Mike Rounds Asks Trump Nominee How United States Can Counter CCP's 'Aggressive Export Financing'

Forbes Breaking News

During a Senate Banking Committee hearing last week, Sen. Mike Rounds (R-SD) spoke about China's financing of other countries.

Transcript

00:00Senator Reynolds. Thank you, Mr. Chairman. Mr. Peters, I'll follow up a little bit and let me be

00:06a little more direct in my question to you and I'll give you an opportunity to fully explain

00:12the answer here. Recent reports have identified at least eight Chinese smuggling networks that

00:17have each trafficked over 100 million dollars worth of U.S. made AI chips into sanctioned

00:24Chinese military and research entities. This poses a serious and escalating national security threat.

00:31I believe this is happening in part because BIS, the Bureau of Industry Security, lacks the enforcement

00:39tools and resources necessary to keep up with the scale and sophistication of this activity.

00:46That's why we've introduced the Stop Stealing Our Chips Act with Senator Warner, a bipartisan piece

00:51of legislation. The intent here is to establish a whistleblower incentive program within BIS aimed

00:57at increasing actionable intelligence on illegal exports. If confirmed, drawing on your experience

01:04as a federal prosecutor, what additional tools do you believe Congress can provide to strengthen BIS's

01:10ability to enforce U.S. export controls? And can you commit to working with Senator Warner and myself on

01:15this legislation? Senator Arntz, thank you. Thank you for your question. With respect to the issue of

01:22resources, as I'm sure you're aware, I'm not yet in the building and so I don't yet have a clear

01:27understanding of exactly what resources we need. I am, however, aware of the publicly available information

01:33related to President Trump's proposed budget, which proposes a significant increase for resources to BIS

01:41targeted primarily towards enforcement. If, in fact, that budget proposal became the appropriation and we

01:48were to be blessed with those resources, it would be part of my charge to immediately set about

01:52determining how those resources could be best allocated to meet the national security threats

01:57that you've just identified. You'll work with Senator Warner and myself? I'd be happy to, I'd be happy to

02:02work with you on that, Senator. Okay. There's, I'm going to come back to you in just a minute,

02:07sir. Let me just swing back over for just a minute to Mr. Yovanovitch. Sir, as a nominee to be the

02:15chair and CEO of the Ex-Im Bank, I want to ask about countering China's aggressive export financing.

02:20Earlier this year, Senators Cortez Mastro and I introduced the Strengthening Exports Against China

02:25Act, a bipartisan measure that would allow Ex-Im to exclude financing tied to China competing technologies

02:32from its 2 percent default cap, thereby boosting support for American exporters and AI semiconductors

02:38and related sectors. Given China's state-backed subsidies and export credit agencies, some of

02:44which you've already referred to, these export credit agencies that heavily support their exporters,

02:51what can Ex-Im do today and what new authorities and flexibility does it need from Congress to level

02:57the playing field and make certain that we can effectively counter CCP subsidies? And if confirmed,

03:02will you commit to working with Senator Cortez Mastro, her office and mine on this legislation?

03:09Senator Rounds, thank you for the question and thank you for your continued support of the Export-Import

03:14Bank and also supporting all of the flexibility and the modern tools that we need to take on this

03:19grave challenge. To put this problem in perspective, sir, the Chinese have spent $3 trillion, with a T,

03:25since the beginning of COVID, to further ensure that nations and companies around the world

03:31are deeply reliant on their supply chains. And so this will, I can assure you, if I'm fortunate enough

03:37to be confirmed, be a focal point of the front office of the Export-Import Bank. And our hope would

03:42be to draw in all the tools, including the China and Transformational Exports Program, of which you've

03:46been a big supporter. We don't need to match them dollar for dollar, Senator. We need to do two things,

03:52and two things very well. Number one, we need to catalyze the great financial markets that we have

03:58here to ensure that private capital can flow into these very important industries and opportunities.

04:04And two, we really need to unlock the ingenuity of the American worker and American companies and

04:09put them first. And I'm fortunate enough, with your support, I'd be honored to work with you and

04:13the entire committee. Thank you. Mr. Peters, just a thought, and I wanted, it was kind of left up in the air,

04:20and I know that you were trying to differentiate a little bit for the ranking member on the

04:25committee. The concern, you were being asked for a yes or a no answer, but I want to give you, just in

04:32the time I've got left, the opportunity to maybe respond a little bit more clearly with regard to the

04:36concern that you would have with AI chips that would go to other countries, and how you would approach the

04:42issue of making sure that they don't end up in the hands of CCP.

04:46So, thank you. Thank you again, Senator, for the opportunity to follow up on this. As I noted,

04:51transshipment and diversion of these sensitive technologies, whether it be to an entity on what's

04:56known as our entities list, or whether it be something that is controlled as a dual use item on

05:01the CCL, these are the exact subjects of our export control regulations and the Export Control Act,

05:09a reform, the Export Control Reform Act of 2018. My charge, should I be confirmed to this role,

05:15would be to vigorously enforce those regulations made criminal under that law. If, in fact, a criminal

05:21prosecution can't be achieved, we have other civil and administrative remedies available to us,

05:26the export administration regulations, and I would look to vigorously enforce those,

05:30whereas you absolutely understand how critical it is we keep these these particular high-value chips

05:37out of the hands of the CCP. I understand, Senator. I share your concern.

05:40Thank you. Thank you, Mr. Chairman.

Category

Transcript

Recommended