U.S.-China Innovation Forum: Setting the Agenda
April 11, 2019
Christopher K. Johnson: (In progress) – of the day. We’ve been talking a lot about things from the company perspective, and now we’re going to hear from – a few ideas from the government perspective from a very distinguished member of the House of Representatives, a tremendous friend to me personally and also to CSIS. We’re always very, very grateful for Congressman Larsen’s support for us.
Christopher K. Johnson: And just to give a quick highlight, Congressman Larsen represents Washington’s 2nd Congressional District. He’s a leader on transportation and aviation, trade, and U.S.-China relations. He is a member of the New Democrat Coalition and is a strong advocate for pro-growth policies that support innovation, job creation, and a strong economic foundation.
Christopher K. Johnson: And, Congressman, one of the things that’s been interesting about our discussion today, we’ve been talking about things like aviation, we’ve been talking about things like defense, both of which of course are in your district in a big way. So, again, thank you so spending your time with us today.
Christopher K. Johnson: And now Craig’s going to say a few words. Thank you.
Craig Allen: Great. Thank you.
Craig Allen: Welcome, Congressman. It’s wonderful to have you here, representing the most beautiful district in the United States. (Laughter.)
Craig Allen: We understand that you have just returned from China, and we’d be very grateful to hear about your trip and any impressions that you have and any reflections that there might be with regard to the future of the trade negotiations. Thank you.
Representative Rick Larsen (D-WA): Yeah. Thanks. And thanks for the invite. I’m glad I was able to be here, and I look forward to the next 40 minutes or so of discussion.
Rep. Rick Larsen: To Chris and Craig, thanks for being up here on the stage with me and help me – helping me through this this afternoon with some questions a little later. But I was asked to provide a few comments about the recent trip that I led with Darin LaHood to China. Darin’s the Republican co-chair of the U.S.-China Working Group. I’m the Democratic co-chair of the U.S.-China Working Group. Darin’s the – Darin is the third Republican co-chair. My first co-chair was Mark Kirk, who ran for the Senate and then served there and then lost. Charles Boustany was my second Republican co-chair, and he ran for the Senate and lost that seat. I’m begging Darin not to run for the Senate, so. (Laughter.) Not that he is. I have no idea what he’s doing. But it just seems that I always have to get a new co-chair when they run for the Senate.
Rep. Rick Larsen: So it was a trip with six members. We went with the National Committee on U.S.-China Relations out of New York. They were helpful in putting this together and getting the schedule put together. And we kind of did this trip in reverse a little bit, went to Hong Kong first and then – and then into the mainland to Hangzhou, home – or site of the G-20 and then the Asian Games in 2022, and then into Beijing. We usually start in Beijing and work our way around the rest of the country, so kind of went in reverse. It actually worked out very well to do that.
Rep. Rick Larsen: This trip was my 11th trip to China, and I tell folks – and four of the members on this trip it was their first trip. And what I – what we try to do with these trips for members of Congress is to get the point across is that the thing you learn most about going to China is that you need to go back. You’re not going to get all the answers on one trip and you’re not going to get all the answers on your second trip. You’re never going to get all the answers. But it’s important to go back and to go to different places as well.
Rep. Rick Larsen: We tried to keep this trip a little bit more stayed. We’ve been to some pretty – I don’t want to say crazy places; I don’t want to be disrespectful – out-of-the-way places in China in the past. This one we tried to stay kind of on the straight and narrow as far as making it a little less exciting for members. So it worked out really well to do this.
Rep. Rick Larsen: So the main message in Beijing and in Hangzhou, where we met with folks – we met with the provincial secretary, Che Jun, in – of Zhejiang province, and sort of practiced our message on him; and then went into – in Beijing, where we met with Che Jun – no, I’ll get all my names right – Wang Qishan – Wang Chen, who is executive vice chair of the NPC; and then we met with Li Zhanshu, who’s the chair of the NPC. And we had a consistent message on trade. Think about the timing of this. This is the week before Lighthizer and Mnuchin were going to Beijing and then, of course, about two weeks before Liu He was here, and we tried to coordinate our message with the administration in a bipartisan way. There were two Democrats and four Republicans on this trip. Tried to coordinate our message on the trade issue and that was our main focus was the trade issue.
Rep. Rick Larsen: So even though I personally have differences of opinion on the approach the administration has taken with regards to China on these trade issues, we tried to stay in our box while we were there and I think everyone did a really good job with that, and there are basically three messages – that there’s a bipartisan consensus in Congress, and this is actually – you know, it helps that it’s true as well – there’s a bipartisan consensus in Congress about the definition of the problems that we believe that we have with China trade and China economic policy. That’s first.
Rep. Rick Larsen: The second is the definition of those problems as structural and the need for structural reforms and on SOE reform and market access, joint ventures, tech transfer, and IP. Those are kind of the big five. And the third message – so those are all playing into some of the process and some of the substance of the trade negotiations – and then the third message was about enforcement – the need for an enforcement mechanism that we would expect to see on our side – a need for an enforcement mechanism.
Rep. Rick Larsen: So those are the three main messages that we delivered to the four leaders as well as we met with U.S. – our American Chamber of Commerce in Beijing and just to let them know, you know, how this all played out a little bit with them, delivering that message. Hong Kong was a little bit different set of circumstances. We met with representatives from the Umbrella Movement and we met with the CE, Carrie Lam, and we met with members of LegCo as well as with Hong Kong – with the U.S. chamber in Hong Kong and a variety of other things as well.
Rep. Rick Larsen: So, all in all, a good trip. We tried to pick a theme and stick with it. We picked trade as a theme a long time ago and it actually worked out from a timing perspective as well so we got lucky in that regard. But I think it’s – you don’t know how successful or unsuccessful you are in these kinds of things. These negotiations take place between governments, not between Congresses. So we, again, tried to be supportive of the administration’s message while we were there to just ensure that there’s a consistent whole of government message coming out of the U.S. – out of the U.S. when it comes to trade talks.
Craig Allen: Well, thank you very much for sharing with us your three messages. And I think every member of the U.S.-China Business Council would certainly wish to thank you because that’s very much in concord with what we have been saying and so very grateful for you underscoring that message with China’s most senior leadership.
Craig Allen: Can I ask the first specific question, and I’d like to ask you about Senator Rubio’s report on “Made in China 2025,” which I think to – perhaps to oversimplify it a little bit, suggests that the United States should move towards a more aggressive industrial policy. Would you support that and is – can we out-China China, as some have said, or where would you stand on that?
Rep. Rick Larsen: Yeah, I reviewed the – Rubio’s report, “Made in China 2025,” and the call for industrial policy. I don’t agree with it in a fundamental respect and that is it’s more of a defensive policy as opposed to going on offense. Here’s the thing. We don’t need to out-China China. We need to out-U.S. the U.S. We’re not doing the – we aren’t taking any actions from a U.S. government policy perspective on the items that China is taking action on in China. Not that we need a – we don’t need a U.S. – a big U.S. government investment in aviation, for instance. We don’t need a U.S. government in variety of areas, but we need to do better about our foundational policies. And we don’t do very well in that regard. We have a serious workforce development and workforce pipeline problem in this country. And we don’t have a very good workforce training and workforce development set of policies or funding mechanisms for that.
Rep. Rick Larsen: And if you want a workforce that’s competitive around the world, we need to do a better job on workforce. We don’t do a very good job of investing in our own infrastructure at the federal level. We do a pretty good job state-to-state, but we don’t have an overall policy, nor do we put the money behind the lack of an overall policy. Thankfully, we don’t put the money behind a lack of an overall policy. If we had an overall policy, I’d be really upset that we weren’t putting money behind it, but right now we don’t have a very good overall policy, and we’re not putting the money behind that.
Rep. Rick Larsen: And so I guess the difference of opinion I would have is largely the inordinate focus on what China is doing and how we can try to stop China from doing that, as opposed to looking at what the U.S. isn’t doing, and how we can get us to do the things we ought to be doing to be competitive, not necessarily with China, but with China as well. That’s how I’d see it.
Christopher K. Johnson: That’s very helpful, Congressman. And let me just say, I’m remiss in not saying at the top, unfortunately Senator Sullivan wasn’t able to join us this afternoon. He’s actually taking some votes on some nominees. And my thought was, given how few nominees are actually making it through the system and how many holes we have in the U.S. government now, I’m happy to have him over there voting on some nominees.
Rep. Rick Larsen: I agree. I do miss not being on the stage with Dan. We’ve been able to work together in his short time as a senator and has been a good partner on a few things.
Christopher K. Johnson: And he’s been a great partner to us here at CSIS as well.
Christopher K. Johnson: Let’s talk about an area where maybe the government should be a little more involved in how to think about this. And this is an area where perhaps we can say that innovation, trade, and national security all kind of collide in this area, which would be telecommunications and 5G, of course. And I’m sure you’ve seen that, you know, Senators Cotton and Van Hollen, and Representative Gallagher and Gallego introduced the Telecommunications Denial Enforcement Act, that would require the president, obviously, to impose denial orders on foreign telecommunications firms. This is largely seen as targeting Huawei.
Christopher K. Johnson: You know, what’s your thought on that legislation? How would you evaluate the concern that Huawei presents in this space? What are your thoughts on the fact that we allowed a strategic industry in the United States to disappear, so we don’t make this stuff anymore? And is this, perhaps, an area where some sort of industrial policy could be a good thing?
Rep. Rick Larsen: Here is my view, right? It’s not the view of the state of Washington. It’s not the view of anyone – I’m not speaking on behalf of anyone in my district. This is my view, my assessment of things. (Laughs.)
Rep. Rick Larsen: If – I’m agnostic, but I’d be supportive of a bill like that. But the reason I’m less than enthusiastic is because of the underlying technology that goes into handsets, into smartphones, into all of this technology. Chinese-based companies own 36 percent of the patents that are considered standard essential for 5G. U.S.-based companies own 14 percent of the patents. So to even create a 5G technology platform and instrument, 36 percent of that technology is already patented by China.-based companies. All right, 14 percent by U.S.-based companies. So you can ban the handset. You can ban the equipment. But those companies, all of them who own the patents – including the other companies that own the other 50 percent of the patents – own the technology that goes into that handset.
Rep. Rick Larsen: So you can’t have – so you have a question in front of you of how you get your hands on the 36 percent of the patents owned by companies that you don’t want to be part of the 5G network when they’re patented? OK, you do that by breaking the law and copying them. Or you do that by purchasing a license, which you apparently – we don’t want to do. Or reinventing something else that’s demonstrably different so it can be patented separately. But it has to be demonstrably different. And, what, are the three or four criteria for it to be patent-eligible.
Rep. Rick Larsen: So that’s the challenge, I think, that we face on that. And I don’t have an answer for that, and I hope someone does, because if you want to pursue – if we want to purse this, we’re ignoring the pieces that go into making the big thing and by – and just – by focusing on just the big thing; focusing on equipment, not the pieces of the equipment and who owns the pieces that go into that equipment.
Christopher K. Johnson: Makes sense.
Craig Allen: Congressman, maybe we could talk about –
Rep. Rick Larsen: Sorry. Maybe there’s something happier I can tell you before the end of the day. (Laughter.)
Craig Allen: Maybe we could talk a little bit about aircraft. You are blessed to have Boeing in your district. What a great company, what a great contributor to U.S. exports and to –
Rep. Rick Larsen: The only thing blessed – the only thing blessed is that Bill Boeing’s mom and dad live there. (Laughter.) And then – and then she birthed him and he stayed. (Laughter.)
Craig Allen: And you have many constituents who are employees of that company, and they make a great, great product.
Rep. Rick Larsen: Yeah.
Craig Allen: And my understanding is that the 737 Max is also assembled in Zhoushan, which makes that –
Rep. Rick Larsen: It’s finished there, yeah.
Craig Allen: So I –
Rep. Rick Larsen: For the Chinese market only. (Laughter.)
Craig Allen: So there’s talk about the agreement that Ambassador Lighthizer and Liu He are discussing, and certainly one part of that agreement we understand will be a purchase agreement where the Chinese, according to the U.S. press, will be purchasing up to $1.2 trillion over six years. And no doubt aerospace would be – and Boeing products would be an important part of any large-ticket purchases coming out of these agreements, but it kind of makes some of us a little bit uncomfortable about state-managed trade, who’s going to be buying these things, what might happen if those purchases are not met or delayed or if there’s problems with the purchases. So I’d be grateful for your thoughts on this. And in general, are you concerned that we might be – within this agreement be moving towards state-directed trade? And if so, is that a problem, or maybe it’s a good thing?
Rep. Rick Larsen: Will there be jobs in my district and my state as a result of these plans getting purchase? (Laughter.)
Craig Allen: There will be many, many jobs.
Rep. Rick Larsen: Oh, then I’m all right. (Laughter.) It’s going to be fine. I’ll be fine.
Rep. Rick Larsen: As far as that goes, I think the final – the resolution of the trade dispute between the U.S. and China will probably have three elements. No shock; that’s not breaking news here. But purchase agreements – so purchases, reforms, and enforcement, those would be the three things to think about in this.
Rep. Rick Larsen: And the challenge that the administration has is talking about the purchase agreements as – the purchases as if they were something that were not going to take place otherwise. How much of those purchases are – you know, were backed up in the system as a result of the trade dispute? And how many of them are actually incremental on top of whatever, would not have happened otherwise?
Rep. Rick Larsen: So, you know, as an example – soybeans is a great example of that. There’s just some question about how much – how many soybeans can the Chinese eat, and therefore – and how many can they grow themselves, and therefore how many – how much do they need to buy.
Rep. Rick Larsen: There is a – on airplanes there’s, you know, a market demand, and there’s market analysis both from the two big OEMs, Boeing and Airbus. They’re a little bit different, but not that much different for single-aisle airplanes. And so they’re already going to buy so many airplanes per year to make that happen anyway. So I don’t know if it’s going to result in more as opposed to promises beyond the existing commitments. But again, it’s always promises beyond the existing commitments, and those commitments still need to be completed, and sometimes they are and sometimes they aren’t. So I – the point is I’d have to see myself to evaluate it, have to see exactly what any kind of agreement is.
Rep. Rick Larsen: The 737 is – the single-aisle airplane is being built in Renton, Washington, for the Chinese market, but then is being flown to Zhoushan for finishing. So it goes over there as a I call it green airplane, and they – it goes over there and gets painted and the seats go in, you know, and the bathrooms go in, and that kind of thing. So think of it that way. So that’s what the – that’s what the Chinese negotiated before with Boeing. And those – if they’re Max, they’re not being flown. Obviously, they’re grounded.
Rep. Rick Larsen: But again, I’m just not sure that – I’d have to see exactly what the numbers are. And remember, these commitments go out to 2025 – not today, not tomorrow, but out to 2025. So we also need to look at the rollout – you know, what’s in year one, two, three, you know, through six.
Rep. Rick Larsen: I would note $1.2 trillion over six years sounds like a lot until you realize it’s $200 billion a year. And I forget exactly what the trade deficit with China is this year, but it’s way more than $200 billion.
Christopher K. Johnson: Yeah, 425 (billion dollars).
Rep. Rick Larsen: Four twenty five (billion dollars). This guy – I guess it’s Chris’ job to know that. (Laughter.) So it’s not closing the trade deficit. And again, is – are these purchases that were going to take place anyway? Those are, you know, legitimate questions to ask. And I don’t want to pop anyone’s bubble, but that’s – folks who follow this will be asking those questions.
Craig Allen: I guess very legitimately there are also capacity issues. Probably to purchase a new 787 would probably take you – the slotting might not be for a while.
Rep. Rick Larsen: Yeah. Well, it’s capacity to build them. Until the grounding, the capacity for 737s was at 52 a month. That’s down to 42, but they’ll be back up to 52 once the plane is back up in the air. And then it’s capacity for your buyer to absorb that much. Like, you know, how many soybeans can the Chinese population eat? How many cherries can they eat? How much wine can they drink? Go down that list of things and you start running into just how much do folks need.
Christopher K. Johnson: I’m happy to help them on the wine consumption front. Just saying. (Laughter.)
Christopher K. Johnson: But you know, like you mentioned – and I agree with your point – you know, you can’t go to China once. You can’t go twice. You can’t go – you have to go a number of times to understand. But when you’ve been several hundred times like some of us – (laughter) – some of us have, it’s hard not to be a little jaded about some of these things.
Rep. Rick Larsen: How many times do you have to go to be jaded?
Christopher K. Johnson: (Laughs.) Quite a few.
Rep. Rick Larsen: OK.
Christopher K. Johnson: But then you’re always surprised, as well, with the positivity you take away. But my point is, I think one of the key issues here – you know, and turning to some of the nitty gritty of the negotiations as you understand it, because it sounds like you had some good discussions with the Chinese side on that – obviously, the main factor here is, are we going to get something that we can call durable, right? And how do we avoid – you know, you mentioned the three baskets.
Christopher K. Johnson: Purchases, I think, is pretty clear. That’s always been, you know, the easy part.
Christopher K. Johnson: Enforcement. How we avoid a situation where we sign an agreement and six months later we’re at war again? Which is, I think, a very realistic possibility.
Christopher K. Johnson: And then did you hear anything from them – because I think they’ve been not so great at signaling thus far in the negotiations – about the structural issues and willingness to challenge and do something there?
Rep. Rick Larsen: Yeah, just on one issue. So for those who are following this, the National People’s Congress did a third reading and passed the foreign investment law, which was a – you know, kind of like, first off, a conglomeration of three or four separate laws into one title – how we would say it in Congress, under one title – and then some of the other important changes. And for the first time – well, for the first time I heard high-ranking officials – Wang Chen, who is the executive vice chair of the NPC – tied the passage of the foreign investment law to the structural reforms that we have been asking for. I thought that was unusual, sort of – you know, whether he – maybe it was his job to say that or to say, like, we’re listening to you and we admit it, we need to make some changes, and here’s one change we’re doing.
Rep. Rick Larsen: That’s a positive, but you know, you have to temper that with the fact that it’s – you know, if we were to write a law like that it would be – you know, it would be longer than the Affordable Care Act. People would be complaining about, you know, did you read the bill. (Laughter.) I think – I think the foreign investment law is 50 pages long. And the Chamber of Commerce made a point to us that – American Chamber of Commerce in Beijing made a point to us that it’s really – again, it’s all about the implementation.
Christopher K. Johnson: Implementing guidelines.
Rep. Rick Larsen: Yeah. And those can take any form, and there are – and there are literally a lot of forms it can take to implement that. And so we shouldn’t get too excited just yet, but it’s good that we can use that – to utilize that in concert with other non-Chinese partners in China to try to get – implement guidelines that actually implement what we would think would be a foreign investment law that would allow more investment into China – more foreign investment into China, and more freedom to make that investment. So it’s just – there’s – that’s one thing that came up.
Rep. Rick Larsen: But on the enforcement side, you know, I’m sure many of you read this as well. And this is – at least one person mentioned this to us – just the importance of – enforcement goes both ways. You know, the Chinese leadership, it was really clear that they’re not just going to sit there and say, oh, of course, you need to enforce the agreement on us. We’re just going to absolutely roll over and take – and, you know, absolutely in America. They have their own views about what enforcement means. Didn’t get into it, but they talk about two-sided or two-way enforcement. And so that is going to be a sticky wicket as well to implement.
Christopher K. Johnson: Yeah. I think that’s right. I mean, the biggest challenge I think we face on that one is the speed with which they go to the sovereignty card on the issue of enforcement and, you know, the desire to have two-way. And then also to your point about the foreign investment law, I mean, I think just from a Chinese perspective, this seems to be the area where they do feel on some of this stuff they’re damned if they do, and they’re damned if they don’t. They ram the thing through, and then we complain that they rammed it through. So it’s challenging, yeah.
Craig Allen: OK. Could we shift the focus just a little bit and talk about export controls and foreign – inbound foreign investment controls in the United States? A lot of today’s conversation has kind of been between the tradeoffs between free trade, national security, and our – meeting our legal obligations. So there’s been some changes in CFIUS and FIRRMA. I think that we’re all anticipating changes in 2019 in export controls. Could we have your views on that, please? I would be grateful to understand the sense of Congress.
Rep. Rick Larsen: Well, the general sense of Congress in passing FIRRMA was that we thought CFIUS wasn’t broad enough. It wasn’t specific enough to technology. It went through a variety of changes to get to where it was. It actually pulled back some from what was originally proposed. And then it was put into the defense bill and passed as a result of the defense bill, mainly as a vehicle to move it. But it would have passed on its own, I think, pretty well as well. So the issue is, I think, again, will be with implementation. And what’s considered – what’s considered sort of a national security essential, if you will – I’m making that term up. It’s not a legal term, but you know, what’s essential on national security or not.
Rep. Rick Larsen: And as a member of the Armed Services Committee, I’m getting – well, I’m not getting mixed messages. I’m getting a very clear message I just think it’s misguided message from the Pentagon. So there’s a couple things going on. There’s a lot of focus on the – especially with regards to China – Chinese military investment in technology. And the use of the technology, AI, and machine learning and so on, as a platform or as an enabler, as a tool for the military. And it makes sense to be concerned about that. And it makes sense for the United States, the Pentagon, our Pentagon, to invest in that as well.
Rep. Rick Larsen: But the problem that I think we might be running into – and this is a warning – is that, AI is like Kleenex or Band-Aid. Now, for those who aren’t familiar with the history of Kleenex or Band-Aids in the United States, Kleenex is actually a brand name and Band-Aid is a brand name. But every tissue paper you use to blow your nose we call a Kleenex. (Laughter.) It doesn’t matter what it is. We call it a Kleenex. And everything you put on your finger to cover a cut we call a Band-Aid, even though there’s a perfectly another – a perfectly useable brand called CUREAD as well. We call CUREADs Band-Aids too. The thing is, the brand name became the name. So that’s the principle I want to get across.
Rep. Rick Larsen: AI is that as well now. Artificial intelligence, AI, everybody has it. China has it. France has it. U.K. has it. The U.S. has it. Everybody has AI. Everybody uses AI. They use it like Kleenex. They use it Band-Aids. And so the danger is that, from our – from my perspective, is that we approach AI on the issue of – when we’re talking about export controls – we approach the technology of artificial intelligence as we ban the export of Kleenexes. We ban the export of Band-Aids. People already have Kleenexes and Band-Aids. We’re focused on the wrong thing.
Rep. Rick Larsen: And the right thing is the brains that go into making the algorithms that use AI, or artificial intelligence, as a platform to be an enabler. And those brains are in people. They’re not in – they’re not in the machine. They’re in people. And so, you know, we can – we can, you know, put high walls around artificial intelligence and any company that’s based in the United States, and it won’t do a dang thing to prevent any other country or any other company in other countries from either developing their own or using AI otherwise.
Rep. Rick Larsen: And so we need to be better targeted when we come to technology, because it’s fundamentally different than, say, banning a missile or banning a radar system, or banning a gyroscope specifically made for something or other. It’s fundamentally different than the hard thing that it’s easier to control than technology, which really becomes a hard thing only because of the brains that got put into it. I hope it makes sense. (Laughter.)
Christopher K. Johnson: I thought so. (Laughs.) As a technological luddite myself, I appreciate that explanation.
Christopher K. Johnson: Well, Congressman, we’d like to see if maybe the audience have a few questions for you. And so we’re going to go ahead and do that now. I think there are microphones around.
Rep. Rick Larsen: I’ll put my glasses on so I can see you all. Oh, a lot of people out there.
Christopher K. Johnson: And who would like to ask a question for the congressman? Please, OK. Right up front here. Just wait for the mic. There it is.
Q: It’s – first, it’s great to know that the trips do help, and you continue to encourage them. Because you visited our plant in Xian in March 2014.
Rep. Rick Larsen: Yeah, when I was on my –
Q: On your crutches.
Rep. Rick Larsen: I was on my crutches, that’s right. (Laughs.) Don’t travel over eight days all across China on crutches. (Laughter.)
Q: Anyway, we’ll invite you back at some time.
Rep. Rick Larsen: Good to see you again.
Q: One of the frustrations a lot of us have – you know, you’re very thoughtful about the problems. You know, you deal in depth about different elements of it. But we often face soundbites – very simple soundbites. You know, Chinese and U.S. businesses in China – Chinese businesses just export, take American jobs. How do you deal with that? I mean, I –
Rep. Rick Larsen: Are you asking my advice how you might deal with that, or how do I personally deal with it?
Q: Well, both.
Rep. Rick Larsen: Yeah. Yeah. Yeah. I think that perhaps a little easier for a member of Congress to answer that question if they devote time to finding an answer to that question. Going into your own district, going to companies that are making things, that are building things, that are creating things – that people are creating. I shouldn’t say companies, because people create these things. That people are creating, working for these companies. And that thing ends up getting built and in the hands of some – of a Chinese consumer. I then go – I mean, it’s a little easier in my district, because I can go play on big airplanes. So I try not to go play on big airplanes. To do – my staff has a directive to go do a better job and find smaller things that end up in the hands of, or in the houses of, Chinese consumers. So in that regard, in that way, it’s easier for us.
Rep. Rick Larsen: I think from a corporate perspective the message has to – it’s a little tougher, because you have to have an internal communications plan for the people that are doing work in the U.S. for that corporation, who understand the connection. And you have to do a – if it’s true – a communication about why you have a presence in China. And a lot of reasons now it’s – you know, it’s in China for China or in China for Asia. And that is itself a message that needs to be communicated still and better among individual companies.
Rep. Rick Larsen: But you’re not going to – you’re never going to win the all jobs lost went to China argument, and I – and I just don’t think people should try to win that argument. You can only win the argument that you have. You can only win the one that you own. And so we have to – you know, like I said, as a member of Congress it’s a little easier, but we have to put time into creating that message, making it – showing that it’s real, and then communicating it.
Christopher K. Johnson: Mr. Druckenmiller. Just wait for the – wait for the mic. It’s coming.
Q: Thank you. You mentioned earlier that when six of you went over there – four Republicans, two Democrats – it was easy to put up a united front because it was actually true that you agreed on the issues. In your opinion, how much has each party moved on the China issue in the last three years? And where do you expect each party to be relative to where they are now in five or 10 years?
Rep. Rick Larsen: Yeah. So a great question. I would – I’d just – not challenge you; I don’t want to say challenge you. The premise you have is binary and it’s actually trinary. I don’t know if that’s a word. Is it trinary? Trinary? (Laughter.)
Q: We know what it means.
Rep. Rick Larsen: Yeah, right. Yeah, you know what it means. Yeah.
Rep. Rick Larsen: It’s not Democrats and Republicans. It’s – and I’ve always said this, that if the economic and trade hawks and the national security hawks and the human rights hawks on China ever found each other, they would fundamentally shift the center of gravity on China policy in Congress. And for the longest time they never found each other. So all the human rights folks were sometimes, you know, Republicans and Democrats, and the trade hawks are mainly Democrats but some Republicans, and the national security hawks were mainly Republicans but some Democrats, and they always went off and they all didn’t like China for their own reasons from a policy perspective. You know, we’re talking policy here, folks. And so long as they didn’t know that each other had the same focus, the gravity wasn’t all that much.
Rep. Rick Larsen: But they have found each other in Congress. And I think if Dan was here, you’d probably see a difference of opinion on approaches – (laughs) – on China because I think we represent different elements of – I’m much more of an engagement still, but now I think I’m in the minority. I think five years ago I wasn’t. And so that’s where it is today. And I think the president helped make that happen, for – again, for better or for ill. I think objectively the president made that happen, helped bring those folks together – on accident, but together anyway.
Rep. Rick Larsen: So five to 10 years, I don’t – I don’t know. I don’t want us to fulfill our own prophecy about China being a peer competitor. I think we are – I think China is a peer competitor, but I think we’re competing on a lot more than just on the national security front. But I also think China is a cooperator with the United States. And I’m not using terms that I made up; I’m stealing some stuff from somebody. But I’m – so just to be clear about that. But what I did – I did a little something different with it, is I don’t know if China and the U.S. are competitive cooperators or cooperative competitors. And I think it depends on the sets of issues because the cooperator part – there’s a lot of potential in cooperation with China on some things, but the competitive theme is shadowing those – that potential. And it also has to do with, I think, a little bit the president is – and his approach to China is shadowing that. Not to say that we don’t need tougher stances on China on some things, but we’re giving up opportunities as well when we do that. So five to 10 years, I think it’ll be defined how we manage this: cooperative competition or this competitive cooperation.
Christopher K. Johnson: Great. Congressman, we know you have to run. I think you would all agree with me that we should all feel a lot better with folks as erudite as Congressman Larsen serving the people in the Congress. Thank you so much for your time.
Rep. Rick Larsen: Thanks a lot. Thank you. Thanks. Thanks a lot. (Applause.)