'What Keeps You Up At Night?': Ted Cruz Presses Witness About China Threat

Forbes Breaking News

At Wednesday's Senate Foreign Relations Committee hearing, Sen. Ted Cruz (R-TX) questioned Troy Fitrell, Senior Bureau Official at the State Department's Bureau of African Affairs, about how China undermines U.S. interests in Africa.

Transcript

00:00Well, that's some damn fine kissing up to the staff.

00:06And given that mine provided Diet Dr. Pepper to me, I echo that sentiment for keeping me

00:13well-caffeinated.

00:19As I discussed in my opening statement, the Chinese have exploited local political, economic,

00:26and sometimes even cultural conditions to undermine American national security interests.

00:32Sometimes they do it by securing bilateral and multilateral agreements that block American

00:37goals.

00:38Other times they do it by creating instability.

00:41But they are actively doing it, and I want to hear from you how they do it.

00:45Could you walk us through, region by region, how China is exploiting these conditions to

00:52undermine U.S. interests?

00:54You bet, Mr. Chairman.

00:57Thank you for the opportunity to just jump right into that.

01:01As we run around the continent, most of the playbook that China uses occurs everywhere around

01:09the continent.

01:10But there are some regional trends.

01:11So as I roll around, everything is true everywhere in Africa.

01:16But there are some focuses that change a little bit.

01:20If I were to start in central and southern Africa, of course, it most heavily relies on the mineral

01:26space and the extractive space.

01:28These are the minerals that they've gone into fast and hard.

01:32And part of the playbook that I think you're asking for was first just being there first,

01:38and having incredibly high risk tolerance.

01:41And by being able to go in without having to worry about meeting the needs of their shareholders

01:49or their board of directors, and being able to focus on just capturing that market without

01:53worrying about turning a profit right away, that allowed them to keep and maintain the

01:58entire supply chain.

02:00Of course, we try and open a minerals processing plant in the U.S.

02:04There's a lot of permitting and issues in that.

02:07The same with Europe.

02:09But in China, where they don't care, they were able to toss that up right off the bat.

02:13And then once they had a sort of a dominant position there, they were able to use that

02:18to continue to maintain.

02:19One of the things we've seen recently is the global's need for lithium is almost infinite,

02:25vastly, 30, 40 times more than we currently have.

02:30So there's a lot of interest in engaging in new lithium operations.

02:36So as Western companies were looking to both look at mining, at processing, and at the whole

02:42supply chain, China immediately dumped a lot of lithium on the market, crashing the price.

02:47And of course, what you see there is then, as these Western companies were going to solicit

02:52financing and talking to banks and doing that kind of work, with the crashing lithium price

02:57suddenly the projects were no longer viable.

03:00And that kind of manipulation is a big part of the threat that they have against the United

03:04States.

03:06When we look in East Africa, we see a lot in the regards of infrastructure kinds of investment.

03:12The traditional roads, rail, bridges, that kind of thing, hydroelectric facilities.

03:17But let's not forget digital infrastructure.

03:21Being in first in that matters as well.

03:23A lot of these can be found as just debt vehicles.

03:29I've on multiple occasions dealt with governments that have asked my help in finding investors

03:32to privatize some of their, because they can't maintain the debt.

03:37But then they find that the market value of this item is double or is half what they still

03:44owe on the facility.

03:46So they're just trapped into that forever.

03:49That's hugely problematic.

03:51And on the digital side, of course, if you want to be part of the modern economy, you're going

03:56to need to have trusted safe networks.

03:58And so basically every country on the African continent has come to me to ask help in encouraging

04:06the big tech companies, Oracle, Microsoft, Google, et cetera, to come to their country.

04:12But they won't come if they can't trust the networks that are there.

04:16And so many of the countries are faced with the issue of if we want to have a modern digital

04:22economy, if we know where we need to be in the future, we actually need to rip out those

04:27systems and replace them.

04:29Because we simply can't operate in isolation with substandard technology in which all of

04:34our data is now subject to Chinese manipulation.

04:38And that's been hugely problematic across the continent.

04:43In West Africa, it's often kind of a mix of the two.

04:47But one thing I would add to that that's not frequently mentioned is in addition to this

04:51insatiable desire for minerals, it's all sorts of extractives, including timber, the deforestation,

04:59but especially fishing.

05:01When you look at the fishing grounds of especially Western Africa, but really of all coastal Africa,

05:06that is the protein for the people.

05:09But when you see these Chinese trawlers coming in and utterly destroying the fishing grounds,

05:14and you can see them on over the shelf, unclassified satellite imagery trawling back and forth,

05:21then suddenly doing a beeline 60 miles offshore, meet a by boat, offload all the fish, come back

05:27to port and say, oh, we didn't catch anything again today.

05:30And they don't catch anything any day, at least according to their official records.

05:34And meanwhile, the amount of food available for the Africans is much more expensive and

05:39much less supply.

05:40And this is a direct and tremendous threat.

05:42And forgive me for going on a little bit more on that subject, but it's not one that normally

05:46gets mentioned.

05:47But it is indicative of the business model that the Chinese entertain on the continent.

05:53Now, of all those threats you described, what keeps you up at night?

05:58What worries you the most?

06:00I get a lot.

06:02I'm actually really excited to work in Africa, and there are a lot of really positive stories.

06:06So actually, I sleep pretty well in that regard.

06:09I'm all in on Africa's future, because I really believe in the place.

06:13And, you know, a lot of people talk about how, you know, in 2040 it's going to be this

06:19much.

06:20But the fact is, Africa is hugely important right now, and I'm excited by that.

06:25But you asked the question, so let me go ahead and address that.

06:29Part of it is the kind of irreparable damage that a number that a lot of these operations

06:35can have.

06:36I'd say probably the number one example was just recently when a Chinese tailings dam collapsed

06:42and they dumped something like 40 million gallons of sulfuric acid into the Kafui River, just

06:48potentially destroying the livelihoods of 6 million people.

06:52That was just the one example.

06:54But that kind of shoddy behavior and completely ignoring the rules-based order in which they

07:00ostensibly live, that kind of thing becoming systemic, yeah, that would be what keeps me

07:06up.

07:08Senator Booker.

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