00:00The gentleman's time has expired. I recognize myself now for five minutes, and as I reflect on the insightful testimony of all of our witnesses, I want to make an initial observation.
00:08I wholeheartedly agree with Mr. Goodman's observation that sound, smart foreign policy involves economic statecraft, involves economic engagement, and there is a narrative, I think, communicated by some, that the America First strategy of the current administration is disengagement,
00:29and that allows China to fill a vacuum. I actually see it the opposite way. As Secretary Besant rightly pointed out, America First is not America alone.
00:38And while the tariff strategy has created some uncertainties and turbulence, what it has done is actually deepened engagement, not disengagement, but deepened negotiations with partners, allies, and adversaries, like China,
00:52to actually get us to a point where there is more American leadership and engagement in the world on the economic front.
01:00I think this has the enormous potential to achieve greater, more bilateral, more reciprocal trade deals that give American exporters more market access and therefore more leverage and economic influence in the world.
01:13And look just to yesterday to see the $600 billion commitment from Saudi Arabia of more foreign direct investment in the United States to see that there is massive economic engagement like we've never seen with this America First strategy.
01:28Let me ask Dr. Norris a question about what Mr. Goodman says is smart economic statecraft.
01:35In February, President Trump issued a national security memorandum entitled America First Investment Policy, directing federal agencies to address outbound investments into China.
01:46I think this is smart economic statecraft.
01:49I think it's very smart to stop financing Chinese military industrial complex companies.
01:56I also would say, though, I very much appreciate, Dr. Norris, your pointing out that we should not try to fight the American private sector,
02:08that our national power ultimately derives from U.S. economic growth and innovation,
02:13and so we need to be careful about mimicking Chinese industrial policy.
02:17We should counter China not by becoming more like China, but by being the best version of ourselves.
02:24Our advantage, I always say, is that we're capitalists, and they're communists, and so they misallocate capital,
02:30and their industrial mercantilist policy is not what we want to emulate.
02:33So can you speak about what is the right way to screen and stop investments and capital flows into China that threaten our national security,
02:43while at the same time adhering to our free market cross-border capital flow ethos?
02:48So I think this idea of outbound investments is an important topic.
02:56I think that you're exactly right when you say we need to do us better and not try to copy what they're doing or try to mimic exactly what they're doing.
03:06The way I think about this is these kinds of investment flows are going to generate things that matter for national security.
03:12So what can we do better on this?
03:13We have to be specific and precise in saying, here's why this is bad for national security.
03:17It doesn't be public, but somebody needs to know.
03:19They need to be able to do that analysis, and then they need to be able to have mechanisms that allows us to put a stop to that kind of behavior,
03:25because it is going to be detrimental to U.S. national security.
03:28I think this dovetails with something that Ranking Member Burr also talked about in terms of the key to U.S. success for most of the 20th century was that we found a system that was able to have other countries' pursuit of their self-interests redound to America's best interests.
03:46That's the secret sauce.
03:47That's what we are after today, I think.
03:49As we start thinking about strategies and ways to design systems, we want to capture and harness these naturally-incurring incentive structures.
03:56So companies want to make money.
03:57They want to manage to quarterly profits.
03:59That's a feature, not a bug, in my opinion, but you also have the importance of long-term capital.
04:05Warren Buffett has achieved a lot of success with a very long-term vision.
04:09There's a space for that, but we have to be smart about harnessing these incentives.
04:14That's where the policymakers come into play.
04:16That's our jobs.
04:17We have to think creatively, and we have to think about what are those incentives.
04:21If everybody looks out for their best interests, what's going to be the macro result of that?
04:25And that's kind of the framework that I'm trying to suggest to you all.
04:27As you think about these security externalities, that's the thing that's not going to be endogenized into the transaction.
04:34I wanted to talk about DFC as an important tool for economic statecraft.
04:38I don't have time.
04:39Let me just ask this final simple question.
04:41Dr. Norris, can you speak to the importance of fiscal responsibility and lowering our deficits to protect strong demand for U.S. Treasury securities and the dollar's dominance?
04:53And why is that important to national security?
04:55Yeah, as all of you will appreciate, the U.S. serving as a world's reserve currency gives us a lot of privileges.
05:04We're unique in this regard.
05:05The United States is a $30 trillion economy, and we as government stewards of public capital always have to think about being prudent with how we allocate and use those resources.
05:15In my opinion, our real strength resides in the private sector.
05:18And what we have to do is find a way to harness those proclivities and naturally occurring tendencies to lead down to the national security interest.
05:25My time has expired.
05:26Growth, growth, growth.
05:27Thank you very much.
05:28And at this point, I recognize the gentleman from Texas, Mr. Castro, for five minutes.
