreign ports for Chinese controlled or affiliated vessels employing Chinese-built technologies, such as 5G.

Through MSR projects, China can advance both economic and non-economic objectives simultaneously. These projects act as “dual-use infrastructure,” developments that serve both commercial and military purposes.

China deploys many different tools to cajole or coerce the cooperation of foreign states, including project finance tools like loan guarantees and conditions, or the control of source funds and debt service obligations.  In addition, design and construction standards, technology transfer requirements, and intelligence acquisition through ownership and operation of infrastructure, enable China to gain favorable access and control of the marine transportation system.

The stakes are high: In an economically interconnected world, foreign-financed infrastructure investment can fuel both development and competition. The MSRI is a linchpin in China’s dominance of international maritime trade and the development of trained labor to support its operation.

China’s investment in its national fleet has made China the most prolific shipbuilding nation to date, dramatically altering the dynamics of the global maritime trades. In fact, the five major Chinese carriers alone controlled 18% of the global volume of container shipping in 2015.

At the same time, we in the United States have allowed our U.S. flag fleet in the foreign trades, our maritime workforce, and our domestic commercial shipbuilding capacity to erode to their lowest points since before the second World War. As a result we have critically undermined our military readiness and a secure sealift capability.

The number of U.S. flagged vessels sailing in the international trade has dwindled from 183 ships in 1992 to 82 as of December 2017, while over 3 thousand Chinese flagged vessels operate in the international trade today. In a world economy increasingly powered by maritime commerce and blue-water presence, we cannot continue to allow the United States deep-water fleet to decay on our watch.

This hearing will shed light on the degree to which the MSRI might co-opt the global maritime transportation system for Chinese industrial, commercial, and security gains, disable the remnant U.S. international trading fleet by monopolizing the transport of U.S. commerce, and destabilize both the U.S. Merchant Marine and maritime supply chain.

Chair DeFazio’s full remarks can be found here.